EXHIBIT 10.40
AMB PROPERTY CORPORATION
INDUSTRIAL LEASE
1. Basic Provisions ["Basic Provisions").
1.1
PARTIES: This Lease ("Lease") dated December 6, 1999, is made by
and
between AMB Property, L.P., a Delaware limited partnership,
("Landlord") and FMI
Int'l (West) LLC, a Delaware limited liability company ("Tenant")
(collectively,
the "Parties" or individually, a "Party").
1.2
PREMISES: The premises ("Premises"), which are the subject of
this
Lease, are located in the industrial center commonly known as
WILMINGTON AVENUE
DISTRIBUTION (the "Industrial Center") and are more commonly known
as 22351
Wilmington Avenue, Carson, California 90745. The Premises are:
[X] Approximately 315,000 square feet of space, plus the
parking
area as depicted on Exhibit A. This space is a part of the building
("Building")
which is also identified on Exhibit A.
or
[ ] All of the building ("Building") identified on Exhibit A,
consisting of approximately ____________ square feet.
If the Premises are all of the Building, there shall, for purposes
of this
Lease, be no distinction between the words "Premises" or
"Building." Tenant
shall have nonexclusive rights to the Common Areas (as defined in
Paragraph 2.2
below) but shall not have any rights to the roof, exterior walls,
or utility
raceways of the Building or to any other buildings in the
Industrial Center. The
Industrial Center consists of the Premises, the Building, the
Common Areas, the
land upon which they are located, and all other buildings and
improvements
within the boundaries of the Industrial Center.
1.3 TERM:
Seven (7) years and one (1) month ("Term") commencing the later
of April 1, 2000 or substantial completion of tenant improvements
by Landlord
("Commencement Date") and ending seven (7) years and one (1) month
after the
Commencement Date ("Expiration Date").
1.4 BASE
RENT: $141,750.00 per month ("Base Rent"), $141,750.00 is
payable on March 1, 2000 for the second month of the Lease term,
the first month
of the Lease term being free of Base Rent.
1.5
TENANT'S SHARE OF OPERATING EXPENSES ("Tenant's Share"):
(a) Common Area
Operating Expenses
100%
(b) Building
Operating Expenses
100%
1.6
TENANT'S ESTIMATED MONTHLY RENT PAYMENT: Following is the
estimated
monthly Rent payment to Landlord pursuant to the provisions of this
Lease. This
estimate is made at the inception of the Lease and is subject to
adjustment
pursuant to the provisions of this Lease:
(a) Base
Rent (Paragraph 4.1)
$ 141,750.00
(b)
Operating Expenses (Paragraph 4.2,
Excluding Real Property Taxes,
Landlord Insurance, and HVAC)
$ 2,375.00
(c)
Landlord
Insurance (Paragraph 8.3) $ 1, 102.00
(d) Real
Property Taxes (Paragraph 10) $ 14,018.00
(e) HVAC
maintenance (Paragraph 4.2) $
125.00
Estimated Monthly Payment
$159,370.00
1.7
SECURITY DEPOSIT: $600,000.00 by an irrevocable letter of
credit
("LC") in Landlord's favor in form and substance and from a
financial
institution acceptable to Landlord ("Security Deposit").
Notwithstanding the
foregoing, if Tenant has not been in default beyond any applicable
cure period
in any prior period of the term of the Lease, the amount of the LC
shall be
reduced to $450,000.00 for months 31-60 of the term of the Lease
and reduced to
$300,000.00 for months 61-84 of the term of the Lease.
l.8
PERMITTED USE ("Permitted Use"): GENERAL OFFICE, WAREHOUSE,
DISTRIBUTION AND STORAGE OF OCEAN CONTAINERS, STORAGE CONTAINERS,
TRUCK DRIVERS'
PERSONAL VEHICLES AND TRACTORS OUTSIDE OF THE BUILDING, PROVIDED
SUCH USES ARE
IN COMPLIANCE WITH ALL LAWS AND FOR NO OTHER USE.
1.9
GUARANTOR: FASHION MARKETING INC., A NEW JERSEY CORPORATION,
AND
FASHION MARKETING LLC, A DELAWARE LIMITED LIABILITY COMPANY
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1.10
ADDENDA: Attached hereto are the following Addenda, all of
which
constitute a part of this Lease:
(a) Addendum:
TENANT
IMPROVEMENT ADDENDUM
(b) Addendum:
RENT ADJUSTMENT
ADDENDUM
(c) Addendum:
OPTION TO
EXTEND
(d) Addendum:
EARLY POSSESSION
AND INDUCEMENT RECAPTURE ADDENDUM
(e) Addendum:
RENT ABATEMENT
ADDENDUM
l.11
EXHIBITS: Attached hereto are the following Exhibits, all of
which
constitute a part of this Lease:
Exhibit A:
Description of Premises.
Exhibit B:
Commencement Date Certificate.
Exhibit C:
Estoppel Certificate
Exhibit D:
Hazardous Substances Questionnaire
1.12
ADDRESS FOR RENT PAYMENTS: All amounts payable by Tenant to
Landlord
shall, until further notice from Landlord, be paid to AMB Property
Corporation
at the following address:
AMB Property, L.P.
Box 842524
Dallas Texas 75284-2524
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TABLE OF CONTENTS
PAGE
1. BASIC PROVISIONS
1
1.1
Parties
1
1.2
Premises
1
1.3
Term
1
1.4
Base
Rent
1
1.5
Tenant's Share of Operating Expenses
1
1.6
Tenant's Estimated Monthly Rent Payment
1
1.7
Security Deposit
1
1.8
Permitted Use
1
1.9
Guarantor
1
1.10
Addenda
1
1.11
Exhibits
2
1.12
Address
for Rent Payments
2
2. PREMISES AND COMMON
AREAS
3
2.1
Letting
3
2.2
Common Areas - Definition
3
2.3
Common Areas - Tenant's Rights
3
2.4
Common Areas - Rules and Regulations
3
2.5
Common Area Changes
3
3. TERM
3
3.1
Term
3
3.2
Delay in Possession
3
3.3
Commencement Date Certificate
3
4. RENT
3
4.1
Base
Rent
3
4.2
Operating Expenses
4
5. SECURITY DEPOSIT
5
6. USE
5
6.1
Permitted Use
5
6.2
Hazardous Substances
5
6.3
Tenant's Compliance with Requirements
6
6.4
Inspection: Compliance with Law
6
7. MAINTENANCE,
REPAIRS, TRADE FIXTURES, AND ALTERATIONS
6
7.1
Tenant's Obligations
6
7.2
Landlord's Obligations
7
7.3
Alterations
7
7.4
Surrender/Restoration
7
8. INSURANCE;
INDEMNITY
7
8.1
Payment of Premiums
7
8.2
Tenant's Insurance
7
8.3
Landlord's Insurance
7
8.4
Waiver of Subrogation
7
8.5
Indemnity
8
8.6
Exemption of Landlord from Liability
8
9. DAMAGE OR
DESTRUCTION
8
9.1
Termination Right
8
9.2
Damage Caused by Tenant
8
10. REAL PROPERTY TAXES
8
10.1
Payment of
Real Property Taxes
8
10.2
Real
Property Tax Definition
8
10.3 Additional
Improvements
9
10.4
Joint
Assessment
9
10.5
Tenant's
Property Taxes
9
11. UTILITIES
9
12. ASSIGNMENT AND SUBLETTING
9
12.1
Landlord's
Consent Required
9
12.2
Rent
Adjustment
9
13. DEFAULT; REMEDIES
9
13.1
Default
9
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TABLE OF CONTENTS
PAGE
13.2
Remedies
10
13.3
Late
Charges
10
14. CONDEMNATION
10
15. ESTOPPEL CERTIFICATE AND FINANCIAL STATEMENTS
10
15.1
Estoppel
Certificate
10
15.2
Financial
Statement
11
16. ADDITIONAL COVENANTS AND PROVISIONS
11
16.1
Severability
11
16.2
Interest
on Past-Due Obligations
11
16.3
Time of
Essence
11
16.4
Landlord
Liability
11
16.5
No Prior
or Other Agreements
11
16.6
Notice
Requirements
11
16.7
Date of
Notice
11
16.8
Waivers
11
16.9
Holdover
11
16.10
Cumulative
Remedies
12
16.11
Binding Effect;
Choice of Law
12
16.12
Landlord
12
16.13
Attorneys' Fees
and Other Costs
12
16.14
Landlord's
Access; Showing Premises; Repairs
12
16.15
Signs
12
16.16
Termination;
Merger
12
16.17
Quiet Possession
12
16.18
Subordination;
Attornment; Non-Disturbance
12
16.19
Rules and
Regulations
13
16.20
Security
Measures
13
16.21
Reservations
13
16.22
Conflict
13
16.23
Offer
13
16.24
Amendments
13
16.25
Multiple Parties
13
16.26
Authority
13
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2. Premises and Common Areas.
2.1
LETTING. Landlord hereby leases to Tenant and Tenant hereby
leases
from Landlord the Premises upon all of the terms, covenants, and
conditions, set
forth in this Lease. Any statement of square footage set forth in
this Lease or
that may have been used in calculating Base Rent and/or Operating
Expenses is an
approximation which Landlord and Tenant agree is reasonable, and
the Base Rent
and Tenant's Share based thereon is not subject to revision whether
or not the
actual square footage is more or less.
2.2 COMMON
AREAS - DEFINITION. "Common Areas" are all areas and facilities
outside the Premises and within the exterior boundary line of the
Industrial
Center and interior utility raceways within the Premises that are
provided and
designated by the Landlord from time to time for the general
nonexclusive use of
Landlord, Tenant, and other tenants of the Industrial Center and
their
respective employees, suppliers, shippers, tenants, contractors,
and invitees.
2.3 COMMON
AREAS - TENANT'S RIGHTS. Landlord hereby grants to Tenant, for
the benefit of Tenant and its employees, suppliers, shippers,
contractors,
customers, and invitees, during the term of this Lease, the
nonexclusive right
to use, in common with others entitled to such use, the Common
Areas as they
exist from time to time, subject to any rights, powers, and
privileges reserved
by Landlord under the terms hereof or under the terms of any rules
and
regulations or covenants, conditions, and restrictions governing
the use of the
Industrial Center.
2.4 COMMON
AREAS - RULES AND REGULATIONS. Landlord shall have the
exclusive control and management of the Common Areas and shall have
the right,
from time to time, to establish, modify, amend, and enforce
reasonable Rules and
Regulations with respect thereto in accordance with Paragraph
16.19.
2.5 COMMON
AREA CHANGES. Landlord shall have the right, in Landlord's sole
discretion, from time to time:
(a) To make changes to the Common Areas, including, without
limitation, changes in the locations, size, shape, and number of
driveways,
entrances, parking spaces, parking areas, loading and unloading
areas, ingress,
egress, direction of traffic, landscaped areas, walkways, and
utility raceways;
(b) To close temporarily any of the Common Areas for
maintenance
purposes so long as reasonable access to the Premises remains
available;
(c) To designate other land outside the boundaries of the
Industrial
Center to be a part of the Common Areas;
(d) To add additional buildings and improvements to the Common
Areas;
(e) To use the Common Areas while engaged in making additional
improvements, repairs, or alterations to the Industrial Center, or
any portion
thereof; and
(f) To do and perform such other acts and make such other
changes
in, to, or with respect to the Common Areas and Industrial Center
as Landlord
may, in the exercise of sound business judgment, deem to be
appropriate.
Notwithstanding the foregoing or anything to the contrary contained
in
this Lease, Landlord represents and warrants that there is no
Common Area to
which this Lease is subject.
3. Term.
3.1 TERM.
The Commencement Date, Expiration Date, and Term of this Lease
are as specified in Paragraph 1.3.
3.2 DELAY
IN POSSESSION. If for any reason Landlord cannot deliver
possession of the Premises to Tenant by the Commencement Date,
Landlord shall
not be subject to any liability therefor, nor shall such failure
affect the
validity of this Lease or the obligations of Tenant hereunder. In
such case,
Tenant shall not, except as otherwise provided herein, be obligated
to pay Rent
or perform any other obligation of Tenant under the terms of this
Lease until
Landlord delivers possession of the Premises to Tenant. The term of
the Lease
shall commence on the earlier of (a) the date Tenant takes
possession of the
Premises or (b) 10 days following notice to Tenant that Landlord is
prepared to
tender possession of the Premises to Tenant. If possession of the
Premises is
not delivered to Tenant within 60 days after the Commencement Date
and such
delay is not due to Tenant's acts, failure to act, or omissions,
Tenant may by
notice in writing to Landlord within 10 days after the end of said
60-day period
cancel this Lease and the parties shall be discharged from all
obligations
hereunder. If such written notice of Tenant is not received by
Landlord within
said 10-day period, Tenant's right to cancel this Lease shall
terminate. The
term "possession" as used in this Paragraph 3.2 shall mean
possession by Tenant
other than for the performance of any inspections and any work
performed by
Tenant as provided herein prior to the Commencement Date.
3.3
COMMENCEMENT DATE CERTIFICATE. At the request of Landlord,
Tenant
shall execute and deliver to Landlord a completed certificate
("Commencement
Date Certificate") in the form attached hereto as Exhibit B.
4. Rent.
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4.1 BASE
RENT. Tenant shall pay to Landlord Base Rent and other monetary
obligations of Tenant to Landlord under the terms of this Lease
(such other
monetary obligations are herein referred to as "Additional Rent")
in lawful
money of the United States, without offset or deduction, in advance
on or before
the first day of each month. Base Rent and Additional Rent for any
period during
the term hereof which is for less than one full month shall be
prorated based
upon the actual number of days of the month involved. Payment of
Base Rent and
Additional Rent shall be made to Landlord at its address stated
herein or to
such other persons or at such other addresses as Landlord may from
time to time
designate in writing to Tenant. Base Rent and Additional Rent are
collectively
referred to as "Rent." All monetary obligations of Tenant to
Landlord under the
terms of this Lease are deemed to be Rent.
4.2
OPERATING EXPENSES. Tenant shall pay to Landlord on the first day
of
each month during the term hereof, in addition to the Base Rent,
Tenant's Share
of all Operating Expenses in accordance with the following
provisions:
(a) "Operating Expenses" are all costs incurred by Landlord in
accordance with the provisions of this Lease relating to the
ownership and
operation of the Industrial Center, Building, and Premises
including, but not
limited to, the following:
(i) The operation, repair, maintenance, and replacement in
neat, clean, good order, and condition of the Common Areas,
including parking
areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways,
parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems,
drainage systems, lighting facilities, fences and gates, exterior
signs, and
tenant directories; however, Operating Expenses shall exclude the
costs of
improvements and/or replacements, as well as the removal of
asbestos or other
Hazardous Substances and the purchase or leasing of any machinery,
equipment,
vehicles, supplies, or the like, that, under generally accepted
accounting
principles consistently applied, are required to be capitalized on
the books and
records of Landlord (collectively, "Capital Items"), and excluding
the costs of
rendering the Common Areas in compliance with the Americans with
Disabilities
Act ("ADA"), to the extent that same shall not be in compliance
therewith as of
the Commencement Date.
(ii) Water, gas, electricity, telephone, and other utilities
servicing the Common Areas; however, the rates charged by Landlord
to Tenant
shall not exceed those that would have been payable by Tenant to
the public
utility company furnishing such services, if such services were
instead
furnished directly to Tenant.
(iii) Trash disposal, janitorial services, snow removal,
property management, and security services.
(iv) Reserves set aside for maintenance, repair, and
replacement of the Common Areas and Building, except that
notwithstanding
Paragraph 6.4 herein reserves for environmental monitoring and/or
insurance
programs, not caused by or arising out of Tenant's use of the
Premises shall not
be included in reserves.
(v) Real Property Taxes.
(vi) Premiums for the insurance policies maintained by
Landlord under Paragraph 8 hereof.
(vii) Monthly amortization of capital improvements or Capital
Item to the Common Areas and the Building. The monthly amortization
of any given
capital improvement or Capital Item shall be the sum of the (a)
quotient
obtained by dividing the cost of the capital improvement by the
number of months
of useful life of such improvement as determined by generally
accepted
accounting principles consistently applied plus (b) an amount equal
to the cost
of the capital improvement times 1/12 of the lesser of 12% or the
maximum annual
interest rate permitted by law.
(viii) Maintenance of the Building including, but not limited
to, painting, caulking and repair of Building components,
including, but not
limited to, roof, elevators, and fire detection and sprinkler
systems.
(ix) Maintenance and repair of heating, ventilating, and air
conditioning systems ("HVAC").
(x) If Tenant fails to maintain the Premises in accordance
with the terms of the Lease, any expense incurred by Landlord for
such
maintenance.
(b) Tenant's Share of Operating Expenses that are not
specifically
attributed to the Premises or Building ("Common Area Operating
Expenses") shall
be that percentage shown in Paragraph 1.5(a). Tenant's Share of
Operating
Expenses that are attributable to the Building ("Building Operating
Expenses")
shall be that percentage shown in Paragraph 1.5(b). Landlord in its
sole
discretion shall determine which Operating Expenses are Common Area
Operating
Expenses, Building Operating Expenses, or expenses to be entirely
borne by
Tenant.
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(c) Unless costs for such items are included in calculating
Operating Expenses, the inclusion of the improvements, facilities,
and services
set forth in Subparagraph 4.2(a) shall not impose any obligation
upon Landlord
either to have said improvements or facilities or to provide those
services.
(d) Tenant shall pay monthly in advance, on the same day that
the
Base Rent is due, Tenant's Share of estimated Operating Expenses
and HVAC
maintenance costs in the amount set forth in Paragraph 1.6.
Landlord shall
deliver to Tenant within 90 days after the expiration of each
calendar year a
reasonably detailed statement showing Tenant's Share of the actual
Operating
Expenses incurred during the preceding year. Within thirty (30)
days of receipt
by Landlord of Tenant's written request for the following, Landlord
shall supply
to Tenant a statement showing (i) the actual amount of Building
Operating
Expenses, Common Area Operating Expenses and Real Property Taxes
(collectively
"Expenses") for the past calendar year, (ii) a reasonably detailed
breakdown of
such Expenses; (iii) the amount of any overpayment to be credited
to Tenant (if
the sum of the Estimated Operating Expenses made during such
calendar year
exceeded the actual Operating Expenses with respect to such
calendar year) or
the amount of any deficiency payable by Tenant to Landlord (if the
actual
Operating Expenses with respect to a calendar year shall exceed the
sum of the
estimated Operating Expenses made during such calendar year). If
Tenants
estimated payments under this Paragraph 4(d) during the preceding
year exceed
Tenant's Share as indicated on said statement, Tenant shall be
credited the
amount of such overpayment against Tenant's Share of Operating
Expenses next
becoming due. If Tenant's estimated payments under this Paragraph
4.2(d) during
said preceding year were less than Tenant's Share as indicated on
said
statement, Tenant shall pay to Landlord the amount of the
deficiency within 10
days after delivery by Landlord to Tenant of said statement. At any
time
Landlord may adjust the amount of the estimated Tenant's Share of
Operating
Expenses and HVAC maintenance costs to reflect Landlord's estimate
of such
expenses for the year.
(e) Notwithstanding the foregoing, Operating Expenses shall not
include (i) interest and amortization on mortgages and deeds of
trust and other
debt costs on real estate or ground lease payments, if any;
depreciation of
buildings and other improvements (except for amortization of
capital
improvements or Capital Items as provided herein or any
depreciation allowed by
generally accepted accounting principles consistently applied for
the ownership
of industrial real property), or costs of any items to the extent
Landlord
receives reimbursement from insurance proceeds or from a third
party (such
proceeds to be deducted from Operating Costs in the year in which
received);
(ii) corporation, inheritance, estate, succession, transfer, realty
transfer
gains tax, gift, franchise, income or profit taxes (whether gross
or net)
imposed upon Landlord to the extent such taxes are not in lieu of
real property
taxes; penalties or interest on taxes caused by the failure of
Landlord to make
timely payment, provided such failure to make timely payment was
not a result of
Tenant's failure to make timely payment of Tenant's Share of
Operating Costs or,
if assessed separately, real property taxes to Landlord; and
mortgage lien
taxes, documentary stamp taxes, recording fees or the like; (iii)
costs of
governmental compliance prior to Tenant's acceptance of possession
of the
Premises (including, without limitation, with respect to the
Americans with
Disabilities Act), remediation of hazardous materials not caused by
Tenant or as
a result of Tenant's use or occupancy of the Premises. Further
notwithstanding
the foregoing, Landlord shall, at its sole cost and expense,
replace the roof
structure, the heating ventilating and air conditioning system and
fire
sprinkler at such time as replacement is required in Landlord's
reasonable
judgment and provided such replacement has not been primarily
caused by Tenant's
failure to maintain such systems.
4.3 BOOKS
AND RECORDS; AUDIT. Landlord shall keep reasonably complete and
accurate books and records showing all Operating Expenses in
accordance with
generally accepted accounting principles consistently applied,
which books and
records shall be maintained and segregated on a year-to-year basis.
Tenant shall
have the right to dispute in writing any specific item or items on
any statement
of Operating Expenses submitted by Landlord to Tenant pursuant to
Paragraph
4.2(d) above at any time during the period commencing upon the date
upon which
such statement is submitted to Tenant and expiring, absent fraud,
within one (1)
year thereafter ("Dispute Period"). Upon submission of a written
dispute by
Tenant, if Landlord and Tenant cannot resolve such dispute within
fifteen (15)
days of submission of such dispute to Landlord, Tenant may audit or
have audited
Landlord's books and records relating to the disputed item(s). Such
audit shall
take place within sixty (60) days of submission of such dispute to
Landlord at
the place where Landlord's books and records are maintained upon at
least ten
(10) business days' notice ("Audit Notice") to Landlord by Tenant.
Such audit
shall take place during Landlord's normal business hours. The Audit
Notice shall
include a detailed list of those items of Operating Expenses which
Tenant is
disputing and
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wishes to audit. In the event Tenant's audit discloses
discrepancies, the
appropriate adjustments shall be made in Tenant's or Landlord's
favor, as the
case may be. If such discrepancies are in excess of three (3%)
percent in
Tenant's favor, Landlord shall reimburse Tenant for the cost of
such audit and
pay Tenant interest at the maximum legal rate on the amount of such
discrepancy.
If such discrepancies are in Landlord's favor, Tenant shall
reimburse Landlord
for its costs in complying with Tenant's audit request. If Tenant
fails to
dispute in writing, any item(s) within the Dispute Period, the
statement for
that period shall be deemed final and conclusive and not subject to
dispute or
audit. Landlord's and Tenant's obligations under this Paragraph 4.3
shall
survive the expiration or termination of the term.
5. Security Deposit. Tenant shall deposit with Landlord upon
Tenant's execution
hereof the Security Deposit set forth in Paragraph 1.7 as security
for Tenant's
faithful performance of Tenant's obligations under this Lease. If
Tenant fails
to pay Base Rent or Additional Rent or otherwise defaults under
this Lease (as
defined in Paragraph 13.1), Landlord may use the Security Deposit
for the
payment of any amount due Landlord or to reimburse or compensate
Landlord for
any liability, cost, expense, loss, or damage (including attorneys'
fees) which
Landlord may suffer or incur by reason thereof. Tenant shall on
demand pay
Landlord the amount so used or applied so as to restore the
Security Deposit to
the amount set forth in Paragraph 1.7. Landlord shall not be
required to keep
all or any part of the Security Deposit separate from its general
accounts.
Landlord shall, at the expiration or earlier termination of the
term hereof and
after Tenant has vacated the Premises, return to Tenant that
portion of the
Security Deposit not used or applied by Landlord. No part of the
Security
Deposit shall be considered to be held in trust, to bear interest,
or to be
prepayment for any monies to be paid by Tenant under this
Lease.
6. Use.
6.1
PERMITTED USE. Tenant shall use and occupy the Premises only for
the
Permitted Use set forth in Paragraph 1.8. Tenant shall not commit
any nuisance,
permit the emission of any objectionable noise or odor, suffer any
waste, make
any use of the Premises which is contrary to any law or ordinance,
or which will
invalidate or increase the premiums for any of Landlord's
insurance. Tenant
shall not service, maintain, or repair vehicles on the Premises,
Building, or
Common Areas. Tenant shall not store foods, pallets, drums, or any
other
materials outside the Premises. Notwithstanding the foregoing,
Tenant may
perform basic preventative maintenance ("Maintenance") of tractors,
trailers and
warehouse equipment. Maintenance shall be deemed to mean tractor,
trailer and
forklift oil changes and grease maintenance, tire and brake
replacement and
light repairs which shall in no event include engine, transmission
or drivetrain
overhauls or rebuilding. All maintenance shall be performed by
Tenant in the
area of the Premises which has been cross-hatcheted and identified
as
"Maintenance Area" on Exhibit A which is attached to this
Lease.
6.2
HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term, "Hazardous
Substance," as used in this Lease, shall mean any product,
substance, chemical,
material, or waste (including, without limitation, asbestos in any
of its forms)
whose presence, nature, quantity, and/or intensity of existence,
use,
manufacture, disposal, transportation, spill, release, or effect,
either by
itself or in combination with other materials expected to be on the
Premises,
the Common Areas and the Building is either: (i) potentially
injurious to the
public health, safety or welfare, the environment, or the Premises;
(ii)
regulated or monitored by any governmental authority or any
substance defined as
a "hazardous substance" under the Comprehensive Environmental
Response
Compensation and Liability Act, 41 U.S.C. 9601 ET. SEQ., as amended
("CERCLA");
or (iii) a basis for potential liability of Landlord to any
governmental agency
or third party under any applicable statute or common law theory.
Hazardous
Substance shall include, but not be limited to, hydrocarbons,
petroleum,
gasoline, crude oil, or any products or by-products thereof. Tenant
shall not
engage in any activity in or about the Premises which constitutes a
Reportable
Use (as hereinafter defined) of Hazardous Substances without the
express prior
written consent of Landlord and compliance in a timely manner (at
Tenant's sole
cost and expense) with all Applicable Requirements (as defined in
Paragraph
6.3). "Reportable Use" shall mean (i) the installation or use of
any above or
below ground storage tank, (ii) the generation, possession,
storage, use,
transportation, or disposal of a Hazardous Substance that requires
a permit
from, or with respect to which a report, notice, registration, or
business plan
is required to be filed with, any governmental authority, and (iii)
the presence
in, on, or about the Premises of a Hazardous Substance with respect
to which any
Applicable Requirements require that a notice be given to persons
entering or
occupying the Premises or neighboring properties. Notwithstanding
the foregoing,
Tenant may, without Landlord's prior consent, but upon notice to
Landlord and in
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compliance with all Applicable Requirements, use any ordinary and
customary
materials reasonably required to be used by Tenant in the normal
course of the
Permitted Use, so long as such use is not a Reportable Use and does
not expose
the Premises or neighboring properties to any meaningful risk of
contamination
or damage, or expose Landlord to any liability therefor. In
addition, Landlord
may (but without any obligation to do so) condition its consent to
any
Reportable Use of any Hazardous Substance by Tenant upon Tenant's
giving
Landlord such additional assurances as Landlord, in its reasonable
discretion,
deems necessary to protect itself, the public, the Premises, and
the environment
against damage, contamination, injury, and/or liability therefor,
including but
not limited to the installation (and, at Landlord's option, removal
on or before
Lease expiration or earlier termination) of reasonably necessary
protective
modifications to the Premises (such as concrete encasements) and/or
the deposit
of an additional Security Deposit.
(b) DUTY TO INFORM LANDLORD. Except as disclosed herein, if
Tenant
knows, or has reasonable cause to believe, that a Hazardous
Substance is located
in, under, or about the Premises or the Building, Tenant shall
immediately give
Landlord written notice thereof, together with a copy of any
statement, report,
notice, registration, application, permit, business plan, license,
claim,
action, or proceeding given to, or received from, any governmental
authority or
private party concerning the presence, spill, release, discharge
of, or exposure
to such Hazardous Substance. Tenant shall not cause or permit any
Hazardous
Substance to be spilled or released in, on, under, or about the
Premises
(including, without limitation, through the plumbing or sanitary
sewer system).
(c) INDEMNIFICATION. Tenant shall indemnify, protect, defend,
and
hold Landlord, Landlord's affiliates, Lenders, and the officers,
directors,
shareholders, partners, employees, managers, independent
contractors, attorneys,
and agents of the foregoing ("Landlord Entities") and the Premises
harmless from
and against any and all damages, liabilities, judgments, costs,
claims, liens,
expenses, penalties, loss of permits, and reasonable attorneys' and
consultants'
fees arising out of or involving any Hazardous Substance on or
brought onto the
Premises by or for Tenant or by any of Tenant's employees, agents,
contractors,
servants, visitors, suppliers, or invitees (such employees, agents,
contractors,
servants, visitors, suppliers, and invitees as herein collectively
referred to
as "Tenant Entities"). Tenant's obligations under this Paragraph
6.2(c) shall
include, but not be limited to, the effects of any contamination or
injury to
person, property, or the environment created or suffered by Tenant,
and the cost
of investigation (including consultants' and reasonable attorneys'
fees and
testing), removal, remediation, restoration and/or abatement
thereof, or of any
contamination therein involved. Tenant's obligations under this
Paragraph 6.2(c)
shall survive the Expiration Date or earlier termination of this
Lease.
6.3
TENANT'S COMPLIANCE WITH REQUIREMENTS. Except as otherwise provided
in
this Lease, Tenant shall, at Tenant's sole cost and expense, fully,
diligently,
and in a timely manner comply with all "Applicable Requirements,"
which term is
used in this Lease to mean all laws, rules, regulations,
ordinances, directives,
covenants, easements, and restrictions of record and other
requirements of the
various governmental departments and subdivisions having
jurisdiction over the
operations of Tenant's business at the Premises, permits, the
requirements of
any applicable fire insurance underwriter or rating bureau licensed
by the State
of California, and the recommendations of Landlord's engineers
and/or
consultants, relating in any manner to Tenant's use and/or
occupancy of the
Premises (including but not limited to matters pertaining to (a)
industrial
hygiene, (b) environmental conditions on, in, under, or about the
Premises,
including soil and groundwater conditions, and (c) the use,
generation,
manufacture, production, installation, maintenance, removal,
transportation,
storage, spill, or release of any Hazardous Substance), now in
effect or which
may hereafter come into effect. Tenant shall, within 5 days after
receipt of
Landlord's written request, provide Landlord with copies of all
documents and
information evidencing Tenant's compliance with any Applicable
Requirements,
and shall immediately upon receipt notify Landlord in writing (with
copies of
any documents involved) of any threatened or actual claim, notice,
citation,
warning, complaint, or report pertaining to or involving failure by
Tenant or
the Premises to comply with any Applicable Requirements.
6.4
INSPECTION; COMPLIANCE WITH LAW. In addition to Landlord's
environmental monitoring and insurance program, the cost of which
is included in
Operating Expenses, Landlord and the holders of any mortgages,
deeds of trust,
or ground leases on the Premises ("Lenders") shall have the right
to enter the
Premises at any time in the case of an emergency, and otherwise at
reasonable
times, upon reasonable prior notice, for the purpose of inspecting
the condition
of the Premises and for verifying compliance by Tenant with this
Lease and all
Applicable Requirements. Landlord shall be entitled to employ
experts and/or
consultants in connection therewith to advise Landlord with respect
to Tenant's
installation, operation, use,
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monitoring, maintenance, or removal of any Hazardous Substance on
or from the
Premises. The cost and expenses of any such inspections shall be
paid by the
party requesting same unless a violation of Applicable Requirements
exists or is
imminent, or the inspection is requested or ordered by a
governmental authority.
If such inspection has been requested by Tenant or by Landlord
because of some
action of Tenant regarding Tenant's use or storage of any Hazardous
Substance,
Tenant shall upon request reimburse Landlord or Landlord's Lender,
as the case
may be, for the costs and expenses of such inspections.
7. Maintenance, Repairs, Trade Fixtures and Alterations.
7.1
TENANT'S OBLIGATIONS. Subject to the provisions of Paragraph
7.2
(Landlord's Obligations), Paragraph 9 (Damage or Destruction), and
Paragraph 14
(Condemnation), Tenant shall, at Tenant's sole cost and expense and
at all
times, keep the Premises and every part thereof in good order,
condition, and
repair (whether or not such portion of the Premises requiring
repair, or the
means of repairing the same, are reasonable or readily accessible
to Tenant and
whether or not the need for such repairs occurs as a result of
Tenant's use, any
prior use, the elements, or the age of such portion of the
Premises) including,
without limiting the generality of the foregoing, all equipment or
facilities
specifically serving the Premises, such as plumbing, heating,
ventilating,
electrical, lighting facilities, boilers, fired or unfired pressure
vessels,
fire hose connectors if within the Premises, fixtures, interior
walls, interior
surfaces of exterior walls, ceilings, floors, windows, doors, plate
glass, and
skylights, but excluding any items which are the responsibility of
Landlord
pursuant to Paragraph 7.2 below. Tenant's obligations shall
include
restorations, replacements, or renewals when necessary to keep the
Premises and
all improvements thereon or a part thereof in good order,
condition, and state
of repair.
7.2
LANDLORD'S OBLIGATIONS. Subject to the provisions of Paragraph
6
(Use), Paragraph 7.1 (Tenant's Obligations), Paragraph 9 (Damage
or
Destruction), and Paragraph 14 (Condemnation), Landlord, at its
expense and not
subject to the reimbursement requirements of Paragraph 4.2, shall
keep in good
order, condition, and repair the roof structure, foundations and
exterior walls
of the Building and utility systems within the Industrial Center.
Landlord,
subject to reimbursement pursuant to Paragraph 4.2, shall keep in
good order,
condition, and repair the air conditioning systems servicing the
Premises,
Building roof membrane, and Common Areas.
7.3
ALTERATIONS. Tenant shall not make nor cause to be made any
alterations or installations in, on, under, or about the
Premises.
7.4
SURRENDER/RESTORATION. Tenant shall surrender the Premises by the
end
of the last day of the Lease term or any earlier termination date,
clean and
free of debris and in good operating order, condition, and state of
repair,
ordinary wear and tear excepted. Without limiting the generality of
the above,
Tenant shall remove all personal property, trade fixtures, and
floor bolts,
patch all floors, and cause all lights to be in good operating
condition.
8. Insurance; Indemnity.
8.1
PAYMENT OF PREMIUMS. The cost of the premiums for the insurance
policies maintained by Landlord under this Paragraph 8 shall be a
Common Area
Operating Expense reimbursable pursuant to Paragraph 4.2 hereof.
Premiums for
policy periods commencing prior to, or extending beyond, the term
of this Lease
shall be prorated to coincide with the corresponding Commencement
Date and
Expiration Date.
8.2
TENANT'S INSURANCE.
(a) At its sole cost and expense, Tenant shall maintain in full
force and effect during the Term of the Lease the following
insurance coverages
insuring against claims which may arise from or in connection with
the Tenant's
operation and use of the Premises.
(i) Commercial General Liability insurance with minimum limits
of $1,000,000 per occurrence and $3,000,000 general aggregate for
bodily injury,
personal injury, and property damage. If required by Landlord,
liquor liability
coverage will be included. Such insurance shall be endorsed to
include Landlord
and Landlord Entities as additional insureds, shall be primary
and
noncontributory with any Landlord insurance, and shall provide
severability of
interests between or among insureds.
(ii) Workers' Compensation insurance with statutory limits and
Employers Liability with a $1,000,000 per accident limit for bodily
injury or
disease.
(iii) Automobile Liability insurance covering all owned,
nonowned, and hired vehicles with a $1,000,000 per accident limit
for bodily
injury and property damage.
(iv) Property insurance against "all risks" at least as broad
as the current ISO Special Form policy, including earthquake and
flood, for loss
to any tenant improvements or betterments, floor and wall
coverings, and
business personal property on a full insurable replacement cost
basis with no
coinsurance clause, and Business Income insurance covering at least
six months
of loss of income and continuing expense.
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(b) Tenant shall deliver to Landlord certificates of all
insurance
reflecting evidence of required coverages prior to initial
occupancy, and
annually thereafter.
(c) If, in the reasonable opinion of Landlord's insurance
advisor,
the amount or scope of such coverage is deemed inadequate at any
time during the
Term, Tenant shall increase such coverage to such reasonable
amounts or scope as
Landlord's advisor deems adequate.
(d) All insurance required under Paragraph 8.2 (i) shall be
issued
by insurers licensed to do business in the state in which the
Premises are
located and which are rated A:VII or better by Best's Key Rating
Guide and (ii)
shall be endorsed to provide at least 30-days prior notification of
cancellation
or material change in coverage to said additional insureds.
8.3
LANDLORD'S INSURANCE. Landlord may, but shall not be obligated
to,
maintain "all risks" coverage as broad as the current ISO Special
Form policy,
including earthquake and flood, covering the buildings within the
Industrial
Center, the Common Areas and the Building, Commercial General
Liability
insurance, and such other insurance in such amounts and covering
such other
liability or hazards as deemed appropriate by Landlord. The amount
and scope of
coverage of Landlord's insurance shall be determined by Landlord
from time to
time in its sole but commercially reasonable discretion and shall
be subject to
such deductible amounts as Landlord may reasonably elect. Landlord
shall have
the right to reduce or terminate any insurance or coverage.
8.4 WAIVER
OF SUBROGATION. To the extent permitted by law and with
permission of their insurance carriers, Landlord and Tenant each
waive any right
to recover against the other on account of any and all claims
Landlord or Tenant
may have against the other with respect to property insurance
actually carried,
or required to be carried hereunder, to the extent of the proceeds
realized from
such insurance coverage.
8.5
INDEMNITY. Tenant shall protect, defend, indemnify, and hold
Landlord
and Landlord Entities harmless from and against any and all loss,
claims,
liability, or costs (including court costs and attorneys' fees)
incurred by
reason of:
(a) any damage to any property (including but not limited to
property of any Landlord Entity) or death, bodily, or personal
injury to any
person occurring in or about the Premises, the Building, or the
Industrial
Center to the extent that such injury or damage shall be caused by
or arise from
any actual or alleged act, neglect, fault, or omission by or of
Tenant, its
agents, servants, employees, invitees, contractors, suppliers,
subtenants, or
visitors;
(b) the conduct or management of any work or anything
whatsoever
done by the Tenant on or about the Premises or from transactions of
the Tenant
concerning the Premises;
(c) Tenant's failure to comply with any and all governmental
laws,
ordinances, and regulations applicable to the condition or use of
the Premises
or its occupancy; or
(d) any breach or default on the part of Tenant in the
performance
of any covenant or agreement to be performed pursuant to this
Lease.
The provisions of this Paragraph 8.5 shall, with respect to any
claims or liability accruing prior to such termination, survive the
Expiration
Date or earlier termination of this Lease.
8.6
EXEMPTION OF LANDLORD FROM LIABILITY. Except to the extent caused
by
the gross negligence or willful misconduct of Landlord, Landlord
shall not be
liable for and Tenant waives any claims against Landlord for injury
or damage to
the person or the property of Tenant, Tenant Entities, or any other
person in or
about the Premises, Building, or Industrial Center from any cause
whatsoever,
including, but not limited to, damage or injury which is caused by
or results
from (a) fire, steam, electricity, gas, water, or rain, or from the
breakage,
leakage, seepage, back up of sewers or drains, obstruction, or
other defects of
pipes, fire sprinklers, wires, appliances, plumbing, air
conditioning, or
lighting fixtures or (b) from the condition of the Premises, other
portions of
the Building, or Industrial Center. Landlord shall not be liable
for any damages
arising from any act or neglect of any other tenant of Landlord nor
from the
failure by Landlord to enforce the provisions of any other lease in
the
Industrial Center. Notwithstanding Landlord's negligence or breach
of this
Lease, Landlord shall under no circumstances be liable for injury
to Tenant's
business, for any loss of income or profit therefrom, or any
indirect,
consequential, or punitive damages.
8.7
EXEMPTION OF TENANT FROM LIABILITY. Except to the extent caused
by
the use of the railroad spur located at the Industrial Center by
Tenant or
Tenant's Entities, Tenant shall not be liable for and Landlord
waives any claims
against Tenant for injury or damage to the person or property of
Landlord, or
any other person in or about the Premises, Building or Industrial
Center from
any cause whatsoever arising out of or related to the use,
maintenance, repair,
replacement or presence of such railroad spur at the Industrial
Center.
Landlord's
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obligations under this Paragraph 8.7 shall survive the Expiration
Date or
earlier termination of the Lease
9. Damage or Destruction.
9.1
TERMINATION RIGHT. Tenant shall give Landlord immediate written
notice
of any damage to the Premises. Subject to the provisions of
Paragraph 9.2, if
the Premises or the Building shall be damaged to such an extent
that there is
substantial interference for a period exceeding 90 consecutive days
with the
conduct by Tenant of its business at the Premises, Tenant, at any
time prior to
commencement of repair of the Premises and following 10 days
written notice to
Landlord, may terminate this Lease effective 30 days after delivery
of such
notice to Landlord. Such termination shall not excuse the
performance by Tenant
of those covenants which under the terms hereof survive
termination. Rent shall
be abated in proportion to the degree of interference during the
period that
there is such substantial interference with the conduct of Tenant's
business at
the Premises. Abatement of rent and Tenant's right of termination
pursuant to
this provision shall be Tenant's sole remedy for failure of
Landlord to keep in
good order, condition, and repair the foundations and exterior
walls of the
Building, Building roof, utility systems outside the Building, the
Common Areas,
and HVAC.
9.2
DAMAGE, CAUSED BY TENANT. Tenant's termination rights under
Paragraph
9.1 shall not apply if the damage to the Premises or Building is
the result of
any act or omission of Tenant or of any of Tenant's agents,
employees,
customers, invitees, or contractors ("Tenant Acts"). Any damage
resulting from a
Tenant Act shall be promptly repaired by Tenant. Landlord at its
option may at
Tenant's expense repair any damage caused by Tenant Acts. Tenant
shall continue
to pay all rent and other sums due hereunder and shall be liable to
Landlord for
all damages that Landlord may sustain resulting from a Tenant
Act.
10. Real Property Taxes.
10.1
PAYMENT OF REAL PROPERTY TAXES. Landlord shall pay the Real
Property Taxes due and payable during the term of this Lease on the
entire
assessor's parcel on which the Premises are located and, except as
otherwise
provided in Paragraph 10.3, such payments shall be a Common Area
Operating
Expense reimbursable pursuant to Paragraph 4.2.
10.2 REAL
PROPERTY TAX DEFINITION. As used herein, the term "Real
Property
Taxes" is any form of tax or assessment, general, special,
ordinary, or
extraordinary, imposed or levied upon (a) the Industrial Center or
Building, (b)
any interest of Landlord in the Industrial Center or Building, (c)
Landlord's
right to rent or other income from the Industrial Center or
Building, and/or (d)
Landlord's business of leasing the Premises, Real Property Taxes
include (a) any
license fee, commercial rental tax, excise tax, improvement bond or
bonds, levy,
or tax; (b) any tax or charge which replaces or is in addition to
any of such
above-described "Real Property Taxes," and (c) any fees, expenses,
or costs
(including attorneys' fees, expert fees, and the like) incurred by
Landlord in
protesting or contesting any assessments levied or any tax rate.
Real Property
Taxes for tax years commencing prior to, or extending beyond, the
term of this
Lease shall be prorated to coincide with the corresponding
Commencement Date and
Expiration Date.
10.3
ADDITIONAL IMPROVEMENTS. Operating Expenses shall not include
Real
Property Taxes attributable to improvements placed upon the
Industrial Center by
other tenants or by Landlord for the exclusive enjoyment of such
other tenants.
Tenant shall, however, pay to Landlord at the time Operating
Expenses are
payable under Paragraph 4.2, the entirety of any increase in Real
Property Taxes
if assessed by reason of improvements placed upon the Premises by
Tenant or at
Tenant's request.
10.4 JOINT
ASSESSMENT. If the Building is not separately assessed, Real
Property Taxes allocated to the Building shall be an equitable
proportion of the
Real Property Taxes for all of the land and improvements included
within the tax
parcel assessed.
10.5
TENANT'S PROPERTY TAXES. Tenant shall pay prior to delinquency
all
taxes assessed against and levied upon Tenant's improvements,
fixtures,
furnishings, equipment, and all personal property of Tenant
contained in the
Premises or stored within the Industrial Center.
11. Utilities. Tenant shall pay directly for all utilities and
services supplied
to the Premises, including but not limited to electricity,
telephone, security,
gas, and cleaning of the Premises, together with any taxes
thereon.
12. Assignment and Subletting.
12.1
LANDLORD'S CONSENT REQUIRED.
(a) Tenant shall not assign, transfer, mortgage, or otherwise
transfer or encumber (collectively, "assign") or sublet all or any
part of
Tenant's interest in this Lease or in the Premises without
Landlord's prior
written consent, which consent shall not be unreasonably withheld.
Relevant
criteria in determining reasonability of consent include, but are
not limited
to, credit history of a proposed assignee or sublessee, references
from prior
landlords, any change or intensification of use of the Premises or
the Common
Areas, and any limitations
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imposed by the Internal Revenue Code and the Regulations
promulgated thereunder
relating to Real Estate Investment Trusts. Assignment or sublet
shall not
release Tenant from its obligations hereunder. Tenant shall not (i)
sublet,
assign, or enter into other arrangements in which the amounts to be
paid by the
sublessee or assignee thereunder would be based, in whole or in
part, on the
income or profits derived by the business activities of the
sublessee or
assignee; (ii) sublet the Premises or assign this Lease to any
person or entity
in which Landlord owns an interest, directly or indirectly (by
applying
constructive ownership rules set forth in Section 856(d)(5) of the
Internal
Revenue Code (the "Code"); or (iii) sublet the Premises or assign
this Lease in
any other manner which could cause any portion of the amounts
received by
Landlord pursuant to this Lease or any sublease to fail to qualify
as "rents
from real property" within the meaning of Section 856(d) of the
Code, or which
could cause any other income received by Landlord to fail to
qualify as income
described in Section 856(c)(2) of the Code. The requirements of
this Section
12.1 shall apply to any further subleasing by any subtenant.
Notwithstanding the
foregoing, in the event of any assignment or subletting to which
Landlord
consents, Landlord shall receive fifty percent (50%), the event of
a sublease,
of any rent received by Tenant above the rent then being paid by
Tenant to
Landlord less any commissions or marketing expense paid by Tenant
for such
sublease. In addition, Landlord shall receive fifty percent (50%),
in the event
of an assignment, of any profit derived by Tenant from such
assignment less any
commissions or marketing expense paid by Tenant for such
assignment.
(b) A change in the control of Tenant shall constitute an
assignment
requiring Landlord's consent. The transfer, on a cumulative basis,
of 25% or
more of the voting or management control of Tenant shall constitute
a change in
control for this purpose.
(c) Notwithstanding the foregoing or anything to the contrary
contained in the Lease, without Landlord's consent, at any time,
Tenant may
sublease or assign all or any portion of the Premises to an
affiliate
("Affiliate") that either is controlled by, directly controls, or
is under
common control with, Tenant.
12.2 RENT
ADJUSTMENT. If, as of the effective date of any permitted
assignment or subletting, the then remaining term of this Lease is
less than 3
years, Landlord may, as a condition to its consent; (a) require
that the amount
of the Rent payable under this Lease be adjusted to what is then
the market
value for property similar to the Premises as then constituted, as
determined by
Landlord; or (b) terminate the Lease as of the date of assignment
or subletting,
subject to the performance by Tenant of those covenants which under
the terms
hereof survive termination.
13. Default; Remedies.
13.1
DEFAULT. The occurrence of any one of the following events
shall
constitute an event of default on the part of Tenant
("Default"):
(a) The abandonment of the Premises by Tenant;
(b) Failure to pay any installment of Base Rent, Additional Rent,
or
any other monies due and payable hereunder, said failure continuing
for a period
of 3 days after the same is due;
(c) A general assignment by Tenant or any guarantor for the
benefit
of creditors;
(d) The filing of a voluntary petition of bankruptcy by Tenant
or
any guarantor; the filing of a voluntary petition for an
arrangement; the filing
of a petition, voluntary or involuntary, for reorganization; or the
filing of an
involuntary petition by Tenant's creditors or guarantors;
(e) Receivership, attachment, or other judicial seizure of the
Premises or all or substantially all of Tenant's assets on the
Premises;
(f) Failure of Tenant to maintain insurance as required by
Paragraph
8.2;
(g) Any breach by Tenant of its covenants under Paragraph 6.2;
(h) Failure in the performance of any of Tenant's covenants,
agreements, or obligations hereunder (except those failures
specified as events
of Default in other Paragraphs of this Paragraph 13.1 which shall
be governed by
such other Paragraphs), which failure continues for 10 days after
written notice
thereof from Landlord to Tenant; provided that, if Tenant has
exercised
reasonable diligence to cure such failure and such failure cannot
be cured
within such 10-day period despite reasonable diligence, Tenant
shall not be in
default under this subparagraph unless Tenant fails thereafter
diligently and
continuously to prosecute the cure to completion;
(i) 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; and
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(j) 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.
13.2
REMEDIES. In the event of any Default by Tenant, Landlord shall
have
any or all of the following remedies:
(a) TERMINATION. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in
equity and
under this Lease, Landlord shall have the immediate option to
terminate this
Lease and all rights of Tenant hereunder by giving written notice
of such
intention to terminate. In the event that Landlord shall elect to
so terminate
this Lease then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and any
other sums due and payable which have been earned at the time of
such
termination; plus
(2) the worth at the time of award of the amount by which the
unpaid Rent and any other sums due and payable which would have
been earned
after termination until the time of award exceeds the amount of
such rental
loss Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which the
unpaid Rent and any other sums due and payable for the balance of
the term of
this Lease after the time of award exceeds the amount of such
rental loss that
Tenant proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its
obligations
under this Lease or which in the ordinary course would be likely to
result
therefrom, including, without limitation, any costs or expenses
incurred by
Landlord (i) in retaking possession of the Premises; (ii) in
maintaining,
repairing, preserving, restoring, replacing, cleaning, the Premises
or any
portion thereof, including such acts for relating to a new lessee
or lessees;
(iii) for leasing commissions; or (iv) for any other costs
necessary or
appropriate to relet the Premises; plus
(5) such reasonable attorneys' fees incurred by Landlord as a
result of a Default, and costs in the event suit is filed by
Landlord to enforce
such remedy; and plus
(6) 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
law. As used in subparagraphs (1) and (2) above, the "worth at the
time of
award" is computed by allowing interest at an annual rate equal to
twelve
percent (12%) per annum or the maximum rate permitted by law,
whichever is less.
As used in subparagraph (3) 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%). Tenant
waives
redemption or relief from forfeiture under California Code of Civil
Procedure
Sections 1174 and 1179, or under any other present or future law,
in the event
Tenant is evicted or Landlord takes possession of the Premises by
reason of any
Default of Tenant hereunder.
(b) CONTINUATION OF LEASE. In the event of any Default by
Tenant,
then in addition to any other remedies available to Landlord at law
or in equity
and under this Lease, Landlord shall have the remedy described in
California
Civil Code Section 1951.4 (Landlord may continue this Lease in
effect after
Tenant's Default and abandonment and recover Rent as it becomes
due, provided
tenant has the right to sublet or assign, subject only to
reasonable
limitations).
(c) RE-ENTRY. In the event of any Default by Tenant, Landlord
shall
also have the right, with or without terminating this Lease, in
compliance with
applicable law, to re-enter the Premises and remove all persons and
property
from the Premises; such property may be removed and stored in a
public warehouse
or elsewhere at the cost of and for the account of Tenant.
(d) RELETTING. In the event of the abandonment of the Premises
by
Tenant or in the event that Landlord shall elect to re-enter or
shall take
possession of the Premises pursuant to legal proceeding or pursuant
to any
notice provided by law, then if Landlord does not elect to
terminate this Lease
as provided in Paragraph a, Landlord may from time to time, without
terminating
this Lease, relet the Premises or any part thereof for such term or
terms and at
such rental or rentals and upon such other terms and conditions as
Landlord in
its sole discretion may deem advisable with the right to make
alterations and
repairs to the Premises. In the event that Landlord shall elect to
so relet,
then rentals received by Landlord from such reletting shall be
applied in the
following order: (1) to reasonable attorneys' fees incurred by
Landlord as a
result of a Default and costs in the event suit is filed by
Landlord to enforce
such remedies; (2) to the payment of any indebtedness other than
Rent due
hereunder from Tenant to Landlord; (3) to the payment of any costs
of such
reletting; (4) to the payment of the costs of any alterations and
repairs to the
Premises; (5) to the payment of Rent due and unpaid hereunder; and
(6) the
residue, if any, shall be held by Landlord and applied in payment
of future Rent
and other sums payable by Tenant hereunder as the same may become
due and
payable hereunder. Should that portion of such rentals received
from such
reletting during any month, which is applied to the payment of Rent
hereunder,
be less than the Rent payable during the month by Tenant hereunder,
then Tenant
shall pay such deficiency to 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.
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<PAGE>
(e) TERMINATION. No re-entry or taking of possession of the
Premises
by Landlord pursuant to this Addendum shall be construed as an
election to
terminate this Lease unless a w
