EXHIBIT 10.20
CONFIDENTIAL TREATMENT REQUESTED
PACIFIC CORPORATE CENTER LEASE
by and between
GREENVILLE INVESTORS, L.P.,
a California limited partnership
as "LANDLORD"
and
FORMFACTOR, INC.,
a Delaware corporation
as "TENANT"
Dated as of May 3, 2001
* * * Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately.
TABLE OF CONTENTS
ARTICLE 1. BASIC TERMS..................................................................1
ARTICLE 2. TERM.........................................................................1
ARTICLE 3. BASE RENT....................................................................2
ARTICLE 4. USE OF PREMISES..............................................................2
ARTICLE 5. LETTERS OF CREDIT/SECURITY DEPOSIT...........................................6
ARTICLE 6. UTILITIES....................................................................7
ARTICLE 7. REAL PROPERTY TAXES..........................................................7
ARTICLE 8. CONSTRUCTION AND ACCEPTANCE..................................................8
ARTICLE 9. REPAIRS AND MAINTENANCE......................................................9
ARTICLE 10. OPERATING AND MAINTENANCE COSTS.............................................10
ARTICLE 11. TRADE FIXTURES AND SURRENDER................................................13
ARTICLE 12. DAMAGE OR DESTRUCTION.......................................................13
ARTICLE 13. EMINENT DOMAIN..............................................................14
ARTICLE 14. INSURANCE...................................................................14
ARTICLE 15. WAIVER OF SUBROGATION.......................................................15
ARTICLE 16. RELEASE AND INDEMNITY.......................................................16
ARTICLE 17. INSOLVENCY, ETC. OF TENANT..................................................16
ARTICLE 18. PERSONAL PROPERTY AND OTHER TAXES...........................................16
ARTICLE 19. SIGNS.......................................................................17
ARTICLE 20. ASSIGNMENT AND SUBLETTING...................................................17
ARTICLE 21. RIGHTS RESERVED BY LANDLORD.................................................18
ARTICLE 22. INTENTIONALLY DELETED.......................................................18
ARTICLE 23. RIGHT OF LANDLORD TO PERFORM................................................18
ARTICLE 24. LANDLORD DEFAULT............................................................18
ARTICLE 25. DEFAULT AND REMEDIES........................................................19
ARTICLE 26. PRIORITY OF LEASE AND ESTOPPEL CERTIFICATE..................................20
ARTICLE 27. HOLDING OVER................................................................21
ARTICLE 28. NOTICES.....................................................................21
ARTICLE 29. LIENS.......................................................................21
ARTICLE 30. QUIET ENJOYMENT.............................................................22
ARTICLE 31. ATTORNEYS' FEES.............................................................22
ARTICLE 32. MISCELLANEOUS...............................................................22
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SCHEDULE OF EXHIBITS
EXHIBIT A SITE PLAN..................................................................A-1
EXHIBIT B CENTER LEGAL DESCRIPTION AND PARCEL MAP....................................B-1
EXHIBIT C WORK LETTER................................................................C-1
EXHIBIT D LETTER OF CREDIT...........................................................D-1
EXHIBIT E RULES AND REGULATIONS......................................................E-1
EXHIBIT F LIST OF HAZARDOUS SUBSTANCES...............................................F-1
EXHIBIT F-1 MINIMUM STANDARDS FOR HAZARDOUS SUBSTANCE
USE/STORAGE AREAS........................................................F-1-1
EXHIBIT G COPY OF CENTER COVENANTS, CONDITIONS AND RESTRICTIONS......................G-1
EXHIBIT H NON-DISCLOSURE AGREEMENT...................................................H-1
EXHIBIT I LIST OF COMPETITORS........................................................I-1
EXHIBIT J ACKNOWLEDGMENT OF COMMENCEMENT DATE........................................J-1
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PACIFIC CORPORATE CENTER LEASE
THIS LEASE is made and entered into as of May 3, 2001, by and between
GREENVILLE INVESTORS, L.P. a California limited partnership (hereafter,
"LANDLORD"), and FORMFACTOR, INC., a Delaware corporation (hereafter "TENANT").
A. DEMISE. Landlord hereby leases, demises and lets to Tenant, and
Tenant hereby leases, hires and takes from Landlord those certain premises ("the
PREMISES") described as follows:
That commercial building consisting of approximately 38,087 square feet
of gross leasable area ("GLA"), designated as Building 3 on the Site Plan
attached hereto as Exhibit A ("BUILDING 3") and to be constructed by Landlord
and Tenant in accordance with Article 8 and Exhibit C hereof. The exterior
walls, roof, air space above and the area beneath Building 3 are not demised and
their use together with the right to install, maintain, use, repair and replace
pipes, ducts, conduits and wires leading through the Premises in locations that
will not materially interfere with Tenant's use and serving other parts of
Building 3, are hereby reserved to the Landlord, except as otherwise expressly
provided herein.
The Premises is located at 501 Lawrence Drive, Livermore, California on
the real property more particularly described and shown on Exhibit B as Parcel 3
("PARCEL 3") and is a part of Pacific Corporate Center, a common interest
development being developed by Landlord in the City of Livermore, Alameda
County, California, (the "CENTER") which includes eight (8) parcels of real
property together with all buildings and other structures and improvements to be
constructed thereon and is more particularly described and shown on Exhibit B,
the Center Legal Description and Parcel Map. All parcels of real property in the
Center owned (in whole or in part) by Landlord from time to time are hereinafter
collectively referred to as "LANDLORD'S PARCELS".
B. TERMS, COVENANTS AND CONDITIONS. The parties agree that this Lease is
made upon the following terms, covenants and conditions:
ARTICLE 1. BASIC TERMS
In all instances, the basic terms set forth in this Article 1 are
subject to the main body of the Lease in general and those Articles noted in
parentheses in particular.
(a) TERM: Approximately Nine (9) Lease Years; four (4) options of 5 (Art.2;
years each Addendum
A-2.1)
(b) INITIAL MONTHLY BASE RENT: $52,179.19 ($1.37 psf of GLA) (Art 3)
(c) LETTERS OF CREDIT: (Art. 5)
One in the amount of $626,150 (12 months Base Rent)
One in the amount of $313,075 (6 months Base Rent)
(d) TENANT'S INITIAL ESTIMATED MONTHLY OPERATING EXPENSE PAYMENT: (Art. 10)
$3,199.00
(e) TENANT'S INITIAL ESTIMATED MONTHLY TAX PAYMENT: $6,703.00 (Art. 7)
(f) TENTATIVE COMMENCEMENT DATE: September 30, 2001 (Art. 8)
(g) RENT COMMENCEMENT DATE: The earlier of June 30, 2002 (provided that (Art. 2)
such date shall be postponed for each day after January 1, 2002,
that the Delivery Date occurs) or the date of substantial
completion of the Tenant Improvements
(h) USE: Office and light manufacturing services, "clean rooms", and (Art. 4)
related lawful purposes
(i) TENANT IMPROVEMENT ALLOWANCE: $952,175 ($25.00 psf of GLA) (Exhibit C)
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(j) ARTICLES AND EXHIBITS: This Lease consists of Articles 1 through
32, Addendum to Lease, and Exhibits A, B, C, D, E, F, F-1, G, H,
I and J attached hereto, which are by this reference
incorporated herein.
ARTICLE 2. TERM
2.1 Landlord and Tenant have entered into a lease of even date hereof
for Building 1 located on Parcel 1 in the Center (the "BUILDING 1 LEASE"). The
Term of this Lease shall commence on the date ("COMMENCEMENT DATE") that the
Premises are delivered to Tenant in the Delivery Condition (as defined in
Article 8), and shall terminate at midnight on the date of expiration of the
initial term of the Building 1 Lease.
See Addendum A-2.1.
2.2 The first "LEASE YEAR" shall begin on the Commencement Date and
shall expire on the last day of the month, twelve (12) full calendar months next
following the Rent Commencement Date set forth in Paragraph 1(g). If the Rent
Commencement Date occurs on the first day of the calendar month, then the first
Lease Year shall end on the day immediately preceding the first anniversary of
the Commencement Date. Subsequent Lease Years shall be each consecutive twelve
(12) calendar month period thereafter except for the last Lease Year which may
be a partial Lease Year.
2.3 Promptly after the Rent Commencement Date, Landlord and Tenant shall
execute a written acknowledgment of the Rent Commencement Date in the form
attached hereto as Exhibit J.
ARTICLE 3. BASE RENT
3.1 Tenant agrees to pay without offset or deduction of any kind (except
as expressly set forth in this Lease) the initial monthly Base Rent amount set
forth in Paragraph 1(b) above and as adjusted pursuant to Section 3.2, in
advance at Landlord's address on the first day of each calendar month during the
Term of this Lease. Tenant's obligation to pay Base Rent shall commence on the
Rent Commencement Date. If the Rent Commencement Date is not the first day of a
calendar month, the first month's rent shall be prorated on the basis of a
thirty (30) day month, and shall be payable with the first full monthly rental
due hereunder. Landlord's address shall be as set forth below its signature, or
as from time to time designated by Landlord to Tenant in writing.
3.2 As of the date of commencement of the second Lease Year and as of
the commencement of each Lease Year during the initial Lease Term thereafter,
the monthly Base Rent shall increase by four percent (4%) over the monthly Base
Rent in effect immediately preceding the applicable adjustment date.
ARTICLE 4. USE OF PREMISES
4.1 The Premises shall be used and occupied only for the purposes
described in Paragraph 1(h) above and for other uses permitted within the light
industrial zoning district within which the Premises is located, unless
prohibited by the Declaration, and provided Tenant's use otherwise complies with
all applicable governmental requirements. Tenant shall not use the Premises for
any other purposes without Landlord's prior written consent, which consent may
be withheld in Landlord's sole discretion. Without limiting the foregoing, it is
acknowledged that Tenant may elect to use a portion of the Premises for an
employee cafeteria and kitchen facilities provided that all construction of such
facilities is performed in accordance with the provisions of Section 9.5 hereof.
4.2 Tenant shall not do or permit to be done in or about the Premises
anything which is illegal or unlawful; or which will cause cancellation of any
insurance on the building of which the Premises are a part. Tenant shall not
obstruct or interfere with the rights of any other tenants and occupants of the
Center or their invitees, nor injure them, nor operate the Premises in a manner
which unreasonably disturbs other tenants in the use of their premises in the
Center. Tenant shall not cause, maintain or permit any nuisance on or about the
Premises. Tenant shall not use nor permit the use of the Premises or any part
thereof as living quarters.
4.3 Tenant acknowledges that although Landlord has permitted Tenant the
use of Premises for the purpose described in this Article, neither Landlord nor
any agent of Landlord has made any representation or
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warranty to Tenant with respect to the suitability of the present zoning of the
Building for such use. Tenant assumes all responsibility for investigating the
suitability of the zoning for its use and for compliance with all other laws and
regulations governing such use.
4.4 Tenant shall have use of, and access to, the Premises twenty four
(24) hours per day, three hundred sixty five (365) days per year, subject to the
provisions of this Lease and ordinances and regulations of applicable
governmental agencies.
4.5 Tenant agrees that, at its own cost and expense, it will comply with
and conform to all Legal Requirements (as defined in Section 4.7(d) below) in
any way relating to the use or occupancy of the Premises throughout the entire
term of this Lease; including the Livermore Fire Code requiring all tenants to
obtain fire extinguishers for the Premises and maintain them so that they are
fully charged and operational at all times and inspected annually. Further,
subject to Landlord's obligation to deliver the Premises to Tenant in the
Delivery Condition, Tenant shall thereafter be obligated at its own cost and
expense to take such action and perform such work (including structural
alterations) to the Premises, as required to comply with the Americans with
Disabilities Act ("ADA") and other applicable handicapped access codes. Further,
if, and to the extent, due to Tenant's use of, or alterations to, or work
performed by Tenant in the Premises, changes, alterations or improvements to
Building 3, Parcel 3 or other portions of the Center are required by any
governmental agency, Tenant shall be responsible for the costs of such changes,
alterations and improvements. Notwithstanding the foregoing, nothing contained
herein shall limit or affect any representations, warranties or covenants of
Landlord or any of Landlord's contractors with respect to any work performed
pursuant to Article 8 or Exhibit C. Except to the extent of Tenant's compliance
obligations set forth above, Landlord shall be obligated to comply with all
Legal Requirements, including, without limitation, the ADA and other applicable
handicapped access codes, with respect to all portions of Parcel 3 outside of
Building 3, subject to reimbursement as specifically set forth in this Lease and
further subject to the terms of the Declaration.
4.6 Tenant shall place no loads upon the floors, walls, ceilings or roof
of the Building in excess of the maximum design load of Building 3.
4.7 HAZARDOUS SUBSTANCES:
A. HAZARDOUS SUBSTANCE; REPORTABLE USES: As used herein, the terms
"HAZARDOUS SUBSTANCE" and "HS " shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment, or the Premises; (ii) regulated or monitored by any
governmental authority; or (iii) a basis for potential liability of Landlord to
any governmental agency or third party under any applicable statute. Hazardous
Substance shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, crude oil or any products or by-products thereof. "REPORTABLE USE"
shall mean (i) the installation or use of any above or below ground storage
tank, (ii) the generation, possession, storage, use, transportation, or disposal
of a Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority, and (iii) the presence in, on or about the Premises of a
Hazardous Substance with respect to which any Applicable HS Requirements (as
defined in subparagraph (F) hereinafter) require that a notice be given to
persons entering or occupying the Premises or neighboring properties.
B. TENANT'S USE OF HAZARDOUS SUBSTANCES:
(1) Notice of Use of Hazardous Substances. Tenant may, without
Landlord's prior consent, but upon notice to Landlord and in compliance with all
Applicable HS Requirements and all other provisions of this Section 4.7, at
Tenant's sole cost and expense, (i) operate a business on the Premises which is
substantially similar to the business it is operating at its facilities in
Livermore, California as of the Commencement Date, i.e. research, development,
design, manufacture (including with clean room facilities), and sale of
electronic components and devices relating to the testing and packaging of
semiconductor devices and to probing technology, and to wafer-level burn-in and
packaging and chip scale packaging of semiconductor devices ("PERMITTED USE"),
and (ii) use any ordinary and customary Hazardous Substances reasonably required
to be used by Tenant in the normal course of the Permitted Use.
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(2) Tenant's HS Use. Tenant shall have the right to use the
Hazardous Substances listed on Exhibit F without Landlord's prior consent and
without the requirement of additional insurance. Tenant shall use all such
Hazardous Substances in accordance with all Applicable HS Requirements and in
compliance with all other provisions of this Section 4.7, specifically including
the notice requirements and restrictions set forth below. Tenant's use of the
substances referenced in Exhibit F may be referred to herein as "TENANT'S HS
USE".
(3) Control of HS Hazards.
(a) Plans for Designated HS Areas. Tenant shall use,
store, or otherwise manage HS only in areas designated by Tenant for such use
("DESIGNATED HS AREAS"). Prior to commencement of Tenant's HS Use on the
Premises, and prior to modification of or addition to any Designated HS Areas,
Tenant shall provide Landlord with written plans (such as architectural or
engineering plans) regarding the design and planned operation of the Designated
HS Areas. The plans shall include descriptions of the types and quantities of HS
that will be used, stored, or otherwise managed in Designated HS Areas, the
maximum design capacity of each Designated HS Area and descriptions of all
equipment and structures that will be used to control environmental, health, and
safety hazards associated with the HS, including, for example, secondary
containment structures and air pollution control equipment. Tenant will also
provide copies of all permits and other approvals required to be obtained to
lawfully operate Tenant's business and Hazardous Substances on the Premises.
(b) Commencement of Tenant's HS Use. Tenant shall not
commence Tenant's HS Use until Landlord has approved the plans submitted by
Tenant pursuant to subparagraph (a) above, which approval shall not be
unreasonably withheld or delayed. Landlord may (but without any obligation to do
so) condition its approval upon Tenant's taking such measures as Landlord, at
its reasonable discretion, deems necessary to protect itself, the public, the
Premises, the Center, and the environment against damage, contamination, injury,
and/or liability, including, but not limited to the installation (and, at
Landlord's option, removal on or before Lease expiration or earlier termination)
of reasonably necessary protective equipment, structures, or modifications to
the Premises. Tenant's plans shall be deemed approved, however, if Tenant's
plans comply with the requirements of subparagraph (a) and the minimum standards
set forth on Exhibit F-1.
(c) Modification/Expansion of Designated HS Areas. Tenant
shall not modify or add to the Designated HS Areas until Landlord has approved
the plans submitted by Tenant pursuant to subparagraph (a) above for the
modification or addition, which approval shall not be unreasonably withheld or
delayed. Tenant's plans shall be deemed approved, however, if Tenant's plans for
the modification or addition comply with the requirements of subparagraph (a)
and the minimum standards set forth on Exhibit F-1.
(4) Notice of HS Use. Tenant shall notify the Landlord in writing
at least five (5) business days prior to any of the following:
(a) the date Tenant first commences Tenant's HS Use on the
Premises; or
(b) the date Tenant commences to store or use any
Hazardous Substance which is not listed on Exhibit F (a "NEW HS"), if the
quantity of the New Hazardous Substance exceeds either (i) 55 gallons of liquid,
500 pounds of solid, 200 cubic feet of compressed gas at standard temperature
and pressure, or (ii) the applicable Threshold Planning Quantity listed in 40
CFR Part 355.
After receipt of a notice pursuant to subparagraph (b) above, if
Tenant's use of the New HS in the Premises is materially more dangerous than
Tenant's use of Hazardous Substances listed on Exhibit F, Landlord may require
Tenant to obtain a policy of pollution liability insurance in a commercially
reasonable form and amounts and with such insurer as may be reasonably approved
by Landlord. For any insurance policy requirement, Landlord shall be named as an
additional insured under such policy. Tenant shall deliver a certificate of any
insurance required prior to bringing the Hazardous Substance into the Premises
and Tenant shall maintain such insurance in effect until the closure
requirements set forth in subparagraph (H) below have been satisfied or the New
HS use ceases.
(5) Contents of New HS Notice. Each notice of a New HS shall
specify the names and quantities of any New HS that Tenant intends to place on
the Premises which exceeds the quantities described in
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subparagraph 4(b) above together with a copy of all permits and other approvals
required to be obtained to lawfully use, store, or otherwise manage the New HS
on the Premises. Tenant's notice shall also provide Landlord with information
regarding the Designated HS Areas where the New HS will be used, stored, or
otherwise managed, the new aggregate quantities of all Hazardous Substances in
Designated HS Areas, and the maximum design capacities of the Designated HS
Areas (if changed or modified from the Designated HS Areas as initially approved
consistent pursuant to Section 4.7(B)(3)(b) above).
(6) Increase in HS Quantities. If, at any time during the Term,
Tenant intends to increase the quantity of existing Hazardous Substances and/or
add New HS such that the aggregate quantity of all Hazardous Substances in any
Designated HS Area on the Premises exceeds the maximum design capacity for the
Designated HS Area, Tenant shall not increase quantities or add New HS until
Landlord has consented to the modification of or addition to the Designated HS
Areas, pursuant to Section 4.7(B)(3)(c) above.
(7) Restrictions on Quantity or Use of HS. Notwithstanding any
other provision of this Lease, but subject to Tenant's right to engage in a
Permitted Use consistent with the standards of Exhibit F-1, Tenant's use of
Hazardous Substances at the Premises is subject to the following restrictions:
(a) Tenant shall not, without Landlord's consent, use any HS
in quantities such that Tenant would be subject to
requirements for preparation of a Risk Management Plan,
as set forth in 40 CFR Part 68 (as such requirements
exist on the date of execution of this Lease without
regard to amendments which may be enacted after the date
hereof) and such HS use is materially more dangerous
than the HS use presently being carried on by Tenant.
(b) Tenant shall not, without Landlord's consent, use any HS
which emits odors unless the odors can be controlled to
the extent they are not present at objectionable levels
in any areas exterior to the Premises that are
accessible to other tenants of the Center or the general
public. In the absence of any legal thresholds for
identifying objectionable odors, other odor standards
may be used, provided they are generally accepted as
being scientifically valid.
(c) Tenant shall not, without Landlord's consent, use any HS
in a manner that would result in "Significant
Emissions". SIGNIFICANT EMISSIONS are defined as air
emissions originating from the Premises for which under
applicable federal or state law (i) notices or warnings
must be given to other occupants of the Center or the
general public based upon their proximity to the
Building, as opposed to entry therein, or (ii) other
occupants of the Center or the general public must
receive special training and/or use personal protective
equipment.
C. PLANS/REPORTS: Within ten (10) days after Tenant submits the same to
any governmental authority, Tenant shall provide Landlord with copies of all
hazardous materials business plans, permits and all other plans, reports and
correspondence pertaining to storage/management of Hazardous Substances at the
Premises, except waste manifests and routine monitoring reports.
D. DUTY TO INFORM LANDLORD: If Tenant knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises or Building or Center, other than as previously permitted or
consented to by Landlord or there has been a spill, release or discharge of any
Hazardous Substances in the Premises (other than discharges permitted,
authorized or otherwise approved by the applicable governmental agencies
regulating the same), Tenant shall immediately give Landlord written notice
thereof, together with a copy of any statement, report, notice, registration,
application, permit, business plan, license, claim, action, or proceeding given
to, or received from, any governmental authority or third party concerning the
presence, spill, release, discharge of, or exposure to, such Hazardous Substance
including but not limited to all such documents as may be involved in any
Reportable Use involving the Premises. Tenant shall not cause or permit any
Hazardous Substance to be spilled or released in, on, under or about the
Premises (including, without limitation, through the plumbing, storm, or
sanitary sewer system).
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E. INDEMNIFICATION: Tenant shall indemnify, protect, defend and hold
Landlord, its agents, employees, lenders, and the Premises and Center, harmless
from and against any and all damages, liabilities, judgments, costs, claims,
liens, expenses, penalties, loss of permits and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance to the extent brought into
the Premises and/or Center by or for Tenant, its employees, agents or
contractors. Tenant's obligations under this Section 4.7(E) shall include, but
not be limited to, the effects of any contamination or injury to person,
property or the environment created or suffered by Tenant, and, except as
otherwise provided in Section 4.7(G), the cost of investigation (including
reasonable consultants' and attorneys' fees and testing), removal, remediation,
restoration and/or abatement thereof, or of any contamination therein involved,
and shall survive the expiration or earlier termination of this Lease. No
termination, cancellation or release agreement entered into by Landlord and
Tenant shall release Tenant from its obligations under this Lease with respect
to Hazardous Substances, unless specifically so agreed by Landlord in writing at
the time of such agreement.
F. TENANT'S COMPLIANCE WITH REQUIREMENTS: Tenant shall, at Tenant's sole
cost and expense fully, diligently and in a timely manner, comply with all
"LEGAL REQUIREMENTS", which term is used in this Lease to mean all laws, rules,
regulations, ordinances, directives, covenants, easements and restrictions of
record, permits, the requirements of any applicable fire insurance underwriter
or rating bureau, relating in any manner to the Premises or Center (including
but not limited to matters pertaining to (i) industrial hygiene, (ii)
environmental conditions on, in, under or about the Premises, including soil and
groundwater conditions, and (iii) the use, generation, manufacture, production,
installation, maintenance, removal, transportation, storage, spill or release of
any Hazardous Substance, which foregoing (ii) and (iii) Legal Requirements may
be referred to as "APPLICABLE HS REQUIREMENTS"), now in effect or which may
hereafter come into effect. Tenant shall, within twenty (20) business days after
receipt of Landlord's written request made from time to time, provide Landlord
with copies of all documents and information, including but not limited to
permits, registrations, manifests, applications, reports and certificates,
evidencing Tenant's compliance with all Applicable HS Requirements specified by
Landlord, and shall within five (5) business days after receipt, notify Landlord
in writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or involving
failure by Tenant or the Premises to comply with any Legal Requirements. Tenant
shall be obligated to disclose to Landlord which Hazardous Substances are used
at the Premises and how such Hazardous Substances are being handled (but in no
event shall Tenant be required to disclose information regarding formulations or
manufacturing processes or procedures related to such Hazardous Substances)
notwithstanding that such information may be proprietary information or a trade
secret. Landlord agrees to keep as confidential all such proprietary information
delivered to Landlord (including, without limitation, Exhibit F) and which
Tenant designates in writing as confidential, provided that Landlord may
disclose the same when required by law or in litigation between Landlord and
Tenant regarding such information or to Landlord's lenders or to prospective
purchasers provided such parties have also agreed to keep the same confidential.
G. COMPLIANCE WITH LAW GOVERNING HAZARDOUS SUBSTANCES: Landlord,
Landlord's agents, employees, contractors and designated representatives, and
the holders of any mortgages, deeds of trust or ground leases on the Premises
("LENDERS") shall have the right to enter the Premises at any time in case of an
emergency, and otherwise at reasonable times (but not more often than annually
for inspection of Tenant's "clean room" on the Premises, if any, or more often
than quarterly for inspection of other parts of the Premises), and upon no less
than 10 days' notice, unless an emergency exists, for the purpose of inspecting
the condition of the Premises and for verifying compliance by Tenant with this
Lease and all Legal Requirements, and Landlord shall be entitled to employ
experts and/or consultants in connection therewith (provided that such experts
and/or consultants are not engaged in a business competitive with Tenant, or
consult or give advice to any competitor of Tenant listed on Exhibit I) to
advise Landlord with respect to Tenant's activities, including but not limited
to Tenant's installation, operation, use, monitoring, maintenance, or removal of
any Hazardous Substance on or from the Premises ("LANDLORD'S CONSULTANTS").
Prior to engaging any Landlord's Consultants, Landlord shall provide Tenant with
written notice of the name of the proposed consultant and Tenant shall have five
(5) business days to object to the engagement based upon Tenant's reasonable
belief that engagement of the particular individual as Landlord's Consultant,
and the consequent access to Tenant's facilities and proprietary information and
trade secrets, could result in competitive injury to Tenant. Landlord shall not
engage with a consultant as to whom Tenant has objected. Tenant shall cooperate
with Landlord's Consultants inspecting the Premises, including responding to
interviews (for a time period not to exceed four (4) hours for the initial site
visit and two (2) hours for site visits thereafter).
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Landlord's Consultants shall at all times be escorted by Tenant, unless Tenant
agrees otherwise. This and all rights to enter except in the event of an
emergency are subject to Landlord, Landlord's agents, employees, contractors,
designated representatives, prospective purchasers and/or Lenders, as the case
may be, executing Tenant' s standard non-disclosure agreement in the form
attached hereto as Exhibit H. The costs and expenses of any such inspections
shall be paid by the party requesting same and in no event shall be borne by or
passed along to Tenant unless requested by Tenant, subject only to the
proceeding sentence. If the inspection is performed due to a violation of
Applicable HS Requirements, Tenant shall, upon request, reimburse Landlord or
Landlord's Lender, as the case may be, as additional rent, for the costs and
expenses of such inspections.
H. CLOSURE REQUIREMENTS: Prior to any termination of the Lease, Tenant,
at its sole cost and expense (except as to those costs and expenses arising out
of actions undertaken by Landlord or by a third party on behalf of Landlord),
shall satisfy the following closure requirements with respect to the Hazardous
Substances Tenant has used in the Premises during the Term:
(1) Comply with all applicable federal, state and local closure
requirements with respect to Hazardous Substances;
(2) Prepare a closure plan (the "CLOSURE PLAN") that specifies
the final disposition of all Hazardous Substances and equipment which
may be contaminated with Hazardous Substances; cleaning and
decontamination activities, and confirmation sampling (e.g. wipe
samples, soil/ground water samples and/or indoor air quality samples, to
the extent warranted by the site conditions then existing).
(3) At least sixty (60) days prior to the Lease termination,
provide to Landlord a copy of the Closure Plan for review and reasonable
approval. Landlord may, after consultation with Tenant, require
modification of the Closure Plan to include additional activities,
including sampling activities, if the site conditions indicate that
there is a reasonable probability that "Significant Residual
Contamination" is present. SIGNIFICANT RESIDUAL CONTAMINATION shall mean
residual contamination which: (i) exceeds standards or guidance levels
typically used by regulatory agencies in California for evaluating
potential threats to human health or the environment; or (ii) would
result in notification requirements under applicable state law of
potential health risks to individuals on the Premises, other tenants of
the Center, and/or the general public; or (iii) would result in
potential environmental liability to Tenant or Landlord; or (iv) would
result in the need for conducting any type of additional decontamination
activities prior to leasing the Premises to a new tenant. If Landlord
fails to request modification of the Closure Plan within ten (10)
business days after its receipt thereof, Tenant's Closure Plan shall be
deemed accepted.
(4) Notify Landlord of closure schedule and allow access to
Landlord and/or Landlord's Consultants for inspections prior to
commencing and following completion of the cleaning/decontamination
activities.
(5) Notify Landlord of all sample analysis results, if any.
Landlord may require additional closure activities if sampling results
disclose Significant Residual Contamination.
(6) Prepare and provide to Landlord closure report documenting
closure activities consistent with the Closure Plan and sample results,
if any, following completion of all closure activities.
Closure shall be deemed to be complete upon Landlord's reasonable
approval of the closure report and, if applicable, Landlord's receipt of a copy
of the written closure approval from the local environmental agency with
jurisdiction over the Hazardous Substances at the Premises.
I. SURVIVAL OF OBLIGATIONS: Tenant's obligations under this Section 4.7
shall survive the termination of this Lease.
See Addendum A-4.7.
4.8 DECLARATION. Tenant acknowledges and agrees that this Lease shall be subject
to and subordinate to a Declaration of Covenants, Conditions and Restrictions
which will be recorded prior to the Delivery Date in the
7
Official Records of Alameda County, California, which, together with all
amendments from time to time, are collectively referred to as the "DECLARATION".
A true and correct copy of the Declaration is attached hereto as Exhibit G.
Tenant agrees to be bound by and comply with all provisions of the Declaration.
Upon recordation, Landlord shall deliver a copy of the recorded Declaration to
Tenant.
See Addendum A-4.8.
ARTICLE 5. LETTERS OF CREDIT/SECURITY DEPOSIT
5.1 In order to secure the prompt and faithful performance by Tenant of
all of the obligations of this Lease to be kept and performed by Tenant, upon
execution of this Lease Tenant shall deliver to Landlord unconditional, clean,
irrevocable, standby Letters of Credit (the "LETTER OF CREDIT") in the amounts
specified in Paragraph 1(c) above.
5.2 Following the occurrence of an Event of Default under this Lease by
Tenant, Landlord may (but shall not be required to) use, apply or retain all or
any part of said Letters of Credit for the payment of any rent or any other sum
in default, or for the payment of any other amount which Landlord may spend or
become obligated to spend by reason of the Event of Default by Tenant, or to
compensate Landlord for any other loss or damage which Landlord has suffered or
may suffer by reason of Tenant's Event of Default. If any portion of said
Letters of Credit is so used, applied or retained, prior to the date that the
second payment of monthly rent is due after the date of such application, Tenant
shall either increase the Letters of Credit to an amount sufficient to restore
each to its original sum or pay to Landlord a cash security deposit in the
amount which was applied (e.g. if the Landlord uses the Letter of Credit for
payment of an overdue installment in March, Tenant shall restore the Letter of
Credit amount or pay the required cash deposit to Landlord prior to May 1).
Tenant's failure to do so shall constitute an Event of Default of this Lease,
and Landlord may, without any further notice, exercise its remedies specified in
Article 25 hereof.
5.3 Provided that on the applicable adjustment date no Event of Default
exists nor has one occurred during the preceding twelve (12) month period, the
Letter of Credit amounts shall be adjusted as follows:
(a) As of the last day of each of the first five (5) Lease Years, the
amount of each Letter of Credit shall be reduced by ten percent (10%) of the
original amount of such Letter of Credit,
(b) As of the last day of the sixth (6th) Lease Year the amount of each
Letter of Credit shall be reduced by twenty-five percent (25%) of the original
amount of such Letter of Credit,
(c) As of the first day of the eighth (8th) Lease Year Tenant may
substitute for all outstanding Letters of Credit then in effect either a cash
security deposit equal to two (2) months of then existing Rent for the Premises
or a new Letter of Credit in the amount of two (2) months' Rent. The substitute
security shall be retained until the end of the Term. Landlord shall not be
required to keep any cash security deposit separate from its general funds and
is in no event to be deemed a trustee thereof, and Tenant shall not be entitled
to interest on any sums deposited or redeposited under this Article 5 and the
same shall be subject to the provisions of Sections 5.2 and 5.5, and
(d) If the requirements for an adjustment are not met on any adjustment
date, that date and each subsequent adjustment date (as the same may be deferred
pursuant to this subparagraph (d)) shall be deferred on a month-by-month basis
until the requirements are satisfied. (For example if the first adjustment date
at the end of the fourth Lease Year was deferred for ninety days, all adjustment
dates thereafter would also be deferred for ninety (90) days).
(e) Notwithstanding and without limiting or affecting the foregoing, at
any time during the Term upon Tenant's written request to Landlord, submitted
with evidence reasonably satisfactory to Landlord that Tenant has satisfied the
financial criteria set forth below for two (2) consecutive calendar years and
provided that no Event of Default then exists nor has one occurred during the
twelve (12) month period preceding Tenant's request, Tenant may substitute for
all outstanding Letters of Credit then in effect a cash security deposit or new
letter of credit equal to four (4) months of the then existing Rent for the
Premises. The cash deposit shall be held on the terms set forth in subsection
(c) above and as of the eighth (8th) Lease Year shall be subject to reduction as
provided in that subsection. Such substitution shall be effective upon written
notice to Landlord together with reasonable evidence
8
that the criteria have been satisfied for the required period. The financial
criteria referred to above are as follows: (i) Tenant's Net Worth (defined as
total assets less total liabilities less unamortized intangible assets less
goodwill) shall be at least $90,000,000, (ii) Tenant's Current Ratio (defined as
current assets divided by current liabilities) shall be at least 1.5:1, and
(iii) Tenant shall have positive annual earnings before income taxes,
depreciation and amortization expenses.
5.4 All Letters of Credit required herein shall be on the following
additional terms and conditions:
(a) Letters of Credit shall be payable on sight with the bearer's draft
issued by and drawn on a major bank or other financial institution which is
defined by ICC Publication 500 as empowered to issue Documentary credits and
Standby Letters of Credit (the "ISSUING BANK") of Tenant's selection, subject to
Landlord's reasonable approval. Landlord hereby approves Imperial Bank as an
acceptable issuing bank. Each Letter of Credit shall state that it shall be
payable against sight drafts presented by Landlord, accompanied by Landlord's
statement that such drawing is in accordance with the terms and conditions of
this Lease; no other document or certification from Landlord shall be required
to negotiate the Letter of Credit. Landlord may designate any bank as Landlord's
advising bank for collection purposes and any sight drafts for the collection of
the Letter of Credit may be presented by the advising bank on Landlord's behalf.
(b) Each Letter of Credit shall be for a term of one (1) year and shall
be substantially in the form of Exhibit D attached hereto. The Letter of Credit
shall provide for its automatic extension for additional one year periods
(subject to any reduction pursuant to Section 5.3 above, if applicable) unless
the issuing bank notifies Landlord not less than sixty (60) days prior to its
then expiration date that the Letter of Credit will not be extended. However, if
the issuing bank notifies Landlord that the Letter of Credit will not be so
extended, Landlord shall be entitled to draw against the Letters of Credit in
the amount of the entire amount which remains unpaid. The fee for the
maintenance of the Letters of Credit shall be at Tenant's sole cost and expense.
(c) Following the occurrence of an Event of Default by Tenant under this
Lease, Landlord shall be entitled to draw against the Letters of Credit in the
amount required to cure Tenant's Event of Default.
(d) If an Event of Default has occurred and remains uncured, Landlord
shall not be required to exhaust its remedies against Tenant before having
recourse to the Letters of Credit or to any other form of security held by
Landlord or to any other remedy available to Landlord at law or in equity.
Notwithstanding anything to the contrary herein, Landlord confirms and agrees
that it will draw upon the Letter of Credit for any monetary Event of Default
prior to taking any action to terminate the Lease by reason of such Event of
Default. If the proceeds of Landlord's draw upon the Letter of Credit satisfies
the monetary Event of Default and Tenant restores the Letter of Credit amount or
pays a cash security deposit to Landlord as required in Section 5.2 above,
Landlord shall have no further right to terminate this Lease by reason of such
Event of Default.
(e) Each Letter of Credit shall be transferable. In the event of any
sale, assignment or transfer by Landlord of its interest in the Premises or this
Lease, Landlord shall have the right to assign or transfer the Letters of Credit
to its grantee, assignee or transferee, and thereupon Landlord shall be
discharged from any further liability with respect thereto and Tenant shall look
solely to such grantee, assignee or transferee for the return of the Letters of
Credit. The provisions of the preceding sentence shall likewise apply to any
subsequent transferees. The first transfer shall be at no charge to Landlord.
Any transfers of the Letters of Credit thereafter shall be at Landlord's
expense.
5.5 If Tenant shall have fully satisfied all of its obligations under
this Lease, both of the Letters of Credit shall be returned to Tenant within
thirty (30) days after the termination of this Lease. If upon the expiration or
termination of this Lease Tenant has not satisfied all of its obligations under
this Lease, including but not limited to the requirements of Section 4.7 and
Article 11 herein regarding Tenant's surrender of the Premises, then Landlord
may draw down the Letters of Credit and may apply the amounts drawn toward the
costs for the cleaning and/or repair and/or restoration of the Premises or the
costs associated with Tenant's failure to perform other obligations. In the
event Landlord's interest in this Lease is sold or otherwise terminated,
Landlord shall have the right to transfer said Letters of Credit to its
successor in interest.
9
ARTICLE 6. UTILITIES
6.1 Tenant, at its own cost and expense, shall pay for all water, gas,
heat, electricity, garbage disposal, sewer charges, telephone, and any other
utility or service charge related to its occupancy of the Premises, including
but not limited to any hook- up charges. Utilities will be separately metered to
the Premises. Tenant acknowledges that all water used with respect to the
landscaping on Parcel 3 and the electricity for all outdoor lighting on Parcel 3
will be metered through the water and electrical meters for the Premises and
billed directly by Tenant. Tenant will not be responsible for such expenses with
respect to any other parcels in the Center.
6.2 Except to the extent arising out of Landlord's negligence or willful
misconduct, Landlord shall not be liable in damages, consequential or otherwise,
nor shall there be any rent abatement, arising out of any interruption or
reduction whatsoever in utility services (i) which is due to fire, accident,
strike, governmental authority, acts of God, acts of other tenants or other
third parties, or other causes beyond the reasonable control of Landlord or any
temporary interruption in such service, and (ii) which is necessary to the
making of alterations, repairs, or improvements to the Center, or any part of it
(all of which shall be conducted pursuant to Article 9), or (iii) to comply with
energy conservation measures mandated by a governmental agency having
jurisdiction over the Center.
ARTICLE 7. REAL PROPERTY TAXES
7.1 Tenant shall pay as Additional Rent all "Taxes" (as hereinafter
defined) which may be levied, assessed or imposed against or become a lien upon
Parcel 3, the tax parcel upon which Building 3 is located, which will be
separately assessed. The term "TAXES" shall mean and include real estate taxes,
assessments (special or otherwise), including impositions for the purpose of
funding special assessment districts, water and sewer rents, rates and charges
(including water and sewer charges which are measured by the consumption of the
actual user of the item or service for which the charge is made) levies, fees
(including license fees) and all other taxes, governmental levies and charges of
every kind and nature whatsoever (and whether or not the same presently exist or
shall be enacted in the future) which may during the term be levied, assessed,
imposed, become a lien upon or due and payable with respect to, out of or for
the Parcel 3 or any part thereof, or of any land, building or improvements
thereon, or the use, occupancy or possession thereof; and imposed or based upon
or measured by the rents receivable by Landlord for the Parcel 3, including
gross receipts taxes, business taxes, business and occupation taxes.
"TAXES" shall also include interest on installment payments and all
costs and fees (including reasonable attorney's and appraiser's fees) incurred
by Landlord in contesting Taxes and negotiating with public authorities as to
the same. Taxes shall not include, however, any franchise, estate, inheritance,
corporation, transfer, net income, excess profits tax or any assessments levied
by the Association pursuant to the Declaration. Association assessments shall be
payable pursuant to the provisions of Section 10.4.
7.2 Tenant shall pay the Taxes with respect to any tax fiscal year
during the term hereof. Landlord's estimate of Tenant's initial tax payment for
Parcel 3 is that amount set forth in Paragraph 1(e) above.
7.3 Commencing with the Commencement Date, Tenant shall pay Landlord
monthly, with each payment of monthly Base Rent, the amount computed in
accordance with Paragraph 1(e) above as an impound toward the Taxes. Tenant's
actual obligation for Taxes shall be determined and computed by Landlord not
less often than annually and at the time each such computation is made, Landlord
and Tenant shall adjust for any difference between impounded amounts and
Tenant's actual share. Tenant shall pay Landlord any deficiency (or Landlord
shall pay Tenant any surplus) within thirty (30) days after receipt of
Landlord's written statement. At the time of each such computation, Landlord may
revise the monthly payment for Taxes set forth in Paragraph 1(e) above by
written notification to Tenant. Tenant shall pay its share of Taxes during each
year of the Lease Term. Landlord shall furnish Tenant with a copy of the tax
bills for the Parcel 3 supporting the amounts charged to Tenant by Landlord.
7.4 If this Lease shall terminate on any date other than the last day of
a tax fiscal year, the amount payable by Tenant during the tax fiscal year in
which such termination occurs shall be prorated on the basis which
10
the number of days from the commencement of said tax fiscal year to and
including said termination date bears to 365. The obligation of Tenant under
this Article 7 shall survive the termination of this Lease.
ARTICLE 8. CONSTRUCTION AND ACCEPTANCE
8.1 Landlord at its sole cost and expense shall construct "LANDLORD'S
WORK" as described in Exhibit C attached hereto and incorporated by reference
herein. Tenant shall construct "TENANT'S WORK" as specified in Exhibit C and
Landlord shall provide a Tenant Improvement Allowance in the amount specified in
Paragraph 1(i) to be applied to the cost of the Tenant Improvements constructed
by Tenant. If the actual cost of such Tenant Improvements exceeds the Tenant
Improvement Allowance, all excess costs shall be at Tenant's sole cost and
expense. If the cost is less than the Tenant Improvement Allowance, the balance
of the Tenant Improvement Allowance shall be applied to the cost of any Special
Tenant Improvements described in Exhibit C, or if none are specified, to the
cost of Tenant Improvements under any then existing lease between Landlord and
Tenant for other premises in the Center. Landlord agrees to notify Tenant at
least ten (10) days prior to the date Landlord anticipates substantial
completion of the Base Building portion of Landlord's Work as set forth in
Exhibit C ("BASE BUILDING WORK"). The "DELIVERY DATE" for the Premises shall be
the date upon which (i) Landlord has substantially completed the Base Building
Work, as evidenced by a written certificate of substantial completion issued by
Landlord's architect, and (ii) the parking areas on Parcel 3 shall have been
substantially completed and all interior roadways designated on the Site Plan
which provide ingress and egress to the Premises and to such parking areas shall
be paved and accessible from the public roads. The remaining Landlord's Work
shall be substantially completed on or before the Rent Commencement Date. As
used herein, "SUBSTANTIAL COMPLETION" shall mean completed, except for minor
punch list items which do not interfere with Tenant's ability to complete its
improvements. The condition of the Premises in compliance with the requirements
set forth in items (i) and (ii) above may sometimes be referred to herein as the
"DELIVERY CONDITION."
8.2 Following delivery of the Premises to Tenant in the Delivery
Condition, Tenant shall diligently proceed to complete Tenant's Work, including
any Special Tenant Improvements and such other work as it may deem necessary for
the conduct of its business in the Premises. Prior to commencing Tenant's Work,
Tenant shall submit to Landlord for approval plans and specifications prepared
by an architect selected by Tenant, which plans shall be subject to Landlord's
prior reasonable approval. Once Tenant's plans are approved by Landlord,
Tenant's contractors (which shall also be subject to prior reasonable approval
by Landlord) shall obtain all necessary permits for the work set forth in the
Approved Tenant Plans (the "TENANT'S WORK") and proceed to complete Tenant's
Work in compliance with all applicable governmental requirements.
8.3 Within thirty (30) days following the Delivery Date, and within
thirty (30) days following the date of substantial completion of Landlord's
Work, Landlord and Tenant shall mutually prepare a punch list of items to be
corrected in the Base Building Work and other Landlord's Work, respectively,
including any defects or non-conformance in Landlord' s construction. Landlord
shall cause its contractors to promptly complete all punch list items.
Landlord's Work shall also be under warranty by Landlord's contractors for a
period of one (1) year. Landlord hereby assigns to Tenant all warranties and
guaranties received by Landlord from its contractors with respect to the Tenant
Improvements and Special Tenant Improvements (if any). If Landlord's contractors
shall fail to complete any punch list items within the 90-day period following
completion of the punchlist, and such failure continues after notice from Tenant
and the cure period provided in Article 24, Tenant may at its option (but shall
not be obligated to) complete the required work at Landlord's cost. Landlord
shall pay to Tenant within thirty (30) days the amount shown on any statement
describing the necessary work completed by Tenant accompanied by the invoices
for such work.
8.4 Landlord will cause its contractors to complete the Base Building
Work with all commercially reasonable diligence and to deliver the Premises in
Delivery Condition on or before October 1, 2001. If the Delivery Date has not
occurred by December 1, 2001 due to a Landlord Delay (as defined in Exhibit C),
Tenant shall be entitled to a rent credit of one day's Base Rent for each of the
first thirty (30) days that Tenant's substantial completion of the Tenant
Improvements is delayed beyond June 30, 2002 due to the Landlord Delay, and a
rent credit of two day's Base Rent for each of the next thirty (30) days of such
delay. Further, if the Delivery Date has not occurred on or before February 1,
2002 due to a Landlord Delay, Tenant shall have the right as its sole remedy to
terminate this Lease without penalty by delivering written notice to Landlord
within thirty (30) days thereafter
11
and prior to the date the Delivery Date has occurred. In the event of such
termination, Landlord shall return to Tenant all amounts paid to Landlord for
the Special Tenant Improvements (as defined in Exhibit C), Tenant's project
management fees and the cost of any Tenant Improvements and Special Tenant
Improvements (if any) constructed by Tenant in the Premises. Pursuant to the
terms of Exhibit C, all time periods referenced above with respect to delivering
the Premises to Tenant shall be extended by the number of days of any delay due
to Tenant's Delay (as defined in Exhibit C) and/or Force Majeure (as defined in
Section 32.8 hereafter).
8.5 After the Premises has been constructed, Landlord's architect shall
measure the gross leasable area of Building 3 and shall certify to Landlord such
measurement in writing. The GLA so certified will be deemed to be the GLA of the
Premises for all purposes of this Lease. To compute the Premises GLA, Building 3
shall be measured to the drip line. The initial monthly Base Rent, estimated tax
and operating expense payments, the Letter of Credit amounts set forth in
Article 1 and the Tenant Improvement Allowance were based on an estimated GLA of
38,087 square feet. In the event that the Premises GLA as determined pursuant
this Section 8.4 is different from the estimated GLA (which difference shall be
certified by Landlord's architect and approved by Tenant), the Base Rent,
estimated payments, Letter of Credit and Tenant Improvement Allowance amounts
set forth in Article 1 shall be adjusted accordingly.
8.6 In the event that Landlord, at its sole option, permits Tenant to
take possession of the Premises prior to the Delivery Date for the purpose of
constructing its Tenant Improvements, such possession shall be on all the terms
and conditions of this Lease except for payment of Rent, specifically including
the insurance and indemnity provisions in Articles 14 and 16. In the event that
Landlord notifies Tenant that Tenant's early possession is causing a delay in
Landlord's Work, Tenant shall promptly cease its construction activities and
cause its contractor to remove its personnel, subcontractors and equipment from
Premises until the Delivery Date or earlier date acceptable to Landlord.
ARTICLE 9. REPAIRS AND MAINTENANCE
9.1 Landlord, at its sole cost and expense, shall be responsible for the
repair, maintenance and, if necessary, replacement of the structural elements,
the roof structure, foundation and the structural integrity of floor slabs of
Building 3, provided that Tenant shall pay for the cost of any such repairs to
the extent occasioned by the negligent act, omission or willful misconduct of
Tenant, its agents, employees, invitees, licensees or contractors, or by the
construction of Tenant Improvements by Tenant, but only to the extent such cost
is in excess of any proceeds received by Landlord from the insurance for
Building 3 maintained by Landlord pursuant to Section 14.2.
9.2 Subject to reimbursement by Tenant as provided in Article 10 hereof,
Landlord shall keep and maintain in good repair (including replacement as
necessary), the roof covering and the exterior surfaces of the exterior walls
and window frames of Building 3 (exclusive of doors, door frames, door checks
and other entrances and windows), all Outdoor Areas (defined in Section 10.1) on
Parcel 3, all Shared Areas (as defined in the Declaration) for the use of Parcel
3 and all systems (including sewer, gas, electrical and water lines) serving the
Premises to the point of connection to Building 3. Tenant shall give Landlord
prompt written notice of any damage to the Premises requiring repair by
Landlord.
9.3 Except to the extent of Landlord's obligations provided in Sections
9.1 and 9.2 hereof, Tenant shall, at its expense, keep and maintain the Premises
and every part thereof in good order, condition and repair, including, without
limiting the generality of the foregoing, all equipment or facilities
specifically serving the Premises, such as plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities, boilers, fired or unfired pressure
vessels, fire hose connections if within the Premises, fixtures, interior walls,
interior surfaces of exterior walls, ceilings, floors, windows, doors, plate
glass, and skylights. Notwithstanding the foregoing, Tenant shall not be
required to make any such repairs to the extent occasioned by the negligent act
or omission or willful misconduct of Landlord, its agents, employees, or
contractors. Tenant shall keep its sewers and drains open and clear to the
perimeter of the Premises, and shall keep the hallways and/or sidewalks and
common areas adjacent to the Premises clean and free of debris created by
Tenant. Tenant shall reimburse Landlord on demand for the cost of damage to the
Premises, Building 3 or Landlord's Parcels caused by Tenant or its employees,
agents, customers, suppliers, shippers, contractors, or invitees which is in
excess of any proceeds received by Landlord from the insurance for Building 3
maintained by Landlord pursuant to Section 14.2. If Tenant shall fail to comply
with the
12
foregoing requirements within ten (10) days after notice from Landlord, Landlord
may (but shall not be obligated to) effect such maintenance and repair, and the
cost thereof together with interest thereon at the Interest Rate (defined below)
shall be due and payable as Additional Rent to Landlord within thirty (30) days
following receipt of Landlord's written statement of such costs.
See Addendum A-9.3.
9.4 Tenant in keeping the Premises in good order, condition, and repair
shall exercise and perform good maintenance practices including obtaining, at
its expense, a contract for the repair and maintenance of the air conditioning
and heating system, if any, exclusively serving the Premises and provide
Landlord with a copy of said contract within thirty (30) days after Tenant takes
possession of the Premises. The contract shall be for the benefit of Landlord
and Tenant and in a form and placed with a licensed contractor satisfactory to
Landlord. Tenant 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, except to the extent
of Landlord's obligations expressly set forth in this Lease.
9.5 Tenant shall not make any exterior or structural alterations,
changes or improvements in or to Building 3 or material modifications to any of
the Base Building operating systems without first obtaining Landlord's prior
written consent (which may be withheld by Landlord in its sole discretion as to
exterior alterations, and which shall not be unreasonably withheld or delayed
with respect to structural or Base Building system modifications), and all of
the same shall be at Tenant's sole cost. Landlord's consent shall not be
required for any interior cosmetic alterations or alterations not affecting Base
Building exterior, structure or systems as referenced above, or for any
alterations, changes, replacements or improvements to any interior nonstructural
Special Tenant Improvements or any other elements of Tenant's Work; provided
that Tenant shall obtain required permits and comply with all other Legal
Requirements and all requirements of Article 8 and Exhibit C regarding
construction by Tenant and shall notify Landlord not less than ten (10) days
prior to commencing any such alterations to give Landlord an opportunity to post
a notice of non-responsibility. Landlord may impose as a condition of its
consent (when required) such requirements as Landlord, in its reasonable
discretion, may deem necessary, including but not limited to, the requirement
that Tenant utilize for such purposes only contractors, materials, mechanics and
materialmen approved by Landlord, and that good and sufficient plans and
specifications be submitted to Landlord at such times as its consent is
requested. Further, Landlord's consent to any alteration which Tenant proposes
to make after the Commencement Date shall designate by written notice to Tenant
any of the alterations, additions and improvements (collectively, "ALTERATIONS")
which Landlord will require Tenant to remove at the expiration or termination of
the Lease and those Alterations (if any) which Tenant is not permitted to
remove. If Landlord so designates, Tenant shall prior to the expiration of the
Term promptly remove the Alterations designated to be removed and repair all
damage caused by such removal at its cost and with all due diligence, and shall
surrender the Premises with all Alterations which Tenant is required to leave.
Unless Landlord designates as a condition to granting its consent to any
Alterations that removal by Tenant is required or prohibited, Tenant shall have
the right, but not the obligation to remove from the Premises the Alterations
for which consent was obtained so long as Tenant promptly repairs any damage
resulting from such removal. Except as otherwise expressly provided herein, all
Alterations made by Tenant (specifically excluding Tenant's furniture, trade
fixtures and equipment) shall become the property of Landlord and a part of the
realty and shall be surrendered to Landlord upon the expiration or sooner
termination of the Term hereof.
See Addendum A-9.5.
ARTICLE 10. OPERATING AND MAINTENANCE COSTS
10.1 All Common Areas in the Center shall be operated and maintained by
the Association pursuant to the Declaration. The term "COMMON AREAS" as used in
this Lease shall include all areas in the Center defined as Common Areas in the
Declaration. Landlord agrees to operate and maintain or cause to operated and
maintained during the term of this Lease all "Outdoor Areas" on Parcel 3. The
term "OUTDOOR AREAS" as used in this Lease shall include all areas on each of
Landlord's Parcels which are not Common Areas, or areas covered by buildings
("BUILDING AREAS") and are provided by Landlord for the convenience and
exclusive use of tenants of each of Landlord's Parcels, their respective
employees, customers, suppliers, shippers, contractors, and invitees.
13
10.2 The manner and method of operation, maintenance, service and repair
of the Common Areas and the expenditures therefore, shall be determined in
accordance with the provisions of the Declaration. The manner and method of
operation, maintenance, service and repair of the Outdoor Areas shall be
determined by Landlord and at minimum shall be comparable to similar projects in
the general vicinity of the Center and shall be in accordance with all Legal
Requirements. Except as otherwise expressly provided herein, Landlord reserves
the right from time to time to make changes in, additions to and deletions from
the Outdoor Areas and/or Common Areas including without limitation changes in
the location, size, shape and number of driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas, walkways and utility raceways and the purposes to
which they are devoted. Notwithstanding the foregoing, in no event shall
Landlord make or permit any modifications to Landlord's Parcels which materially
and adversely affect Tenant's access to or from Parcel 3 as shown on Exhibit A
or which would reduce the number of exclusive parking spaces on Parcel 3
available to Tenant, its agents, employees or contractors.
10.3 Tenant agrees to comply with such reasonable rules and regulations
as the Association may adopt from time to time for the orderly and proper
operation of the Common Areas. Tenant further agrees to comply with and observe
all reasonable rules and regulations established by Landlord from time to time
for use of the Outdoor Areas on Parcel 3, including, without limitation, the
removal, storage and disposal of refuse and rubbish. The initial Rules and
Regulations for the Center are attached hereto as Exhibit E. All rules and
regulations adopted or amended after the date of this Lease shall be reasonable
and non-discriminatory and shall be subject to the restrictions set forth in
Section A-4.9 of the Addendum.
10.4 During the Term of this Lease, Tenant shall pay to Landlord, as
Additional Rent, at the time and in the manner specified in Section 10.6 below,
Tenant's pro rata share of all costs and expenses of every kind and nature paid
or incurred by Association and/ or Landlord in operating, policing, protecting,
lighting, providing sanitation and sewer and other services to, insuring,
repairing, replacing and maintaining in neat, clean, good order and condition,
the Common Areas of the Center and all Outdoor Areas on Landlord's Parcels and
in operating, insuring and maintaining the Buildings on Landlord's Parcels
("OPERATING AND MAINTENANCE COSTS").
Subject to the exclusions set forth below, operating and maintenance
costs shall include, but shall not be limited to, the following: water, gas and
electricity to the Common Areas and Outdoor Areas, and security and guard
services; salaries and wages (including employment taxes and so called "fringe
benefits") or maintenance contracts of all persons and management personnel to
the extent engaged in the regular operation, servicing, repair and maintenance,
(specifically including the site coordinator and site superintendent, clerical,
and on-site and off-site accounting staff), repair and replacement of roofs of
Buildings on Landlord's Parcels, painting and cleaning the exterior surfaces of
such Buildings, premiums for liability, property damage and Workers'
Compensation insurance (which insurance Landlord, at all times during the Lease
term, agrees to maintain with respect to Landlord's Parcels); all costs
associated with obtaining such insurance or making any claims under such
insurance policies, including the cost of any deductible portion payable with
respect to claims (subject to subparagraphs (x) and (xxv)); personal property
taxes, if any; charges, excises, surcharges, fees or assessments levied by a
governmental agency by virtue of the parking facilities furnished; costs and
expenses of planting, replanting and relandscaping; trash disposal, if any;
lighting, including exterior building lights; utilities; maintenance and repair
of utility lines, sewers and fire detection and suppression systems (including
the water used in connection with such systems); sweeping, repairing and
resurfacing the blacktop surfaces; repainting and restriping; exterior signs and
any tenant directories for the Center as a whole, reserves set aside for
maintenance and repair, the cost of any environmental inspections; fees for any
licenses and/or permits required for operation of the Common Areas and Outdoor
Areas, or any part thereof; equipment rental or purchases, supplies, postage,
telephone, service agreements, deliveries, promotion, dues and subscriptions,
and reasonable legal fees.
The following costs shall be excluded from the operating and maintenance
costs payable by Tenant:
(i) the costs of the initial construction of the Center, including
the Buildings, roads, parking lots, utility lines and similar
improvements shown on Exhibit A;
(ii) debt service (including, without limitation, principal,
interest, late fees, prepayment fees, principal, points, impound
payments and all other charges) with respect to any financing
relating to
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Landlord's acquisition or initial construction of the Center or
any portion thereof or any refinancing of such costs;
(iii) any fees or other amounts payable with respect to any ground
lease now or hereafter affecting any portion of the Center;
(iv) any costs, fines or penalties incurred as a result of any
violation of laws, rules or regulations by Landlord, its agents,
employees or contractors;
(v) the cost of any items for which Landlord is reimbursed (or if
Landlord fails to carry the insurance required by Section 14.2,
would have been so reimbursed) by insurance proceeds,
condemnation awards, other tenants of the Center, or for which
Landlord is otherwise actually reimbursed;
(vi) any real estate brokerage commissions or other costs (including,
without limitation, finder's fees, legal fees, space planning
fees and review and supervision fees) incurred in connection
with the sale, leasing or subleasing of any portion of the
Center, including the renewal, extension or modification of
leases;
(vii) any costs representing amounts paid to an entity or person which
is an affiliate of Landlord which is in excess of the amount
which would have been paid in the absence of the relationship,
including, without limitation, any overhead or profit increment
paid to subsidiaries or affiliates of Landlord for goods and/or
services to any portion of the Center to the extent in excess of
the amount which would be paid to unaffiliated third parties on
a competitive basis;
(viii) capital improvements and expenditures shall be amortized over
the useful life of the capital item in accordance with GAAP;
(ix) non-cash items, such as deductions for depreciation or
obsolescence of any improvements or equipment within or used in
connection with the Center, and reserves for future expenditures
(except reserves maintained by the Association pursuant to the
Declaration);
(x) costs incurred by Landlord for the repair of damage to the
Center caused by fire, windstorm, earthquake or other casualty,
condemnation or eminent domain; provided that an amount equal to
the deductible under Landlord's insurance policy may be
included, up to a maximum of $5,000 for property damage and
$25,000 for liability insurance (collectively the "EXISTING
DEDUCTIBLES"), unless otherwise approved by Tenant, and
specifically excluding any earthquake insurance deductible;
(xi) Landlord's general corporate overhead and general administrative
expenses (including memberships, travel, recruitment and
marketing);
(xii) any compensation or benefits paid to clerks or attendants for
parking operations of the Center, including validated parking
for any entity unless the revenues, if any, from such operations
are used to reduce the operating and maintenance costs;
(xiii) electric power, water or other utility costs for which any
tenant or occupant of the Center directly contracts with the
local public service company or for which any tenant is
separately metered or submetered and pays Landlord directly;
(xiv) penalties, late charges and interest incurred as a result of
Landlord's failure or negligence to make payments and/or to file
any returns (including tax or other informational returns) when
due, unless due to Tenant's failure to timely pay the Rent
hereunder;
(xv) Landlord's charitable or political contributions, membership
dues to organizations or expenses related to attendance at or
travel to meetings of political, charitable or business
organizations;
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(xvi) costs associated with the operation of the business of the
corporation, partnership or other entity which constitutes
Landlord as the same are distinguished from the costs of
operation of the Center, including partnership accounting and
legal matters, and costs of selling or mortgaging any of
Landlord's interest in the Center;
(xvii) any expenses for repairs or maintenance to the extent reimbursed
through warranties, service contracts or recoveries from
vendors;
(xviii) any costs incurred in connection with the defense of Landlord's
title to the Center or any portion thereof;
(xix) fines and penalties incurred by Landlord due to the violation by
Landlord or any tenant of the Center of the terms and conditions
of any lease at the Center, or fines or penalties incurred by
Landlord due to the violation by Landlord or any tenant of the
Center of any law, code, regulation or ordinance;
(xx) marketing, advertising and promotional expenditures ;
(xxi) any bad debt or expense, rent loss or reserves for bad debt or
rent loss;
(xxii) any amounts constituting "Taxes" as defined in and to the extent
payable pursuant to Article 7 of this Lease;
(xxiii) the costs of any building repairs, maintenance, replacement or
casualty insurance for any buildings other than Building 3;
(xxiv) any costs which would duplicate a cost included in the
Association charges payable by Tenant with respect to Parcel 3;
and
(xxv) any premiums for any policy of earthquake insurance with respect
to the Center or any portion thereof or any deductible amount
under such policies.
10.5 Tenant shall pay its pro-rata share of the operating and
maintenance costs described in Section 10.4 above. Tenant's pro-rata share of
operating and maintenance costs for the Common Areas of the Center shall be the
share of such costs allocated by the Association to Parcel 3 pursuant to the
Declaration. Tenant's pro rate share of all other operating and maintenance
costs shall be as follows: (i) costs related to repairs, maintenance,
replacement and casualty insurance for Building 3 shall be allocated entirely to
Tenant; (ii) if Landlord desires to increase the Existing Deductibles described
in Section 10.4 (x) above and Tenant does not approve the increase, Landlord may
obtain separate policies of property damage and liability insurance for the
Outdoor and Common Areas on Parcel 3 to maintain the Existing Deductibles and
the premiums for such insurance shall be allocated entirely to Tenant; (iii)
costs related to any Shared Areas allocable to Parcel 3 pursuant to the
Declaration shall be paid by Tenant in the proportion provided in the
Declaration; (iv) costs related to all other Outdoor Areas on Landlord's Parcels
shall be the ratio determined by dividing the square footage of Parcel 3 by the
total square footage of all of Landlord's Parcels; and (v) notwithstanding the
foregoing, operating costs which benefit only one or a portion of all of
Landlord's Parcels shall be equitably allocated by Landlord only among the
Parcels benefited either by GLA or Parcel square footage, as applicable in
Landlord's reasonable business judgment. Landlord's estimate of Tenant's initial
pro rata share based on current calculations as outlined above is that amount
set forth in Paragraph 1(d) above.
10.6 As Additional Rent, Tenant shall pay Landlord monthly on the first
day of each month, following the Commencement Date and continuing on the first
day of each month thereafter during the Term hereof, an operating and
maintenance charge in an amount estimated by Landlord to be Tenant's share of
the "operating and maintenance costs".
The initial monthly operating and maintenance charge shall be the amount
estimated by Landlord as set
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forth in Paragraph 1(d). Landlord may adjust said monthly charge at the end of
each calendar year thereafter on the basis of Landlord's reasonably anticipated
costs for the following calendar year.
10.7 Within one hundred twenty (120) days after the end of each calendar
year, Landlord shall furnish to Tenant a statement showing the total operating
and maintenance costs, Tenant's share of such costs, and the total of the
monthly payments made by Tenant to Landlord during the calendar year just ended.
Landlord shall keep good and accurate books and records concerning the
operation, maintenance and management of the Landlord's Parcels, and Tenant and
its agents shall have the right, upon twenty (20) days' written notice given
within nine (9) months after receipt of the statement for a calendar year, and
at Tenant's sole cost and expense to audit, inspect and copy such books and
records with respect to such calendar year at the office where the same are
located. If such audit discloses that the annual statement has overstated the
actual operating and maintenance expenses for the calendar year under review,
Landlord shall rebate to Tenant the amount by which Tenant has been overcharged
or, at Tenant's election, Tenant may offset such amount against operating and
maintenance charges becoming due; and if the audit discloses that Landlord's
annual statement has overstated such charges by more than five percent (5%),
then, in addition to rebating to Tenant any overcharge, Landlord shall also pay
the reasonable costs incurred by Tenant for such audit. If Landlord disputes the
results of Tenant's audit, the parties shall submit the dispute for resolution
by arbitration in accordance with the procedures set forth in Section 10.4 of
the Declaration, which shall be deemed to be incorporated herein by this
reference. The decision of the arbitrator shall be binding and conclusive on the
parties.
10.8 If Tenant's share of the operating and maintenance costs for the
accounting period exceeds the payments made by Tenant, Tenant shall pay Landlord
the deficiency within ten (10) days after the receipt of Landlord's statement.
If Tenant's payments made during the accounting period exceed Tenant's pro-rata
share of the operating and maintenance costs, Tenant may deduct the amount of
the excess from the estimated payments next due to Landlord. If a credit remains
at the end of the Lease Term, such credit shall be refunded by Landlord to
Tenant within twenty (20) business days thereafter. The obligations of Landlord
and Tenant under this Section 10.8 shall survive the termination of this Lease.
ARTICLE 11. TRADE FIXTURES AND SURRENDER
11.1 Upon the expiration or sooner termination of the Term hereof,
Tenant shall surrender the Premises including, without limitation, all apparatus
and fixtures then upon the Premises, in good condition and repair, reasonable
wear and tear excepted, broom clean and free of trash and rubbish, subject,
however to the following:
a. Tenant shall remove all Alterations which Landlord has
designated to be removed pursuant to Section 9.5 above and shall leave all
Alterations which Landlord has designated pursuant to that Section must remain;
b. If no consent was required or obtained, Tenant shall either
remove or leave all Alterations which Landlord prior to the end of the Term
designates in writing to Tenant must be removed or left in place;
c. Tenant at its election may remove or leave all Alterations
with respect to which Landlord has not made a designation as described in (a) or
(b) above.
d. Tenant shall remove all of Tenant's Personal Property (as
defined in Section 11.3 below).
e. Tenant shall repair all damage caused by removal of its
Personal Property and any Alterations Tenant is permitted to remove.
Notwithstanding anything to the contrary herein, Tenant
Improvements and any Special Tenant Improvements shall be the property of
Landlord throughout the Term to the extent of the amount of the Tenant
Improvement Allowance, and such improvements may not be removed by Tenant
without Landlord's prior written consent. To the extent the costs of Tenant
Improvements and/or Special Tenant Improvements exceed the Tenant Improvement
Allowance, such improvements shall be owned by Tenant throughout the Term. At
the end of the Term, all Tenant Improvements and Special Tenant Improvements
which Tenant is not required to remove in
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accordance with the terms hereof shall be surrendered by Tenant without any
injury, damage or disturbance thereto, and Tenant shall not be entitled to any
payment therefore.
11.2 Consistent with Section 4.7, Tenant shall notify Landlord in
writing of the manner and means in which it will remove any and all Hazardous
Substances used in the Premises during its occupancy. Tenant shall also certify
in writing upon delivery of Premises to Landlord on the date of the Lease
expiration that all Hazardous Substances were removed in accordance with all
governmental and regulatory laws.
11.3 Moveable trade fixtures, furniture and other personal property
(collectively, Tenant's "PERSONAL PROPERTY") installed in the Premises by Tenant
at its cost shall be Tenant's property unless otherwise provided in Section 11.1
above and Tenant shall remove all of the same prior to the termination of this
Lease and at its own cost repair any damage to the Premises and Parcel 3 caused
by such removal. If Tenant fails to remove any of such property, Landlord may at
its option retain such property as abandoned by Tenant and title thereto shall
thereupon vest in Landlord, or Landlord may remove the same and dispose of it in
any manner and Tenant shall, upon demand, pay Landlord the actual expense of
such removal and disposition plus the cost of repair of any and all damage to
said Premises and the building thereto resulting from or caused by such removal.
ARTICLE 12. DAMAGE OR DESTRUCTION
12.1 Except as otherwise provided in Section 12.2 below, if the Premises
are damaged and destroyed by any casualty covered by fire and special extended
coverage insurance policies which Landlord is required to provide pursuant to
Article 14, Landlord shall repair such damage as soon as reasonably possible, to
the extent of the available proceeds, and the Lease shall continue in full force
and effect.
12.2 If the Premises are damaged or destroyed by any casualty covered by
Landlord's fire and special extended coverage insurance policies which Landlord
is required to provide pursuant to Article 14, to the extent of seventy-five
percent (75%) or more of the replacement cost thereof, or to the extent of
twenty-five percent (25%) or more of the replacement cost of the Premises if the
damage occurs during the last twelve (12) months of the Term, or if the
insurance proceeds which are received by Landlord, under the policies Landlord
is required to provide, are not sufficient to repair the damage (specifically
including any insufficiency due to payment of such proceeds to Landlord's
lender, if required), then Landlord may, at Landlord's option, either (i) repair
such damage as soon as reasonably possible, in which event this Lease shall
continue in full force and effect, or (ii) cancel and terminate this Lease as of
the date of the occurrence of such damage. Landlord shall deliver to Tenant
written notice of Landlord's election within sixty (60) days after the date of
the occurrence of the damage, which notice shall also specify the expected time
to restore the Premises if Landlord elects to repair the damages.
See Addendum A-12.2.
12.3 If at any time during the Term the Premises are damaged and such
damage was caused by a casualty not covered under the insurance policy Landlord
is required to carry pursuant to Section 14.2, Landlord may, at its option,
either (i) repair such damage as soon as reasonably possible at Landlord's
expense, in which event this Lease shall continue in full force and effect, or
(ii) cancel and terminate this Lease as of the date of the occurrence of such
damage, by giving Tenant written notice of Landlord's election to do so within
thirty (30) days after the date of occurrence of such damage, in which event
this Lease shall so terminate unless within thirty (30) days thereafter Tenant
agrees to repair the damage at its cost and expense or pay for Landlord's repair
of such damage.
12.4 Notwithstanding anything to the contrary herein, if it is
determined that the damage or destruction resulting from a casualty cannot be
repaired within twelve (12) months following the date of casualty, Tenant may
terminate this Lease by written notice delivered to Landlord within thirty (30)
days following Tenant's receipt of Landlord's written notice given under Section
12.2 or 12.3 above.
12.5 In the event of any damage or destruction the Base Rent and all
Additional Rent payable by Tenant hereunder shall be proportionately reduced
from the date of casualty until the completion by Landlord of any repair or
restoration pursuant to this Article 12 (provided that the abatement period
shall not exceed twelve (12)
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months). Said reduction shall be based upon the extent to which the damage or
the making of such repairs or restoration shall interfere with Tenant's business
conducted in the Premises.
12.6 Landlord shall in no event be required or obligated to repair,
restore or replace any of Tenant's Personal Property. Landlord shall restore the
Tenant Improvements and Special Tenant Improvements (if any) to the extent of
insurance proceeds received by Landlord. In the event of a termination of this
Lease pursuant to this Article 12, Landlord shall pay to Tenant from the
proceeds of the insurance payable to Landlord with respect to the Tenant
Improvements and Special Tenant Improvements an amount equal to the unamortized
cost of Tenant's ownership interest in the Tenant Improvements and the Special
Tenant Improvements.
12.7 In the event of a dispute by the parties regarding the extent of
damage, duration of repair or rights of termination under Article 12 or 13 only
of the Lease, either party can request arbitration within ninety (90) days after
the date of the damage has occurred. In such event the dispute shall be resolved
by arbitration in accordance with the procedures set forth in Section 10.4 of
the Declaration. The decision of the arbitrator shall be binding and conclusive
on the parties.
ARTICLE 13. EMINENT DOMAIN
13.1 If all or substantially all of the Premises shall be taken or
appropriated by any public or quasi-public authority under the power of eminent
domain (or similar law authorizing the involuntary taking of private property,
which shall include a sale in lieu thereof to a public body), either party
hereto shall have the right, at its option, to terminate this Lease effective as
of the date possession is taken by said authority, and Landlord shall be
entitled to any and all income, rent, award and any interest thereon whatsoever
which may be paid or made in connection with such public or quasi-public use or
purpose. Tenant shall have no claim against Landlord for any portion of
Landlord's award and shall not make a claim for the value of any unexpired term
of this Lease.
13.2 If only a portion of the Premises is taken such that the Premises
are still accessible and usable for the operation of Tenant's business, then
this Lease shall continue in full force and effect and the proceeds of the award
shall be used by Landlord to restore the remainder of the improvements on the
Premises so far as practicable to a complete unit of like quality and condition
to that which existed immediately prior to the taking, and all Rent payable by
Tenant hereunder shall be reduced in proportion to the floor area of the
Premises which is no longer available for Tenant's use. Landlord's restoration
work shall not exceed the scope of work done by Landlord in originally
constructing the Premises and the cost of such work shall not exceed the amount
of the award received by Landlord with respect to the Premises.
13.3 Nothing hereinbefore contained shall be deemed to deny to Tenant
its right to seek a separate award from the condemning authority for the
unamortized costs of Tenant's ownership interest in the Tenant Improvements and
Special Tenant Improvements, damage to its trade fixtures and personal property,
relocation expenses or loss of goodwill.
ARTICLE 14. INSURANCE
14.1 Tenant shall, at all times during the Term hereof, at its expense,
carry and maintain insurance policies in the amounts and in the form hereafter
provided:
(a) COMMERCIAL LIABILITY AND PROPERTY DAMAGE: Commercial general
liability insurance in an amount not less than One Million Dollars ($1,000,000)
per occurrence and Two Million Dollars ($2,000,000) in the general aggregate of
bodily injury and property damage insuring against liability of the insured with
respect to the Premises or arising from the maintenance, use or occupancy
thereof. All such insurance shall include contractual liability insurance for
the bodily injury, personal injury and property damage liability assumed by
Tenant in Article 16 hereof. Said insurance shall provide that Landlord is named
as an additional insured and will have a "separation of insureds" clause.
Landlord's recovery under Tenant's insurance as an additional insured shall
apply to loss or damages resulting from Tenant's negligence and shall not be
restricted due to any contributory negligence on the part of Landlord. However,
Tenant's insurance shall not be responsible for loss or damage that is
determined to be due to the sole negligence of Landlord. The insurance by this
policy shall be primary insurance. The liability
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insurance required to be provided by Tenant shall be applicable to claims
incurred by reason of events with respect to the Premises or arising from the
maintenance, use or occupancy thereof during the term of this Lease, regardless
of when such claims shall be first made against Tenant and/or Landlord. Should
any required liability insurance be written on a claims-made basis, Tenant shall
continue to provide evidence of such coverage beyond the term of this Lease, for
a period mutually agreed upon by Landlord and Tenant at the time of termination,
but in no event for a period of less than five years. Not more frequently than
once each year, if in the opinion of Landlord's lender or of the insurance
consultant retained by Landlord, the amount of liability insurance coverage at
that time is not adequate, Tenant shall increase the insurance coverage as
either required by Landlord's lender or recommended by Landlord's insurance
consultant.
(b) TENANT PERSONAL PROPERTY: Insurance covering all of Tenant's trade
fixtures, merchandise and other personal property from time to time in the
Premises in an amount equal to their full replacement cost from time to time,
providing protection against the "risks of physical damage" as provided in the
ISO Causes of Loss -- Special Form (CP 10 30), or equivalent insurance company
form. The proceeds of such insurance shall, so long as this Lease remains in
effect, be used to repair or replace the property damaged or destroyed, as
determined by Tenant.
(c) WORKER'S COMPENSATION: Worker's Compensation insurance as required
by the State of California.
(d) POLICY FORM: All insurance to be carried by Tenant hereunder shall
be in companies, on forms and with loss payable clauses satisfactory to
Landlord. The commercial liability and property damage insurance carried by
Tenant pursuant to Section 14.1(a) above shall name Landlord, its managers,
their officers, directors, partners, employees and agents as additional
insureds. Each policy shall include a notice of cancellation to additional
insured on the Additional Insured endorsement providing that no such policy
shall be canceled except upon thirty (30) days advance notice to all additional
insureds by the issuing company in the event of cancellation. Tenant shall have
the right to maintain required insurance under blanket policies provided that
Landlord and such parties as Landlord may reasonably designate from time are
named therein as additional insureds (as to Tenant's liability policies)and that
the coverage afforded Landlord will not be reduced or diminished by reason
thereof, including self funded insurance reserves.
(e) EVIDENCE OF INSURANCE: Concurrent with delivery of possession of the
Premises to Tenant, Tenant shall provide Landlord with the following evidence of
insurance:
(i) Certificate evidencing that each of the insurance policies
required in subparagraphs (a), (b) and (c) above are in full force and effect,
and
(ii) A copy of the applicable provision or endorsement from each
of Tenant's policies specifying that Landlord and the parties designated by
Landlord are additional insureds, that the insurer recognizes the waiver of
subrogation set forth in Article 15 hereof, and that the insurer agrees not to
cancel the policy without the notice to Landlord specified in subparagraph (d)
above.
14.2 Subject to reimbursement by Tenant as provided in Article 10
herein, Landlord shall obtain and keep in force during the term hereof, a policy
or policies of insurance covering loss or damage to Building 3 and improvements
on Landlord's Parcels. Landlord's insurance shall cover the "risks of physical
damage" as provided in the ISO Causes of Loss -- Special Form (CP 10 30), or
equivalent insurance company form, together with an endorsement providing for
rental income insurance covering all Rent payable by Tenant hereunder for a
period of twelve (12) months.
14.3 Landlord's policy described in Section 14.2 shall also insure all
Tenant Improvements and Special Tenant Improvements for one hundred percent of
the replacement cost thereof, with an agreed amount endorsement in lieu of
coinsurance. Tenant shall pay to Landlord the cost of the insurance covering the
Tenant Improvements and Special Tenant Improvements as provided in Article 10
herein. Tenant acknowledges that Landlord's insurance on the Tenant and Special
Tenant Improvements will not include earthquake insurance. Upon Tenant's
request, Landlord shall obtain such coverage at Tenant's sole cost and expense.
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14.4 If Tenant shall fail to procure and maintain any insurance policy
required herein, Landlord may (but shall not be obligated to), after reasonable
written notice to Tenant procure the same on Tenant's behalf, and the cost of
same shall be payable as Additional Rent within ten (10) business days after
written demand therefore by Landlord. Tenant's failure to pay such Additional
Rent shall constitute an Event of Default of this Lease, and Landlord may,
without any further notice, exercise its remedies specified in Article 25
hereof.
ARTICLE 15. WAIVER OF SUBROGATION
Any fire and special extended coverage insurance and any other property
damage insurance carried by either party with respect to Landlord's Parcels, the
Common Areas, the Premises and property contained in the Premises or occurrences
related to them shall include a clause or endorsement denying to the insurer
rights of subrogation against the other party to the extent rights have been
waived by the insured prior to occurrence of damage or loss. Each party,
notwithstanding any provisions of this Lease to the contrary, waives any right
of recovery against the other for injury or loss due to hazards covered by
insurance containing such clause or endorsement to the extent that the damage or
loss is covered by such insurance.
ARTICLE 16. RELEASE AND INDEMNITY
16.1 Tenant shall indemnify, defend and hold harmless Landlord against
and from any and all claims, actions, damages, liability and expenses, including
reasonable attorneys' fees, arising from or out of Tenant's use of the Premises
or from the conduct of its business or from any activity, work, or other things
done, permitted or suffered by the Tenant in or about the Premises or Tenant's
reserved parking spaces. Tenant shall further indemnify, defend and hold
Landlord harmless from any and all claims arising from any negligent act or
omission or willful misconduct of Tenant, or any officer, agent, employee,
contractor, guest, or invitee of Tenant, and from all costs, damages, attorneys'
fees, and liabilities incurred in defense of any such claim of any action or
proceeding brought thereon, including any action or proceeding brought against
Landlord by reason of such claim. Tenant, as a material part of the
consideration to Landlord, hereby assumes all risk of damage to property or
injury to persons in the Premises, from any cause except to the extent arising
out of or resulting from Landlord's (or its agents', employees' or contractors')
negligent act or omission or willful misconduct. Tenant shall give prompt notice
to Landlord in case of casualty or accidents in the Premises.
16.2 Landlord shall indemnify, defend and hold harmless Tenant against
and from any and all claims, actions, damages, liability and expenses, including
reasonable attorneys' fees, arising from or out of any activity, work, or other
things done by Landlord, its agents, employees or contractors in or about the
Outdoor Areas and Common Areas on Landlord's Parcels. Landlord shall further
indemnify, defend and hold Tenant harmless from any and all claims arising from
the negligent act or omission or willful misconduct of Landlord, or any officer,
agent, employee, or contractor of Landlord while on any of Landlord's Parcels or
Buildings, and from all costs, damages, attorneys' fees, and liabilities
incurred in defense of any such claim of any action or proceeding brought
thereon, including any action or proceeding brought against Tenant by reason of
such claim.
16.3 Except to the extent arising out of or resulting from Landlord's
negligent act or omission or willful misconduct, Landlord shall not be liable
for injury or damage which may be sustained by the person, goods, wares,
merchandise or property of Tenant, its employees, invitees or customers, or by
any other person in or about the Premises caused by or resulting from fire,
building vibrations or movement of floor slab, steam, electricity, gas, water or
rain which may leak or flow from or into any part of the Premises, or from the
breakage, leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures of the same, whether
said damage or injury results from conditions arising upon the Premises or from
other sources. Landlord shall not be liable for any damages arising from any act
or neglect of any other tenant of the Building. Notwithstanding the foregoing,
nothing contained herein shall limit any representations, warranties or
covenants of Landlord set forth in this Lease, or any warranties provided with
respect to work performed by Landlord's contractors. Further, notwithstanding
the foregoing, the terms of Article 12 shall govern with respect to any events
of casualty.
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ARTICLE 17. INSOLVENCY, ETC. OF TENANT
17.1 The filing of any petition in bankruptcy whether voluntary or
involuntary, or the adjudication of Tenant as bankrupt or insolvent, or the
appointment of a receiver or trustee to take possession of all or substantially
all of Tenant's assets, or an assignment by Tenant for the benefit of its
creditors, or any action taken or suffered by Tenant under any State or Federal
insolvency or bankruptcy act including, without limitation, the filing of a
petition for or in reorganization, or the taking or seizure under levy of
execution or attachment of the Premises or any part thereof, shall constitute a
breach of this Lease by Tenant, and in any one or more of said events this Lease
shall be deemed terminated to the extent such result is permitted by relevant
bankruptcy laws and statutes.
17.2 Landlord shall be entitled, notwithstanding any provision of this
Lease to the contrary, upon re-entry of the Premises in case of a breach under
this Article, to recover from Tenant as damages, and not as a penalty, such
amounts as are specified in Article 25, unless any statute governing the
proceeding in which such damages are to be proved shall lawfully limit the
amount thereof capable of proof, in which later event Landlord shall be entitled
to recover as and for its damages the maximum amount permitted under said
statute.
ARTICLE 18. PERSONAL PROPERTY AND OTHER TAXES
18.1 Tenant shall pay, before delinquency, any and all taxes and
assessments, sales, use, business, occupation or other taxes, and license fees
or other charges whatever levied, assessed or imposed upon its business
operations conducted in the Premises. Tenant shall also pay, before delinquency,
any and all taxes and assessments levied, assessed or imposed upon its
equipment, furniture, furnishings, trade fixtures, merchandise and other
personal property in, on or upon the Premises.
18.2 Tenant shall pay all taxes and assessments levied, assessed or
imposed on Tenant's trade fixtures and its leasehold improvements, regardless of
whether such improvements were installed and/or paid for by Tenant or by
Landlord, and regardless of whether or not the same are deemed to be a part of
the Building.
18.3 Tenant shall pay (or reimburse Landlord therefor forthwith on
demand) any excise tax, gross receipts tax, or any other tax however designated,
and whether charged to Landlord, or to Tenant, or to either or both of them,
which is imposed on or measured by or based on the rentals to be paid under this
Lease, or any estate or interest of Tenant, or any occupancy, use or possession
of the Premises by Tenant.
18.4 Nothing hereinabove contained in this Article shall be construed as
requiring Tenant to pay any inheritance, estate, succession, transfer, gift,
franchise, income or profits tax or taxes imposed upon Landlord.
ARTICLE 19. SIGNS
Tenant shall not place, construct or maintain on the windows, doors or
exterior walls or roof of the Premises or any interior portions that may be
visible from the exterior of the Premises, any signs, advertisements, names,
trademarks or other similar item without Landlord's consent, which consent shall
not be unreasonably withheld or delayed so long as the signage Tenant installs
complies with all Legal Requirements and the master sign program for the Center.
Upon written notice from Landlord specifying the violation in reasonable detail,
Tenant shall, at Tenant's cost, remove any item so placed or maintained which
does not comply with the provisions of this Section. Landlord agrees that
Landlord shall not install or permit the installation of signs or billboards on
the exterior walls and/or the roof of the Premises.
See Addendum 32.25.
ARTICLE 20. ASSIGNMENT AND SUBLETTING
20.1 Subject to the terms of Section 20.4, Tenant shall not voluntarily,
involuntarily, or by operation of law assign, transfer, hypothecate, or
otherwise encumber this Lease or Tenant's interest therein, and shall not sublet
nor permit the use by others of the Premises or any part thereof without first
obtaining in each instance Landlord's written consent. If consent is once given
by Landlord to any such assignment, transfer, hypothecation or subletting, such
consent shall not operate as a waiver of the necessity for obtaining Landlord's
consent to any subsequent
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assignment, transfer, hypothecation or sublease, and no assignment shall release
Tenant from any liability hereunder. Any such assignment or transfer without
Landlord's consent shall be void and shall, at Landlord's option, constitute an
Event of Default of this Lease. This Lease shall not, nor shall any interest
therein, be assignable as to Tenant's interest by operation of law, without
Landlord's express prior written consent.
20.2 The consent of Landlord required under Section 20.1 above shall not
be unreasonably withheld or delayed. Should Landlord withhold its consent for
any of the following reasons, the withholding shall be deemed to be reasonable:
(a) Conflict of the proposed use with other uses in the Building or
Center;
(b) Financial inadequacy of the proposed subtenant or assignee;
(c) A proposed use which would diminish the reputation of the Center
or the other businesses located therein;
(d) A proposed use which would have a detrimental impact on the
common facilities or the other tenants in the Center.
20.3 Each assignee or transferee shall agree to assume and be deemed to
have assumed this Lease and shall be and remain liable jointly and severally
with Tenant for the payment of all rents due here under, and for the due
performance during the term of all the covenants and conditions herein set forth
by Tenant to be performed. No assignment or transfer shall be effective or
binding on Landlord unless said assignee or transferee shall, concurrently,
deliver to Landlord an assumption agreement by said assignee or transferee
assuming all obligations of Tenant under this Lease.
20.4 Notwithstanding anything to the contrary herein, Landlord's consent
shall not be required for any assignment, transfer or sublease to any entity
which controls, is controlled by or under common control with Tenant, or to any
entity resulting from a reorganization, merger or sale of substantially all of
the assets of Tenant. The term "CONTROL" shall mean the ownership of at least
50% of the stock or assets of Tenant. Further, Landlord's consent shall not be
required for any offering of the stock of Tenant on the public market or any
open market transactions involving the stock of Tenant. If Tenant is not a
publicly traded corporation, or if Tenant is an unincorporated association or a
partnership, the transfer, assignment, or hypothecation or any stock or interest
in such corporation, association or partnership in the aggregate of in excess of
fifty percent (50%) shall be deemed an assignment within the meaning of this
Article, except transfers in connection with Tenant becoming a publicly traded
corporation. Tenant shall give Landlord prior written notice of all transfers,
whether or not consent is required, and in no event shall Tenant be released
from any of its obligations under this Lease.
20.5 If Tenant intends to assign this Lease and Landlord's consent to
such assignment is required, Tenant shall give prior written notice to Landlord
of each such proposed assignment or subletting specifying the proposed assignee
or subtenant and the terms of such proposed assignment or sublease. Landlord
shall, within fifteen (15) business days thereafter, notify Tenant in writing
either, that (i) it consents (subject to any conditions of consent that may be
imposed by Landlord) or does not consent to such transaction, or (ii) it elects
to cancel this Lease in which event the parties would have no further
obligations to each other except with respect to obligations which arose prior
to the effective date of termination or which otherwise survive the termination
of this Lease.
20.6 In the event of an assignment or subletting which requires
Landlord's consent pursuant to this Article 20, Tenant shall assign to Landlord
75% of any and all consideration paid to Tenant directly or indirectly for the
assignment by Tenant of its leasehold interest, and 75% of any and all
subrentals payable by sublessees to Tenant which are in excess of the Rent
payable by Tenant hereunder. Tenant's brokerage fees shall be paid by Tenant and
deducted from excess proceeds on a pro rata basis monthly over the term of the
sublease.
20.7 Tenant agrees to reimburse Landlord for Landlord's reasonable costs
and attorneys fees' incurred in connection with the processing and documentation
of any requested assignment, transfer, hypothecation or
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subletting of this Lease aforesaid, whether or not such consent is granted, in
an amount not to exceed $2500 in each instance.
ARTICLE 21. RIGHTS RESERVED BY LANDLORD
Subject to Tenant's reasonable security and trade secret requirements,
upon reasonable prior notice, Landlord or its agents shall have the right to
enter the Premises for the purposes of:
(a) Inspection of the Premises and the equipment therein, not to
exceed once per calendar quarter (or not to exceed once per year
for inspections of any clean room), except in the event of an
emergency or unless a known problem exists or Landlord is
responding to a third party complaint involving the Premises;
(b) Making repairs or improvements to the Premises and/or Building 3
which are the responsibility of Landlord under the terms of this
Lease;
(c) Performing remodeling, construction or other work incidental to
any portion of the Building 3, including, without limitation,
the premises of another tenant adjacent to, above or below the
Premises. Landlord agrees to coordinate the timing and staging
of any major construction program with Tenant
(d) Showing the Premises to persons wishing to purchase or make a
mortgage loan upon the same;
(e) Posting notice of non-responsibility;
(f) Posting "For Lease" signs and showing the Premises to persons
wishing to rent the Premises during the last six (6) months of
the term of this Lease.
ARTICLE 22. INTENTIONALLY DELETED
ARTICLE 23. RIGHT OF LANDLORD TO PERFORM
All covenants to be performed by Tenant hereunder shall be performed by
Tenant at its sole cost and expense and without any abatement of any rent to be
paid hereunder, subject to the terms and conditions set forth in this Lease. If
Tenant shall fail to pay any sum, other than rent, required to be paid by it or
shall fail to perform any other act on its part to be performed, and such
failure shall continue beyond the applicable notice and grace period set forth
in Article 25, Landlord may (but shall not be obligated to) and without waiving
or releasing Tenant from any of its obligations, make any such payment or
perform any such other act on Tenant's part to be made or performed as herein
provided. All sums so paid by Landlord and all necessary incidental costs,
together with interest at the Interest Rate from the date of such payment by
Landlord shall be payable by Tenant as Additional Rent within thirty (30) days
after Landlord's written demand therefor. Tenant's failure to pay such
Additional Rent shall constitute an Event of Default of this Lease, and Landlord
may, without any further notice, exercise its remedies specified in Article 25
hereof.
ARTICLE 24. LANDLORD DEFAULT
24.1 If Landlord shall be in default of any covenant of this Lease to be
performed by it, Tenant, prior to exercising any right or remedy it may have
against Landlord on account thereof, shall give Landlord a thirty (30) day
written notice of such default, specifying the nature of such default.
Notwithstanding anything to the contrary elsewhere in this Lease, Tenant agrees
that if the default specified in said notice is of such nature that it can be
cured by Landlord, but cannot with reasonable diligence be cured within said
thirty (30) day period, then such default shall be deemed cured if Landlord
within said thirty (30) days period shall have commenced the curing thereof and
shall continue thereafter with all due diligence to cause such curing to proceed
to completion.
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24.2 If Landlord shall fail to cure a default of any covenant of this
Lease to be performed by it within the time period provided in Section 24.1, the
same shall be deemed an Event of Default by Landlord and, subject to Section
24.3, Tenant may pursue all remedies available at law or in equity and may
recover all costs and expenses incurred by Tenant by reason of such default by
Landlord. Notwithstanding the foregoing, if Tenant shall recover a money
judgment against Landlord, such judgment shall be satisfied solely out of the
right, title and interest of Landlord in the Premises and its underlying realty
and out of the rents, or other income from said property receivable by Landlord,
or out of the consideration received by Landlord's right, title and interest in
said property, but neither Landlord nor any partner or joint venture of Landlord
shall be personally liable for any deficiency.
24.3 Tenant agrees to give any mortgagee and/or trust deed holders
("MORTGAGEE"), by registered mail, a copy of any notice of default served upon
the Landlord, provided that prior to such notice Tenant has been notified in
writing (by way of Notice of Assignment of Rents and Leases, or otherwise) of
the address of such Mortgagee. Tenant further agrees that if Landlord shall have
failed to cure such default within the time provided for in this Lease, then the
Mortgagee shall have an additional sixty (60) days within which to cure such
default or if such default cannot be cured within that time, then such
additional time as may be necessary to cure such default shall be granted if
within such sixty (60) days Mortgagee has commenced and is diligently pursuing
the remedies necessary to cure such default (including, but not limited to,
commencement of foreclosure proceedings, if necessary to effect such cure), in
which event the Lease shall not be terminated while such remedies are being so
diligently pursued.
ARTICLE 25. DEFAULT AND REMEDIES
25.1 The occurrence of any of the following shall constitute an "EVENT
OF DEFAULT" under this Lease by Tenant:
(a) Any failure by Tenant to pay when due any of the Rent required to be
paid by Tenant hereunder where such failure continues for five (5) business days
after Tenant's receipt of written notice that the same is overdue;
(b) A failure by Tenant to observe and perform any other provision of
this Lease to be observed or performed by Tenant where such failure continues
for thirty (30) days after written notice thereof from Landlord; provided, that
if the nature of such default is such that the same cannot with due diligence be
cured within said period, Tenant shall not be deemed to be in default if it
shall within said period commence such during and thereafter diligently
prosecutes the same to completion;
(c) Any default by Tenant under any other lease between Landlord and
Tenant for other premises in the Center;
(d) The abandonment or vacation of the Premises, provided that if Tenant
has vacated the Premises and is actively seeking a subtenant or assignee, no
default shall be deemed to exist under this Lease so long as Tenant is paying
the Rent required to be paid hereunder; and
(e) Any other event herein specified to be an Event of Default under
this Lease.
25.2 In the event of any Event of Default by Tenant as aforesaid, in
addition to any and all other remedies available to Landlord at law or in
equity, Landlord shall have the right to immediately terminate this Lease and
all rights of Tenant hereunder by giving written notice to Tenant of its
election to do so. If Landlord shall elect to terminate this Lease, then it may
recover from Tenant:
(a) The worth at the time of the award of the unpaid rent payable
hereunder which had been earned at the date of such termination; plus
(b) The worth at the time of the award of the amount by which the unpaid
rent which would have been earned after termination and until the time of the
award exceeds the amount of such rental loss which Tenant proves could have been
reasonably avoided; plus
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(c) The worth at the time of the award of the amount by which the unpaid
rent for the balance of the term after the time of the award exceeds the amount
of such rental loss which Tenant proves could be reasonably avoided; plus
(d) Any other amounts necessary to compensate Landlord for all detriment
proximately caused by Tenant's failure to perform its obligations hereunder or
which, in the ordinary course of affairs, would likely result therefrom; and
(e) At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted by applicable California law from time to
time.
25.3 As used in subparagraphs (a) and (b) above, the "worth at the time
of the award" is computed by allowing interest at the rate of twelve (12%)
percent per annum (the "INTEREST RATE"). As used in subparagraph (c) above, the
"worth at the time of the award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award plus one (1%) percent.
25.4 Following the occurrence of an Event of Default by Tenant, Landlord
shall also have the right, with or without terminating this Lease, to re-enter
the Premises and remove all property and persons therefrom, and any such
property may be removed and stored in a public warehouse or elsewhere at the
cost and for the account of Tenant, all in accordance with all Legal
Requirements.
25.5 If Landlord (in accordance with California Civil Code Section
1951.4) shall elect to re-enter as above provided or shall take possession of
the Premises pursuant to legal proceedings or pursuant to any notice provided by
law, and if Landlord has not elected to terminate this Lease, Landlord may
continue this Lease and may either recover all rental as it becomes due or relet
the Premises or any part or parts thereof for such term or terms and upon such
provisions as Landlord, in its sole judgment, may deem advisable and shall have
the right to make repairs to and alterations of the Premises.
25.6 If Landlord shall elect to relet as aforesaid, then rentals
received by Landlord therefrom shall be applied as follows:
(a) to the payment of any indebtedness of Tenant to Landlord other than
rent due hereunder from Tenant;
(b) to the payment of all costs and expenses incurred by Landlord in
connection with such reletting;
(c) to the payment of the cost of any alterations of and repairs to the
Premises; and
(d) to the payment of rent due and unpaid hereunder and the residue, if
any, shall be held by Landlord and applied in payment of future rent as the same
may become due and payable hereunder.
In no event shall Tenant be entitled to any excess rental received by
Landlord over and above that which Tenant is obligated to pay hereunder. Should
that portion of such rentals received from such reletting during any month,
which is applied to the payment of rent hereunder, be less than the rent payable
hereunder during that month by Tenant, then Tenant shall pay such deficiency to
Landlord forthwith upon demand, and said deficiency shall be calculated and paid
monthly. Tenant shall also pay Landlord as soon as ascertained and upon demand,
all costs and expenses incurred by Landlord in connection with such reletting
and in making any such alterations and repairs which are not covered by the
rentals received from such reletting.
25.7 No re-entry or taking possession of the Premises by Landlord under
this Article shall be construed as an election to terminate this Lease unless a
written notice of such intention is given to Tenant or unless the termination
thereof be adjudged by a court of competent jurisdiction. Notwithstanding any
reletting without termination by Landlord because of Tenant's default, Landlord
may at any time after such reletting elect to terminate this Lease because of
such default.
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25.8 Nothing contained in this Article shall constitute a waiver of
Landlord's right to recover damages by reason of Landlord's efforts to mitigate
the damages to it caused by Tenant's default; nor shall anything in this Article
adversely affect Landlord's right, as in this Lease elsewhere provided, to
indemnification against liability for injury or damage to persons or property
occurring prior to a termination of this Lease.
25.9 Subject only to Article 31, if Landlord shall retain an attorney
for the purpose of collecting any rental due from Tenant or enforcing any other
covenant of this Lease, Tenant shall pay the reasonable fees of such attorney
for his services regardless of the fact that no legal proceeding or action may
have been filed or commenced.
25.10 Any unpaid rent and any other sums due and payable hereunder by
Tenant shall bear interest at the maximum lawful rate per annum from the due
date and until payment thereof.
25.11 The terms "RENT," "RENT" and "RENTAL" as used herein and elsewhere
in this Lease shall be deemed to be and mean the Base Rent, all Additional Rent,
rental adjustments and any and all other sums, however designated, required to
be paid by Tenant hereunder.
25.12 Tenant acknowledges that late payment by Tenant to Landlord of
rent will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of such costs being extremely difficult and impracticable to fix.
Such costs include, without limitation, processing and accounting charges, and
late charges that may be imposed on Landlord by the terms of any encumbrance and
note secured by any encumbrance covering the Premises. Therefore, if any
installment of rent due from Tenant is not received by Landlord when due more
than once in any calendar year during the Term, Tenant shall pay to Landlord as
additional rent an additional sum of six percent (6%) of the overdue rent as a
late charge. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by reason of late
payment by Tenant. Acceptance of any late charge shall not constitute a waiver
of Tenant's default with respect to the overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies available to Landlord.
25.13 If Landlord shall retain a collection agency for the purpose of
collecting any moneys due from Tenant arising out of an Event of Default
hereunder, Tenant shall pay all fees of such collection agency for their
services.
ARTICLE 26. PRIORITY OF LEASE AND ESTOPPEL CERTIFICATE
26.1 At Landlord's election, this Lease shall be either superior to or
subordinate to any and all trust deeds, mortgages, or other security
instruments, ground leases, or leaseback financing arrangements now existing or
which may hereafter be executed covering the Premises and/or the land underlying
the same or any part or parts of either thereof, and for the full amount of all
advances made or to be made thereunder together with interest thereon, and
subject to all the provisions thereof, all without the necessity of having
further instruments executed by Tenant to effectuate the same. Tenant agrees to
execute, acknowledge and deliver upon request by Landlord any and all documents
or instruments which are or may be deemed necessary or proper by Landlord to
more fully and certainly assure the superiority or the subordination of this
Lease and to any such trust deeds, mortgages or other security instruments,
ground leases, or leasebacks provided that as a condition to any such
subordination and if this Lease shall be made subordinate to any future security
instrument, any person or persons purchasing or otherwise acquiring any interest
at a foreclosure sale under said trust deed, mortgages or other security
instruments, or by termination of said ground leases or leasebacks, shall
continue this Lease in full force and effect in the same manner as if such
person or persons had been named as Landlord herein and this Lease shall
continue in full force and effect as aforesaid, and Tenant shall automatically
become the tenant of Landlord's successor in interest and shall attorn to said
successor in interest. The words "PERSON" and "PERSONS" as used herein or
elsewhere in this Lease shall mean individuals, partnerships, firms,
associations and corporations.
See Addendum A-26.1.
26.2 Landlord and Tenant shall at any time and from time to time
execute, acknowledge and deliver to the other party hereto, within ten (10)
business days after such party's written request therefor, a written statement
certifying as follows:
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(a) that this Lease is unmodified and in full force (or if there has
been modification thereof, that the same is in full force as modified and
stating the nature thereof);
(b) that to the best of its knowledge, there are no uncured defaults or
matters which, upon the passage of time and the giving of notice, or both, would
constitute a default or breach by Tenant or Landlord, as applicable (or if such
exist, the specific nature and extent);
(c) that no claims or defenses exist on the part of the certifying party
and no events exist that would constitute a basis for such claim or defense (or
if such exist, the specific nature and extent);
(d) the date to which any rents and other charges have been paid in
advance, if any;
(e) such other matters which are reasonably requested by the requesting
party with respect to the Lease and its status, including status of
construction; and
(f) in the case of Tenant's certificate, that Tenant will not enter into
any agreements or modification of the Lease without the prior written consent of
the lender specified by Landlord, provided such consent would not be
unreasonably withheld.
If Landlord or Tenant shall fail to execute and deliver any such
statement to the requesting party within ten (10) business days, the requesting
party may deliver a second written notice requesting the statement. If the party
required to deliver the statement fails to make such delivery within five (5)
business days following such second notice, the failure shall constitute an
Event of Default hereunder entitling the requesting party to pursue available
remedies as set forth in this Lease.
26.3 At Landlord's election, this Lease shall be subordinate to any and
all encumbrances, covenants, restrictions, conditions and easements of record
now existing or which hereafter may be executed ("RECORD MATTERS") covering the
Premises and/or the land underlying the same or any parts thereof without the
necessity of having further instruments executed by Tenant to effectuate the
same, provided that any future encumbrances shall be subject to the provision of
Section 26.1 above and any other Record Matters recorded after the date of this
Lease shall not materially and adversely affect Tenant's use of the Premises.
Landlord hereby confirms that it has no present knowledge of the existence of
any encumbrances, covenants, restrictions, conditions or easements of record
which now exist, or which will be recorded in the future with respect to Parcel
3, that would materially and adversely affect Tenant's use of the Premises other
than those shown in the title report for Center attached hereto as Exhibit H.
ARTICLE 27. HOLDING OVER
If, without the execution of a new lease or written extension of this
Lease, and with the consent of Landlord, Tenant shall hold over after the
expiration of the Term of this Lease, Tenant shall be deemed to be occupying the
Premises as a tenant from month-to-month, which tenancy may be terminated as
provided by law. During said tenancy, the Base Rent payable to Landlord by
Tenant shall be one hundred fifty percent (150%) of the Base Rent set forth in
Article 3 of this Lease which is payable immediately preceding the date of
expiration of this Lease, and upon all of the other terms, covenants and
conditions set forth in this Lease so far as the same are applicable.
If Tenant shall holdover and fail to surrender the Premises upon the
termination of this Lease without Landlord's consent, in addition to any other
liabilities to Landlord arising therefrom, Tenant shall and does hereby agree to
indemnify and hold Landlord harmless from loss or liability resulting from such
failure including, but not limited to, claims made by any succeeding tenant
founded on such failure.
ARTICLE 28. NOTICES
All notices, approvals, demands, consents or other communications
required or permitted under this Lease shall be in writing and shall be deemed
to have been given when personally served or received by certified mail,
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postage prepaid, or on the next business day sent by telefax, Express Mail,
Federal Express or similar reputable overnight delivery service, addressed to
the appropriate party at the address indicated next to each party's signature
below. Notwithstanding the foregoing, notices during the initial construction of
the Premises relating to construction matters shall be governed by the
provisions of Exhibit C.
ARTICLE 29. LIENS
29.1 Tenant shall pay all costs for work done by it or caused to be done
by it in the Premises and Tenant shall keep the Premises and the Center free and
clear of all mechanics' liens and other liens of account or work done for Tenant
or persons claiming under it. Notwithstanding the foregoing, Tenant shall have
no responsibility or liability with respect to liens filed with respect to the
Base Building, and Tenant Improvements or any other work performed by Landlord
pursuant to Article 8, Exhibit C or otherwise. Tenant agrees to and shall
indemnify and hold Landlord harmless against liability, loss, damage, costs,
attorneys' fees, and any other expenses on account of claims of liens of
laborers or materialmen for work performed or materials or supplies furnished
for Tenant or persons claiming under it. If any such lien shall attach to the
Premises or the Center by reason of any work performed by Tenant, Tenant shall
promptly, and in any event within twenty (20) days thereafter, discharge it as a
matter of record or bond over it. If necessary to accomplish same, Tenant shall
furnish and record a bond to insure the protection of Landlord, the Premises,
and the Center (including all buildings located thereon or of which they form a
part) from loss by virtue of any such lien.
29.2 Any bond furnished by Tenant pursuant to the provisions of Section
29.1 above shall be a lien release bond issued by a corporation authorized to
issue surety bonds in the State of California in an amount equal to one and
one-half the amount of such claim of lien. The bond shall meet the requirements
of Civil Code Section 3143 and shall provide for the payment of any sum that the
claimant may recover on the claim, together with said lien claimant's costs of
suit if he recovers therein.
29.3 If a mechanics' lien which is Tenant's responsibility pursuant to
Section 29.1 above has been filed, and Tenant shall not have discharged same of
record within the time permitted by that Section, Landlord may (but shall not be
obligated to) pay said claim and any costs, and the amount so paid, together
with reasonable attorneys' fees incurred in connection therewith shall be
payable by Tenant to Landlord as Additional Rent within five (5) days after
written demand therefor. Tenant's failure to pay such Additional Rent shall
constitute an Event of Default of this Lease, and Landlord may, without any
further notice, exercise its remedies specified in Article 25 hereof.
29.4 Tenant shall, at least ten (10) days prior to commencing any work
which might result in a lien as aforesaid, give Landlord written notice of its
intention to commence such work, to enable Landlord to post, file and record a
legally effective notice of non-responsibility. Landlord or its representatives
shall have the right to enter into the Premises and inspect the same at all
reasonable times, and shall have the right to post and keep posted thereon said
notices of non-responsibility and such other notices as Landlord may deem proper
to protect its interest therein.
ARTICLE 30. QUIET ENJOYMENT
Landlord agrees that Tenant, upon payment of the Base Rent, Additional
Rent, and all other sums and charges required to be paid by Tenant hereunder,
and the due and punctual performance of all of Tenant's other covenants and
obligations under this Lease, shall have the quiet and undisturbed possession of
the Premises.
ARTICLE 31. ATTORNEYS' FEES
Should either party hereto institute any action or proceeding in court
to enforce any provision hereof or for damages or for declaratory or other
relief hereunder, the prevailing party shall be entitled to receive from the
losing party, in addition to court costs, such amount as the court may adjudge
to be reasonable as attorneys' fees for services rendered to said prevailing
party, and said amount may be made a part of the judgment against the losing
party.
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ARTICLE 32. MISCELLANEOUS
32.1 Nothing contained in this Lease shall be deemed or construed as
creating a partnership or joint venture between Landlord and Tenant or between
Landlord and any other party, or cause Landlord to be in any manner responsible
for the debts or obligations of Tenant, or any other party. The covenants in
this Lease are made between the parties to the Lease and shall not be deemed or
construed as creating any rights in any other party claiming to be a third party
beneficiary of this agreement.
32.2 If any provision of this Lease shall be determined to be void or
voidable by any court of competent jurisdiction, such determination shall not
affect any other provision of this Lease and all such other provisions shall
remain in effect. It is the intention of the parties hereto that if any
provision of this Lease is capable of two constructions, one of which would
render the provision void or voidable and the other of which would render the
provision valid, then the provision shall have the meaning which renders it
valid.
32.3 If Tenant hereunder is a corporation or partnership, the parties
executing this Lease on behalf of Tenant represent and warrant to Landlord that:
they are authorized to enter into this Lease; this Lease is executed in the
usual course of business of Tenant and that neither the corporate Articles nor
Bylaws of Tenant or any partnership agreement of Tenant, as the case may be,
require the consent of its shareholders or partners, as applicable, thereto;
Tenant is a valid and existing corporation or partnership, as applicable; all
things necessary to qualify Tenant to do business in California have been
accomplished prior to the date of this Lease; all franchise and other taxes have
been paid to the date of this Lease; all forms, reports, fees, and taxes
required to be filed or paid by Tenant in compliance with all Legal Requirements
will be filed and paid when due.
32.4 The entire agreement between the parties hereto is set forth in
this Lease, and any agreement hereafter made shall be ineffective to change,
modify, alter or discharge it in whole or in part unless such agreement is in
writing and signed by both parties hereto. It is further understood that there
are no oral agreements between the parties hereto affecting this Lease, and that
this Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter of this Lease, and none of the same shall be available to interpret or
construe this Lease. All negotiations and oral agreements acceptable to both
parties hereto have been merged into and are included in this Lease.
32.5 Landlord reserves the absolute right to effect such other tenancies
in the Center. Tenant does not rely on the fact nor does Landlord represent that
any specific tenant or number of tenants shall during the term of this Lease
occupy any space in any Building.
32.6 The laws of the State of California shall govern the validity,
performance and enforcement of this Lease. Should either party institute legal
suit or action for enforcement of any obligation herein, it is agreed that the
venue of such suit or action shall be in Alameda County, California, and Tenant
expressly consents to Landlord's designating Alameda County as the venue of any
such suit or action.
32.7 A waiver of any breach or default shall not be a waiver of any
other breach or default. Landlord's consent to or approval of, any act by Tenant
requiring Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent similar act by
Tenant. The acceptance by Landlord of any rental or other payments due hereunder
with knowledge of the breach of any of the covenants of this Lease by Tenant
shall not be construed as a waiver of any such breach. The acceptance at any
time or times by Landlord of any sum less than that which is required to be paid
by Tenant shall, unless Landlord specifically agrees otherwise in writing, be
deemed to have been received only on account of the obligation for which it is
paid, and shall not be deemed an accord and satisfaction notwithstanding any
provisions to the contrary written on any check or contained in a letter of
transmittal.
32.8 Any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain labor or materials or reasonable
substitutes therefore, failure of power, governmental restrictions, regulations
or controls, enemy or hostile governmental action, riot, civil commotion, fire
or other casualty, inclement weather beyond seasonal norm and other causes of a
like nature beyond the reasonable control of the party obligated to
30
perform (any such event being "FORCE MAJEURE"), shall excuse the performance by
such party for a period equal to any such prevention, delay or stoppage, except
that Tenant's obligations to pay Rent and any other sums or charges specifically
due and payable pursuant to this Lease shall not be affected thereby.
32.9 The term "LANDLORD" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners at the time in question of the Premises, and in
the event of any transfer or transfers of title thereto, Landlord herein named
(and in case of any subsequent transfers or conveyances, the then grantor) shall
be automatically freed and relieved from and after the date of such transfer or
conveyance of all liability as respects the performance of any covenants or
obligations hereunder of the part of Landlord to be performed thereafter.
32.10 The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work a merger, and shall, at the option
of the Landlord terminate all or any existing subleases and subtenancies, or
may, at Landlord's option, operate as an assignment to it of any or all such
subleases or subtenancies.
32.11 Although the printed provisions of this Lease were prepared and
drawn by Landlord, this Lease shall not be construed either for or against
Landlord or Tenant, but its construction shall be at all times in accord with
the general tenor of the language so as to reach a fair and equitable result.
32.12 Except as otherwise expressly provided in this Lease, any and all
"approvals", "consents" and "permissions" that either party is obligated or
required to provide under this Lease shall not be unreasonably withheld or
delayed.
32.13 Upon Landlord's written request not more often than once per year,
Tenant shall promptly furnish to Landlord, from time to time, financial
statements reflecting Tenant's current financial condition. If Tenant is a
publicly held company, Tenant may furnish to Landlord Tenant's most recent
publicly filed annual or quarterly report to satisfy this request.
32.14 Time is of the essence with respect to the performance of each of
the covenants and agreements of this Lease.
32.15 Each and all of the provisions of this Lease shall be binding upon
and inure to the benefit of the parties hereto and (except as set forth in
Section 32.9 above and as otherwise specifically provided elsewhere in this
Lease), their respective personal representatives, successors and assigns,
subject at all times to all provisions and restrictions elsewhere in this Lease
respecting the assignment, transfer, encumbering or subletting of all or any
part of the Premises or Tenant's interest in this Lease.
See Addendum A-32.15.
32.16 Submission of this instrument by or on behalf of Landlord for
examination or execution by Tenant does not constitute a reservation of or
option for lease, and this instrument shall not be effective as a lease or
otherwise until executed and delivered by both Landlord and Tenant.
32.17 The captions shown in this Lease are for convenience or reference
only, and shall not, in any manner, be utilized to construe the scope or the
intent of any provisions thereof.
32.18 This Lease shall not be recorded, but Tenant may record a short
form Memorandum of this Lease at its expense and Landlord agrees to execute such
a memorandum in a form reasonably approved by Landlord upon Tenant's request. In
such event, upon Landlord's written request Tenant agrees to execute a quitclaim
deed at the end of the term relinquishing any interest in the Premises.
32.19 Intentionally Deleted.
32.20 All agreements herein by Tenant, whether expressed as covenants or
conditions, shall be deemed to be conditions for the purpose of this Lease.
31
32.21 The parties represent and warrant to each other that each has not
dealt with any real estate agent other than Colliers International, as to
Landlord, and The Staubach Company as to Tenant. Each agrees to indemnify and
hold the other harmless from and against all loss, cost and expenses incurred by
reason of the breach of such representation and warranty. Landlord shall be
responsible for paying all commissions due, in accordance with the terms of a
separate written agreement.
32.22 The terms of this Lease are confidential and constitute
proprietary information of the parties. Neither party, nor its respective
employees or agents, shall disclose the terms of this Lease to any other person
without the prior written consent of the other party hereto, which consent may
be withheld in such party's sole discretion. However, either party may disclose
the terms of this Lease to its lenders, accountants and prospective transferees,
provided that such lenders, accountants, and prospective transferees have a
reasonable bona fide need to know such terms, and provided that the disclosing
party ensures that such lenders, accountants and prospective transferees
maintain the confidentiality of such terms. In addition, either party may
disclose the terms of this Lease in litigation or other dispute resolution
proceeding between Landlord and Tenant with respect to the Lease subject to the
Lease being filed under seal if the filing of the document would otherwise make
it publicly available and if the court approves of filing under seal, and: (i)
pursuant to an order of a court of competent jurisdiction, provided that the
disclosing party promptly notifies the other party of any motion to compel such
disclosure and the disclosure order, and/or (ii) in order to comply with any
applicable Securities Exchange Commission laws, rules or regulations, provided
that the disclosing party notifies the other party of the fact that such
disclosure will take place, subject, however, to the disclosing party in each of
(i) and (ii), using commercially reasonable best efforts to limit the scope and
extent of the disclosure.
32.23 The Addendum attached hereto is hereby made a part of this Lease.
See Addendum A-32.24-32.27.
WITNESS the signatures of the parties hereto, the day and year first
above written.
LANDLORD: TENANT:
GREENVILLE INVESTORS, L.P. FORMFACTOR, INC.,
By: Greenville Ventures, Inc. a Delaware corporation
Title: General Partner
By: /s/ William A. Drummond By: /s/ Jens Meyerhoff
--------------------------------- ------------------------------
William A. Drummond
Its: Vice President Its: CFO
-----------------------------
ADDRESS: 675 Hartz Avenue, Suite 300 ADDRESS: 2020 Research Drive
Danville, CA 94526 Livermore, CA 94550
32
ADDENDUM TO LEASE
A-2.1 OPTIONS TO RENEW. Provided that no Event of Default by Tenant
under this Lease exists as of the date of exercise of the applicable option or
at the expiration of the initial term or preceding Option Term, and provided
further that Tenant has not assigned this Lease, Tenant shall have the option to
extend the initial lease term for four (4) additional, successive terms of five
(5) years each (each, an "OPTION TERM"). Tenant shall exercise the option, if at
all, by delivering to Landlord written notice of the exercise no sooner than
fifteen (15) months nor later than twelve (12) months prior to the expiration of
the initial Lease Term or preceding Option Term, as applicable. Tenant's right
to exercise each option shall be conditioned upon Tenant delivering to Landlord
with Tenant's notice of exercise, current financial reports which evidence that
Tenant's financial condition on the date of exercise is equal to or better than
Tenant's financial condition on the date of execution of this Lease. If Tenant's
financial condition has declined in Landlord's business judgment, Landlord may
refuse to accept Tenant's exercise unless Tenant agrees to provide a new
Letter(s) of Credit with terms and amounts acceptable to Landlord in its
business judgment to secure Tenant's obligations during the applicable Option
Term.
All terms, provisions, conditions and covenants of this Lease shall
remain in full force and effect during the Option Terms, provided that Tenant
shall have no additional option periods and the Base Rent payable during the
first Lease Year of each Option Term (and for increases during the Option Term,
as applicable) shall be the market rate then prevailing as projected for the
commencement of the applicable Option Term, for premises comparable in size,
quality and location in comparable class R&D/Office buildings throughout the
Tri-Valley/Livermore area taking into account all relevant factors (the "MARKET
RENT"). Base Rent for the Option Term shall be determined prior to the
commencement of the applicable Option Term in the following manner:
If Landlord and Tenant are unable to agree on the market rent within
sixty (60) days after Tenant gives notice of its exercise of the Option Term,
then Tenant shall have the right to revoke its exercise of the option by
delivering written notice within ten (10) days following the expiration of such
60-day period. In the event of such revocation, Tenant shall forfeit all rights
to thereafter exercise any option under this Lease and the Lease shall terminate
at the end of the initial term, or then Option Term, as applicable. If Tenant
does not revoke its exercise and elects to proceed with the determination of
market rent, then the monthly Base Rent and Additional Rent payable during the
Option Term shall be determined by appraisal in the following manner:
If Landlord and Tenant can agree on a single appraiser, then the rate
set by such appraiser as set forth below shall be the Base Rent for the Option
Term. If the parties cannot agree on a single appraiser, then each party, by
giving written notice to the other party, shall appoint as an appraiser an
experienced commercial real estate agent in the area in which the Premises are
located. Said appointment shall be made within ten (10) days following the
expiration of the sixty (60) day period aforesaid, and if one of the parties
does not appoint an appraiser within that time, the single appraiser named shall
be the sole appraiser and shall set the monthly Base Rent for the Option Term.
If the two appraisers are appointed as provided herein, each shall
independently prepare an estimate of the market rent within sixty (60) days. If
the higher of the two estimates so determined is within ten percent (10%) of the
lower estimate, then the monthly Base Rent to be paid by Tenant during the
Option Term shall be the average of the amounts determined by the appraisers. If
the difference between the two estimates exceeds ten percent (10%) of the lower
one, the two appraisers shall select a third appraiser meeting the
qualifications set forth hereinabove within ten (10) days thereafter who will
likewise independently estimate the market rate within sixty (60) days after the
appointment. The average of the two closest appraisals shall be set as the
monthly Base Rent.
Each party shall pay the fees of the appraiser appointed by such party
and the parties will share equally the fees of any third appraiser appointed
pursuant to this Section A-2.1.
Notwithstanding the above, the Base Rent payable by Tenant during each
Option Term shall be in addition to all Additional Rent and other sums and
charges payable by Tenant under the terms of this Lease.
Tenant acknowledges that the options granted herein are personal to
Tenant and may not be assigned with an assignment of this Lease except in
connection with an assignment to an entity which controls, is controlled by or
is under common control with Tenant (as defined in Article 20 of this Lease) or
which is a successor to Tenant by merger, consolidation or sale of substantially
all of Tenant's assets with Landlord's prior written consent, not to be
unreasonably withheld.
A-4.7.HAZARDOUS SUBSTANCES. Landlord hereby represents that it has, prior to the
date of this Lease, provided to Tenant copies of all environmental reports in
its possession, regarding the presence of Hazardous Substances at the Center or
upon, around or under Parcel 3. Except as specifically disclosed in the reports
delivered to Tenant, Landlord represents and warrants that to its actual
knowledge, Landlord does not know of any Hazardous Substances in the Center.
Landlord shall indemnify, defend and hold Tenant harmless for any claims, costs
or liabilities (collectively, "Claims") arising out of or relating to any breach
or misrepresentation by Landlord of the foregoing representation and warranty.
Landlord's confidentiality obligations under Section 4.7 and its indemnity
obligations pursuant to this Section A-4.7 shall survive the termination of this
Lease.
A-4.8 DECLARATION. Notwithstanding the provisions of Section 4.8, Landlord shall
not amend the Declaration in a manner which (i) reduces the number of Tenant's
exclusive parking spaces on Parcel 3, (ii) restricts Tenant 's permitted use
described in Article 4, (iii) adversely and materially affects Tenant's access
to or from Parcel 3 and Lawrence Road or South Front Road or (iv) increases the
share of Common Area Costs assessed against Parcel 3 or Parcel 3's proportionate
share of Shared Maintenance Costs, without the prior written consent of Tenant
which shall not be unreasonably withheld or delayed.
A-9.3 REPAIRS BY TENANT. Notwithstanding the provisions of Section 9.4, except
to the extent necessary due to damage caused by the negligence of Tenant, its
employees, agents or contractors, Tenant shall have no obligation to replace the
HVAC system or any other essential building system serving Building 3
(specifically excluding any special HVAC system for Tenant's operations in the
Premises, such as the HVAC serving any "clean room", the replacement of which
shall be at Tenant's sole cost and expense) within the last eighteen (18) months
of the Term. If any such replacement is necessary, Landlord and Tenant shall
mutually agree on the type of equipment to be installed and a commercially
reasonable cost sharing arrangement which will take into account the number of
years of the useful life of such equipment or system which will occur following
the expiration of the Term. If Tenant subsequently exercises an option to extend
the Lease, however, the replacement shall be at Tenant's sole option, cost and
expense and within thirty (30) days after Tenant's exercise of the option,
Tenant shall reimburse Landlord for all amounts previously paid by Landlord for
the system replaced.
A-9.5.TENANT EQUIPMENT/IMPROVEMENTS. The equipment Tenant initially intends to
install in the Premises is described on Exhibit C attached hereto. If landlord
wishes to require removal of any Tenant Improvements, Landlord shall designate
as a part of its approval pursuant to the terms of Exhibit C of the plans for
Tenant's Work, any Tenant Improvements and/or Special Tenant Improvements (if
any) or equipment which Landlord will require Tenant to remove at the expiration
of the Term. In connection with any such required removal by Tenant, Tenant
shall repair all damage caused by such removal.
A-12.2. DAMAGE OR DESTRUCTION. If the Premises is damaged to an extent
greater than 75% of its replacement cost, and Landlord has given Tenant notice
of its election to terminate the Lease pursuant to Section 12.2, this Lease
shall terminate upon the expiration of thirty (30) days after receipt by Tenant
of such notice unless Tenant shall elect, by notice to Landlord within such
30-day period, to repair or restore the Premises. If Tenant so elects, this
Lease shall continue in full force and effect and Tenant shall proceed to make
repairs and restoration as soon as reasonably possible and the rent shall be
abated as provided in Section 12.5 of the Lease. Subject to the rights of
Landlord's lender, the proceeds of Landlord's insurance allocable to Building 3
and available for rebuilding shall be deposited into a construction escrow for
the purpose of rebuilding and periodically disbursed to Tenant pursuant to
procedures mutually agreed to by Tenant, Landlord and Landlord's lender. All
costs in excess of the escrowed insurance proceeds shall be paid by Tenant.
Notwithstanding the foregoing, Tenant shall not have the right to elect to
rebuild unless there are at least five (5) full Lease Years remaining on the
term of its Lease.
A-26.1. NON-DISTURBANCE AGREEMENT. Landlord shall use commercially reasonable
efforts to obtain an agreement from Landlord's existing construction lender
prior to the Delivery date to not disturb Tenant's possession under this Lease
so long as Tenant is not in default of its obligations hereunder.
A-32.15. RESTRICTION ON SALE. Notwithstanding the provisions of Section
32.15 of the Lease, during the term of this Lease and provided that Tenant is
not then in default of this Lease beyond any applicable cure period, Landlord
shall not sell Parcel 3 or Building 3 to an entity on Tenant's competitor list
which is attached hereto as Exhibit I without Tenant's prior written consent,
which may be withheld in Tenant's sole discretion.
A-32.24. BUILDING SALE NOTICE RIGHTS. Landlord shall provide written
notice to Tenant the first time Landlord responds in writing to a new interested
third party to purchase Building 3, provided that Tenant is not then in default
of this Lease beyond any applicable cure period. Landlord shall only be required
to notify Tenant of third party interest one time with respect to the Building.
Tenant shall have five (5) days to indicate its interest in negotiating a sale.
Landlord may negotiate concurrently with Tenant and interested third party(ies).
Landlord's obligation to notify Tenant as described herein shall in no way
obligate Landlord to sell Building 3 to Tenant. Tenant's notice rights shall
expire upon Landlord's execution of a sale agreement with a third party.
A- 32.25. PARKING. Parcel 3 has been allocated 117 parking stalls
assuming that roll-up doors are not required by Tenant. Throughout the Term of
the Lease, all parking on Parcel 3 shall be for Tenant's exclusive use. Tenant
is also leasing from Landlord the buildings designated as "Building 1",
"Building 2" and "Building 5" on Exhibit A. So long as Tenant's lease of
Building 1 is in effect, Tenant may use a portion of the parking spaces on
Parcel 1 in connection with its use of Building 3, so long as the Tenant's lease
of Building 2 is in effect, Tenant may use a portion of the parking spaces on
Parcel 2 in connection with its use of Building 3 and so long as the Tenant's
lease of Building 5 is in effect, Tenant may use a portion of the parking spaces
on Parcel 5 in connection with its use of Building 3.
A-32.26 SIGNAGE. All of Tenant' s signage at the Premises and Parcel 1
must be in accordance with the City-approved master sign program for the Center.
The program provides 2' x 16' signage areas at each entry structure and a 2'6" x
5'0" signage area on a monument at the street in front of each building.
Tenant's corporate logo and trade style are permitted to be used in accordance
with the parameters of the sign program. Any additional signage outside the
scope of the master signage program shall be subject to the approval of the
Landlord (which shall not be unreasonably withheld) and the City of Livermore.
Subject to City and Landlord's approval, Landlord shall permit Tenant to install
a temporary sign or banner in the Center, in a location approved by Landlord,
announcing the Center as Tenant's new headquarters location.
A-32.27 USE OF ROOF. Tenant acknowledges that Landlord has reserved the
right to use the roof of Building 3, including the right to lease or license its
use. Tenant and no employee or invitee of Tenant shall go upon the roof of the
Building, except as otherwise expressly provided herein.
Tenant shall have the exclusive right to use 50% of the total area of
the roof, in location(s) designated by Landlord and reasonably approved by
Tenant, to install a satellite dish or cluster of dishes and ancillary
telecommunications equipment in connection with Tenant's business operations.
Tenant's roof use shall be on the following terms and conditions set forth
herein. Subject to Applicable Laws, Tenant shall have the right to install or
cause to be installed rooftop equipment ("ROOFTOP EQUIPMENT") pursuant to plans
and specifications which shall be subject to Landlord's prior written approval,
which shall not be unreasonably withheld or delayed on the roof of the Building,
in a location as Landlord and Tenant may mutually agree. There shall be no
additional charge payable by Tenant to Landlord for the use of such area or for
the installation of the Rooftop Equipment. If the Rooftop Equipment is to be
installed on the roof, Tenant shall notify Landlord in writing that the Rooftop
Equipment is to be installed on the roof. Tenant shall be solely responsible for
complying with (or causing its vendor to comply with) the requirements of such
roof warranty or roof bond in connection with the installation, maintenance,
repair, replacement or removal of the Rooftop Equipment. Tenant shall repair any
damage to the roof caused by the installation, maintenance, repair, replacement
or removal of the Rooftop Equipment. Landlord shall
permit Tenant reasonable access to the designated area as reasonably necessary
to install, maintain and remove the Rooftop Equipment, and Tenant shall
indemnify Landlord and be solely responsible, at Tenant's cost and expense, for
the maintenance and repair of the Rooftop Equipment, and Landlord shall have no
responsibility with respect thereto unless the same was made necessary by the
negligence or willful act of Landlord or Landlord's Agents. Tenant hereby agrees
to defend, indemnify and hold Landlord harmless form any mechanics or
materialmen's liens upon the Premises or the Center which result from work
associated with the installation of the Rooftop Equipment. Tenant shall obtain
all licenses or approvals required to install and operate the Rooftop Equipment.
The Rooftop Equipment shall remain the property of Tenant and upon expiration of
the Lease, Tenant shall remove the Rooftop Equipment and repair the Premises and
any damage to the area upon which the Rooftop Equipment was located to the
original condition, normal wear and tear excepted. Landlord shall have the right
to request that Tenant relocate the Rooftop Equipment, if necessary, at
Landlord's sole cost and expense to facilitate Landlord's use of the roof.
Tenant covenants that the Rooftop Equipment will be installed, maintained and
removed in accordance with all Applicable Requirements. Tenant shall be
responsible for all damage caused by the installation, maintenance, repair
and/or removal of Tenant's Rooftop Equipment. Tenant's access to the roof to
exercise its rights hereunder shall be subject to Landlord's prior approval,
which shall not be unreasonably withheld, provided that Tenant exercises such
access rights in a manner that does not void any roof warranty. Tenant's Rooftop
Equipment shall not interfere with the operation of any existing roof top
equipment which has been installed on the portion of the roof used by Landlord.
Landlord shall not install or permit the installation of any rooftop equipment
which will interfere with any Rooftop Equipment for which Tenant has submitted
installation plans to Landlord or which Tenant has previously installed on the
portion of the roof for Tenant's use.
EXHIBIT A
SITE PLAN
EXHIBIT B
CENTER LEGAL DESCRIPTION AND PLAT MAP
REAL PROPERTY IN THE City of Livermore, County of Alameda, State of California,
described as follows:
Parcels 1 through 8 as shown on Parcel Map No. 7624, filed December 12, 2000, in
Book 254 of Maps at Pages 73 through 82, Alameda County Records.
EXHIBIT C
WORK LETTER
This Work Letter sets forth the terms and conditions relating to the
construction of the Premises.
SECTION 1
INITIAL CONSTRUCTION OF THE BUILDING AND THE PREMISES
1.1 BASE BUILDING. Landlord shall construct the "Base Building" at Landlord's
sole cost and expense; provided that any modifications to the Base Building
required by the Tenant Improvement Work described below shall be deemed to be
Tenant Improvements. The Base Building shall be constructed in accordance with
the plans for such improvements listed on the plan list attached as Schedule 1
to this Exhibit C (the "Plan List") provided that Landlord, shall not be
responsible to install the 2000 amp, 480/277 volt, 3 phase electrical service
with main switch in the electrical room described in such plans. The electrical
service work for the Building will be performed by Tenant in accordance with the
Approved Tenant Improvement Plans. The Base Building shall include, without
limitation:
a) Fully enclosed tilt-up concrete building(s) with 5" thick concrete
slab and grade doors as shown on the construction drawings listed in the Plan
List;
b) Water and gas service stubbed into the Building;
c) A sanitary sewer gut line as shown on the construction drawings;
d) Four (4) 4" telephone conduits and 8' x 8' plywood terminal board in
the electrical room; and
e) Fire sprinklers at roof to meet Legal Requirements for the Building
shell.
1.2 SPECIAL TENANT IMPROVEMENTS. In addition to the Base Building, Landlord
shall also obtain all necessary permits and approvals for and shall construct
those improvements specifically described in Architect's Bulletin No. 4 dated
February 2, 2001 (the "BULLETIN") and prepared by Ware Malcomb Architects, which
Bulletin has been approved by Landlord and is attached hereto (the "SPECIAL
TENANT IMPROVEMENTS"). Prior to the date hereof Tenant has paid to Landlord
$135,000 representing the estimated cost of the Special Tenant Improvements. In
the event the actual cost of completing the Special Tenant Improvements exceeds
$135,000 the remainder shall be charged against the Tenant Improvement
Allowance. If the actual cost is less than $135,000, the remainder shall be
promptly refunded to Tenant.
1.3 PARCEL 3 IMPROVEMENTS. Landlord shall construct the site improvements on
Parcel 3 at Landlord's sole cost and expense in accordance with the plans for
such improvements listed on the Plan List. The site improvements shall include,
without limitation, site concrete, asphalt paving, striping, exterior lighting,
site utilities and landscaping.
1.4 LANDLORD'S WORK. "LANDLORD'S WORK" shall mean all work to be constructed by
Landlord described in Sections 1.1, 1.2 and 1.3 above.
1.5 TENANT'S WORK. "TENANT'S WORK" will include designing, providing and
installing all Tenant Improvements (defined hereafter) and providing the
required furnishings, fixtures and equipment for Tenant's use of the Premises.
As used in this Lease, the term "TENANT IMPROVEMENTS" shall mean all
improvements set forth in the Approved Tenant Improvement Plans. Tenant shall
obtain all necessary permits and approvals for and shall construct the "TENANT
IMPROVEMENTS" in accordance with the Approved Tenant Improvement Plans (as
defined in Section 2.4 below). Landlord will disburse the Tenant Improvement
Allowance described in Section 4 below to pay for Tenant Improvement Costs
(defined hereafter). All such costs of completing Tenant's Work which are in
excess of the Tenant Improvement
Allowance shall be paid by Tenant pursuant to the terms of the Lease and this
Work Letter.
SECTION 2
TENANT IMPROVEMENT PLANS
2.1 ARCHITECT/CONSTRUCTION PLANS. Tenant has retained CAS Architects, Inc. (the
"Architect") to prepare the construction plans for all Tenant Improvements and
Special Tenant Improvements. Tenant shall retain engineering consultants (the
"Engineers") approved by Landlord (which approval shall not be unreasonably
withheld or delayed) to prepare all plans and engineering working drawings
relating to the Tenant Improvements, including without limitation, all
structural, HVAC, electrical, plumbing, life safety, and sprinkler work in the
Premises which is not part of the Base Building. The final working plans and
drawings to be prepared by Architect and the Engineers hereunder shall be known
collectively as the "Tenant Improvement Plans". The scope, form and content of
all plans and drawings shall be discussed in reasonable detail at each of the
weekly meetings held pursuant to the terms of Section 3.2.6 below. All Tenant
Improvement Plans shall be in a form suitable for bidding and construction by
qualified contractors, shall meet the requirements of the City of Livermore, and
shall be subject to Landlord's approval, which shall not be unreasonably
withheld or delayed. Tenant and Architect shall verify, in the field, the
dimensions and conditions as shown on the relevant portions of the Base Building
plans, and Tenant and Architect shall be solely responsible for the same, and
Landlord shall have no responsibility in connection therewith. Landlord's review
of the Tenant Improvement Plans as set forth in this Section 2, shall be for its
sole purpose and shall not obligate Landlord to review the same, for quality,
design, code compliance or other like matters. Accordingly, notwithstanding that
any Tenant Improvement Plans are reviewed by Landlord or its architect,
engineers and consultants, and notwithstanding any advice or assistance which
may be rendered to Tenant by Landlord or Landlord's space planner, architect,
engineers, and consultants, Landlord shall have no liability whatsoever in
connection therewith and shall not be responsible for any omissions or errors
contained in the Tenant Improvement Plans, and Tenant's waiver and indemnity set
forth in Section 16 of this Lease shall specifically apply to the Tenant
Improvement Plans.
2.2 FINAL DESIGN DRAWINGS. Tenant and the Architect shall prepare the final
design drawings and specifications for Tenant Improvements in the Premises
(collectively, the "Final Design Drawings") and shall deliver the same to
Landlord for Landlord's approval. The Final Design Drawings shall include a
layout and designation of all offices, rooms and other partitioning. Landlord
may request clarification or more specific drawings for special use items not
included in the Final Design Drawings. Landlord shall advise Tenant within five
(5) business days after Landlord's receipt of the Final Design Drawings for the
Premises if the same are unsatisfactory or incomplete in any respect. If Tenant
is so advised, Tenant shall promptly cause the Final Design Drawings to be
revised to correct any deficiencies or other matters Landlord may reasonably
require.
2.3 FINAL WORKING DRAWINGS. After the Final Design Drawings have been approved
by Landlord, Tenant shall promptly cause the Architect and the Engineers to
complete the architectural and engineering drawings for the Premises, and
Architect shall compile a fully coordinated set of architectural, structural,
mechanical, electrical and plumbing working drawings in a form which is
sufficiently complete to allow subcontractors with a reasonable level of
competence and experience in the industry to bid on the work and to obtain all
permits required for the construction of the Tenant Improvements (the "PERMITS")
and shall submit the same (collectively, the "FINAL WORKING DRAWINGS") to
Landlord for Landlord's approval, which approval shall not be unreasonably
withheld or delayed. Tenant shall supply Landlord with three (3) copies signed
by Tenant of such Final Working Drawings. Landlord shall advise Tenant within
five (5) business days after Landlord's receipt of the Final Working Drawings
for the Premises if the same are unsatisfactory or incomplete in any respect. If
Tenant is so advised, Tenant shall promptly cause the Final Working Drawings to
be revised in accordance with such review and any disapproval of Landlord in
connection therewith.
2.4 APPROVED TENANT IMPROVEMENT PLANS. The Final Working Drawings shall be
approved by Landlord (the "Approved Tenant Improvement Plans") prior to the
commencement of construction of the Tenant Improvements by Tenant. In order to
expedite the permitting process, however, prior to Landlord's
approval pursuant to Section 2.3 above, Tenant may submit the Final Working
Drawings to the appropriate municipal authorities for all Permits necessary to
allow Landlord's contractor to commence and fully complete the construction of
the Tenant Improvements. Notwithstanding the foregoing, Tenant acknowledges that
Landlord does not waive the right to approve the Final Working Drawings and by
electing to submit the Final Working Drawings for permit prior to Landlord's
approval, Tenant is assuming the risk that Landlord may require changes in such
drawings after the same have been submitted for permits. Tenant hereby agrees
that neither Landlord nor Landlord's consultants shall be responsible for
obtaining any of the Permits or a certificate of occupancy for the Premises and
that obtaining the same shall be Tenant's responsibility; provided, however,
that Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy. No changes, modifications or
alterations in the Approved Tenant Improvement Plans may be made without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed, provided that if a proposed change would directly or
indirectly delay the "SUBSTANTIAL COMPLETION" of Landlord's Work as that term is
defined in Article 8 of the Lease, Landlord may proceed to establish a Tenant
Delay pursuant to Section 5 hereof.
SECTION 3
CONSTRUCTION OF TENANT IMPROVEMENTS
3.1 TENANT'S SELECTION OF CONTRACTORS.
3.1.1 TENANT'S CONTRACTOR. A general contractor shall be retained by
Tenant to construct the Tenant Improvements. Such general contractor ("TENANT'S
CONTRACTOR") shall be subject to Landlord's prior approval, which approval shall
not be unreasonably withheld or delayed.
3.1.2 TENANT'S AGENTS. All subcontractors, laborers, materialmen, and
suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and Tenant's Contractor to be known collectively as "TENANT'S
AGENTS") must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed. If Landlord does not approve any of Tenant's
proposed subcontractors, laborers, materialmen or suppliers, Tenant shall submit
other proposed subcontractors, laborers, materialmen or suppliers for Landlord's
written approval. Notwithstanding the foregoing, Tenant shall retain
subcontractors designated or reasonably approved by Landlord in connection with
any structural, mechanical, electrical, plumbing or heating, air-conditioning or
ventilation work to be performed in the Premises. Further Landlord's approval
shall not be required for any of Tenant's Agents performing work or providing
materials costing less than $10,000.
3.2 CONSTRUCTION OF TENANT IMPROVEMENTS BY TENANT'S AGENTS.
3.2.1 TENANT'S CONSTRUCTION CONTRACT; COST BUDGET. Prior to Tenant's
execution of the construction contract and general conditions with Tenant's
Contractor ("TENANT'S CONSTRUCTION Contract"), Tenant shall submit Tenant's
Construction Contract to Landlord for its approval, which approval shall not be
unreasonably withheld or delayed. Prior to the commencement of the construction
of the Tenant Improvements, and after Tenant has accepted all bids for the
Tenant Improvements, Tenant shall provide Landlord with a detailed breakdown, by
trade, of the final costs to be incurred or which have been incurred in
connection with the design and construction of the Tenant Improvements to be
performed by or at the direction of Tenant or Tenant's Contractor, which costs
form a basis for the amount of Tenant's Construction Contract (the "Final
Costs"). If the costs of the Tenant Improvements exceed the Tenant Improvement
Allowance, Tenant shall also provide Landlord with its computation of percentage
that the Tenant Improvement Allowance bears to the total costs of the Tenant
Improvements (the "ALLOWANCE PERCENTAGE")
3.2.2 TENANT'S AGENTS.
A. Landlord's General Terms for Tenant's Agents and Tenant
Improvement Work. Tenant's and Tenant's Agent's construction of the Tenant
Improvements shall comply with the following:
(i) the Tenant Improvements shall be constructed in accordance with the Approved
Tenant Improvement Plans; (ii) Tenant's Agents shall submit schedules of all
work relating to the Tenant Improvements to Tenant's Contractor and Tenant's
Contractor shall, within five (5) business days of receipt thereof, inform
Tenant's Agents of any changes which are necessary thereto, and Tenant's Agents
shall adhere to such corrected schedule; and (iii) Tenant shall abide by all
rules made by Landlord with respect to storage of materials, coordination of
work with the contractors of other tenants and Landlord, and any other matter in
connection with this Work Letter, including, without limitation, the
construction of the Tenant Improvements.
B. Indemnity. Tenant's indemnity of Landlord as set forth in
Section 16.1 of this Lease shall also apply with respect to any and all costs,
losses, damages, injuries and liabilities related in any way to any act or
omission of Tenant or Tenant's Agents, or anyone directly or indirectly employed
by any of them, or in connection with Tenant's non-payment of any amount arising
out of the Tenant Improvements and/or Tenant's disapproval of all or any portion
of any request for payment. Such indemnity by Tenant, as set forth in Section
16.1 of this Lease, shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to Landlord's performance
of any ministerial acts reasonably necessary (i) to permit Tenant to complete
the Tenant Improvements, and (ii) to enable Tenant to obtain any building permit
or certificate of occupancy for the Premises.
C. Requirements of Tenant's Agents. Each of Tenant's Agents shall
guarantee to Tenant and for the benefit of Landlord that the portion of the
Tenant Improvements for which it is responsible shall be free from any defects
in workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. Each of Tenant's Agents shall be responsible for the
replacement or repair, without additional charge, of all work done or furnished
in accordance with its contract that shall become defective within one (1) year
after the later to occur of (i) completion of the work performed by such
contractor or subcontractors and (ii) the Lease Commencement Date. The
correction of such work shall include, without additional charge, all additional
expenses and damages incurred in connection with such removal or replacement of
all or any part of the Tenant Improvements, and/or the Building and/or common
areas that may be damaged or disturbed thereby. All such warranties or
guarantees as to materials or workmanship of or with respect to the Tenant
Improvements shall be contained in the Contract or subcontract and shall be
written such that such guarantees or warranties shall inure to the benefit of
both Landlord and Tenant, as their respective interests may appear, and can be
directly enforced by either. Tenant covenants to give to Landlord any assignment
or other assurances which may be necessary to effect such right of direct
enforcement.
D. Insurance Requirements.
1. General Coverages. All of Tenant's Agents shall carry
worker's compensation insurance covering all of their respective employees, and
shall also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in Article 14 of this Lease.
2. Special Coverages. Tenant shall carry "Builder's All
Risk" insurance in an amount approved by Landlord covering the construction of
the Tenant Improvements, and such other insurance as Landlord may require, it
being understood and agreed that the Tenant Improvements shall be insured by
Landlord pursuant to Article 14 of this Lease upon completion thereof. Tenant's
policy of Builder's All Risk insurance shall be in amounts and shall include
such extended coverage endorsements as may be reasonably required by Landlord
including, but not limited to, the requirement that all of Tenant's Agents shall
carry Excess Liability and Products and Completed Operation Coverage insurance,
each in amounts not less than $1,000,000 per incident, $2,000,000 in aggregate,
and in form and with companies as are required to be carried by Tenant as set
forth in Article 14 of this Lease.
3. General Terms. Certificates for all insurance carried
pursuant to this Section 3.2.2(D) shall be delivered to Landlord before the
commencement of construction of the Tenant Improvements and before the equipment
of Tenant's Contractor is moved onto the site. All such policies of insurance
must contain a provision that the company writing said policy will give Landlord
thirty (30)
days' prior written notice of any cancellation or lapse of the effective date or
any reduction in the amounts of such insurance. In the event that the Tenant
Improvements are damaged by any cause during the course of the construction
thereof, Tenant shall immediately repair the same at Tenant's sole cost and
expense. Tenant's Agents shall maintain all of the foregoing insurance coverage
in force until the Tenant Improvements are fully completed and accepted by
Landlord, except for any Products and Completed Operation Coverage insurance
required by Landlord, which is to be maintained for ten (10) years following
completion of the work and acceptance by Landlord and Tenant. All policies
carried under this Section 3.2.2(D) shall insure Landlord and Tenant, as their
interests may appear, as well as Tenant's Contractor and Tenant's Agents. All
insurance, except Workers' Compensation, maintained by Tenant's Agents shall
preclude subrogation claims by the insurer against anyone insured thereunder.
Such insurance shall provide that it is primary insurance as respects the
Landlord and that any other insurance maintained by Landlord is excess and
noncontributing with the insurance required hereunder. The requirements for the
foregoing insurance shall not derogate from the provisions for indemnification
of Landlord by Tenant under Section 3.2.2(B) of this Work Letter.
3.2.3 GOVERNMENTAL COMPLIANCE. The Tenant Improvements shall comply in
all respects with the following: (i) all building codes and other state,
federal, city or quasi-governmental laws, codes, ordinances and regulations, as
each may apply according to the rulings of the controlling public official,
agent or other person; (ii) applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) building material manufacturer's specifications.
3.2.4 MECHANIC'S LIENS. Tenant shall keep the Premises and the Center
free and clear of mechanics' liens arising out of its construction of Tenant's
Work as provided in Article 29. All provisions of Article 29 shall apply to
Tenant's Work as if fully set forth into this Work Letter.
3.2.5 INSPECTION BY LANDLORD. Landlord shall have the right to inspect
the Tenant Improvements at all times, provided however, that Landlord's failure
to inspect the Tenant Improvements shall in no event constitute a waiver of any
of Landlord's rights hereunder nor shall Landlord's inspection of the Tenant
Improvements constitute Landlord's approval of the same. Should Landlord
reasonably disapprove any portion of the Tenant Improvements, Landlord shall
notify Tenant in writing of such disapproval and shall specify the items
disapproved. Any material defects or deviations in, and/or disapproval by
Landlord of, the Tenant Improvements shall be rectified by Tenant at no expense
to Landlord, provided however, that in the event Landlord determines that a
defect or deviation exists or disapproves of any matter in connection with any
portion of the Tenant Improvements and such defect, deviation or matter might
adversely affect the mechanical, electrical, plumbing, heating, ventilating and
air-conditioning or life-safety systems of the Building, the structure or
exterior appearance of the Building or any other tenant's use of such other
tenant's leased premises, Landlord after giving Tenant at least three (3)
business days advance written notice and an opportunity to cure or otherwise
demonstrate compliance, may take such action as Landlord deems necessary, at
Tenant's expense and without incurring any liability on Landlord's part, to
correct any such defect, deviation and/or matter, including, without limitation,
causing the cessation of performance of the construction of the Tenant
Improvements until such time as the defect, deviation and/or matter is corrected
to Landlord's satisfaction.
3.2.6 MEETINGS. Commencing upon the execution of this Lease, Tenant
shall hold weekly meetings at a reasonable time, with the Architect and the
Tenant's Contractor regarding the progress of the preparation of the Tenant
Improvement Plans and the construction of the Tenant Improvements, and Landlord
and/or its agents shall receive prior notice of, and shall have the right to
attend, all such meetings, and, upon Landlord's request, certain of Tenant's
Agents shall attend such meetings. Such meetings shall include a detailed review
of the plans, drawings and specifications prepared to date and all participants
in the meeting shall make a good faith effort to raise any issues or concerns
they may have regarding the scope, form or content of any plan submitted.
3.3 NOTICE OF COMPLETION; COPY OF RECORD SET OF PLANS. Within ten (10) days
after completion of construction of the Tenant Improvements, Tenant shall cause
a Notice of Completion with respect to the Tenant Improvements to be recorded in
the office of the Recorder of the County of Alameda in accordance
with Section 3093 of the Civil Code of the State of California or any successor
statute, and shall furnish a copy thereof to Landlord upon such recordation. If
Tenant fails to do so, Landlord may execute and file the same on behalf of
Tenant as Tenant's agent for such purpose, at Tenant's sole cost and expense. At
the conclusion of construction, (i) Tenant shall cause the Architect and
Tenant's Contractor (A) to update the Approved Working Drawings as necessary to
reflect all changes made to the Approved Working Drawings during the course of
construction, (B) to certify to the best of their knowledge that the
"record-set" of mylar as-built drawings are true and correct, which
certification shall survive the expiration or termination of this Lease, and (C)
to deliver to Landlord two (2) sets of copies of such record set of drawings
within ninety (90) days following issuance of a certificate of occupancy for the
Premises, and (ii) Tenant shall deliver to Landlord a copy of all warranties,
guaranties, and operating manuals and information relating to the improvements,
equipment, and systems in the Premises.
SECTION 4
TENANT IMPROVEMENT ALLOWANCE; CONSTRUCTION COSTS
4.1 TENANT IMPROVEMENT ALLOWANCE. Tenant shall be entitled to a one-time tenant
improvement allowance (the "Tenant Improvement Allowance") in the amount of
$25.00 per square foot of the Premises GLA for the costs relating to the initial
design and construction of the Tenant Improvements. In no event shall Landlord
be obligated to make disbursements pursuant to this Work Letter in a total
amount which exceeds the Tenant Improvement Allowance.
4.2 DISBURSEMENT OF THE TENANT IMPROVEMENT ALLOWANCE.
4.2.1 TENANT IMPROVEMENT ALLOWANCE ITEMS. Except as otherwise set forth
in this Work Letter, the Tenant Improvement Allowance shall be disbursed by
Landlord only for the following items and costs (collectively the "Tenant
Improvement Allowance Items"):
A. Payment of the fees of the Architect and the Engineers
B. The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;
C. The cost of construction of the Tenant Improvements,
including, without limitation, testing and inspection costs, utility usage,
trash removal costs, and contractors' fees and general conditions;
D. The cost of any changes in the Base Building when such changes
are required by the Tenant Improvement Plans, such cost to include all direct
architectural and/or engineering fees and expenses incurred in connection
therewith;
E. The cost of any changes to the Tenant Improvement Plans or
Tenant Improvements required by Code; and
F. A Landlord coordination fee for Building 3 of Twenty Two
Thousand ($22,000).
4.2.2 DISBURSEMENT OF TENANT IMPROVEMENT ALLOWANCE. During the
construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Tenant Improvement Allowance for Tenant Improvement
Allowance Items:
A. Monthly Disbursements. No more frequently than monthly, during
the construction of the Tenant Improvements (or such other date as Landlord may
designate), Tenant shall deliver to Landlord: (i) a request for payment of
Tenant's Contractor, approved by Tenant, in a form to be provided by Landlord,
showing the schedule, by trade, of percentage of completion of the Tenant
Improvements in the Premises, detailing the portion of the work completed and
the portion not completed; (ii) invoices from all of Tenant's Agents, for labor
rendered and materials delivered to the Premises; (iii) executed mechanic's lien
releases from all of Tenant's Agents which shall comply with the appropriate
provisions, as reasonably determined by Landlord, of California Civil Code
Section 3262(d); and (iv) all other information reasonably requested by
Landlord. Tenant's request for payment shall be deemed Tenant's approval of the
work furnished and/or the materials supplied as set forth in Tenant's payment
request. After receipt of the foregoing and provided that Landlord does not
dispute any request for payment based on non-compliance of any work with the
Approved Tenant Improvement Plans, or due to any substandard work, or for any
other reason, Landlord shall deliver a check to Tenant in an amount equal to the
lesser of: (a) the Allowance Percentage of the Tenant Improvement costs for
which payment is so requested less a ten percent (10%) retention (the aggregate
amount of such retentions to be known as the "Final Retention"), or (b) the
balance of the undisbursed Tenant Improvement Allowance (excluding the Final
Retention). Landlord's payment of such amounts shall not be deemed Landlord's
approval or acceptance of the work furnished or materials supplied as set forth
in Tenant's payment request.
B. Final Retention. Subject to the provisions of this Work
Letter, a check for the Final Retention shall be delivered by Landlord to Tenant
within fifteen (15) days after all the following conditions have been satisfied:
(i) Tenant delivers to Landlord a properly executed unconditional waiver and
lien release from Tenant's Contractor in compliance with applicable sections of
the California Civil Code, (ii) Landlord has determined that no substandard work
exists, (iii) Architect delivers to Landlord a certificate, in a form reasonably
acceptable to Landlord, certifying that the construction of the Tenant
Improvements in the Premises has been substantially completed, (iv) Tenant has
recorded a Notice of Completion with respect to Tenant's Work and thirty (30)
days has expired from the date of such recording with no liens having been filed
during such thirty day period, and (v) there is no existing Event of Default by
Tenant under the Lease nor has Landlord notified Tenant of any default which
would become an Event of Default under the Lease with the passage of time if not
cured.
C. Other Terms. Landlord shall only be obligated to make
disbursements from the Tenant Improvement Allowance to the extent costs are
incurred by Tenant for Tenant Improvement Allowance Items. No disbursements
shall be made to pay for Special Improvements unless the Tenant Improvement
Allowance exceeds the costs of all other Tenant Improvements. All costs of
completing Tenant's Work in excess of the Tenant Improvement Allowance shall be
at Tenant's sole cost and expense.
D. Other Landlord Costs. Tenant shall also be responsible for the
payment of (i) the fees incurred by Landlord for Landlord's consultants in
connection with design drawing review and routine construction support related
to the Tenant Improvements, (ii) the cost of documents and materials supplied by
Landlord and Landlord's consultants, and (iii) all other verifiable, directly
related costs, such as blueprint costs and delivery, fax and copy charges
incurred by Landlord and Landlord's consultants related to the design/routine
construction support of the Tenant Improvements. When the Tenant Improvement
Plans have been approved by Landlord, Landlord shall submit to Tenant Landlord's
estimate of the foregoing costs. The Tenant Improvement Allowance will not be
used to pay the foregoing costs. Tenant shall pay such costs to Landlord from
time to time within ten (10) days after receipt from Landlord of statements of
such expenses.
SECTION 5
CONSTRUCTION DELAYS
5.1 TENANT DELAYS. As used in this Lease, the term "TENANT DELAY" shall mean the
period of an actual delay or delays in the Substantial Completion of Landlord's
Work or in the occurrence of any of the other conditions precedent to the
Delivery Date, as set forth in Article 8 of the Lease, to the extent resulting
from:
a. Tenant's failure to approve any matter requiring Tenant's approval
within the time period specifically provided in this Work Letter for such
approval;
b. A breach by Tenant of the terms of this Work Letter or the Lease;
c. Changes to the Base Building work described in the Plan List required
by the Approved Tenant Improvement Drawings or requested in writing by Tenant;
or
d. Any other acts or omissions of Tenant, or its agents, or employees,
(each a "TENANT DELAY"). Landlord shall provide prompt (within 48 hours of
becoming aware of any such delay) written notice to Tenant ("DELAY NOTICE")
specifying the action or inaction which Landlord contends constitutes a Tenant
Delay hereunder. The period of delay, however, shall commence to run on the date
of the action or inaction and not on the date of the Delay Notice. To the extent
an action or inaction by Tenant specified in any Delay Notice constitutes a
Tenant Delay as defined above and actually results in a delay in the Substantial
Completion of the Premises (after taking into account any delays resulting from
Landlord Delays and/or Force Majeure Delays described below), a Tenant Delay
shall be deemed to have been established.
5.2 TENANT'S LEASE DEFAULT. Notwithstanding any provision to the contrary
contained in this Lease: (i) if an Event of Default as described in Article 25
of the Lease has occurred; or (ii) a default by Tenant under this Work Letter
has occurred at any time on or before the substantial completion of Landlord's
Work and Tenant fails to remedy the default within such 48 hours after written
notice from Landlord, then Landlord may thereafter: (x) in addition to all other
rights and remedies granted to Landlord pursuant to the Lease, Landlord shall
have the right to withhold payment of all or any portion of the Tenant
Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the Premises (in which case, Tenant shall be responsible for any
Tenant Delay resulting from such work stoppage as set forth in Section 4.1 above
of this Work Letter), and (y) all other obligations of Landlord under the terms
of this Work Letter shall be deferred until such time as such default is cured
pursuant to the terms of the Lease.
5.3 LANDLORD DELAY. As used herein, "LANDLORD DELAY" shall mean: (i) any actual
delay in the completion of the work Tenant is required to perform hereunder
which results from any failure of Landlord to act or provide approvals within
five (5) business days or (ii) the actual delay in the Substantial Completion of
Landlord's Work due to any failure of Landlord, its agents, employees or
contractors to perform the Base Building work or other work required to be
provided by Landlord hereunder in compliance with the terms hereof and in
compliance with applicable laws, rules and regulations or any other acts or
omissions of Landlord, or its agents, or employees. Tenant shall provide prompt
(within 48 hours of becoming aware of any such delay) written notice to Landlord
("Delay Notice") specifying the action or inaction which Tenant contends
constitutes a Landlord Delay hereunder. The period of delay, however, shall
commence to run on the date of the action or inaction and not on the date of the
Delay Notice.
5.4 FORCE MAJEURE DELAYS. The term "FORCE MAJEURE DELAYS" shall mean delays
caused by any event of force majeure described in Section 32.8 of the Lease.
5.5 SUBSTANTIAL COMPLETION. The date set forth in Section 8.4 of the Lease for
Landlord's Substantial Completion of the Base Building work shall be extended
for the period of any Tenant Delays and Force Majeure Delays.
SECTION 6
MISCELLANEOUS
6.1 TENANT'S REPRESENTATIVE. Tenant has designated Greg Gehlen and Dennis Rhett
as its sole representatives with respect to the matters set forth in this Work
Letter, each of whom, until further notice to Landlord, shall have full
authority and responsibility to act on behalf of the Tenant as required in this
Work Letter.
6.2 LANDLORD'S REPRESENTATIVE. Landlord has designated William Drummond as its
sole representative with respect to the matters set forth in this Work Letter,
who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Work Letter.
6.3 TIME OF THE ESSENCE IN THIS WORK LETTER. Unless otherwise indicated, all
references herein to a "number of days" shall mean and refer to calendar days.
In all instances where Tenant is required to approve or deliver an item, if no
written notice of approval is given or the item is not delivered within the
stated time period, at Landlord's sole option, at the end of such period the
item shall automatically be deemed approved or delivered by Tenant and the next
succeeding time period shall commence.
SCHEDULE 1
PLAN LIST -- BUILDING 3
ARCHITECTURAL - ALL DRAWINGS DATED 9-14-00 CONSTRUCTION SET
A0.1 Title Sheet
A0.2 Title 24 ADA Notes
A0.3 General Notes
A1.1 Overall Site Plan
A1.2 Enlarged Site Plan
A2.2 Building Three: Floor Plan
A3.2 Building Three: Roof Plan
A4.2 Building Three: Exterior Elevations
A5.1 Building Sections
A5.2 Wall Sections
A5.3 Wall Sections
A6.1 Enlarged Floor Plans and Exterior Elevations
A8.1 Door Schedule
A9.1 Details
A9.2 Details
A9.3 Details
A9.4 Details
STRUCTURAL - DRAWINGS DATED 8-31-00 4TH PLAN CHECK SUBMITTAL, UNLESS OTHERWISE
NOTED
SD-0 General Notes
SD-1 Foundation Plan
SD-2 Panel at Footing Details
SD-3 Panel Details
SD-4 Roof Details 7-28-00 2nd Plan Check Submittal
SD-5 Chevron Brace Details 7-28-00 2nd Plan Check Submittal
SD-6 Miscellaneous Details 7-28-00 2nd Plan Check Submittal
2S-1 Foundation Plan 6-16-00 Addendum 1
2S-2 Roof Framing Plan
2S-3 Nailing Diagram
2S-4.1 Panel Elevations
2S-4.2 Panel Elevations
PLUMBING - ALL DRAWINGS DATED 6-16-00 ADDENDUM 1
P0.1 Legend Notes & Schedule
P2.03 Building Three Floor Plan
P2.33 Building Three Roof Plan
ELECTRICAL
E0.1 Legend Notes & Schedule 6-16-00 Addendum 1
E1.0 Site Plan Utilities 11-02-00 Addendum 6
E1.1 Site Plan Exterior Lighting 9-27-00 Addendum 5
E2.03 Building 3 Floor Plan 7-28-00 2nd Plan Check Submittal
LANDSCAPE - ALL DRAWINGS DATED 2-7-01 MISCELLANEOUS REVISIONS
L-1 Layout and Mounding Plan
L-2 Irrigation Plan
L-3 Planting Plan
L-4 Legend and Notes
L-5 Details
CIVIL - ALL DRAWINGS DATED 11-13-00 BULLETIN 2
C-1 Cover Sheet
C-2 Topographic Survey
C-3 Grading and Drainage Plan -- Phase I
C-4 Utility Plan -- Phase I
C-5 Driveway and Entry Details
C-6 Sections and Standard Details
C-7 City Standard Details
C-8 Erosion Control Plan -- Phase I
C-9 Phase 2 Borrow Area
EXHIBIT D
LETTER OF CREDIT
LETTER OF CREDIT NO.
IRREVOCABLE STANDBY LETTER OF CREDIT
PLACE AND DATE OF ISSUE:
ACCOUNT PARTY: FORMFACTOR, INC., 2020 RESEARCH DRIVE, LIVERMORE, CALIFORNIA
94550
BENEFICIARY: GREENVILLE INVESTORS, L.P., 675 HARTZ AVENUE, SUITE 300, DANVILLE,
CALIFORNIA 94526
AMOUNT: $__________
EXPIRY DATE AND PLACE FOR PRESENTATION OF DOCUMENTS: [12 MONTHS FROM ISSUE DATE]
IMPERIAL BANK INTERNATIONAL DIVISION, 2015 MANHATTAN BEACH BLVD., 2nd FLR.,
REDONDO BEACH, CA 90278
CREDIT IS AVAILABLE WITH IMPERIAL BANK INTERNATIONAL DIVISION AGAINST PAYMENT OF
DRAFTS DRAWN AT SIGHT ON IMPERIAL BANK INTERNATIONAL DIVISION, 2015 MANHATTAN
BEACH BLVD., 2nd FLR., REDONDO BEACH, CA 90278
DOCUMENTS REQUIRED:
1. THE ORIGINAL OF THIS STANDBY LETTER OF CREDIT AND AMENDMENTS) IF ANY.
2. BENEFICIARY'S STATEMENT DATED AND PURPORTEDLY SIGNED BY AN AUTHORIZED
REPRESENTATIVE CERTIFYING THAT A DEFAULT HAS OCCURRED UNDER ONE OR MORE OF THE
TERMS OF THAT CERTAIN LEASE AGREEMENT DATED ________ 2001 THAT EXISTS BETWEEN
FORMFACTOR, INC. AND BENEFICIARY (THE "LEASE") AND ANY APPLICABLE CURE PERIOD
HAS LAPSED WITHOUT REMEDY.
SPECIAL CONDITIONS:
ALL INFORMATION REQUIRED WHETHER INDICATED BY BLANKS, BRACKETS OR OTHERWISE,
MUST BE COMPLETED AT THE TIME OF DRAWING.
ALL SIGNATURES MUST BE MANUALLY EXECUTED ORIGINALS.
UPON RECEIPT OF THE DOCUMENTATION REQUIRED, WE WILL HONOR BENEFICIARY'S DRAWS
AGAINST THIS IRREVOCABLE STANDBY LETTER OF CREDIT WITHOUT INQUIRY INTO THE
ACCURACY OF BENEFICIARY'S SIGNED STATEMENT AND REGARDLESS OF WHETHER ACCOUNT
PARTY DISPUTES THE CONTENT OF THAT STATEMENT.
PARTIAL DRAWINGS MAY BE MADE UNDER THIS LETTER OF CREDIT, PROVIDED, HOWEVER,
THAT EACH SUCH DEMAND THAT IS PAID BY US SHALL REDUCE THE AMOUNT AVAILABLE UNDER
THIS LETTER OF CREDIT.
IT IS A CONDITION OF THIS STANDBY LETTER OF CREDIT THAT IT SHALL BE DEEMED
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR ONE YEAR PERIODS FROM
THE PRESENT EXPIRATION DATE HEREOF, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO ANY
SUCH DATE, WE SHALL NOTIFY YOU IN WRITING BY CERTIFIED MAIL OR COURIER SERVICE
AT THE ABOVE LISTED ADDRESS THAT WE ELECT NOT TO CONSIDER THIS IRREVOCABLE
LETTER OF CREDIT EXTENDED FOR ANY SUCH ADDITIONAL PERIOD. UPON RECEIPT BY YOU OF
SUCH NOTICE, YOU MAY DRAW HEREUNDER BY MEANS OF YOUR DRAFTS) ON US AT SIGHT
ACCOMPANIED BY YOUR ORIGINAL SIGNED STATEMENT WORDED AS FOLLOWS: [BENEFICIARY]
HAS RECEIVED NOTICE FROM IMPERIAL BANK THAT THE EXPIRATION DATE OF LETTER OF
CREDIT NO. [INSERT L/C NO.] WILL NOT BE EXTENDED FOR AN ADDITIONAL PERIOD. AS OF
THE DATE OF THIS DRAWING, [BENEFICIARY] HAS NOT RECEIVED A SUBSTITUTE LETTER OF
CREDIT OR OTHER INSTRUMENT ACCEPTABLE TO [BENEFICIARY] AS SUBSTITUTE FOR
IMPERIAL BANK LETTER OF CREDIT NO. [INSERT L/C NO.] AND THE PROCEEDS OF THIS
DRAWING WILL BE APPLIED AND HELD AS A CASH SECURITY DEPOSIT PURSUANT TO THE
TERMS OF THE LEASE.
NOTWITHSTANDING THE ABOVE, THE FINAL EXPIRATION DATE SHALL BE [SPECIFY DATE
SIXTY (60) DAYS AFTER EXPIRATION DATE OF INITIAL TERM]
THIS LETTER OF CREDIT IS TRANSFERABLE SUCCESSIVELY IN WHOLE ONLY UP TO THE THEN
AVAILABLE AMOUNT IN FAVOR OF ANY NOMINATED TRANSFEREE THAT IS THE SUCCESSOR IN
INTEREST TO BENEFICIARY OR IS THE NEW OWNER OF CERTAIN STATED PROPERTY
("TRANSFEREE"), ASSUMING SUCH TRANSFER TO SUCH TRANSFEREE IS IN COMPLIANCE WITH
THE THEN APPLICABLE LAW AND REGULATIONS, AT THE TIME OF TRANSFER, THE ORIGINAL
STANDBY L/C AND AMENDMENTS, IF ANY, MUST BE SURRENDERED TO US TOGETHER WITH OUR
TRANSFER FORM AS PER ANNEX "A" ATTACHED HERETO, WHICH FORMS AN INTEGRAL PART OF
THIS LETTER OF CREDIT AND PAYMENT OF OUR TRANSFER COMMISSION.
APPLICANT WILL PAY THE TRANSFER FEES FOR THE FIRST TRANSFER ONLY.
ALL DRAFTS AND DOCUMENTS REQUIRED UNDER THIS LETTER OF CREDIT MUST BE MARKED:
"DRAWN UNDER IMPERIAL BANK LETTER OF CREDIT NO. [INSERT L/C NO.]."
ALL DOCUMENTS ARE TO BE DISPATCHED IN ONE LOT BY COURIER SERVICE TO IMPERIAL
BANK INTERNATIONAL DIVISION, 2015 MANHATTAN BEACH BLVD., 2nd FLR., REDONDO
BEACH, CA 90278.
THIS LETTER OF CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND SUCH
UNDERTAKING SHALL NOT BE IN ANY WAY MODIFIED, AMENDED OR AMPLIFIED BY REFERENCE
TO ANY DOCUMENT, INSTRUMENT OR AGREEMENT REFERRED TO HEREIN OR IN WHICH THIS
LETTER OF CREDIT IS REFERRED TO OR TO WHICH THIS LETTER OF CREDIT RELATES, AND
ANY SUCH REFERENCE SHALL NOT BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY
DOCUMENT, INSTRUMENT OR AGREEMENT.
WE HEREBY ENGAGE WITH YOU THAT ALL DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE
TERMS OF THIS CREDIT WILL BE DULY HONORED IF DRAWN AND PRESENTED FOR PAYMENT AT
THIS OFFICE ON OR BEFORE THE EXPIRATION DATE OF THIS CREDIT.
EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, TI [IS CREDIT IS SUBJECT TO
THE "UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS"(1993 REVISION)
INTERNATIONAL CHAMBER OF COMMERCE (PUBLICATION NO. 500).
TRANSFER FORM ANNEX "A"
WHICH FORMS AN INTEGRAL PART TO IMPERIAL BANK STANDBY LETTER OF CREDIT
NO. [INSERT L/C NO.].
TO: IMPERIAL BANK
____________________
____________________ DATE: ____________________
FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS ALL
RIGHTS UNDER THE ABOVE MENTIONED LETTER OF CREDIT TO:
____________________________________________________________
(NAME OF TRANSFEREE)
____________________________________________________________
(ADDRESS OF TRANSFEREE)
WE HEREBY CERTIFY THAT THE TRANSFEREE IS (CHECK ONE):
_____THE SUCCESSOR IN INTEREST TO THE BENEFICIARY;
_____THE NEW OWNER OF A CERTAIN STATED BUILDING LOCATED AT
____________________________________________________________
BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN IMPERIAL BANK
LETTER OF CREDIT NO. [INSERT L/C NO.] ARE TRANSFERRED IN ITS ENTIRETY TO THE
TRANSFEREE AND THE TRANSFEREE SHALL HAVE THE SOLE RIGHTS AS BENEFICIARY THEREOF,
INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS, WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECTLY TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.
THE ORIGINAL LETTER OF CREDIT NO. [INSERT L/C NO.] PLUS ALL ORIGINAL AMENDMENTS,
IF ANY, ARE ENCLOSED HERETO AND WE ASK YOU TO ENTER THE TRANSFER ON THE REVERSE
SIDE OF THE ORIGINAL LETTER OF CREDIT AND FORWARD IT TOGETHER WITH THE
AMENDMENTS, IF ANY, DIRECTLY TO THE TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF
TRANSFER.
OUR CHECK IN THE AMOUNT OF $_____ COVERING THE TRANSFER FEE IS ENCLOSED HERETO
AND WE AGREE TO PAY YOU ON DEMAND ANY EXPENSES WHICH MAY BE INCURRED BY YOU IN
CONNECTION WITH THIS TRANSFER.
VERY TRULY YOURS,
SIGNATURE AUTHENTICATED
__________________________________ ____________________________________
SIGNATURE OF BENEFICIARY
BENEFICIARY'S NAME:_________________
__________________________________
(AUTHORIZED SIGNATURE)
EXHIBIT E
RULES AND REGULATIONS
1. The sidewalks, passages, exits and entrances of the Building (the
"Building") shall not be obstructed by Tenant or used by it for any purpose
other than for ingress and egress from the Premises. The passages, exits,
entrances, elevators and stairways are not for the use of the general public,
and Landlord shall in all cases retain the right to control and prevent access
thereto of all persons whose presence in the judgment of the Landlord would be
prejudicial to the safety, character, reputation and interests of the Building
and its tenants, provided that nothing herein contained shall be construed to
prevent such access to persons with whom Tenant normally deals in the ordinary
course of its business, unless such persons are engaged in illegal activities.
Tenant shall not go upon the roof of the building except as permitted to install
and operate rooftop equipment pursuant to the Lease.
2. The Premises shall not be used for lodging or sleeping, and unless
ancillary to a food service or cafeteria use for Tenant's employees and invitees
permitted under the terms of the Lease, no cooking shall be done or permitted by
Tenant on the Premises, except that the preparation of coffee, tea, hot
chocolate and similar items for Tenant and its employees shall be permitted.
Tenant shall not cause or permit any unusual or objectionable odors to be
produced on the Premises.
3. Unless specifically provided for in the Lease, all janitorial work
and light bulb replacement for the Premises shall be paid for by the Tenant.
4. Intentionally Deleted.
5. Tenant shall not use or keep in the Premises or the Building any
kerosene, gasoline or flammable or combustible fluid or materials or use any
method of heating or air conditioning except as permitted under the terms of the
Lease. Tenant shall not use, keep or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors and/or vibrations, or
interfere in any way with other tenants or those having business in the
building.
6. Nothing shall be placed on the outside of the Building, including the
exterior windowsills or projections.
7. Tenant must, upon Lease termination, leave the doors and windows in
the demised Premises in the condition required under the terms of the Lease.
8. Tenant shall not permit any animals, including but not limited to,
any household pets to be brought or kept in or about the Premises, the Building
or the Center or any of the Common Areas of the foregoing, except seeing eye
dogs.
9. In case of invasion, mob, riot, public excitement or other
circumstances rendering such action advisable in Landlord's opinion, Landlord
reserves the right to prevent access to the Building during the continuance of
same by such action as Landlord may deem appropriate, including closing
entrances to the Building.
10. Tenant shall only allow its employees to park in such areas as
designated by Landlord. Vehicles of Tenant and their employees may be required
to have identifying stickers provided by Landlord. Tenant agrees to assist
Landlord in enforcing parking restrictions and foreign substance of any kind
whatsoever shall be deposited therein, and any damage resulting t same from
Tenant misuse shall be paid for by Tenant.
11. Tenant shall see that the doors of the Premises are closed and
securely locked at such time as Tenant's employees leave the Premises.
12. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose or in any other manner other than that for
which they were constructed, no foreign substance of any kind whatsoever shall
be deposited therein, and any damage resulting to same from Tenant misuse shall
be paid for by Tenant.
13. Except with the prior consent of Landlord, Tenant shall not sell, or
permit the sale from the Premises or use or permit the use of any sidewalk area
adjacent to the Premises for the sale of newspapers, magazines, periodicals,
theater tickets or any other goods, merchandise or service, or for any business
or activity other than that specifically provided for in Tenant's lease.
14. Except with the prior consent of Landlord, no sales of merchandise,
storage or any other business operation will be allowed in any of the Common
Areas or outside of Tenant's premises.
15. Tenant shall not install any radio or television antenna,
loudspeaker or other device on the roof or exterior walls of the Building except
as otherwise expressly permitted under the terms of the Lease.
16. All wires used by Tenant must be clearly tagged at the distributing
boards and junction-boxes and elsewhere in the Building, with the number of the
office to which said wires lead, and the purpose for which said wires
respectively are used, together with the name of the company operating same. The
attaching of wires to the outside of the Building is absolutely prohibited.
17. Tenant shall not use or allow any of its vendors to use in any
space, or in the common areas of the Building, any hand trucks, carts, dollies
or bins except those equipped with rubber tires and wall protecting side guards.
No other vehicles of any kind shall be brought by Tenant into the Building or
kept in or about the Premises. Further, all repair costs of any damage resulting
from deliveries to the Premises shall be at Tenant's sole cost and expense.
Forklifts must be equipped with pneumatic (soft) tires only. Any other mobile
weight handling equipment shall have the Landlord's written approval before use
in the building.
18. Tenant shall store all its trash and garbage within designated trash
enclosures. Any trash not disposed of in the manner above and determined and
identified as being Tenant's will be properly disposed of by Landlord, and such
Tenant shall be responsible for all costs for time, materials and labor
involved. Absolutely no household items such as mattresses, garden clippings,
furniture, tires, automobile batteries, etc. shall be disposed of in the
Building. No hazardous material shall be placed in Building's trash boxes or
receptacles or any other materials if Such material is of such nature that it
may not be disposed of in the ordinary customary
manner of removing and disposing of trash and garbage in the City of Livermore
without being in violation of any law or ordinance governing such disposal or
any requirement or regulation.
19. Canvassing, soliciting, peddling or distribution of handbills or any
other written material in the Center is prohibited and Tenant shall cooperate to
prevent same.
20. Intentionally Deleted
21. Subject to the terms of the Lease with respect to signage, Landlord
reserves the right to select the name of the Center and the buildings therein
and to make such change or changes of name as it may deem appropriate from time
to time, and Tenant shall not refer to the Center and the buildings therein by
any name other than; (i) the names as selected by Landlord (as same may be
changed from time to time) or (ii) the postal address, approved by the United
States Post Office. Tenant shall not use the name of the Center and the
buildings therein in any respect other than as an address of its operation in
the Center and in marketing efforts with respect to a proposed sublease without
the prior written consent of Landlord.
22. At all times during the term of this Lease, Tenant shall not conduct
any going-out-of-business, fire, bankruptcy, sidewalk or distress sale on or
about the Premises without Landlord's prior written consent.
23. Intentionally deleted.
24. The requirements of Tenant will be attended to only upon application
at such office location designated by Landlord. Employees of Landlord shall not
perform any work or do anything outside of their regular duties unless special
written instructions have been given by Landlord to the employee.
25. Tenant shall not disturb, solicit, or canvass any occupant of the
Building or Center and shall cooperate with Landlord or Agent of Landlord to
prevent same.
26. Tenant is required per the City of Livermore Fire Code to have a
fully serviced fire extinguisher(s) in the Premises in good working order,
including a current inspection certificate.
27. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of the Rules and Regulations in favor of
any other tenant or tenants, or prevent Landlord from thereafter enforcing any
such Rules and Regulations against any or all of the tenants in the Center or
Landlord's Parcels.
28. Wherever the word "Tenant" occurs in these Rules and Regulations, it
is understood and agreed that it shall mean Tenant's associates, agents, clerks,
employees and visitors. Wherever the word "Landlord" occurs in the Rules and
Regulations, it is understood and agreed that it shall mean Landlord's assigns,
agents, clerks, and employees.
29. These Rules and Regulations are in addition to, and shall not be
construed in any way to modify, alter or amend, in whole or part, the terms,
covenants, agreements and conditions
of any lease of Premises in the Center. In the event of any express conflict
between the terms of the Lease and the terms of this Exhibit E, the terms of the
Lease shall control.
30. Landlord reserves the right to make such other reasonable rules and
regulations as in its judgment may from time to time be needed to for safety,
care and cleanliness of the Center, and for the preservation of good order
herein.
31. Tenant shall not exceed the maximum occupancy of the Premises as
determined by the City of Livermore Fire Marshall.
32. Intentionally Deleted.
33. All window coverings installed by Tenant and visible from the
outside of the Building require the prior written approval of Landlord, which
shall not be unreasonably withheld or delayed.
34. Tenant shall park motor vehicles in those general parking areas as
designated by landlord except for loading and unloading. During those periods of
loading and unloading, Tenant shall not unreasonably interfere with the traffic
flow within the Center and loading and unloading areas of other tenants.
35. Business machines and mechanical equipment belonging to Tenant which
causes noise or vibration that may be transmitted to the structure of the
Building to such a degree as to be objectionable to Landlord or other Building
tenants, shall be placed and maintained by Tenant at Tenant's expense on
vibration eliminators or other devices sufficient to eliminate noise or
vibration.
36. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in the parking or receiving areas overnight.
37. Tractor trailers which must be unhooked or parked with dolly wheels
on asphalt paving must use steel plates or wood blocks under the dolly wheels to
prevent damage to the asphalt paving surfaces. No parking or storing of such
trailers shall be permitted in the auto parking areas of the Center or on the
streets adjacent thereto.
38. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
39. Tenant shall not permit any motor vehicles to be washed on any
portion of the premises or in the Common Areas of the Center not shall Tenant
permit mechanical work or maintenance of motor vehicles, to be performed on any
portion of the premises or in the Common Areas of the Center.
EXHIBIT F
LIST OF HAZARDOUS SUBSTANCES
- -------------------------------------------------------------------------------
205 Fast Hardener Nitrogen Trifluoride
- -------------------------------------------------------------------------------
* * * * * *
- -------------------------------------------------------------------------------
Acetone Oxygen
- -------------------------------------------------------------------------------
Acetylene Palladium AA Standards
- -------------------------------------------------------------------------------
ACR Auxillary Salts * * *
- -------------------------------------------------------------------------------
* * * * * *
- -------------------------------------------------------------------------------
* * * Potassium Cyanide
- -------------------------------------------------------------------------------
* * * Potassium Hydroxide
- -------------------------------------------------------------------------------
Ammonium Hydroxide * * *
- -------------------------------------------------------------------------------
Ardox 4025, D Film Resist Stripper * * *
- -------------------------------------------------------------------------------
Argon * * *
- -------------------------------------------------------------------------------
Aubel (2M) Sodium Hydroxide
- -------------------------------------------------------------------------------
* * * Sodium Hypochlorite
- -------------------------------------------------------------------------------
* * * Sodium Persulfate
- -------------------------------------------------------------------------------
* * * Sodium Sulfite
- -------------------------------------------------------------------------------
* * * Sulfamic Acid
- -------------------------------------------------------------------------------
Bath: copper sulfate & sulfuric acid solution Sulfuric Acid 10%
- -------------------------------------------------------------------------------
Bath: sulfuric acid & sodium hydroxide, acetic * * *
- -------------------------------------------------------------------------------
Bath: sulfuric acid solution Texmet Polishing Cloth
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
Boric Acid
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
Butyl Acetate
- -------------------------------------------------------------------------------
Carbon Dioxide
- -------------------------------------------------------------------------------
Chloroform
- -------------------------------------------------------------------------------
Copper AA Standard
- -------------------------------------------------------------------------------
Cyanide Gold Reclaim
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
Epoxide Hardener
- -------------------------------------------------------------------------------
Gold Solution
- -------------------------------------------------------------------------------
Helium, Compressed
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
Hydrochloric Acid
- -------------------------------------------------------------------------------
Hydrofluoric Acid
- -------------------------------------------------------------------------------
Hydrogen Peroxide Solution 50%
- -------------------------------------------------------------------------------
Isopropyl Alcohol
- -------------------------------------------------------------------------------
Lead AA Standard
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
Liquid Nitrogen
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
Miscellaneous Acid Waste
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
* * *
- -------------------------------------------------------------------------------
Nitric Acid 70%
- -------------------------------------------------------------------------------
Nitric Acid 70% Redistilled 99.999%
- -------------------------------------------------------------------------------
Nitrogen
- -------------------------------------------------------------------------------
Nitrogen Hydrogen Gas
- -------------------------------------------------------------------------------
- ------------
* * * Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as *****. A complete version of this exhibit
has been filed separately.
EXHIBIT F-1
MINIMUM STANDARDS FOR HAZARDOUS SUBSTANCE USE AND/OR STORAGE AREAS
All areas where hazardous substances are used and/or stored will be designed,
constructed, and operated to meet the minimum standards specified below.
Legal and Other Applicable Standards
All structures and equipment where hazardous substances are used and/or stored
will, at a minimum, meet the standards specified in applicable federal, state,
and local laws, regulations, codes, or standards.
Secondary Containment
Secondary containment must be provided for all liquid hazardous substances used
and/or stored in indoor and outdoor areas. Containment capacity must be equal to
or exceed the volume of the largest container or 10 percent of the total
aggregate volume of all containers within the containment structure. Containment
structures must be designed to ensure that contents of containers will not be
released if containers tip over. The surfaces of the containment structures must
be compatible with the hazardous substances used and/or stored, such that any
hazardous substances released within the containment structure will not
deteriorate or penetrate the containment structure. A building or interior room
will not be considered a secondary containment structure unless the entire
building or room meets the above specifications and entryways are designed to
contain releases.
Container Storage
No hazardous substance container will be placed directly on top of any other
container (i.e., no stacking), unless it can be demonstrated that such
configuration could not result in releases of liquid hazardous substances.
Containers will be stored in a manner such that exterior surfaces are readily
accessible for visible inspection at all times. If hazardous substances are
stored in drums or other large containers, any rows of such containers will be
no more than two containers wide, with minimum aisle space between the rows of
24 inches.
Outdoor Areas
All solid hazardous substances stored in outdoor areas will be provided with
secondary containment. All outdoor areas where hazardous substances are used
and/or stored will be designed to prevent run-off or discharge of storm water
that has been in contact with any hazardous substances or equipment.
Ancillary Equipment
All ancillary equipment (i.e., piping, pumps, valves, fittings, etc.) will be
provided with secondary containment and will be constructed of materials
compatible with the hazardous substances that contact the equipment.
Segregation of Incompatible Hazardous Substances
All incompatible hazardous substances will be segregated by secondary
containment structures such that releases of incompatible hazardous substances
cannot intermingle.
Ventilation
All areas where hazardous substance are used and/or stored will be adequately
ventilated to prevent accumulation of flammable or explosive vapors. Ventilation
systems will be provided with appropriate air pollution control equipment in
accordance with federal, state, and local regulations.
EXHIBIT G
COPY OF CENTER
COVENANTS, CONDITIONS & RESTRICTIONS
- ---------------------
RECORDING REQUESTED
BY
CHICAGO TITLE COMPANY
- ---------------------
- --------------------------------------------------------------------------------
RECORDED AT THE REQUEST OF: CERTIFIED TO BE A TRUE COPY OF DOCUMENT
RECORDED 8-3-01 IN BOOK __
WHEN RECORDED RETURN TO: SERIES 2001-281501 OF OFFICIAL RECORDS
Pacific Union Commercial Development
675 Hartz Avenue, #300 CHICAGO TITLE INS. CO
Danville, CA 94526 BY_______________________________
Attention Bill Drummond
- --------------------------------------------------------------------------------
DECLARATION OF COVENANTS CONDITIONS AND
RESTRICTIONS OF
PACIFIC CORPORATE CENTER
A Common Interest Development
INDEX
DECLARATION OF COVENANTS,
CONDITIONS AND RESTRICTIONS OF
PACIFIC CORPORATE CENTER
A Common Interest Development
I INTENTION OF DECLARATION......................................................... 1
1.1 FACTS..................................................................... 1
1.1.1 Property Owned by Declarant........................................ 1
1.1.2 Nature of Project.................................................. 1
1.2 APPLICABILITY OF RESTRICTIONS...................................... 1
II DEFINITIONS...................................................................... 2
2.1 ADDITIONAL CHARGES........................................................ 2
2.2 ALTERATION................................................................ 2
2.3 ARTICLES.................................................................. 2
2.4 ASSOCIATION............................................................... 2
2.5 ASSOCIATION LANDSCAPE AREA................................................ 2
2.6 ASSOCIATION PRIVATE DRIVE................................................. 2
2.7 BOARD..................................................................... 2
2.8 BUDGET.................................................................... 2
2.9 BUILDING.................................................................. 2
2.10 BYLAWS.................................................................... 2
2.11 CITY...................................................................... 2
2.12 COMMON AREA............................................................... 2
2.13 COUNTY.................................................................... 2
2.14 DECLARANT................................................................. 2
2.15 DECLARATION............................................................... 3
2.16 FIRST MORTGAGE............................................................ 3
2.17 FIRST MORTGAGEE........................................................... 3
2.18 IMPROVEMENTS.............................................................. 3
2.19 INVITEE................................................................... 3
2.20 MAINTENANCE PLAT.......................................................... 3
2.21 MAP....................................................................... 3
2.22 MEMBER.................................................................... 3
2.23 MORTGAGE.................................................................. 3
2.24 MORTGAGEE................................................................. 3
2.25 NOTICE AND HEARING........................................................ 3
2.26 OWNER..................................................................... 3
2.27 PARCEL.................................................................... 4
2.28 PROJECT................................................................... 4
2.29 PROJECT DOCUMENTS......................................................... 4
2.30 RULES..................................................................... 4
2.31 SHARED LANDSCAPE AREA..................................................... 4
2.32 SHARED PRIVATE DRIVE...................................................... 4
III OWNERSHIP AND EASEMENTS.......................................................... 4
3.1 NON-SEVERABILITY.......................................................... 4
- i -
3.2 OWNERSHIP OF PARCELS...................................................... 4
3.3 OWNERSHIP OF COMMON AREA.................................................. 4
3.4 EASEMENTS................................................................. 4
3.4.1 Additional Easements............................................... 4
3.4.2 Association ....................................................... 5
3.4.3 Common Area........................................................ 5
3.4.4 Governmental Entities.............................................. 5
3.4.5 Map................................................................ 5
3.4.6 Shared Landscape Area.............................................. 5
3.4.7 Shared Private Drive............................................... 5
3.4.8 Storm Drains....................................................... 5
3.4.9 Support, Maintenance and Repair.................................... 5
3.4.10 Utilities.......................................................... 5
IV USE RESTRICTIONS................................................................. 6
4.1 ALTERATIONS............................................................... 6
4.2 ANIMALS................................................................... 6
4.3 ANTENNAS AND SATELLITE DISHES............................................. 6
4.4 EXTERIOR LIGHTING......................................................... 6
4.5 INVITEES.................................................................. 6
4.6 PARKING................................................................... 6
4.7 RENTAL OF PARCELS......................................................... 6
4.8 RULES..................................................................... 6
4.9 SIGNS..................................................................... 6
4.10 STORAGE OF WASTE MATERIALS................................................ 7
4.11 TAXES..................................................................... 7
4.12 USE OF BUILDINGS.......................................................... 7
4.13 USE OF COMMON AREA........................................................ 7
V IMPROVEMENTS..................................................................... 7
5.1 MAINTENANCE OF COMMON AREA AND IMPROVEMENTS............................... 7
5.2 ALTERATIONS TO COMMON AREA................................................ 8
5.2.1 Approval........................................................... 8
5.2.2 Funding............................................................ 8
5.3 MAINTENANCE OF PARCELS AND BUILDINGS...................................... 8
5.3.1 Generally.......................................................... 8
5.3.2 Utility Lines...................................................... 8
5.3.3 Storm Water Improvements........................................... 8
5.4 LIMITATIONS............................................................... 8
5.4.1 Architectural Committee Approval................................... 8
5.4.2 Loading Docks...................................................... 8
5.4.3 Fences............................................................. 8
5.5 LANDSCAPING............................................................... 8
5.5.1 Common Area........................................................ 9
5.5.2 Parcels............................................................ 9
5.6 SHARED MAINTENANCE........................................................ 9
5.7 RIGHT OF MAINTENANCE AND ENTRY BY ASSOCIATION............................. 9
5.8 DAMAGE AND DESTRUCTION -- ASSOCIATION..................................... 10
5.8.1 Bids............................................................... 10
5.8.2 Proceeds........................................................... 10
5.9 DAMAGE OR DESTRUCTION..................................................... 10
- ii -
5.10 CONDEMNATION OF COMMON AREA............................................... 10
VI FUNDS AND ASSESSMENTS............................................................ 10
6.1 COVENANTS TO PAY.......................................................... 11
6.1.1 Liability for Payment.............................................. 11
6.1.2 Funds Held in Trust................................................ 11
6.1.3 Offsets............................................................ 11
6.2 REGULAR ASSESSMENTS....................................................... 11
6.2.1 Payment of Regular Assessments..................................... 11
6.2.2 Allocation of Regular Assessments.................................. 11
6.2.3 Non-Waiver of Assessments.......................................... 11
6.3 SPECIAL ASSESSMENTS....................................................... 11
6.4 REIMBURSEMENT ASSESSMENTS................................................. 12
6.5 ACCOUNTS.................................................................. 12
6.5.1 Types of Accounts.................................................. 12
6.5.2 Reserve Account.................................................... 12
6.5.3 Current Operation Account.......................................... 12
6.6 BUDGET, FINANCIAL STATEMENTS, REPORTS AND STUDIES......................... 12
6.6.1 Preparation and Distribution of Budget............................. 12
6.6.2 Annual Report...................................................... 12
6.6.3 Notice of Increased Assessments.................................... 12
6.6.4 Statement of Outstanding Charges................................... 12
6.7 ENFORCEMENT OF ASSESSMENTS................................................ 12
6.7.1 Procedures......................................................... 12
6.7.2 Additional Charges................................................. 13
6.7.3 Satisfaction of Lien............................................... 13
6.7.4 Lien Eliminated By Foreclosure..................................... 13
6.8 SUBORDINATION OF LIEN..................................................... 14
VII MEMBERSHIP IN AND DUTIES OF THE ASSOCIATION...................................... 14
7.1 THE ORGANIZATION.......................................................... 14
7.2 MEMBERSHIP................................................................ 14
7.3 VOTING.................................................................... 14
7.4 RULES..................................................................... 14
7.5 TRANSFERS OF COMMON AREA.................................................. 14
7.6 INSURANCE................................................................. 14
7.6.1 General Provisions and Limitations................................. 15
7.6.2 Types of Coverage.................................................. 15
7.6.3 Annual Review...................................................... 16
VIII DEVELOPMENT RIGHTS............................................................... 16
8.1 LIMITATIONS OF RESTRICTIONS............................................... 16
8.2 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION........................... 16
8.3 APPEARANCE OF PROJECT..................................................... 17
8.4 MARKETING RIGHTS.......................................................... 17
8.5 AMENDMENT................................................................. 17
IX RIGHTS OF MORTGAGEES............................................................. 17
9.1 CONFLICT.................................................................. 17
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9.2 INSPECTION OF BOOKS AND RECORDS........................................... 17
9.3 FINANCIAL STATEMENTS FOR MORTGAGEES....................................... 17
9.4 MORTGAGE PROTECTION....................................................... 17
X AMENDMENT AND ENFORCEMENT........................................................ 17
10.1 AMENDMENTS................................................................ 17
10.2 ENFORCEMENT............................................................... 18
10.2.1 Rights to Enforce.................................................. 18
10.2.2 Violation of Law................................................... 18
10.2.3 Remedies Cumulative................................................ 18
10.2.4 Nonwaiver.......................................................... 18
10.3 DISPUTES BETWEEN OWNERS AND DECLARANT..................................... 18
10.4 MANDATORY BINDING ARBITRATION............................................. 19
10.4.1 Selection and Timing............................................... 19
10.4.2 Discovery.......................................................... 19
10.4.3 Full Disclosure.................................................... 19
10.4.4 Hearing............................................................ 20
10.4.5 Decision........................................................... 20
10.4.6 Fees and Costs..................................................... 20
10.4.7 Judicial Reference Alternative..................................... 20
XI ARCHITECTURAL AND LANDSCAPING CONTROL............................................ 21
11.1 APPLICABILITY............................................................. 21
11.1.1 Generally.......................................................... 21
11.1.2 Exceptions......................................................... 21
11.1.3 Declarant Exemption................................................ 21
11.1.4 Relationship to Governmental Approvals............................. 21
11.2 MEMBERS AND VOTING........................................................ 21
11.2.1 Initial Committee.................................................. 21
11.2.2 Appointment by Owners.............................................. 21
11.3 DUTIES AND POWERS......................................................... 21
11.3.1 Duties............................................................. 21
11.3.2 Architectural Standards............................................ 22
11.3.3 Powers............................................................. 22
11.3.4 Consultants........................................................ 22
11.4 APPLICATION FOR APPROVAL OF IMPROVEMENTS.................................. 22
11.5 BASIS FOR APPROVAL OF IMPROVEMENTS........................................ 22
11.6 FORM OF APPROVALS, CONDITIONAL APPROVALS
AND DENIALS............................................................... 22
11.7 WORK...................................................................... 22
11.8 DETERMINATION............................................................. 22
11.8.1 Notice of Completion............................................... 22
11.8.2 Inspection......................................................... 23
11.9 FAILURE TO REMEDY THE NON-COMPLIANCE...................................... 23
11.10 WAIVER.................................................................... 23
11.11 APPEAL OF DECISION OF COMMITTEE........................................... 23
11.12 NO LIABILITY.............................................................. 23
11.13 EVIDENCE OF APPROVAL OR DISAPPROVAL....................................... 23
XII MISCELLANEOUS PROVISIONS......................................................... 24
12.1 TERM OF DECLARATION................................................ 24
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12.2 CONSTRUCTION OF PROVISIONS......................................... 24
12.3 BINDING............................................................ 24
12.4 SEVERABILITY AND PROVISIONS........................................ 24
12.5 GENDER, NUMBER AND CAPTIONS........................................ 24
12.6 REDISTRIBUTION OF PROJECT DOCUMENTS................................ 24
12.7 EXHIBITS........................................................... 24
12.8 REQUIRED ACTIONS OF ASSOCIATION.................................... 24
12.9 SUCCESSOR STATUTES................................................. 24
12.10 CONFLICT........................................................... 24
- v -
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
OF
PACIFIC CORPORATE CENTER
A COMMON INTEREST DEVELOPMENT
THIS DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF PACIFIC CORPORATE
CENTER ("Declaration") is made by GREENVILLE INVESTORS, L.P., a California
limited partnership ("Declarant").
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ARTICLE I
INTENTION OF DECLARATION
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1.1 FACTS: This Declaration is made with reference to the following
facts:
1.1.1 Property Owned by Declarant: Declarant is the owner of all
the real property and Improvements thereon located in the City of Livermore,
County of Alameda, State of California, described as follows:
Parcels 1 through 8, inclusive, as shown on Parcel Map 7624,
filed for record on December 12, 2000, in Book 254 of Maps at
Pages 73 through 82, inclusive, in the Official Records of the
County of Alameda, State of California.
1.1.2 Nature of Project: Declarant intends to develop the
Project as a Common Interest Development which shall be a planned development as
defined in California Civil Code Section 1351(k). The Project is intended to be
created in conformity with the provisions of the Davis-Stirling Common Interest
Development Act (California Civil Code, Section 1350 et seq.). To establish the
Project, Declarant desires to impose on the Project these mutually beneficial
restrictions, easements, assessments and liens under a comprehensive general
plan of improvement and development for the benefit of all of the Owners, the
Parcels and Common Area within the Project.
1.2 APPLICABILITY OF RESTRICTIONS: Pursuant to California Civil Code
Sections 1353 and 1354, Declarant hereby declares that the Project and all
Improvements thereon are subject to the provisions of this Declaration. The
Project shall be held, conveyed, hypothecated, encumbered, leased, rented, used,
occupied and improved subject to the covenants, conditions and restrictions
stated in this Declaration. All such covenants, conditions and restrictions are
declared to be in furtherance of the plan for the subdivision, development and
management of the Project as a Common Interest Development. All of the
limitations, easements, uses, obligations, covenants, conditions, and
restrictions stated in this Declaration shall run with the Project and shall
inure to the benefit of and be binding on all Owners and all other parties
having or acquiring any right, title or interest in any part of the Project.
1
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ARTICLE II
DEFINITIONS
- --------------------------------------------------------------------------------
Unless otherwise defined or unless the context clearly requires a different
meaning, the terms used in this Declaration, the Map and any grant deed to a
Parcel shall have the meanings specified in this Article.
2.1 ADDITIONAL CHARGES: The term "Additional Charges" shall mean costs,
fees, charges and expenditures, including without limitation, attorneys' fees,
late charges, interest and recording and filing fees actually incurred by the
Association in collecting and/or enforcing payment of assessments, fines and/or
penalties.
2.2 ALTERATION: The term "Alteration" shall mean constructing,
performing, installing, remodeling, repairing, replacing, demolishing, and/or
changing the color or shade of any Improvement.
2.3 ARTICLES: The term "Articles" shall mean the Articles of
Incorporation of Pacific Corporate Center Owners Association, which are or shall
be filed in the Office of the Secretary of State of the State of California.
2.4 ASSOCIATION: The term "Association" shall mean Pacific Corporate
Center Owners Association, its successors and assigns, a nonprofit mutual
benefit corporation incorporated under the laws of the State of California.
2.5 ASSOCIATION LANDSCAPE AREA: The term "Association Landscape Area"
shall mean the landscape strips, medians and areas situated within an
Association Maintained Area as shown on the Maintenance Plat.
2.6 ASSOCIATION PRIVATE DRIVE: The term "Association Private Drive"
shall mean the roadways, driveways and parking areas situated within an
Association Maintained Area as shown on the Maintenance Plat.
2.7 BOARD: The term "Board" shall mean the Board of Directors of the
Association.
2.8 BUDGET: The term "Budget" shall mean a pro forma operating budget
prepared by the Board in accordance with Section 6.6.1 of this Declaration.
2.9 BUILDING: The term "Building" shall mean each of the buildings
constructed on the Parcels approximately as shown on the Maintenance Plat.
2.10 BYLAWS: The term "Bylaws" shall mean the Bylaws of the Association
and any amendments thereto.
2.11 CITY: The term "City" shall mean the City of Livermore, California.
2.12 COMMON AREA: The term "Common Area" shall mean easements under,
over, upon and across the Association Landscape Areas and Association Private
Drives, for the
2
purposes described in Section 3.4.3. Common Area includes all Improvements
situated thereon or therein.
2.13 COUNTY: The term "County" shall mean the County of Alameda, State
of California.
2.14 DECLARANT: The term "Declarant" shall mean GREENVILLE INVESTORS,
L.P., a California limited partnership. The term "Declarant" shall also mean any
person or entity if (i) a notice signed by Declarant and such person or entity
has been recorded in the County in which such person or entity assumes the
rights and duties of Declarant to some portion of the Project, or (ii) such
person or entity acquires all of the Project then owned by a Declarant which
must be more than one (1) Parcel. There may be more than one Declarant at any
given time.
2.15 DECLARATION: The term "Declaration" shall mean this Declaration of
Covenants, Conditions and Restrictions of Pacific Corporate Center and includes
any subsequently recorded amendments.
2.16 FIRST MORTGAGE: The term "First Mortgage" shall mean a Mortgage
which has priority under the recording statutes of the State of California over
all other Mortgages encumbering a specific Parcel.
2.17 FIRST MORTGAGEE: The term "First Mortgagee" shall mean the
Mortgagee of a First Mortgage. The term "First Mortgagee" shall also include an
insurer or governmental guarantor of a First Mortgage including, without
limitation, the Federal Housing Authority and the Department of Veteran's
Affairs.
2.18 IMPROVEMENTS: The term "Improvements" shall mean everything
constructed, installed or planted on real property, including without
limitation, buildings, streets, fences, walls, paving, pipes, wires, grading,
landscaping and other works of improvement as defined in Section 3106 of the
California Civil Code, excluding only those Improvements or portions thereof
which are dedicated to the public or a public or quasi-public entity or utility
company, and accepted for maintenance by the public, such entity or utility
company.
2.19 INVITEE: The term "Invitee" shall mean any person whose presence
within the Project is approved by or is at the request of the Association or a
particular Owner, including, but not limited to, lessees, tenants, and the
family, guests, employees, licensees, patrons, customers, or invitees of Owners,
tenants or lessees.
2.20 MAINTENANCE PLAT: The term "Maintenance Plat" shall mean the
drawing attached hereto as Exhibit "A," "B-1" and "B-2."
2.21 MAP: The term "Map" shall mean Parcel Map 7624, recorded on
December 12, 2000, in Book 254 of Maps at Pages 73 through 82, inclusive, in the
Official Records of the County, including any subsequently recorded amended
final maps, parcel maps, certificates of correction, lot line adjustments and/or
records of survey.
2.22 MEMBER: The term "Member" shall mean an Owner.
3
2.23 MORTGAGE: The term "Mortgage" shall mean any duly recorded mortgage
or deed of trust encumbering a Parcel.
2.24 MORTGAGEE: The term "Mortgagee" shall mean a Mortgagee under a
Mortgage as well as a beneficiary under a deed of trust.
2.25 NOTICE AND HEARING: The term "Notice and Hearing" shall mean the
procedure which gives an Owner notice of an alleged violation of the Project
Documents and the opportunity for a hearing before the Board.
2.26 OWNER: The term "Owner" shall mean the holder of record fee title
to a Parcel, including Declarant as to each Parcel owned by Declarant. If more
than one person owns a single Parcel, the term "Owner" shall mean all owners of
that Parcel. The term "Owner" shall also mean a contract purchaser (vendee)
under an installment land contract but shall exclude the contract vendor and any
person having an interest in a Parcel merely as security for performance of an
obligation.
2.27 PARCEL: The term "Parcel" refers to a Separate Interest as defined
in California Civil Code Section 1351(1) and shall mean Parcels 1 through 8,
inclusive, as shown on the Map. Parcel includes all Improvements situated
thereon or therein.
2.28 PROJECT: The term "Project" shall mean Parcels 1 through 8,
inclusive, as shown on the Map and all Improvements thereon.
2.29 PROJECT DOCUMENTS: The term "Project Documents" shall mean the
Articles, Bylaws, this Declaration and the Rules.
2.30 RULES: The term "Rules" shall mean the rules adopted by the Board,
including architectural guidelines, restrictions and procedures.
2.31 SHARED LANDSCAPE AREA: The term "Shared Landscape Area" shall mean
the landscape strips, medians and areas situated within a Shared Maintenance
Area as shown on the Maintenance Plat.
2.32 SHARED PRIVATE DRIVE: The term "Shared Private Drive" shall mean
the roadways, driveways and parking areas situated within a Shared Maintenance
Area as shown on the Maintenance Plat.
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ARTICLE III
OWNERSHIP AND EASEMENTS
- --------------------------------------------------------------------------------
3.1 NON-SEVERABILITY: The interest of each Owner in the use and benefit
of the Common Area shall be appurtenant to the Parcel owned by the Owner. Any
conveyance of any Parcel shall automatically transfer the right to use the
Common Area without the necessity of express reference in the instrument of
conveyance. The ownership interests in the Common Area and Parcels described in
this Article are subject to the easements described, granted and reserved in
this Declaration. Each of the easements described, granted or reserved herein
shall be established upon the recordation of this Declaration and shall be
enforceable as equitable
4
servitudes and covenants running with the land for the use and benefit of the
Owners and their Parcels superior to all other encumbrances applied against or
in favor of any portion of the Project.
3.2 OWNERSHIP OF PARCELS: Title to each Parcel in the Project shall be
conveyed in fee to an Owner, subject to the easement in the Common Area and any
other easements described in Section 3.4, below.
3.3 OWNERSHIP OF COMMON AREA: An easement in the Colmon Area shall be
conveyed to the Association prior to or concurrently with the conveyance of the
first-Parcel to an Owner. The Association shall be deemed to have accepted the
Common Area conveyed to it when (i) a grant deed of easement conveying the
Common Area has been recorded in the Official Records of the County and (ii)
assessments have commenced.
3.4 EASEMENTS: The easements and rights specified in this Article are
hereby created and shall exist whether or not they are also set forth in
individual grant deeds to Parcels. By reference to this Declaration, each grant
deed to a Parcel shall be deemed to be conveyed with the benefit of and subject
to all applicable easements set forth in this Section.
3.4.1 Additional Easements: Notwithstanding anything expressed
or implied to the contrary, this Declaration shall be subject to all easements
granted by Declarant for the installation and maintenance of utilities and
drainage facilities necessary for the development of the Project.
3.4.2 Association: The Association and its duly authorized
agents and representatives shall have a non-exclusive right and easement as is
necessary to perform the duties and obligations of the Association set forth in
the Project Documents, including the right to enter upon Parcels, subject to the
limitations contained in this Declaration.
3.4.3 Common Area: There is hereby reserved from the conveyance
of each Parcel and granted to the Association an easement for ingress, egress,
utilities and landscaping purposes over, under and through the Common Area.
Every Owner shall have a non-exclusive right and easement for the ingress,
egress, use and enjoyment of the Common Area which shall be appurtenant to and
shall pass with the title to every Parcel, subject to exceptions, limitations or
restrictions set forth in the deed which conveys the Common Area to the
Association.
3.4.4 Governmental Entities: All governmental and
quasi-governmental entities, agencies and utilities and their agents shall have
a non-exclusive easement over the Common Area for the purposes of performing
their duties within the Project.
3.4.5 Man: The Common Area and Parcels are subject to all
easements and rights of way shown on the Map.
3.4.6 Shared Landscape Area: There is hereby reserved from the
conveyance of each of Parcels 1 through 6, inclusive, an easement for the
installation, maintenance, repair and replacement of landscaping, irrigation and
ancillary purposes, over, under and through the portions of these Parcels which
are a "Shared Landscape Area." The Owners of Parcels 1 through 6, inclusive,
shall each have a non-exclusive right and easement for installation,
5
maintenance, repair and replacement of landscaping, irrigation and ancillary
purposes, under, over, upon and across any "Shared Landscape Area" which serves
their Parcel, as indicated on the Maintenance Plat.
3.4.7 Shared Private Drive: There is hereby reserved from the
conveyance of each of Parcels 1 through 6, inclusive, an easement for ingress,
egress, and utilities purposes over, under and through the portions of these
Parcels which are a "Shared Private Drive." The Owners of Parcels 1 through 6,
inclusive, shall each have a non-exclusive right and easement for ingress,
egress, utilities purposes, under, over, upon and across any "Shared Private
Drive" which serves their Parcel, as indicated on the Maintenance Plat.
3.4.8 Storm Drains: There are reserved and granted for the
benefit of each Parcel and the Common Area, over, under, across and through the
Project, except the Buildings, non-exclusive easements for surface and
subsurface storm drains and the flow of water in accordance with natural
drainage patterns and the drainage patterns and Improvements installed or
constructed by Declarant. Additionally, this Declaration and each Parcel and the
Common Areas shall be subject to all easements granted by Declarant for the
installation and maintenance of drainage Improvements necessary for the
development of the Project.
3.4.9 Support, Maintenance and Repair: The Association and each
Owner shall have a non-exclusive right and easement appurtenant to the Common
Area and to all Parcels through each Parcel and the Common Area for the support,
maintenance and repair of the Common Area and all Parcels.
3.4.10 Utilities: Each Owner shall have a non-exclusive right
and easement over, under, across and through the Project, except for portions of
the Project on which a structure is situated, for utility lines, pipes, wires
and conduits installed by Declarant. Additionally, this Declaration and each
Parcel and the Common Areas shall be subject to all easements granted by
Declarant for the installation and maintenance of utilities necessary for the
development of the Project.
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ARTICLE IV
USE RESTRICTIONS
- --------------------------------------------------------------------------------
4.1 ALTERATIONS: Except as otherwise specifically provided in this
Declaration, no Alteration may be made to any Improvement until plans have been
submitted and approved pursuant to Article XI.
4.2 ANIMALS: The Board shall have the right to prohibit the maintenance
of any pet which, after Notice and Hearing, is found to be a nuisance to other
Owners. No dog shall be allowed outside of a Building unless it is under the
control of a responsible person by leash.
4.3 ANTENNAS AND SATELLITE DISHES: No outside television antenna,
microwave or satellite dish, aerial, or other such device (collectively "Video
Antennas") with a diameter or diagonal measurement in excess of one (1) meter
shall be erected, constructed or placed on any Common Area or Parcel without the
approval of the Architectural Committee. Video antennas with a diameter or
diagonal measurement of one (1) meter or less may be
6
installed only if they conform to the Architectural Standards and, if then
required by the Architectural Standards, any necessary approval is obtained in
accordance with the provisions of Article XI. Reasonable restrictions which do
not significantly increase the cost of the Video Antenna system or significantly
decrease its efficiency or performance may be imposed.
4.4 EXTERIOR LIGHTING: No Owner shall remove, damage or disable any
exterior photo cell light fixture which is installed by Declarant. The Owner of
the Parcel on which such exterior photo cell light fixture is situated shall at
all times maintain the fixture in good working condition, including maintenance
of the light bulb and shall pay all electric charges required to operate the
fixture. Notwithstanding the foregoing, the Association shall maintain any
exterior photo cell light fixtures, if any, which are connected to the
Association's electric service.
4.5 INVITEES: Each Owner shall be responsible for compliance with the
provisions of the Project Documents by that Owner's Invitees. An Owner shall
promptly pay any Reimbursement Assessment levied and/or any fine or penalty
imposed against an Owner for violations committed by that Owner's Invitees.
4.6 PARKING: No dilapidated or inoperable vehicle shall be parked or
stored where visible from adjacent Parcels or the public streets adjacent to the
Project. As long as applicable ordinances and laws are observed, including the
requirements of Section 22658.2 of the California Vehicle Code, any vehicle
which is in violation of this Declaration may be removed.
4.7 RENTAL OF PARCELS: An Owner shall be entitled to rent or lease a
Parcel, if: (i) there is a written rental or lease agreement specifying that the
tenant shall be subject to all provisions of the Project Documents and a failure
to comply with any provision of the Project Documents shall constitute a default
under the agreement; (ii) the period of the rental or lease is not less than
thirty (30) days; (iii) the Owner gives notice of the tenancy to the Board and
has otherwise complied with the terms of the Project Documents; and (iv) the
Owner gives each tenant a copy of the Project Documents.
4.8 RULES: The Board may promulgate reasonable Rules relating to the use
of the Project by Owners and their Invitees. Neither an Owner nor its Invitees
shall violate any provision of this Declaration, the Bylaws or the Rules as the
same may be amended from time to time.
4.9 SIGNS: All signs displayed in the Project shall be attractive and
compatible with the design of the Project and shall comply with all applicable
local ordinances. The Board may establish uniform Rules to govern the location,
size and appearance of signs; provided, however, any sign which is installed
consistent with the current Rules at the time of the installation, including a
substantially similar replacement sign, if necessary, may remain in place
(provided that it is properly maintained in good aesthetic condition consistent
with any applicable Rules governing the maintenance of signs) notwithstanding
any subsequent change to the Rules.
4.10 STORAGE OF WASTE MATERIALS: All garbage, trash and accumulated
waste material shall be placed in appropriate covered containers.
7
4.11 TAXES: Each Owner shall be obligated to pay any taxes or
assessments assessed by the County Assessor against that Owner's Parcel and
personal property. Until such time as real property taxes have been segregated
by the County Assessor, they shall be paid by the respective Owners. The
proportionate share of the taxes for a particular Parcel shall be determined by
dividing the initial Parcel sales price or, in the case of unsold Parcels, the
price the Parcel is then being offered for sale by Declarant ("Offered Price"),
by the total initial sales prices and Offered Prices of all Parcels. If an Owner
fails to pay that Owner's proportionate share in accordance with the preceding
sentence, the Association shall collect such share, including that Owner's
interest and penalties, from the delinquent Owner.
4.12 USE OF BUILDINGS: Each Parcel and Building may be used for the
following purposes which are presently permitted by local ordinance within the
I-2 light industrial district: (a) manufacturing, assembling, processing,
storage or packaging of products, except (1) manufacturing, processing, storage
or packaging of chemicals, petroleum, and heavy agricultural products or other
hazardous materials (this limitation should not be interpreted to prohibit the
storage of reasonable quantities of hazardous materials in compliance with all
applicable laws, rules and regulations) and (2) vehicle dismantling yards, scrap
and waste yards; (b) warehousing and distribution facilities; (c) research and
development facilities; (d) professional and administrative offices and (e)
restaurants, except fast food facilities. Other uses which are permitted by
local ordinance within the I-2 light industrial district are not permitted
unless, however, the use is expressly approved by Declarant. Additional uses
permitted by local ordinance within the I-3 zoning district are not permitted,
even for any Parcel within the I-3 zoning district, unless, however, the use is
expressly approved by Declarant. No Parcel or Building may be used for
residential purposes. No Owner may permit or cause anything to be done or kept
upon or in a Parcel which the Board reasonably determines either obstructs or
interfere with the rights of other Owners or is noxious, harmful or unreasonably
offensive to other Owners. Each Owner shall comply with all of the requirements
of all federal, state and local governmental authorities, and all laws,
ordinances, rules and regulations applicable to the Owner's Parcel.
4.13 USE OF COMMON AREA: All use of Common Area is subject to the Rules.
There shall be no obstruction of any part of the Common Area. Nothing shall be
stored or kept in the Common Area without the prior consent of the Board.
Nothing shall be done or kept in the Common Area which will increase the rate of
insurance on the Common Area without the prior consent of the Board. No Owner
shall permit anything to be physically done or kept in the Common Area or any
other part of the Project which might result in the cancellation of insurance on
any part of the-Common Area, which would interfere with rights of other Owners,
or which the Board determines is a nuisance, noxious, harmful or unreasonably
offensive to other Owners. No waste shall be committed in the Common Area. The
provisions of this Declaration concerning use, maintenance and management of the
Common Area are subject to any rights or limitations established by any
easements or other encumbrances which encumber the Common Area.
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ARTICLE V
IMPROVEMENTS
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8
5.1 MAINTENANCE OF COMMON AREA AND IMPROVEMENTS: Except as otherwise
specifically provided in this Declaration, the Association shall be responsible
for the maintenance, repair, replacement, management, operation, painting and
upkeep of Common Area. The Association shall keep the Common Area in good
condition and repair, provide for all necessary services and cause all acts to
be done which may be necessary or proper to assure the maintenance of the Common
Area in first class condition.
5.2 ALTERATIONS TO COMMON AREA:
5.2.1 Approval: Alterations to any Improvements situated in,
upon or under the Common Area may be made only by the Association. A proposal
for an Alteration to an Improvement may be made at any meeting. A proposal may
be adopted by the Board, subject to the limitations contained in the Bylaws.
5.2.2 Funding: Expenditures for maintenance, repair or
replacement of an existing capital Improvement for which reserves have been
collected may be made from the Reserve Account. The Board may levy a Special
Assessment to fund any Alteration of an Improvement for which no reserve has
been collected.
5.3 MAINTENANCE OF PARCELS AND BUILDINGS:
5.3.1 Generally: Except as otherwise specifically provided in
this Declaration, each Owner shall maintain and care for the Owner's Parcel,
including the Building and other Improvements located thereon, but excluding the
Common Area, in a manner consistent with the standards established by the
Project Documents and other well maintained areas in the vicinity of the Project
and in compliance with the Architectural Standards.
5.3.2 Utility Lines: Each Owner shall maintain, repair and
replace those portions of all electric, gas, sewer, water and other utility
lines, pipes wires and conduits which (i) are not maintained by a public or
quasi-public entity or utility company and (ii) serve only that Owner's Parcel,
irrespective of whether the utility line is located on Common Area, or another
Parcel. The Association shall maintain, repair and replace those portions of all
electric, gas, sewer, water and other utility lines, pipes wires and conduits
situated within Common Area which (i) are not maintained by a public or
quasi-public entity or utility company and (ii) serve more than one (1) Parcel.
5.3.3 Storm Water Improvements: Each Owner shall maintain,
repair and replace those portions of all storm water pipes and other storm water
Improvements situated on their Parcel, excluding Common Area (which shall be
maintained by the Association) or Shared Maintenance Areas as shown on the
Maintenance Plat (which shall be maintained in accordance with Section 5.6,
below).
5.4 LIMITATIONS:
5.4.1 Architectural Committee Approval: Alterations may be made
to the interior of a Building if the Owner complies with all laws and ordinances
regarding alterations and remodeling. Any proposals for Alterations to the
exteriors of a Building or to the portions of a Parcel not covered by a Building
shall be made in accordance with the provisions of Article XI.
9
5.4.2 Loading Docks: No loading docks are permitted within the
Project without the approval of Declarant, except (i) on Parcel 7 along the
southern elevation of the Building constructed on this Parcel and (ii) on Parcel
8 along the western elevation of the Building constructed on this Parcel.
5.4.3 Fences: Unless otherwise approved by Declarant, no fence
may be constructed within the Project except along the boundary of the Project
on Parcels 7 and 8. The construction of any fence is subject to the approval of
the Architectural Committee.
5.5 LANDSCAPING: All landscaping in the Project shall be maintained and
cared for in a manner consistent with the standards of design and quality as
originally established by Declarant and in a condition comparable to that of
other well maintained areas in the vicinity of the Project. All landscaping
shall be maintained in a neat and orderly condition. Any weeds shall be removed
and any diseased or dead lawn, trees, ground cover or shrubbery shall be removed
and replaced. All lawn areas shall be neatly mowed and trees and shrubs shall be
neatly trimmed. Other specific restrictions on landscaping may be established in
the Rules. Irrigation systems, if any, shall be fully maintained in good working
condition to ensure continued regular watering of landscape areas, and health
and vitality of landscape materials.
5.5.1 Common Area: The Association shall maintain all
landscaping located on Common Area.
5.5.2 Parcels: Each Owner shall maintain all landscaping located
within the Owner's Parcel, excluding the Common Area.
5.6 SHARED MAINTENANCE: The provisions of this Section 5.6 shall be
individually applied to each Shared Landscape Area and Shared Private Drive
which serves a group of Parcels, as indicated on the Maintenance Plat. The term
"Obligated Owner," as used in this Section 5.6, shall refer to Parcels
designated on the Maintenance Plat as having the obligation to maintain a
particular Shared Landscape Area or Shared Private Drive.
5.6.1 Maintenance Standards: The term "Maintenance," as used in
this Section 5.6 shall in the case of Shared Landscape Area, refer to all work
required to maintain the landscaping within the Shared Landscape Area to the
standards provided in Section 5.5, above. The term "Maintenance," as used in
this Section 5.6 shall in the case of Shared Private Drive, refer to all work
required to maintain, repair and, when necessary, replace and reconstruct the
paved surface located on the Shared Private Drive and all storm drainage
Improvements within the Shared Private Drive which serve more than one (1)
Parcel. At all times the Shared Private Drives shall be maintained in a good,
safe and usable condition, in good repair, and in compliance with all applicable
state, county and local ordinances.
5.6.2 When Maintenance Required: Maintenance shall be required
when determined by a majority of the Obligated Owners. The preceding sentence
shall not extend to any Maintenance required as a result of the willful or
negligent act of an Owner, or its family, contract purchasers, lessees, or
tenants, or their licensees, guests, invitees or contractors and/or workmen
providing services for individual Owners. Rather, any Maintenance required as a
result of such negligence or willful action shall be the responsibility of the
Owner to whom the
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willful or negligent act is attributed. In the event that the Obligated Owners
cannot agree with respect to the necessity for or standard of Maintenance, the
contractors to be engaged to perform any Maintenance, or any other matters
pertaining to the use or Maintenance of the Shared Landscape Area or Shared
Private Drive, the dispute shall be submitted to the Board for arbitration and
the decision of the Board shall be final.
5.6.3 Allocation of Costs: The costs of performing the
Maintenance shall be shared by the Obligated Owners in accordance with the
percentages set forth in the Maintenance Plat.
5.6.4 Indemnity and Right of Contribution: Each Obligated Owner
shall be liable for an equal share of all costs, damages, attorneys' fees,
expenses and liabilities arising from injury to person or property occurring on
the Shared Private Drive for which (i) any Owner is held liable by virtue of the
fact that it is the Owner of the Private Drive or the fact that the Obligated
Owners failed to adequately perform Maintenance, or (ii) all Obligated Owners
are held liable by virtue of their ownership of an easement or the fact that the
Obligated Owners failed to adequately perform Maintenance. Any Obligated Owner
who pays greater than their share of such costs, damages, attorneys' fees,
expenses and liabilities shall have a right of contribution against any
Obligated Owner who has paid less than their share of such costs, damages,
attorneys' fees, expenses and liabilities.
5.7 RIGHT OF MAINTENANCE AND ENTRY BY ASSOCIATION: If an Owner fails to
perform maintenance and/or repair which that Owner is obligated to perform
pursuant to this Declaration, and if the Association determines, after Notice
and Hearing given pursuant to the provisions of the Bylaws, that such
maintenance and/or repair is necessary to preserve the attractiveness, quality,
nature and/or value of the Project, the Association may cause such maintenance
and/or repair to be performed. The costs of such maintenance and/or repair shall
be charged to the Owner of the Parcel as a Reimbursement Assessment. In order to
effectuate the provisions of this Declaration, the Association may enter any
Parcel whenever entry is necessary in connection with the performance of any
maintenance or construction which the Association is authorized to undertake.
Entry within a Parcel shall be made with as little inconvenience to an Owner as
practicable and only after reasonable advance written notice of not less than
forty-eight (48) hours, except in emergency situations.
5.8 DAMAGE AND DESTRUCTION -- ASSOCIATION: The term "restore" shall mean
repairing, rebuilding or reconstructing a damaged Improvement to substantially
the same condition and appearance in which it existed prior to fire or other
casualty damage. If fire or other casualty damage extends to any Improvement
which is insured under an insurance policy held by the Association, the
Association shall proceed with the filing and adjustment of all claims arising
under the existing insurance policies. The insurance proceeds shall be paid to
and held by the Association.
5.8.1 Bids: Whenever restoration is to be performed pursuant to
this Section, the Board shall obtain such bids from responsible licensed
contractors to restore the damaged Improvement as the Board deems reasonable;
and the Board, on behalf of the Association, shall contract with the contractor
whose bid the Board deems to be the most reasonable.
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5.8.2 Proceeds: The costs of restoration of the damaged
Improvement shall be funded pursuant to the provisions and in the priority
established by this Section 5.8.2. A lower priority procedure shall be utilized
only if the aggregate amount of funds then available pursuant to the procedures
of higher priority are insufficient to restore the damaged Improvement. The
following funds and procedures shall be utilized:
1. The first priority shall be any insurance proceeds paid to the
Association under existing insurance policies.
2. The second priority shall be all Reserve Account funds designated for
the repair or replacement of the capital Improvement(s) which has been damaged.
3. The third priority shall be funds raised by a Special Assessment
against all Owners levied by the Board.
5.9 DAMAGE OR DESTRUCTION: If all or any portion of a Building or
Parcel, other than Common Area, is damaged by fire or other casualty, the Owner
of the Improvement shall either (i) restore the damaged Improvements or (ii)
remove all damaged Improvements, including foundations, and leave the Parcel in
a clean and safe condition. Any restoration under clause (i) preceding must be
performed so that the Improvements are in substantially the same condition in
which they existed prior to the damage, unless the Owner complies with the
provisions of Article XI. Unless extended by the Board, the Owner must commence
such work within one hundred eighty (180) days after the damage occurs and must
complete the work within one (1) year thereafter.
5.10 CONDEMNATION OF COMMON AREA: If all or any portion of the Common
Area is taken for any public or quasi-public use under any statute, by right of
eminent domain or by purchase in lieu of eminent domain, the entire award shall
be deposited into the Current Operation Account until distributed. The
Association shall distribute such funds equally to all Owners and shall
represent the interests of all Owners.
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ARTICLE VI
FUNDS AND ASSESSMENTS
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6.1 COVENANTS TO PAY: Declarant and each Owner covenant and agree to pay
to the Association the assessments and any Additional Charges levied pursuant to
this Article VI.
6.1.1 Liability for Payment: The obligation to pay assessments
shall run with the land so that each successive record Owner of a Parcel shall
in turn be liable to pay all such assessments. No Owner may waive or otherwise
escape personal liability for assessments or release the Owner's Parcel from the
liens and charges hereof by non-use of the Common Area, abandonment of the
Parcel or any other attempt to renounce rights in the Common Area or the
facilities or services within the Project. Each assessment shall constitute a
separate assessment and shall also be a separate, distinct and personal
obligation of the Owner of the Parcel at the time when the assessment was levied
and shall bind the Owner's heirs, devisees, personal representatives and
assigns. Any assessment not paid when due is delinquent. The personal obligation
of an Owner for delinquent assessments shall not pass to a successive Owner
unless
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the personal obligation is expressly assumed by the successive Owner. No such
assumption of personal liability by a successor Owner (including a contract
purchaser under an installment land contract) shall relieve any Owner from
personal liability for delinquent assessments. After an Owner transfers fee
title of record to a Parcel, the Owner shall not be liable for any charge
thereafter levied against that Parcel.
6.1.2 Funds Held in Trust: The assessments collected by the
Association shall be held by the Association for and on behalf of each Owner and
shall be used solely for the operation, care and maintenance of the Project as
provided in this Declaration.
6.1.3 Offsets: No offsets against any assessment shall be
permitted for any reason, including, without limitation, any claim that the
Association is not properly discharging its duties.
6.2 REGULAR ASSESSMENTS:
6.2.1 Payment of Regular Assessments: Regular Assessments for
each fiscal year shall be established when the Board approves the Budget for
that fiscal year. Regular Assessments shall be levied on a fiscal year basis;
however, each Owner shall be entitled to pay the Regular Assessment in twelve
(12) equal monthly installments, one installment payable on the first day of
each calendar month during the fiscal year, as long as the Owner is not
delinquent in the payment of any monthly installment. If an Owner fails to pay
any monthly installment by the sixtieth (60th) day after the date the
installment was due, the Board may terminate that Owner's right to pay the
Regular Assessment in monthly installments and declare the then unpaid balance
of the Regular Assessment for that year immediately due and payable. Regular
Assessments shall commence for all Parcels on the first day of the first month
following the month in which the first Parcel is conveyed to an Owner and may
commence prior to that date at the option of Declarant.
6.2.2 Allocation of Regular Assessments: The total amount of the
Association's anticipated revenue attributable to Regular Assessments as
reflected in the Budget for that fiscal year shall be allocated equally among
the Parcels.
6.2.3 Non-Waiver of Assessments: If before the expiration of any
fiscal year the Association fails to fix Regular Assessments for the next fiscal
year, the Regular Assessment established for the preceding year shall continue
until a new Regular Assessment is fixed.
6.3 SPECIAL ASSESSMENTS: Special Assessments may be levied in addition
to Regular Assessments for (i) constructing capital Improvements, (ii)
correcting an inadequacy in the Current Operation Account, (iii) defraying, in
whole or in part, the cost of any construction, reconstruction, unexpected
repair or replacement of Improvements in the Common Area, or (iv) paying for
such other matters as the Board may deem appropriate for the Project. Special
Assessments shall be levied in the same manner as Regular Assessments.
6.4 REIMBURSEMENT ASSESSMENTS: The Association shall levy a
Reimbursement Assessment against an Owner to (a) reimburse the Association for
the costs of repairing damage caused by that Owner or that Owner's Invitee or
(b) if a failure to comply with the Project Documents has resulted in (i) an
expenditure of monies, including attorneys' fees, by
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the Association to bring the Owner or the Owner's Parcel or Improvements into
compliance or (ii) the imposition of a fine or penalty. A Reimbursement
Assessment shall be due and payable to the Association when levied. A
Reimbursement Assessment shall not be levied by the Association until Notice and
Hearing has been given in accordance with the Bylaws.
6.5 ACCOUNTS:
6.5.1 Types of Accounts: Assessments collected by the
Association shall be deposited into at least two (2) separate accounts with a
responsible financial institution, which accounts shall be clearly designated as
(i) the Current Operation Account and (ii) the Reserve Account. The Board shall
deposit those portions of the assessments collected for current maintenance and
operation into the Current Operation Account and shall deposit those portions of
the assessments collected as reserves for replacement and deferred maintenance
of major components which the Association is obligated to repair, restore,
replace or maintain into the Reserve Account.
6.5.2 Reserve Account: The Association shall not expend funds
from the Reserve Account for any purpose other than the maintenance, repair or
replacement of the Common Area.
6.5.3 Current Operation Account: All other costs properly
payable by the Association shall be paid from the Current Operation Account.
6.6 BUDGET, FINANCIAL STATEMENTS, REPORTS AND STUDIES:
6.6.1 Preparation and Distribution of Budget: The Board shall
annually prepare, adopt and distribute a Budget of the estimated revenues and
expenses on an accrual basis. The Budget shall also set forth the current
estimated replacement cost, estimated remaining life, and estimated useful life
of each major component of the Common Area required to be maintained by the
Association.
6.6.2 Annual Report: The Board shall annually prepare and
distribute an income and expense statement and summaries of such other financial
accounting information as shall be prepared for the Association.
6.6.3 Notice of Increased Assessments: The Board shall provide
notice to the Owners of any increase in Regular Assessments or the levy of any
Special Assessments within fifteen (15) days after the adoption of a resolution
establishing the increased Regular Assessment or levying the Special Assessment.
6.6.4 Statement of Outstanding Charges: Within ten (10) days of
a written request by an Owner, the Association shall provide a written statement
to the Owner which sets forth the amounts of delinquent assessments, penalties,
attorneys' fees and other charges against that Owner's Parcel. A charge for the
statement may be made by the Association, not to exceed the reasonable costs of
preparation and reproduction of the statement.
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6.7 ENFORCEMENT OF ASSESSMENTS:
6.7.1 Procedures: In addition to all other remedies provided by
law, the Association, or its authorized representative, may enforce the
obligations of the Owners to pay each assessment provided for in this
Declaration in any manner provided by law or by either or both of the following
procedures:
(a) By Suit: The Association may commence and maintain a
suit at law against any Owner personally obligated to pay a delinquent
assessment. The suit shall be maintained in the name of the Association. Any
judgment rendered in any action shall include the amount of the delinquency, and
such additional costs, fees, charges and expenditures ("Additional Charges") and
any other amounts as the court may award. A proceeding to recover a judgment for
unpaid assessments may be maintained without the necessity of foreclosing or
waiving the lien established herein.
(b) By Lien: The Association or a trustee nominated by
the Association may commence and maintain proceedings to establish and/or
foreclose assessment liens. No action shall be brought to foreclose a lien until
the lien is created by recording a Notice of Delinquent Assessment ("Notice").
Prior to recording a Notice, the Association shall: (i) notify the affected
Owner in writing by certified mail of the fee and penalty procedures of the
Association; (ii) provide an itemized statement of the charges owed by the
Owner, including items on the statement which indicate the principal owed, any
late charges, the method of calculation, and attorneys' fees; and (iii) describe
the collection practices used by the Association, including the right of the
Association to recover reasonable costs of collection. The Notice must be
authorized by the Board, signed by an authorized agent and recorded in the
Official Records of the County. The Notice shall state the amount of the
delinquent assessment(s), the Additional Charges incurred to date, a legal
description of the Parcel, the name(s) of the record Owner(s) thereof and the
name and address of the trustee, if any, authorized by the Association to
enforce the lien by sale and shall be signed by the person authorized to do so
by the Board, or if no one is specifically designated, by the President or Chief
Financial Officer. No later than ten (10) days after recordation of the Notice,
copies of the Notice shall be mailed to all record owners of the Parcel in the
manner set forth in Section 2924b of the California Civil Code. After the
expiration of thirty (30) days following the recording of a Notice, the lien may
be foreclosed as provided in Section 1367 of the Civil Code of the State of
California.
6.7.2 Additional Charges: In addition to any other amounts due
or any other relief or remedy obtained against an Owner who is delinquent in the
payment of any assessments, each Owner agrees to pay such Additional Charges as
the Association may incur or levy in collecting the monies due and delinquent
from that Owner. All Additional Charges shall be included in any judgment in any
suit or action brought to enforce collection of delinquent assessments or may be
levied against a Parcel as a Reimbursement Assessment. Additional Charges shall
include, but not be limited to, the following:
(a) Attorneys' Fees: Reasonable attorneys' fees and
costs incurred in the event an attorney(s) is employed to collect any assessment
or sum due, whether by suit or otherwise;
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(b) Late Charges: A late charge in an amount to be fixed
by the Board in accordance with the then current laws of the State of California
to compensate the Association for additional collection costs incurred in the
event any assessment or other sum is not paid when due or within any "grace"
period established by law;
(c) Costs of Suit: Costs of suit and court costs
incurred as are allowed by the court;
(d) Interest: Interest on the delinquent assessment and
Additional Charges at a rate fixed by the Board in accordance with the then
current laws of the State of California; and
(e) Other: Any such other additional costs that the
Association may incur in the process of collecting delinquent assessments or
sums.
6.7.3 Satisfaction of Lien: All amounts paid by an Owner toward
a delinquent assessment shall be credited first to reduce the principal amount
of the debt. Upon payment or other satisfaction of a delinquent assessment for
which a Notice was recorded, the Association shall record a certificate stating
the satisfaction and release of the assessment lien.
6.7.4 Lien Eliminated By Foreclosure: If the Association has
recorded a Notice of Delinquent Assessment and the lien is eliminated as a
result of a foreclosure of a Mortgage or a transfer pursuant to the remedies
provided in the Mortgage, the new Owner of the Parcel shall pay to the
Association a pro-rata share of the Regular Assessment for each month remaining
in the Association's fiscal year after the date of the foreclosure or transfer
pursuant to the remedies provided in the Mortgage.
6.8 SUBORDINATION OF LIEN: Notwithstanding any provision to the
contrary, the liens for assessments created pursuant to this Declaration shall
be subject and subordinate to and shall not affect the rights of the holder of a
First Mortgage made in good faith and for value. Upon the foreclosure of any
First Mortgage on a Parcel, any lien for assessments which became due prior to
such foreclosure shall be extinguished; provided, however, that after such
foreclosure there shall be a lien on the interest of the purchaser at the
foreclosure sale to secure all assessments, whether Regular or Special, charged
to such Parcel after the date of such foreclosure sale, which lien shall have
the same effect and shall be enforced in the same manner as provided herein. For
purposes of this Section, a Mortgage may be given in good faith or for value
even though the Mortgagee has constructive or actual knowledge of the assessment
lien provisions of this Declaration.
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ARTICLE VII
MEMBERSHIP IN AND DUTIES OF THE ASSOCIATION
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7.1 THE ORGANIZATION: The Association is a nonprofit mutual benefit
corporation. Its affairs shall be governed by and it shall have the powers set
forth in the Project Documents.
16
7.2 MEMBERSHIP: Each Owner (including Declarant for so long as Declarant
is an Owner), by virtue of being an Owner, shall be a Member of the Association.
No other person shall be accepted as a Member. Association membership is
appurtenant to and may not be separated from the ownership of a Parcel.
Membership shall terminate upon termination of Parcel ownership. Ownership of a
Parcel shall be the sole qualification for Association membership. Membership
shall not be transferred, pledged or alienated in any way except upon transfer
of title to the Owner's Parcel (and then only to the transferee of title to such
Parcel). Any attempt to make a prohibited transfer is void. Membership shall not
be related to the use or non-use of the Common Area and may not be renounced.
The rights, duties, privileges and obligations of all Members shall be as
provided in the Project Documents.
7.3 VOTING: Any action required by law or by the Project Documents to be
approved by the Owners, the Members or each class of Members shall be approved,
if at all, in accordance with the procedures set forth in the Bylaws.
7.4 RULES: The Board may propose, adopt, amend and repeal Rules
appropriate for the management of the Project, which are consistent with the
Project Documents. The Rules may also establish architectural controls and may
govern the use of the Common Area by Owners or their Invitees. After adoption, a
copy of the Rules shall be furnished to each Owner. Owners shall be responsible
for distributing the Rules to their tenants.
7.5 TRANSFERS OF COMMON AREA: Subject to any applicable provision in the
Bylaws, the Board shall have the power and right in the name of the Association
and all of the Owners as their attorneys-in-fact to grant, convey, dedicate,
mortgage, or otherwise transfer to any Owner or other person or entity, fee
title, easements, exclusive use easements, security rights or other rights or
licenses in, on, over or under the Common Area that, in the sole discretion of
the Board, are in the best interests of the Association and its Members.
Notwithstanding anything herein to the contrary, in no event shall the Board
take any action authorized hereunder that would permanently and unreasonably
interfere with the use, occupancy and enjoyment by any Owner of that Owner's
Parcel without the prior written consent of that Owner.
7.6 INSURANCE: The Board shall make every reasonable effort to obtain
and maintain the insurance policies as provided in this Section. If the Board is
unable to purchase a policy or if the Board believes that the cost of the policy
is unreasonable, the Board shall call a special meeting of Members to determine
what action to take. The Board shall comply with any resolution concerning
insurance coverage adopted at such a meeting.
7.6.1 General Provisions and Limitations: All insurance policies
shall be subject to and, where applicable, shall contain the following
provisions and limitations:
(a) Underwriter: All policies (except earthquake
insurance) shall be written with a company legally qualified to do business in
the State of California and (i) holding a "B" or better general policyholder's
rating and a "6" or better financial performance index rating as established by
Best's Insurance Reports, (ii) reinsured by a company described in (i), above,
or (iii) if such a company is not available, the best rating possible or its
equivalent.
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(b) Named Insured: Unless otherwise provided in this
Section, the named insured shall be the Association or its authorized
representative, as a trustee for the Owners. However, all policies shall be for
the benefit of Owners and their Mortgagees, as their interests may appear.
(c) Authority to Negotiate: Exclusive authority to
adjust losses under policies obtained by the Association shall be vested in the
Board; provided, however, that no Mortgagee having an interest in such losses
may be prohibited from participating in any settlement negotiations related
thereto.
(d) Contribution: In no event shall the insurance
coverage obtained and maintained by the Association be brought into contribution
with insurance purchased by Owners or their Mortgagees.
(e) General Provisions: To the extent possible, the
Board shall make every reasonable effort to secure insurance policies providing
for the following:
(i) A waiver of subrogation by the insurer as to
any claims against the Board, the manager, the Owners and their respective
servants, agents and guests;
(ii) That the policy will be primary, even if an
Owner has other insurance which covers the same loss;
(iii) That no policy may be cancelled or
substantially modified without at least ten (10) days' prior written notice to
the Association and to each First Mortgagee listed as a scheduled holder;
(iv) An agreed amount endorsement, if the policy
contains a coinsurance clause;
(v) A guaranteed replacement cost or replacement
cost endorsement; and
(vi) An inflation guard endorsement.
(f) Term: The period of each policy shall not exceed
three (3) years. Any policy for a term greater than one (1) year must permit
short rate cancellation by the insureds.
(g) Deductible: The policy may contain a reasonable
deductible and the amount of the deductible shall be added to the face amount of
the policy in determining whether the insurance equals replacement cost.
7.6.2 Types of Coverage: Unless the Association determines
otherwise pursuant to Section 7.6, the Board shall obtain at least the following
insurance policies in the amounts specified:
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(a) Property Insurance: A Special Form or "All-Risk"
policy of property insurance for all insurable Common Area Improvements,
including fixtures and building service equipment, against loss or damage by
fire or other casualty, in an amount equal to the full replacement cost (without
respect to depreciation) of the Common Area, and exclusive of land, foundations,
excavation and other items normally excluded from coverage. A replacement cost
endorsement shall be part of the policy.
(b) Liability Insurance: A combined single limit policy
of liability insurance in an amount not less than Three Million Dollars
($3,000,000.00) covering the Common Area and all damage or injury caused by the
negligence of the Association, the Board or any of its agents or the Owners
against any liability to the public or to any Owner incident to the use of or
resulting from any accident or intentional or unintentional act of an Owner or a
third party occurring in or about any Common Area. If available, each policy
shall contain a cross liability endorsement in which the rights of the named
insured shall not be prejudiced with respect to any action by one named insured
against another named insured.
(c) Worker's Compensation: Worker's compensation
insurance to the extent necessary to comply with all applicable laws of the
State of California or the regulations of any governmental body or authority
having jurisdiction over the Project.
(d) Other Insurance: Other types of insurance as the
Board determines to be necessary to fully protect the interests of the Owners.
(e) Insurance by Owner: Each Owner, at that Owner's sole
cost and expense, shall obtain insurance coverage which the Owner considers
necessary or desirable to protect that Owner and that Owner's Parcel, Building
and personal property; provided, however, that no Owner shall be entitled to
maintain insurance coverage in a manner so as to decrease the amount which the
Association, on behalf of all Owners and their Mortgagees, may realize under any
insurance policy which the Association may have in effect at any time.
7.6.3 Annual Review: The Board shall review the adequacy of all
insurance, including the amount of liability coverage and the amount of property
damage coverage, at least once every year. At least once every three years, the
review shall include a replacement cost appraisal of all insurable Common Area
Improvements without respect to depreciation. The Board shall adjust the
policies to provide the amounts and types of coverage and protection that are
customarily carried by prudent owners of similar property in the area in which
the Project is situated.
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ARTICLE VIII
DEVELOPMENT RIGHTS
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8.1 LIMITATIONS OF RESTRICTIONS: Declarant is undertaking the work of
developing Parcels and other Improvements within the Project. The completion of
the development and the marketing, sale, lease, rental and/or other disposition
of the Parcels is essential to the establishment and welfare of the Project. In
order that the work may be completed and the Project established as rapidly as
possible, nothing in this Declaration shall be interpreted to deny Declarant the
rights set forth in this Article.
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8.2 RIGHTS OF ACCESS AND COMPLETION OF CONSTRUCTION: Until the fifth
(5th) anniversary of the commencement of Regular Assessments, Declarant, its
contractors and subcontractors shall have the right to: (i) obtain reasonable
access over and across the Common Area and/or do within any Parcel owned or
controlled by it whatever is reasonably necessary or advisable in connection
with the completion of the Project; and (ii) erect, construct and maintain on
the Common Area- and/or within any Parcel owned or controlled by it such
structures as may be reasonably necessary for the conduct of its business to
complete the work, establish the Project and dispose of the Project in parcels
by sale, lease, rental or otherwise. Each Owner acknowledges that: (a) the
construction of the Project may occur over an extended period of time; (b) the
Owner's quiet use and enjoyment of the Owner's Parcel may be disturbed as a
result of the noise, dust, vibrations and other nuisances associated with
construction activities; and (c) the nuisances will continue until the
completion of the construction of the entire Project.
8.3 APPEARANCE OF PROJECT: Declarant shall not be prevented from
changing the exterior appearance of Buildings, landscaping or any other matter
directly or indirectly connected with the Project in any manner deemed desirable
by Declarant, if Declarant obtains all governmental consents required by law.
8.4 MARKETING RIGHTS: Declarant shall have the right to: (i) maintain
sales and construction trailers, leasing offices, rental offices, storage areas,
parking lots and related facilities in any Parcels owned or controlled by
Declarant or Common Area as are necessary or reasonable, in the opinion of
Declarant, for the construction, sale, lease, rental or other disposition of the
Parcels; (ii) make reasonable use of the Common Area for the construction, sale,
lease, rental or other disposition of Parcels; and (iii) conduct its business of
disposing of Parcels by sale, lease, rental or otherwise.
8.5 AMENDMENT: The provisions of this Article may not be amended without
the written consent of Declarant.
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ARTICLE IX
RIGHTS OF MORTGAGEES
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9.1 CONFLICT: Notwithstanding any contrary provision in the Project
Documents, the provisions of this Article shall control with respect to the
rights and obligations of Mortgagees specified herein.
9.2 INSPECTION OF BOOKS AND RECORDS: Upon request, any Owner or First
Mortgagee shall be entitled to inspect and copy the books, records and financial
statements of the Association, the Project Documents and any amendments thereto
during normal business hours.
9.3 FINANCIAL STATEMENTS FOR MORTGAGEES: If an audited financial
statement for the immediately preceding fiscal year is available, the
Association shall provide a copy to any Mortgagee who makes a written request
for it. If an audited financial statement is not available, any Mortgagee who
desires to have an audited financial statement of the Association may cause an
audited financial statement to be prepared at the Mortgagee's expense.
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The audited financial statement shall be available within one hundred twenty
(120) days of the end of the Association's fiscal year.
9.4 MORTGAGE PROTECTION: A breach of any of the conditions or the
enforcement of any lien provisions contained in this Declaration shall not
defeat or render invalid the lien of any First Mortgage made in good faith and
for value as to any Parcel in the Project; but all of the covenants, conditions
and restrictions contained in this Declaration shall be binding upon and
effective against any Owner of a Parcel if the Parcel is acquired by
foreclosure, trustee's sale or otherwise.
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ARTICLE X
AMENDMENT AND ENFORCEMENT
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10.1 AMENDMENTS: Prior to the conveyance of the first Parcel to an Owner
other than a Declarant, any Project Document may be amended by Declarant alone.
After the conveyance of the first Parcel, the Project Documents may be amended
by the approval of each class of Members; provided however, that no provision of
this Declaration which provides for a vote of more than fifty-one percent (51%)
may be amended by a vote less than the percentage specified in the Section to be
amended. Any amendment to this Declaration shall be effective upon the
recordation in the Official Records of the County of an instrument executed by
the President and Secretary of the Association which sets forth the terms of the
amendment and a statement which certifies that the required percentage of
Members has approved the amendment.
10.2 ENFORCEMENT:
10.2.1 Rights to Enforce: Subject to the provisions of Section
10.4, Declarant, the Association and/or any Owner shall have the power to
enforce the provisions of the Project Documents in any manner provided by law or
in equity and in any manner provided in this Declaration. In addition to
instituting appropriate legal action, the Association may temporarily suspend an
Owner's voting rights and/or levy a fine against an Owner in a standard amount
to be determined by the Board from time to time. No determination of whether a
violation has occurred may be made until Notice and Hearing has been provided to
the Owner pursuant to the Bylaws. If legal action is instituted by the
Association, any judgment rendered shall include all appropriate Additional
Charges. Notwithstanding anything to the contrary contained in this Declaration,
the Association has no power to cause a forfeiture or abridgement of an Owner's
right to the full use and enjoyment of the Owner's Parcel, including access
thereto over and across the Common Area, due to the Owner's failure to comply
with the provisions of the Project Documents unless the loss or forfeiture is
the result of the judgment of a court, an arbitration decision, a foreclosure
proceeding or a sale conducted pursuant to this Declaration. The provisions of
this Declaration are equitable servitudes, enforceable by any Owner or the
Association against the Association or any other Owner in the Project. Except as
otherwise provided, Declarant, the Association or any Owner(s) has the right to
enforce, in any manner permitted by law or in equity, any and all of the
provisions of the Project Documents, including any decision made by the
Association, upon the Owners, the Association or upon any property in the
Project.
21
10.2.2 Violation of Law: The Association may treat any Owner's
violation of any state, municipal or local law, ordinance or regulation, which
creates a nuisance to the other Owners in the Project or to the Association, in
the same manner as a violation of the Project Documents by making such violation
subject to any or all of the enforcement procedures set forth in this
Declaration, as long as the Association complies with the Notice and Hearing
requirements.
10.2.3 Remedies Cumulative: Each remedy provided in this
Declaration is cumulative and not exclusive.
10.2.4 Nonwaiver: The failure to enforce the provisions of any
covenant, condition or restriction contained in this Declaration will not
constitute a waiver of any right to enforce any such provisions or any other
provisions of this Declaration.
10.3 DISPUTES BETWEEN OWNERS AND DECLARANT: Before any Owner initiates
arbitration in accordance with the provisions of Section 10.4, the Owner and
Declarant shall first attempt, in good faith, to resolve the dispute informally
by negotiation. Either party may initiate negotiations by writing a letter to
the other party describing the nature of the dispute and any proposals to
resolve the dispute. The letter shall be sent by certified mail and shall be
deemed received three (3) days after its deposit in the U.S. Mail. The recipient
shall respond, within ten (10) days of receipt of the letter, either with a
letter that addresses the dispute and its proposed resolution or by requesting a
meeting of the parties. The meeting(s) shall be held at a mutually acceptable
location. After at least one exchange of letters or at least one meeting of the
parties, should either party honestly believe that the dispute cannot be
resolved informally, then that party shall so notify the other party either
personally at a meeting or in writing. At this point, either party may initiate
arbitration as provided herein. Should either party refuse to participate in the
negotiations, then upon expiration of the ten (10) day initial response time,
the party who sent the initiating letter may commence arbitration proceedings in
accordance with the provisions of Section 10.4.
If the dispute involves an alleged problem with materials,
design or construction of any portion of the Project, then Declarant shall have
the right to inspect the alleged problem before any such meeting or any written
response is required from Declarant. If Declarant elects to attempt to cure the
alleged problem, Claimant shall allow Declarant to perform whatever work is
deemed necessary by Declarant during normal working hours. Declarant agrees to
begin its curative work within thirty (30) days after the first meeting between
the parties. If the dispute remains unresolved after the good faith attempt to
negotiate has been concluded or if the curative action performed by Declarant is
not undertaken as promised or does not resolve the alleged problem, then either
party may initiate arbitration as provided herein in accordance with the
provisions of Section 10.4.
10.4 MANDATORY BINDING ARBITRATION: Any disputes, claims, issues or
controversies between any Owner and Declarant or between the Association and
Declarant regarding any matters that arise out of or are in any way related to
the Project, the relationship between Owner and Declarant or the relationship
between the Association and Declarant, whether contractual or tort, including,
but not limited to, the purchase, sale, condition, design, construction or
materials used in construction of any portion of the Project or the agreement
22
between Declarant and any Owner to purchase a Parcel or any related agreement,
including, but not limited to warranties, disclosures, or alleged construction
defects (latent or patent), (collectively "disputes") except as otherwise set
forth herein, shall be resolved through the procedures established in this
Declaration. The party who has a dispute with Declarant is referred to as the
"Claimant" in this Section. If negotiations fail then all such disputes shall be
resolved by neutral, binding arbitration and not by any court action except as
provided for judicial review of arbitration proceedings by California law.
Except as otherwise set forth herein, the arbitration proceedings shall be
conducted by and in accordance with the rules of Judicial Arbitration and
Mediation Services, Inc. (JAMS/Endispute) or any successor thereto and, except
for procedural issues, the arbitration proceedings, the ultimate decisions of
the arbitrator, and the arbitrator shall be subject to and bound by existing
California case and statutory law including, but not limited, to applicable
statutes of limitation such as California Code of Civil Procedure Sections 337,
337.15(a), 338(d), 340, and 340(3). Nothing herein shall toll, extend, shorten
or otherwise affect any applicable statute of limitation. Should JAMS/Endispute
cease to exist, as such, then all references herein to JAMS/Endispute shall be
deemed to refer to its successor or, if none, to the American Arbitration
Association (in which case its commercial arbitration rules shall be used).
10.4.1 Selection and Timing: The matter shall be heard by one
(1) arbitrator. Within five (5) business days of receipt of a written request
from one of the parties to arbitrate a claim, JAMS/Endispute shall provide a
list of five (5) qualified names to both parties. The term "qualified" shall
mean a retired judge (or if none is available then an attorney, licensed to
practice in California having at least fifteen (15) years of experience) with a
strong emphasis on the laws governing real estate matters, especially those
dealing with real estate development and construction. Each side will strike one
name (based on reasons listed in CCP Section 1297.121 or 1297.124 or for no
reason at all) until one is left (which shall be the appointed arbitrator),
unless the parties sooner agree. The parties shall have no more than three (3)
business days for the striking of each name. The initiating party shall be the
first party to strike a name and submit it to the other party.
10.4.2 Discovery: Except as limited herein, each party shall be
entitled to discovery to the extent provided in Section 1283.05 of the Code of
Civil Procedure or any successor statute thereto. Each party shall have the
right to depose the expert witnesses of the other party and to conduct two other
depositions of its choice without the need to obtain an order of the arbitrator.
All other depositions, document requests, requests for admissions and similar
discovery shall be conducted under the direction and supervision of the
arbitrator. No party shall be entitled to bring any motion to exclude or limit
the evidence to be submitted to the arbitrator. No party shall have any other
discovery rights except as authorized by the arbitrator for good cause.
10.4.3 Full Disclosure: Both parties shall, in good faith, make
a full disclosure of all issues and evidence to the other party prior to the
hearing. Any evidence or information that the arbitrator determines was
unreasonably withheld shall be inadmissible by the party which withheld it. The
initiating party shall be the first to disclose all of the following, in
writing, to the other party and to the arbitrator an outline of the issues and
its position on each such issue; a list of all witnesses it intends to call; and
copies of all written reports and other documentary evidence whether or not
written or contributed to by its retained experts (collectively "outline").
23
The initiating party shall submit its outline to the other party and the
arbitrator within thirty (30) days of the final selection of the arbitrator. The
responding party shall submit its written response as directed by the
arbitrator. If the dispute involves alleged construction defects, then the
Claimant shall be the first party to submit its written outline, list of
witness, and reports/documents and shall include a detailed description of the
nature and scope of the alleged defect(s), its proposal for repair or
restoration any repairs made to date and an estimate of the cost of
repair/restoration together with the calculations used to derive the estimate.
10.4.4 Hearing: The hearing shall be held in the County. The
hearing shall commence within ninety (90) days of the receipt by the parties of
the list of names of proposed arbitrators from JAMS/Endispute unless this date
is determined to be infeasible by the arbitrator in which case the arbitrator
shall select the next available date for the hearing. The arbitration shall be
conducted as informally as possible. Neither the rules of admissibility of
evidence nor the Evidence Code of the State of California shall be applicable
except for Evidence Code Section 1152 et seq. which shall be applicable for the
purpose of excluding from evidence offers, compromises, and settlement
proposals, unless both parties consent to their admission. The arbitrator shall
be the sole judge of the admissibility of and the probative value of all
evidence offered and is authorized to provide all legally recognized remedies
whether in law or equity. Attorneys are not required and either party may elect
to be represented by someone other than a licensed attorney. Cost of an
interpreter shall be born by the party requiring the services of the interpreter
in order to be understood by the arbitrator. Except as set forth herein, the
arbitration shall be conducted pursuant to Title 9 of the California Code of
Civil Procedure, Section 1280 et seq.
10.4.5 Decision: The decision of the arbitrator shall be binding
on the parties and may be entered as a judgment in any court of the State of
California that has jurisdiction and venue. In no event shall the award of the
arbitrator include any component for punitive or exemplary damages. The
arbitrator shall cause a complete record of all proceedings to be prepared
similar to those kept in the Superior Court; shall try all issues of both fact
and law; and shall issue a written statement of decision, such as that described
in Code of Civil Procedure Section 643 (or its successor) which shall specify
the facts and law relied upon in reaching his/her decision within twenty (20)
days after the close of testimony.
10.4.6 Fees and Costs: Notwithstanding any statute to the
contrary, including Code of Civil Procedure Section 645.1, each party shall bear
their own costs of the hearing, including attorneys' fees. No attorneys fees or
costs shall be awarded to either party but each party shall be solely
responsible for its own attorneys' fees and costs, including, expert witnesses,
consultants, reports, and similar costs. The total cost of the arbitration
proceedings, including the advanced initiation fees and other fees of
JAMS/Endispute and any related costs and fees incurred by JAMS/Endispute (such
as experts and consultants retained by it) shall be borne as determined by the
arbitrator, regardless of the outcome
10.4.7 Reference Alternative: To the extent that either party
may be otherwise entitled to bring an action at law pursuant to California Code
of Civil Procedure Section 1298.7, or if a court of competent jurisdiction
determines that the dispute resolution set forth herein is void or
unenforceable, the entire matter shall proceed as one of judicial reference
pursuant to Code of Civil Procedure Section 638 et seq. The rules of procedure
set forth herein shall be the
24
rules of procedure for the reference proceeding, unless precluded by law.
JAMS/Endispute shall hear, try and decide all issues of both fact and law and
make any required findings of facts and, if applicable, conclusions of law and
report these along with the judgment to the supervising court within twenty (20)
days after the close of testimony.
The parties shall cooperate and diligently perform such acts as
may be necessary to carry out the purposes of this Section.
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ARTICLE XI
ARCHITECTURAL AND LANDSCAPING CONTROL
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11.1 APPLICABILITY:
11.1.1 Generally: Except as otherwise provided in this
Declaration, proposals for Alterations (which includes all landscaping, except
as provided in 11.1.2, below) are subject to the provisions of this Article and
may not be made until approved in accordance with the provisions of this
Article.
11.1.2 Exceptions: The provisions of this Declaration requiring
architectural approvals do not apply to repainting or refinishing any
Improvement in the same color, hue, intensity, tone, and shade or repairing or
replacing any Improvement with the same materials. The provisions of this
Declaration requiring architectural approvals include planting or removing
landscaping except for landscaping which at maturity will not be visible from
other Parcels. The Architectural Standards may establish additional exceptions
from time to time.
11.1.3 Declarant Exemption: The provisions of this Declaration
requiring architectural approvals shall not apply to the original construction
of any Improvements on a Parcel by Declarant, its agents, contractors or
employees. The provisions of this paragraph may not be amended without the
consent of Declarant until all of the Parcels in the Project owned by Declarant
have been conveyed.
11.1.4 Relationship to Governmental Approvals: Proposals for
Alterations may also be subject to review and approval by state or local
governmental entities or agencies. Satisfying the provisions of this Declaration
does not automatically satisfy any requirement for governmental approval,
permitting or inspection. All approvals, permits and inspections which are
required under local, state or federal law for any proposed Alteration are the
responsibility of the Owner and must be obtained by the Owner in addition to the
approvals required by this Declaration.
11.2 MEMBERS AND VOTING:
11.2.1 Initial Committee: The Architectural Committee
("Committee") shall initially consist of three (3) members. Declarant shall
appoint all of the original members of the Committee and all replacements until
the tenth (10th) anniversary of commencement of Regular Assessments. After the
tenth (10th) anniversary of commencement of Regular Assessments, the terms of
the members of the Committee appointed by Declarant shall terminate.
25
11.2.2 Appointment by Owners: Commencing upon the tenth (10th)
anniversary of commencement of Regular Assessments, the Committee shall consist
of up to eight (8) members, one member appointed by the Owner of each Parcel (if
an Owner owns more than one (1) Parcel, then that Owner shall appoint one (1)
member, but that member shall have one (1) vote for each Parcel owned). All
members will serve until they resign or are replaced by the Owner that appointed
them. All decisions of the Committee shall be made by majority vote, based upon
one (1) vote for each Parcel which that member represents; provided, however, no
member shall cast a vote with respect to a Parcel which is the subject of the
application.
11.3 DUTIES AND POWERS:
11.3.1 Duties: The Committee shall review and approve,
conditionally approve, or deny all plans, submittals, applications and requests
made or tendered to it by Owners or their agents, pursuant to the provisions of
this Declaration. In connection therewith, the Committee may investigate and
consider the architecture, design, layout, landscaping, and other features of
the proposed Improvements.
11.3.2 Architectural Standards: The Committee, from time to time
and in its sole discretion, may adopt architectural rules, regulations and
guidelines ("Architectural Standards"). The Architectural Standards may impose
specific requirements on individual Parcels if those requirements are reasonable
in light of specific Parcel topography, visibility or other factors. The
Architectural Standards will be effective when they are adopted by the
Committee. The Architectural Standards shall interpret and implement the
provisions of this Declaration by setting forth the standards and procedures for
architectural review and guidelines for architectural design, placement of
buildings, color schemes, exterior finishes and materials, landscaping, fences,
and similar features which may be used in the Project; provided, however, that
the Architectural Standards may not be in derogation of the minimum standards
established by this Declaration. The Architectural Standards may include a
schedule of fees for processing submittals (which shall not exceed the amount
necessary to defray all costs incurred by the Committee in processing the
submittals) and establish the time and manner in which such fees will be paid.
The Architectural Standards will constitute Rules.
11.3.3 Powers: The Committee may adopt rules and regulations for
the transaction of business, scheduling of meetings, conduct of meetings and
related matters. The Committee may also adopt criteria, consistent with the
purpose and intent of this Declaration to be used in making its determination to
approve, conditionally approve or deny any matter submitted to it for decision.
11.3.4 Consultants: With the consent of the Board, the Committee
may hire and the Association shall pay consulting architects, landscape
architects, urban designers, engineers, inspectors, and/or attorneys in order to
advise and assist the Committee in performing its duties.
11.4 APPLICATION FOR APPROVAL OF IMPROVEMENTS: Any Owner, except
Declarant and its designated agents, who wants to perform any Alteration for
which approval is required shall notify the Committee in writing of the nature
of the proposed work and shall furnish such information as may be required by
the Architectural Standards or reasonably requested by the Committee.
26
11.5 BASIS FOR APPROVAL OF IMPROVEMENTS: The Committee may approve the
proposal only if the Committee determines that (i) the plans and specifications
conform to this Declaration and to the Architectural Standards in effect at the
time the proposal was submitted and (ii) the proposed Alteration will be
consistent with the standards of the Project and the provisions of this
Declaration as to harmony of exterior design, visibility with respect to
existing structures and environment, and location with respect to topography and
finished grade elevation.
11.6 FORM OF APPROVALS, CONDITIONAL APPROVALS AND DENIALS: All
approvals, conditional approvals and denials must be in writing. Any denial of a
proposal must state the reasons for the decision to be valid. Any proposal which
has not been rejected in writing within sixty (60) days from the date of
submission will be deemed approved.
11.7 WORK: Upon approval of the Committee, the Owner must diligently
proceed with the commencement and completion of all work so approved. Completion
of the-work approved must occur within one (1) year following the approval of
the work unless the Architectural Committee grants an extension. This Section
shall not be interpreted to extend any other time period imposed by this
Declaration. If the Owner fails to complete the work within the required time
period, the Committee may notify the Owner in writing of the non-compliance and
shall proceed in accordance with the provisions of Section 11.9, below.
11.8 DETERMINATION OF COMPLIANCE: Any work performed, whether or not the
Owner obtained proper approvals, may be inspected and a determination of
compliance made as follows:
11.8.1 Notice of Completion: Upon the completion of any work
performed by an Owner for which approval was required, the Owner must give
written notice of completion to the Committee.
11.8.2 Inspection: Within sixty (60) days after the Committee's
receipt of the Owner's notice of completion, or, if the Owner fails to give a
written notice of completion to the Committee within the completion period
specified in Section 11.7, above, a designee of the Committee may inspect the
work performed and determine whether it was performed and completed in
substantial compliance with the approval granted. If the Committee finds that
the work was not performed or completed in substantial compliance with the
approval granted or if the Committee finds that the approval required was not
obtained, the Committee shall notify the Owner in writing of the non-compliance.
The notice shall specify the particulars of non-compliance and require the Owner
to remedy the non-compliance.
11.9 FAILURE TO REMEDY THE NON-COMPLIANCE: If the Committee has
determined that an Owner has not constructed an Improvement consistently with
the specifications of the approval granted or within the time permitted for
completion and if the Owner fails to remedy such non-compliance in accordance
with the provisions of the notice of non-compliance, then after the expiration
of thirty (30) days from the date of such notification, the Committee shall
notify the Board, and the Board shall provide Notice and Hearing to consider the
Owner's continuing non-compliance. At the Hearing, if the Board finds that there
is no valid reason for the continuing non-compliance, the Board shall determine
the estimated costs
27
of correcting it. The Board shall then require the Owner to remedy or remove the
same within a period of not more than forty-five (45) days from the date of the
Board's determination. If the Owner does not comply with the Board's ruling
within such period or within any extension of such period as the Board, in its
discretion, may grant, the Board may either remove the non-complying Improvement
or remedy the non-compliance. The costs of such action shall be assessed against
the Owner as a Reimbursement Assessment.
11.10 WAIVER: Approval of any plans, drawings or specifications for any
work proposed, or for any other matter requiring approval shall not be deemed to
constitute a waiver of any right to deny approval of any similar plan, drawing,
specification or matter subsequently submitted for approval.
11.11 APPEAL OF DECISION OF COMMITTEE: This Section does not apply if
the Board has dissolved the Committee or during the period of time that a
majority of the Members of the Architectural Committee have been appointed by
Declarant. If the Owner who applied or who the Committee determined should have
applied for approval of an Alteration on a Parcel or Building disputes the
jurisdiction or powers of the Committee or any requirement, rule, regulation or
decision of the Committee applicable to the denial or conditional approval of
the Owner's application (collectively referred to as "decision"), that Owner may
appeal such decision to the Board. The Board shall notify the Owner of the time,
date and place of a hearing to review the decision of the Committee. The notice
shall be given at least fifteen (15) days prior to the date set for the hearing
and may be delivered either personally or by mail. If delivery is made by mail,
it shall be deemed to have been delivered seventy-two (72) hours after it has
been deposited in the United States mail, first class, postage prepaid,
addressed to the Owner at the address given by the Owner to the Board for the
purpose of service of notices or to the address of the Owner's Parcel if no
other address has been provided. After the hearing has taken place, the Board
shall notify the Owner of its decision. The decision shall become effective not
less than five (5) days after the date of the hearing. The determination of the
Board shall be final.
11.12 NO LIABILITY: If members of the Architectural Committee have acted
in good faith, neither the Committee nor any member will be liable to the
Association or to any Owner for any damage, loss or prejudice suffered or
claimed due to: (a) the approval or disapproval of any plans, drawings and
specifications, whether or not defective; (b) the construction or performance of
any work, whether or not pursuant to approved plans, drawings, and
specifications; (c) the development of any property within the Project; or (d)
the execution and filing of any estoppel certificate, whether or not the facts
therein are correct.
11.13 EVIDENCE OF APPROVAL OR DISAPPROVAL: After a determination of
compliance is made pursuant to Section 11.8, the Board may issue a written
Notice of Architectural Determination. The Notice of Architectural Determination
must be executed by any two (2) Directors and shall certify that as of the date
of the Notice either (i) the work completed complies with the provisions of this
Declaration and the approval(s) issued by the Architectural Committee ("Notice
of Approval") or (ii) the work completed does not comply with the provisions of
this Declaration or the approval(s) issued by the Architectural Committee
("Notice of Disapproval"). A Notice of Disapproval must also identify the
particulars of the non-compliance. Any successor in interest of the Owner will
be entitled to rely on a Notice of Architectural Determination with respect to
the matters set forth. Each Owner must disclose to
28
the Owner's subsequent purchaser any Notice of Disapproval unless the Owner has
a subsequently issued Notice of Approval which covers the same Alteration. The
Notice of Architectural Determination will be conclusive as between the
Association, the Architectural Committee, Declarant and all Owners and such
persons deriving any interest through any of them. Any Owner may make a written
request that the Board prepare and execute a Notice of Architectural
Determination, and the Board must do so within sixty (60) days of its receipt of
the request.
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ARTICLE XII
MISCELLANEOUS PROVISIONS
- --------------------------------------------------------------------------------
12.1 TERM OF DECLARATION: This Declaration will continue for a term of
fifty (50) years from its date of recordation. Thereafter, this Declaration will
be automatically extended for successive periods of ten (10) years until
two-thirds (2/3) of the Owners approve a termination of this Declaration.
12.2 CONSTRUCTION OF PROVISIONS: The provisions of this Declaration are
to be liberally construed to effect its purpose of creating a uniform plan for
the development and operation of a planned development pursuant to the
provisions of the Davis-Stirling Common Interest Development Act, Section 1350
et seq. of the California Civil Code.
12.3 BINDING: This Declaration is for the benefit of and binding upon
all Owners, their respective heirs, legatees, devisees, executors,
administrators, guardians, conservators, successors, purchasers, tenants,
encumbrancers, donees, grantees, mortgagees, lienors and assigns.
12.4 SEVERABILITY OF PROVISIONS: The provisions hereof shall be deemed
independent and severable, and the invalidity or unenforceability of any one
provision will not affect the validity or enforceability of any other provision
hereof.
12.5 GENDER. NUMBER AND CAPTIONS: As used herein, the singular includes
the plural and masculine pronouns include feminine pronouns, where appropriate.
The title and captions of each paragraph hereof are not a part thereof and shall
not affect the construction or interpretation of any part hereof.
12.6 REDISTRIBUTION OF PROJECT DOCUMENTS: Upon the resale of any Parcel
by any Owner, the Owner must supply a copy of each of the Project Documents to
the buyer of the Parcel.
12.7 EXHIBITS: All exhibits attached to this Declaration are
incorporated by this reference as though fully set forth herein.
12.8 REQUIRED ACTIONS OF ASSOCIATION: The Association shall at all times
take all reasonable actions necessary for the Association to comply with the
terms of this Declaration or to otherwise carry out the intent of this
Declaration.
29
12.9 SUCCESSOR STATUTES: Any reference in the Project documents to a
statute will be deemed a reference to any amended or successor statute.
12.10 CONFLICT: In the event of a conflict, the provisions of this
Declaration will prevail over the Bylaws and the Rules.
IN WITNESS WHEREOF, the undersigned has executed this Declaration on the 6th day
of July, 2001.
DECLARANT: GREENVILLE
INVESTORS L.P., a
California limited
partnership
By: /s/ W. A. Drummond
-------------------------
Name: W.A. DRUMMOND
---------------
Title: Vice President
---------------
Greenville Ventures, Inc.
General Partner
STATE OF CALIFORNIA
}ss.
COUNTY ALAMEDA
On July 6, 2001, before me, Stacey M. Fortner, Notary Public,
personally appeared William A. Drummond, personally known to me to be
the person whose name is subscribed to the within instrument and
acknowledged to me that he executed the same in his authorized
capacity), and that by his signature on the instrument, the person or
the entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ Stacey M. Fortner
---------------------
Notary Public
STACEY M. FORTNER
COMMISSION # 1233595
NOTARY PUBLIC - CALIFORNIA
ALAMEDA COUNTY
MY COMM. EXPIRES AUG 31, 2003
30
EXHIBITS
A Maintenance Plat - Association Maintained Areas
B-1 Maintenance Plat - Shared Maintenance Area
B-2 Maintenance Plat - Shared Maintenance Area
31
[Map of Parcels 1-8 appears here]
EXHIBIT A
ASSOCIATION MAINTAINED
AREAS
JMH WEISS INC.
DESCRIPTION TO ACCOMPANY
EXHIBIT A
The Association Maintained Areas shall consist of all landscape areas abutting
the public right-of-way, all textured paving at the drive entries to the site,
all under and above ground utilities and the hardscape and landscape areas
designated on Exhibit A.
Refer to Exhibit A for area designations.
[Map of Parcels 1-3 appears here]
EXHIBIT B-1
SHARED MAINTENANCE
AREA
JMH WEISS INC.
[Map of Parcels 4-6 appears here]
EXHIBIT B-2
SHARED MAINTENANCE
AREA
JMH WEISS INC.
DESCRIPTION TO ACCOMPANY
EXHIBITS B-1 AND B-2
The shared maintenance areas include the hardscape, underground and above ground
utilities in between buildings excluding all landscape islands, transformers and
trash enclosures, which shall be the responsibility of the owner of the parcel
on which they are located. The shared maintenance areas shall not include any
hardscape, underground or above ground utilities within 5-feet of the buildings.
Refer to exhibits B-1 and B-2 for the area designations.
The following is a breakdown of the Shared Maintenance Areas
Shared Maintenance Area A
Parcel 1 50%
Parcel 3 50%
Shared Maintenance Area B
Parcel 1 - 25%
Parcel 2 - 50%
Parcel 3 - 25%
Shared Maintenance Area C
Parcel 4 - 50%
Parcel 6 - 50%
Shared Maintenance Area D
Parcel 4 - 25%
Parcel 5 - 50%
Parcel 6 - 25%
SUBORDINATION AND CONSENT
HOUSING CAPITAL COMPANY, a Minnesota partnership ("Lender") as Beneficiary under
the deed of trust ("Deed of Trust") executed by GREENVILLE INVESTORS, L.P., a
California limited partnership, and recorded on June 9, 2000, as Series No.
2000173764 in the Official Records of the County of Alameda, State of
California, hereby subordinates the lien of the Deed of Trust to the lien of the
Declaration of Covenants, Conditions and Restrictions of Pacific Corporate
Center ("Declaration") to which this Subordination and Consent is attached to
the same extent and with the same force and effect as though the Declaration had
been executed and recorded prior to the execution and recordation of the Deed of
Trust.
Dated: July 27, 2001
LENDER:
HOUSING CAPITAL COMPANY, A MINNESOTA PARTNERSHIP
BY: DFP Financial, Inc., a California partnership
ITS: Managing General Partner
/s/ Norma J. Avery
- ------------------
BY: Norma J. Avery
ITS: Vice President
STATE OF CALIFORNIA
ss.
COUNTY OF SAN MATEO
On July 27, 2001, before me, Carolyn R Shipley, a Notary Public, personally
appeared Norma J. Avery, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
/s/ Carolyn R. Shipley
CAROLYN R. SHIPLEY
COMMISSION # 1256748
NOTARY PUBLIC - CALIFORNIA
SAN MATEO COUNTY
MY COMM. EXPIRES MAR 13, 2004
EXHIBIT H
NON-DISCLOSURE AGREEMENT
FFI Contact Name: _________________________ FFI Contact Phone: ____________
FORMFACTOR, INC.
NON-DISCLOSURE AGREEMENT
(COMPANY)
This Non-Disclosure Agreement ("Agreement") dated as of ________________________
("Effective Date"), is by and between FormFactor, Inc. ("FormFactor"), a
Delaware corporation, having an office at 5666 La Ribera Street, Livermore, CA
94550, and
Name: , ____________________________________________________________
having an office at
Street Address:____________________________________________________,
City, State, Zip Code:____________________________________________, on
its own behalf and on behalf of its parents, subsidiaries and affiliated
companies (collectively "Recipient").
FormFactor desires to disclose, and Recipient desires to receive for its
own internal evaluation, information relating to certain of FormFactor's
technologies and business strategies, which information is deemed to be
confidential, secret and/or proprietary to FormFactor, for the sole purpose of
assisting in the determination of their mutual interest in a business
relationship ("Purpose"). Accordingly, FormFactor and Recipient agree as
follows:
1. CONFIDENTIAL INFORMATION.
1.1 "Confidential Information" shall mean:
(a) All information disclosed by FormFactor to Recipient whether such
information is disclosed in written, graphic, electronic, oral or sample
form; and
(b) All component specifications, component and contact structures,
equipment designs, electronic configurations, manufacturing processes and
methodologies, including any information which can be obtained by
examination, testing, repair, reverse engineering and analysis of any
hardware, or component part thereof comprising, relating to, or a part of a
product manufactured or assembled with FormFactor's technology,
notwithstanding the fact that the requirements for marking and designation
referred to in Paragraph 2.1 have not been fulfilled.
1.2 Confidential Information shall not include information that Recipient
can demonstrate, through extant, contemporaneously prepared, written records:
(a) Is or becomes part of the public domain through no fault or breach
on the part of Recipient, any of its subsidiaries, affiliates or persons to
whom Confidential Information is disclosed as permitted by this Agreement;
or
(b) Is known to Recipient or any of its subsidiaries or affiliates prior
to the disclosure by FormFactor; or
(c) Is subsequently rightfully obtained by Recipient or any of its
subsidiaries or affiliates from a third party who has the legal right to
disclose or transfer it to Recipient.
2. DISCLOSURE AND PROTECTION OF CONFIDENTIAL INFORMATION.
2.1 As to any information which FormFactor regards as "Confidential
Information", disclosures by FormFactor following the Effective Date are subject
to and in FormFactor's sole and absolute discretion and will be made as follows:
(a) If such information is in writing, or in a drawing, or in some other
tangible form, such information at the time of such disclosure will be
clearly marked as "Confidential Information"; and
(b) In the event that such information is orally disclosed, as may
happen during exchanges between the parties, FormFactor shall state that the
information disclosed is Confidential Information.
2.2 As to any information whether or not specifically designated by
FormFactor as "Confidential Information" (as hereinabove described), FormFactor
reserves all of its rights and remedies as may now or in the future be accorded
to FormFactor under the patent and copyright laws as may apply to the disclosure
or use of such information by Recipient.
2.3 Recipient shall use Confidential Information solely and exclusively for
the purpose of this Agreement. Recipient shall not use Confidential Information
for the benefit of any other party, or disclose, publish, disseminate or copy
Confidential Information or any part thereof, to any other person, corporation
or other organization without, in each case, obtaining the prior written consent
of FormFactor. Recipient shall restrict any and all circulation of Confidential
Information to a limited number of its employees on a "need to know basis" for
the exclusive purpose of reviewing the Confidential Information for the Purpose
of this Agreement. Recipient acknowledges that all information is provided "AS
IS" and without any warranty, whether express or implied, as to its accuracy or
completeness, non-infringement or use for particular purpose.
2.4 Recipient shall not reverse engineer, decompile or disassemble any of
the Confidential Information or any products or samples containing Confidential
Information; provided, however, Recipient may examine FormFactor's products or
samples for the sole purpose of internally evaluating them. Recipient may
examine FormFactor's products or samples for the sole purpose of internally
evaluating them. Recipient shall use its best efforts to safeguard against the
unauthorized use or disclosure of Confidential Information, and take security
precautions at least as great as the precautions it takes to protect its own
confidential and proprietary information and materials.
2.5 Notwithstanding anything to the contrary herein provided, Recipient
shall not:
(a) Deliver or leave any samples; parts or products containing
Confidential Information to or with third party;
(b) Disclose to any third party the manufacturing or assembly process
used by FormFactor, or the structure of FormFactor's electronic interconnect
technology products; and/or
(c) Disclose to any third party any evaluation and testing date or
results, unless FormFactor gives prior written approval of such disclosure.
2.6 Neither execution of this Agreement nor the furnishing of any
Confidential Information to Recipient shall be construed as granting to
Recipient, either expressly or by implication, estoppel, or otherwise, any
license or right to (a) make use of any such Confidential Information, or (b)
any patents or other intellectual property of FormFactor, other than for the
purpose. Recipient agrees that neither it nor any of its subsidiaries,
affiliates or representatives will use Confidential Information for outer than
the purpose without the specific and written express consent of FormFactor prior
to such use. Furthermore, Recipient agrees that Confidential Information is the
sole property of FormFactor and that Recipient has no proprietary interest in
such information whatsoever.
2.7 Within ten (10) business days of receipt of FormFactor's written
request, Recipient will return to
FormFactor all information and materials, including but not limited to
documents, drawings, programs, lists, models, records, compilations, notes,
extracts, summaries, and any samples or parts containing Confidential
Information, and all copies thereof containing Confidential Information,
regardless of whether prepared by FormFactor or Recipient or any of its
subsidiaries, affiliates or representatives. Fur purposes of this Paragraph 2.7,
the term "documents" includes all information fixed in any tangible medium or
expression, in whatever furor or format whether known or hereafter created.
2.8 Recipient hereby acknowledges and agrees that unauthorized use or
disclosure of Confidential Information Would cause serious and irreparable harm
and significant injury to FormFactor that may be difficult or impossible to
ascertain. Accordingly, Recipient agrees that FormFactor will have, in addition
to all outer remedies at law or in equity, the right to seek and obtain
immediate injunctive relief for the actual or threatened unauthorized use or
disclosure of Confidential Information. Recipient shall notify FormFactor
immediately upon the discovery of any unauthorized disclosure or use of
Confidential Information, or any other breach of this Agreement by Recipient.
Recipient will cooperate with FormFactor in every reasonable way to help
FormFactor regain possession of the Confidential Information and prevent further
unauthorized use.
3. EXPORT RESTRICTIONS. Recipient agrees that it will not in any form export,
reexport, resell, ship or divert or cause to be exported, reexported, resold,
stripped or diverted, directly or indirectly, any product or technical data to
any country for which the United States Government or any agency thereof at the
time of export or reexport requires an export license or other government
approval without first obtaining such approval.
4. TERMS. This Agreement shall be effective as of the Effective Date and may be
terminated by FormFactor with respect to further disclosures upon thirty (30)
days written notice. All obligations of confidentiality and restrictions on the
use of Confidential Information created under and by this Agreement shall remain
in force and effect for five (5) years from the date any Confidential
Information is or was disclosed by FormFactor Recipient or, in the event that
FormFactor and the Recipient enter into a business relationship following the
date of this Agreement, five (5) years following the date such business
relationship terminates, whichever is later. All other terms and conditions of
this Agreement shall survive the termination of this Agreement.
5. NO OBLIGATIONS. This Agreement and any action taken pursuant to the terms and
conditions hereof shall not obligate either party to enter into any other
business relationship. The terms and conditions of any such relationship shall
be subject to separate negotiation and agreement of the parties.
6. MISCELLANEOUS.
6.1 This Agreement is the entire agreement between FormFactor and Recipient
with respect to the subject matter contained herein and supersedes any prior or
contemporaneously oral or written agreements concerning this subject matter.
This Agreement may not be amended except by written agreement signed by
authorized representatives of both parties. No waiver of any provision of this
Agreement shall constitute a waiver of any other provision(s) or of the same
provision on another occasion. If any provision of this Agreement shall be held
by a court of competent jurisdiction to be illegal, invalid or unenforceable,
the remaining provisions shall remain in full force and effect.
6.2 This Agreement may not be assigned or transferred by Recipient without
FormFactor's prior written consent.
6.3 This Agreement will be governed and construed in accordance with the
laws of the State of California, without regard to its conflict of laws
principles. The parties hereby agree to submit themselves to the jurisdiction of
the federal and state courts within Santa Clara County, California.
IN WITNESS THEREOF, FormFactor and Recipient have executed this Agreement as
of the Effective Date.
"FORMFACTOR": "RECIPIENT":
FormFactor, Inc. Name: ___________________________
(Individual or Company,
as applicable)
By: _________________________________
(Signature) By: ___________________________
(Signature)
Name: _________________________________
(Printed Name) Name: ___________________________
(Printed Name)
Title: _________________________________
(Authorized Officer) Title: ___________________________
(Authorized Officer)
EXHIBIT I
LIST OF COMPETITORS
The following is a list of Tenant's competitors:
Kulicke and Soffa
Wentworth
JEM
MJC
Tessera
Cascade Microtech
Feinmetal
EXHIBIT J
ACKNOWLEDGEMENT OF COMMENCEMENT DATE
THIS ACKNOWLEDGMENT OF COMMENCEMENT DATE is made as of
___________________, 2001, by and between the undersigned parties with reference
to that certain Lease (the "LEASE") dated as of ___________________, by and
between Greenville Investors, L.P., as "LANDLORD" therein, and Form Factor, Inc.
as "TENANT," for the premises commonly known as "BUILDING 3", located in the
Pacific Corporate Center, in the City of Livermore, California, as more
particularly described in the Lease. All capitalized terms referred to herein
shall have the same meaning defined in the Lease, except where expressly
provided to the contrary.
1. Landlord and Tenant hereby confirm that in accordance with the
provisions of the Lease, the Commencement Date of the Term has occurred and is
____________, and that, unless sooner terminated, the initial term thereof
expires on ________________________. If Tenant elects to exercise its first
extension option pursuant to the terms of the Lease, Tenant must deliver written
notice to Landlord by no later than ________________________.
2. This Acknowledgment of Commencement Date shall inure to the benefit
of, and bind, the parties hereto, and their respective heirs, successors and
assigns, subject to the restrictions upon assignment and subletting contained in
the Lease.
IN WITNESS WHEREOF, the parties have executed this acknowledgement of
Commencement Date as of the date first above written.
LANDLORD: TENANT:
GREENVILLE INVESTORS, L.P. FORM FACTOR, INC.,
a California limited partnership
By: Greenville Ventures, Inc. By: ______________________________
Title: Greenville Partner
Its: ______________________________
By: _______________________________
Its: _______________________________