Exhibit 10.12
SINGLE TENANT COMMERCIAL SPACE LEASE ("NNN")
LANDLORD: DEERFIELD SCOTT LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
TENANT: SMTEK SANTA CLARA, INC.,
A CALIFORNIA CORPORATION
COMMENCEMENT DATE: AUGUST 1, 2002
SUBJECT PROPERTY: 3240 - 3242 SCOTT BOULEVARD,
SANTA CLARA, CALIFORNIA
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS ..................................... 1
1.1 Commencement Date ................................. 1
1.2 Lease Term ........................................ 1
1.3 Property .......................................... 1
1.4 Leased Premises ................................... 1
1.5 Building .......................................... 1
1.6 Tenant's Allocated Share........................... 1
1.7 Prepaid Rent ...................................... 2
1.8 Security Deposit .................................. 2
1.9 Permitted Use ..................................... 2
1.10 Tenant's Minimum Liability Insurance Coverage..... 2
1.11 Additional Definitions ........................... 2
ARTICLE 1 - DEMISE AND ACCEPTANCE............................ 2
2.1 Demise of Premises ................................ 2
2.2 Term .............................................. 2
2.3 Tenant's Improvements and Acceptance of Premise.... 2
ARTICLE 3 - RENT ............................................ 3
3.1 Base Monthly Rent ................................. 3
3.2 Additional Rent ................................... 3
3.3 Payment of Rent ................................... 3
3.4 Late Charge and Interest on Rent in Default ....... 4
3.5 Security Deposit .................................. 4
3.6 No Accord and Satisfaction ........................ 5
3.7 Intentionally Omitted.............................. 5
3.8 Disputed Sums...................................... 5
ARTICLE 4 - USE OF LEASED PREMISES .......................... 5
4.1 Limitation on Type ................................ 5
4.2 Compliance with Laws and Private Restrictions ..... 6
4.3 Insurance Requirements ............................ 6
4.4 Signs ............................................. 6
4.5 Intentionally Omitted.............................. 6
4.6 Parking............................................ 6
ARTICLE 5 - TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS ....... 7
5.1 Trade Fixtures .................................... 7
5.2 Leasehold Improvements ............................ 7
5.3 Alterations Required by Law........................ 7
5.4 Landlord's Improvements............................ 8
5.5 Liens ............................................. 8
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ARTICLE 6 - REPAIR AND MAINTENANCE .......................... 8
6.1 Tenant's Obligations to Maintain ................... 8
6.2 Landlord's Obligation to Maintain .................. 9
6.3 Tenant's Negligence ................................ 9
6.4 Capital Improvements............................... 10
ARTICLE 7 - WASTE DISPOSAL AND UTILITIES .................... 10
7.1 Waste Disposal ..................................... 10
7.2 Utilities .......................................... 10
7.3 Compliance with Rules, Regulations and Requirement.. 10
ARTICLE 8 - REAL PROPERTY TAXES ............................. 11
8.1 Real Property Taxes Defined ....................... 11
8.2 Tenant's Obligation to Reimburse .................. 12
8.3 Taxes on Tenant's Personal Property............ 12
8.4 Tenant's Improvements.......................... 12
ARTICLE 9 - INSURANCE .................................. 12
9.1 Tenant's Insurance ............................ 12
9.2 Release and Waiver of Subrogation ............. 13
9.3 Landlord's Real Property Insurance............. 14
ARTICLE 10 - LIMITATION ON LANDLORD'S
LIABILITY AND INDEMNITY ................. 14
10.1 Limitation on Landlord's Liability............ 14
10.2 Limitation on Tenant's Recourse .............. 15
10.3 Indemnification of Landlord ................. 15
ARTICLE 11 - DAMAGE TO LEASED PREMISES.................. 15
11.1 Landlord's Duty to Restore.................... 15
11.2 Landlord's Right to Terminate ................ 16
11.3 Tenant's Right to Terminate .................. 17
11.4 Abatement of Rent ............................ 17
11.5 Tenant's Costs and Insurance Proceeds......... 17
ARTICLE 12 - CONDEMNATION .............................. 17
12.1 Taking of Leased Premises..................... 17
12.2 Restoration Following the Taking.............. 18
12.3 Abatement of Rent ............................ 18
12.4 Temporary Taking ............................. 18
12.5 Division of Condemnation Award................ 18
ARTICLE 13 - DEFAULT AND REMEDIES ...................... 19
13.1 Events of Tenant's Default.................... 19
13.2 Landlord's Remedies .......................... 20
13.3 Landlord's Default and Tenant's Remedies...... 22
13.4 Waiver ....................................... 22
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ARTICLE 14 - ASSIGNMENT................................ 23
14.1 By Tenant ................................... 23
14.2 By Landlord ................................. 26
ARTICLE 15 - TERMINATION............................... 26
15.1 Surrender of the Leased Premises............. 26
15.2 Holding Over................................. 26
ARTICLE 16 - LANDLORD'S RIGHT TO ENTER ................ 27
16.1 Landlord's Right to Enter ................... 27
ARTICLE 17 - MORTGAGES & TRANSFER....................... 27
17.1 Subordination ................................ 27
17.2 Tenant's Attornment .......................... 28
17.3 Mortgagee Protection ......................... 28
17.4 Estoppel Certificates ........................ 28
17.5 Financial Statements.......................... 28
ARTICLE 18 - GENERAL PROVISIONS......................... 29
18.1 Force Majeure ................................ 29
18.2 Notices ...................................... 29
18.3 Fees and Expenses ............................ 29
18.4 Corporate Authority ........................... 30
18.5 Additional Definitions......................... 30
18.5.1 Agreed Interest Rate.................... 30
18.5.2 CPI..................................... 30
18.5.3 Effective Date.......................... 31
18.5.4 Law..................................... 31
18.5.5 Leasehold Improvements.................. 31
18.5.6 Lender ................................. 31
18.5.7 Private Restrictions ................... 31
18.5.8 Trade Fixtures ......................... 31
18.6 Construction of Meaning and Other Miscellaneous
Provisions .................................... 31
18.7 Quiet Enjoyment................................ 32
18.8 Landlord Representations....................... 32
18.9 Brokerage Commissions ......................... 32
18.10 Entire Agreement ............................. 33
18.11 Security Measures ............................ 33
18.12 Signatures Required/Non-Binding Offer ........ 33
ARTICLE 19 - ENVIRONMENTAL MATTER........................ 33
19.1 Tenant's Covenants Regarding Hazardous Materials. 33
19.2 Indemnification of Landlord.................... 35
19.3 Tenant Indemnification......................... 35
ARTICLE 20 - OPTION TO EXTEND LEASE...................... 36
20.1 Option to Extend Lease Term.................... 36
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Signature Page....................................... 38
EXHIBITS:
EXHIBIT A - LEGAL DESCRIPTION............................. 39
EXHIBIT B - FLOOR PLAN.................................... 40
(Deerfield Scott (Smtek) TOC 6/10/02)
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SINGLE-TENANT COMMERCIAL SPACE LEASE
("LEASE")
THIS LEASE, dated as of June 10, 2002 (the "Reference Date"), is made by
and between DEERFIELD SCOTT LLC, a California limited liability company
("Landlord") and SMTEK SANTA CLARA, INC., a California corporation ("Tenant"),
with reference to those matters set forth hereinafter.
RECITALS:
WHEREAS, Landlord and Tenant wish to enter into a new lease for a term of
three (3) years on the conditions and provisions set forth hereinafter.
ARTICLE 1
DEFINITIONS
1.1. Commencement Date: The term "Commencement Date" shall mean August 1,
2002.
1.2. Lease Term: The term "Lease Term" shall mean the term
of this Lease, which shall be for a period of thirty-six (36) full
calendar months (plus the partial month, if any, immediately following the
Commencement Date), commencing on the Commencement Date and ending at midnight
on the last day of the thirty-sixth (36th) full calendar month thereafter,
unless this Lease is sooner terminated according to its terms or by mutual
agreement.
1.3. Property: The term "Property" shall mean that real property
commonly described as 3240 - 3242 Scott Boulevard, Santa Clara, California
with all improvements now or hereafter located thereon described by the Legal
Description attached hereto as Exhibit "A".
1.4. Leased Premises: The term "Leased Premises" and/or "Premises" shall
mean those certain premises located at the Property attached hereto as Exhibit
"A" and as shown by the Floor Plan attached hereto as Exhibit "B" containing
approximately 44,685 square feet of gross leasable area ("Tenant's Gross
Leasable Area").
1.5. Building: The term "Building" shall mean the structure
situated on the Property in which the Leased Premises are located
containing approximately 44,685 square feet of gross leasable area (the
"Building Gross Leasable Area").
1.6. Tenant's Allocated Share: The term "Tenant's Allocated Share"
shall mean the percentage obtained by dividing Tenant's Gross Leasable Area by
the Building Gross Leasable Area, which as of the Effective Date hereof is
agreed to be 100%.
1.7. Prepaid Rent: The term "Prepaid Rent" shall mean the sum of
N/A
.
1.8. Security Deposit: The term "Security Deposit" shall mean the sum
of $43,453.59 which Security Deposit is already being held by Landlord. The
parties agree that Landlord may immediately expend up to $20,000.00 of such
Security Deposit to cure certain safety infractions and/or requirements of the
City of Santa Clara Fire Department at the Premises with Tenant to replenish
that portion of the Security Deposit utilized by Landlord within thirty (30)
days of presentation of invoice to Tenant in the amount actually expended by
Landlord for such purpose in an amount not to exceed $20,000.00.
1.9. Permitted Use: The term "Permitted Use" shall mean general office,
R&D, light manufacturing and assembly, storage/warehouse and related uses.
1.10. Tenant's Minimum Liability Insurance Coverage: The term "Tenant's
Minimum Liability Insurance Coverage" shall mean single limit coverage in an
amount not less than $1,000,000.00 per occurrence with an amount aggregate of
not less than $2,000,000.00.
1.11. Additional Definitions: As used in this Lease or any
addendum or amendment thereto, the following terms shall have the meanings set
forth in Section 18.5: "Agreed Interest Rate," "Effective Date," "Private
Restrictions," "Lender," "Law," "Leasehold Improvements," and "Trade
Fixtures."
ARTICLE 2
DEMISE AND ACCEPTANCE
2.1. Demise of Premises: Landlord hereby leases to Tenant, and Tenant
leases from the Landlord, for the Lease Term upon the terms and conditions of
this Lease, the Leased Premises. Tenant's lease of the Leased Premises shall
be subject to all Laws, all Private Restrictions, easements, and other matters
of public record.
2.2. Term: The term of this Lease shall be the Lease Term and shall
commence upon the Commencement Date and continue for the period set forth in
Section 1.2.
2.3. Tenant Improvements and Acceptance of Premises: Landlord, at its
sole expense and cost, shall pay for and be responsible for the re-carpeting
and repainting of certain agreed upon interior parts of the Premises and other
Leasehold Improvements approved by Landlord in an amount not to exceed
$40,000.00. Other than the above carpet and painting work and other
conditions known to Landlord and Tenant, Tenant agrees to accept the Premises
in its "AS IS" physical condition, without further improvements, repairs or
alterations by Landlord.
ARTICLE 3
RENT
3.1. Base Monthly Rent: Commencing on the Commencement Date and
continuing throughout the Lease Term, Tenant shall pay to Landlord the Base
Monthly Rent determined as follows:
3.1.1. Base Monthly Rent for the first twelve (12) months of this
Lease Agreement shall be $26,811.00.
3.1.2. Base Monthly Rent for months 13 thru 24 of the Lease
Agreement shall be $35,748.00.
3.1.3. Base Monthly Rent for months 25 thru 36 of the Lease
Agreement shall be $44,685.00.
3.2. Additional Rent: Within ten (10) days after receipt of invoices(s)
therefore, Tenant shall pay to Landlord or to Landlord's designated agent or
entity as Additional Rent, the following:
(1) All Real Property Taxes relating to the Premises as set
forth in Article 8, and
(2) All Landlord's Real Property Insurance relating to the
Premises, as set forth in Section 9.3, and
(3) An additional amount equal to two and one-half (2-1/2%) percent
of the Base Monthly Rent as compensation to Landlord for its accounting,
administration, and management services rendered by Landlord, and
(4) Landlord's share of the net consideration received by
Tenant upon certain assignments and sublettings as required by Section 14.1.6,
and
(5) All charges, costs, expenses and other amounts which Tenant
is required to pay hereunder, together with all interest, late charges,
penalties, costs and expenses including without limitation reasonable
attorneys' fees, legal and accounting expenses, collection costs, and court
costs, that may accrue thereto or be incurred in the event of Tenant's
default, refusal or failure to pay such amounts, and all damages, reasonable
costs and expenses which Landlord may incur by reason of any default by Tenant
or failure on Tenant's part to comply with the terms of this Lease. In the
event of failure by Tenant to pay such Additional Rent in accordance with the
terms hereof, Landlord shall have all the rights and remedies with respect
thereto as Landlord has for nonpayment of Basic Rent. The term "rent" shall
include without limitation "Rent" and "Additional Rent."
3.3. Payment of Rent: All rent required to be paid in monthly
installments shall be paid in advance on the first day of each calendar month
during the Lease Term. All rent shall be paid in lawful money of the United
States, without any abatement, deduction or offset whatsoever, and without any
prior demand therefor, to Landlord at its address set forth above or at such
other place as Landlord may designate from time-to-time. Tenant's obligation
to pay rent shall be prorated at the commencement and expiration of the Lease
Term.
3.4. Late Charge and Interest on Rent in Default: Tenant acknowledges
that the late payment by Tenant of any monthly installment of Base Monthly
Rent or any Additional Rent will cause Landlord to incur certain costs and
expenses not contemplated under this Lease, the exact amount of which are
extremely difficult or impractical to fix. Such costs and expenses will
include, without limitation, administration and collection costs and
processing and accounting expenses. Therefore, if any such rent is not
received by Landlord from Tenant within ten (10) days after the same becomes
due, Tenant shall immediately pay to Landlord a late charge equal to five
percent (5%) of such delinquent rent. Landlord and Tenant agree that this late
charge represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for its loss suffered by Tenant's failure to make
timely payment. In no event shall this provision for a late a charge be deemed
to grant to Tenant a grace period or extension of time within which to pay any
rental installment or prevent Landlord from exercising any right or remedy
available to Landlord upon Tenant's failure to pay each rental installment due
under this Lease in a timely fashion. If any rental installment should become
delinquent for a period in excess of thirty (30) days then, in addition to
such late charge Tenant shall pay to Landlord interest on any rent that is not
paid when due at the Agreed Interest Rate from the thirtieth (30th) day
following the date such amount became due until paid.
3.5. Security Deposit: Tenant has deposited with Landlord the amount set
forth in Section 1.8 concurrently with its execution of the Lease (the
"Security Deposit") as security for the performance by Tenant of the terms of
this Lease to be performed by Tenant, and not as prepayment of rent. Landlord
may apply such portion or portions of the Security Deposit as are reasonably
necessary for the following purposes: (i) to remedy Tenant's default (as
defined in Article 13 below) in the payment of any Rent; (b) to repair damage
to the Leased Premises caused by Tenant; (iii) to clean the Leased Premises
upon termination of this Lease; (iv) to reimburse Landlord for the payment of
any amount which Landlord may reasonably spend or be required to spend by
reason of Tenant's Default; or (v) to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant's Default, including
without limitation, those damages provided for in California Civil Code,
Section 1951.2, and any successor statutes providing for damages in the event
of the termination of a lease due to a default by the tenant thereunder, and
those damages provided by other provisions of applicable law now or hereafter
in force or provided for in equity. In the event the Security Deposit or any
portion thereof is so used, Tenant agrees to pay to Landlord promptly upon
demand an amount in cash sufficient to restore the Security Deposit to the
full original sum. Landlord shall not be deemed a trustee of the Security
Deposit. Landlord may use the Security Deposit in Landlord's ordinary business
and shall not be required to segregate it from its general accounts. Tenant
shall not be entitled to any interest on the Security Deposit. If Landlord
transfers the Leased Premises during the Lease Term, Landlord may pay the
Security Deposit to any subsequent owner in conformity with the provisions of
Section 1950.7 of the California Civil Code and/or any successor statute, in
which event the transferring Landlord will be released from all liability for
the return of the Security Deposit. As a material part of the consideration
given by Tenant to Landlord to induce Landlord to enter into this Lease,
Tenant waives the provisions of California Civil Code, Section 1950.7, and all
other provisions of law now in force or that become in force after the date of
the execution of this Lease, that provide that Landlord may claim from a
security deposit only those sums reasonably necessary to remedy defaults in
the payment of rent, to repair damage caused by Tenant, or to clean the
Premises. Landlord and Tenant agree that Landlord may, in addition, claim
those sums reasonably necessary to compensate Landlord for any other
foreseeable or unforeseeable loss or damage caused by the acts or omissions of
Tenant or Tenant's officers, agents, employees, independent contractors or
invitees. Should Tenant faithfully and fully comply with all of the terms,
covenants, and conditions of this Lease, within thirty (30) days following the
expiration of the Term, the Security Deposit shall be returned to Tenant or,
at the option of Landlord, to the last assignee of Tenant's interest in this
Lease.
3.6. No Accord and Satisfaction: No payment by Tenant or receipt by
Landlord of a lesser amount than the rent herein provided shall be deemed to
be other than on account of the earliest rent due and payable hereunder, nor
shall any endorsement or statement on any check or any letter accompanying any
check or payment as rent be deemed an accord and satisfaction, and Landlord
may accept any such check or payment without prejudice to Landlord's right to
recover the balance of such rent or pursue any other remedy provided in this
Lease.
3.7. Prepayment of Rent: Intentionally Omitted.
3.8. Disputed Sums: Under the terms of this Lease, numerous charges are
and may be due from Tenant to Landlord including Base Monthly Rent, Additional
Rent and advances made by Landlord in respect of Tenant's default at
Landlord's option. In event that at any time during the term of this Lease
there is a bonafide dispute between the parties as to the amount due for any
of such charges claimed Landlord to be due, the amount demanded by Landlord
shall be paid by Tenant until the resolution of the dispute between the
parties or by litigation. Failure by Tenant to pay the disputed sums until
resolution shall constitute a default under the terms of this Lease.
ARTICLE 4
USE OF LEASED PREMISES
4.1. Limitation on Type: Tenant shall use the Leased Premises solely
for the Permitted Use (as described in Section 1.9) and for no other use
unless Tenant shall have first obtained Landlord's prior written consent.
Tenant shall not do or permit anything to be done in or about the Leased
Premises which might interfere with the rights of other tenants of Landlord to
use the Property or cause structural injury to the Leased Premises or the
Building. Tenant shall not commit nor permit to be committed any waste in or
about the Leased Premises, and Tenant shall keep the Leased Premises in a
clean, attractive and wholesome condition, free of any objectionable noises,
odors, dust or nuisances.
4.2. Compliance with Laws and Private Restrictions: Tenant shall not
use or permit any person to use the Leased Premises in any manner which
violates any Laws or Private Restrictions. Tenant shall abide by and promptly
observe and comply with all Laws and Private Restrictions and shall indemnify
and hold Landlord harmless from any liability resulting from Tenant's failure
to do so.
4.3. Insurance Requirements: Tenant shall not use or permit any person
to use the Leased Premises in any manner which will cause the existing rate of
insurance upon the Building or any of its contents to be increased or cause a
cancellation of any insurance policy covering the Building. Tenant shall not
sell, or permit to be kept, used, or sold in or about the Leased Premises any
article which may be prohibited by the standard form of fire insurance policy.
Tenant shall comply with all requirements of any insurance company, insurance
underwriter, or Board of Fire Underwriters which are necessary to maintain, at
standard rates, the insurance coverage carried by either Landlord or Tenant
pursuant to this Lease.
4.4. Signs: Tenant shall not place on any portion of the Leased
Premises, the Building or the Property any sign, placard, lettering in or on
windows, banner, displays or other advertising or communicative material which
is visible from the exterior of the Building without the prior written
approval of Landlord, which approval shall not unreasonably be withheld. All
such approved signs shall strictly conform to all Laws, Private Restrictions
and Landlord's sign criteria, if any, and shall be installed at the expense of
Tenant. If Landlord so elects, Tenant shall, at the expiration or sooner
termination of this Lease, remove all signs installed by it and repair any
damage caused by such removal. Tenant shall at all times maintain such signs
in good condition and repair.
4.5. Rules and Regulations: Intentionally Omitted.
4.6. Parking: Tenant is allocated and shall have the exclusive right to
use the parking spaces contained within the Property described in paragraph
2.1 for its use and the use of its employees and invitees, the location of
which may be designated from time-to-time by Landlord. All trucks and delivery
vehicles shall be (i) parked at the rear of the Building, (ii) loaded and
unloaded in a manner which does not interfere with the businesses of other
occupants of the Property, and (iii) permitted to remain on the Property only
so long as is reasonably necessary to complete loading and unloading.
ARTICLE 5
TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS
5.1. Trade Fixtures: Throughout the Lease Term, Tenant shall provide,
install, and maintain in good condition all Trade Fixtures required in the
conduct of its business in the Leased Premises. All Trade Fixtures shall
remain Tenant's property.
5.2. Leasehold Improvements: Tenant shall not construct any Leasehold
Improvements or otherwise alter the Leased Premises without Landlord's prior
approval, if the cost thereof exceeds Ten Thousand Dollars ($10,000.00), and
not until Landlord shall have first approved the plans and specifications
therefor, which approvals shall not be unreasonably withheld. In no event
shall Tenant make any alterations to the Leased Premises which could affect
the structural integrity or the design of the Building. All Leasehold
Improvements constructed by Tenant shall be constructed by Tenant at Tenant's
expense using a licensed contractor first approved by Landlord in substantial
compliance with the approved plans and specifications therefor. All
construction done by Tenant shall be done in accordance with all Laws and in a
good and workmanlike manner using new materials of good quality. Tenant shall
not commence construction of any Leasehold Improvements until (i) all required
governmental approvals and permits shall have been obtained, (ii) all
requirements regarding insurance imposed by this Lease have been satisfied,
(iii) Tenant shall have given Landlord at least five (5) days prior written
notice of its intention to commence such construction, (iv) Tenant shall have
notified Landlord by telephone of the commencement of construction on the day
it commences, and (v) if requested by Landlord, Tenant shall have obtained
contingent liability and broad form builders risk insurance in an amount
satisfactory to Landlord if there are any perils relating to the proposed
construction not covered by insurance carried pursuant to Article 9. All
Leasehold Improvements shall remain the property of Tenant during the Lease
Term but shall not be damaged, altered, or removed from the Leased Premises.
At the expiration or sooner termination of the Lease Term, all Leasehold
Improvements shall be surrendered to Landlord as a part of the realty and
shall then become Landlord's property, and Landlord shall have no obligation
to reimburse Tenant for all or any portion of the value or cost thereof;
provided, however, that if Landlord shall require Tenant to remove any
Leasehold Improvements in accordance with the provisions of Section 15.1, then
Tenant shall so remove such Leasehold Improvements prior to the expiration of
the Lease Term.
5.3. Alterations Required by Law: Tenant shall make any alteration,
addition or change of any sort, whether structural or otherwise, to the Leased
Premises that is required by any Law because of (i) Tenant's use or change of
use of the Leased Premises, (ii) Tenant's application for any permit or
governmental approval, or (iii) Tenant's construction or installation of any
Leasehold Improvements or Trade Fixtures.
5.4. Landlord's Improvements: All fixtures, improvements or equip-
ment which are installed, constructed on or attached to the Property by
Landlord at its expense shall become a part of the realty and belong to
Landlord.
5.5. Liens: Tenant shall keep the Leased Premises and the Property free
from any liens and shall pay when due all bills arising out of any work
performed, materials furnished, or obligations incurred by Tenant, its agents,
employees or contractors relating to the Leased Premises. If any claim of lien
is recorded, Tenant shall bond against or discharge the same within ten (10)
days after the same has been recorded against the Leased Premises and/or the
Property.
ARTICLE 6
REPAIR AND MAINTENANCE
6.1. Tenant's Obligations to Maintain: Except as otherwise provided in
Article 11 regarding the restoration of damage caused by fire and other
perils, Tenant shall, at all times during the Lease Term, clean, keep, and
maintain in good order, condition, and repair the Leased Premises and every
part thereof, through regular inspections and servicing, including but not
limited to (i) all plumbing and sewage facilities (including all sinks,
toilets, faucets and drains), and all ducts, pipes, vents, or other parts of
the HVAC or plumbing system, (ii) all fixtures, interior walls, floors,
carpets and ceilings, (iii) all windows, doors, entrances, plate glass,
showcases, including cleaning both interior and exterior surfaces, (iv) all
electrical facilities and all equipment including all lighting fixtures,
lamps, bulbs and tubes, fans, vents, exhaust equipment and systems, (v) any
automatic fire extinguisher equipment in the Leased Premises, (vi) ceilings,
roofs, skylights, roof gutters and drains, and (vii) landscaping, driveways,
parking lots, signs, sidewalks, and parkways located in, on, about or adjacent
to the Premises. Tenant, in keeping the Premises in good order, condition and
repair, shall exercise and perform good maintenance practices. Tenant's
obligations shall include restorations, replacements or renewals when
necessary to keep the Premises and all improvements thereon or a part thereof
in good order, condition and state of repair. If Tenant occupies the Premises
for seven (7) years or more, Landlord may require Tenant to repaint the
exterior of the buildings on the Premises as reasonably required, but not more
frequently than once every seven (7) years. Tenant shall replace any damaged
or broken glass in the Leased Premises (including all interior and exterior
doors, windows, and showcases) with glass of the same kind, size and quality.
Tenant shall repair any damage to the Leased Premises (including exterior
doors and windows) caused by vandalism or any unauthorized entry. Tenant shall
(i) maintain, repair, and replace when necessary all HVAC equipment, roof
covering, landscaping and parking lot surface areas which serves the Leased
Premises and shall keep the same in good condition through regular inspection
and servicing, and (ii) maintain continuously throughout the Lease Term a
service contract for the maintenance of all such HVAC equipment with a
licensed HVAC repair and maintenance contractor approved by Landlord which
provides for the periodic inspection and servicing of the HVAC equipment at
least once every sixty (60) days during the Lease Term. Landlord may elect at
any time to assume responsibility for the maintenance, repair and replacement
of such HVAC equipment, roof covering, landscaping, and parking lot surface
which serves the Leased Premises, and if it does so, all third party costs
incurred by it in performing such maintenance, repair and replacement shall be
paid for by Tenant on a periodic basis as Additional Rent within ten (10) days
after receipt of a statement therefor from Landlord. Tenant shall also
maintain continuously throughout the Lease Term a service contract for the
washing of all windows in the Leased Premises (both interior and exterior
surfaces) with a contractor approved by Landlord which provides for the
periodic washing of all such windows at least once every ninety (90) days
during the Lease Term. Tenant shall furnish Landlord with copies of all such
service contracts, which shall provide that they may not be canceled or
changed without at least thirty (30) days prior written notice to Landlord.
All repairs and replacements required of Tenant shall be promptly made with
new materials of like kind and quality. If the work affects the structural
parts of the Building or if the estimated cost of any item of repair or
replacement is in excess of Ten Thousand Dollars ($10,000.00), then Tenant
shall first obtain Landlord's written approval of the scope of work, plans
therefor, materials to be used, and the contractor.
6.2. Landlord's Obligation to Maintain: Landlord shall maintain and
repair (i) the structural portions of the roof; (ii) the foundation (but not
the floor or floor covering) of the Building; (iii) the exterior walls of the
Building (subject to Section 6.1., above) so that the same is kept in good
order and repair, reasonable wear and tear excepted; and (iv) any damages to
the Premises caused by the negligence or willful misconduct of Landlord.
Landlord shall not be responsible for repairs required by any accident, fire
or other peril except as otherwise required by Article 11, or for damage
caused to any part of the Property by any act, negligence or omission of
Tenant or its agents, contractors, or employees or invitees. Landlord may
engage contractors of its choice to perform the obligations required of it by
this Article, and the necessity of any expenditure to perform such obligations
shall be at the reasonable discretion of Landlord. It is an express condition
precedent to all obligations of Landlord to repair and maintain that Tenant
shall have notified Landlord in writing of the need for such repairs and
maintenance, after which Landlord shall be given a reasonable opportunity to
repair same.
6.3. Tenant's Negligence: Anything in this Article to the contrary
notwithstanding, Tenant shall pay for all damage to the Leased Premises or the
Property caused by the negligent act or omission of Tenant, its employees,
contractors, or invitees or by the failure of Tenant to promptly discharge its
obligations under this Lease or comply with the terms of this Lease, but only
to the extent such damage is not covered by insurance proceeds actually
recovered by Landlord. Tenant shall make payment therefore on damages incurred
by Landlord.
6.4. Capital Improvements: If any repair or replacement is required to
be made to the Leased Premises which would constitute a capital expenditure
under generally accepted accounting principles ("GAAP"), then Landlord shall
be required to make such repair or replacement, and Tenant shall be required
to pay the costs therefor as Additional Rent to the extent such costs are
amortized over the useful life of such capital items. The cost of such repair
or replacement shall be amortized over the useful life of the improvement with
interest on the unamortized balance at the then prevailing market rate
Landlord would pay if it borrowed funds to construct such improvements from an
institutional lender, and Landlord shall inform Tenant of the monthly
amortization payment required to so amortize such costs, and shall also
provide Tenant with the information upon which such determination is made.
ARTICLE 7
WASTE DISPOSAL AND UTILITIES
7.1. Waste Disposal: Tenant shall store its waste either inside the
Leased Premises or within outside trash enclosures that are (i) fully fenced
and screened in compliance with all Private Restrictions designed for such
purpose to be used either exclusively by Tenant or in common with other
occupants of the Property, as designated by Landlord, and (ii) first approved
by Landlord. All entrances to such outside trash enclosures shall be kept
closed, and waste shall be stored in such manner as not to be visible from the
exterior of such outside enclosures. Tenant shall cause all of its waste to be
regularly removed from the Property at Tenant's sole cost. Tenant shall keep
all fire corridors and mechanical equipment rooms in the Leased Premises free
and clear of all obstructions at all times.
7.2. Utilities: Tenant shall promptly pay, as the same become due,
all charges for water, gas, electricity, telephone, sewer service, waste pick-
up, and any other utilities, materials or services furnished directly to or
used by Tenant on or about the Leased Premises during the Lease Term,
including, without limitation, all hookup and installation costs, fees and
expenses of any such utilities. In addition to the above, Tenant shall be
solely responsible for the cost of installation of heating, ventilation, and
air-conditioning to its "server room" in the event that Tenant utilizes a
"server room" requiring cooling beyond normal working hours (defined herein to
be up to a maximum of ten (10) hours a day).
7.3. Compliance with Rules, Regulations and Requirements: Landlord
shall comply with all rules, regulations and requirements promulgated by
national, state or local governmental agencies or utility suppliers concerning
the use of utility services, including any rationing, limitation or other
control. Tenant shall not be entitled to terminate this Lease nor to any
abatement in rent by reason of such compliance. Furthermore, Landlord shall be
entitled to cooperate voluntarily in a reasonable manner with the efforts of
all governmental agencies or utility suppliers in reducing energy or other
resources consumption. Tenant agrees at all times to cooperate fully with
Landlord and to abide by all rules and regulations-and requirements which
Landlord may prescribe in order to maximize the efficient operation of the
HVAC system and all other utility systems.
ARTICLE 8
REAL PROPERTY TAXES
8.1. Real Property Taxes Defined: The term "Real Property Taxes" as
used herein shall mean (i) all taxes, assessments, levies, and other charges
of any kind or nature whatsoever, general and special, foreseen and unforeseen
(including all installments or principal and interest required to pay any
general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership) or hereafter
imposed by any governmental or quasi-governmental authority or special
district having the direct or indirect power to tax or levy assessments, which
are levied or assessed against, or with respect to the value, occupancy or use
of, all or any portion of the Property (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord's
interest therein; the fixtures, equipment and other property of Landlord, real
or personal, that are an integral part of and located on the Property; and the
gross receipts, income, or rentals from the Property; or the use of parking
areas, public utilities, or energy within the Property; (ii) all charges,
levies or fees imposed by reason of governmental control of the Property, and
(iii) all third party costs and fees (including attorneys' fees) incurred by
Landlord in contesting any Real Property Tax and in negotiating with public
authorities as to any Real Property Tax. If at any time during the Lease Term
the taxation or assessment of the Property prevailing as of the Effective Date
shall be altered so that in lieu of or in addition to any Real Property Tax
described above there shall be levied, assessed or imposed (whether by reason
of a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate or additional tax or charge (i) on
the value, use or occupancy of the Property of Landlord's interest therein or
(ii) on or measured by the gross receipts, income, or rentals from the
Property, on Landlord's business of leasing the Property, or computing in any
manner with respect to the operation of the Property, then any such tax or
charge, however designated, shall be included within the meaning of the term
"Real Property Taxes" for purposes of this Lease. If any Real Property Tax is
based upon property or rents unrelated to the Property, then only that part of
such Real Property Tax that is fairly allocable to the Property shall be
included within the meaning of the term "Real Property Taxes". Notwithstanding
the foregoing, the term "Real Property Taxes" shall not include estate,
inheritance, transfer, gift or franchise taxes of Landlord or the federal or
state net income tax imposed on Landlord's income from all sources.
8.2. Tenant's Obligation to Reimburse: As Additional Rent, Tenant
shall pay Tenant's Allocable Share of all Real Property Taxes (i) within
twenty (20) days after being billed for the same by Landlord, or (ii) no later
than ten (10) days before such Real Property Tax becomes delinquent, whichever
last occurs. If requested by Tenant in writing within thirty (30) days of
receipt of a bill for Tenant's Allocated Share of Real Property Taxes,
Landlord shall furnish Tenant with such evidence as is reasonably available to
Landlord with respect to the amount of any Real Property Tax which is part of
such bill. Tenant may not withhold payment of such bill pending receipt and/or
review of such evidence. If any Lender requires Landlord to impound Real
Property Taxes on a periodic basis during the Lease Term, then Tenant, on
notice from Landlord indicating this requirement, shall pay a sum of money
toward its liability under this Article to Landlord on the same periodic basis
in accordance with the lender's requirements. Landlord shall impound the Real
Property Tax payments received from Tenant in accordance with requirements of
the Lender.
8.3. Taxes on Tenant's Personal Property: Tenant shall pay before
delinquency any and all taxes, assessments, license fees, and public charges
levied, assessed, or imposed against Tenant or Tenant's estate in this Lease
or the property of Tenant situated within the Leased Premises which become due
during the Lease Term. On demand by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of these payments.
8.4. Tenant's Improvements: If any of the Alterations and/or Tenant
Improvements constructed and/or installed in the Leased Premises, whether
installed and/or paid for by Landlord or Tenant, and whether or not the same
affect the Real Property so as to become part thereof, are assessed for Real
Property Tax purposes at a valuation higher than the valuation at which the
Building standard improvements are assessed, then the Real Property Taxes and
assessments levied against the Building by reason of such excess assessed
valuation shall be governed by the provisions of Section 8.2 hereof. If the
records of the County Assessor are available and sufficiently detailed to
serve as a basis for determining whether the Alterations and/or Tenant
Improvements are assessed at a higher valuation than the Building standard
improvements, such records shall be binding on both the Landlord and Tenant.
If the records of the County Assessor are not available or sufficiently
detailed to serve as a basis for making such determination, the actual costs
of construction shall be used.
ARTICLE 9
INSURANCE
9.1. Tenant's Insurance: Tenant shall maintain in full force and
effect during the Lease Term the following insurance:
9.1.1. Tenant shall maintain a policy or policies of
commercial general liability insurance, including property damage, against
liability for personal injury, bodily injury, death, and damage to property
occurring in or about, or resulting from an occurrence in or about, the Leased
Premises with combined single limit coverage of not less than the amount of
Tenant's Minimum Liability Insurance set forth in Section 1.10. Such
comprehensive general liability insurance shall contain fire damage coverage
and a "contractual liability" endorsement insuring Tenant's performance of
Tenant's obligation to indemnify Landlord contained in Section 10.3. If
Landlord's Lender, insurance advisor or counsel reasonably determines at any
time that the amount of such coverage is not adequate, Tenant shall increase
such coverage to such amount as Landlord's Lender, insurance advisor or
counsel reasonably deem adequate, not to exceed the level of coverage then
commonly carried by comparable businesses similarly situated.
9.1.2. Tenant shall maintain a policy or policies of fire and
property damage insurance in "all risk" form with a sprinkler leakage
endorsement (if the Building contains fire sprinklers) insuring the personal
property, inventory, Trade Fixtures, and Leasehold Improvements within the
Leased Premises for the full replacement value thereof. The proceeds from any
of such policies shall be used for the repair or replacement of such items so
insured.
9.1.3. Tenant shall maintain a policy or policies of worker's
compensation insurance and any other employee benefit insurance sufficient to
comply with all Laws.
9.1.4. Landlord and such others it designates shall be named as
additional insureds on the policies of insurance described in Sections 9.1.1
and 9.1.2 above. All insurance required by this paragraph (i) shall be primary
insurance which provides that the insurer shall be liable for the full amount
of the loss up to and including the total amount of liability set forth in the
declarations without the right of contribution from any other insurance
coverage of Landlord, (ii) shall be in a form satisfactory to Landlord, (iii)
shall be carried with companies reasonably acceptable to Landlord, (iv) shall
provide that such policies shall not be subject to cancellation or change
except after at least thirty (30) days prior written notice to Landlord, and
(v) shall not have a "deductible" in excess of One thousand Dollars
($1,000.00) per occurrence. Copies of such policy or policies, or duly
executed certificates for them, together with satisfactory evidence of the
payment of the premium thereon shall be deposited with Landlord prior to the
time Tenant enters into possession of the Leased Premises and upon renewal of
such policies, but not less than thirty (30) days prior to the expiration of
the term of such coverage.
9.2. Release and Waiver of Subrogation: The parties hereto release
each other, and their respective agents, employees, and contractors, from
any claims for injury or damage to property that are caused by or result
from risks insured against under any insurance policies carried by the
parties and in force at the time of such damage, but only to the extent such
claims are covered by such insurance. This release shall be in effect only
so long as the applicable insurance policies contain a clause to the effect
that this release shall not affect the right of the insured to recover under
such policies. Each party shall cause each insurance policy obtained by it
to provide that the insurance company waives all rights of recovery by way
of subrogation against either party in connection with any damage covered by
such policy so long as such waiver is available without unreasonable
additional cost.
9.3. Landlord's Real Property Insurance: Landlord shall purchase and
keep in force policy(ies) of insurance covering loss or damage to the
Premises by reason of fire (extended coverage), flood and/or earthquake (if
available and available at commercially reasonable costs in Landlord's sole
discretion, or if required by a lender) and those perils included within the
classification of "all risks" insurance (with sprinkler damage and other
appropriate endorsements), which insurance shall be in the amount of the
full replacement value of the Premises as determined by insurance company
appraisers or Landlord's insurance broker; plus Landlord's liability
insurance; plus rental income insurance in the amount of one hundred (100%)
percent of up to twelve (12) months Basic Rent (plus sums paid during such
period as Additional Rent). Such coverage shall exclude routine maintenance
and repairs and incidental damage caused by accidents or vandalism for which
Tenant is responsible under Section 9. Tenant agrees to pay to Landlord as
Additional Rent in accordance with Section 3.2(2) of this Lease the costs of
such insurance coverage, including the premiums and deductibles for any such
coverage obtained by Landlord. If such insurance cost is increased due to
Tenant's particular use of the Premises, Tenant agrees to pay to Landlord
the full costs of such increase. Tenant shall have no interest in nor any
right to the proceeds of any insurance procured by Landlord for or with
respect to the Premises.
ARTICLE 10
LIMITATION ON LANDLORD'S LIABILITY
AND INDEMNITY
10.1. Limitation on Landlord's Liability: Landlord shall not be
liable to Tenant, nor shall Tenant be entitled to any abatement of rent, for
any injury to Tenant, its agents, employees, contractors, or invitees; damage
to Tenant's property; or loss to Tenant's business resulting from any cause,
including without limitation any (i) failure, interruption or installation of
any heating, ventilating and/or air-conditioning system or other utility
system or service; (ii) failure to furnish or delay in furnishing any
utilities or services when such failure or delay is caused by acts of God or
the elements, labor disturbances of any character, any other accidents or
other conditions beyond the reasonable control of Landlord, or by the making
of repairs or improvements to the Leased Premises or Building; (iii) the
limitation, curtailment, rationing or restriction on the use of water or
electricity, gas or any other form of energy or any services or utility
whatsoever serving the Leased Premises or Building; (iv) vandalism or forcible
entry by unauthorized person; or (iv) penetration of water into or onto any
portion of the Leased Premises through roof leaks or otherwise.
Notwithstanding the foregoing, Landlord shall be liable for such injury,
damage or loss which is proximately caused by Landlord's negligence or willful
misconduct, but only to the extent such injury, damage or loss is not covered
by insurance actually carried or required to be carried pursuant to this
Lease.
10.2. Limitation on Tenant's Recourse: Other than for acts of fraud
by Landlord, Tenant expressly agrees that so long as the Landlord under this
Lease shall be and remains a corporation, a trust, a partnership, a joint
venture, an unincorporated association, or other form of business entity, (i)
the obligations of the Landlord under this Lease shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals or representatives of such
business entity, and (ii) Tenant shall have recourse only to the assets of
such business entity for the satisfaction of such obligations and not against
the assets of such officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, principals, or representatives, other than to
the extent of their interest in the assets owned by such business entity.
10.3. Indemnification of Landlord: Tenant shall hold harmless,
indemnify and defend Landlord, and its employees, agents, and contractors,
with competent counsel reasonably satisfactory to Landlord, from all
liability, penalties, losses, damages, costs, expenses, causes of action,
claims and/or judgments arising by reason of any death, bodily injury,
personal injury or property damage (i) resulting from any cause or causes
whatsoever (other than the negligence or willful misconduct of Landlord)
occurring in or about or resulting from any occurrence in or about the Leased
Premises during the Lease Term, or (ii) resulting from the negligence or
willful misconduct of Tenant, its agents, employees and contractors, wherever
the same may occur. The provisions of this paragraph shall survive the
expiration or termination of this Lease with respect to any claims or
liability occurring prior to such expiration or sooner termination.
ARTICLE 11
DAMAGE TO LEASED PREMISES
11.1. Landlord's Duty to Restore: If the Leased Premises are damaged
by any Covered Peril (as hereinafter defined in Section 11.2.1) after the
Effective Date of this Lease, Landlord shall restore the Leased Premises
unless the Lease is terminated by Landlord pursuant to Section 11.2 or by
Tenant pursuant to Section 11.3. All insurance proceeds available from the
fire and property damage insurance carried by Landlord pursuant to Section 9.3
shall be paid to and become the property of Landlord. All insurance proceeds
available from insurance carried by Tenant which covers loss to property (that
is the loss that is covered by insurance) and the issuance of all necessary
governmental permits, Landlord shall commence and diligently prosecute to
completion the restoration of the Leased Premises, to the extent then allowed
by Law, to substantially the same condition in which the Leased Premises were
immediately prior to such damage. Landlord's obligation to restore shall be
limited to the Leased Premises and interior improvements constructed by
Landlord as they existed as of the Commencement Date, excluding any Leasehold
Improvements, Trade Fixtures and/or personal property constructed or installed
by Tenant in the Leased Premises. Tenant shall forthwith replace or fully
repair all Leasehold Improvements and Trade Fixtures installed by Tenant and
existing at the time of such damage or destruction.
11.2. Landlord's Right to Terminate: Landlord shall have the option
to terminate this Lease in the event any of the following occurs, which option
may be exercised only by delivery to Tenant of a written notice of election to
terminate within thirty (30) days after the date of such damage.
11.2.1. The Building is damaged by any peril covered by valid
and collectible insurance actually carried by Landlord and in force at the
time of such damage or destruction ("Covered Peril"), to such an extent that
the estimated cost to restore the Building equals or exceeds thirty three and
one-third (33-1/3%) percent of the then replacement value thereof;
11.2.2. The Building is damaged by any peril not covered by
valid and collectible insurance actually carried by Landlord and in force at
the time of such damage or destruction, to such an extent that the estimated
cost to restore the Building equals or exceeds twenty-five percent (25%) of
the then replacement value thereof;
11.2.3. The Leased Premises are damaged by any Covered Peril
within six (6) months of the last day of the Lease Term to such an extent that
the estimated cost to restore equals or exceeds an amount equal to six (6)
times the Base Monthly Rent then due; provided, however, that Landlord may not
terminate this Lease pursuant to this subsection 11.2.3 if Tenant, at the time
of such damage, has an express written option to further extend the term of
this Lease and Tenant exercises such option to so further extend the Lease
Term within fifteen (15) days following the date of such damage; or
11.2.4. The Building is damaged by any Covered Peril and,
because of the Laws then in force, (i) may not be restored at reasonable cost
to substantially the same condition in which it was prior to such damage, or
(ii) may not be used for the same use being made thereof before such damage
whether or not restored as required by this Article.
11.3. Tenant's Right to Terminate: If the Leased Premises are damaged
by any peril and Landlord does not elect to terminate this Lease or is not
entitled to terminate this Lease pursuant to Section 11.2, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written opinion
of Landlord's architect or construction consultant as to when the restoration
work required of Landlord may be completed. Tenant shall have the option to
terminate this Lease in the event any of the following occurs, which option
may be exercised only by delivery to Landlord of a written notice of election
to terminate within seven (7) days after Tenant receives from Landlord the
estimate of the time needed to complete such restoration:
11.3.1. The Leased Premises are damaged by any peril and, in
the reasonable opinion of Landlord's architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within
one hundred eighty (180) days after the date of such damage; or
11.3.2. The Leased Premises are damaged by any peril within
twelve (12) months of the last day of the Lease Term and in the reasonable
opinion of Landlord's architect or construction consultant the restoration of
the Leased Premises cannot be substantially completed within ninety (90) days
after the date of such damage.
11.4. Abatement of Rent: In the event of damage to the Leased
Premises which does not result in the termination of this Lease, the Base
Monthly Rent shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Leased Premises is
impaired by such damage. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of Tenant's property or any inconvenience or
annoyance caused by such damage or restoration. Tenant hereby waives the
provisions of Section 1932, subdivision 2, and Section 1933, Subdivision 4, of
the California Civil Code, and the provisions of any similar law hereinafter
enacted.
11.5. Tenant's Costs and Insurance Proceeds: Upon damage or
destruction of all or any part of the Premises by a Covered Peril, Tenant
shall immediately deliver to Landlord all property insurance proceeds received
by Tenant with respect to the Tenant Improvements and any Alterations, but
excluding proceeds for Tenant's furniture, fixtures, equipment and other
personal property, whether or not this Lease is terminated as permitted in
this Article 11, and Tenant hereby assigns to Landlord all rights to receive
such insurance proceeds.
ARTICLE 12
CONDEMNATION
12.1. Taking of Leased Premises: If all or any part of the (i) any
taking by the Leased Premises are taken by means of: (i) any taking by the
exercise of the power of eminent domain, whether by legal proceedings or
otherwise, (ii) a voluntary sale or transfer by Landlord to any condemnor
under threat of condemnation or while legal proceedings for condemnation are
pending, or (iii) any taking by inverse condemnation (a "Condemnation"), then
Landlord shall have the option to terminate this Lease. If all or any part of
the Leased Premises are taken by Condemnation and the Leased Premises cannot
be reconstructed within a reasonable period of time and thereby made
reasonably suitable for Tenant's continued occupancy for the Permitted Use,
then Tenant shall have the option to terminate this Lease. Any such option to
terminate by either Landlord or Tenant must be exercised within a reasonable
period of time, to be effective as of the date that possession of the Leased
Premises is taken by the condemnor.
12.2. Restoration Following the Taking: If any part of the Leased
Premises is taken by Condemnation and this Lease is not terminated, then
Landlord shall make all repairs and alterations that are reasonably necessary
to make that which is not taken a complete architectural unit, but such work
shall not exceed the scope of the work done by Landlord in originally
constructing the Property.
12.3. Abatement of Rent: Except in the case of a temporary taking, if
any portion of the Leased Premises is taken by Condemnation and this Lease is
not terminated, then as of the date possession is taken, the Base Monthly Rent
and Additional Rent shall be reduced in the same proportion that the floor
area of that part of the Leased Premises so taken (less any addition thereto
by reason of any reconstruction) bears to the original floor area of the
Leased Premises.
12.4. Temporary Taking: If any portion of the Leased Premises is
temporarily taken by Condemnation for a period which either exceeds one (1)
year or which extends beyond the natural expiration of the Lease Term, then
Landlord and Tenant shall each independently have the option to terminate this
Lease, effective on the date possession is taken by the condemnor.
12.5. Division of Condemnation Award: Any award made as a result of
any Condemnation of the Leased Premises shall belong to and be paid to
Landlord, and Tenant hereby assigns to Landlord all of its right, title and
interest in any such award; provided, however, that Tenant shall be entitled
to receive any Condemnation award that is made directly to Tenant (i) for the
taking of personal property or Trade Fixtures belonging to Tenant, (ii) for
the interruption of Tenant's business or its moving costs, (iii) for loss of
Tenant's goodwill, or (iv) for any temporary taking where this Lease is not
terminated as a result of such taking. The rights of Landlord and Tenant
regarding any Condemnation shall be determined as provided in this Article,
and each party hereby waives the provisions of Section 1265.130 of the
California Code of Civil Procedure and the provisions of any similar law
hereinafter enacted allowing either party to petition the Superior Court to
terminate this Lease in the event of a partial taking of the Leased Premises.
ARTICLE 13
DEFAULT AND REMEDIES
13.1. Events of Tenant's Default: Tenant shall be in default of its
obligations under this Lease if any of the following events shall occur:
13.1.1. Intentionally Omitted.
13.1.2. Failure to pay any installment of Rent or any
other monies due and payable hereunder, said failure continuing for a period
of three (3) days after the same is due;
13.1.3. A general assignment by Tenant for the benefit of
creditors;
13.1.4. The filing of a voluntary petition in bankruptcy by
Tenant, the filing of a voluntary petition for an arrangement, the filing of a
petition, voluntary or involuntary, for reorganization, or the filing of an
involuntary petition by Tenant's creditors, said involuntary petition
remaining undischarged for a period of sixty (60) days;
13.1.5. Receivership, attachment, or other judicial seizure of
substantially all of Tenant's assets on the Leased Premises, such attachment
or other seizure remaining undismissed or undischarged for a period of sixty
(60) days after the levy thereof;
13.1.6. Failure of Tenant to execute and deliver to Landlord any
estoppel certificate, subordination agreement, or financial statement within
the time periods and in the manner required by Article 17;
13.1.7. An assignment or sublease, or attempted assign-ment or
sublease, of this Lease or the Leased Premises by Tenant contrary to the
provision of Article 14, unless such assignment or sublease is expressly
conditioned upon Tenant having received Landlord's consent thereto;
13.1.8. Failure of Tenant to restore the Security Deposit to
the amount and within the time period provided in Subsection 3.6.;
13.1.9. Failure in the performance of any of Tenant's
covenants, agreements or obligations hereunder (except those failures
specified as events of Default in other Sections of this Article 13, which
shall be governed by such other Sections), which failure continues for thirty
(30) days after written notice thereof from Landlord to Tenant provided that,
if Tenant has exercised reasonable diligence to cure such failure and such
failure cannot be cured within such thirty (30) day period despite reasonable
diligence, Tenant shall not be in default under this subparagraph unless
Tenant fails thereafter diligently and continuously to prosecute the cure to
completion; and
13.1.10. Chronic delinquency by Tenant in the payment of Rent,
or any other periodic payments required to be paid by Tenant under this Lease.
"Chronic Delinquency" shall mean failure by Tenant to pay Rent, or any other
payments required to be paid by Tenant under this Lease, within ten (10) days
after the same is due for any three (3) months (consecutive or non-
consecutive) during any twelve (12) month period. In the event of a Chronic
Delinquency, in addition to Landlord's other remedies for Default provided in
this Lease, at Landlord's option, Landlord shall have the right to require
that Rent be paid by Tenant quarterly, in advance.
13.2. Landlord's Remedies: In the event of any default by Tenant,
Landlord shall have the following remedies, in addition to all other rights
and remedies provided by any Law or otherwise provided in this Lease, to which
Landlord may resort cumulatively, or in the alternative:
13.2.1. Landlord may, at Landlord's election, keep this Lease
in effect and enforce by an action at law or in equity all of its rights and
remedies under the Lease, including (i) the right to recover the rent and
other sums as they become due by appropriate legal action, (ii) the right to
make payments required of Tenant or perform Tenant's obligations and be
reimbursed by Tenant for the cost thereof with interest at the Agreed Interest
Rate from the date the sum is paid by Landlord until Landlord is reimbursed by
Tenant, and (iii) the remedies of injunctive relief and specific enforcement
to compel Tenant to perform its obligations under this Lease.
13.2.2. Landlord may, at Landlord's election, terminate this
Lease by giving Tenant written notice of termination, in which event this
Lease shall terminate on the date set forth for termination in such notice.
Any termination under this subparagraph shall not relieve Tenant from its
obligation to pay any sums then due Landlord or from any claim against Tenant
for damages or rent previously accrued or then accruing. In no event shall any
one or more of the following actions by Landlord, in the absence of a written
election by Landlord to terminate this Lease, constitute a termination of this
Lease:
A. Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;
B. Consent to any subletting of the Leased Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof
or otherwise; or
C. Any other action by Landlord or Landlord's agents
intended to mitigate the adverse effects of any breach of this Lease by
Tenant, including without limitation any action taken to maintain and preserve
the Leased Premises or any action taken to relet the Leased Premises or any
portions thereof, for the account of Tenant and in the name of Tenant.
13.2.3. In the event Tenant breaches this Lease and abandons
the Leased Premises, this Lease shall not terminate unless Landlord gives
Tenant written notice of its election to so terminate this Lease. No act by or
on behalf of Landlord intended to mitigate the adverse effect of such breach,
including those described by Sections 13.2.2 A, B and C immediately preceding,
shall constitute a termination of Tenant's right to possession unless Landlord
gives Tenant written notice of termination. Should Landlord not terminate this
Lease by giving Tenant written notice, Landlord may enforce all its rights and
remedies under this Lease, including the right to recover the rent as it
becomes due under the Lease as provided in California Civil Code Section
1951.4, as in effect on the Effective Date of this Lease.
13.2.4. In the event Landlord terminates this Lease, Landlord
shall be entitled, at Landlord's election, to damages in an amount as set
forth in California Civil Code Section 1951.2 as in effect on the Effective
Date of this Lease. For purposes of computing damages pursuant to Section
1951.2, (i) the Agreed Interest Rate shall be used where permitted, and (ii)
rent due under this Lease shall include Base Monthly Rent and all other rent
hereunder, prorated on a monthly basis where necessary to compute such
damages. Such damages shall include without limitation:
A. The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably avoided,
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%); and
B. Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would
be likely to result therefrom, including, without limitation, the following:
(i) expenses for cleaning, repairing or restoring the Leased Premises; (ii)
expenses for altering, remodeling or otherwise improving the Leased Premises
for the purpose of reletting, including installation of leasehold improvements
(whether such installation be funded by a reduction of rent, direct payment or
allowance to a new tenant, or otherwise); (iii) broker's fees, advertising
costs and other expenses of reletting the Leased Premises; (iv) costs of
carrying the Leased Premises, such as taxes, insurance premiums, utilities,
and security precautions; (v) expenses in retaking possession of the Leased
Premises; and (vi) attorneys, fees and court costs incurred by Landlord in
retaking possession of the Leased Premises and in re-leasing the Leased
Premises or otherwise incurred as a result of Tenant's default.
C. For purposes of this Article, the rent due for any
calendar month after which Tenant has terminated the operation of its business
as herein specified or has abandoned the Leased Premises shall be deemed to be
the average monthly rent, including the Base Monthly Rent and all additional
rent hereunder, which were due for the twelve (12) month period immediately
prior to such termination or for such shorter period of time as this Lease
shall have been in effect.
13.2.5. Nothing in this Section shall limit Landlord's right to
indemnification from Tenant as provided in Section 10.2.
13.3. Landlord's Default and Tenant's Remedies: In the event
Landlord fails to perform any of its obligations under this Lease and fails to
cure such default within thirty (30) days after written notice from Tenant
specifying the nature of such default where such default could reasonably be
cured within said thirty (30) day period, or fails to commence such cure
within said thirty (30) day period and thereafter continuously with due
diligence prosecute such cure to completion where such default could not
reasonably be cured within said thirty (30) day period, then Tenant shall have
the following remedies only:
13.3.1. Tenant may proceed in equity or at law to compel Landlord
to perform its obligations and/or to recover damages proximately caused by
such failure to perform (except to the extent Tenant has waived its right to
damages resulting from injury to person or damage to property as provided
herein).
13.3.2. Tenant, at its option, may cure any default of Landlord
at Landlord's cost. If Tenant at any time by reason of Landlord's default
reasonably pays any sum or does any act that requires the payment of any sum,
the sum paid by Tenant shall be immediately due from Landlord to Tenant at the
time the sum is paid, and shall bear interest at the Agreed Interest Rate from
the date the sum is paid by Tenant until Tenant is reimbursed by Landlord.
13.3.3. Tenant waives the provisions of Sections 1932, 1933(4),
1941, and 1942 of the California Civil Code and/or any similar or successor
law regarding Tenant's right to terminate this Lease or to make repairs and
deduct the expenses of such repairs from the rent due under the Lease. Tenant
hereby waives any right of redemption or relief from forfeiture under the laws
of the State of California, or under any other present or future law, in the
event Tenant is evicted or Landlord takes possession of the Leased Premises by
reason of any default by Tenant.
13.4. Waiver: One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be
deemed to waive or render unnecessary the first party's consent to or approval
of any subsequent similar act by the other party. The receipt by Landlord of
any rent or payment with or without knowledge of the breach of any other
provision hereof shall not be deemed a waiver of any such breach unless such
waiver is in writing and signed by Landlord. No delay or omission in the
exercise of any right or remedy accruing to either party upon any breach by
the other party under this Lease shall impair such right or remedy or be
construed as a waiver of any such breach theretofore or hereafter occurring.
The waiver by either party of any breach of any provision of this Lease shall
not be deemed to be a waiver of any subsequent breach of the same or any other
provisions herein contained. Moreover, if Landlord accepts a partial payment
of rent after filing an unlawful detainer complaint pursuant to California
Code of Civil Procedure, Section 1166, the Landlord's acceptance of partial
payment is only evidence of that payment, without waiver of any rights,
including any right Landlord may have to recover possession of the Leased
Premises.
ARTICLE 14
ASSIGNMENT
14.1. By Tenant: Tenant shall not voluntarily or by operation of law,
(1) mortgage, pledge, hypothecate or encumber this Lease or any interest
herein, (2) assign or transfer this Lease or any interest herein, sublet the
Leased Premises or any part thereof, or any right or privilege appurtenant
thereto, or allow any other person (the employees, agents, and invitees of
Tenant excepted) to occupy or use the Leased Premises, or any portion thereof,
without first obtaining the written consent of Landlord, which consent shall
not be withheld unreasonably. When Tenant requests Landlord's consent to such
assignment or subletting, Landlord shall have the option, to be exercised
within thirty (30) days of receipt of the foregoing, to (1) cancel this Lease
as of the Commencement Date stated in the proposed sublease or assignment, (2)
acquire from Tenant the interest, or any portion thereof, in this Lease and/or
the Leased Premises that Tenant proposes to assign or sublease, on the same
terms and conditions as stated in the proposed sublet or assignment agreement,
(3) consent to the proposed assignment or sublease, or (4) refuse its consent
to the proposed assignment or sublease, providing that such consent shall not
be unreasonably withheld. In this regard:
14.1.1. Any attempted subletting, assignment, or
encumbrance without Landlord's prior consent shall be voidable and, at
Landlord's election, shall constitute a default.
14.1.2. Tenant agrees to reimburse Landlord all reasonable
costs and attorneys fees actually incurred by Landlord in conjunction with the
processing and documentation of any such requested subletting, assignment or
encumbrance, none of which shall be effective until Tenant shall have paid
such costs and fees which shall not exceed $2,500.00.
14.1.3. Consent by Landlord to one or more assignments or
encumbrances of this Lease or to one or more sublettings of the Leased
Premises shall not be deemed to be a consent to any subsequent assignment,
encumbrances, or subletting.
14.1.4. No subletting or assignment, even with consent of
Landlord, shall relieve Tenant of its personal and primary obligation to pay
the rent and to perform all of the other obligations to be performed by Tenant
hereunder. The acceptance of rent by Landlord from any person shall not be
deemed to be a waiver by Landlord of any, provision of this Lease or to be a
consent to any assignment or subletting.
14.1.5. If Tenant is a corporation, any dissolution,
merger, consolidation, or other reorganization of Tenant, or the sale or other
transfer in the aggregate over the Lease Term of a controlling percentage of
the capital stock of Tenant, shall be deemed a voluntary assignment of
Tenant's interest in this Lease. The phrase "controlling percentage" means the
ownership of and the right to vote stock possessing more than fifty percent
(50%) of the total combined voting power of all classes of Tenant's capital
stock issued, outstanding and entitled to vote for the election of directors.
If Tenant is a partnership or limited liability company, a withdrawal or
change, voluntary, involuntary or by operation of law, of any general partner
or member(s), or the dissolution of the partnership or limited liability
company, shall be deemed a voluntary assignment.
14.1.6. If Tenant assigns or sublets its interest (or any portion
thereof) in this Lease in accordance with this Article, then Tenant shall pay
to Landlord fifty percent (50%) of all net consideration received by Tenant in
excess of the rent under the Lease as a result of such assignment as and when
received by Tenant as allowed by Civil Code Section 1995.240, after deducting
any cost incurred for advertising and other marketing expenses, leasing
commission, attorney fees and tenant improvements ("Allowed Transfer Costs").
If Tenant sublets all or part of the Leased Premises in accordance with this
Article, then Tenant shall pay to Landlord fifty percent (50%) of the positive
difference, if any, between (i) all rent and other consideration paid by the
subtenant to Tenant less (ii) Allowed Transfer Costs incurred by Tenant
incident to the sublease agreement (including an amount equal to the resulting
product of the rent payable hereunder to Landlord by Tenant during the time
period covered by such payments by the subtenant times a fraction whose
numerator is the leasable area of that portion of the Leased Premises so
sublet and whose denominator is Tenant's Gross Leasable Area). Said
consideration shall be payable to Landlord on the same basis, whether periodic
or in lump sum, that such consideration is paid to Tenant by its subtenant
after all Allowed Transfer Costs theretofore paid by Tenant have been
recouped. Immediately following its execution, Tenant shall deliver to
Landlord a true copy of any permitted assignment or sublease. At the time
Tenant makes any payment to Landlord required by this Section 14.1.6, Tenant
shall deliver an itemized statement of the method by which the amount due
Landlord was calculated, certified by Tenant as true and correct. Landlord
shall have the right to inspect Tenant's books and records relating to the
payments due pursuant to this Section.
14.1.7. Tenant shall give Landlord at least twenty (20)
days prior written notice of any desired Transfer and of the proposed terms of
such Transfer, including, but not limited to (i) the name and legal
composition of the proposed Transferee; (ii) an audited financial statement,
if available, or any unaudited financial statement if an audited statement is
not available, of the Transferee prepared in accordance with generally
accepted accounting principles for a period ending not more than one (1) year
prior to the proposed effective date of the Transfer; (iii) the nature of the
proposed Transferee's business to be carried on in the Leased Premises; (iv)
all consideration to be given on account of the Transfer; (v) a current
financial statement of Tenant; and (vi) such other information as may, be
requested by Landlord. Tenant's notice shall not be deemed to have been served
or given until such time as Tenant has provided Landlord with all information
required by this Section 14.1.7. Without otherwise limiting the criteria upon
which Landlord may withhold its consent to any proposed Transfer, if Landlord
withholds its consent where the proposed Transferee's net worth (according to
generally accepted accounting principles) is less than the greater of (i) the
net worth of Tenant immediately prior to the Transfer, or (ii) the net worth
of Tenant as of the Commencement Date, such withholding of consent shall be
presumptively reasonable. The following rights are in addition to Landlord's
right to withhold its consent to any Transfer and may be exercised by Landlord
in its sole discretion without limiting Landlord in the exercise of any other
right or remedy which Landlord may have.
14.1.8. Notwithstanding the provisions of Sections 14.1
through 14.1.7. to the contrary, Tenant may, without Landlord's consent,
sublet all or any portion of the Premises or assign the Lease to: (i) a
subsidiary, parent, affiliate, division or corporation controlled by or under
common control with Tenant; or (ii) a successor corporation related to Tenant
by merger, consolidation, reorganization, acquisition of capital stock, or
government action. However, no such subletting or assignment, even without the
consent of Landlord, shall relieve Tenant of its primary obligation to pay
rent and perform all of the other obligations to be performed by Tenant
hereunder for which it will remain liable. Any of the above transfers shall be
considered a "Voluntary Permitted Transfer" of Tenant's interest in this
Lease. Under any such Voluntary Permitted Transfer, Tenant and any assignee(s)
or transferee(s) shall be, and agree to be, fully liable for all of the
obligations of Tenant due under the Lease. Moreover, Tenant and such
assignee(s) or transferee(s) must notify Landlord in writing of such
subletting or assignment described in this Section 14.1.8 within fifteen (15)
days of the transfer and the assignee(s_ or transferee(s) must expressly agree
in a written document satisfactory to Landlord to assume all of Tenant's
obligations under the Lease and a failure to do so shall not relieve such
assignee(s) or transferee(s) from liability for all obligations of Tenant due
under the Lease.
14.1.9. Tenant acknowledges and agrees that the
restrictions, conditions and limitations imposed by this Article 14 on
Tenant's ability to assign or transfer this Lease or any interest herein, to
sublet the Leased Premises or any part thereof, to transfer or assign any
right or privilege appurtenant to the Leased Premises, or to allow any other
person to occupy or use the Leased Premises or any portion thereof, are, for
the purposes of California Civil Code Section 1951.4, as amended from time-to-
time, and for all other purposes, reasonable at the time that the Lease was
entered into, and shall be deemed to be reasonable at the time that Tenant
seeks to assign or transfer this Lease or any interest herein, to sublet the
Leased Premises or any part thereof, to transfer or assign any right or
privilege appurtenant to the Leased Premises, or to allow any other person to
occupy or use the Leased Premises or any portion thereof.
14.1.10. Notwithstanding the above to the contrary,
Landlord agrees that Tenant may sublease up to 20,000 square feet of space at
the Premises with Landlord's consent (which consent may not be unreasonably
withheld) and that Tenant may retain one hundred (100%) percent of the
proceeds from any such subleasing.
14.2. By Landlord: Landlord and its successors in interest shall have
the right to transfer their interest in the Leased Premises and the Property
at any time and to any person or entity. In event of any such transfer the
Landlord originally named herein (and in the case of any subsequent transfer,
the transferor) from the date of such transfer, (i) shall be automatically
relieved, without any further act by any person or entity, of all liability
for the performance of the obligations of the Landlord hereunder which may
accrue after the date of such transfer, and (ii) shall be relieved of all
liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer only if its transferee agrees
to assume and be bound by the terms of this Lease and to perform all
obligations of the Landlord hereunder.
ARTICLE 15
TERMINATION
15.1. Surrender of the Leased Premises: Immediately prior to the
expiration or upon the sooner termination of this Lease, Tenant shall remove
all Tenant's Trade Fixtures and other personal property and vacate and
surrender the Leased Premises to Landlord in the same condition as existed at-
the Commencement Date, reasonable wear and tear excepted, with all interior
walls cleaned, all carpets shampooed and cleaned, all HVAC equipment within
the Leased Premises in operating order and in good repair, and all floors
cleaned, all to the reasonable satisfaction of Landlord. Landlord may, at
Tenant's expense, hire independent contractors to inspect any HVAC system
serving the Leased Premises or electrical system within the Leased Premises
for the purpose of determining whether they have been properly maintained by
Tenant, and Tenant shall pay the cost thereof within ten (10) days after
receipt of a statement therefore from Landlord. If Landlord so requests,
Tenant shall, prior to the expiration or sooner termination of this Lease,
remove any Leasehold Improvements designated by Landlord and repair all damage
caused by such removal. If the Leased Premises are not so surrendered at the
termination of this Lease, Tenant shall be liable to Landlord for all costs
incurred by Landlord in returning the Leased Premises to the required
condition, plus interest on all costs incurred at the Agreed Interest Rate.
Tenant shall indemnify Landlord against loss or liability resulting from delay
by Tenant in so surrendering the Leased Premises, including, without
limitation, any claims made by any succeeding tenant or losses to Landlord due
to lost opportunities to lease to succeeding tenants.
15.2. Holding Over: This Lease shall terminate without further notice
at the expiration of the Lease Term. Any holding over by Tenant after
expiration of the Lease Term shall not constitute a renewal or extension of
the Lease or give Tenant any rights in or to the Leased Premises except as
expressly provided in this Lease. Any holding over after such expiration with
the consent of Landlord shall be construed to be a tenancy from month-to-month
on the same terms and conditions herein specified insofar as applicable except
that Base Monthly Rent shall be increased to an amount equal to one hundred
fifty percent (150%) of the Base Monthly Rent required during the last month
of the Lease Term.
ARTICLE 16
LANDLORD'S RIGHT TO ENTER
16.1. Landlord's Right to Enter: Tenant shall permit Landlord and its
agents to enter the Leased Premises at all reasonable times for the purpose of
(i) inspecting the same; (ii) posting notices of non-responsibility; (iii)
supplying any service to be provided by Landlord to Tenant; (iv) showing the
Leased Premises to prospective purchasers, mortgagees or tenants; (v) making
necessary alterations, additions, or repairs; (vi) performing Tenant's
obligation when Tenant has failed to do so after written notice from Landlord;
and (vii) placing upon the Leased Premises ordinary "for lease" or "for sale"
signs or in the case of an emergency. For each of the aforesaid purposes,
Landlord may enter the Leased Premises by means of a master key, and Landlord
shall have the right to use any and all means Landlord may deem necessary and
proper to open the doors of the Leased Premises in an emergency. Any entry to
the Leased Premises or portions thereof obtained by Landlord by any of said
means, or otherwise, shall not under any circumstances be construed or deemed
to be a forcible or unlawful entry into, or a detainer of, the Leased
Premises, or an eviction, actual or constructive, of Tenant from the Leased
Premises or any portion thereof.
ARTICLE 17
MORTGAGES & TRANSFER
17.1. Subordination: This Lease is subject and subordinate to all
underlying ground leases, mortgages and deeds of trust which affect the
Property and are of public record as of the Effective Date of this Lease, and
to all renewals, modifications, consolidations, replacements and extensions
thereof. However, if the lessor under any such lease or any Lender holding
such mortgage or deed of trust shall advise Landlord that it desires or
requires this Lease to be prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all documents or instruments which Landlord or such lessor or
Lender deems necessary or desirable to make this Lease prior thereto. At
Landlord's election, this Lease shall become and thereafter remain subject and
subordinate to any and all future ground leases, mortgages or deeds of trust
affecting the Property which may hereafter be executed and placed of public
record after the Effective Date of this Lease, or any renewals, modifications,
consolidations, replacements or extensions thereof, for the full amount of all
advances made or to be made thereunder and without regard to the time or
character of such advances, so long as the lessor of such ground lease or the
Lender holding the mortgage or deed of trust to which this Lease is to be
subordinated agrees that it will recognize Tenant's rights under this Lease
and not disturb its quiet possession of the Leased Premises so long as Tenant
is not in default hereunder. Tenant agrees, within ten (10) days after
Landlord's written request therefor to execute, acknowledge and deliver upon
request of Landlord any and all documents or instruments requested by Landlord
or such lessor or mortgage holder(s) as may be necessary or proper to assure
the subordination of this Lease to any such ground lease, mortgage or deed of
trust.
17.2. Tenant's Attornment: Tenant shall attorn (i) to any purchaser of
the Building or Property at any foreclosure sale or private sale conducted
pursuant to any security instrument encumbering the Building and/or the
Property, (ii) to any grantee or transferee designated in any deed given in
lieu of foreclosure, or (iii) to the lessor under any underlying ground lease
should such ground lease be terminated.
17.3. Mortgagee Protection: In the event of any default on the part of
Landlord, Tenant will give notice by registered mail to any Lender or lessor
under any underlying ground lease whose name has been provided to Tenant and
shall offer such Lender or lessor a reasonable opportunity to cure the
default, including time to obtain possession of the Leased Premises by power
of sale or judicial foreclosure or other appropriate legal proceedings, if
such should prove necessary to effect a cure.
17.4. Estoppel Certificates: At all times during the Lease Term,
Tenant agrees, following any request by Landlord, to promptly execute and
deliver to Landlord an estoppel certificate, except as otherwise set forth in
such request, (i) certifying that this Lease is unmodified and in full force
and effect, or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect, (ii)
stating the date to which the rent and other charges are paid in advance, if
any, (iii) acknowledging that there is not, to Tenant's knowledge, any uncured
defaults on the part of Landlord hereunder, and if there are uncured defaults
on the part of Landlord, stating the nature of such uncured defaults, and (iv)
certifying such other information about the Lease as may be reasonably
required by Landlord. Tenant's failure to deliver an estoppel certificate
within ten (10) days after delivery of Landlord's request therefore shall be a
conclusive admission by Tenant that, as of the date of the request for such
statement, (i) this Lease is unmodified except as may be represented by
Landlord in said request and is in full force and effect, (ii) there are no
uncured defaults in Landlord's performance, and (iii) no rent has been paid in
advance.
17.5. Financial Statements: At any time during the Lease Term, Tenant
shall, upon fifteen (15) days' prior written notice from Landlord, provide
Tenant's most recent financial statement and financial statements covering the
twenty-four (24) month period prior to the date of such most recent financial
statements to Landlord and to any existing Lender, potential Lender or buyer
or potential buyer of the Premises. Such statements shall be prepared in
accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant.
ARTICLE 18
GENERAL PROVISIONS
18.1. Force Majeure: Any prevention, delay, or stoppage due to strikes,
lockouts, labor disputes, or labor shortages; inability to obtain materials,
supplies or reasonable substitutes therefor; governmental restrictions,
regulations, controls, action or inaction by local governmental agencies,
embargoes, civil commotion, terrorist act, riot, or war; earthquake, flood,
fire, power failure or shortage, or other acts of God; fault or neglect by the
other party to this Lease or its agents, employees or contractors; or other
causes beyond the reasonable control of the party obligated to perform (except
financial inability) shall excuse the performance for a period equal to the
period of any said prevention, delay or stoppage, of any obligation hereunder,
except the obligation of Tenant to pay rent or any other sums due hereunder in
the event such prevention, delay or stoppage has been caused by the fault or
neglect of Tenant. In the event the time for performance shall be extended
one hundred eighty (180) beyond the original date for performance, the party
to whom the obligation is owed may terminate this Lease by giving notice to
the other party, unless said party giving notice has been the cause of such
delay.
18.2. Notices: Any notice required or desired to be given regarding
this Lease shall be in writing and shall be personally served, or in lieu of
personal service may be given by certified mail. If served by mail, such
notice shall be deemed to have been given (i) on the third business day after
mailing if such notice was deposited in the United States Mail, certified mail
and postage prepaid, addressed to the party to be served at its address first
above set forth and (ii) in all other cases when actually received. Either
party may change its address by giving notice of same in accordance with this
Section 18.2.
18.3. Fees and Expenses: All sums reasonably incurred by Landlord in
connection with any event of Tenant Default, enforcing or implementing the
terms of this Lease, or holding over of possession by Tenant after the
expiration or earlier termination of this Lease, including, without
limitation, all costs, expenses and actual accountants, appraisers, attorneys
and other professional fees, and any collection agency or other collection
charges, shall be due and payable by Tenant to Landlord on demand, and shall
bear interest thereon at the Interest Rate regardless of whether legal
proceedings are or have been commenced to enforce the Lease, including
attorneys' fees and expenses arising in or related to a case brought by
Tenant, its successors, assignees or subtenant(s), under Title 11, U.S.C.,
Bankruptcy Code provisions. If either Landlord or Tenant commences or engages
in, or threatens to commence or engage in an action by or against the other
party arising out of or in connection with the interpretation of or
enforcement of the terms, conditions and obligations of this Lease, including,
but not limited to, any action for recovery of Rent due and unpaid, to recover
possession or for damages for breach of this Lease, the prevailing party shall
be entitled to have and recover from the losing party reasonable attorneys'
fees, expert's fees and costs, arbitrator's fees and costs, discovery costs
and expenses and other costs incurred in connection with the action,
preparation for such action, any appeals relating thereto and enforcing any
judgments rendered in connection therewith.
18.4. Corporate Authority: If Tenant is a corporation (or a
partnership), each individual executing this Lease on behalf of said
corporation (or partnership) represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said corporation in
accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement of said partnership) and that this Lease is
binding upon said corporation (or partnership) in accordance with its terms.
If Tenant is a corporation, each of the persons executing this Lease on behalf
of Tenant does hereby covenant and warrant that Tenant is a duly authorized
and existing corporation, that Tenant has and is qualified to do business in
California and that the corporation has full right and authority to enter into
this Lease. If Tenant is a corporation Tenant shall, within thirty (30) days
after execution of this Lease, deliver to Landlord a certified copy of the
resolution of the board of directors of said corporation authorizing or
ratifying the execution of this Lease.
18.5. Additional Definitions: Any term that is given a special
meaning by any provision in this Lease shall have such meaning when used in
this Lease or any addendum or amendment hereto. As used herein, the following
terms shall have the following meanings:
18.5.1. Agreed Interest Rate: The term "Agreed Interest Rate"
shall mean an interest rate of either twelve percent (12%) per annum or the
maximum applicable rate permitted by law, whichever is less.
18.5.2. CPI: The term "CPI" shall mean the Consumer Price Index
for All Items, for All Urban Consumers (base year 1982-1984 = 100) for San
Francisco-Oakland-San Jose, California published by the United States
Department of Labor, Bureau of Labor Statistics. If the CPI is changed so that
the base year differs from that used as of the Commencement Date, the CPI
shall be converted in accordance with the conversion factor published by the
U.S. Department of Labor, Bureau of Labor Statistics. If the CPI is
discontinued or revised during the term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the CPI had not been
discontinued or revised.
18.5.3. Effective Date: The term "Effective Date" shall mean the
date the last signatory to this Lease whose execution is required to make it
binding on the parties hereto shall have executed this Lease.
18.5.4. Law: The term "Law" shall mean any judicial decision,
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirement of any municipal, county, state, federal or other
government agency or authority having jurisdiction over the parties to this
Lease or the Leased Premises or both, in effect either at the Effective Date
of this Lease or any time during the Lease Term, including, without
limitation, any regulation, order, or policy of any quasi-governmental entity
or body (e.g., board of fire examiners, public utilities or special district).
18.5.5. Leasehold Improvements: The term "Leasehold
Improvements" shall mean all improvements, additions, alterations,
and fixtures installed in the Leased Premises by Tenant at its expense which
are not Trade Fixtures.
18.5.6. Lender: The term "Lender" shall mean any beneficiary,
mortgagee, secured party, or other holder of any deed of trust, mortgage or
other written security device or agreement affecting the Property, and the
note or other obligations secured by it.
18.5.7. Private Restrictions: The term "Private Restrictions"
shall mean all recorded covenants, conditions and restrictions, private
agreements, reciprocal easement agreements, and any other recorded instruments
affecting the use of the Leased Premises as they may exist from time-to-time.
18.5.8. Trade Fixtures: The term "Trade Fixture" shall mean
anything affixed to the Leased Premises by Tenant at its expense for the
purposes of trade, manufacture, ornament, or domestic use (except replacement
of similar work or material originally installed by Landlord) which can be
removed without injury to the Leased Premises unless such thing has, by the
manner in which it is affixed, become an integral part of the Leased Premises;
provided, however, that all of Tenant's signs shall be Trade Fixtures
regardless of how affixed to the Leased Premises.
18.6. Construction of Meaning and Other Miscellaneous Provisions: (1)
Should any provision of this Lease prove to be invalid or illegal, such
invalidity or illegality shall in no way affect, impair or invalidate any
other provision hereof, and such remaining provisions shall remain in full
force and effect. (2) Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor. (3)
The captions used in this Lease are for convenience only and shall not be
considered in the construction or interpretation of any provision hereof. (4)
Any executed copy of this Lease shall be deemed an original for all purposes.
(5) This Lease shall, subject to the provisions regarding assignment, apply to
and bind the respective heirs, successors, executors, administrators, and
assigns of Landlord and Tenant. (6) "Party" shall mean Landlord or Tenant, as
the context implies. (7) If Tenant consists of more than one person or entity,
then all members of Tenant shall be jointly and severally liable hereunder.
(8) This Lease shall be construed and enforced in accordance with the laws of
the State of California. (9) The language in all parts of this Lease shall in
all cases be construed as a whole according to its fair meaning, and not
strictly for or against either Landlord or Tenant. (10) When the context of
this Lease requires, the neuter gender includes the masculine, the feminine, a
partnership or corporation or joint venture, and the singular includes the
plural. (11) The terms "shall", "will", and "agree" are mandatory. The term
"may" is permissive. (12) When a party is required to do something by this
Lease, it shall do so at its sole cost and expense without right of
reimbursement from the other party unless specific provision is made therefor.
(13) All measurements of gross leasable area shall be made from the outside
faces of exterior walls and the centerline of joint partitions. (14) Landlord
makes no covenant nor warranty as to the exact square footage of any area.
(15) Where Tenant is obligated not to perform any act, Tenant is also
obligated to restrain any others within its control from performing said act,
including agents, invitees, contractors, subcontractors and employees. (16)
Landlord shall not become or be deemed a partner nor a joint venturer with
Tenant by reason of the provisions of this Lease.
18.7. Quiet Enjoyment: Upon the observance and performance of all
the covenants, terms, and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without
hindrance or interruption by Landlord or any other person claiming by or
through Landlord. Landlord agrees to make reasonable efforts to protect Tenant
from interference or disturbance by other tenants or third parties; however,
Landlord shall not be liable for any interference or disturbance, nor shall
Tenant be released from any of the obligations of this Lease because of such
interference or disturbance.
18.8. Landlord Representations: Landlord represents to Tenant that
it is the owner of the Property with full power and authority to enter into
this Lease.
18.9. Brokerage Commissions: Tenant warrants that it has not had any
dealings with any real estate brokers, leasing agents, salesmen, or incurred
any obligations for the payment of real estate brokerage commissions or
finder's fees which would be earned or due and payable by reason of the
execution of this Lease. Landlord warrants that it has not had any dealings
with any real estate brokers, leasing agents, salesmen, or incurred any
obligations for the payment of real estate brokerage commissions or finder's
fees which would be earned or due and payable by reason of the execution of
this Lease other than Deerfield Realty Corporation for the benefit of Leon G.
Campbell ("Broker"). Landlord shall be solely responsible for the payment of
Brokerage Commissions to the above identified real estate brokerage entities
pursuant to a separate agreement. Landlord shall pay the Brokerage Commissions
one-half (1/2) upon Lease execution and the remaining one-half (1/2) upon the
Commencement Date of the Lease. Tenant hereby agrees to and shall indemnify,
defend, and hold harmless Landlord from and against any and all claims,
liabilities, causes of action, damages, including attorneys' fees and costs,
arising out of any claims or causes of action that may be asserted against
Landlord by any other broker, finder or other real estate agent with whom
Tenant has purportedly dealt with in connection with het subject matter of
this Lease.
18.10. Entire Agreement: The Lease, Exhibits "A" (Site Plan)
and "B" (Floor Plan), which are attached hereto (and by this reference
incorporated herein), constitute the entire agreement between the parties, and
there are no binding agreements or representations between the parties except
as expressed herein. Tenant acknowledges that neither Landlord nor Landlord's
agent(s) has made any representation or warranty as to (i) whether the Leased
Premises may be used for Tenant's intended use under existing law or (ii) the
suitability of the Leased Premises or the Property for the conduct of Tenant's
business or the condition of any improvements located thereon. Tenant
expressly waives all claims for damage by reason of any statement,
representation, warranty, promise or other agreement of Landlord or Landlord's
agent(s), if any, not contained in this Lease or in any addendum or amendment
hereto. No subsequent change or addition to this Lease shall be binding unless
in writing and signed by the parties hereto.
18.11. Security Measures: Tenant hereby acknowledges that the Rent
payable to Landlord hereunder does not include the costs of guard service or
other security measures, and that Landlord shall have no obligation whatsoever
to provide same. Tenant assumes all responsibility for the protection of
Tenant, Tenant's invitees and their property from acts of third parties.
18.12. Signatures Required/Non-Binding Offer: Submission of this
Lease for examination or signature by Tenant does not constitute an offer or
option for lease, and it is not effective as a lease or otherwise until
executed and delivered by both Landlord and Tenant.
ARTICLE 19
ENVIRONMENTAL MATTERS
19.1. Tenant's Covenants Regarding Hazardous Materials:
19.1.1. Tenant shall at all times and in all respects comply
with all federal, state and local laws, ordinances, and regulations
("Hazardous Materials Laws") relating to industrial hygiene, environmental
protection, or the use, analysis, generation, manufacturer, storage, disposal
or transportation of any oil, flammable explosives, asbestos, urea
formaldehyde, radioactive materials or waste, or other hazardous, toxic,
contaminated or polluting materials, substances or wastes, including, without
limitation, any "hazardous substances," "Hazardous Materials").
19.1.2. Tenant shall at its own expense procure, maintain in
effect and comply with all conditions of any and all permits, licenses and
other governmental and regulatory approvals required for Tenant's use of the
Leased Premises, including, without limitation, discharge of (appropriately
treated) materials or waste into or through any sanitary sewer serving the
Leased Premises. Except as discharged into the sanitary sewer in strict
accordance and conformity with all applicable Hazardous Materials, Tenant
shall cause any and all Hazardous Materials removed from the Leased Premises
to be removed and transported solely by duly licensed haulers to duly licensed
facilities for final disposal of such materials and waste. Tenant shall in all
respects handle, treat, deal with and manage any and all Hazardous Materials
in, or under or about the Leased Premises in total conformity with all
applicable Hazardous Materials Laws and prudent industry practices regarding
management of such Hazardous Materials. Upon expiration or earlier termination
of the term of the Lease, Tenant shall cause all Hazardous Materials to be
removed from the Leased Premises and transported for use, storage or disposal
in accordance and in compliance with all applicable Hazardous Materials Laws.
Tenant shall not take any remedial action in response to the presence of any
Hazardous Materials in or about the Leased Premises or any building, nor enter
into any settlement agreement, consent decree or other compromise in respect
to any claims relating to any Hazardous Materials in any way connected with
the Leased Premises, without first notifying Landlord of Tenant's intention to
do so and affording Landlord ample opportunity to appear, intervene or
otherwise appropriately assert and protect Landlord's interest with respect
thereto.
19.1.3. Tenant shall immediately notify Landlord in writing of:
A. Any enforcement, cleanup, removal or other governmental
or regulatory action instituted, completed or threatened pursuant to any
Hazardous Materials Laws;
B. Any claim made or threatened by any person against
Tenant or the Leased Premises relating to damage, contribution, cost recovery
compensation, loss or injury resulting from or claimed to result from any
Hazardous Materials; and
C. Any reports made to any environmental agency arising
out of or in connection with any Hazardous Materials in or removed from the
Leased Premises, including any complaints, notices, warnings or asserted
violations in connection therewith. Tenant shall also supply to Landlord as
promptly as possible, and in any event within five (5) business days after
Tenant first receives or sends the same, with copies of all claims, reports,
complaints, notices, warnings or asserted violations related in any way to the
existence of Hazardous Materials at, in, under or about the Premises or
Tenant's use thereof. Tenant shall promptly deliver to Landlord copies of
Hazardous waste manifest reflecting the legal and proper disposal of all
Hazardous Materials removed from the Leased Premises.
19.2. Indemnification of Landlord: To the fullest extent permitted
by law, Tenant shall indemnify, defend by counsel reasonably acceptable to
Landlord, protect, and hold Landlord and each of Landlord's partners,
employees, agents, attorneys, successors, and assigns, free and harmless from
and against any and all claims, liabilities, penalties, forfeitures, damages,
losses or expenses (including reasonable attorney's fees) or death of or
injury to any person or damage to any property whatsoever arising from or
caused in whole or in part, directly or indirectly by (A) the presence in, or
under or about the Leased Premises or discharge by Tenant in or from the
Leased Premises caused by Tenant of any Hazardous Materials or Tenant's use,
analysis, storage, transportation, disposal, release, threatened release,
discharge or generation of Hazardous Materials to, in, on, under, about or
from the Leased Premises, or (B) Tenant's failure to comply with any Hazardous
Materials Law. Tenant's obligations hereunder shall include, without
limitation, whether foreseeable or unforeseeable, all costs, of any required
or necessary repair, cleanup or detoxification or decontamination of the
Leased Premises, and the preparation and implementation of any closure,
remedial action or other required plans in connection therewith, and shall
survive the expiration or earlier termination of the term of this Lease. For
purposes of the release and indemnity provision hereof, any actions or
omissions of Tenant or by employees, agents, assignees, contractors or
subcontractors of Tenant or others acting for or on behalf of Tenant (whether
or not they are negligent, intentional, willful or unlawful) shall be strictly
attributable to Tenant. Notwithstanding the above to the contrary, the
indemnification of Landlord by Tenant shall not apply to events which occurred
prior to October 13, 2001.
19.3. Tenant Indemnification: Landlord shall defend, indemnify,
protect, and hold Tenant and each of Tenant's partners, employees, agents,
attorneys, successors, and assigns, free and harmless from and against any and
all claims, liabilities, penalties, forfeitures, losses or expenses (including
reasonable attorney's fees) or death of or injury to any person or damage to
any property to the extent not arising from or caused directly or indirectly
by Tenant's use, analysis, storage, transportation, disposal, release,
threatened release, discharge or generation of Hazardous Materials to, in, on,
under , about or from the Leased Premises. Notwithstanding the above to the
contrary, the indemnification of Tenant by Landlord shall only apply to events
occurring after October 12, 2001.
ARTICLE 20
OPTION TO EXTEND LEASE
20.1 Option to Extend Lease Term: Landlord hereby grants to Tenant an
option to extend the Lease Term for a three (3) year term ("Option Period") on
the following term and conditions:
A. Tenant must give Landlord notice in writing of its exercise
of the option in question no earlier than 250 days and no later than 120 days
before the date the Lease Term would end but for said exercise.
B. Tenant may not extend the Lease Term pursuant to any option
granted by this paragraph if Tenant is materially in default beyond any
applicable cure period as of the date of exercise of the option in question or
as of the date this Lease would have been terminated but for said exercise.
C. All terms, covenants and conditions of this Lease shall
apply during the option period, except that the Base Monthly Rent for the
Option Period shall be determined as provided in Paragraph D.
D. The Base Monthly Rent for the first twelve (12) months of
the Option Period shall be the greater of (i) the monthly Basic Rent payable
for the last month of the Premises Lease Term, or (ii) the then fair market
monthly rent determined as of the commencement of the Option
Period, based upon a NNN lease for like premises and buildings with like
improvements in the Santa Clara area. If the parties are unable to agree upon
the fair market monthly rent for the Premises for the Option Period in
question within thirty (30) days from Tenant's delivery of notice of exercise
of the option, then the fair market monthly rent shall be determined by
appraisal conducted pursuant to subparagraph E.
E. In the event it becomes necessary to determine by appraisal
the fair market rent of the Premises for the purpose of establishing the Base
Monthly Rent during the Option Period, then such fair market monthly rent
shall be determined by three (3) real estate appraisers, all of whom shall be
members of the American Institute of Real Estate Appraisers with not less than
five (5) years experience appraising real property (other than residential or
agricultural property) located in Santa Clara County, California, in
accordance with the following procedures:
(1) The party demanding an appraisal (the "Notifying Party")
shall notify the other party (the "Non-Notifying Party") thereof by delivering
a written demand for appraisal, which demand, to be effective, must give the
name, address, and qualifications of an appraiser selected by the Notifying
Party. Within ten (10) days of receipt of said demand, the Non-Notifying Party
shall select its appraiser and notify the Notifying Party, in writing, of the
name, address, and qualifications of an appraiser selected by it. Failure by
the Non-Notifying Party to select a qualified appraiser within said ten (10)
day period shall be deemed a waiver of its right to select a second appraiser
on its own behalf and the Notifying Party shall select a second appraiser on
behalf of the Non-Notifying Party within five (5) days after the expiration of
said ten (10) day period. Within ten (10) days from the date the second
appraiser shall have been appointed, the two (2) appraisers so selected shall
appoint a third appraiser. If the two appraisers fail to select a third
qualified appraiser, the third appraiser shall be selected by the American
Arbitration Association or if it shall refuse to perform this function, then
at the request of either Landlord or Tenant, such third appraiser shall be
promptly appointed by the then Presiding Judge of the Superior Court of the
State of California for the County of Santa Clara.
(2) The three (3) appraisers so selected shall meet in Santa
Clara, California, not later than twenty (20) days following the selection of
the third appraiser. At said meeting the appraisers so selected shall attempt
to determine the fair market monthly rent of the Premises for the Option
Period (including the timing and amount of periodic increases).
(3) If the appraisers so selected are unable to complete their
determinations in one meeting, they may continue to consult at such times as
they deem necessary for a fifteen (15) day period from the date of the first
meeting, in an attempt to have at least two (2) of them agree. If, at the
initial meeting or at any time during said fifteen (15) day period, two (2) or
more of the appraisers so selected agree on the fair market rent of the Leased
Premises, such agreement shall be determinative and binding on the parties
hereto, and the agreeing appraisers shall, in simple letter form executed by
the agreeing appraisers, forthwith notify both Landlord and Tenant of the
amount set by such agreement.
(4) If two (2) or more appraisers do not so agree within said
fifteen (15) day period, then each appraiser shall, within five (5) days after
the expiration of said fifteen (15) day period, submit his independent
appraisal in simple letter form to Landlord and Tenant stating his
determination of the fair market rent of the Premises for the Option Period in
question. The parties shall then determine the fair market rent for the
Premises by determining the average of the fair market rent set by each of the
appraisers. However, if the lowest appraisal is less than eighty-five percent
(85%) of the middle appraisal then such lowest appraisal shall be disregarded
and/or if the highest appraisal is greater than one hundred fifteen percent
(115%) of the middle appraisal then such highest appraisal shall be
disregarded. If the fair market rent set by any appraisal is so disregarded,
then the average shall be determined by computing the average set by the other
appraisals that have not been disregarded.
(5) Nothing contained herein shall prevent Landlord and Tenant
from jointly selecting a single appraiser to determine the fair market rent of
the Premises, in which event the determination of such appraisal shall be
conclusively deemed the fair market rent of the Premises.
(6) Each party shall bear the fees and expenses of the
appraiser selected by or for it, and the fees and expenses of the third
appraiser (or the joint appraiser if one joint appraiser if one joint
appraiser is used) shall be borne fifty percent (50%) by Landlord and fifty
percent (50%) by Tenant.
F. The option rights of Tenant under this Article 20, and the
extended term thereunder, are granted solely and exclusively for Tenant's
personal benefit and may not be assigned or transferred by Tenant.
G. The Base Monthly Rent for the remainder of the Option Period shall
be increased by annual CPI increases.
H. Subparagraph 14.1.10 shall not apply during the Option Period.
WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the
intent to be legally bound thereby, to be effective as of the Effective Date
of this Lease.
AS LANDLORD: AS TENANT:
DEERFIELD SCOTT, LLC, a SMTEK SANTA CLARA, INC., a
California limited liability California corporation
company
By: By:
Its: Its:
Date: Date:
Deerfield Scott (Smtek) Single Ten. Com. Sp. Lease 6/10/02
EXHIBIT "A"
(LEGAL DESCRIPTION OF LEASED PREMISES)
ALL OF PARCEL 1, as shown on that certain map entitled "Parcel Map
Lands of Envirotech Systems, Inc., being all of Pcl V as shown on Parcel Map
Bk 331 of Maps, page 120, Santa Clara County, California" which map was filed
for record in the Office of the Recorder of the County of Santa Clara, State
of California on May 22, 1980 in Book 463 of Maps, page 42.
216-29-111
EXHIBIT "B"
(SEE ATTACHED FLOOR PLAN)
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