FindLaw | Find a Lawyer. Find Answers.
Are you a legal Professional?
My current location:
Los Angeles, CA
| Change location
| Featured Legal Services | |
|
(562) 435-1426
|
DUPLICATE ORIGINAL
SINGLE TENANT INDUSTRIAL LEASE
------------------------------
Effective Date: December 4, 1995
(The date set forth below Landlord's signature.)
BASIC LEASE INFORMATION
-----------------------
Landlord: CATELLUS DEVELOPMENT CORPORATION, a
Delaware corporation
Landlord's Address
For Notice: 1065 N, PacifiCenter Drive, Suite 200
Anaheim, CA 92806
Attn: Asset Management
Telephone: (714) 630-8100
Fax: (714) 237-7416
Landlord's Address
For Payment of Rent: File #53694
Los Angeles, CA 90074-3694
Tenant: MOHAWK INDUSTRIES, INC., a Georgia corporation
Tenant's Address P.O. Box 2208
-----------------------------------
For Notice: Dalton, CA, 30722
-----------------------------------
Attn: JACK SHARPE
-----------------------------
Telephone: 706-277-1100
------------------------
Fax: 706-277-1440
------------------------------
Project: 16400 Trojan Way
Building: Approximately 220,000 rentable square feet as
shown in Exhibit A.
---------
Building Address:
Street: 16400 Trojan Way
City and State: La Mirada, CA 90638
Lot: The tax parcel on which the Building is located.
Term: Sixty (60) months
Estimated Commencement
Date: September 1, 1996
Base Rent Per Month: Seventy Four Thousand Eight Hundred Dollars
($74,800.00)
Security Deposit: None
Broker: Lee & Associates
Lease Year: Shall refer to each three hundred sixty-five
(365) day period during the Term commencing on
the Commencement Date and on each anniversary
thereof.
Permitted Uses: Warehousing and distribution of carpet and no
other uses shall be permitted without the prior
written consent of Landlord.
(i)
<PAGE>
EXHIBITS
A - Building/Lot - Premises
B - Work Letter
B-I - Space Plan
C - Commencement Date Memorandum
D - Insurance Certificate
E - Prohibited Uses
F - Correction Items
G - Estoppel Certificate
The Basic Lease Information set forth above and the Exhibits attached
hereto are incorporated into and made a part of the following Lease. Each
reference in this Lease to any of the Basic Lease Information shall mean the
respective information above and shall be construed to incorporate all of the
terms provided under the particular Lease paragraph pertaining to such
information. In the event of any conflict between the Basic Lease Information
and the provisions of the Lease, the latter shall control.
LANDLORD (ILLEGIBLE) AND TENANT (JV) AGREE.
------ ------
initial initial
X
(ii)
<PAGE>
Table of Contents
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
1. PREMISES...................................................... 1
1.1 Premises................................................ 1
1.2 Reserved Rights......................................... 1
2. TERM.......................................................... 1
2.1 Lease Term and Commencement Date........................ 1
2.2 Possession.............................................. 1
3. RENT.......................................................... 2
3.1 Rent.................................................... 2
3.2 Late Charge and Interest................................ 2
3.3 Intentionally Omitted................................... 2
4. UTILITIES..................................................... 2
5. TAXES......................................................... 2
5.1 Real Property Taxes..................................... 2
5.2 Personal Property Taxes................................. 3
6. TRIPLE NET LEASE.............................................. 3
7. INSURANCE..................................................... 3
7.1 Landlord................................................ 3
7.2 Tenant.................................................. 3
7.3 General................................................. 4
7.4 Indemnity............................................... 4
7.5 Exemption of Landlord from Liability.................... 5
8. REPAIRS AND MAINTENANCE....................................... 5
8.1 Landlord................................................ 5
8.2 Tenant.................................................. 5
8.3 Roof - Repair and Replacement........................... 6
8.4 Condition of the Premises............................... 6
9. ALTERATIONS................................................... 6
9.1 Trade Fixtures; Alterations............................. 6
9.2 Damage; Removal......................................... 6
9.3 Liens................................................... 6
10. USE........................................................... 7
11. ENVIRONMENTAL MATTERS......................................... 7
11.1 Hazardous Meterials..................................... 7
11.2 Indemnification......................................... 7
11.3 Landlord's Disclosure................................... 8
11.4 Storage Tank Removal.................................... 8
12. DAMAGE AND DESTRUCTION........................................ 8
12.1 Casualty................................................ 8
12.2 Tenant's Fault.......................................... 8
12.3 Uninsured Casualty...................................... 9
12.4 Waiver.................................................. 9
13. EMINENT DOMAIN................................................ 9
13.1 Total Condemnation...................................... 9
13.2 Partial Condemnation.................................... 9
13.3 Award................................................... 9
13.4 Temporary Condemnation.................................. 9
</TABLE>
(iii)
<PAGE>
<TABLE>
<S> <C>
14. DEFAULT....................................................... 9
14.1 Events of Defaults..................................... 9
14.2 Remedies............................................... 10
14.3 Cumulative............................................. 11
15. ASSIGNMENT AND SUBLETTING.................................... 11
16. ESTOPPEL, ATTORNMENT AND SUBORDINATION....................... 11
16.1 Estoppel............................................... 11
16.2 Subordination.......................................... 11
16.3 Attornment............................................. 12
17. MISCELLANEOUS................................................ 12
17.1 General................................................ 12
17.2 Signs.................................................. 12
17.3 Waiver................................................. 12
17.4 Financial Statements................................... 13
17.5 Limitation of Liability................................ 13
17.6 Notices................................................ 13
17.7 Brokerage Commission................................... 13
17.8 Authorization.......................................... 13
17.9 Holding Over; Surrender................................ 13
17.10 Joint and Several...................................... 13
17.11 Covenants and Conditions............................... 13
17.12 Addenda................................................ 13
</TABLE>
(iv)
<PAGE>
1. PREMISES.
1.1 Premises. Landlord hereby leases to Tenant the Building and that
--------
portion of the Lot (or all thereof if the Building constitutes the material
improvement thereon) upon which the same is situated (hereinafter collectively
referred to as the "Premises") as shown on Exhibit A attached hereto.
---------
1.2 Reserved Rights. Landlord reserves the right to enter the Premises
---------------
upon reasonable notice to Tenant (except in case of an emergency) and/or to
undertake the following: inspect the Premises and/or the performance by Tenant
of the terms and conditions hereof; grant easements on the Project, dedicate for
public use portions thereof and record covenants, conditions and restrictions
("CC&R's") affecting the Project and/or amendments to existing CC&R's which do
not unreasonably interfere with Tenant's use of the Premises; change the name of
the Project; and, during the last nine (9) months of the Term, show the Premises
to prospective tenants.
2. TERM.
----
2.1 Lease Term and Commencement Date. The Term of the Lease shall be for a
--------------------------------
period of sixty (60) months, subject to extension in accordance with Section 20
below. The Term shall commence (the "Commencement Date") on the first day of the
first full calendar month following the Possession Date (as defined in Section
2.2.2), except that if the Possession Date occurs on the first day of a month,
that day shall also be the Commencement Date. Tenant shall execute and deliver
to Landlord, upon request by Landlord, a Commencement Date Memorandum in the
form attached hereto as Exhibit C acknowledging (i) the Commencement Date (and,
---------
if requested, the Possession Date and Rent Commencement Date, as defined below),
(ii) the final square footage of the Premises, and (iii) Tenant's acceptance of
the Premises.
2.2 Possession.
----------
2.2.1 Landlord's Possession. Tenant acknowledges that the Premises
---------------------
are currently occupied by an existing tenant thereof and that Landlord's
delivery of possession of the Premises is contingent upon such tenant vacating
the Premises. Landlord presently anticipates that the current tenant will vacate
the Premises and restore possession thereof to Landlord on or about September 1
1996 and Landlord shall use its commercially reasonable efforts to recover
possession on such date or as soon as practicable thereafter. In the event that
Landlord does not recover possession of the Premises on or before such date, as
a result of the failure of the existing tenant to vacate the Premises on or
before such date, Landlord shall not be subject to any liability therefor and
such failure shall not affect the validity of this Lease or the obligations of
either party hereunder, provided, however, that if the existing tenant fails to
vacate the Premises on or before November 1, 1996 (subject to Force Majeure
events), either Landlord or Tenant may, at its option, by written notice to the
other party given within ten (10) days thereafter, terminate this Lease, in
which event Landlord shall return to Tenant all funds paid in advance and the
Parties shall be discharged from all further obligations hereunder.
Notwithstanding anything set forth in this Section 2.2, Tenant shall not be
obligated to pay Base Rent for its use and occupancy of the Premises until the
Rent Commencement Date, as defined in Section 3.1.
2.2.2 Tender of Possession to Tenant. Landlord shall tender
------------------------------
possession of the Premises to Tenant as soon as practicable following the date
on which Landlord receives possession thereof. Tenant's possession and use of
the Premises from the date on which Landlord tenders possession thereof to
Tenant (the "Possession Date") to the Commencement Date (the "Early Possession
Period") shall be subject to all the provisions of this Lease. During the Early
Possession Period, Tenant shall (i) arrange for and pay for all utilities
delivered to the Premises (ii) arrange for, and maintain in effect, the
insurance coverages required to be obtained by Tenant pursuant to Section 7.2
of this Lease, (iii) pay to Landlord as and when due, all sums payable to
Landlord hereunder, including, without limitation. amounts payable for Real
Property Taxes (as defined in Section 5) and insurance premiums, and (iv)
perform all other obligations required by Tenant pursuant to this Lease.
2.2.3 Tenant Improvements. Landlord shall arrange for the
-------------------
construction of certain Tenant improvements (as defined in the Work Letter
attached hereto as Exhibit B) in accordance with and subject to the terms of the
---------
Work Letter. Landlord shall commence the construction of the Tenant improvements
and diligently pursue such construction to completion as soon as reasonably
practicable following the Possession Date. Tenant's use of the Premises shall
not unreasonably interfere with Landlord's contractor(s) or otherwise impede the
completion of the Tenant Improvements. The construction of the Tenant
improvements shall not delay the occurrence of the Commencement Date. Tenant has
determined that the Premises are acceptable for Tenant's use and Tenant
acknowledges that, except as set forth in the Work Letter, neither Landlord nor
any broker or agent has made any representations or warranties in connection
with the physical condition of the Premises or their fitness for Tenant's use
upon which Tenant has relied directly or indirectly for any purpose.
2.2.4 Substantial Completion. The Tenant improvements shall be
----------------------
deemed to be "Substantially Complete" on the date on which Landlord files or
causes to be filed with the City in which the Premises are located (if required)
and
1.
<PAGE>
delivers to Tenant an architect's notice of substantial completion, or similar
written notice that the Tenant Improvements are Substantially Complete. As used
herein, the term "Substantially Complete" means that the Tenant Improvements
have been constructed in substantial compliance with the applicable plans and
specifications, except only minor "punchlist" items. Landlord shall promptly
complete such punchlist items to the reasonable satisfaction of Tenant.
3. RENT.
----
3.1 Rent.
----
3.1.1 Tenant's obligation to pay Base Rent shall commence on the
first (1st) calendar day following the date on which the Tenant Improvements are
Substantially Complete and possession of the Premises has been tendered to
Tenant (the "Rent Commencement Date"). Tenant shall pay to Landlord, at
Landlord's Address for Payment of Rent designated in the Basic Lease
Information, or at such other address as Landlord may from time to time
designate in writing to Tenant for the payment of Rent, the Base Rent, without
notice, demand, offset or deduction, in advance, on the first day of each
calendar month. Upon the execution of this Lease, Tenant shall pay to Landlord
the first month's Base Rent. Base Rent for the period from the Rent Commencement
Date to the first day of the next calendar month shall be prorated on a per diem
basis. All sums other than Base Rent which Tenant is obligated to pay under this
Lease shall be deemed to be additional rent due hereunder, whether or not such
sums are designated "additional rent." The term "Rent" means the Base Rent and
all additional rent payable hereunder.
3.1.2 As set forth in the Basic Lease Information, the initial Base
Rent shall be the sum of $74,800.00 per month which is calculated on the basis
of $0.34 per square foot. Tenant acknowledges that the Premises contains
approximately 220,000 rentable square feet of space. The parties acknowledge
that such measurement is an estimate and that the Base Rent shall not be
adjusted on the basis of a difference in the actual number of rentable square
feet.
3.2 Late Charge and Interest. The late payment of any Rent will cause
------------------------
Landlord to incur additional costs, including administration and collection
costs and processing and accounting expenses and increased debt service
("Delinquency Costs"). If Landlord has not received any installment of Rent
within ten (l0) days after such amount is due, Tenant shall pay a late charge
of five percent (5%) of the delinquent amount, which is agreed to represent a
reasonable estimate of the Delinquency Costs incurred by Landlord. In addition,
all such delinquent amounts shall bear interest from the date such amount was
due until paid in full at a rate per annum ("Applicable Interest Rate") equal to
the lesser of (a) the maximum interest rate permitted by law or (b) five percent
(5%) above the rate publicly announced by Bank of America, N.A. (or if Bank of
America, N.A. ceases to exist, the largest bank then headquartered in the State
of California ("Bank") as its "Reference Rate." If the use of the announced
Reference Rate is discontinued by the Bank, then the term Reference Rate shall
mean the announced rate charged by the Bank which is, from time to time,
substituted for the Reference Rate. Landlord and Tenant recognize that the
damage which Landlord shall suffer as a result of Tenant's failure to pay such
amounts is difficult to ascertain and said late charge and interest are the best
estimate of the damage which Landlord shall suffer in the event of late payment
If a late charge becomes payable for any three (3) installments of Rent within
any twelve (l2) month period, then the Rent shall automatically become due and
payable quarterly in advance.
3.3 Intentionally Omitted.
---------------------
4. UTILITIES. Tenant shall make all arrangements for and shall pay all charges
---------
for heat, water, gas, electricity, telephone and any other utilities used on or
provided to the Premises including, without limitation, paying any deposits and
"hook up charges." Landlord shall not be liable to Tenant for interruption in or
curtailment of any utility service, nor shall any such interruption or
curtailment constitute constructive eviction or grounds for rental abatement.
The cost of maintaining and repairing the plumbing, electrical distribution, and
mechanical systems, and other utility installations shall be borne by the
parties as provided in Section 8.
5. TAXES.
-----
5.1 Real Property Taxes. Landlord shall pay to the proper taxing
-------------------
authorities as the same become due all Real Property Taxes applicable to the
Premises, subject to reimbursement by Tenant as provided below. The term "Real
Property Taxes" shall be the sum of the following: all real property taxes,
possessory-interest taxes, business or license taxes or fees, service payments
in lieu of such taxes or fees, annual or periodic license or use fees, excises,
transit and traffic charges, housing fund assessments, open space charges, child
care fees, school, sewer and parking fees or any other assessments, levies,
fees, executions or charges, general and special, ordinary and extraordinary,
unforeseen as well as foreseen (including fees "in-lieu" of any such tax or
assessment) which are assessed, levied, charged, conferred or imposed by any
public authority upon the Premises (or any real property comprising any portion
thereof) or its operations, together with all taxes, assessments or other fees
imposed by any public authority upon or measured by any Rent or other charges
payable hereunder, including any gross receipts tax or excise tax levied by any
governmental authority with respect to receipt of rental income, or upon, with
respect to or by reason of the development, possession, leasing, operation,
management, maintenance alteration, repair, use or occupancy by Tenant of the
Premises or any portion thereof, or documentary transfer taxes upon this
transaction or
2.
<PAGE>
any document to which Tenant is a party creating or transferring an interest in
the Premises, together with any tax imposed in substitution, partially or
totally, of any tax previously included within the aforesaid definition or any
additional tax the nature of which was previously included within the aforesaid
definition, together with the costs and expenses (including attorneys and expert
witness fees and costs) of challenging any of the foregoing or seeking the
reduction in or abatement, redemption or return of any of the foregoing, but
only to the extent of any such reduction, abatement, redemption or return.
Nothing contained in this Lease shall require Tenant to pay any franchise,
corporate, estate or inheritance tax of Landlord, or any income, profits or
revenue tax or charge upon the net income of Landlord.
5.1.1 Reimbursement By Tenant. Tenant shall pay to Landlord an
-----------------------
amount equal to the Real Property Taxes then due within fifteen (15) days after
delivery to Tenant by Landlord of an invoice for the same, together with a copy
of the corresponding tax bill. Landlord may, at Landlord's option, deliver
statements from different taxing authorities at different times or deliver all
such statements at one time; provided however, that Landlord shall not change
the method of invoicing Tenant for Real Property Taxes more than one (1) time
in each three (3) year period and, in each case, shall give Tenant thirty (30)
days notice prior to any change in such method of invoicing Tenant. In addition,
Landlord may elect to collect such Real Property Taxes from Tenant in advance,
on a monthly or quarterly basis, based upon Landlord's reasonable estimate of
such Real Property Taxes. If the amount of monthly or quarterly payments for
estimated Real Property Taxes received by Landlord from Tenant is more or less
than the actual Real Property Taxes due, an appropriate adjustment shall be made
by Landlord and Tenant.
5.1.2 Partial Years. Real Property Taxes for partial tax fiscal
-------------
years, if any, falling within the Term, shall be prorated. Tenant's obligations
for Real Property Taxes for the last full or partial year of the Term shall
survive the expiration or earlier termination of this Lease.
5.2 Personal Property Taxes. Prior to delinquency, Tenant shall pay all
-----------------------
taxes and assessments levied upon trade fixtures, alterations, additions,
improvements, inventories and other personal property located and/or installed
on the Premises by Tenant; and Tenant shall provide Landlord copies of receipts
for payment of all such taxes and assessments. To the extent any such taxes are
not separately assessed or billed to Tenant, Tenant shall pay the amount thereof
as invoiced by Landlord.
6. TRIPLE NET LEASE. It is intended that this Lease be a "triple net lease."
----------------
and that the Rent to be paid hereunder by Tenant will be received by Landlord
without any deduction or offset whatsoever by Tenant, foreseeable or
unforeseeable. Except as expressly provided to the contrary in this Lease,
Landlord shall not be required to make any expenditure, incur any obligation, or
incur any liability of any kind whatsoever in connection with this Lease or the
ownership, construction, maintenance, operation or repair of the Premises.
Notwithstanding the foregoing. Tenant shall reimburse Landlord monthly, as
additional rent, for all costs and fees reasonably incurred by Landlord in
connection with the management of this Lease and the Premises including the cost
of those services which are customarily performed by a property management
services company.
7. INSURANCE.
---------
7.1 Landlord. Landlord shall maintain insurance insuring the Building
--------
against fire and extended coverage (including, if Landlord elects, "all risk"
coverage, earthquake/volcanic action, flood and/or surface water insurance) for
the full replacement cost of the Building, with deductibles and the form and
endorsements of such coverage as selected by Landlord, together with rental
abatement insurance against loss of Rent in an amount equal to the amount of
Rent for a period of at least twelve (12) months commencing on the date of loss.
Landlord may also carry such other insurance as Landlord may deem prudent or
advisable, including, without limitation, liability insurance in such amounts
and on such terms as Landlord shall determine. Tenant shall pay to Landlord an
amount equal to the premiums then due within fifteen (15) days after delivery to
Tenant by Landlord of an invoice for any such premiums. Landlord may, at
Landlord's option, elect to collect such premiums from Tenant in advance, on a
monthly or quarterly basis, based upon Landlord's reasonable estimate of such
premiums. If the amount of monthly or quarterly payments for estimated premiums
received by Landlord from Tenant are more or less than the actual premiums due,
an appropriate adjustment shall be made by Landlord and Tenant.
7.2 Tenant. Tenant shall, at Tenant's expense, obtain and keep in force at
------
all times the following insurance:
7.2.1 Commercial General Liability Insurance (Occurrence Form). A
-------------------------------------------------------
policy of commercial general liability insurance (occurrence form) having a
combined single limit of not less than Two Million Dollars ($2,000.000) per
occurrence and Two Million Dollars ($2,000,000) aggregate per location if Tenant
has multiple locations, providing coverage for, among other things, blanket
contractual liability, premises, products/completed operations and personal and
advertising injury coverage, with deletion of (a) the exclusion for operations
within fifty (50) feet of a railroad track (railroad protective liability), if
applicable, and (b) the exclusion for explosion, collapse or underground hazard,
if applicable, and, if necessary, Tenant shall provide for restoration of the
aggregate limit;
3.
<PAGE>
7.2.2 Automobile Liability Insurance. Comprehensive automobile
------------------------------
liability insurance having a combined single limit of not less than Two Million
Dollars ($2,000,000) per occurrence and insuring Tenant against liability for
claims arising out of ownership, maintenance, or use of any owned, hired or non-
owned automobiles;
7.2.3 Workers' Compensation and Employer's Liability Insurance.
--------------------------------------------------------
Workers' compensation insurance having limits not less than those required by
state statute and federal statute, if applicable, and covering all persons
employed by Tenant in the conduct of its operations on the Premises (including
the all states endorsement and, if applicable, the volunteers endorsement),
together with employer's liability insurance coverage in the amount of at least
One Million Dollars ($1,000,000); and
7.2.4 Property Insurance. "All risk" property insurance including
------------------
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any of Tenant's personal property, fixtures, equipment and alterations,
including electronic data processing equipment (collectively "Tenant's
Property") (and coverage for the full replacement cost thereof including
business interruption of Tenant), together with, if the property of Tenant's
invitee's is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitee's and located in the Premises.
7.3 General.
-------
7.3.1 Insurance Companies. Insurance required to be maintained by
-------------------
Tenant shall be written by companies licensed to do business in the state in
which the Premises are located and having a "General Policyholders Rating" of at
least A 8 (or such higher rating as may be required by a lender having a lien on
the Premises) as set forth in the most current issue of "Best's Insurance
Guide."
7.3.2 Certificates of Insurance. Tenant shall deliver to Landlord
-------------------------
certificates of insurance for all insurance required to be maintained by Tenant
in the form of Exhibit D, attached hereto, no later than seven (7) days prior to
---------
the date of possession of the Premises. Tenant shall, at least ten (10) days
prior to expiration of the policy, furnish Landlord with certificates of renewal
or "binders" thereof. Each certificate shall expressly provide that such
policies shall not be cancelable or otherwise subject to modification except
after sixty (60) days prior written notice to the parties named as additional
insured in this Lease (except in the case of cancellation for nonpayment of
premium in which case cancellation shall not take effect until at least (10)
days' notice has been given to Landlord). If Tenant fails to maintain any
insurance required in this Lease, Tenant shall be liable for all losses and cost
resulting from said failure.
7.3.3 Additional Insured. Landlord and any property management
------------------
company of Landlord for the Premises shall be named as additional insured under
all of the policies required by Section 7.2.1. The policies required under
Section 7.2.1 shall provide for severability of interest.
7.3.4 Primary Coverage. All insurance to be maintained by Tenant
----------------
shall, except for workers' compensation and employer's liability insurance, be
primary, without right of contribution from insurance of Landlord. Any umbrella
liability policy or excess liability policy (which shall be in "following form")
shall provide that if the underlying aggregate is exhausted, the excess coverage
will drop down as primary insurance. The limits of insurance maintained by
Tenant shall not limit Tenant's liability under this Lease.
7.3.5 Mutual Waiver of Subrogation. Tenant waives any right to
----------------------------
recover against Landlord for claims for damages to Tenant's Property to the
extent covered, or required by this Lease to be covered by insurance. Landlord
waives any right to recover against Tenant for damages to Landlord's property to
the extent covered, or required by this Lease to be covered by property
insurance. This provision is intended to waive fully, and for the benefit of
Landlord and Tenant, any rights and/or claims which might give rise to a right
of subrogation in favor of any insurance carrier. The coverage obtained by
Landlord and Tenant pursuant to this Lease shall include, without limitation, a
waiver of subrogation endorsement attached to the certificate of insurance.
7.3.6 Notification of Incidents. Tenant shall notify Landlord
-------------------------
within seventy-two (72) hours after the occurrence of any accidents or incidents
in the Premises which could give rise to a claim under any of the insurance
policies required under this Section 7.
7.4 Indemnity.
---------
7.4.1 Tenant's Indemnity. Tenant shall indemnify, protect, defend
------------------
(by counsel reasonably acceptable to both Landlord and Tenant) and hold harmless
Landlord and its partners, directors, officers, employees, shareholders,
lenders, agents, contractors and each of their successors and assigns from and
against any and all claims, judgments, causes of action, damages, penalties,
costs, liabilities, and expenses, including all costs, attorneys' fees, expenses
and liabilities incurred in the defense of any such claim or any action or
proceeding brought thereon, arising at any time during or after the Term as a
result (directly or indirectly) of or in connection with (i) any default in the
performance of any obligation on Tenant's part to be
4.
<PAGE>
performed under the terms of this Lease, or (ii) Tenant's use of the Premises,
the conduct of Tenant's business or any activity, work or things done, permitted
or suffered by Tenant in or about the Premises or other portions of the Project,
except to the extent caused by Landlord's gross negligence or wilful misconduct.
The obligations of Tenant under this Section 7.4 shall survive the termination
of this Lease with respect to any claims or liability arising out of any act,
omission, or event occurring on or before the date of such termination.
7.4.2 Landlord's Indemnity. Except as expressly provided in this
--------------------
Lease, and subject to the limitations of Section 17.5, Landlord shall indemnify,
protect, defend (by counsel reasonably acceptable to both Landlord and Tenant)
and hold harmless Tenant and its partners, directors, officers, employees,
shareholders, lenders, agents, contractors and each of their successors and
assigns from and against any and all claims, judgments, causes of action,
damages, penalties, costs, liabilities, and expenses, including all costs,
attorneys' fees, expenses and liabilities incurred in the defense of any such
claim or any action or proceeding brought thereon, arising at any time during or
after the Term as a result (directly or indirectly) of or in connection with (i)
any default in the performance of any obligation on Landlord's part to be
performed under the terms of this Lease, or (ii) Landlord's gross negligence or
intentional misconduct in connection with Landlord's activities in or about the
Premises. The obligations of Landlord under this Section 7.4 shall survive the
termination of this Lease with respect to any claims or liability arising out of
any act, omission, or event occurring on or before the date of such termination.
7.5 Exemption of Landlord from Liability. Tenant, as a material part of
------------------------------------
the consideration to Landlord, hereby assumes all risk of damage to property
including, but not limited to, Tenant's fixtures, equipment, furniture and
alterations or injury to persons in, upon or about the Premises or other
portions of the Project arising from any cause, and Tenant hereby waives all
claims in respect thereof against Landlord, except to the extent such claims are
caused by the gross negligence or wilful misconduct of Landlord, its employees,
agents, and contractors. Tenant hereby agrees that Landlord shall not be liable
for injury to Tenant's business or any loss of income therefrom or for damage to
the property of Tenant, or injury to or death of Tenant, Tenant's employees,
invitee's, customers, agents or contractors or any other person in or about the
Premises or the Project, whether such damage or injury is caused by fire, steam,
electricity, gas, water or rain, or from the breakage, leakage or other defects
of sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the Premises, or from other sources or places, and
regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible to Tenant, except to the extent caused by the
gross negligence or wilful misconduct of Landlord, its employees, agents, and
contractors.
8. REPAIRS AND MAINTENANCE.
-----------------------
8.1 Landlord. Landlord shall, subject to the following sentence, maintain
--------
the structural portions of the roof, foundation, and load-bearing portions of
walls (excluding wall coverings, painting, glass and doors) of the Improvements.
Landlord shall not be required to make any repair resulting from (i) any
alteration or modification to the Improvements or to mechanical equipment within
the Improvements performed by, for or because of Tenant or to special equipment
or systems installed by, for or because of Tenant, (ii) the installation, use or
operation of Tenant's property, fixtures and equipment, (iii) the moving of
Tenant's property in or out of the Improvements or in and about the Premises,
(iv) Tenant's use or occupancy of the Premises in violation of Section l0 of
this Lease or in the manner not contemplated by the parties at the time of the
execution of this Lease, (v) the acts or omissions of Tenant and Tenant's
employees, agents, invitees, subtenants, licensees or contractors, (vi) fire and
other casualty, except as provided by Section 12 of this Lease or (vii)
condemnation, except as provided in Section 13 of this Lease. Landlord shall
make repairs under this Section 8.1 as soon as reasonably practicable after
receipt of written notice from Tenant of the need for such repairs. Landlord
shall procure and maintain, at Tenant's expense, regularly scheduled preventive
maintenance/service contracts for (i) the maintenance and repair of the fire
detection and sprinkler system, and (ii) the regular and routine maintenance and
annual inspection of the roof membrane. Tenant shall reimburse Landlord upon
thirty (30) days written notice for the reasonable cost thereof. Tenant waives
any right to repair the Premises at the expense of Landlord under any applicable
governmental laws, ordinances, statutes, orders or regulations now or hereafter
in effect which might otherwise apply.
8.2 Tenant. Except for the portions of the Premises expressly required to
------
be maintained by Landlord under Section 8.1, Tenant, at Tenant's expense, shall
maintain the Premises in good order, condition and repair, including, without
limitation, subfloors and floor coverings, walls and wall coverings, mechanical,
electrical, and plumbing systems, doors, windows, parking lots, and truck
aprons, gutters and downspouts, landscaping and any signage. During the Term of
this Lease, or any extensions thereof, Tenant shall procure and maintain, at
Tenant's expense, regularly scheduled preventive maintenance/service contracts
with maintenance contractors reasonably acceptable to Landlord for (i) servicing
all hot water and heating and air conditioning systems and equipment ("HVAC") in
the Premises, and (ii) the landscape maintenance. Tenant shall provide Landlord
with a copy of the HVAC contract and shall furnish a copy of all reports and
correspondence involving the condition of the HVAC equipment to Landlord. Each
contract shall provide that the maintenance contractor will notify Landlord in
writing at least ten (10) days prior to any termination of the contract.
Notwithstanding the foregoing, Landlord reserves the right to procure and
maintain the foregoing maintenance/service contracts, and Tenant shall promptly
reimburse Landlord upon thirty (30) days written notice for the cost thereof. In
the event Tenant fails, in the reasonable judgment of Landlord, to maintain the
Premises in good order, condition and repair. Landlord shall have the right to
perform such maintenance, repairs or refurbishing at Tenant's expense.
5.
<PAGE>
8.3 Roof - Repair and Replacement. As provided in Section 8.1, Landlord,
-----------------------------
at its cost, shall maintain the structural portions of the roof during the Term
of this Lease. In addition, Landlord shall arrange for regular and routine
maintenance and annual inspection of the roof surface and membrane, subject to
Tenant's reimbursement to Landlord for the reasonable cost thereof within thirty
(30) days' written notice. In the event that the surface and membrane of the
roof needs to be replaced as a matter of prudent building management and
ownership, as reasonably determine by an independent and qualified roofing
consultant, during the initial Term of this Lease or, if the Term is extended
pursuant to Section 20, during the First Extension Term, Landlord shall arrange
and pay for the replacement thereof at Landlord's sole cost and expense. If the
Term of this Lease is further extended, either pursuant to Section 20 or by
other agreement of the parties, and the roof surface and membrane needs to be
replaced as a matter of prudent building management and ownership, as reasonably
determined by an independent and qualified roofing consultant, during such
additionally extended term. Tenant shall arrange and pay for the replacement
thereof at Tenant's sole cost and expense.
8.4 Condition of the Premises.
-------------------------
8.4.1 Landlord warrants to Tenant that the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect on the Commencement Date. Said warranty
does not apply to the use to which Tenant will put the Premises or to any
alterations or utility installations made or to be made by Tenant. If the
Premises do not comply with said warranty, Landlord shall, except as otherwise
provided in this Lease, promptly after receipt of written notice from Tenant
setting forth with specificity the nature and extent of such condition of
non-compliance, rectify the same at Landlord's expense. If Tenant fails to give
Landlord written notice of a condition of non-compliance with this warranty
within six (6) months after the Possession Date, the correction of such
condition of non-compliance shall be the obligation of Tenant at Tenant's sole
cost and expense.
8.4.2 Landlord and Tenant have jointly conducted a walk-through of
the Premises and have agreed that those items which are set forth in Exhibit F
---------
hereto require correction and that such items shall be corrected by Landlord, at
its sole cost and expense. On or about the Possession Date, Landlord and Tenant
shall conduct a subsequent walk-through of the Premises and shall jointly and
reasonably determine if there are any new and additional items in the Premises
which require correction and, if so, such items shall be added to Exhibit F.
---------
Landlord shall cause the items set forth in Exhibit F, as the same may be
---------
revised following the Possession Date walk through, to be corrected promptly and
at Landlord's sole cost and expense.
9. ALTERATIONS.
-----------
9.1 Trade Fixtures: Alterations. Tenant may install necessary trade
---------------------------
fixtures, equipment and furniture in the Premises, provided that such items are
installed and are removable without structural or material damage to the
Premises or the Project. Tenant shall not construct, nor allow to be
constructed, any alterations or physical additions in, about or to the Premises
without obtaining the prior written consent of Landlord, which consent shall be
conditioned upon Tenant's compliance with Landlord's reasonable requirements
regarding construction of improvements and alterations but such consent
otherwise shall not be unreasonably withheld. Tenant shall submit plans and
specifications to Landlord with Tenant's request for approval and shall
reimburse Landlord for all costs which Landlord may incur in connection with
granting approval to Tenant for any such alterations and additions, including
any costs or expenses which Landlord may incur in electing to have outside
architects and engineers review said matters. Tenant shall file a notice of
completion after completion of such work and provide Landlord with a copy
thereof. Tenant shall provide Landlord with a set of "as-built" drawings for any
such work.
9.2 Damage: Removal. Tenant shall repair all damage to the Premises caused
---------------
by the installation or removal of Tenant's fixtures, equipment, furniture and
alterations. Upon the termination of this Lease, Tenant shall remove any or all
alterations, additions, improvements and partitions made or installed by Tenant
and restore the Premises to its condition existing prior to the construction of
any such items; provided, however, Landlord may permit, upon written notice to
Tenant, any such items designated by Landlord to remain on the Premises, in
which event (and if Tenant elects to leave such items on the Premises) they
shall be and become the property of Landlord upon the termination of this Lease.
All such removals and restoration shall be accomplished in a good and
workmanlike manner and so as not to cause any damage to the Premises or the
Project whatsoever.
9.3 Liens. Tenant shall promptly pay and discharge all claims for labor
-----
performed, supplies furnished and services rendered at the request of Tenant and
shall keep the Premises free of all mechanics' and materialmen's liens in
connection therewith. Tenant shall provide at least ten (l0) days prior
written notice to Landlord before any labor is performed, supplies furnished or
services rendered on or at the Premises and Landlord shall have the right to
post on the Premises notices of non-responsibility. If any lien is filed, Tenant
shall cause such lien to be released and removed within ten (10) days after the
date of filing, and if Tenant fails to do so. Landlord may take such action as
may be necessary to remove such lien and Tenant shall pay Landlord such amounts
expended by Landlord together with interest thereon at the Applicable Interest
Rate from the date of expenditure.
6.
<PAGE>
10. USE. The Premises shall be used only for the Permitted Uses set forth in
---
the Basic Lease Information and for no other uses. Tenant's use of the Premises
shall be in compliance with and subject to all applicable governmental laws,
ordinances, statutes, orders and regulations and any CC&R's or any supplement
thereto recorded in any official or public records with respect to the Project
or any portion thereof. In no event shall the Premises be used for any of the
Prohibited Uses set forth on Exhibit E attached hereto. Tenant shall comply with
---------
the reasonable rules and regulations as Landlord may from time to time
prescribe. Tenant shall not commit waste, overload the floors or structure of
the Premises, subject the Premises or the Project to any use which would damage
the same or increase the risk of loss or violate any insurance coverage, permit
any unreasonable odors, smoke, dust, gas, substances, noise or vibrations to
emanate from the Premises, take any action which would constitute a nuisance or
would disturb, obstruct or endanger any other tenants of the Project, take any
action which would abrogate any warranties, or use or allow the Premises to be
used for any unlawful purpose. Tenant shall have the right to use for its
employees and invitees, the parking areas on the Premises. Landlord shall not be
responsible for non-compliance by any other tenant or occupant of the Project
with, or Landlord's failure to enforce, any of the rules or regulations or any
other terms or provisions of such tenant's or occupant's lease. Tenant shall
promptly comply with the reasonable requirements of any board of fire insurance
underwriters or other similar body now or hereafter constituted. Tenant shall
not do any act which shall in any way encumber the title of Landlord in and to
the Premises or the Project.
11. ENVIRONMENTAL MATTERS.
---------------------
11.1 Hazardous Materials. Tenant shall not cause nor permit, nor allow any
-------------------
of Tenant's employees, agents, customers, visitors, invitee's, licensees,
contractors, assignees or subtenants (collectively, "Tenant's Parties") to cause
or permit, any Hazardous Materials to be brought upon, stored, manufactured,
generated, blended, handled, recycled, treated, disposed or used on, under or
about the Premises or the Project, except for routine office and janitorial
supplies in usual and customary quantities stored, used and disposed of in
accordance with all applicable Environmental Laws. As used herein, "Hazardous
Materials" means any chemical, substance, material, controlled substance,
object, condition, waste, living organism or combination thereof which is or may
be hazardous to human health or safety or to the environment due to its
radioactivity, ignitability, corrosivity, reactivity, explosivity, toxicity,
carcinogenicity, mutagenicity, phytotoxicity, infectiousness or other harmful or
potentially harmful properties or effects, including, without limitation,
petroleum and petroleum products, asbestos, radon, polychlorinated biphenyls
(PCBs) and all of those chemicals, substances, materials, controlled substances,
objects, conditions, wastes, living organisms or combinations thereof which are
now or become in the future listed, defined or regulated in any manner by any
Environmental Law based upon, directly or indirectly, such properties or
effects. As used herein, "Environmental Laws" means any and all federal, state
or local environmental, health and/or safety-related laws, regulations,
standards, decisions of courts, ordinances, rules, codes, orders, decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant, the Premises, the Building or the Project. Tenant and Tenant's
Parties shall comply with all Environmental Laws and promptly notify Landlord of
the violation of any Environmental Law or presence of any Hazardous Materials,
other than office and janitorial supplies as permitted above, on the Premises.
Landlord shall have the right to enter upon and inspect the Premises and to
conduct tests, monitoring and investigations. If such tests indicate the
presence of any environmental condition which occurred during the Term of this
Lease, Tenant shall reimburse Landlord for the cost of conducting such tests.
The phrase "environmental condition" shall mean any adverse condition relating
to any Hazardous Materials or the environment, including surface water,
groundwater. drinking water supply, land, surface or subsurface strata or the
ambient air and includes air, land and water pollutants, noise, vibration, light
and odors. In the event of any such environmental condition. Tenant shall
promptly take any and all steps necessary to rectify the same to Landlord's
reasonable satisfaction or shall, at Landlord's election, reimburse Landlord,
upon demand, for the cost to Landlord of performing rectifying work. The
reimbursement shall be paid to Landlord in advance of Landlord's performing such
work, based upon Landlord's reasonable estimate of the cost thereof, and upon
completion of such work by Landlord, Tenant shall pay to Landlord any shortfall
within thirty (30) days after Landlord bills Tenant therefore or Landlord shall
within thirty (30) days refund to Tenant any excess deposit, as the case may be.
11.2 Indemnification. Tenant shall indemnify, protect, defend (by
---------------
counsel acceptable to Landlord) and hold harmless Landlord and its partners,
directors, officers, employees, shareholders, lenders, agents, contractors and
each of their respective successors and assigns (individually and collectively,
"Indemnitees") from and against any and all claims, judgments, causes of action,
damages, penalties, fines, taxes, costs, liabilities, losses and expenses
arising at any time during or after the Term as a result (directly or
indirectly) of or in connection with (a) Tenant and/or Tenant's Parties' breach
of any prohibition or provision of the preceding section, or (b) the presence of
Hazardous Materials on, under or about the Premises or other property as a
result (directly or indirectly) of Tenant's and/or Tenant's Parties' activities,
or failure to act, in connection with the Premises. This indemnity shall include
the cost of any required or necessary repair, cleanup or detoxification, and the
preparation and implementation of any closure, monitoring or other required
plans, whether such action is required or necessary prior to or following the
termination of this Lease. Neither the written consent by Landlord to the
presence of Hazardous Materials on, under or about the Premises, nor the strict
compliance by Tenant with all Environmental Laws, shall excuse Tenant from
Tenant's obligation of indemnification pursuant hereto. Tenant's obligations
pursuant to the foregoing indemnity shall survive the termination of this Lease.
7.
<PAGE>
11.3 Landlord's Disclosure. Landlord has no actual knowledge and has
---------------------
received no written notice that (i) any Hazardous Materials are located on,
under, or in the Premises, or (ii) there is a pending proceeding, inquiry,
investigation, or order by any governmental authority with respect to any
Hazardous Materials on, under, or in the Premises. As use herein, the term
"actual knowledge" means that the specific matter has come to the actual
attention of the person or persons employed by Landlord who are responsible and
authorized to act with respect to such matter.
11.4 Storage Tank Removal. The parties acknowledge that the previous
--------------------
tenant of the Premises had installed a 10,000 gallon underground diesel storage
tank (the "Tank"). Landlord shall remove or cause the Tank to be removed in
accordance with all applicable laws and regulations and within sixty (60) days
following the Commencement Date. Landlord further acknowledges and agrees that
Tenant shall have no liability for any cost or expense arising out of the
installation, use, or removal of the Tank.
12. DAMAGE AND DESTRUCTION.
----------------------
12.1 Casualty. If the Premises should be damaged or destroyed by fire or
--------
other casualty, Tenant shall give immediate written notice to Landlord. Within
thirty (30) days after receipt thereof. Landlord shall notify Tenant whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days from the date of such notice.
12.1.1 Less Than 90 Days. If the Premises should be damaged only to
-----------------
such extent that rebuilding or repairs can reasonably be completed within ninety
(90) days, this Lease shall not terminate and, provided that insurance proceeds
are available to fully repair the damage. Landlord shall repair the Premises
utilizing such insurance proceeds and shall not recover any of such repair costs
from Tenant pursuant to Section 6. Landlord shall not be required to rebuild,
repair or replace any alterations, partitions, fixtures, additions and other
improvements (collectively, "Improvements") which may have been placed in, on or
about the Premises by or for the benefit of Tenant, it being the intent of the
parties that Tenant shall replace such Improvements utilizing insurance proceeds
available to Tenant pursuant to Section 7.2.4. If Tenant is required to vacate
all or a portion of the Premises during Landlord's repair thereof, the Base Rent
payable hereunder shall be abated proportionately from the date Tenant vacates
all or a portion of the Premises only to the extent rental abatement insurance
proceeds are received by Landlord and only during the period the Premises are
unfit for occupancy.
12.1.2 Greater Than 90 Days. If the Premises should be damaged only
--------------------
to such extent that rebuilding or repairs can reasonably be completed in more
than ninety (90) days but in less than one hundred eighty (180) days, then
Landlord shall have the option of: (a) terminating the Lease effective upon the
occurrence of such damage, in which event the Rent shall be abated from the date
Tenant vacates the Premises; or (b) electing to repair the Premises, provided
insurance proceeds are available to fully repair the damage (except that
Landlord shall not be required to rebuild, repair or replace any part of the
Improvements which may have been placed In, on or about the Premises by or for
the benefit of Tenant). If Tenant is required to vacate all or a portion of the
Premises during Landlord's repair thereof, the Base Rent payable hereunder shall
be abated proportionately from the date Tenant vacates all or a portion of the
Premises only to the extent rental abatement insurance proceeds are received by
Landlord and only during the period the Premises are unfit for occupancy. In the
event that Landlord should fail to substantially complete such repairs within
one hundred eighty (180) days after the date upon which Landlord is notified by
Tenant of the casualty (such period to be extended for delays caused by Tenant
or because of any items of Force Majeure, as hereinafter defined) and Tenant has
not re-occupied the Premises, Tenant shall have the right, as Tenant's exclusive
remedy, within ten (10) days after the expiration of such one hundred eighty
(180) day period, to terminate this Lease by delivering written notice to
Landlord as Tenant's exclusive remedy, whereupon all rights hereunder shall
cease and terminate thirty (30) days after Landlord's receipt of such notice.
12.1.3 Greater Than 180 Days. If the Premises should be so damaged
---------------------
that rebuilding or repairs cannot be completed within one hundred eighty (180)
days, either Landlord or Tenant may terminate this Lease by giving written
notice within ten (10) days after notice from Landlord specifying such time
period of repair; and this Lease shall terminate and the Rent shall be abated
from the date Tenant vacates the Premises. In the event that neither party
elects to terminate this Lease, Landlord shall promptly commence and diligently
prosecute to completion the repairs to the Premises, provided insurance proceeds
are available to repair the damage (except that Landlord shall not be required
to rebuild, repair or replace any Improvements which may have been placed in, on
or about the Premises by or for the benefit of Tenant). If Tenant is required to
vacate all or a portion of the Premises during Landlord's repair thereof, the
Base Rent payable hereunder shall be abated proportionately from the date Tenant
vacates all or a portion of the Premises only to the extent rental abatement
insurance proceeds are received by Landlord and only during the period that the
Premises are unfit for occupancy.
12.2 Tenant's Fault. If the Premises or any portion of the Premises is
--------------
damaged resulting from the negligence or breach of this Lease by Tenant or any
of Tenant's Parties, Rent shall not be reduced during the repair of such damage
and Tenant shall be liable to Landlord for the cost of the repair caused thereby
to the extent such cost is not covered by insurance proceeds.
8.
<PAGE>
12.3 Uninsured Casualty. In the event that the Premises or any portion of
------------------
the Premises is damaged to the extent Tenant is unable to use the Premises and
such damage is not covered by insurance proceeds received by Landlord or in the
event that the holder of any indebtedness secured by the Premises requires that
the insurance proceeds be applied to such indebtedness, then Landlord shall have
the right at Landlord's option either (i) to repair such damage as soon as
reasonably possible at Landlord's expense, or (ii) to give written notice to
Tenant within thirty (30) days after the date of the occurrence of such damage
of Landlord's intention to terminate this Lease as of the date of the occurrence
of such damage. In the event Landlord elects to terminate this Lease, Tenant
shall have the right (but not the obligation) within ten (10) days after receipt
of such notice to give written notice to Landlord of Tenant's intention to pay
the cost of repair of such damage, in which event this Lease shall continue in
full force and effect, Landlord shall make such repairs as soon as reasonably
possible and Tenant shall reimburse Landlord for such repairs within fifteen
(15) days after receipt of an invoice from Landlord. If Tenant is required to
vacate all or a portion of the Premises during Landlord's repair thereof, the
Base Rent payable hereunder shall be abated proportionately from the date Tenant
vacates all or a portion of the Premises only to the extent rental abatement
insurance proceeds are received by Landlord and only during the period that the
Premises are unfit for occupancy. If Tenant does not give such notice within the
ten (l0) day period, this Lease shall terminate automatically as of the date
of the occurrence of the damage.
12.4 Waiver. With respect to any damage or destruction which Landlord is
------
obligated to repair or may elect to repair, Tenant waives all rights to
terminate this Lease pursuant to rights otherwise presently or hereafter
accorded by law and not specifically set forth herein.
13. EMINENT DOMAIN.
--------------
13.1 Total Condemnation. If all of the Premises is condemned by eminent
------------------
domain, inversely condemned or sold under threat of condemnation for any public
or quasi-public use or purpose ("Condemned"), this Lease shall terminate as of
the earlier of the date the condemning authority takes title to or possession of
the Premises, and Rent shall be adjusted to the date of termination.
13.2 Partial Condemnation. If any portion of the Premises is Condemned and
--------------------
such partial condemnation materially impairs Tenant's ability to use the
Premises for Tenant's business as reasonably determined by Landlord, Landlord
shall have the option of either (i) relocating Tenant to comparable space within
the Project or (ii) terminating this Lease as of the earlier of the date title
vests in the condemning authority or as of the date an order of immediate
possession is issued and Rent shall be adjusted to the date of termination. If
such partial condemnation does not materially impair Tenant's ability to use the
Premises for the business of Tenant, Landlord shall promptly restore the
Premises to the extent of any condemnation proceeds recovered by Landlord,
excluding the portion thereof lost in such condemnation, and this Lease shall
continue in full force and effect except that after the date of such title
vesting Rent shall be adjusted as reasonably determined by Landlord.
13.3 Award. If the Premises are wholly or partially Condemned, Landlord
-----
shall be entitled to the entire award paid for such condemnation, and Tenant
waives any claim to any part of the award from Landlord or the condemning
authority; provided, however, Tenant shall have the right to recover from
Landlord such compensation, if any, as may be specifically awarded to Landlord
in connection with costs in removing Tenant's merchandise, furniture, fixtures,
leasehold improvements and equipment to a new location. No condemnation of any
kind shall be construed to constitute an actual or constructive eviction of
Tenant or a breach of any express or implied covenant of quiet enjoyment.
13.4 Temporary Condemnation. In the event of a temporary condemnation not
----------------------
extending beyond the Term, this Lease shall remain in effect, Tenant shall
continue to pay Rent and Tenant shall receive any award made for such
condemnation except damages to any of Landlord's property. If a temporary
condemnation is for a period which extends beyond the Term, this Lease shall
terminate as of the date of initial occupancy by the condemning authority and
any such award shall be distributed in accordance with the preceding section. If
a temporary condemnation remains in effect at the expiration or earlier
termination of this Lease, Tenant shall pay Landlord the reasonable cost of
performing any obligations required of Tenant with respect to the surrender of
the Premises, unless Landlord receives such costs from the condemning authority.
14. DEFAULT
-------
14.1 Events of Defaults. The occurrence of any of the following events
------------------
shall, at Landlord's option, constitute an "Event of Default":
14.1.1 Vacation or abandonment of the Premises for a period of
thirty (30) consecutive days;
14.1.2 Failure to pay Rent on the date when due and the failure
continuing for a period of five (5) days after such payment is due;
14.1.3 Failure to perform Tenant's covenants and obligations
hereunder (except default in the payment of Rent) where such failure continues
for a period of thirty (30) days after written notice from Landlord: provided,
however, if the
9.
<PAGE>
nature of the default is such that more than thirty (30) days are reasonably
required for its cure. Tenant shall not be deemed to be in default if Tenant
commences the cure within the thirty (30) day period and diligently prosecutes
such cure to completion;
14.l.4 The making of a general assignment by Tenant for the
benefit of creditors: the filing of a voluntary petition by Tenant or the filing
of an involuntary petition by any of Tenant's creditors seeking the
rehabilitation, liquidation or reorganization of Tenant under any law relating
to bankruptcy, insolvency or other relief of debtors and, in the case of an
involuntary action, the failure to remove or discharge the same within sixty
(60) days of such filing; the appointment of a receiver or other custodian to
take possession of substantially all of Tenant's assets or this leasehold:
Tenant's insolvency or inability to pay Tenant's debts or failure generally to
pay Tenant's debts when due; any court entering a decree or order directing the
winding up or liquidation of Tenant or of substantially all of Tenants assets;
Tenant taking any action toward the dissolution or winding up of Tenant's
affairs: the cessation or suspension of Tenant's use of the Premises; or the
attachment, execution or other judicial seizure of substantially all of Tenant's
assets or this leasehold;
14.1.5 The making of any material misrepresentation or omission by
Tenant or any successor in interest of Tenant in any materials delivered by or
on behalf of Tenant to Landlord or Landlord's lender pursuant to this Lease; or
14.l.6 The occurrence of an Event of Default set forth in Section
14.l.4 or l5.l.5 with respect to any guarantor of this Lease, if applicable.
14.2 Remedies.
--------
14.2.1 Termination. In the event of the occurrence of any Event of
-----------
Default, Landlord shall have the right to give a written termination notice to
Tenant and, on the date specified in such notice, this Lease shall terminate
unless on or before such date all arrears of Rent and all other sums payable by
Tenant under this Lease and all costs and expenses incurred by or on behalf of
Landlord hereunder shall have been paid by Tenant and all other Events of
Default at the time existing shall have been fully remedied to the satisfaction
of Landlord.
14.2.l.l Repossession. Following termination, without
------------
prejudice to other remedies Landlord may have, Landlord may (i) peaceably re-
enter the Premises upon voluntary surrender by Tenant or remove Tenant therefrom
and any other persons occupying the Premises, using such legal proceedings as
may be available; (ii) repossess the Premises or relet the Premises or any part
thereof for such term (which may be for a term extending beyond the Term), at
such rental and upon such other terms and conditions as Landlord in Landlord's
sole discretion shall determine, with the right to make reasonable alterations
and repairs to the Premises; and (iii) remove all personal property therefrom.
14.2.l.2 Unpaid Rent. Landlord shall have all the rights
-----------
and remedies of a landlord provided by applicable law, including the right to
recover from Tenant: (a) the worth, at the time of award, of the unpaid Rent
that bad been earned at the time of termination, (b) the worth, at the time of
award, of the amount by which the unpaid Rent that would have been earned after
the date of termination until the time of award exceeds the amount of loss of
rent that Tenant proves could have been reasonably avoided, (c) 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 the loss of rent that Tenant
proves could have been reasonably avoided, and (d) any other amount, and court
costs, necessary to compensate Landlord for all detriment proximately caused by
Tenant's default. The phrase "worth, at the time of award," as used in (a) and
(b) above, shall be computed at the Applicable Interest Rate, and as used in (c)
above, shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).
14.2.2 Continuation. Even though an Event of Default may
------------
have occurred, this Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession; and Landlord may enforce all of
Landlord's rights and remedies under this Lease, including the right to recover
Rent as it becomes due. Landlord, without terminating this Lease, may, during
the period Tenant is in default, enter the Premises and relet the same, or any
portion thereof, to third parties for Tenant's account and Tenant shall be
liable to Landlord for all costs Landlord incurs in reletting the Premises,
including, without limitation, brokers' commissions, expenses of remodeling the
Premises and like costs. Reletting may be for a period shorter or longer than
the remaining Term. Tenant shall continue to pay the Rent on the date the same
is due. No act by Landlord hereunder, including acts of maintenance,
preservation or efforts to lease the Premises or the appointment of a receiver
upon application of Landlord to protect Landlord's interest under this Lease,
shall terminate this Lease unless Landlord notifies Tenant that Landlord elects
to terminate this Lease. In the event that Landlord elects to relet the
Premises, the rent that Landlord receives from reletting shall be applied to the
payment of, first, any indebtedness from Tenant to Landlord other than Base Rent
and Real Property Taxes: second, all costs, including maintenance, incurred by
Landlord in reletting; and, third, Base Rent and Real Property Taxes under this
Lease. After deducting the payments referred to above, any sum remaining from
the rental Landlord receives from reletting shall be held by Landlord and
applied in payment of future Rent as Rent becomes due under this Lease. In no
event, and notwithstanding anything in Section 15 to the contrary, shall Tenant
be entitled to any excess rent received by Landlord. If, on the date Rent is due
under this Lease, the rent received from the reletting is less than the Rent due
on that date. Tenant shall pay to Landlord, in addition to the remaining
10.
<PAGE>
Rent due, all costs, including maintenance, which Landlord incurred in reletting
the Premises that remain after applying the rent received from reletting as
provided hereinabove. So long as this Lease is not terminated, Landlord shall
have the right to remedy any default of Tenant, to maintain or improve the
Premises, to cause a receiver to be appointed to administer the Premises and new
or existing subleases and to add to the Rent payable hereunder all of Landlord's
reasonable costs in so doing, with interest at the Applicable Interest Rate from
the date of such expenditure.
14.3 Cumulative. Each right and remedy of Landlord provided for herein or
----------
now or hereafter existing at law, in equity, by statute or otherwise shall be
cumulative and shall not preclude Landlord from exercising any other rights or
remedies provided for in this Lease or now or hereafter existing at law or in
equity, by statute or otherwise. No payment by Tenant of a lesser amount than
the Rent nor any endorsement on any check or letter accompanying any check or
payment as Rent shall be deemed an accord and satisfaction of full payment of
Rent; and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies.
15. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet or otherwise
-------------------------
transfer, whether voluntarily or involuntarily or by operation of law, the
Premises or any part thereof without Landlord's prior written approval, which
shall not be unreasonably withheld. The merger of Tenant with any other entity
or the transfer of any controlling or managing ownership or beneficial interest
in Tenant, or the assignment of a substantial portion of the assets of Tenant,
whether or not located at the Premises, shall constitute an assignment
hereunder. If Tenant desires to assign this Lease or sublet any or all of the
Premises, Tenant shall give Landlord written notice thereof with copies of all
related documents and agreements associated with the assignment or sublease,
including without limitation, the financial statements of any proposed assignee
or subtenant, forty-five (45) days prior to the anticipated effective date of
the assignment or sublease. Tenant shall pay Landlord's reasonable attorneys'
fees incurred in the review of such documentation plus an administrative fee of
Three Hundred Fifty Dollars ($350.00) for each proposed transfer. Landlord shall
have a period of thirty (30) days following receipt of such notice and all
related documents and agreements to notify Tenant in writing of Landlord's
approval or disapproval of the proposed assignment or sublease. If Landlord
fails to notify Tenant in writing of such election, Landlord shall be deemed to
have approved such assignment or subletting. This Lease may not be assigned by
operation of law. Any purported assignment or subletting contrary to the
provisions hereof shall be void and shall constitute an Event of Default
hereunder. If Tenant receives rent or other consideration for any such transfer
in excess of the Rent, or in case of the sublease of a portion of the Premises,
in excess of such Rent that is fairly allocable to such portion, after
appropriate adjustments to assure that all other payments required hereunder are
appropriately taken into account, Tenant shall pay landlord fifty percent (50%)
of the difference between each such payment of rent or other consideration and
the Rent required hereunder. During any period in which an Event of Default (as
defined in Section 14.1) remains uncured, Landlord may, without waiving any
other rights or remedies, collect rent from the assignee, subtenant or occupant
and apply the net amount collected to the Rent herein reserved and apportion any
excess rent so collected in accordance with the terms of the preceding sentence.
Tenant shall continue to be liable as a principal and not as a guarantor or
surety to the same extent as though no assignment or subletting had been made.
Landlord may consent to subsequent assignments or subletting of this Lease or
amendments or modifications to the Lease by assignees of Tenant without
notifying Tenant or any successor of Tenant and without obtaining their consent.
No permitted transfer shall be effective until there has been delivered to
Landlord a counterpart of the transfer instrument in which the transferee agrees
to be and remain jointly and severally liable with Tenant for the payment of
Rent pertaining to the Premises and for the performance of all the terms and
provisions of this Lease relating thereto arising on or after the date of the
transfer. Subject to the provisions hereof and provided Landlord receives thirty
(30) days prior written notice and a true and correct copy of the assignment
instrument. Landlord hereby consents to the assignment of Tenant's interest in
and to this Lease to any wholly owned subsidiary of Tenant.
16. ESTOPPEL ATTORNMENT AND SUBORDINATION.
-------------------------------------
l6.l Estoppel. Within ten (l0) days after request by Landlord, Tenant
--------
shall deliver an Estoppel certificate duly executed (and acknowledged if
required by any lender), in the form attached hereto as Exhibit G, or in such
---------
other form as may be acceptable to the lender, which form may include some or
all of the provisions contained in Exhibit G, to any proposed mortgagee,
---------
purchaser or Landlord. Tenant's failure to deliver said statement in such time
period shall be an Event of Default hereunder and shall be conclusive upon
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord's performance and Tenant has no right of offset, counterclaim or
deduction against Rent hereunder, and (c) no more than one month's Base Rent has
been paid in advance. If any financier should require that this Lease be amended
(other than in the description of the Premises, the Term, the Permitted Use, the
Rent or as will substantially, materially and adversely affect the rights of
Tenant), Landlord shall give written notice thereof to Tenant, which notice
shall be accompanied by a Lease supplement embodying such amendments. Tenant
shall, within ten (10) days after the receipt of Landlord's notice, meet and
confer with Landlord in good faith with respect to such proposed amendments.
l6.2 Subordination. This Lease shall be subject and subordinate to all
-------------
ground leases and the lien of all mortgages and deeds of trust which now or
hereafter affect the Premises or the Project or Landlord's interest therein, and
all amendments thereto, all without the necessity of Tenant's executing further
instruments to effect such subordination. If requested, Tenant shall execute and
deliver to Landlord within ten (10) days after Landlord's request whatever
documentation that may
11.
<PAGE>
reasonably be required to further effect the provisions of this paragraph. With
respect to any new mortgage or deed of trust encumbering the Premises after the
date of this Lease, Landlord shall use its best efforts to obtain from such
mortgagee or beneficiary under the deed of trust a non-disturbance agreement in
such party's usual and customary form protecting the interest of Tenant
hereunder.
l6.3 Attornment. In the event of a foreclosure proceeding, the exercise
----------
of the power of sale under any mortgage or deed of trust or the termination of a
ground lease, Tenant shall, if requested, attorn to the purchaser thereupon and
recognize such purchaser as Landlord under this Lease; provided, however,
Tenant's obligation to attorn to such purchaser shall be conditioned upon
Tenant's receipt of a non-disturbance agreement protecting the interest of
Tenant hereunder.
17. MISCELLANEOUS
-------------
17.1 General.
-------
17.1.1 Entire Agreement. This Lease sets forth all the agreements
----------------
between Landlord and Tenant concerning the Premises; and there are no
agreements either oral or written other than as set forth herein.
17.1.2 Time of Essence. Time is of the essence of this Lease.
---------------
17.13 Attorneys' Fees. In any action or proceeding which either
---------------
party brings against the other to enforce its rights hereunder, the unsuccessful
party shall pay all costs incurred by the prevailing party, including reasonable
attorneys' fees, which amounts shall be a part of the judgment in said action or
proceeding.
17.1.4 Severability. If any provision of this Lease or the
------------
application of any such provision shall be held by a court of competent
jurisdiction to be invalid, void or unenforceable to any extent, the remaining
provisions of this Lease and the application thereof shall remain in full force
and effect and shall not be affected, impaired or invalidated.
17.1.5 Law. This Lease shall be construed and enforced in
---
accordance with the laws of the state in which the Premises are located.
17.1.6 No Option. Submission of this Lease to Tenant for
---------
examination or negotiation does not constitute an option to lease, offer to
lease or a reservation of, or option for, the Premises; and this document shall
become effective and binding only upon the execution and delivery hereof by
Landlord and Tenant.
17.1.7 Successors and Assigns. This Lease shall be binding upon and
----------------------
inure to the benefit of the successors and assigns of Landlord and, subject to
compliance with the terms of Section 15, Tenant.
17.1.8 Third Party Beneficiaries. Nothing herein is intended to
-------------------------
create any third party benefit.
17.1.9 Memorandum of Lease. Tenant shall not record this Lease or a
-------------------
short form memorandum hereof without Landlord's prior written consent.
17.1.10 Agency. Partnership or Joint Venture. Nothing contained
------
herein nor any acts of the parties hereto 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 by the parties hereto
or any relationship other than the relationship of landlord and tenant.
17.1.11 Merger. The voluntary or other surrender of this Lease by
------
Tenant or a mutual cancellation thereof or a termination by Landlord shall not
work a merger and shall, at the option of Landlord, terminate all or any
existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.
17.1.12 Headings. Section headings have been inserted solely as a
--------
matter of convenience and are not intended to define or limit the scope of any
of the provisions contained therein.
17.2 Signs. All signs and graphics of every kind visible in or from
-----
public view or the exterior of the Premises shall be subject to Landlord's prior
written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's signage program.
Tenant shall remove all such signs and graphics prior to the termination of this
Lease. Such installations and removals shall be made in such manner as to avoid
injury or defacement of the Premises; and Tenant shall repair any injury or
defacement, including without limitation, discoloration caused by such
installation or removal.
17.3 Waiver. No waiver of any default or breach hereunder shall be
------
implied from any omission to take action on account thereof, notwithstanding any
custom and practice or course of dealing. No waiver by either party of any
provision under this Lease shall be effective unless in writing and signed by
such party. No waiver shall affect any default other than
12.
<PAGE>
the default specified in the waiver and then such waiver shall be operative only
for the time and to the extent therein stated. Waivers of any covenant shall not
be construed as a waiver of any subsequent breach of the same.
17.4 Financial Statements. Tenant shall provide to any lender, purchaser
--------------------
or Landlord, within ten (10) days after request, a current, accurate, certified
financial statement for Tenant and Tenant's business prepared under generally
accepted accounting principles consistently applied and such other certified
financial information as may be reasonably required by Landlord, purchaser or
any lender of either.
17.5 Limitation of Liability. The obligations of Landlord under this Lease
-----------------------
are not personal obligations of the individual partners, directors, officers,
shareholders, agents or employees of Landlord; and Tenant shall look solely to
the Premises for satisfaction of any liability of Landlord and shall not look to
other assets of Landlord nor seek recourse against the assets of the individual
partners, directors, officers, shareholders, agents or employees of Landlord.
Whenever Landlord transfers its interest, Landlord shall be automatically
released from further performance under this Lease and from all further
liabilities and expenses hereunder and the transferee of Landlord's interest
shall assume all liabilities and obligations of Landlord hereunder from the date
of such transfer.
17.6 Notices. All notices to be given hereunder shall be in writing and
-------
mailed postage prepaid by certified or registered mail, return receipt
requested, or delivered by personal or courier delivery, or sent by facsimile
(immediately followed by one of the preceding methods), to Landlord's Address
and Tenant's Address, or to such other place as Landlord or Tenant may designate
in a written notice given to the other party. Notices shall be deemed served
upon the earlier of receipt or three (3) days after the date of mailing.
17.7 Brokerage Commission. Landlord shall pay a brokerage commission to
--------------------
Broker in accordance with a separate agreement between Landlord and Broker.
Tenant warrants to Landlord that Tenant's sole contact with Landlord or with the
Premises in connection with this transaction has been directly with Landlord and
Broker, and that no other broker or finder can properly claim a right to a
commission or a finder's fee based upon contacts between the claimant and
Tenant. Tenant agrees to indemnify and hold Landlord harmless from any claims or
liability, including reasonable attorneys' fees, in connection with a claim by
any person for a real estate broker's commission, finder's fee or other
compensation based upon any statement, representation or agreement of Tenant,
and Landlord agrees to indemnify and hold Tenant harmless from any such claims
or liability, including reasonable attorneys' fees, based upon any statement,
representation or agreement of Landlord.
17.8 Authorization. Each individual executing this Lease on behalf of
-------------
Tenant represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of Tenant and that such execution is binding upon
Tenant.
17.9 Holding Over Surrender.
----------------------
17.9.1 Holding Over. If Tenant holds over the Premises or any part
------------
thereof after expiration of the Term, such holding over shall constitute a
month-to-month tenancy, at a rent equal to one hundred twenty-five percent
(125%) of the Base Rent in effect immediately prior to such holding over and
shall otherwise be on all the other terms and conditions of this Lease. This
paragraph shall not be construed as Landlord's permission for Tenant to hold
over. Acceptance of Rent by Landlord following expiration or termination shall
not constitute a renewal of this Lease or extension of the Term except as
specifically set forth above. If Tenant fails to surrender the Premises upon
expiration or earlier termination of this Lease. Tenant shall indemnify and hold
Landlord harmless from and against all loss or liability resulting from or
arising out of Tenant's failure to surrender the Premises, including, but not
limited to, any amounts required to be paid to any tenant or prospective tenant
who was to have occupied the Premises after the expiration or earlier
termination of this Lease and any related attorneys' fees and brokerage
commissions.
l7.9.2 Surrender. Upon the termination of this Lease or Tenant's
---------
right to possession of the Premises, Tenant will surrender the Premises,
together with all keys, in good condition and repair, reasonable wear and tear
excepted. Conditions existing because of Tenant's failure to perform
maintenance, repairs or replacements shall not be deemed "reasonable wear and
tear."
17.l0 Joint and Several. If Tenant consists of more than one person, the
-----------------
obligation of all such persons shall be joint and several.
17.1l Covenants and Conditions. Each provision to be performed by Tenant
------------------------
hereunder shall be deemed to be both a covenant and a condition.
l7.l2 Addenda. The Addenda attached hereto, if any, and identified with
-------
this Lease are incorporated herein by this reference as if fully set forth
herein.
13.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Lease as of the date
set forth above.
"Landlord" "Tenant"
CATELLUS DEVELOPMENT CORPORATION, MOHAWK INDUSTRIES. INC.,
a Delaware corporation a Georgia corporation
By: /s/ [SIGNATURE ILLEGIBLE] By: /s/ [SIGNATURE ILLEGIBLE]
---------------------------- ----------------------------
Its: VP Its: PRESIDENT
--------------------------- ------------------------
Date: 12-4-95 Date: 11-28-95
--------------------------- ------------------------
<PAGE>
ADDENDUM TO LEASE
-----------------
THIS ADDENDUM TO LEASE ("Addendum") is attached to and constitutes an
integral part of the Lease between CATELLUS DEVELOPMENT CORPORATION, as
Landlord, and MOHAWK INDUSTRIES, INC., as Tenant. The terms of this Addendum
shall be incorporated in the Lease for all purposes. In the event of a conflict
between the provisions of the Lease and the provisions of this Addendum, this
Addendum shall control.
THE FOLLOWING NEW SECTIONS ARE HEREBY ADDED TO THE LEASE WHICH STATE IN THEIR
ENTIRETY AS FOLLOWS:
18. Force Majeure Event. For purposes of this Lease, the term "Force Majeure
-------------------
Event" shall mean and include the following: any delay caused by any action,
inaction, order, ruling, moratorium, regulation, statute, condition or other
decision of any governmental agency having jurisdiction over any portion of the
Project, over the construction anticipated to occur thereon or over any uses
thereof, or by fire, flood, inclement weather, strikes, lockouts or other labor
or industrial disturbance (whether or not on the part of agents or employees of
either party hereto engaged in the construction of the Premises), civil
disturbance, order of any government, court or regulatory body claiming
jurisdiction or otherwise, act of public enemy, war, riot, sabotage, blockade,
embargo, failure or inability to secure materials, supplies or labor through
ordinary sources by reason of shortages or priority, discovery of hazardous or
toxic materials, earthquake, or other natural disaster, or any cause whatsoever
beyond the reasonable control (excluding financial inability) of the party whose
performance is required, or any of its contractors or other representatives,
whether or not similar to any of the causes hereinabove stated.
19. CPI Adjustment. Effective as of the first day of the thirty-first (31st)
--------------
month of the Term (the "CPI Adjustment Date"), the Base Rent in effect
immediately before the CPI Adjustment Date shall be increased, in accordance
with the percentage increase, if any, in the Consumer Price Index, to an amount
which is equal to the product of (i) the Index (as hereinafter defined) for the
third month preceding the CPI Adjustment Date, multiplied by (ii) the initial
Base Rent set forth in the Basic Lease Information, divided by (iii) the Basic
Index (as hereinafter defined); provided, however, in no event shall the Base
Rent (as adjusted) in effect immediately prior to the CPI Adjustment Date be
decreased, nor shall it be increased as a result of a CPI adjustment by more
than six percent (6%) per Lease Year, compounded annually. The "Index" shall
mean the Consumer Price Index, All Items, 1982-1984 = 100, All Urban Consumers,
for the Los Angeles/Riverside/Anaheim Area, as published by the United States
Department of Labor, Bureau of Labor Statistics, or its successor index, and the
"Basic Index" shall mean the Index published for the third month preceding the
Commencement Date. The adjusted Base Rent shall be rounded to the nearest $1.00.
If the Index required for the calculation specified in this subsection is not
available on the CPI Adjustment Date in question, Tenant shall continue to pay
the same amount of Base Rent payable during the period immediately preceding the
CPI Adjustment Date until the Index is available and the necessary calculation
is made. As soon as such calculation is made, Tenant shall immediately pay to
Landlord the amount of any underpayment of Base Rent for the month(s) that may
have elapsed. In the event the compilation or publication of the Index shall be
transferred to any other governmental department, bureau or agency or shall be
discontinued, the index most nearly the same as the Index shall be used to make
such calculation.
15.
<PAGE>
20. Options to Extend.
-----------------
20.1 Terms of Options. Provided (i) Tenant is not in default under the
----------------
terms of this Lease at the time each renewal option is exercised or at the
commencement of the applicable Extension Term (as hereinafter defined), (ii)
Tenant is occupying at least ninety percent (90%) of the Premises, including any
expansion space, and (iii) Landlord has not given more than two (2) notices of
default in any twelve (12) month period for nonpayment of monetary obligations,
Tenant shall have two (2) options to renew this Lease for an additional period
of sixty (60) months each (the "First and Second Extension Terms"). The
Extension Terms shall be on all the terms and conditions of this Lease, except
that Landlord shall have no additional obligation for free rent, leasehold
improvements or for any other tenant inducements for the Extension Terms. Base
Rent shall be increased (but not decreased) as set forth below. There shall be
no additional extension terms beyond the Extension Terms set forth herein.
Tenant must exercise its options to extend this Lease by giving Landlord written
notice of its election to do so not less than one hundred eighty (180) days
prior to the end of the initial Term, or the First Extension Term, as
applicable. Any notice not given in a timely manner shall be void, and Tenant
shall be deemed to have waived its extension rights. The extension options set
forth herein are personal to Tenant and shall not be included in any assignment
of this Lease.
20.2 Base Rent During First Extension Term. Effective as of the first day
-------------------------------------
of the First Extension Term, and on the first day of the thirty-first (31st)
month thereafter (the "First Extension CPI Adjustment Date(s)"), the monthly
Base Rent shall be increased in accordance with the percentage increase, if any,
in the Consumer Price Index, calculated in the manner set forth in Section 19;
provided, however, in no event shall the Base Rent (as adjusted) in effect
immediately prior to the applicable First Extension CPI Adjustment Date be
decreased, nor shall it be increased as a result of a CPI adjustment by more
than six percent (6%) per Lease Year, compounded annually.
20.3 Base Rent During Second Extension Term. The monthly Base Rent payable
--------------------------------------
for the first thirty (30) months of the Second Extension Term shall be increased
(but not decreased) to 98% of the fair market rental rate ("Market Rent") to be
determined as follows:
20.3.1 Agreement on Base Rent. Landlord and Tenant shall have thirty
----------------------
(30) days after Landlord receives the exercise notice in which to agree on the
Base Rent during the Second Extension Term. Notwithstanding anything in this
Section 20.3 to the contrary, in no event shall the Base Rent for the Second
Extension Term be less than the Base Rent in effect immediately prior to the
Second Extension Term.
20.3.2 Appraisal. If Landlord and Tenant are unable to agree upon the
---------
Base Rent for the Second Extension Term within such thirty (30) day period, then
within fifteen (15) days after the expiration of the thirty (30) day period,
each party, by giving notice to the other party, shall appoint a real estate
appraiser who is a current member of the American Institute of Real Estate
Appraisers, with at least five (5) years of experience appraising building space
comparable to the Premises in the city and county where the Premises is located
to determine the Market Rent. Market Rent shall mean the monthly amount per
rentable square foot in the Premises that a willing, non-equity new tenant would
pay and a willing landlord would accept at arm's length for space in a
comparable building or buildings, with comparable tenant improvements, in a
comparable location, giving appropriate consideration to monthly rental rates
per rentable square foot, the presence or absence of rent escalation clauses
such as operating expense and tax pass-throughs, length of lease term, size and
location of premises being leased and other
16.
<PAGE>
generally applicable terms and conditions of tenancy for a similar building or
buildings. If the two (2) appraisers are unable to agree on the Market Rent for
the Second Extension Term within twenty (20) days, they shall select a third
appraiser meeting the qualifications stated in this Section within five (5) days
after the last day the two (2) appraisers are given to set the Market Rent for
the Second Extension Term. The third appraiser, however selected, shall be a
person who has not previously acted in any capacity for either party. Within
twenty (20) days after the selection of the third appraiser, a majority of the
appraisers shall set the Market Rent for the Second Extension Term. If a
majority of the appraisers is unable to set the Market Rent within the twenty
(20) day period, the two (2) closest appraisals shall be added together and
their total divided by two (2). The resulting quotient shall be the Market Rent
for the first thirty (30) months of the Second Extension Term. Each party shall
be responsible for the costs, charges and fees of the appraiser appointed by
that party plus one-half of the cost of the third appraiser.
20.3.3 Amendment of Lease. Immediately after the Base Rent is
------------------
determined pursuant to this Section 20.3, Landlord and Tenant shall execute an
amendment to this Lease stating the new Base Rent in effect.
20.3.4 Base Rent Increase During Second Extension Term. Effective
-----------------------------------------------
as of the first day of the thirty-first (31st) month of the Second Extension
Term (the "Second Extension CPI Adjustment Date"), the monthly Base Rent shall
be increased in accordance with the percentage increase, if any, in the Consumer
Price Index, calculated in the manner set forth in Section 19; except that the
Index shall be multiplied by the monthly Base Rent payable during the first
thirty (30) months of the Second Extension Term, and the Basic Index shall mean
the Index published for the third month preceding the commencement of the Second
Extension Term; provided, however, in no event shall the Base Rent in effect
after the Second Extension CPI Adjustment Date be less than the Base Rent in
effect immediately preceding the Second Extension CPI Adjustment Date.
LANDLORD'S INITIALS ILLEGIBLE TENANT'S INITIALS JL
----------- --------
17.
<PAGE>
EXHIBIT A
[PLAN APPEARS HERE]
<PAGE>
EXHIBIT B
---------
WORK LETTER
-----------
Tenant Improvements.
-------------------
1.1 Landlord shall construct or cause to be constructed in and to the Premises,
at Landlord's cost and expense, not to exceed One Hundred Eighty Thousand
Dollars ($180,000.00), certain tenant improvements, including space planning,
permits and related costs (the "Tenant Improvements"), substantially in
accordance with the space plan or other appropriate exhibit (the "Space Plan")
attached hereto, marked Exhibit B-1 and made a part hereof and in accordance
-----------
with Landlord's current building standards. If said Exhibit is not attached, the
Space Plan shall be prepared by Landlord and submitted to Tenant for approval,
which approval shall be given within five (5) days following receipt thereof,
and evidenced by Tenant's signature thereon. A failure by Tenant to respond
within said five (5) day period shall be deemed approval. Upon approval by both
parties, the Space Plan shall be deemed incorporated herein by reference,
although not attached hereto.
1.2 The Tenant Improvements shall include costs approved by Landlord and
associated with the design, permit process and construction (including, a fee
equal to five percent (5%) of the total cost thereof as reimbursement for the
expense of Landlord's administration and coordination) of the Tenant
Improvements, including but not limited to, architect's fees, plan check and
permit fees, and fees for utility and telephone service hook-ups. The Tenant
Improvements shall not include any improvements which Landlord, in its sole
discretion, considers specialized, or any equipment or trade fixtures of Tenant,
nor any improvements not shown on the Space Plan which Tenant may desire or
governing agencies may require.
1.3 In the event that Tenant desires any change in the Tenant Improvements
which is reasonable and practical (which shall be conclusively determined by the
Architect), such change may only be requested by the delivery to Landlord by
Tenant of a proposed written "Change Order" specifically setting forth the
requested change. Landlord shall have five (5) business days from the receipt of
the proposed Change Order to provide Tenant with the Architect's disapproval of
the proposed change stating the reason(s) for such disapproval, or if the
Architect approves the proposed change, the following items: (i) a summary of
any increase in the cost caused by such change (the "Change Order Cost"), (ii) a
statement of the number of days of any delay caused by such proposed change (the
"Change Order Delay"), and (iii) a statement of the cost of the Change Order
Delay (the "Change Order Delay Expense"), which Change Order Delay Expense shall
be the product of the number of days of delay multiplied by $2,500.00. Tenant
shall then have three (3) business days to approve the Change Order Cost, the
Change Order Delay and the Change Order Delay Expense. If Tenant gives timely
written notice of approval of the Change Order Cost, the Change Order Delay and
the Change Order Delay Expense, Landlord shall promptly execute the Change Order
and cause the appropriate changes to the Plans and Specifications to be made.
Tenant's approval shall include full payment of the Change Order Cost and
Change Order Delay Expense. If Tenant fails to respond to Landlord within said
three (3) business day period, the Change Order Cost, the Change Order Delay and
the Change Order Delay Expense shall be deemed disapproved by Tenant and
Landlord shall have no further obligation to perform any work set forth in the
proposed Change Order. The Change Order Cost shall include all costs associated
with the Change Order, including, without limitation, architectural fees and
construction costs, as conclusively determined by the Architect and the General
Contractor, respectively, together with a five percent (5%) fee of these costs
as reimbursement for the expense of administration and coordination of such
Change Order by Landlord. The Change Order Delay shall include all delays caused
by the Change Order, including, without limitation, all architectural and
construction delays, as conclusively determined by the Architect and the General
Contractor, respectively.
1.4 Landlord hereby to assign to Tenant, upon request, the benefit of any and
all contractor's and manufacturer's warranties received by Landlord in
connection with the construction of the Tenant Improvements.
LANDLORD'S INITIALS ILLEGIBLE TENANT'S INITIALS ______
----------
<PAGE>
EXHIBIT B-1
-----------
SPACE PLAN
----------
<PAGE>
EXHIBIT C
---------
COMMENCEMENT DATE MEMORANDUM
----------------------------
With respect to that certain lease ("Lease") dated ___________, 19
__, between __________________, a_________________("Tenant"), and Catellus
Development Corporation, a Delaware corporation ("Landlord"), whereby Landlord
leased to Tenant and Tenant leased from Landlord approximately _______ rentable
square feet of the building located at ________________________("Premises"),
Tenant hereby acknowledges and certifies to Landlord as follows:
(1) Landlord delivered possession of the Premises to Tenant in a
Substantially completed condition on _____________________
("Possession Date");
(2) The Commencement Date is _________________________
(3) The Premises contain ________ square feet of space; and
(4) Tenant has accepted and is currently in possession of the Premises
and the Premises are acceptable for Tenant's use.
IN WITNESS WHEREOF, this Commencement Date Memorandum is executed this _____
day of _____________, 199_.
"Tenant"
_______________________________
a _____________________________
By: ___________________________
Its: ________________________
By: ___________________________
Its: ________________________
<PAGE>
[LOGO] CERTIFICATE OF INSURANCE ISSUE DATE (MM/DD/YY)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS
NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND,
EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
--------------------------------------------------------------------------------
COMPANIES AFFORDING COVERAGE
(Must have "Best" Rating of "A, B" or better)
--------------------------------------------------------------------------------
COMPANY
LETTER A
--------------------------------------------------------------------------------
----------------------------------
COMPANY
INSURED LETTER B
--------------------------------------------------------------------------------
COMPANY
LETTER C
--------------------------------------------------------------------------------
COMPANY D
LETTER
--------------------------------------------------------------------------------
COMPANY E
LETTER
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
COVERAGES
THIS IS TO CERTIFY THAT POLICIES OF INSURANCE LISTED BELOW HAVE SEEN ISSUED
TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED NOTWITHSTANDING
ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH
RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN. THE INSURANCE
AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS,
EXCLUSIONS, AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN
REDUCED BY PAID CLAIMS.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE POLICY EXPIRATION
LTR DATE (MM/DD/YY) DATE (MM/DD/YY) DATE (MM/DD/YY)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GENERAL LIABILITY
[X] COMMERICAL GENERAL LIABILITY
[_] [_] CLAIMS MADE [X] OCCURRENCE
[X] OWNER'S & CONTRACTORS PROTECTIVE
[X] Railroad Prot. Liab.
[X] X C 11 Included
--------------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY
[X] ANY AUTO
[_] ALL DAMAGED AUTOS
[_] SCHEDULED AUTOS
[X] HIRED AUTOS
[X] NON-OWNED AUTOS
[X] GARAGE LIABILITY
[_] ___________________
--------------------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY
[X] Following Form
[_] OTHER THAN UMBRELLA FORM
--------------------------------------------------------------------------------------------------------------------------------
WORKERS COMPENSATION
AND
EMPLOYERS' LIABILITY
--------------------------------------------------------------------------------------------------------------------------------
OTHER
--------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
--------------------------------------------------------------------------------------------------------------------------------
CO TYPE OF INSURANCE ALL LIMITS IN THOUSANDS
LTR
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GENERAL LIABILITY GENERAL AGGREGATE $ 2,000
--------------------------------------------------
[X] COMMERICAL GENERAL LIABILITY PRODUCTS -COMP/OPS AGGREGATE $ 2,000
--------------------------------------------------
[_] [_] CLAIMS MADE [X] OCCURRENCE PERSONAL & ADVERTISING [ILLEGIBLE] $ 2,000
--------------------------------------------------
[X] OWNER'S & CONTRACTORS PROTECTIVE EACH OCCURRENCE $ 2,000
--------------------------------------------------
[X] Railroad Prot. Liab. FIRE DAMAGE (ANY ONE FIRE) $ 50
--------------------------------------------------
[X] X C 11 Included MEDICAL EXPENSE (ANY ONE PERSON) $ 5
--------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY
[X] ANY AUTO CK $ 2,000
--------------------------------------------------
[_] ALL DAMAGED AUTOS BODILY
INJURY
[_] SCHEDULED AUTOS PER PERSON $
--------------------------------------------------
[X] HIRED AUTOS BODILY
INJURY
[X] NON-OWNED AUTOS PER
ACCIDENT
--------------------------------------------------
[X] GARAGE LIABILITY PROPERTY
DAMAGE $
[_] ___________________
--------------------------------------------------------------------------------------------------------------------
EXCESS LIABILITY EACH AGGREGATE
OCCURRENCE
[X] Following Form $ $
[_] OTHER THAN UMBRELLA FORM
--------------------------------------------------------------------------------------------------------------------
STATUTORY
---------------------------------------------------
WORKERS COMPENSATION $ 1,000 (EACH ACCIDENT)
AND $ 1,000 ([ILLEGIBLE] POLICY
EMPLOYERS' LIABILITY $ 1,000 ([ILLEGIBLE]- EACH EMPLOYEE
--------------------------------------------------------------------------------------------------------------------
OTHER