Exhibit 10.6
INDUSTRIAL COMPLEX LEASE
(California)
Industrial Complex: Caribbean Corporate Center
Landlord: MP Caribbean, Inc.
Tenant: Ariba Technologies, Inc.
Reference Date: August 11, 1997
INDEX TO LEASE
TITLE PAGE
ARTICLE 1.
DEFINITIONS AND CERTAIN BASIC PROVISIONS . . . . . . . . . . . . . . . 1
ARTICLE 2.
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3.
DELIVERY OF DEMISED PREMISES . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 4.
RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 5.
FINANCIAL REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 6.
TENANT'S RESPONSIBILITY FOR TAXES, OTHER
REAL ESTATE CHARGES AND INSURANCE EXPENSES . . . . . . . . . . . . . . 4
ARTICLE 7.
COMMON AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 8.
[INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 9.
USE AND CARE OF DEMISED PREMISES . . . . . . . . . . . . . . . . . . . 7
ARTICLE 10.
MAINTENANCE AND REPAIR OF DEMISED PREMISES . . . . . . . . . . . . . . 7
ARTICLE 11.
ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 12.
LANDLORD'S RIGHT OF ACCESS . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 13.
SIGNS; STORE FRONTS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 14.
UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE 15.
INSURANCE COVERAGES . . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE 16.
WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION . . . . . . . . . . .11
ARTICLE 17.
DAMAGES BY CASUALTY . . . . . . . . . . . . . . . . . . . . . . . . . .12
ARTICLE 18.
EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE 19.
ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . .13
ARTICLE 20.
SUBORDINATION; ATTORNMENT; ESTOPPELS . . . . . . . . . . . . . . . . .15
ARTICLE 21.
TENANT'S INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . .15
ARTICLE 22.
DEFAULT BY TENANT AND REMEDIES . . . . . . . . . . . . . . . . . . . .16
ARTICLE 23
[INTENTIONALLY OMITTED] . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE 24.
HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
ARTICLE 25.
NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE 26.
COMMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE 27.
REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
ARTICLE 28.
HAZARDOUS MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . .21
ARTICLE 29.
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
EXHIBIT "A" DEMISED PREMISES
EXHIBIT "B" CONSTRUCTION: TENANT ACCEPTANCE OF SPACE "AS IS"
EXHIBIT "C" TENANT CONSTRUCTION RULES AND REGULATIONS
EXHIBIT "D" RIGHT OF FIRST OPPORTUNITY
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INDUSTRIAL COMPLEX LEASE
(California)
ARTICLE 1.
DEFINITIONS AND CERTAIN BASIC PROVISIONS
1.1 The following list sets out certain defined terms and certain
financial and other information pertaining to this lease:
(a) "Landlord": MP Caribbean, Inc., a Delaware corporation,
whose taxpayer identification number is 00-0000000.
(b) Landlord's address: c/o GE Capital Investment Advisors,
Inc., 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Asset Management and Legal Department
(c) "Tenant": Ariba Technologies, Inc., a Delaware
corporation, whose taxpayer identification number is 00-0000000.
(d) Tenant's address:
Prior to Commencement Date: 0000 Xxxxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Upon Commencement Date: 0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000
(See also section 25.1)
(e) Tenant's trade name: Ariba Technologies
(f) Tenant's Guarantor: N/A
(g) "Agent": South Bay Development Company, whose address is
000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxx.
(h) "Industrial Complex": Landlord's property in the City of
Sunnyvale, Santa Xxxxx County, California, which property is commonly known as:
1310-1327 Chesapeake Terrace, Caribbean Corporate Center, Sunnyvale, California.
(i) "Demised Premises": that certain area in the Industrial
Complex located at 0000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx and being
described or shown cross-hatched on the floor plan(s) attached hereto as EXHIBIT
"A" which Landlord and Tenant acknowledge and agree to contain 32,576 square
feet of rentable area.
(j) "Commencement Date": the later of September 14, 1997, or
that date upon which Landlord has completed all of the Landlord's Improvements
as provided in Article IV of EXHIBIT "B" attached hereto.
(k) "Lease Term": commencing on the Commencement Date and
continuing for seven (7) years and no months after the Commencement Date;
provided that if the Commencement Date is a date other than the first day of a
calendar month, the lease term shall be extended by the number of days remaining
in the calendar month in which the Commencement Date occurs. See EXHIBIT "D".
(l) Minimum guaranteed rental: $57,008.00, subject to Section
4.1 below.
(m) Prepaid rental: $57,008.00, being an estimate of the
initial minimum guaranteed rental, for the first month of the lease term, such
prepaid rental being due and payable upon execution of this lease.
(n) Security deposit: $76,396.00, such security deposit being
due and payable upon execution of this lease.
(o) Permitted use: General office and software development,
and for no other purpose whatsoever.
(p) Tenant's maximum insurance deductible: $5,000.00.
(q) "Tenant's Broker": Xxxxxxx & Xxxxxxxxx of California,
Inc.
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(r) (i) "Tenant's Proportionate Share of Building Basic
Costs": 44.89%
(ii) "Tenant's Proportionate Share of Industrial
Complex Basic Costs": 12.85%
(iii) "Tenant's Proportionate Share of Parcel Basic
Costs": 22.09%.
ARTICLE 2.
GRANTING CLAUSE
2.1 Landlord leases the Demised Premises to Tenant, and Tenant leases
the Demised Premises from Landlord, upon the terms and conditions set forth in
this lease.
ARTICLE 3.
DELIVERY OF DEMISED PREMISES
3.1 Except to the extent modified by Landlord's express assumption of
construction obligations, if any, in EXHIBIT "B" attached to this lease, the
Demised Premises is being leased "AS IS," with Tenant accepting all defects, if
any; and Landlord makes no warranty of any kind, express or implied, with
respect to the Demised Premises (without limitation, Landlord makes no warranty
as the habitability, fitness or suitability of the Demised Premises for a
particular purpose nor as to the absence of any toxic or otherwise hazardous
substances). This Section 3.1 is subject to any contrary requirements under
applicable law; however, in this regard Tenant acknowledges that it has been
given the opportunity to inspect the Demised Premises and to have qualified
experts inspect the Demised Premises prior to the execution of this lease.
3.2 Notwithstanding the foregoing, Landlord warrants for a period of
ninety (90) days following the Commencement Date that the roof, mechanical,
electrical and plumbing systems serving the Demised Premises shall be in proper
working order. Landlord shall repair any defective or malfunctioning component
of the foregoing building systems about which Landlord has received written
notice from Tenant describing the failure or malfunction within ninety (90) days
of the Commencement Date.
3.3 Notwithstanding anything to the contrary in this Lease, Tenant
may, prior to the Commencement Date, enter the Demised Premises for the purpose
of installing telephones, electronic communication or related equipment,
fixtures, furniture and equipment, provided that Tenant shall be solely
responsible for any of such equipment, fixtures, furniture or material and for
any loss or damage thereto from any cause whatsoever, excluding only the gross
negligence or willful misconduct of Landlord. Such early access to the Demised
Premises and such installation shall be permitted only to the extent that
Landlord determines that such early access and installation activities will not
delay Landlord's completion of the Landlord Improvements. Landlord and Tenant
shall cooperate in the scheduling of Tenant's early access to the Demised
Premises and of Tenant's installation activities. The provisions of Articles 15,
16 and 21 below shall expressly apply in full during the period of any such
early entry, and Tenant shall (i) provide certificates of insurance evidencing
the existence and amounts of liability insurance carried by Tenant and its
agents and contractors, reasonably satisfactory to Landlord, prior to such early
entry, and (ii) comply with all applicable laws, regulations, permits and other
approvals applicable to such early entry work in the Demised Premises. No rent
shall be due for such early access period.
ARTICLE 4.
RENT
4.1 The minimum guaranteed rental shall be subject to periodic
increases based upon the following schedule and which increases shall become
effective automatically and without further notice as of the first day of the
specified lease month:
Lease Months Monthly Rental
------------ --------------
Months 1 -12 $57,008.00
Months 13-24 $59,858.00
Months 25 -36 $62,851.00
Months 37 -48 $65,994.00
Months 49 -60 $69,294.00
Months 61 -72 $72,758.00
Months 73 -84 $76,396.00
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Notwithstanding anything to the contrary contained herein, Tenant shall be
credited for the amount of minimum guaranteed rental for months one (1) and two
(2) of the lease term in the total amount of $114,016.00. Tenant acknowledges
that in no way shall this minimum guaranteed rental credit apply to any other
period of the lease term or in any way relieve Tenant of its responsibility to
pay all other charges due under this lease, including without limitation,
Tenant's obligation to pay Tenant's pro rata share of real estate charges,
insurance expenses and common area expenses. In the event Tenant is in default
of any of its obligations set forth in this lease beyond any applicable notice
and cure period at any time during the term of this lease, and Landlord elects
to pursue its remedies under Section 22.2(c) below ("Landlord's Recovery
Action"), in addition to any other fights or remedies Landlord may have as a
result of such default in such Landlord's Recovery Action, the entire
$114,016.00 amount of the minimum guaranteed rental credit hereinabove
referenced shall be due and payable by Tenant to Landlord.
4.2 Rental shall accrue from the Commencement Date, and shall be
payable to Landlord at Agent's address specified in Section 1.1(g) above or at
such other address as Landlord shall so notify Tenant from time to time.
4.3 Tenant shall pay to Landlord minimum guaranteed rental in monthly
installments in the amounts specified in Section 1.1(l) and Section 4.1 of this
lease. The first such monthly installment shall be due and payable on or before
the Commencement Date, and subsequent installments shall be due and payable on
or before the first day of each succeeding calendar month during the lease term;
provided that if the Commencement Date is a date other than the first day of a
calendar month, there shall be due and payable on or before such date as minimum
guaranteed rental for the balance of such calendar month a sum equal to that
proportion of the rent specified for the first full calendar month as herein
provided, which the number of days from the Commencement Date to the end of the
calendar month during which the Commencement Date shall fall bears to the total
number of days in such month. Tenant agrees to pay to Landlord, if assessed by
the jurisdiction in which the Industrial Complex is located, any sales, excise
or other tax imposed, assessed or levied in connection with Tenant's payment of
rents.
4.4 It is understood that the minimum guaranteed rental is payable on
or before the first day of each calendar month (in accordance with Section 4.2
above), without offset or deduction of any nature. In the event any rental is
not received within five (5) days after its due date for any reason whatsoever,
or if any rental payment is by check which is returned for insufficient funds,
then in addition to the past due amount Tenant shall pay to Landlord one of the
following (the choice to be at the sole option of Landlord unless one of the
choices is improper under applicable law, in which event the other alternative
will automatically be deemed to have been selected): (a) a late charge in an
amount equal to six percent (6%) of the rental then due, in order to compensate
Landlord for its administrative and other overhead expenses; or (b) interest on
the rental then due at the maximum contractual rate which could legally be
charged in the event of a loan of such rental to Tenant (but in no event to
exceed 1-1/2% per month), such interest to accrue continuously on any unpaid
balance due to Landlord by Tenant during the period commencing with the rental
due date and terminating with the date on which Tenant makes full payment of all
amounts owing to Landlord at the time of said payment. Any such late charge or
interest payment shall be payable as additional rental under this lease, shall
not be considered a waiver by Landlord of any default by Tenant hereunder, and
shall be payable immediately on demand.
4.5 If Tenant fails in two (2) consecutive months to make rental
payments within five (5) days after it is due, Landlord, in order to reduce its
administrative costs, may require, by giving written notice to Tenant (and in
addition to any late charge or interest accruing pursuant to Section 4.4 above,
as well as any other rights and remedies accruing pursuant to Article 22 or
Article 23 below, or any other provision of this lease or at law), that minimum
guaranteed rentals are to be paid quarterly in advance instead of monthly, and
that all future rental payments are to be made on or before the due date by
cash, cashier's check, or money order and that the delivery of Tenant's
personal or corporate check will no longer constitute a payment of rental as
provided in this lease. Any acceptance of a monthly rental payment or of a
personal or corporate check thereafter by Landlord shall not be construed as a
subsequent waiver of said rights.
4.6 Tenant shall pay when due any and all sales taxes levied, imposed
or assessed by the United States of America, the State of California, or any
political subdivision thereof or other taxing authority upon the minimum
guaranteed rental, additional rent and all other sums payable hereunder.
ARTICLE 5.
FINANCIAL REPORTS
5.1 From time to time during the lease term, Tenant shall, within
fifteen (15) days of Landlord's request therefor, furnish a true and accurate
statement of its financial condition prepared in conformity with recognized
accounting principles and in a form reasonably satisfactory to Landlord.
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Landlord shall use reasonable efforts to maintain the confidentiality of such
financial reports; provided, however, that Landlord may disclose such financial
reports to individuals within its legal, real estate and accounting departments
who have a reasonable need to know the information contained in such financial
reports. Landlord and Tenant agree that Landlord may disclose Tenant's financial
statements to potential purchasers of, or lenders on, the Industrial Complex
only with Tenant's prior written consent, which consent shall not be
unreasonably withheld or delayed.
ARTICLE 6.
TENANT'S RESPONSIBILITY FOR TAXES, OTHER
REAL ESTATE CHARGES AND INSURANCE EXPENSES
6.1 Tenant shall be liable for all taxes levied against personal
property and trade fixtures placed by Tenant in the Demised Premises which taxes
shall be paid when due and before any delinquency. If any such taxes are levied
against Landlord or Landlord's property and if Landlord elects to pay the same
or if the assessed value of Landlord's property is increased by inclusion of
personal property and trade fixtures placed by Tenant in the Demised Premises
and Landlord elects to pay the taxes based on such increase, Tenant shall pay to
Landlord upon demand that part of such taxes for which Tenant is primarily
liable hereunder.
6.2 Tenant shall also be liable for Tenant's Proportionate Share (as
specified in Section 1.1(r) above and determined in accordance with Section 7.5
below) of all "real estate charges" (as defined below) and "insurance expenses"
(as defined below) related to the Industrial Complex or Landlord's ownership of
the Industrial Complex. Tenant's obligations under this Section 6.2 shall be
prorated during any partial year (i.e., the first year and the last year of the
lease term). Tenant's Proportionate Share shall be adjusted as reasonably
determined by Landlord in the event that the total rentable area of the
buildings in the Industrial Complex shall change after the date hereof. "Real
estate charges" shall include ad valorem taxes, general and special assessments,
parking surcharges, any tax or charge for governmental services (such as street
maintenance or fire protection) which are attributable to the transfer or
transaction directly or indirectly represented by this Lease, by any sublease or
assignment hereunder or by other Leases in the Industrial Complex or by any
document to which Tenant is a party creating or transferring (or reflecting the
creation or transfer) or any interest or an estate in the Demised Premises and
any tax or charge which replaces or is in addition to any of such
above-described "real estate charges"; real estate charges shall also include
any fees, expenses or costs (including attorney's fees, expert fees and the
like) incurred by Landlord in protesting or contesting any assessments levied or
the tax rate. "Real estate charges" shall not be deemed to include sales tax
payable by Tenant pursuant to Section 4.6 above and any franchise, estate,
inheritance or general income tax. "Insurance expenses" shall include all
premiums and other expenses incurred by Landlord for liability insurance and
fire and extended coverage property insurance (plus whatever endorsements or
special coverages which Landlord, in Landlord's sole discretion, may consider
appropriate) business interruption, and rent loss, earthquake and any other
insurance policy which may be carried by Landlord insuring the Demised Premises,
the Common Area, the Industrial Complex, or any improvements.
6.3 At Landlord's sole option, Landlord and Tenant shall attempt to
obtain separate assessments for Tenant's obligations pursuant to Section 6.1
and, with respect to Section 6.2, for such of the "real estate charges" as are
readily susceptible of separate assessment. To the extent of a separate
assessment, Tenant agrees to pay such assessment before it becomes delinquent
and to keep the Demised Premises free from any lien or attachment; moreover, as
to all periods of time during the lease term, this covenant of Tenant shall
survive the termination of the lease. With regard to the calendar year during
which the lease term expires, Landlord at its option either may xxxx Tenant when
the charges become payable or may charge the Tenant an estimate of Tenant's pro
rata share of whichever charges have been being paid directly by Tenant (based
upon information available for the current year plus, if current year
information is not adequate in itself, information relating to the immediately
preceding year).
6.4 At such time as Landlord has reason to believe that at some time
within the immediately succeeding twelve (12) month period Tenant will owe
Landlord any amounts pursuant to one or more of the preceding sections of this
Article 6, Landlord may direct that Tenant prepay monthly a pro rata portion of
the prospective future payment (i.e., the prospective future payment divided by
the number of months before the prospective future payment will be due). Tenant
agrees that any such prepayment directed by Landlord shall be due and payable
monthly on the same day that minimum guaranteed rental is due. Any amounts paid
by Tenant under this Section 6.4 shall be subject to reconciliation at the end
of the tax year or calendar year, at Landlord's option, on the basis of the
actual costs for such period, with Tenant to be credited with any overpayments
made.
6.5 In the event that any payment due from Tenant to Landlord is
not received within ten (10) days after its due date for any reason
whatsoever, or if any such payment is by check which is returned for
insufficient funds, then in addition to the amount then due, Tenant shall pay
to Landlord interest on
4
the amount then due at the maximum contractual rate which could legally be
charged in the event of a loan of such amount to Tenant (but in no event to
exceed 1-1/2% per month), such interest to accrue continuously on any unpaid
balance until paid.
ARTICLE 7.
COMMON AREA
7.1 The term "Common Area" is defined for all purposes of this lease
as that part of the Industrial Complex intended for the common use of all
tenants, including among other facilities (as such may be applicable to the
Industrial Complex), parking areas, private streets and alleys, landscaping,
curbs, loading areas, sidewalks, recreation/picnic areas, malls and promenades
(enclosed or otherwise), lighting facilities, drinking fountains, meeting rooms,
public toilets, and the like, but excluding (i) space in buildings (now or
hereafter existing) designated for rental for commercial purposes, as the same
may exist from time to time; (ii) streets and alleys maintained by a public
authority; (iii) areas within the Industrial Complex which may from time to time
not be owned by Landlord (unless subject to a cross-access agreement benefiting
the area which includes the Demised Premises); and (iv) areas leased to a
single-purpose user where access is restricted. In addition, although the
roof(s) of the building(s) in the Industrial Complex are not literally part of
the Common Area, they will be deemed to be so included for purposes of (i)
Landlord's ability to prescribe rules and regulations regarding same, and (ii)
their inclusion for purposes of common area maintenance reimbursements. Landlord
reserves the right to change from time to time the dimensions and location of
the Common Area, as well as the dimensions, identities, locations and types of
any buildings, signs or other improvements in the Industrial Complex; provided,
however, that Landlord's actions pursuant to this sentence shall not
unreasonably interfere with Tenant's access to or use of the Demised Premises.
For example, and without limiting the generality of the immediately preceding
sentence, Landlord may from time to time substitute for any parking area other
areas reasonably accessible to the tenants of the Industrial Complex, which
areas may be elevated, surface or underground.
7.2 Tenant, and its employees and customers, and when duly authorized
pursuant to the provisions of this lease, its subtenants, licensees and
concessionaires, shall have the nonexclusive right to use the Common Area
(excluding roofs of buildings in the Industrial Complex) as constituted from
time to time, such use to be in common with Landlord, other tenants in the
Industrial Complex and other persons permitted by Landlord to use the same,
including the nonexclusive right to use not more than 130 of the parking spaces
in the Common Area as designated by Landlord from time to time, and subject to
rights of governmental authorities, easements, other restrictions of record, and
such reasonable rules and regulations governing use as Landlord may from time to
time prescribe. For example, and without limiting the generality of Landlord's
ability to establish rules and regulations governing all aspects of the Common
Area, Tenant agrees as follows:
(a) Landlord may from time to time designate specific areas
within the Industrial Complex or in reasonable proximity thereto in which
automobiles owned by Tenant, its employees, subtenants, licensees, and
concessionaires shall be parked; and in this regard, Tenant shall furnish to
Landlord upon request a complete list of license numbers of all automobiles
operated by Tenant, its employees, its subtenants, its licensees or its
concessionaires, or their employees; and Tenant agrees that if any automobile or
other vehicle owned by Tenant or any of its employees, its subtenants, its
licensees or its concessionaires, or their employees, shall at any time be
parked in any part of the Industrial Complex other than the specified areas
designated for employee parking, Tenant shall pay to Landlord as additional rent
upon demand an amount equal to the daily rate or charge for such parking as
established by Landlord from time to time for each day, or part thereof, that
such automobile or other vehicle is so parked.
(b) Tenant shall not solicit business within the Common Area
nor take any action which would interfere with the rights of other persons to
use the Common Area.
(c) Landlord may temporarily close any part of the Common
Area for such periods of time as may be necessary to make repairs or alterations
or to prevent the public from obtaining prescriptive rights.
(d) With regard to the roof(s) of the building(s) in the
Industrial Complex, use of the roof(s) is reserved to Landlord, or with regard
to any tenant demonstrating to Landlord's satisfaction a need to use same, to
such tenant after receiving prior written consent from Landlord.
7.3 Landlord shall be responsible for the operation, management and
maintenance of the Common Area, the manner of maintenance and the expenditures
therefor to be in the sole discretion of Landlord, but to be generally in
keeping with similar industrial centers within the same geographical area as the
Industrial Complex. Landlord shall be the sole determinant of the type and
amount of security services to be provided, if any. Landlord shall not be liable
to Tenant, and Tenant hereby waives any
5
claim against Landlord for (i) any unauthorized or criminal entry of third
parties into the Demised Premises or Industrial Complex, (ii) any damage to
persons or property, except to the extent caused by the gross negligence or
willful misconduct of Landlord, or (iii) any loss of property in and about the
Demised Premises or Industrial Complex from any unauthorized or criminal acts of
third parties, regardless of any action, inaction, failure, breakdown or
insufficiency of security.
7.4 In addition to the rentals and other charges prescribed in this
lease, Tenant shall pay to Landlord Tenant's Proportionate Share (as determined
in Section 7.5 below) of the cost of operation and maintenance of the Common
Area which may be incurred by Landlord in its discretion, including, among other
costs, those for lighting, painting, cleaning, policing, inspecting, repairing,
replacing, and, if there is an enclosed mall or promenade in the Industrial
Complex, heating and cooling; Tenant's Proportionate Share of capital
expenditures and expenses incurred by Landlord to increase the operating
efficiency of the Industrial Complex or to cause the Common Area to comply with
applicable Regulations (as such term is defined in Section 27.1), it being
agreed that the cost of such capital expenditures and installation shall be
amortized over the reasonable life of the capital expenditure, with the
reasonable life and amortization schedule being determined in accordance with
generally accepted accounting principles consistently applied; a reasonable
portion of whatever management fee Landlord pays to the property manager for the
Industrial Complex; a reasonable allowance for Landlord's overhead costs and the
cost of any insurance for which Landlord is not reimbursed pursuant to Section
6.2 but specifically excluding all expenses paid or reimbursed pursuant to
Article 6. In addition, although the roof(s) of the buildings(s) in the
Industrial Complex are not literally part of the Common Area, Landlord and
Tenant agree that roof maintenance, repair and replacement shall be included as
a common area maintenance item to the extent not specifically allocated to
Tenant under this lease nor to another tenant pursuant to its lease. With regard
to capital expenditures other than the capital expenditures contemplated by the
first sentence of this Section, (i) the original investment in capital
improvements, i.e., upon the initial construction of the Industrial Complex,
shall not be included, and (ii) improvements and replacements, to the extent
capitalized on Landlord's records, shall be included only to the extent of a
reasonable depreciation or amortization (including interest accruals
commensurate with Landlord's interest costs). If this lease should commence on a
date other than the first day of a calendar year or terminate on a date other
than the last day of a calendar year, Tenant's reimbursement obligations under
this Section 7.4 shall be prorated based upon Landlord's expenses for the entire
calendar year. Tenant shall make such payment to Landlord on demand, at
intervals not more frequent than monthly. Landlord may, at its option, make
monthly or other periodic charges based upon the estimated annual cost of
operation and maintenance of the Common Area, payable in advance but subject to
adjustment after the end of the year on the basis of the actual cost for such
year. Landlord has the right to establish as a reserve, such amounts as Landlord
deems reasonable for the maintenance, repair and restoration of the roof and
parking of the Industrial Complex. In the event that any payment due from Tenant
to Landlord is not received within ten (10) days after its due date for any
reason whatsoever, or if any such payment is by check which is returned for
insufficient funds, then, in addition to the amount then due, Tenant shall pay
to Landlord interest on the amount then due at the maximum contractual rate
which could legally be charged in the event of a loan of such amount to Tenant
(but in no event to exceed 1-1/2% per month), such interest to accrue
continuously on any unpaid balance until paid. Any delay or failure of Landlord
in delivering any estimate or statement described in this Section 7.4 or in
computing or billing Tenant's Proportionate Share of the foregoing costs shall
not constitute a waiver of Landlord's right to require an increase in rent as
provided herein or in any way impair the continuing obligations of Tenant under
this Section.
7.5 "Basic Costs" shall mean the cost of (i) operation and
maintenance of the common area for which Tenant is responsible to pay Tenant's
Proportionate Share pursuant to Section 7.4; and (ii) real estate charges and
insurance expenses for which Tenant is responsible to pay Tenant's Proportionate
Share pursuant to Section 6.2. Basic Costs shall be comprised of "Building Basic
Costs", "Industrial Complex Basic Costs", and "Parcel Basic Costs". "Building
Basic Costs" shall consist of those Basic Costs which Landlord determines
pertains exclusively to the building in which the Demised Premises are located
(the "Building"). "Industrial Complex Basic Costs" shall consist of those Basic
Costs which Landlord determines shall be shared among all buildings at the
Industrial Complex. "Parcel Basic Costs" shall consist of those Basic Costs
which Landlord determines shall be shared among the Building and the other free
standing building contained on the same legal parcel as the Building (the
"Parcel"). For purposes of determining Tenant's Proportionate Share of Basic
Costs in accordance with this Article 7, (i) Tenant's Proportionate Share of
Building Basic Costs shall equal a fraction, the numerator of which shall be the
rentable area of the Demised Premises and the denominator of which shall be the
rentable area of the Building; (ii) Tenant's Proportionate Share of Industrial
Complex Basic Costs shall equal a fraction, the numerator or which shall be the
rentable area of the Demised Premises and the denominator of which shall be the
rentable area of all buildings (including the Building) at the Industrial
Complex; and (iii) Tenant's Proportionate Share of Parcel Basic Costs shall
equal a fraction the numerator of which shall be the rentable area of the
Demised Premises and the denominator of which shall be the rentable area of the
two buildings (including the Building) located on the Parcel.
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ARTICLE 8.
[INTENTIONALLY OMITTED]
ARTICLE 9.
USE AND CARE OF DEMISED PREMISES
9.1 The Demised Premises shall be used and occupied by Tenant solely
for the permitted use specified in Section 1.1.(o) above and for no other
purpose. Tenant, at its sole cost and expense, shall obtain and keep in effect
during the term, all permits, licenses and other authorizations necessary to
permit Tenant to use and occupy the Demised Premises for the permitted use.
Without limiting the generality of the foregoing, Tenant shall not use or store
any gasoline, flammable or so called "Red Label" materials in or about the
Demised Premises. All equipment used within the Demised Premises shall be
subject to approval by Landlord's insurance carriers and shall be Underwriters
Laboratory or Factory Mutual approved for the uses intended, evidence of which
shall be furnished to Landlord upon request. Tenant shall not operate any
machinery or equipment in the Demised Premises which, in Landlord's sole
discretion, shall cause any excessive noise, vibration or damage or disturbance
to the other tenants in the Industrial Complex.
9.2 Tenant shall take good care of the Demised Premises and keep the
same free from waste at all times. Tenant shall not overload the floors in the
Demised Premises, nor deface or injure the Demised Premises. Tenant shall keep
the Demised Premises and sidewalks, service-ways and loading areas adjacent to
the Demised Premises neat, clean and free from dirt, rubbish, ice or snow at all
times. Tenant shall store all trash and garbage within the Demised Premises or
in a trash dumpster or similar container approved by Landlord as to type,
location and screening; and Tenant shall arrange for the regular pick-up of such
trash and garbage at Tenant's expense (unless Landlord finds its necessary to
furnish such a service, in which event Tenant shall be charged an equitable
portion of the total of the charges to all tenants using the service). Receiving
and delivery of goods and merchandise and removal of garbage and trash shall be
made only in the manner and areas prescribed by Landlord. Tenant shall not
operate an incinerator or burn trash or garbage within the Industrial Complex.
ARTICLE 10.
MAINTENANCE AND REPAIR OF DEMISED PREMISES
10.1 Landlord shall keep the foundation, the exterior walls (except
plate glass; windows, doors and other exterior openings; window and door frames,
molding, closure devices, locks and hardware; special store fronts; lighting,
heating, air conditioning, plumbing and other electrical, mechanical and
electromotive installation, equipment and fixtures; signs, placards, decorations
or other advertising media of any type; and interior painting or other treatment
of exterior walls) and roof (subject to the second sentence in Section 7.4
above) of the Demised Premises in good repair. Landlord, however, shall not be
required to make any repairs occasioned by the act or negligence of Tenant, its
agents, contractors, employees, subtenants, invitees, customers, licensees and
concessionaires (including, but not limited to, roof leaks resulting from
Tenant's installation of air conditioning equipment or any other roof
penetration or placement); and the provisions of the previous sentence are
expressly recognized to be subject to the provisions of Article 17 and Article
18 of this lease. In the event that the Demised Premises should become in need
of repairs required to be made by Landlord hereunder, Tenant shall give
immediate written notice thereof to Landlord and Landlord shall have a
reasonable time after receipt by Landlord of such written notice in which to
make such repairs. Landlord shall not be liable to Tenant for any interruption
of Tenant's business or inconvenience caused due to any work performed in the
Demised Premises or in the Industrial Complex pursuant to Landlord's rights and
obligations under the Lease, so long as the work is performed without gross
negligence or willful misconduct.
10.2 Tenant shall keep the Demised Premises in good, clean and
habitable condition and shall at its sole cost and expense keep the Demised
Premises free of insects, rodents, vermin and other pests and make all needed
repairs and replacements, including replacement of cracked or broken glass,
except for repairs and replacements required to be made by Landlord under the
provisions of Section 10.1, Article 17 and Article 18 and except to the extent
any such repairs are necessitated by the gross negligence or willful misconduct
of Landlord. Without limiting the coverage of the previous sentence, it is
understood that Tenant's responsibilities therein include the repair and
replacement in accordance with all applicable Regulations of all lighting,
heating, air conditioning, plumbing and other electrical, mechanical and
electromotive installation, equipment and fixtures and also include all utility
repairs in ducts, conduits, pipes and wiring, and any sewer stoppage located in,
under and above the Demised Premises, regardless of when or how the defect or
other cause for repair or replacement occurred or became apparent; provided,
however, that as to the maintenance and repair of the HVAC equipment in the
Demised Premises, Landlord shall have the option of contracting directly with an
HVAC servicing company for all such work and charging Tenant for all costs
thereof. If any repairs required to be made by Tenant hereunder are not made
within ten (10) days after written notice delivered to Tenant by
7
Landlord, Landlord may at its option make such repairs without liability to
Tenant for any loss or damage which may result to its stock or business by
reason of such repairs and Tenant shall pay to Landlord upon demand, as
additional rental hereunder, the cost of such repairs plus interest at the
maximum contractual rate which could legally be charged in the event of a loan
of such payment to Tenant (but in no event to exceed 1-1/2% per month), such
interest to accrue continuously from the date of payment by Landlord until
repayment by Tenant. At the expiration of this lease, Tenant shall surrender the
Demised Premises in good condition, excepting reasonable wear and tear and
losses required to be restored by Landlord in Section 10.1, Article 17 and
Article 18 of this lease.
10.3 Tenant waives the right to make repairs at Landlord's expense
under Section 1941 and 1942 of the California Civil Code and all other laws now
or hereafter in effect.
ARTICLE 11.
ALTERATIONS
11.1 Tenant shall not make any alterations, additions or improvements
to the Demised Premises (collectively, the "Alterations") without the prior
written consent of Landlord, except for the installation of unattached, movable
trade fixtures which may be installed without drilling, cuffing or otherwise
defacing the Demised Premises. Tenant shall furnish complete plans and
specifications to Landlord at the time it requests Landlord's consent to any
Alterations if the desired Alterations (i) will affect the Industrial Complex's
mechanical, electrical, plumbing, or life safety systems or services, or (ii)
will affect any structural component of the Demised Premises or the Industrial
Complex, or (iii) will require the filing of plans and specifications with any
governmental or quasi-governmental agency or authority, or (iv) will cost in
excess of Twenty-Five Thousand Dollars ($25,000.00). Subsequent to obtaining
Landlord's consent and prior to commencement of the Alterations, Tenant shall
deliver to Landlord any building permit required by applicable law and a copy of
the executed construction contract(s). Tenant shall reimburse Landlord within
ten (10) days after the rendition of a xxxx for all of Landlord's actual
out-of-pocket costs incurred in connection with any Alterations, including,
without limitation, all management, engineering, outside consulting, and
construction fees incurred by or on behalf of Landlord for the review and
approval of Tenant's plans and specifications and for the monitoring of
construction of the Alterations. If Landlord consents to the making of any
Alteration, such Alteration shall be made by Tenant at Tenant's sole cost and
expense by a contractor approved in writing by Landlord. Tenant shall give
Landlord not less than ten (10) days advance written notice of the commencement
of Tenant's Alterations to enable Landlord to post and record notices of
nonresponsibility. Tenant shall require its contractor to maintain insurance in
such amounts and in such form as Landlord may require. Any construction,
alteration, maintenance, repair, replacement, installation, removal or
decoration undertaken by Tenant in connection with the Demised Premises shall be
completed in accordance with plans and specifications which must be approved by
Landlord, shall be carried out in a good, workmanlike and prompt manner and in
accordance with the provisions of EXHIBIT "C" annexed hereto, shall comply with
all applicable Regulations of the authorities having jurisdiction thereof, and
shall be subject to supervision by Landlord or its employees, agents or
contractors. Without limiting the generality of the immediately preceding
sentence, any installation or replacement of Tenant's heating or air
conditioning equipment must be effected strictly in accordance with Landlord's
instructions, the Clean Air Act and all other applicable Regulations. Without
Landlord's prior written consent, Tenant shall not use any portion of the Common
Areas either within or without the Industrial Complex in connection with the
making of any Alterations. If the Alterations which Tenant causes to be
constructed result in Landlord being required to make any alterations and/or
improvements to other portions of the Industrial Complex in order to comply with
any applicable Regulations, then Tenant shall reimburse Landlord upon demand for
all costs and expenses incurred by Landlord in making such alterations and/or
improvements. Any Alterations made by Tenant shall become the property of
Landlord upon installation and shall remain on and be surrendered with the
Demised Premises upon the expiration or sooner termination of this lease, except
Tenant shall upon demand by Landlord, at Tenant's sole cost and expense,
forthwith and with all due diligence remove all or any portion of any
Alterations made by Tenant which are designated by Landlord to be removed and
repair and restore the Demised Premises in a good and workmanlike manner to
their original condition, reasonable wear and tear excepted. Notwithstanding the
foregoing, prior to commencing any Alterations, Tenant may request Landlord's
waiver of the restoration obligation with respect to specified Alterations,
which waiver may be granted or withheld by Landlord in its sole discretion.
11.2 All construction work done by Tenant within the Demised Premises
shall be performed in a good and workmanlike manner with new materials of
first-class quality, lien-free and in compliance with all governmental
requirements and Regulations, and in such manner as to cause a minimum of
interference with other construction in progress and with the transaction of
business in the Industrial Complex. Tenant agrees to indemnify Landlord and hold
Landlord harmless against any loss, liability or damage resulting from such
work, and Tenant shall, if requested by Landlord, furnish a bond or other
security satisfactory to Landlord against any such loss, liability or damage.
8
11.3 In the event Tenant uses a general contractor to perform
construction work within the Demised Premises, Tenant shall, prior to the
commencement of such work, require said general contractor to execute and
deliver to Landlord a waiver and release of any and all claims against Landlord
and liens against the Industrial Complex to which such contractor might at any
time be entitled. The delivery of the waiver and release of lien within the time
period set forth above shall be a condition precedent to Tenant's ability to
enter on and begin its construction work at the Demised Premises and, if
applicable, to any reimbursement from Landlord for its construction work.
11.4 Nothing contained in this lease shall be construed as
constituting the consent or request of Landlord, express or implied, to or for
the performance by any contractor, laborer, materialman or vendor of any labor
or services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Demised Premises or any
part thereof. All materialmen, contractors, artisans, mechanics, laborers and
any other persons now or hereafter furnishing any labor, services, materials,
supplies or equipment to Tenant with respect to any portion of the Demised
Premises are hereby charged with notice that they must look exclusively to
Tenant to obtain payment for same. Tenant and any subtenants shall have no power
to do any act or make any contract which may create or be the foundation of any
lien, mortgage or other encumbrance upon the reversionary or other estate of
Landlord, or any interest of Landlord in the Demised Premises. NOTICE IS HEREBY
GIVEN THAT LANDLORD IS NOT AND SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING THE
DEMISED PREMISES OR ANY PART THEREOF, AND THAT NO MECHANICS' OR OTHER LIENS FOR
ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LANDLORD IN AND TO THE DEMISED PREMISES.
11.5 In the event that Landlord elects to remodel all or any portion
of the Industrial Complex, Tenant will cooperate with such remodeling, including
Tenant's tolerating temporary inconveniences (and even the temporary removal of
Tenant's signs in order to facilitate such remodeling, as it may relate to the
exterior of the Demised Premises).
ARTICLE 12.
LANDLORD'S RIGHT OF ACCESS
12.1 Landlord and Landlord's agents and representatives shall have the
right to enter the Demised Premises at any time in case of an emergency, and
otherwise at all reasonable times upon reasonable advance oral or written notice
for any purpose permitted pursuant to the terms of this lease, including, but
not limited to, examining the Demised Premises; making such repairs or
alterations therein as may be necessary or appropriate in Landlord's sole
judgment for the safety and preservation thereof; erecting, installing,
maintaining, repairing or replacing wires, cables, conduits, vents, ducts,
risers, pipes, HVAC equipment or plumbing equipment running in, to, or through
the Demised Premises; showing the Demised Premises to prospective purchasers or
mortgagees and during the last year of this lease, prospective tenants; and
posting notices of nonresponsibility. Except in the event of an emergency,
Landlord's agents and representatives shall be accompanied by a representative
of Tenant whenever they enter the Demised Premises. Tenant shall use reasonable
efforts to accommodate Landlord's requests for accompanied entry of the Demised
Premises.
12.2 If requested in writing by Landlord, Tenant shall give Landlord a
key for all of the doors for the Demised Premises, excluding Tenant's vaults,
safes and files. Landlord shall have the right to use any and all means to open
the doors to the Demised Premises in an emergency in order to obtain entry
thereto without liability to Tenant therefor. Any entry to the Demised Premises
by Landlord by any of the foregoing means, or otherwise, shall not be construed
or deemed to be a forcible or unlawful entry into or a detainer of the Demised
Premises, or an eviction, partial eviction or constructive eviction of Tenant
from the Demised Premises or any portion thereof, and shall not relieve Tenant
of its obligations hereunder.
ARTICLE 13.
SIGNS; STORE FRONTS
13.1 Tenant shall not place or permit to be placed any signs upon (i)
the roof of the Demised Premises, or (ii) the Common Areas or any exterior area
of the Industrial Complex without Landlord's prior written approval which
approval shall not be unreasonably withheld or delayed provided any proposed
sign is placed only in those locations as may be designated by Landlord, and
complies with the sign criteria promulgated by Landlord from time to time. Upon
request of Landlord, Tenant shall immediately remove any sign, advertising
material or lettering which Tenant has placed or permitted to be placed upon the
exterior or interior surface of any door or window or at any point inside the
Demised Premises, on the exterior of the Industrial Complex if required in
connection with any cleaning, maintenance or repairs to the Industrial Complex
or which, in Landlord's reasonable opinion, is of such
9
a nature as to not be in keeping with the standards of the Industrial Complex
and if Tenant fails to do so, Landlord may without liability remove the same at
Tenant's expense. Tenant shall comply with such regulations as may from time to
time be promulgated by Landlord governing signs, advertising material or
lettering of all tenants in the Industrial Complex.
ARTICLE 14.
UTILITIES
14.1 Tenant shall obtain all water, electricity, sewerage, gas,
telephone and other utilities directly from the public utility company
furnishing same. Any meters required in connection therewith shall be installed
at Tenant's sole cost. Tenant shall pay all utility deposits and fees, and all
monthly service charges for water, electricity, sewage, gas, telephone and any
other utility services furnished to the Demised Premises during the term of this
lease. In the event any such utilities are not separately metered on the
Commencement Date, then until such time as such services are separately metered,
Tenant shall pay Landlord Tenant's equitable share of the cost of such services,
as determined by Landlord. If for any reason the use of any utility is measured
on a meter(s) indicating the usage of Tenant and other tenants of the Industrial
Complex, Tenant and such other tenants shall allocate the cost of such utility
amongst themselves and shall each be responsible for the payment of its
allocable share. Landlord shall furnish and install all piping, feeders, risers
and other connections necessary to bring utilities to the perimeter walls of the
Demised Premises. Anything to the contrary notwithstanding, Tenant shall remain
obligated for the payment of Tenant's pro rata share of any heating costs and/or
other utilities or services furnished to the Common Areas pursuant to Section
7.4.
14.2 Tenant shall have the right to use the existing heating, air
conditioning and ventilation equipment in the Demised Premises, if any. All such
equipment shall be maintained, repaired and replaced, as necessary, by Tenant in
its sole expense and shall be surrendered by Tenant to Landlord at the end of
the term of this lease together with the Demised Premises. Subject to Section
3.2, Landlord makes no representation or warranty as to the condition or
capacity of such equipment. Landlord shall have no obligation whatsoever to
provide the Demised Premises with any additional heat, air conditioning,
ventilation or hot water.
14.3 Landlord shall not be liable for any interruption whatsoever, nor
shall Tenant be entitled to an abatement or reduction of rent on account
thereof, in utility services not furnished by Landlord, nor for interruptions in
utility services furnished by Landlord which are due to fire, accident, strike,
acts of God or other causes beyond the control of Landlord or which are
necessary or useful in connection with making any alterations, repairs or
improvements. Notwithstanding the foregoing, if such interruption or failure in
utility services (i) is caused by Landlord or Landlord's authorized agent; (ii)
can be repaired at the Industrial Complex; and (iii) continues for more than
sixty (60) consecutive days, then Tenant shall be entitled to a proportionate
abatement of all rental charges due hereunder, effective on the sixtieth day of
such utility service failure.
14.4 Tenant shall not install any equipment which exceeds or overloads
the capacity of the utility facilities serving the Demised Premises.
ARTICLE 15.
INSURANCE COVERAGES
15.1 Landlord shall procure and maintain throughout the term of this
lease a policy or policies of insurance, at its sole cost and expense (but
subject to Article 6 above), causing the Industrial Complex to be insured under
standard fire and extended coverage insurance (excluding hurricane and storm
insurance unless readily obtainable at commercially reasonable rates) and
liability insurance (plus whatever endorsements or special coverages Landlord,
in its sole discretion, may consider appropriate), to the extent necessary to
comply with Landlord's obligations pursuant to other provisions of this lease.
15.2 Tenant shall procure and maintain throughout the term of this
lease, at its sole cost and expense, the following insurance:
(i) Comprehensive General Liability Insurance
providing coverage for bodily injury (including death), property
damage and products liability insurance (where such exposure
exists). This policy shall contain a broad form contractual
liability endorsement under which the insurer agrees to insure
Tenant's obligations under Article 21 hereof. Such insurance
shall have a combined single limit of not less than Two Million
Dollars ($2,000,000) per occurrence, or such greater amount as
Landlord may from time to time require;
(ii) Fire and extended coverage insurance covering
Tenant's personal property, fixtures, improvements, wall
coverings, floor coverings, window coverings, alterations,
furniture,
10
equipment, lighting, ceilings, heating, ventilation and air
conditioning equipment, interior plumbing and plate glass against
loss or damage by fire, flood, windstorms, hail, earthquakes,
explosion, riot, damage from aircraft and vehicles, smoke damage,
vandalism and malicious mischief and such other risks as are from
time to time covered under "extended coverage" endorsements and
special extended coverage endorsements commonly known as "all
risks" endorsements, containing the waiver of subrogation
required in Section 16.3 of this lease and in an amount equal to
the greater of the full replacement value or the amount required
by the holder of any mortgage from time to time placed upon the
Industrial Complex or a portion of the Industrial Complex
containing the Demised Premises;
(iii) State Worker's Compensation Insurance in the
statutorily mandated limits and Employers Liability Insurance
with limits of not less than Five Hundred Thousand Dollars
($500,000), or such greater amount as Landlord may from time to
time require; and
(iv) Such other insurance as Landlord may reasonably
require from time to time.
It is expressly understood and agreed that the foregoing minimum limits
of insurance coverage shall not limit the liability of Tenant for its acts or
omissions as provided in this lease. All of the foregoing insurance policies
(with the exception of Worker's Compensation Insurance to the extent not
available under statutory law) shall name Landlord, any mortgagee, any managing
agent for the Industrial Complex and such other parties as Landlord shall from
time to time designate as an additional insured as their respective interests
may appear, and shall provide that any loss shall be payable to Landlord and any
other additional insured parties as their respective interests may appear. All
insurance required hereunder shall be placed with companies which are rated
A:VII or better by Best's Insurance Guide and licensed to do business in the
State of California. All such policies shall be written as primary policies with
deductibles not to exceed the amount specified in Section 1.1(p) above. Any
other policies, including Landlord's policy, will serve as excess coverage.
Tenant shall deliver duplicate original copies of all such policies and all
endorsements thereto, prior to the Commencement Date, or, in the case of
renewals thereto, fifteen (15) days prior to the expiration of the prior
insurance policy, together with evidence that such policies are fully paid for,
and that no cancellation, material change or non-renewal thereof shall be
effective except upon thirty (30) days' prior written notice from the insurer to
Landlord, as well as to Landlord's agent (at the address for the payment of rent
set forth in Section 4.2 above). If Tenant should fail to comply with the
foregoing requirement relating to insurance, Landlord may obtain such insurance
and Tenant shall pay to Landlord on demand as additional rental hereunder the
premium cost thereof plus interest at the maximum contractual rate (but in no
event to exceed 1-1/2% per month) from the date of payment by Landlord until
repaid by Tenant.
ARTICLE 16.
WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION
16.1 Landlord and Landlord's agents and employees shall not be liable
to Tenant, nor to Tenant's employees, agents or visitors, nor to any other
person whomsoever, for any injury to person or damage to property caused by the
Demised Premises or other portions of the Industrial Complex becoming out of
repair or by defect or failure of any structural element of the Demised Premises
or of any equipment, pipes or wiring, or broken glass, or by the backing up of
drains, or by gas, water, steam, electricity, or oil leaking, escaping or
flowing into the Demised Premises (except where due to Landlord's willful
failure to make repairs required to be made by Landlord hereunder, after the
expiration of a reasonable time after written notice to Landlord of the need for
such repairs), nor shall Landlord be liable to Tenant, nor to Tenant's
employees, agents or visitors, nor to any other person whomsoever, for any loss
or damage that may be occasioned by or through the acts or omissions of other
tenants of the Industrial Complex or of any other persons whomsoever, excepting
only duly authorized employees and agents of Landlord. Landlord shall not be
held responsible in any way on account of any construction, repair or
reconstruction (including widening) of any private or public roadways, walkways
or utility lines.
16.2 Landlord shall not be liable to Tenant or to Tenant's employees,
agents, contractors, or to any other person whomsoever, for any injury to person
or damage to property on or about the Demised Premises or the Common Area caused
by the negligence or misconduct of Tenant, its employees, agents, subtenants,
invitees, customers, licensees or concessionaires, or of any other person
entering the Industrial Complex under express or implied invitation of Tenant
(with the exception of customers in the Common Area), or arising out of the use
of the Demised Premises by Tenant and the conduct of its business therein, or
arising out of any breach or default by Tenant in the performance of its
obligations under this lease; and Tenant hereby agrees to indemnify Landlord and
hold Landlord harmless from any loss, expense or claims arising out of such
damage or injury. Furthermore, Tenant agrees to indemnify Landlord and hold
Landlord harmless from and against any and all liability, claims, demands,
causes of action of any kind and nature arising or growing out of or in any way
connected with Tenant's use, occupancy, management or control of the Demised
Premises and Tenant's operations or activities in the Industrial Complex.
11
16.3 Landlord and Tenant each hereby release the other from any and
all liability or responsibility to the other, or to any other party claiming
through or under them by way of subrogation or otherwise, for any loss or damage
to property caused by a casualty which is insurable under standard fire and
extended coverage insurance; provided, however, that this mutual waiver shall be
applicable only with respect to a loss or damage occurring during the time when
property insurance policies, which are readily available in the marketplace,
contain a clause or permit an endorsement to the effect that any such release
shall not adversely affect or impair the policy or the right of the insured
party to receive proceeds under the policy; provided, further, that this release
shall not be applicable to the portion of any damage which is not reimbursed by
the damaged party's insurer because of the "deductible" in the damaged party's
insurance coverage. The release specified in this Section 16.3 is cumulative
with any releases or exculpations which may be contained in other provisions of
this lease. Landlord and Tenant agree that all policies of insurance obtained by
them pursuant to the terms of this lease shall contain provisions or
endorsements thereto waiving the insurer's rights of subrogation with respect to
claims against the other, and, unless the policies permit waiver of subrogation
without notice to the insurer, each shall notify its insurance companies of the
existence of the waiver and indemnity provisions set forth in this lease.
ARTICLE 17.
DAMAGES BY CASUALTY
17.1 Tenant shall give immediate written notice to Landlord of any
damage caused to the Demised Premises by fire or other casualty.
17.2 In the event that the Demised Premises shall be damaged or
destroyed by fire or other casualty insurable under standard fire and extended
coverage insurance and Landlord does not elect to terminate this lease as
hereinafter provided, Landlord shall proceed with reasonable diligence and at
its sole cost and expense to rebuild and repair the Demised Premises. In the
event (a) the building in which the Demised Premises are located is destroyed or
substantially damaged by a casualty not covered by Landlord's insurance, or (b)
such building is destroyed or rendered untenantable to an extent in excess of
fifty percent (50%) of the first floor area by a casualty covered by Landlord's
insurance, or (c) the holder of a mortgage, deed of trust or other lien on such
building at the time of the casualty elects, pursuant to such mortgage, deed of
trust or other lien, to require the use of all or part of Landlord's insurance
proceeds in satisfaction of all or part of the indebtedness secured by the
mortgage, deed of trust or other lien, or (d) the Demised Premises shall be
damaged to the extent of fifty percent (50%) or more of the cost of replacement,
then Landlord may elect either to terminate this lease or to proceed to rebuild
and repair the Demised Premises. Landlord shall give written notice to Tenant of
such election within sixty (60) days after the occurrence of such casualty and,
if it elects to rebuild and repair, shall proceed to do so with reasonable
diligence and at its sole cost and expense.
17.3 Landlord's obligation to rebuild and repair under this Article 17
shall in any event be limited to restoring one of the following (as may be
applicable): (a) if this lease does not include an attached exhibit describing
Landlord's initial construction responsibility ("Landlord's Work"), restoring
the Demised Premises to substantially the condition in which the same existed
prior to such casualty, exclusive of any alterations, additions, improvements,
fixtures and equipment installed by Tenant; or (b) restoring Landlord's Work, as
described in the applicable exhibit attached to this lease (if such an exhibit
is attached), to substantially the same condition in which the same existed
prior to the casualty. Tenant agrees that promptly after completion of such work
by Landlord, Tenant will proceed with reasonable diligence and at Tenant's sole
cost and expense to restore, repair and replace all alterations, additions,
improvements, fixtures, signs and equipment installed by Tenant, and, if an
exhibit describing Tenant's Work is attached hereto, all items of Tenant's Work
as described in such exhibit.
17.4 Notwithstanding anything to the contrary in this Article 17, if
the casualty should occur during the last six (6) months of the term, and at
least fifty percent (50%) of the Demised Premises has been damaged thereby,
either party may, upon ten (10) days notice to the other party given within
fifteen (15) days of the date of the casualty, terminate this lease.
17.5 Tenant agrees that during any period of reconstruction or repair
of the Demised Premises, it will continue the operation of its business within
the Demised Premises to the extent practicable. During the period from the
occurrence of the casualty until Landlord's repairs are completed, the minimum
guaranteed rental and additional rental charges shall be proportionately reduced
hereunder.
17.6 Tenant hereby waives the provisions of California Civil Code
Sections 1932(2) and 1933(4) and the provisions of any successor or other law of
like import.
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ARTICLE 18.
EMINENT DOMAIN
18.1 If more than thirty percent (30%) of the floor area of the
Demised Premises should be taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent domain or by
private purchase in lieu thereof, this lease shall terminate and the rent shall
be abated during the unexpired portion of this lease, effective on the date
physical possession is taken by the condemning authority.
18.2 If less than thirty percent (30%) of the floor area of the
Demised Premises should be taken as aforesaid, this lease shall not terminate;
however, the minimum guaranteed rental payable hereunder during the unexpired
portion of this lease shall be reduced in proportion to the area taken,
effective on the date physical possession is taken by the condemning authority.
Following such partial taking, Landlord shall make all necessary repairs or
alterations to the remaining premises or, if an exhibit describing Landlord's
Work is attached to this lease, all necessary repairs within the scope of
Landlord's Work as described in such exhibit, as the case may be, required to
make the remaining portions of the Demised Premises an architectural whole, but
in no event shall Landlord be required to expend an amount greater than the
award actually received by Landlord in connection with such taking.
18.3 If any part of the Common Area should be taken as aforesaid, this
lease shall not terminate, nor shall the rent payable hereunder be reduced,
except that either Landlord or Tenant may terminate this lease if the area of
the Common Area remaining following such taking plus any additional parking area
provided by Landlord in reasonable proximity to the Industrial Complex shall be
less than seventy percent (70%) of the area of the Common Area immediately prior
to the taking. Any election to terminate this lease in accordance with this
provision shall be evidenced by written notice of termination delivered to the
other party within thirty (30) days after the date physical possession is taken
by the condemning authority.
18.4 All compensation awarded for any taking (or the proceeds of
private sale in lieu thereof) of the Demised Premises or Common Area shall be
the property of Landlord, and Tenant hereby assigns its interest in any such
award to Landlord; provided, however, Landlord shall have no interest in any
award made to Tenant for Tenant's moving and relocation expenses or for the loss
of Tenant's fixtures and other tangible personal property if a separate award
for such items is made to Tenant as long as such separate award does not reduce
the amount of the award that would otherwise be awarded to Landlord.
18.5 The rights contained in this Article 18 shall be Tenant's sole
and exclusive remedy in the event of a taking or condemnation. Each party waives
the provisions of Sections 1265.130 and 1265.150 of the California Code of Civil
Procedure and the provisions of any successor or other law of like import.
18.6 Notwithstanding anything to the contrary, Landlord may terminate
this lease with no further liability to Tenant if (i) fifty percent (50%) or
more of the gross leasable area of the Industrial Complex is taken or (ii) if
following any taking, Landlord's mortgagee elects to require Landlord to apply
all or a portion of such award to the outstanding indebtedness.
ARTICLE 19.
ASSIGNMENT AND SUBLETTING
19.1 Tenant shall not assign or in any manner transfer this lease or
any estate or interest therein, or sublet the Demised Premises or any part
thereof, or grant any license, concession or other right of occupancy of any
portion of the Demised Premises without the prior written consent of Landlord.
Landlord agrees that it will not withhold consent in a wholly unreasonable and
arbitrary manner (as further explained in Section 29.4 of this lease); however,
in determining whether or not to grant its consent, Landlord shall be entitled
to take into consideration factors such as Landlord's desired tenant mix, the
reputation and net worth of the proposed transferee, and the then current market
conditions (including market rentals). In addition, Landlord shall also be
entitled to charge Tenant a reasonable fee for processing Tenant's request.
Consent by Landlord to one or more assignments or sublettings shall not operate
as a waiver of Landlord's rights as to any subsequent assignments and
sublettings. In all events, Landlord can refuse to consent to an assignment or
sublease if there shall exist any uncured default of Tenant or a matter which
will become a default with the passage of time.
19.2 If Tenant is a corporation, partnership or other entity and if at
any time during the term of this lease the person or persons who own a majority
of either the outstanding voting rights or the outstanding ownership interests
of Tenant at the time of the execution of this lease cease to own a majority of
such voting rights or ownership interests (except as a result of transfers by
devise or descent), the loss of a majority of such voting rights or ownership
interests shall be deemed an assignment of this lease by Tenant and, therefore,
subject in all respects to the provisions of Section
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19.1 above. The previous sentence shall not apply, however, if at the time of
the execution of this lease, (i) Tenant is a corporation and the outstanding
voting shares of capital stock of Tenant are listed on a recognized security
exchange or over-the-counter market or (ii) Tenant is a privately held,
corporation which subsequently elects to offer shares of stock in the
corporation to the public through a "public offering". Further, any sale or
transfer of all or substantially all of the stock or assets of Tenant shall not
be deemed an assignment hereunder, provided that the successor entity expressly
assumes the obligations of Tenant hereunder in an agreement whose form and
content is satisfactory to Landlord in its sole discretion.
19.3 Notwithstanding anything to the contrary contained herein, and
without prejudice to Landlord's right to require a written assumption from each
assignee, any person or entity to whom this lease is assigned including, without
limitation, assignees pursuant to the provisions of the Bankruptcy Code, 11
U.S.C. paragraph 101, ET SEQ. (the 'Bankruptcy Code"), shall automatically be
deemed, by acceptance of such assignment or sublease or by taking actual or
constructive possession of the Demised Premises, to have assumed all obligations
of Tenant arising under this lease effective as of the earlier of the date of
such assignment or sublease or the date on which the assignee or sublessee
obtains possession of the Demised Premises. In the event this lease is assigned
to any person or entity pursuant to the provisions of the Bankruptcy Code, any
and all monies or other consideration payable or otherwise to be delivered in
connection with such assignment shall be paid or delivered to Landlord and shall
remain the exclusive property of Landlord and not Constitute the property of
Tenant or Tenant's estate within the meaning of the Bankruptcy Code. All such
money or other consideration not paid or delivered to Landlord shall be held in
trust for the benefit of Landlord and shall be promptly paid or delivered to
Landlord.
19.4 Notwithstanding any assignment or subletting, Tenant and any
guarantor of Tenant's obligations under this lease shall at all times remain
fully responsible and liable for the payment of the rent herein specified and
for compliance with all of its other obligations under this lease (even if
future assignments and sublettings occur subsequent to the assignment or
subletting by Tenant, and regardless of whether or not Tenant's approval has
been obtained for such future assignments and sublettings). Moreover, in the
event that the rental due and payable by a sublessee (or a combination of the
rental payable under such sublease plus any bonus or other consideration
therefor or incident thereto) exceeds the rental payable under this lease, or if
with respect to a permitted assignment, permitted license or other transfer by
Tenant permitted by Landlord, the consideration payable to Tenant by the
assignee, licensee or other transferee exceeds the rental payable under this
lease, then Tenant shall be bound and obligated to pay Landlord fifty percent
(50%) of all such excess rental and other excess consideration within ten (10)
days following receipt thereof by Tenant from such sublessee, assignee, licensee
or other transferee, as the case may be. Finally, in the event of an assignment
or subletting, it is understood and agreed that all rentals paid to Tenant by an
assignee or sublessee (other than the fifty percent (50%) of excess rental or
other consideration resulting from such assignment or sublease) shall be
received by Tenant in trust for Landlord, to be forwarded immediately to
Landlord without offset or reduction of any kind; and upon election by Landlord
such rentals shall be paid directly to Landlord as specified in Section 4.2 of
this lease (to be applied as a credit and offset to Tenant's rental obligation).
19.5 Tenant shall not mortgage, pledge or otherwise encumber its
interest in this lease or in the Demised Premises;
19.6 In the event of the transfer and assignment by Landlord of its
Interest in this lease and in the building containing the Demised Premises to a
person expressly assuming Landlord's obligations under this lease, Landlord
shall thereby be released from any further obligations hereunder, and Tenant
agrees to look solely to such successor in interest of the Landlord for
performance of such obligations. Any security given by Tenant to secure
performance of Tenant's obligations hereunder may be assigned and transferred by
Landlord to such successor in interest and Landlord shall thereby be discharged
of any further obligation relating thereto.
19.7 Notwithstanding anything to the contrary contained herein,
Landlord shall have the option, in its sole discretion, in the event of any
proposed subletting or assignment, to terminate this Lease, or in the case of a
proposed subletting of less than the entire Demised Premises for substantially
all of the remaining term of this lease, to recapture the portion of the Demised
Premises to be sublet, as of the date the subletting or assignment is to be
effective. The option shall be exercised by Landlord giving Tenant written
notice ("Landlord's Recapture Notice") within twenty (20) days following
Landlord's receipt of Tenant's written notice as required above. If this Lease
shall be terminated with respect to the entire Demised Premises, the Term shall
end on the date stated in Tenant's notice as the effective date of the sublease
or assignment as if that date had been originally fixed in this Lease for the
expiration of the Term. If Landlord recaptures only a portion of the Demised
Premises, the minimum guaranteed rental during the unexpired Term shall xxxxx,
proportionately, based on the minimum guaranteed rental due as of the date
immediately prior to such recapture. Notwithstanding the foregoing, Tenant shall
have the right to withdraw its request to assign or sublet within three (3)
business days of delivery of Landlord's
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Recapture Notice, in which event, this Lease shall continue unaffected and
Landlord's Recapture Notice shall be null and void.
19.8 Tenant hereby waives any suretyship defenses it may now or
hereafter have to an action brought by Landlord including those contained in
Sections 2787 through 2856, Inclusive, 2899 and 3433 of the California Civil
Code, as now or hereafter amended, or similar laws of like import.
ARTICLE 20.
SUBORDINATION; ATTORNMENT; ESTOPPELS
20.1 Tenant accepts this lease subject and subordinate to any
mortgage, deed of trust or other lien presently existing upon the Industrial
Complex or any portion of the Industrial Complex which includes the Demised
Premises, and to any renewals, modifications and extensions thereof and this
subordination shall be self operative and no further instrument of
subordination is needed. Tenant agrees that any mortgagee shall have the
right at any time to subordinate its mortgage, deed of trust or other lien to
this lease; provided, however, notwithstanding that this lease may be (or is
made to be) superior to a mortgage, deed of trust or other lien, the
mortgagee shall not be liable for prepaid rentals, security deposits and
claims accruing during or with respect to Landlord's ownership, any amendment
or modification made to this lease without its prior written consent or any
offsets or claims against Landlord; further provided that the provisions of a
mortgage, deed of trust or other lien relative to the right of the mortgagee
with respect to proceeds arising from an eminent domain taking (including a
voluntary conveyance by Landlord) and provisions relative to proceeds arising
from insurance payable by reason of damage to or destruction of the Demised
Premises shall be prior and superior to any contrary provisions contained in
this instrument with respect to the payment or usage thereof. Landlord shall
have the right to require Tenant to subordinate this lease to any mortgage,
deed of trust or other lien hereafter placed upon the Demised Premises or the
Industrial Complex as a whole, and Tenant agrees upon demand to execute an
instrument subordinating this lease as Landlord may request; provided,
however, that Tenant's obligation to execute such a subordination (and
attornment) instrument shall be conditioned on Tenant's receipt from the
lender of a nondisturbance agreement in the form typically utilized by such
lender. If the holder of any mortgage, indenture or deed of trust or similar
instrument (each a "Mortgagee") succeeds to Landlord's interest in the
Demised Premises, Tenant shall, upon request of any such Mortgagee,
automatically become the tenant of and attorn to and recognize such Mortgagee
as the landlord under this lease and will pay to it all rents and other
amounts payable by Tenant under this lease, in accordance with the applicable
terms of this lease.
20.2 Tenant may not exercise any remedies for default by Landlord
hereunder unless and until Landlord and the holder(s) of any indebtedness
secured by mortgage, deed of trust or other lien on the Demised Premises shall
have received written notice of such default and a reasonable time (not less
than 45 days) shall thereafter have elapsed without the default having been
cured.
20.3 Tenant agrees that it will from time to time upon request by
Landlord execute and deliver to Landlord a written statement addressed to
Landlord (and to a party[ies] designated by Landlord), which statement shall
identify Tenant and this lease, shall certify that this lease is unmodified and
in full force and effect (or if there have been modifications, that the same is
in full force and effect as so modified), shall confirm that Landlord is not in
default as to any obligations of Landlord under this lease (or if Landlord is in
default, specifying any default), shall confirm Tenant's agreements contained
above in this Article 20, and shall contain such other information or
confirmations as Landlord may reasonably require. Landlord is hereby irrevocably
appointed and authorized as the agent and attorney-in-fact of Tenant to execute
and deliver any such written statement on Tenant's behalf if Tenant fails to do
so within seven (7) days after the delivery of a written request from Landlord
to Tenant.
ARTICLE 21.
TENANT'S INDEMNIFICATION
21.1 Tenant shall indemnify, defend and hold harmless Landlord,
Landlord's asset manager, Landlord's subasset manager, Landlord's partners, any
subsidiary or affiliate of Landlord and the officers, directors, shareholders,
partners, employees, managers, independent contractors, attorneys and agents of
any of the foregoing (collectively, the "lndemnitees") from and against any and
all claims, demands, causes of action, judgments, costs and expenses, and all
losses and damages (including consequential and punitive damages) arising from
Tenant's use of the Demised Premises or from the conduct of its business or from
any activity, work, or other acts or things done, permitted or suffered by
Tenant in or about the Demised Premises, and shall further indemnify, defend and
hold harmless the Indemnitees from and against any and all claims arising from
any breach or default in the performance of any obligation on Tenant's part to
be performed under the terms of this lease, or arising from any act, omission or
negligence or willful or criminal misconduct of Tenant, or any officer, agent,
employee, independent contractor, guest, or invitee thereof, and from all costs,
attorneys' fees and disbursements,
15
and liabilities incurred in the defense of any such claim or any action or
proceeding which may be brought against, out of or in any way related to this
lease, except, in each Instance, to the extent caused by the gross negligence or
willful misconduct of Landlord. Upon notice from Landlord, Tenant shall defend
any such claim, demand, cause of action or suit at Tenant's expertise by counsel
satisfactory to Landlord in its sole discretion. As a material part of the
consideration to Landlord for this lease, Tenant hereby assumes all risk of
damage to property or injury to persons in, upon or about the Demised Premises
from any cause, except to the extent caused by the gross negligence or willful
misconduct of Landlord, and Tenant hereby waives all claims with respect thereto
against Landlord. Tenant shall give immediate notice to Landlord in case of
casualty or accidents in the Demised Premises. The provisions of this Article 21
shall survive the expiration or sooner termination of this lease.
21.2 All personal property of Tenant, including goods, wares,
merchandise, inventory, trade fixtures and other personal property of Tenant,
shall be stored at the sole risk of Tenant. Landlord or its agents shall not
be liable for any loss or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water or rain which may
leak from any part of the Industrial Complex or from the pipes, appliances or
plumbing works therein or from the roof, street or subsurface or from any
other places resulting from dampness or any other cause whatsoever, or from
the act or negligence of any other tenant or any officer, agent, employee,
contractor or guest of any such tenant, except personal injury caused by or
due to the gross negligence or willful misconduct of Landlord. Landlord or
its agents shall not be liable for interference with the electrical service,
ventilation, or for any latent defect in the Demised Premises.
21.3 The parties hereto acknowledge that all or a part of the Demised
Premises may be used for the storage and shipment of goods not owned by Tenant,
and Landlord is not willing to enter into this lease unless Tenant indemnifies
the Indemnitees to Landlord's satisfaction from any liability on the part of the
Indemnitees to the owner(s) of such goods for damage to the same arising out of
any acts or omissions of the Indemnitees. As a material inducement to Landlord
to enter into this lease, Tenant agrees to defend, indemnify and hold the
Indemnitees harmless from and against any and all losses, claims, liabilities,
obligations and damages imposed upon or incurred or asserted against the
Indemnitees by reason of damage to goods of persons storing such goods with
Tenant, notwithstanding the fact that such losses, claims, liabilities,
obligations or damages may have been caused by the acts or omissions of
Landlord, except to the extent caused by the gross negligence or willful
misconduct of Landlord. Tenant agrees that at all times during which it shall
store goods not owned by it in the Demised Premises, it shall insure the
indemnity described under this Section 21.3 in a manner reasonably satisfactory
to Landlord. Landlord shall not be deemed a bailee, consignee, or warehouseman
(or responsible for the standard of care incidental thereto) with respect to any
goods stored or shipped to or from the Demised Premises for consignment or
bailment and Tenant shall insert a clause to that effect in all warehouse
receipts or consignment agreements for the storage or shipment of goods to or
from the Demised Premises.
ARTICLE 22.
DEFAULT BY TENANT AND REMEDIES
22.1 The following events shall be deemed to be events of default by
Tenant under this lease:
(a) Tenant shall fail to pay any installment of rental or any
other obligation under this lease involving the payment of money and such
failure shall continue for a period of ten (10) days after such payment shall
become due and payable after written notice thereof to Tenant; provided,
however, that for each calendar year during which Landlord has already given
Tenant one (1) written notice of the failure to pay an installment of rental, no
further notice shall be required (i.e., the event of default will automatically
occur on the tenth (10th) day after the day upon which the rental was due; and
provided further that any such notice shall be in lieu of, and not in addition
to, any notice required under Section 1161, ET SEQ., of the California Code of
Civil Procedure).
(b) Tenant shall fail to comply with any provision of this
lease, other than as described in subsection (a) above, and either shall not
cure such failure within fifteen (15) days after written notice thereof to
Tenant, or shall cure that particular failure but shall again fail to comply
with the same provision of this lease within three (3) months after Landlord's
written notice; provided, however, that any such notice shall be in lieu of, and
not in addition to, any notice required under Section 1161 ET SEQ. of the
California Code of Civil Procedure; provided further, however, that if the
noticed failure cannot reasonably be cured within fifteen (15) days, Tenant
shall not be deemed in default hereunder if Tenant commences to cure the default
within such fifteen (15) day period, and thereafter diligently prosecutes such
cure to completion.
(c) Tenant or any guarantor of Tenant's obligations under
this lease shall become insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.
16
(d) Tenant or any guarantor of Tenant's obligations under
this lease shall file a petition under any section or chapter of the federal
Bankruptcy Code, as amended, or under any similar law or statue of the United
States or any state thereof; or Tenant or any guarantor of Tenant's obligations
under this lease shall be adjudged bankrupt or insolvent in proceedings filed
against Tenant or any guarantor of Tenant's obligations under this lease
thereunder.
(e) A receiver or Trustee shall be appointed for the Demised
Premises or for all or substantially all of the assets of Tenant or any
guarantor of Tenant's obligations under this lease.
(f) Tenant shall desert or vacate or shall commence to desert
or vacate the Demised Premises or any substantial portion of the Demised
Premises or at any time prior to the last month of the lease term shall remove
or attempt to remove, without the prior written consent of Landlord, all or a
substantial amount of Tenant's goods, wares, equipment, fixtures, furniture, or
other personal property.
(g) Tenant shall do or permit to be done anything which
creates a lien upon the Demised Premises or upon all or any part of the
Industrial Complex.
(h) Any transfer of a substantial portion of the assets of
Tenant, or any incurrence of a material obligation by Tenant, unless such
transfer or obligation is undertaken or incurred in the ordinary course of
Tenant's business or in good faith for equivalent consideration, or with
Landlord's consent.
(i) The default of any guarantors of Tenant's obligations
hereunder under any guaranty of this Lease, or the attempted repudiation or
revocation of any such guaranty.
22.2 Upon the occurrence of any such event of default, Landlord shall
have the option to pursue any one or more of the following remedies to the
extent permitted by law:
(a) Without any further notice or demand whatsoever, Tenant
shall be obligated to reimburse Landlord for the damages suffered by Landlord as
a result of the event of default, plus interest on such amount at the maximum
contractual rate which could legally be charged in the event of a loan of such
amount to Tenant (but in no event to exceed 1-1/2% per month); and Landlord may
pursue a monetary recovery from Tenant.
(b) Without any further notice or demand whatsoever,
Landlord may take any one or more of the actions permissible at law to insure
performance by Tenant of Tenant's covenants and obligations under this lease.
In this regard, and without limiting the generality of the immediately
preceding sentence, it is agreed that if Tenant fails to open for business as
required in this lease or, having opened for business, deserts or vacates the
Demised Premises, Landlord may enter upon and take possession of such
premises in order to protect them from deterioration and continue to demand
from Tenant the monthly rentals and other charges provided in this lease,
without any obligation to relet; however, if Landlord does, at its sole
discretion, elect to relet the Demised Premises, such action by Landlord
shall not be deemed as an acceptance of Tenant's surrender of the Demised
Premises unless Landlord expressly notifies Tenant of such acceptance in
writing pursuant to this subsection (b), Tenant hereby acknowledging that
Landlord shall otherwise be reletting as Tenant's agent and Tenant
furthermore hereby agreeing to pay to Landlord on demand any deficiency that
may arise between the monthly rentals and other charges provided in this
lease and that actually collected by Landlord. In the event that Landlord
shall elect to relet, then rentals received by Landlord from such reletting
shall be applied: first, to the payment of any indebtedness (other than rent)
due hereunder from Tenant to Landlord; second, to the payment of any cost of
such reletting (including brokerage commissions); third, to the payment of
the cost of any alterations and repairs to the Demised Premises; fourth, to
the payment of rent due and unpaid hereunder; and the residue, if any, shall
be held by Landlord and applied in payment of future rent as the same may
become due and payable hereunder. Should reletting, during any month to which
such rent is applied, result in the actual payment of rentals at less than
the rent payable during that month by Tenant hereunder, then Tenant shall pay
such deficiency to Landlord immediately upon demand therefor by Landlord.
Such deficiency shall be calculated and paid monthly. Tenant shall also pay
to Landlord as soon as ascertained, any costs and expenses incurred by
Landlord in such reletting or in making such alterations and repairs not
covered by the rentals received from such reletting. Finally, it is agreed
that in the event of any default described in subsection (g) of Section 22.1
of this lease, Landlord may pay or bond around such lien, whether or not
contested by Tenant; and in such event Tenant agrees to reimburse Landlord on
demand for all costs and expenses incurred in connection with any such
action, with Tenant further agreeing that Landlord shall in no event be
liable for any damages or claims resulting from such action. No action or
inaction by Landlord including, without limitation, the re-entry or taking of
possession of the Demised Premises by Landlord pursuant to this Section
22.2(b) shall be construed as an election to terminate this lease or as
interference with Tenant's rights of possession, assignment or subletting
unless a written notice of such election shall be given to Tenant or unless
the termination thereof be decreed by a court of competent jurisdiction.
17
Notwithstanding any reletting without termination by Landlord, Landlord may, at
any time after such reletting, elect to terminate this lease for any such
default.
(c) Landlord may terminate this lease by written notice to
Tenant, in which event Tenant shall immediately surrender the Demised Premises
to Landlord. In the event that Landlord shall elect to so terminate this lease,
then Landlord may recover from Tenant:
(i) The worth at the time of award of any unpaid rent
which had been earned at the time of such termination; plus
(ii) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such
rental loss Tenant proves reasonably could have been avoided;
plus
(iii) The worth at the time of award of the amount by
which the unpaid rent for the balance of the Term after the time
of award exceeds the amount of such rental loss that Tenant
proves reasonably could be avoided; plus
(iv) Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant's failure to
perform its obligations under this lease or which in the ordinary
course would be likely to result therefrom, plus
(v) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from
time to time by applicable California law.
As used in subparagraphs (i) and (ii) above, the "worth at the
time of award" is computed by allowing interest at the maximum
rate permitted by law. As used in subparagraph (iii) above, the
"worth at the time of award" is computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
Forbearance by Landlord to enforce one or more of the remedies herein provided
upon an event of default shall not be deemed or construed to constitute a waiver
of such default. Tenant hereby waives for Tenant and for all those claiming
under Tenant all right now or hereafter existing to redeem by order or judgment
of any court or by any legal process or writ, Tenant's right of occupancy of the
Demised Premises after any termination of this lease.
(d) In addition to all other rights and remedies provided
Landlord in this lease and by law, Landlord shall have the remedy described in
California Civil Code Section 1951.4 (Landlord may continue the lease in effect
after Tenant's breach and abandonment and recover rent as it becomes due if
Tenant has the right to sublet or assign the lease, subject to reasonable
limitations).
22.3 It is expressly agreed that in determining "the unpaid rent" as
that term is used throughout subsections 22.2(c)(i) and 22.2(c)(ii) above, there
shall be added to the minimum guaranteed rental (as specified in Sections 1.1(l)
and 4.1 of this lease) a sum equal to the charges for maintenance of the Common
Area (as specified in Section 7.4 of this lease), and the payments for taxes,
charges and insurance (as specified in Article 6 of this lease).
22.4 It is further agreed that, in addition to payments required
pursuant to subsections 22.2(b) and 22.2(c) above, Tenant shall compensate
Landlord for all expenses incurred by Landlord in repossession (including, among
other expenses, any increase in insurance premiums caused by the vacancy of the
Demised Premises), all expenses incurred by Landlord in reletting (including,
among other expenses, repairs, remodeling, replacements, advertisements and
brokerage fees), all concessions granted to a new tenant upon reletting
(including, among other concessions, renewal options), all losses incurred by
Landlord as a direct or indirect result of Tenant's default (including, among
other losses, any adverse reaction by Landlord's mortgagee or by other tenants
or potential tenants of the Industrial Complex) and a reasonable allowance for
Landlord's administrative efforts, salaries and overhead attributable directly
or indirectly to Tenant's default and Landlord's pursuing the rights and
remedies provided herein and under applicable law.
22.5 Landlord may restrain or enjoin any breach or threatened breach
of any covenant, duty or obligation of Tenant herein contained without the
necessity of proving the inadequacy of any legal remedy or irreparable harm. The
remedies of Landlord hereunder shall be deemed cumulative and not exclusive of
each other.
22.6 If on account of any breach or default by Tenant in its
obligations hereunder, Landlord shall employ an attorney to present, enforce or
defend any of Landlord's rights or remedies hereunder, Tenant agrees to pay any
reasonable attorneys' fees incurred by Landlord in such connection.
18
22.7 Tenant acknowledges its obligation to deposit with Landlord the
sum stated in Section 1.1(n) above, to be held by Landlord without interest as
security for the performance by Tenant of Tenant's covenants and obligations
under this lease. Tenant agrees that such deposit may be commingled with
Landlord's other funds and that such security deposit is not an advance payment
of rental or a measure of Landlord's damages in case of default by Tenant. Upon
the occurrence of any event of default by Tenant, Landlord may, from time to
time, without prejudice to any other remedy provided herein or provided by law,
use such funds to the extent necessary to make good any arrears of rentals and
any other damage, injury, expense or liability caused to Landlord by such event
of default, and Tenant shall pay to Landlord on demand the amount so applied in
order to restore the security deposit to its original amount. If Tenant is not
then in default hereunder, any remaining balance of such security deposit shall
be returned by Landlord to Tenant within thirty (30) days of termination of this
lease and Tenant's vacating of the Demised Premises (subject to the provisions
of Section 19.6 above).
22.8 (a) In the event of any default described in subsection (d)
of Section 22.1 of this lease, any assumption and assignment must conform with
the requirements of the Bankruptcy Code and, in order to provide Landlord with
the assurances contemplated by the Bankruptcy Code, Tenant must fulfill the
following obligations, in addition to any other reasonable obligations that
Landlord may require, before any assumption of this lease is effective: (i) all
defaults under subsection (a) of Section 22.1 of this lease must be cured within
ten (10) days after the date of assumption; (ii) all other defaults under
Section 22.1 of this lease other than under subsection (d) of Section 22.1 must
be cured within fifteen (15) days after the date of assumption; (iii) all actual
monetary losses incurred by Landlord (including, but not limited to, reasonable
attorneys' fees) must be paid to Landlord within ten (10) days after the date of
assumption; and (iv) Landlord must receive within ten (10) days after the date
of assumption a security deposit in the amount of six (6) months minimum
guaranteed rent (using the minimum guaranteed rent in effect for the first full
month immediately following the assumption) and an advance prepayment of minimum
guaranteed rent in the amount of three (3) months minimum guaranteed rent (using
the minimum guaranteed rent in effect for the first full month immediately
following the assumption), both sums to be held by Landlord in accordance with
Section 22.7 above and deemed to be rent under this lease for the purposes of
the Bankruptcy Code as amended and from time to time in effect.
(b) In the event this lease is assumed in accordance with the
requirements of the Bankruptcy Code and this lease, and is subsequently
assigned, then, in addition to any other reasonable obligations that Landlord
may require and in order to provide Landlord with the assurances contemplated by
the Bankruptcy Code, Landlord shall be provided with (i) a financial statement
of the proposed assignee prepared in accordance with generally accepted
accounting principles consistently applied, though on a cash basis, which
reveals a net worth in an amount sufficient, in Landlord's reasonable judgment,
to assure the future performance by the proposed assignee of Tenant's
obligations under this lease; or (ii) a written guaranty by one or more
guarantors with financial ability sufficient to assure the future performance of
Tenant's obligations under this lease, such guaranty to be in form and content
satisfactory to Landlord and to cover the performance of all of Tenant's
obligations under this lease.
ARTICLE 23.
[INTENTIONALLY OMITTED]
ARTICLE 24.
HOLDING OVER
24.1 In the event Tenant remains in possession of the Demised Premises
after the expiration of this lease and without the execution of a new lease or
an amendment hereto, it shall be deemed to be occupying said premises as a
tenant from month to month at a rental equal to the rental herein provided plus
(i) fifty percent (50%) of such amount for the first ninety (90) days of the
holdover period and (ii) one hundred percent (100%) of such amount thereafter,
and otherwise subject to all the conditions, provisions and obligations of this
lease insofar as the same are applicable to a month-to-month tenancy. Neither
any provision hereof nor acceptance by Landlord of rent after such expiration or
earlier termination shall be deemed a consent to a holdover hereunder or result
in a renewal of this lease or an extension of the Term. Notwithstanding any
provision to the contrary contained herein, (i) Landlord expressly reserves the
right to require Tenant to surrender possession of the Demised Premises upon the
expiration of the Term of this lease or upon the earlier termination hereof, the
right to reenter the Demised Premises, and the right to assert any remedy at law
or in equity to evict Tenant and collect damages in connection with any such
holding over, and (ii) Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all claims, demands, actions, losses, damages,
obligations, costs and expenses, including, without limitation, attorneys' fees
incurred or suffered by Landlord by reason of Tenant's failure to surrender the
Demised Premises on the expiration or earlier termination of this Lease in
accordance with the provisions of this lease.
19
ARTICLE 25.
NOTICES
25.1 Wherever any notice is required or permitted hereunder, such
notice shall be in writing. Any notice or document required or permitted to be
delivered hereunder shall be deemed to be delivered when actually received by
the designated addressee or, if earlier and regardless of whether actually
received or not, when deposited in the United States mail, postage prepaid,
certified mail, return receipt requested, addressed to the parties hereto at the
respective addresses set out in Section 1.1 above (or at Landlord's option, to
Tenant at the Demised Premises), or at such other addresses as they have
theretofore specified by written notice. Copies of all notices to Tenant shall
concurrently be delivered to Xxxxxx X. Jacob, Thoits, Love, Xxxxxxxxxxx &
XxXxxx, 000 Xxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000.
25.2 If and when included within the term "Landlord" as used in this
instrument there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such notice
specifying some individual at some specific address for the receipt of notices
and payments to the Landlord; if and when included within the term "Tenant" as
used in this instrument there are more than one person, firm or corporation, all
shall jointly arrange among themselves for their joint execution of such a
notice specifying some individual at some specific address for the receipt of
notices and payment to Tenant. All parties included within the terms "Landlord"
and "Tenant," respectively, shall be bound by notice and payments given in
accordance with the provisions of this Article to the same effect as if each had
received such notice or payment. In addition, Tenant agrees that actions by
Landlord and notices to Tenant hereunder may be taken or given by Agent,
Landlord's attorney, or any other property manager or agent.
25.3 A copy of any notice or document required or permitted to be
delivered hereunder to Landlord shall simultaneously be delivered to Agent.
ARTICLE 26.
COMMISSIONS
26.1 Tenant and Landlord warrant that they have had no dealings with
any broker or agent in connection with this lease, other than Agent and Tenant's
Broker. Landlord shall be responsible for the payment of a commission to Agent
pursuant to a separate agreement between Landlord and Agent. Landlord and Tenant
covenant to pay, hold harmless and indemnify each other from and against any and
all cost, expense or liability for any compensation, commissions or charges
claimed by any other broker or agent utilized by the indemnitor with respect to
this lease or the negotiation hereof.
ARTICLE 27.
REGULATIONS
27.1 Landlord and Tenant acknowledge that there are now in effect and
may hereafter be enacted or go into effect federal, state, county and municipal
laws, orders, rules, directives and regulations relating to or affecting the
Demised Premises or the Industrial Complex, concerning the impact on the
environment of construction, land use, maintenance and operation of structures,
toxic or otherwise hazardous substances, and the conduct of business, including,
without limitation, the Americans With Disabilities Act of 1990 and the Clean
Air Act and regulations issued thereunder (all of the foregoing, as amended from
time to time, being herein called the "Regulations"). Tenant will not cause or
permit to be caused, any act or practice, by negligence, omission or otherwise,
that would adversely affect the environment or do anything or permit anything to
be done that would violate any of said Regulations. Moreover, Tenant shall have
no claim against Landlord by reason of any changes Landlord may make in the
Industrial Complex or the Demised Premises pursuant to said Regulations or any
charges imposed upon Tenant, Tenant's customers or other invitees pursuant to
same.
27.2 If, by reason of any Regulations, the payment to, or collection
by, Landlord of any rental or other charge (collectively referred to hereinafter
as "Lease Payments") payable by Tenant to Landlord pursuant to the provisions of
this lease is in excess of the amount (the "Maximum Charge") permitted thereof
by the Regulations, then Tenant, during the period (the "Freeze Period") when
the Regulations shall be in force and effect shall not be required to pay, nor
shall Landlord be permitted to collect, any sum in excess of the Maximum Charge.
Upon the earlier of (i) the expiration of the Freeze Period, or (ii) the
issuance of a final order or judgment of a court of competent jurisdiction
declaring the Regulations to be invalid or not applicable to the provisions of
this lease, Tenant, to the extent not then proscribed by law, and commencing
with the first day of the month immediately following, shall pay to Landlord as
additional rental, in equal monthly installments during the balance of the term
of this lease, a sum equal to the cumulative difference between the Maximum
Charges and the Lease Payments during the Freeze
20
Period. If any provisions of this Section, or the application thereof, shall to
any extent be declared to be invalid and unenforceable, the same shall not be
deemed to affect any of the other provisions of this section or of this lease,
all of which shall be deemed valid and enforceable to the fullest extent
permitted by law.
27.3 Tenant acknowledges that it will be wholly responsible for any
accommodations or alterations which need to be made to the Demised Premises to
accommodate disabled employees and customers of Tenant, including without
limitation, the requirements under the Americans with Disabilities Act and any
equivalent California law. Any alterations made to the Demised Premises in order
to comply with either statute must be made solely at Tenant's expense and in
compliance with all terms and requirements of this lease. Landlord agrees to
make reasonable efforts to ensure that the Common Area is in compliance with the
applicable disability access laws as of the date hereof. If a complaint is
received by Landlord from either a private or government source regarding
disability access to the Common Area of the Industrial Complex, Landlord
reserves the right to mediate, contest, comply with or otherwise respond to such
complaint as Landlord deems to be reasonably prudent under the circumstances. If
Landlord decides to make alterations to the Common Area of the Industrial
Complex in response to any such complaints or in response to legal requirements
Landlord considers to be applicable to the Common Area of the Industrial
Complex, the cost of such alterations shall be included in the Common Area
maintenance charge under this lease. Landlord and Tenant agree that so long as
the governmental entity or entities charged with enforcing such statutes have
not expressly required Landlord to take specific action to effectuate compliance
with such statutes, Landlord shall be conclusively deemed to be in compliance
with such statutes. Tenant agrees to provide Landlord with written notice should
Tenant become aware of a violation of such statutes with respect to the Common
Area. In the event either Landlord or Tenant is required to take action to
effectuate compliance with such statutes, Landlord or Tenant, as applicable,
shall have a reasonable period of time to make the improvements and alterations
necessary to effectuate such compliance, hich period of time shall be extended
by any time necessary to cause, any necessary improvements and alterations to be
made.
ARTICLE 28.
HAZARDOUS MATERIALS
28.1 During the term of this lease, Tenant shall comply with all
Environmental Laws and Environmental Permits (each as defined in Section 28.7
hereof) applicable to the operation or use of the Demised Premises, will cause
all other persons occupying or using the Demised Premises to comply with all
such Environmental Laws and Environmental Permits, will immediately pay or cause
to be paid all costs and expenses incurred by reason of such compliance, and
will obtain and renew all Environmental Permits required for operation or use of
the Demised Premises.
28.2 Tenant shall not generate, use, treat, store, handle, release or
dispose of, or permit the generation, use, treatment, storage, handling, release
or disposal of Hazardous Materials (as defined in Section 28.7 hereof) on the
Demised Premises, or the Industrial Complex, or transport or permit the
transportation of Hazardous Materials to or from the Demised Premises or the
Industrial Complex except for limited quantities used or stored at the Demised
Premises and required in connection with the routine operation and maintenance
of the Demised Premises, and then only upon the written consent of Landlord and
in compliance with all applicable Environmental Laws and Environmental Permits.
28.3 At any time and from time to time during the term of this lease,
Landlord may perform, at Tenant's sole cost and expense, an environmental site
assessment report concerning the Demised Premises, prepared by an environmental
consulting firm chosen by Landlord, indicating the presence or absence of
Hazardous Materials caused or permitted by Tenant and the potential cost of any
compliance, removal or remedial action in connection with any such Hazardous
Materials on the Demised Premises. Tenant shall grant and hereby grants to
Landlord and its agents access to the Demised Premises and specifically grants
Landlord an irrevocable non-exclusive license to undertake such an assessment;
and the cost of such assessment shall be immediately due and payable on demand.
28.4 Tenant will immediately advise Landlord in writing of any of the
following: (1) any pending or threatened Environmental Claim (as defined in
section 28.7 hereof) against Tenant relating to the Demised Premises or the
Industrial Complex; (2) any condition or occurrence on the Demised Premises or
the Industrial Complex that (a) results in noncompliance by Tenant with any
applicable Environmental Law, or (b) could reasonably be anticipated to form the
basis of an Environmental Claim against Tenant or Landlord or the Demised
Premises; (3) any condition or occurrence on the Demised Premises or any
property adjoining the Demised Premises that could reasonably be anticipated to
cause the Demised Premises to be subject to any restrictions on the ownership,
occupancy, use or transferability of the Demised Premises under any
Environmental Law; and (4) the actual or anticipated taking of any removal or
remedial action by Tenant in response to the actual or alleged presence of any
Hazardous Material on the Demised Premises or the Industrial Complex. All such
notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Tenant's
21
response thereto. In addition, Tenant will provide Landlord with copies of all
communications regarding the Demised Premises with any government or
governmental agency relating to Environmental Laws, all such communications with
any person relating to Environmental Claims, and such detailed reports of any
such. Environmental Claim as may reasonably be requested by Landlord.
28.5 Tenant will not change or permit to be changed the present use of
the Demised Premises unless Tenant shall have notified Landlord thereof in
writing and Landlord shall have determined, in its sole and absolute discretion,
that such change will not result in the presence of Hazardous Materials on the
Demised Premises except for those described in Section 28.2 above.
28.6 (a) Tenant agrees to defend, indemnify and hold harmless the
Indemnitees (as defined in Section 21.1) from and against all obligations
(including removal and remedial actions), losses, claims, suits, judgments,
liabilities, penalties, damages (including consequential and punitive damages),
costs and expenses (including attorneys' and consultants' fees and expenses) of
any kind or nature whatsoever that may at any time be incurred by, imposed on or
asserted against such Indemnitees directly or indirectly based on, or arising or
resulting from (a) the actual or alleged presence of Hazardous Materials on the
Industrial Complex which is caused or permitted by Tenant and (b) any
Environmental Claim relating in any way to Tenant's operation or use of the
Demised Premises (the "Hazardous Materials Indemnified Matters"). The provisions
of this Article 28 shall survive the expiration or sooner termination of this
lease.
(b) To the extent that the undertaking in the preceding
paragraph may be unenforceable because it is violative of any law or public
policy, Tenant will contribute the maximum portion that it is permitted to pay
and satisfy under applicable law to the payment and satisfaction of all
Hazardous Materials Indemnified Matters incurred by the Indemnitees.
(c) All sums paid and costs incurred by Landlord with respect
to any Hazardous Materials Indemnified Matter shall bear interest at the lesser
of (i) eighteen (18%) percent per annum, or (ii) the maximum legal rate of
interest allowed in the State of California, from the date so paid or incurred
until reimbursed by Tenant, and all such sums and costs shall be immediately due
and payable on demand.
28.7 (a) "Hazardous Materials" means (i) petroleum or petroleum
products, natural or synthetic gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, and radon gas; (ii) any substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "extremely hazardous wastes," "restricted
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (iii) any other substance exposure which is regulated by any
governmental authority; (b) "Environmental Law" means any federal, state or
local statute, law, rule, regulation, ordinance, code, policy or rule of common
law now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, relating to the environment, health, safety
or Hazardous Materials, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C.
Sections 9601 ET SEQ.; the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901 ET SEQ.; the Hazardous Materials Transportation Act, 49 U.S.C.
Sections 1801 ET SEQ.; the Clean Water Act, 33 U.S.C. Sections 1251 ET SEQ.; the
Toxic Substances Control Act, 15 U.S.C. Sections 2601 ET SEQ.; the Clean Air
Act, 42 U.S.C. Sections 7401 ET SEQ.; the Safe Drinking Water Act, 42 U.S.C.
Sections 300f ET SEQ.; the Atomic Energy Act, 42 U.S.C. Sections 2011 ET SEQ.;
the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 ET
SEQ.; the Occupational Safety and Health Act, 29 U.S.C. Sections 651 ET SEQ.;
(c) "Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations, proceedings, consent orders or
consent agreements relating in any way to any Environmental Law or any
Environmental Permit, including without limitation (i) any and all Environmental
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Environmental Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment;
(d) "Environmental Permits" means all permits, approvals, identification
numbers, licenses and other authorizations required under any applicable
Environmental Law.
28.8 Landlord hereby represents to its actual knowledge without
investigation that there are no Hazardous Materials in the Demised Premises in
violation of any applicable Environmental Law.
22
ARTICLE 29.
MISCELLANEOUS
29.1 Nothing in this lease shall be deemed or construed by the parties
hereto, nor by any third party, as creating the relationship of principal and
agent or of partnership or of joint venture between the parties hereto, it being
understood and agreed that neither the method of computation of rent, nor any
other provision contained herein, nor any acts of the parties hereto, shall be
deemed to create any relationship between the parties hereto other than the
relationship of landlord and tenant.
29.2 Tenant shall not for any xxxxx withhold or reduce Tenant's
required payments of rentals and other charges provided in this lease, it being
agreed that the obligations of Landlord under this lease are independent of
Tenant's obligations except as may be otherwise expressly provided. The
immediately preceding sentence shall not be deemed to deny Tenant the ability of
pursuing all rights granted it under this lease or at law; however, at the
direction of Landlord, Tenant's claims in this regard shall be litigated in
proceedings different from any litigation involving rental claims or other
claims by Landlord against Tenant (i.e., each party may proceed to a separate
judgment without consideration, counterclaim or offset as to the claims asserted
by the other party).
29.3 The liability of Landlord, any agent of Landlord, or any of their
respective officers, directors, shareholders, or employees to Tenant for or in
respect of any default by Landlord under the terms of this lease or in respect
of any other claim or cause of action shall be limited to the interest of
Landlord in the Industrial Complex, and Tenant agrees to look solely to
Landlord's interest in the Industrial Complex for the recovery and satisfaction
of any judgment against Landlord, any agent of Landlord, or any of their
respective officers, directors, shareholders, and employees.
29.4 In all circumstances under this lease where the prior consent of
one party (the "consenting party"), whether it be Landlord or Tenant, is
required before the other party (the "requesting party") is authorized to take
any particular type of action, such consent shall not be withheld in a wholly
unreasonable and arbitrary manner; however, the requesting party agrees that its
exclusive remedy if it believes that consent has been withheld improperly
(including, but not limited to, consent required from Landlord pursuant to
Section 19.1) shall be to Institute litigation either for a declaratory judgment
or for a mandatory injunction requiring that such consent be given (with the
requesting party hereby waiving any claim for damages, attorneys' fees or any
other remedy unless the consenting party refuses to comply with a court order or
judgment requiring it to grant its consent).
29.5 Whenever a period of time is herein prescribed for action to be
taken by either Landlord or Tenant, such party shall not be liable or
responsible for, and there shall be excluded from the computation of any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations or restrictions or any
other causes of any kind whatsoever which are beyond the reasonable control of
such party; provided, however, that this provision shall NOT apply to Tenant's
obligation to pay rent or any other sums due hereunder.
29.6 If any provision of this lease should be held to be Invalid or
unenforceable, the validity and enforceability of the remaining provisions of
this lease shall not be affected thereby.
29.7 [INTENTIONALLY OMITTED]
29.8 The laws of the State of California shall govern the
interpretation, validity, performance and enforcement of this lease. Venue for
any action under this lease shall be the county in which rentals are due
pursuant to Section 4.2 and Section 1.1 of this lease.
29.9 The captions used herein are for convenience only and do not
limit or amplify the provisions hereof.
29.10 Whenever herein the singular number is used, the same shall
include the plural, and words of any gender shall include each other gender.
29.11 All covenants and obligations contained within this lease shall
bind and inure to the benefit of Landlord, its successors and assigns, and shall
be binding upon Tenant, its permitted successors and assigns.
29.12 This lease contains the entire agreement between the parties, and
no rights are created in favor of either party other than as specified or
expressly contemplated in this lease. No brochure, rendering, information or
correspondence shall be deemed to be a part of this agreement unless
specifically incorporated herein by reference. In addition, no agreement shall
be effective to change, modify or terminate this lease in whole or in part
unless such is in writing and duly signed by the party against whom enforcement
of such change, modification or termination is sought.
23
29.13 LANDLORD AND TENANT HEREBY ACKNOWLEDGE THAT THEY ARE NOT RELYING
UPON ANY BROCHURE, RENDERING, INFORMATION, REPRESENTATION OR PROMISE OF THE
OTHER, OR OF THE AGENT, EXCEPT AS MAY BE EXPRESSLY SET FORTH IN THIS LEASE.
29.14 No waiver of any of the terms, covenants, provisions, conditions,
rules and regulations imposed by this lease, and no waiver of any legal or
equitable relief or remedy, shall be implied by the failure of Landlord to
assert any rights, declare any forfeiture, or for any other reason. No waiver of
any of the terms, provisions, covenants, conditions, rules and regulations shall
be valid unless it shall be in writing signed by Landlord. No waiver by Landlord
or forgiveness of performance by Landlord for one or more tenants shall
constitute a Waiver or forgiveness of performance in respect to Tenant.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval under this Lease shall not be deemed to render unnecessary
the obtaining of Landlord's consent to or approval of any subsequent act of
Tenant. No act or thing done by Landlord or Landlord's agents during the Term
of this lease shall be deemed an acceptance of a surrender of the Demised
Premises, unless in writing signed by Landlord. The delivery of the keys to any
employee or agent of Landlord shall not operate as a termination of this lease
or a surrender of the Demised Premises. The acceptance of any rent by Landlord
following a breach of this lease by Tenant shall not constitute a waiver by
Landlord of such breach or any other breach unless such waiver is expressly
stated in a writing signed by Landlord.
29.15 Tenant shall deliver and surrender to Landlord possession of the
Demised Premises (including all of Tenant's permanent work upon and to the
Demised Premises, all replacements and all fixtures permanently attached to the
Demised Premises) immediately upon the expiration of the Term or the termination
of this lease in as good condition and repair as the same were on the delivery
date (loss by any insured casualty and ordinary wear and tear only excepted),
and deliver the keys at the office of Landlord or Landlord's agent; provided,
however, that upon Landlord's request made at least thirty (30) days prior to
the end of the Term, or the date Tenant is otherwise required to vacate the
Demised Premises, Tenant shall remove all fixtures and equipment affixed to the
Demised Premises by Tenant, and repair and restore the Demised Premises to their
condition on the delivery date (loss by any insured casualty and ordinary wear
and tear only excepted), at Tenant's sole expense. The removal shall be
performed prior to the earlier of the end of the Term or the date Tenant is
required to vacate the Demised Premises.
29.16 Tenant shall not record this lease. Without the prior written
consent of Landlord, Tenant shall not record any memorandum of this lease, short
form or other reference to this lease.
29.17 The submission of this lease for examination does not constitute
a reservation of or option for the Demised Premises or any other space in the
Industrial Complex, and shall not vest any right in Tenant. This lease shall
become effective as a lease only upon its execution and delivery by the parties.
29.18 LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY
DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF
CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THE DEMISED PREMISES
(INCLUDING WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS LEASE OR ANY
CLAIMS OR DEFENSES ASSERTING THAT THIS LEASE WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR VOIDABLE). THIS WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD
TO ENTER AND ACCEPT THIS LEASE.
24
29.19 This lease consists of twenty-nine Articles and Exhibits "A"
through "D". With the exception of Article 7, in the event any provision of an
exhibit shall be inconsistent with a provision in the body of the lease, the
provision as set forth in the exhibit shall be deemed to control.
EXECUTED as of the latest date accompanying a signature by Landlord or
Tenant below.
LANDLORD: MP CARIBBEAN, INC.,
a Delaware corporation
By: GE CAPITAL INVESTMENT ADVISORS, INC.,
its agent
By: /s/ [ILLEGIBLE]
-------------------------------------
Name: [ILLEGIBLE]
------------------------------
Title: [ILLEGIBLE]
-----------------------------
Date of Signature: 8-22-97
---------------------
TENANT: ARIBA TECHNOLOGIES, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Vice President - Finance
Chief Financial Officer
-----------------------------
Date of Signature: 8-22-97
---------------------
25
EXHIBIT "A"
DEMISED PREMISES
[FLOOR PLAN]
26
EXHIBIT "B"
CONSTRUCTION: TENANT ACCEPTANCE OF SPACE "AS IS"
ARTICLE I. GENERAL
Tenant hereby accepts the Demised Premises "as is" and "ready for occupancy."
Except as provided herein, Landlord shall have no obligation to make or pay for
any improvements, renovations or alterations in or to the Demised Premises to
prepare or make ready the Demised Premises for Tenant's occupancy as of the
Commencement Date. Prior to any modification of the existing premises, Tenant
shall adhere to the following as well as the provisions contained in Article 11
and EXHIBIT "C" of the lease.
ARTICLE II. PRE-CONSTRUCTION OBLIGATIONS
A. Plans, diagrams, schedules and other data relating to work to
be performed by Tenant must be furnished by Tenant to Landlord
complete, sufficient to obtain a building permit, and ready
for Landlord's consideration and final approval within fifteen
(15) days after execution of this lease (or at such other time
as may be specified by this exhibit). Without limiting the
generality of the immediately preceding sentence, Tenant's
submissions must include a floor plan, a reflected ceiling
plan, a plumbing plan, elevations of walls and a fixture plan.
All drawings shall be at scale of either 1/8" or 1/4" Tenant
shall reimburse Landlord for any loss or extra cost which may
result to Landlord by reason of failure on the part of Tenant
to submit any such plans, diagrams, schedules, specifications
and/or other data within said period of time.
B. Tenant shall secure Landlord's written approval of all
designs, plans, specifications, materials, contractors and
contracts for work to be performed by Tenant before beginning
the work (including following whatever "work letter"
instructions, if any, which Landlord may deliver to Tenant in
connection with the work), and shall secure all necessary
licenses and permits to be used in performing the work.
Tenant's finished work shall be subject to Landlord's approval
and acceptance.
C. The insurance requirements under Article 15 of this lease and
the indemnity requirements under Article 16 of this lease
shall apply during the construction contemplated in this
exhibit, and Tenant shall provide evidence of appropriate
insurance coverage prior to beginning any of Tenant's work.
Tenant shall provide Landlord with evidence of insurance
covering both Tenant and Tenant's contractor against damage to
their personal property, as well as against third-party
liability and workers' compensation claims arising out of all
construction and associated activities. All policies of
insurance shall be subject to Landlord's prior approval and
shall be endorsed showing Landlord as an additional named
insured (or if permitted by Landlord, may provide a waiver of
subrogation against Landlord).
ARTICLE III. DESCRIPTION OF TENANT'S WORK
A. Signs: Tenant shall pay for all signs and the installation
thereof, including the electrical hook-up, subject to the
provisions of Section 13.1 of this lease.
B. Utilities: All meters or other measuring devices in connection
with utility services shall be provided by Tenant. All service
deposits shall be made by Tenant at Tenant's expense.
C. All work undertaken by Tenant shall be at Tenant's expense and
shall not damage the building or any part thereof. Any roof
penetration shall be performed by Landlord's roofer or, at
Landlord's option, by a bonded roofer approved in advance by
Landlord. The work shall be begun only after Landlord has
given consent, which consent shall in part be conditioned upon
Tenant's plans, to include materials acceptable to Landlord,
in order to prevent injury to the roof and to spread the
weight of the equipment being installed. Tenant shall also be
responsible for obtaining and paying for professional
inspections of any structural work (including, without
limitation, any roof work or concrete work).
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D. All work undertaken by Tenant shall be awarded to Landlord's
contractor unless, before any construction begins, Tenant
chooses and receives Landlord's written approval for another
contractor to complete Tenant's work.
E. All work performed by or at the behest of Tenant shall be in
compliance with all applicable Regulations.
ARTICLE IV. DESCRIPTION OF LANDLORD'S WORK
Landlord shall cause the roof, mechanical, electrical and plumbing systems
serving the Demised Premises to be in proper working order as of the
Commencement Date ("Landlord's Improvements").
INITIALED:
LANDLORD:
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TENANT:
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EXHIBIT "C"
TENANT CONSTRUCTION RULES AND REGULATIONS
1. All demolition, removals and other categories of work that may
inconvenience other tenants or disturb building operations must be
scheduled and performed before or after normal working hours, and the
property manager for the Industrial Complex (the "Property Manager")
shall be provided with at least twenty-four (24) hours notice prior to
proceeding with such work.
2. All structural and floor loading requirements shall be subject to the
prior approval of the Industrial Complex's structural engineer. Approval
shall be obtained by Tenant and any fees shall be at Tenant's sole
expense.
3. All mechanical (HVAC, plumbing and sprinkler) and electrical
requirements shall be subject to the prior approval of Landlord's
mechanical and electrical engineers. When necessary, Property Manager
will require engineering and shop drawings, which drawings must be
approved by Property Manager before the work is started. Drawings shall
be prepared by Tenant and all approvals shall be obtained by Tenant.
4. If the shutdown of risers and mains for electrical, HVAC, sprinkler
and/or plumbing work is required, such work shall be supervised by a
representative of Landlord at Tenant's sole expense at a time approved
in advance by Property Manager.
5. Tenant's general contractor is responsible to do all of the following:
(a) Properly supervise construction at the Demised Premises at all
times.
(b) Police the work at all times, continually keeping the affected
space(s) safe and orderly.
(c) Maintain the cleanliness and protection of all affected areas.
(d) Avoid and prevent the disturbance of other tenants.
6. If Tenant's general contractor is negligent in any of its
responsibilities, Tenant shall be charged for the corrective work done
by Landlord's personnel.
7. No electrical cords are to be stretched across any walkways or public
areas in any manner that would cause any safety hazard.
8. Radios may not be played if the sound can be heard in the Common Area or
in other tenant suites.
9. Electrical rooms may not be used to store any materials, fixtures, etc.
10. All sprinkler shut downs, draining or filling shall be scheduled and
coordinated with the Landlord's chief engineer or his delegate.
11. Bracing, soldering or welding shall be scheduled in advance with
Property Manager.
12. Dust shall be kept at a minimum to avoid smoke detector activation.
13. If requested by Tenant, Property Manager shall provide space in the
parking lot at a location to be determined by Landlord for a trash and
debris bin during construction of the tenant improvements.
14. Damage to ANY pre-installed fixtures (E.G., water fountains, sinks,
lights, commodes, signage, etc.) shall be repaired at Tenant's sole
expense.
15. Tenant's general contractor shall coordinate the keying, schedule,
Tenant's key requirements and cylinder installation with Landlord's
designated locksmith.
16. Where appropriate, Tenant shall submit to Property Manager a final
"as-built" set of drawings showing all items of work in full detail.
"As-builts" shall be sepias or vellums.
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17. Throughout the construction period and upon conclusion of the work,
Tenant's general contractor shall cause the work areas and all other
affected areas to be clear and free of debris.
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EXHIBIT "D"
RIGHT OF FIRST OPPORTUNITY
Tenant shall have a one-time right of first opportunity ("Right of First
Opportunity") to lease all, but not less than all, of the adjacent space in the
Industrial Complex known as 0000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxxxx,
containing approximately 40,000 square feet (the "First Opportunity Space"), at
such time as the First Opportunity Space becomes "available for lease" (as
defined below) during the lease term provided that Tenant is not then in default
hereunder beyond any applicable notice and cure period. If the existing lease of
the First Opportunity Space should expire or be terminated, the First
Opportunity Space shall be deemed "available for lease" and, at such time,
Landlord shall give written notice thereof to Tenant ("Landlord's Notice"). Upon
receipt of Landlord's Notice, Tenant shall have the opportunity to inspect the
First Opportunity Space and conduct reasonable non-invasive investigations
therein for the purpose of determining whether Tenant wishes to lease the First
Opportunity Space (the "Tenant Inspection"). If Tenant in response to Landlord's
Notice elects to lease the First Opportunity Space, Tenant shall so notify
Landlord in writing (the "Election Notice"). If Tenant does not deliver to
Landlord the Election Notice within the later of (i) ten (10) days after
Landlord's delivery of the Landlord's Notice or (ii) three (3) days after
Landlord has provided Tenant with the opportunity to conduct the Tenant
Inspection, Landlord shall be relieved of its obligation to make available for
lease to Tenant the First Opportunity Space and the provisions of this paragraph
shall be of no further force or effect. Without limiting the foregoing, upon the
non-delivery of the Election Notice by Tenant, Landlord shall be entitled to
grant options and rights free and clear of Tenant's Right of First Opportunity
under this paragraph to other tenants or prospective tenants of the Industrial
Complex. Upon Tenant's TIMELY delivery of the Election Notice with respect to
the First Opportunity Space ("Tenant's Timely Notice Delivery Date"), Landlord
and Tenant shall promptly enter into an amendment of this lease adding the First
Opportunity Space to the Demised Premises on all the terms and conditions set
forth in this lease as to the Demised Premises, except that (i) the term of the
lease to Tenant of the First Opportunity Space shall commence (the "ROFO
Commencement Date") upon the later of (a) the actual availability date of the
First Opportunity Space or (b) Tenant's Timely Notice Delivery Date, and shall
be coterminous with the remainder of the Demised Premises, (ii) Tenant shall
take the First Opportunity Space in its then "AS-IS" condition (except that the
First Opportunity Space shall be delivered to Tenant broom-clean and subject to
the same warranty by Landlord as is set forth in Section 3.2 of this lease, with
the ninety (90) day period to commence as of the ROFO Commencement Date;
provided that in no event shall Landlord be required to expend in excess of
$25,000.00 to repair any defective or malfunctioning component(s) of any of the
building systems enumerated in said Section 3.2) and Landlord shall neither
provide nor pay for any interior improvement work or services related to the
First Opportunity Space, (iii) the minimum guaranteed rental per rentable square
foot payable by Tenant for the First Opportunity Space shall be equal to the
minimum guaranteed rental per rentable square foot then payable by Tenant under
the lease for the original Demised Premises (with scheduled increases), which
minimum guaranteed rental shall commence as of the ROFO Commencement Date, and
(iv) Tenant's Proportionate Share shall be increased to reflect the addition of
the First Opportunity Space to the Demised Premises.
Notwithstanding anything to the contrary contained in this EXHIBIT
"D", in the event that Landlord does not deliver a Landlord's Notice to Tenant
on or before August 31, 2002, then Tenant shall have the right to terminate this
lease upon thirty (30) days notice to Landlord ("Tenant's Termination Notice")
provided that (i) the Right of First Opportunity has not previously been
relinquished due to Tenant's default under this lease beyond any applicable
notice and cure period, and (ii) Tenant's Termination Notice is delivered no
later than September 30, 2002. In the event Tenant is entitled to and timely
elects to exercise this early termination right, the lease shall terminate
thirty (30) days following Landlord's receipt of Tenant's Termination Notice,
subject to Tenant's obligations under Section 29.15 of the lease. If Tenant is
entitled to exercise this early termination right, but does not timely do so,
the lease shall continue in full force and effect through the scheduled
expiration of the lease term, and Tenant's Right of First Opportunity under this
EXHIBIT "D" shall be null and void and of no further force or effect.
