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EXHIBIT 10.6
INDUSTRIAL SPACE LEASE
(MULTI-TENANT NET)
THIS LEASE, dated November 9, 1995 for reference purposes only, is
made by and between Renco Associates, a California Partnership ("Landlord"),
and Weitek Corporation ("Tenant"), to be effective and binding upon the parties
as of the date the last of the designated signatories to this Lease shall have
executed this Lease (the "Effective Date of this Lease").
ARTICLE 1
REFERENCES
1.1 References: All references in this Lease (subject to any
further clarifications contained in this Lease) to the following terms shall
have the following meaning or refer to the respective address, person, date,
time period, amount, percentage, calendar year or fiscal year as below set
forth:
A. Tenant's Address for Notices: 2801 Orchard Parkway
San Jose, California
B. Tenant's Representative: Paul K. Kidman
Phone Number:
C. Landlord's Address for Notices: 1285 Oakmead Parkway
Sunnyvale, California 94086
D. Landlord's Representative: William N. Neidig
Phone Number: (408) 730-5500
E. Intended Commencement Date: December 1, 1995
F. Intended Term: From the actual commencement
date to July 1, 2001
G. Lease Expiration Date: July 1, 2001
H. Tenant's Punchlist Period: Thirty (30) days
I. First Month's Prepaid Rent: $33,112.00
J. Last Month's Prepaid Rent: --
K. Tenant's Security Deposit: $33,112.00
L. Late Charge Amount: Ten Percent (10%) of the
delinquent amount
M. Tenant's Required Liability Coverage: $2,000,000.00
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N. Tenant's Number of Parking Spaces: 150
O. Brokers: Joan S. Haynes; Colliers
Parrish International
P. Project or Property: That certain real property situated in the
City of San Jose, County of Santa Clara, State of California, as presently
improved with one building, which real property is shown on the Site Plan
attached hereto as Exhibit "A" and is commonly known as or otherwise described
as follows:
2801 Orchard Parkway
San Jose, California
Q. Building: That certain Building within the Project in which the
Leased Premises are located, which Building is shown outlined in red on Exhibit
"A" hereto.
R. Common Areas: The "Common Areas" shall mean those areas within
the Project which are located outside the buildings and which are provided and
designated by Landlord from time to time for general use by tenants of the
Project including driveways, pedestrian walkways, parking spaces, landscaped
areas and enclosed trash disposal areas.
S. Leased Premises: That certain space which is a portion of the
Building, which space is shown outlined in red on the Floor Plan attached
hereto as Exhibit "B" consisting of approximately 40,380 square feet of
leasable area and, for purposes of this Lease, agreed to contain said number of
square feet. The Leased Premises are commonly known as or otherwise described
as follows:
2801 Orchard Parkway
San Jose, California
T. Base Monthly Rent: The term "Base Monthly Rent" shall mean the
following:
Thirty three thousand one hundred twelve dollars ($33,112.00) for
each of the first thirty-four (34) months of the lease term.
After which the Base Monthly Rent will be increased pursuant to
section 1.1T of the First Addendum to Lease.
U. Permitted Use: The term "Permitted Use" shall mean the following:
General office, research and development, light manufacturing,
marketing, sales, the distribution and warehousing of Tenant's
products.
V. Exhibits: The term "Exhibits" shall mean the Exhibits to this
Lease which are described as follows:
Exhibit "A" - Site Plan showing the Project and delineating
the Building in which the Leased Premises are
located.
Exhibit "B" - Floor Plan outlining the Leased Premises.
Exhibit "C" - Tenant Improvement Agreement.
Exhibit "D" - Acceptance Agreement.
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W. Addenda: The term "Addenda" shall mean the Addendum (or Addenda)
to this Lease which is (or are) described as follows:
First Addendum to Lease
ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION
2.1 Demise of Leased Premises: Landlord hereby leases to Tenant
and Tenant hereby leases from Landlord for Tenant's own use in the conduct of
Tenant's business and not for purposes of speculating in real estate, for the
Lease Term and upon the terms and subject to the conditions of this Lease, that
certain interior space described in Article 1(s) as the Leased Premises.
Landlord further reserves the right to install, maintain, use and replace
ducts, wires, conduits and pipes leading through the Leased Premises in
locations which will not materially interfere with Tenant's use of the Leased
Premises. Tenant's lease of the Leased Premises, together with the appurtenant
right to use the Common Areas as described in Article 2.2 below, shall be
conditioned upon and be subject to the continuing compliance by Tenant with (i)
all the terms and conditions of the Lease, (ii) all Laws governing the use of
the Leased Premises and the Project, (iii) all Private Restrictions, easements
and other matters now of public record respecting the use of the Leased
Premises and the Project, and (iv) all reasonable rules and regulations from
time to time established by Landlord.
2.2 Right to Use Common Areas: As an appurtenant right to
Tenant's right to the use of the Leased Premises, Tenant shall have the
non-exclusive right to use the Common Areas in conjunction with other tenants
of the Project and their invitees, subject to the limitations on such use as
set forth in Article 4, and solely for the purposes for which they were
designed and intended. Tenant's right to use the Common Areas shall terminate
concurrently with any termination of this Lease.
2.3 Lease Commencement Date and Lease Term: The term of this
Lease shall begin, and the Lease Commencement Date shall be deemed to have
occurred in accordance with Section 2.4 below. The term of this Lease shall
end on the Lease Expiration Date (as set forth in Article 1), irrespective of
whatever date the Lease Commencement Date is determined to be pursuant to the
foregoing sentence. The Lease Term shall be that period of time commencing on
the Lease Commencement Date and ending on the Lease Expiration Date (the "Lease
Term").
2.4 Delivery of Possession: Landlord shall deliver to Tenant
possession of the Leased Premises on or before the Intended Commencement Date
(as set forth in Article 1) in their presently existing condition, broom clean,
unless Landlord shall have agreed, as a condition to Tenant's obligation to
accept possession of the Leased Premises, pursuant to an Exhibit or Addenda
attached to and made a part of this Lease to modify existing interior
improvements or to make, construct and/or install additional specified
improvements within the Leased Premises, in which case Landlord shall deliver
to Tenant possession of the Leased Premises on or before the Intended
Commencement Date as so modified and/or improved. If Landlord is unable to so
deliver possession of the Leased Premises to Tenant on or before the Intended
Commencement Date, for whatever reason, Landlord shall not
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be in default under this Lease, nor shall this Lease be void, voidable or
cancelable by Tenant until the lapse of one hundred twenty days after the
Intended Commencement Date (the "delivery grace period"); however, the Lease
Commencement Date shall not be deemed to have occurred until such date as
Landlord notifies Tenant that the Leased Premises are Ready for Occupancy.
Additionally, the delivery grace period above set forth shall be extended for
such number of days as Landlord may be delayed in delivering possession of the
Leased Premises to Tenant by reason of Force Majeure or the actions of Tenant.
If Landlord is unable to deliver possession of the Leased Premises to Tenant
within the described delivery grace period (including any extensions thereof by
reason of Force Majeure or the actions of Tenant), then Tenant's sole remedy
shall be to cancel and terminate this Lease, and in no event shall Landlord be
liable to Tenant for such delay. Tenant may not cancel this Lease at any time
after the date Landlord notifies Tenant the Leased Premises are Ready for
Occupancy.
2.5 Acceptance of Possession: Tenant acknowledges that it has
inspected the Leased Premises and is willing to accept them in their existing
condition, broom clean, unless Landlord shall have agreed, as a condition to
Tenant's obligation to accept possession of the Leased Premises, pursuant to an
Exhibit or Addenda attached to and made a part of this Lease to modify existing
interior improvements or to make, construct and/or install additional specified
improvements within the Leased Premises, in which case Tenant agrees to accept
possession of the Leased Premises when Landlord has substantially completed
such modifications or improvements and the Leased Premises are Ready for
Occupancy. If Landlord shall have so modified existing improvements or
constructed additional improvements within the Leased Premises for Tenant,
Tenant shall, within Tenant's Punchlist Period (as set forth in Article 1)
which shall commence on the date that Landlord notifies Tenant that the Leased
Premises are Ready for Occupancy, submit to Landlord a signed copy of the
Acceptance Agreement attached hereto as Exhibit "D" together with a punchlist
of al incomplete and/or improper work performed by Landlord. Upon the
expiration of Tenant's Punchlist Period, Tenant shall be conclusively deemed to
have accepted the Leased Premises in their then-existing condition as so
delivered by Landlord to Tenant, except as to those items reasonably set forth
in the punchlist submitted to Landlord prior to the expiration of said period.
Landlord agrees to correct all items reasonably set forth in Tenant's
punchlist, provided that such punchlist was submitted to Landlord within
Tenant's Punchlist Period. Additionally, Landlord agrees to place in good
working order all existing plumbing, electrical lighting, heating, ventilating
and air conditioning systems within the Leased Premises, roof and all man doors
and roll-up truck doors serving the Leased Premises to the extent that such
systems and/or items are not in good operating condition as of the date Tenant
accepts possession of the Leased Premises.
2.6 Surrender of Possession: Immediately prior to the expiration
or upon the sooner termination of this Lease, Tenant shall remove all of
Tenant's signs from the exterior of the Building and shall remove all of
Tenant's equipment, trade fixtures, furniture, supplies, wall decorations and
other personal property from the Leased Premises, and shall vacate and
surrender the Leased Premises to Landlord in the same condition, broom clean,
as existed at the Lease Commencement Date. Landlord, at Tenant's expense,
shall retain a mechanical contractor to service all heating, ventilation and
air conditioning equipment, and Tenant shall pay the cost to restore (or
replace as required), subject to 13.12C of the Addendum said equipment to good
working order. Tenant shall pay the cost of
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restoring or replacing all trees, shrubs, plants, lawn and ground cover, and
repair (or replace as required) all paved surfaces of the Property, and
otherwise satisfy all requirements to repair any damage or wear to the Leased
Premises, Building, Common Areas, Outside Areas, and/or Property. Tenant shall
repair all damage to the Leased Premises caused by Tenant or by Tenant's
removal of Tenant's property and all damage to the exterior of the Building
caused by Tenant's removal of Tenant's signs. Tenant shall patch and refinish,
to Landlord's reasonable satisfaction, all penetrations made by Tenant or its
employees to the floor, walls or ceiling of the Leased Premises, whether such
penetrations were made with Landlord's approval or not. Tenant shall clean,
repair or replace all stained or damaged ceiling tiles, wall coverings and
clean or replace as may be required floor coverings to the reasonable
satisfaction of Landlord. Tenant shall replace all burned out light bulbs and
damaged light lenses, and clean and repaint all painted walls. Tenant shall
repair all damage caused by Tenant to the exterior surface of the Building and
the paved surfaces of the outside areas adjoining the Leased Premises and,
where necessary, subject to Addendum 13.12C, replace or resurface same.
Additionally, Tenant shall, prior to the expiration or sooner termination of
this Lease, remove any improvements constructed or installed by Tenant which
Landlord requests be so removed by Tenant and repair all damage caused by such
removal. If the Leased Premises are not surrendered to Landlord in the
condition required by this Article at the expiration or sooner termination of
this Lease, Landlord may, at Tenant's expense, so remove Tenant's signs,
property and/or improvements not so removed and make such repairs and
replacements not so made or hire, at Tenant's expense, independent contractors
to perform such work. Tenant shall be liable to Landlord for all costs
incurred by Landlord in returning the Leased Premises to the required
condition, plus interest on all costs incurred from the date paid by Landlord
at the then maximum rate of interest not prohibited by Law until paid, payable
by Tenant to Landlord within ten days after receipt of a statement therefore
from Landlord, and Tenant shall be deemed to have impermissibly held over until
such time as such required work is completed, and Tenant shall pay Base Monthly
Rent and Additional Rent in accordance with the terms of Section 13.2 (Holding
Over) until such work is completed. Tenant shall indemnify Landlord against
loss or liability resulting from delay by Tenant in so surrendering the Leased
Premises, including, without limitation, any claims made by any succeeding
tenant or any losses to Landlord due to lost opportunities to lease to
succeeding tenants.
Insert 2.6
2.7 Early Occupancy: If Tenant enters into possession of the
Leased Premises prior to the Intended Commencement Date (or permits its
contractors to enter the Leased Premises prior to the Intended Commencement
Date), unless otherwise agreed in writing by Landlord, the Lease Commencement
Date shall be deemed to have occurred on such sooner date, and Tenant shall be
obligated to perform all its obligations under this Lease, including the
obligation to pay rent, from that sooner date.
Insert 2.7
ARTICLE 3
RENT, LATE CHARGES AND SECURITY DEPOSITS
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3.1 Base Monthly Rent: Commencing on the Lease Commencement Date
(as determined pursuant to Article 2.3 above) and continuing throughout the
Lease Term, Tenant shall pay to Landlord, without prior demand therefore, in
advance on the first day of each calendar month, as base monthly rent, the
amount set forth as "Base Monthly Rent" in Article 1 (the "Base Monthly Rent").
3.2 Additional Rent: Commencing on the Lease Commencement Date(as
determined pursuant to Article 2.3 above) and continuing throughout the Lease
Term, in addition to the Base Monthly Rent, Tenant shall pay to Landlord as
additional rent (the "Additional Rent") the following amounts:
A. Tenant's Proportionate Share of all Building
Operating Expenses (as defined in Article 13). Payment shall be made by
whichever of the following methods (or combination of methods) is (are) from
time to time designated by Landlord:
1. Landlord may bill to Tenant, on a periodic
basis not more frequently than monthly, Tenant's Proportionate Share of
such expenses (or group of expenses) as paid or incurred by Landlord, and
Tenant shall pay such share of such expenses within ten days after receipt
of a written bill therefore from Landlord; and/or
2. Landlord may deliver to Tenant Landlord's
reasonable estimate of any given expense (or group of expenses, such as
Landlord's Insurance Costs or Real Property Taxes) which it anticipates
will be paid or incurred for the ensuing calendar or fiscal year, as
Landlord may determine, and Tenant shall pay its Proportionate Share of
such expenses for such year in equal monthly installments during such year
with the installments of Base Monthly Rent. Landlord reserves the right to
change from time to time the method of billing Tenant its Proportionate
Share of such expenses or the periodic basis on which such expenses are
billed.
B. Landlord's share of the consideration received by
Tenant upon certain assignments and sublettings as required by Article 7;
C. Any legal fees and costs that Tenant is obligated to
pay or reimburse to Landlord pursuant to Article 13; and
D. Any other charges or reimbursement due Landlord from
Tenant pursuant to the terms of this Lease.
3.3 Year-End Adjustments: If Landlord shall have elected to
charge Tenant its Proportionate Share of the Building Operating Expenses (or
any group of such expenses) on an estimated basis in accordance with the
provisions of Article 3.2A(2) above, Landlord shall furnish to Tenant within
three months following the end of the applicable calendar or fiscal year, as
the case may be, a statement setting forth (i) the amount of such expenses paid
or incurred during the just ended calendar or fiscal year, as appropriate, and
(ii) Tenant's Proportionate Share of such expenses for such period. If Tenant
shall have paid more than its Proportionate Share of such expenses for the
stated period, Landlord shall, at its election, either (i) credit the amount of
such overpayment toward the next ensuing payment or payments of Additional Rent
that would otherwise be due or (ii) immediately refund in cash to Tenant the
amount of such overpayment. If such year-end statement shall show that Tenant
did not pay its
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Proportionate Share of any such expenses in full, then Tenant shall pay to
Landlord the amount of such underpayment within ten days from Landlord's
billing of same to Tenant. The provisions of this Article shall survive the
expiration or sooner termination of this Lease.
3.4 Late Charge and Interest on Rent in Default: Tenant
acknowledges that the late payment by Tenant of any monthly installment of Base
Monthly Rent or any Additional Rent will cause Landlord to incur certain costs
and expenses not contemplated under this Lease, the exact amounts of which are
extremely difficult or impractical to fix. Such costs and expenses will
include, without limitation, administration and collection costs and processing
and accounting expenses. Therefore, if any installment of Base Monthly Rent is
not received by Landlord from Tenant within six calendar days after the same
becomes due, Insert 3.4 Tenant shall immediately pay to Landlord a late charge
in an amount equal to the amount set forth in Article 1 as the "Late Charge
Account", and if any Additional Rent is not received by Landlord within six
calendar days after same becomes due, Insert 3.4 Tenant shall immediately pay
to Landlord a late charge in an amount equal to ten percent of the Additional
Rent not so paid. Landlord and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for its loss suffered by reason of Tenant's failure to make timely
payment. In no event shall this provision for a late charge be deemed to grant
to Tenant a grace period or extension of time within which to pay any rental
installment or prevent Landlord from exercising any right or remedy available
to Landlord upon Tenant's failure to pay each rental installment due under this
Lease when due, including the right to terminate this Lease. If any rent
remains delinquent for a period in excess of six calendar days, then, in
addition to such late charge, Tenant shall pay to Landlord interest on any rent
that is not so paid from said sixth day at the then maximum rate of interest
not prohibited by Law until paid.
3.5 Payment of Rent: Except as set forth in this Lease, all rent
shall be paid in lawful money of the United States, without any abatement,
deduction or offset for any reason whatsoever, to Landlord at such address as
Landlord may designate from time to time. Tenant's obligation to pay Base
Monthly Rent and all Additional Rent shall be prorated at the commencement and
expiration of the Lease Term. The failure by Tenant to pay any Additional Rent
as required pursuant to this Lease when due shall be treated the same as a
failure by Tenant to pay Base Monthly Rent when due, and Landlord shall have
the same rights and remedies against Tenant as Landlord would have if Tenant
failed to pay the Based Monthly Rent when due.
3.6 Prepaid Rent: Upon signing this Lease, Tenant shall
immediately pay to Landlord the amount set forth in Article 1 as "First Month's
Prepaid Rent" as prepayment of rent for credit against the first installment(s)
of Base Monthly Rent due hereunder. Additionally, Tenant has paid to Landlord
the amount set forth in Article I as "Last Month's Prepaid Rent" as prepayment
of rent for credit against the last installment(s) of Base Monthly Rent due
hereunder, subject, however, to the provisions of Article 3.7 below.
3.7 Security Deposit: Upon signing this Lease, Tenant shall
immediately deposit with Landlord the amount set forth in Article 1 as the
"Security Deposit" as security for the performance by Tenant of the terms of
this Lease to be performed by Tenant, and not as prepayment of rent. Landlord
may apply such portion or portions of the Security Deposit as are reasonably
necessary for the
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following purposes: (i) to remedy any default by Tenant in the payment of Base
Monthly Rent or Additional Rent or a late charge or interest on defaulted rent;
(ii) to repair damage to the Leased Premises caused by Tenant; (iii) to clean
and repair the Leased Premises following their surrender to Landlord if not
surrendered in the condition required pursuant to the provisions of Article 2;
and (iv) to remedy any other default of Tenant to the extent permitted by Law
including, without limitation, paying in full on Tenant's behalf any sums
claimed by materialmen or contractors of Tenant to be owing to them by Tenant
for work done or improvements made at Tenant's request to the Leased Premises.
In this regard, Tenant hereby waives any restriction on the uses to which the
Security Deposit may be applied as contained in Section 1950.7(c) of the
California Civil Code and/or any successor statute. In the event the Security
Deposit or any portion thereof is so used, Tenant shall pay to Landlord,
promptly upon demand, an amount in cash sufficient to restore the Security
Deposit to the full original sum. If Tenant fails to promptly restore the
Security Deposit and if Tenant shall have paid to Landlord any sums as "Last
Month's Prepaid Rent", Landlord may, in addition to any other remedy, Landlord
may have under this Lease, reduce the amount of Tenant's Last Month's Prepaid
Rent by transferring all or portions of such Last Month's Prepaid Rent to
Tenant's Security Deposit until such Security Deposit is restored to the amount
set forth in Article 1. Landlord shall not be deemed a trustee of the Security
Deposit. Landlord may use the Security Deposit in Landlord's ordinary business
and shall not be required to segregate it from its general accounts. Tenant
shall not be entitled to any interest on the Security Deposit. If Landlord
transfers the Building during the Leased Term, Landlord may pay the Security
Deposit to any subsequent owner in conformity with the provisions of Section
1950.7 of the California Civil Code and/or any successor statute, in which
event the transferring landlord shall be released from all liability for the
return of the Security Deposit. Tenant specifically grants to Landlord (and
hereby waives the provisions of California Civil Code Section 1950.7 to the
contrary) a period of 30 days following a surrender of the Leased Premises by
Tenant to Landlord within which to return the Security Deposit (less permitted
deductions) to Tenant, it being agreed between Landlord and Tenant that 30 days
is a reasonable period of time within which to inspect the Leased Premises,
make required repairs, receive and verify workmen's billings therefore, and
prepare a final accounting with respect to such deposit. In no event shall the
Security Deposit, or any portion thereof, be considered prepaid rent.
ARTICLE 4
USE OF LEASED PREMISES AND COMMON AREAS
4.1 Permitted Use: Tenant shall be entitled to use the Leased
Premises solely for the "Permitted Use" as set forth in Article 1 and for no
other purpose whatsoever. Subject to the limitations contained in this Article
4, Tenant shall have the right to use the Common Areas, in conjunction with
other tenants and during normal business hours, solely for the purposes for
which they were intended and for no other purposes whatsoever. Tenant shall
not have the right to use the exterior surfaces of exterior walls, the area
beneath the floor or the area above the ceiling of the Leased Premises.
4.2 General Limitations on Use: Tenant shall not do or permit
anything to be done in or about the Leased Premises, the Building, the Common
Areas or the Project which does or could (i) interfere with the right of other
tenants or
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occupants of the Building or the Project, (ii) jeopardize the structural
integrity of the Building or (iii) cause damage to any part of the Building or
the Project. Tenant shall not operate any equipment within the Leased Premises
which does or could (i) injure, vibrate or shake the Leased Premises or the
Building, (ii) damage, overload, corrode, or impair the efficient operation of
any electrical, plumbing, sewer, heating, ventilating or air conditioning
systems within or servicing the Leased Premises or the Building or (iii) damage
or impair the efficient operation of the sprinkler system (if any) within or
servicing the Leased Premises or the Building, Insert 4.2. Tenant shall not
install any equipment or antennas on or make any penetrations of the exterior
walls or roof of the Building. Tenant shall not affix any equipment to or make
any penetrations or cuts in the floor, ceiling or walls of the Leased Premises,
Insert 4.2. Tenant shall not place any loads upon the floors, walls, ceiling
or roof systems which could endanger the structural integrity of the Building
or damage its floors, foundations or supporting structural components. Tenant
shall not place any explosive, flammable or harmful fluids, including Hazardous
Materials, or other waste materials in the drainage systems of the Building or
the Project. Tenant shall not drain or discharge any fluids in the landscaped
areas or across the paved areas of the Project. Tenant shall not use any area
located outside the Leased Premises for the storage of its materials, supplies,
inventory or equipment, and all such materials, supplies, inventory and
equipment shall at all times be stored within the Leased Premises. Tenant
shall not commit nor permit to be committed any waste in or about the Leased
Premises, the Common Area or the Project.
4.3 Noise and Emissions: All noise generated by Tenant in its use
of the Leased Premises shall be confined or muffled so that it does not
unreasonably interfere with the businesses of or annoy other tenants of the
Building or the Project. All dust, fumes, odors and other emissions generated
by Tenant's use of the Leased Premises shall be sufficiently dissipated in
accordance with sound environmental practices and exhausted from the Leased
Premises in such a manner so as not to unreasonably interfere with the
businesses of or annoy other tenants of the Building or the Project, or cause
any damage to the Leased Premises or the Building or any component part thereof
or the property of other tenants of the Building or the Project.
4.4 Trash Disposal: Tenant shall provide trash and garbage
disposal facilities outside the Leased Premises, (Insert 4.4), for all of its
trash, garbage and waste requirements and shall cause such trash, garbage and
waste to be regularly removed from the Leased Premises at Tenant's sole cost.
Tenant shall keep all areas outside the Leased Premises and all fire corridors
and mechanical equipment rooms in or about the Leased Premises free and clear
of all trash, garbage, waste and boxes containing same at all time.
4.5 Parking: Tenant is allocated, and Tenant and its employees
and invitees shall have the non-exclusive right to use, not more than the
number of parking spaces set forth in Article 1 as "Tenant's Number of Parking
Spaces". Tenant shall not, at any time, use or permit its employees or
invitees to use more parking spaces than the number so allocated to Tenant.
Tenant shall not have the exclusive right to use any specific parking space,
and Landlord reserves the right to designate from time to time the location of
the parking spaces allocated for Tenant's use. In the event, Landlord elects
or is required by any Law to limit or control parking within the Project,
whether by validation of parking tickets or any other method, Tenant agrees to
participate in such
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validation or other program as reasonably established by Landlord. Tenant
shall not, at any time, park or permit to be parked any trucks or vehicles
adjacent to entryways or loading areas within the Project so as to unreasonably
interfere in any way with the use of such areas, nor shall Tenant, at any time,
park or permit the parking of Tenant's trucks or other vehicles, or the trucks
and vehicles of Tenant's suppliers or others, in any portion of the Common
Areas not designated by Landlord for such use by Tenant. Tenant shall not, at
any time, park or permit to be parked any recreational vehicles, inoperative
vehicles or equipment on any portion of the common parking area or other Common
Areas of the Project. Tenant agrees to assume responsibility for compliance by
its employees and invitees with the parking provisions contained herein.
Tenant hereby authorizes Landlord, at Tenant's sole expense, to tow away from
the Project and store until redeemed by its owner any vehicle belonging to
Tenant or Tenant's employees parked in violation of these provisions.
4.6 Signs: Tenant shall not place or install on or within any
portion of the Leased Premises, the Building, the Common Areas or the Project
any sign (other than a business identification sign first approved by Landlord
in accordance with this Article), advertisements, banners, placards or pictures
which are visible from the exterior of the Leased Premises. Tenant shall not
place or install on or within any portion of the Leased Premises, the Building,
the Common Areas or the Project any business identification sign which is
visible from the exterior of the Leased Premises until Landlord shall have
first approved in writing the location, size, content, design, method of
attachment and material to be used in the making of such sign. Any signs, once
approved by landlord, shall be installed only in strict compliance with
Landlord's approval, at Tenant's expense, using a person first approved by
Landlord to install same. Landlord may remove any signs (not first approved in
writing by Landlord), advertisements, banners, placards or pictures so placed
by Tenant on or within the Leased Premises, the Building, the Common Areas or
the Project and charge to Tenant the cost of such removal, together with any
costs incurred by Landlord to repair any damage caused thereby, including any
cost incurred to restore the surface upon which such sign was so affixed to its
original condition. Tenant shall remove any such signs, repair any damage
caused thereby, and restore the surface upon which the sign was affixed to its
original condition, all to Landlord's reasonable satisfaction, upon the
termination of this Lease.
Insert 4.6
4.7 Compliance with Laws and Private Restrictions: Subject to
Article 5 Tenant shall not use or permit any person to use the Leased Premises
in any manner which violates any Laws or Private Restrictions, Insert 4.7.
Tenant shall abide by and shall promptly observe and comply with, at its sole
cost and expense, all Laws and Private Restrictions respecting the use and
occupancy of the Leased Premises, the Building, the Common Areas or the Project
and shall defend with competent counsel, indemnify and hold Landlord harmless
from any claims, damages or liability resulting from Tenant's failure to do so.
4.8 Compliance with Insurance Requirements: With respect to any
insurance policies carried by Landlord in accordance with the provisions of
this Lease, Tenant shall not conduct (nor permit any other person to conduct)
any activities within the Leased Premises, or store, keep or use anything
within the Leased Premises which (i) is prohibited under the terms of any of
such policies, (ii) could result in the termination of the coverage afforded
under any of such
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policies, (iii) could give to the insurance carrier the right to cancel any of
such policies, or (iv) could cause an increase in the rates (over standard
rates) charged for the coverage afforded under any of such policies. Tenant
shall comply with all requirements of any insurance company, insurance
underwriter, or Board of Fire Underwriters which are necessary to maintain, at
standard rates, the insurance coverages carried by either Landlord or Tenant
pursuant to this Lease.
Insert 4.8
4.9 Landlord's Right to Enter: Landlord and its agents shall have
the right to enter into Leased Premises during normal business hours and
subject to Tenant's reasonable security measures for the purpose of (i)
inspecting the same; (ii) supplying any services to be provided by Landlord to
Tenant; (iii) showing the Leased Premises to prospective purchasers, mortgagees
or tenants; (iv) making necessary alterations, additions or repairs; (v)
performing any of Tenant's obligations when Tenant has failed to do so after
giving Tenant reasonable written notice of its intent to do so; and (vi)
posting notices of non-responsibility or "For Lease" or "For Sale" signs.
Additionally, Landlord shall have the right to enter the Leased Premises at
times of emergency. Any entry into the Lease Premises or portions thereof
obtained by Landlord in accordance with this Article shall not under any
circumstances be construed or deemed to be forcible or unlawful entry into, or
a detainer of, the Leased Premises, or a eviction, actual or constructive, of
Tenant from the Leased Premises or any portion thereof.
4.10 Control of Common Areas: Landlord shall at all times have
exclusive control of the Common Areas. Landlord shall have the right, without
the same constituting an actual or constructive eviction and without entitling
Tenant to any reduction in or abatement of rent, to: (i) temporarily close any
part of the Common Areas to whatever extent required in the opinion of
Landlord's counsel to prevent a dedication thereof or the accrual of any
prescriptive rights therein; (ii) temporarily close all or any part of the
Common Areas to perform maintenance or for any other reason deemed sufficient by
Landlord; (iii) change the shape, size, location, number and extent of
improvements within the Common Areas including, without limitation, changing the
location of driveways, entrances, exits, parking spaces, parking areas,
sidewalks, directional or locator signs, or the direction of the flow of
traffic; and (iv) to make additions to the Common Areas including, without
limitation, the construction of parking structures. Landlord shall have the
right to change the number or address of the Building. Tenant, in its use of the
Common Areas, shall keep the Common Areas free and clear of all obstructions
created or permitted by Tenant. If, in the opinion of Landlord, unauthorized
persons are using any of the Common Areas by reason of, or under claim of, the
express or implied authority or consent of Tenant, then Tenant, upon demand of
Landlord, shall restrain, to the fullest extent than allowed by Law, such
unauthorized use, and shall initiate such appropriate proceedings as may be
required to so restrain such use. Nothing contained herein shall affect the
right of Landlord at any time to remove any unauthorized person from the Common
Areas or to prohibit the use of the Common Areas by unauthorized persons,
including, without limitation, the right to prohibit mobile food and beverage
vendors. In exercising any such right regarding the Common Areas, Landlord shall
make a reasonable effort to minimize the disruption to Tenant's business.
12
4.11 Rules and Regulations: Landlord shall have the right from time
to time to establish reasonable rules and regulations and/or amendments or
additions thereto respecting the use of space within the Project and the use of
the Common Areas for the care and orderly management of the Project and the
safety of its tenants, occupants and invitees. Upon delivery to Tenant of a copy
of such rules and regulations or any amendments or additions thereto, Tenant
shall comply with such rules and regulations. A violation by Tenant of any of
such rules and regulations shall constitute a default by Tenant under this
Lease. If there is a conflict between the rule and regulations and any of the
provisions of this Lease, the provisions of this Lease shall prevail. Landlord
shall not be responsible or liable to Tenant for the violation of such rules and
regulations by any other tenant of the Project.
4.12 Environmental Protection: Landlord may voluntarily cooperate in
a reasonable manner with the efforts of all governmental agencies in reducing
actual or potential environmental damage. Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason of
such compliance or cooperation. Tenant agrees at all time to cooperate fully
with Landlord and to abide by all rules and regulations and requirements which
Landlord may reasonably prescribe in order to comply with the requirements and
recommendations of governmental agencies regulating, or otherwise involved in,
the protection of the environment.
See Insert 4.12
4.13 Outside Areas: No materials, pallets, supplies, tanks or
containers whether above or below ground level, equipment, finished products or
semi-finished products, raw materials, inoperable vehicles or articles of any
nature shall be stored upon or permitted to remain outside of the Leased
Premises except in fully fenced and screened areas outside the Building which
have been designed for such purpose and have been approved in writing by
Landlord for such use by Tenant.
4.14 Hazardous Materials: Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Property:
A. Any handling, transportation, storage, treatment,
disposal or use of Hazardous Materials by Tenant, Tenant's Agents, or any other
party after the Effective Date of this Lease in or about the Property shall
strictly comply with all applicable Hazardous Materials Laws. Tenant shall
indemnify, defend upon demand with counsel reasonably acceptable to Landlord,
and hold harmless Landlord from and against any and all liabilities, losses
claims, damages, lost profit, consequential damages, interest, penalties,
fines, court costs, remediation cots, investigation costs, and other expenses
which result from or arise in any manner whatsoever out of the use, storage,
treatment, transportation, release, or disposal of Hazardous Materials on or
about the Property by Tenant, Tenant's Agents, Permitees, or Invitees after the
Effective Date and during the term of this Lease.
B. If the presence of Hazardous Materials on the
Property caused by Tenant, Tenant's Agents, Permittees, or Invitees after the
Effective Date of this Lease results in contamination or deterioration of water
or soil or any other part of the Property, then Tenant shall promptly take any
and all action necessary to investigate and remediate such contamination.
Tenant shall further
13
be solely responsible for, and shall defend, indemnify and hold Landlord and
its agents harmless from and against all claims, costs and liabilities,
including attorney's fees and costs, arising out of or in connection with any
investigation and remediation (including investigative analysis, removal,
cleanup, and/or restoration work) required hereunder to return the Leased
Premises, Building, Common Areas, Outside Areas, and/or Property and any other
property of whatever nature to their condition existing prior to the appearance
of such Hazardous Materials.
Insert 4.14
C. Landlord and Tenant shall each give written notice to
the other as soon as reasonably practicable of (i) any communication received
from any governmental authority concerning Hazardous Materials which relates to
the Property, and (ii) any contamination of the Property by Hazardous Materials
which constitutes a violation of any Hazardous Materials Law. Tenant may use
small quantities of household chemicals such as adhesive, lubricants, and
cleaning fluids in order to conduct is business at the Premises and such other
Hazardous Materials as are necessary to the operation of Tenant's business of
which Landlord receives notice prior to such Hazardous Materials being brought
onto the Property (or any portion thereof). In granting Landlord's consent,
Landlord may specify the location and manner or use, storage, or handling of
any Hazardous Material. Landlord's consent shall in no way relieve Tenant from
any of its obligations as contained herein. Tenant shall notify Landlord in
writing at least ten (10) days prior to the first appearance of any Hazardous
Material by Tenant on the Lease Premises, Building, Common Areas, Outside
Areas, and/or Property. Tenant shall provide Landlord with a list of all
Hazardous Materials and the quantities of each Hazardous Material to be stored,
or used, on any portion of the Property, and upon Landlord's request Tenant
shall provide Landlord with copies of any and all Hazardous Materials
Management Plans, Insert 4.14C Material Safety Data Sheets, Hazardous Waste
Manifests, and other documentation maintained or received by Tenant pertaining
to the Hazardous Materials used, stored, or transported or to be used, stored,
or transported on any portion of the Property. At any time during the Lease
Term, Tenant shall, within five days after written request therefor received
from Landlord, disclose in writing all Hazardous Materials that re being used
by Tenant on the Property (or have been used on the Property), the nature of
such use, and the manner of storage and disposal.
D. Landlord may cause testing wells to be installed on
the Property and may cause the ground water to be tested to detect the presence
of Hazardous Material by the use of such tests as are then customarily used for
such purposes. If Tenant so requests, Landlord shall supply Tenant with copies
of such test results. The cost of such tests and of the installation,
maintenance, repair and replacement of such wells shall be paid by Tenant if
such tests disclose the existence of facts which give rise to liability of
Tenant pursuant to its indemnity given in A and/or B above. Landlord may
retain consultants to insect the Property, conduct periodic environmental
audits, and review any information provided by Tenant. Tenant shall pay the
reasonable cost of fees charged by Landlord and/or Landlord's consultants as a
Project Maintenance Cost.
E. See Insert 4.14E. Upon the expiration or earlier
termination of the Lease, Tenant, at its sole cost, shall remove all Hazardous
Materials from the Property. If Tenant fails to so surrender the Property,
Tenant shall
14
indemnify and hold Landlord harmless from all damages resulting from Tenant's
failure to surrender the Property as required by this Subsection, including,
without limitation, any claims or damages in connection with the condition of
the Property including, without limitation, damages occasioned by the inability
to Lease the Property (or any portion thereof) or a reduction in the fair
market and/or rental value of the Property, Building, Common Areas, Outside
Areas, and/or Property by reason of the existence of any Hazardous Materials in
or around the Leased Premises, Building, Common Areas, Outside Areas, and/or
Property. If any action is required to be taken by a governmental authority to
test, monitor, and/or clean up Hazardous Materials from the Leased Premises,
Building, Common Areas, Outside Areas, and/or Property and such action is not
completed prior to the expiration or earlier termination of the Lease, Tenant
shall be deemed to have impermissibly held over until such time as such
required action is completed, and Tenant shall pay Base Monthly Rent and
Additional Rent in accordance with the terms of Section 13.2 (Holding Over).
In addition, Landlord shall be entitled to all damages directly or indirectly
incurred in connection with such holding over, including without limitation,
damages occasioned by the inability to Lease the Property or a reduction of the
fair market and/or rental value of the Leased Premises, Building, Common Areas,
Outside Areas, and/or Property. [Insert 4.14]
F. As used herein, the term "Hazardous Material(s)"
means any hazardous or toxic substance, material or waste, which is or becomes
regulated by any federal, state, regional or local governmental authority
because it is in any way hazardous, toxic, carcinogenic, mutagenic or otherwise
adversely affects any part of the environment or creates risks of any such
hazards or effects, including, but not limited to, petroleum; asbestos, and
polychlorinated bipheyls and any material, substance, or waste (a) defined as a
"hazardous waste," "extremely hazardous waste" or "restricted hazardous waste"
under Sections 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of
the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous
Waste Control Law); (b) defined as a "hazardous substance" under Section 25316
of the California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter-Presley Tanner Hazardous Substance Account Act); (c) defined as a
"hazardous material," "hazardous substance" or "hazardous waste" under Section
25501 of the California Health and Safety Code, Division 20, Chapter 6.95
(Hazardous Materials Release Response Plans and Inventory); (d) defined as a
"hazardous substance" under Section 25281 of the California Health and Safety
Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances);
(e) defined as "hazardous substance" pursuant to Section 311 of the Clean
Water Act, 33 United States Code Sections 1251 et seq. (33 U.S.C. 1321) or
listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. 1317); (f)
defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Recovery Act, 42 United States Code Sections 6901 et seq. (42
U.S.C. 6903); or (g) defined as a "hazardous substance" pursuant to Section 101
of the Comprehensive Environmental Response, Compensation, and Liability Act,
42 United States Code Section 9601 et seq. (42 U.S.C. 9601) or (h) defined as a
"hazardous substance" pursuant to Section 311 of the Federal Water Pollution
Control Act, 33 U.S.C. 1251 et seq. or (i) listed pursuant to Section 307 of
the Federal Water Pollution Control Act (33 U.S.C. 1317) or (j) regulated under
the Toxic Substances Control Act (15 U.S.C. 2601 et seq.) or (k) defined as a
"hazardous material" under Section 66680 or 66084 of Title 22 of the California
Code of Regulations (Administrative Code); (l) listed in the United States
Department of Transportation Hazardous Materials Table (49 C.F.R. 172.101) or
(m) listed by the Environmental Protection Agency as "hazardous
15
substances" (40 C.F.R. Part 302) and amendments thereto. The term "Hazardous
Material Laws" shall mean (i) all of the foregoing laws as amended from time to
time and (ii) any other federal, state, or local law, ordinance, regulation, or
order regulating Hazardous Materials.
G. Tenant's failure to comply with any of the
requirements of this Section regarding the storage, use, disposal, or
transportation of Hazardous Materials, on the Leased Premises, Building, Common
Area, Outside Area, and/or the Property without Landlord's consent shall be an
Event of Default as defined in this Lease. The obligations of Landlord and
Tenant under this Section shall survive the expiration or earlier termination
of the Lease Term. The rights and obligations of Landlord and Tenant within
respect to issues relating to Hazardous Materials are exclusively established
by this section. In the event of any inconsistency between any other part of
this Lease and this Section, the terms of this Section shall control.
ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AN UTILITIES
5.1 Repair and Maintenance: Except in the case of damage to or
destruction of the Leased Premises, the Building or the Project caused by an
Act of God or other peril, in which case the provisions of Article 10 shall
control, the parties shall have the following obligations and responsibilities
with respect to the repair and maintenance of the Leased Premises, the Building
and the Common Areas.
A. Tenant's Obligation: Subject to 5.1B, Tenant shall,
at all times during the Lease Term and at its sole cost and expense, regularly
clean and continuously keep and maintain in good order, condition and repair
the Leased Premises and every part thereof, including, without limiting the
generality of the foregoing, (i) all interior walls, floors and ceilings, (ii)
all doors, (iii) all electrical wiring, conduits, connectors and fixtures, (iv)
all plumbing, pipes, sinks, toilets, faucets and drains, (v) all lighting
fixtures, bulbs and lamps, (vi) all heating, ventilating and air conditioning
equipment located within the Leased Premises or located outside the Leased
Premises (e.g. rooftop compressors) and serving the Leased Premises (other than
Common HVAC as defined in Subarticle B below). Tenant, if requested to do so
by Landlord, shall hire, at Tenant's sole cost and expense, a licensed heating,
ventilating and air conditioning contractor to regularly, and periodically
inspect (not less frequently than every three months) and perform required
maintenance on the heating, ventilating and air conditioning equipment and
systems serving the Leased Premises, or alternatively, Landlord may, at its
election, contract in its own name for such regular and periodic inspections of
and maintenance on such heating, ventilating and air conditioning equipment and
systems and charge to Tenant, as Additional Rent, the cost thereof. Tenant
shall (subject to Addendum 13124) pay the cost to repair all damage to the
Building, the Common Areas or the Project caused by the activities of Tenant,
its employees, invitees or contractors promptly following written notice from
Landlord to so repair such damage. If Tenant shall fail to perform the
required maintenance or fail to make repairs required of it pursuant to this
Article within a reasonable period of time following notice from Landlord to do
so, then Landlord may, at its election and without waiving any other remedy it
may otherwise have under this Lease or at Law, perform such maintenance or make
such
16
repairs and charge to Tenant, as Additional Rent, the costs so incurred by
Landlord for same.
B. Landlord's Obligation: Landlord shall, at all times
during the Lease Term, maintain in good condition and repair: (i) the exterior
and structural parts of the Building (including the foundation, subflooring,
loadbearing and exterior walls, and roof); (ii) the Common Areas; and (iii) the
electrical and plumbing systems located outside the Leased Premises which
service the building. Additionally, to the extent that the Building contains
central heating, ventilating and/or air conditioning systems located outside
the Leased Premises which are designed to service, and are then servicing, more
than a single tenant within the Building ("Common HVAC"), Landlord shall
maintain in good operating condition and repair such Common HVAC equipment and
systems. The provisions of this Subarticle B shall in no way limit the right
of Landlord to charge to tenants of the Project, as Additional Rent pursuant to
Article 3, the costs incurred by Landlord in making such repairs and/or
performing such maintenance.
See Insert 5.1B
5.2 Services and Utilities: The parties shall have the following
responsibilities and obligations with respect to obtaining and paying the cost
of providing the following utilities and other services to the Leased Premises.
A. Gas and Electricity: Tenant shall arrange, at its
sole cost and expense and in its own name, for the supply of gas and
electricity to the Leased Premises. In the event that such services are not
separately metered, Tenant shall, at its sole expense, cause such meters to be
installed. Tenant shall be responsible for determining if the local supplier
of gas and/or electricity can supply the needs of Tenant and whether or not the
existing gas and/or electrical distribution systems within the Building and the
Leased Premises are adequate for Tenant's needs. Tenant shall pay all charges
for gas and electricity as so supplied to the Leased Premises.
B. Water: Landlord shall provide the Leased Premises
with water for lavatory and drinking purposes only. Tenant shall pay, as
Additional Rent, the cost to Landlord of providing water to the Leased
Premises. In the event Landlord believes that Tenant is using more water than
what normally would be required for lavatory and drinking purposes, Landlord at
its election may (i) periodically charge Tenant, as Additional Rent, a sum
equal to Landlord's estimate of the cost of Tenant's excess water usage or (ii)
install (or require Tenant to install at Tenant's sole cost) a separate meter
for purposes of measuring Tenant's water usage and, based upon such meter
readings, periodically charge Tenant, as Additional Rent, a sum equal to
Landlord's estimate of the cost of Tenant's excess water usage. In the event
that Landlord shall so install such a separate meter, Tenant shall pay to
Landlord, upon demand, the reasonable costs incurred by Landlord in purchasing
and installing such meter and thereafter all reasonable costs incurred by
Landlord in maintaining said meter. The cost of Tenant's water usage shall
include any costs to Landlord in keeping account of such usage and all
governmental fees, public charges or the like attributable to or based upon
(such as sewer usage fees) the use of water to the extent of such usage.
C. Security Service: Tenant acknowledges that Landlord
is not responsible for the security of the Leased Premises or the protection of
Tenant's
17
property or Tenant's employees, invitees or contractors, and that to the extent
Tenant determines that such security or protection services are advisable or
necessary, Tenant shall arrange for and pay the costs of providing same.
D. Trash Disposal: Tenant acknowledges that Landlord is
not responsible for the disposal of Tenant's waste, garbage or trash and that
Tenant shall arrange, in its own name and at its sole cost, for the regular and
periodic removal of such waste, garbage or trash from the Leased Premises. In
no event shall Landlord be required to provide trash bins for the disposal of
Tenant's waste, garbage or trash.
5.3 Energy and Resource Consumption: Landlord may voluntarily
cooperate in a reasonable manner with the efforts of governmental agencies
and/or utility suppliers in reducing energy or other resource consumption
within the Project. Tenant shall not be entitled to terminate this Lease or to
any reduction in or abatement of rent by reason of such compliance or
cooperation. Tenant agrees at all times to cooperate fully with Landlord and
to abide by all reasonable rules established by Landlord (i) in order to
maximize the efficient operation of the electrical, heating, ventilating and
air conditioning systems and all other energy or other resource consumption
systems within the Project and/or (ii) in order to comply with the requirements
and recommendations of utility suppliers and governmental agencies regulating
the consumption of energy and/or other resources.
5.4 Limitation of Landlord's Liability: Landlord shall not be
liable to Tenant for injury to Tenant, its employees, agent, invitees or
contractors, damage to Tenant's property or loss of Tenant's business or
profits, nor shall Tenant be entitled to terminate this Lease or to any
reduction in or abatement of rent by reason of (i) Landlord's failure to
perform any maintenance or repairs to the Project until Tenant shall have first
notified Landlord, in writing, of the need for such maintenance or repairs, and
then only after Landlord shall have had a reasonable period of time following
its receipt of such notice within which to perform such maintenance or repairs,
or (ii) any failure, interruption, rationing or other curtailment in the supply
of water, electric current, gas or other utility service to the Leased
Premises, the Building or the Project from whatever cause (other than
Landlord's active negligence or willful misconduct), or (iii) the unauthorized
intrusion or entry into the Leased Premises by third parties (other than
Landlord).
ARTICLE 6
ALTERATIONS AND IMPROVEMENTS
6.1 By Tenant: Tenant shall not make any alternations to or
modifications of the Leased Premises or construct any improvements to or within
the Leased Premises without Landlord's prior written approval, and then not
until Landlord shall have first approved, in writing, the plans and
specifications therefore, which approval shall not be unreasonably withheld.
All such modifications, alterations or improvements, once so approved, shall be
made, constructed or installed by Tenant at Tenant's expense, using a licensed
contractor first approved by Landlord, in substantial compliance with the
Landlord-approved plans and specifications therefore. All work undertaken by
Tenant shall be done in accordance with all Laws and in a good and workmanlike
manner using new materials of good quality. Tenant shall not commence the
making
18
of any such modifications or alterations or the construction of any such
improvements until (i) all required governmental approvals and permits shall
have been obtained, (ii) all requirements regarding insurance imposed by this
Lease have been satisfied, (iii) Tenant shall have given Landlord at least five
business days prior written notice of its intention to commence such work so
that Landlord may post and file notices of non-responsibility, and (iv) if
requested by Landlord, Tenant shall have obtained contingent liability and
broad form builder's risk insurance in an amount reasonably satisfactory to
Landlord to cover any perils relating to the proposed work not covered by
insurance carried by Tenant pursuant to Article 9. In no event shall Tenant
make any modifications, alterations or improvements to the Common Areas or any
areas outside of the Leased Premises. As used in this Article, the term
modifications, alterations and/or improvements shall include, without
limitation, the installation of additional electrical outlets, overhead
lighting fixtures, drains, sinks, partitions, doorways, or the like.
[Insert 6.1]
6.2 Ownership of Improvements: All modifications, alterations or
improvements made or added to the Leased Premises by Tenant (other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures) shall be deemed real property and a part of the Leased Premises, but
shall remain the property of Tenant during the Lease Term. Any such
modifications, alterations or improvements, once completed, shall not be
altered or removed from the Leased Premises during the Lease Term without
Landlord's written approval first obtained in accordance with the provisions of
Article 6.1 above. At the expiration or sooner termination of the Lease, all
such modifications, alterations and improvements (other than Tenant's
inventory, equipment, movable furniture, wall decorations and trade fixtures)
shall automatically become the property of Landlord and shall be surrendered to
Landlord as a part of the Leased Premise as required pursuant to Article 2,
unless Landlord shall require Tenant to remove any of such modifications,
alterations or improvements in accordance with the provisions of Article 2, in
which case Tenant shall so remove same. Landlord shall have no obligation to
reimburse to Tenant all or any portion of the cost or value of any such
modifications, alterations or improvements in accordance with the provisions of
Article 2, in which case Tenant shall so remove same. Landlord shall have no
obligation to reimburse to Tenant all or any portion of the cost or value of
any such modifications, alterations or improvements so surrendered to Landlord.
All modifications, alterations or improvements which are installed or
constructed on or attached to the Leased Premises by Landlord at Landlord's
expense shall be deemed real property, and a part of the Leased Premises and
shall be the property of Landlord. All lighting, plumbing, electrical,
heating, ventilating and air conditioning fixtures, partitioning, window
coverings, wall coverings and floor coverings installed by Tenant shall be
deemed improvements to the Leased Premises and not trade fixtures of Tenant.
6.3 Alterations: At its sole cost, Tenant shall make all
modifications, alterations and improvements to the Leased Premises that are
required by any Law because of (i) Tenant's use or occupancy of the Leased
Premises, the Building, the Outside Areas, or the Property, (ii) Tenant's
application for any permit or governmental approval, or (iii) Tenant's making
of any modifications, alterations or improvements to or within the Leased
Premises. If Landlord shall, at any time during the Lease Term, (i) be
required by any governmental authority to make any
19
modifications, alterations or improvements to the Building or the Project, (ii)
modify the existing (or construct additional) capital improvements or provide
building service equipment for the purpose of reducing the consumption of
utility services or project maintenance costs for the property, the cost
incurred by Landlord in making such modifications, alterations or improvements,
including a 12% per annum cost of money fact, shall be amortized by Landlord
over the useful life of such modifications, alterations or improvements, as
determined in accordance with generally accepted accounting standards, and the
monthly amortized cost of such modifications, alterations and improvements as
so amortized shall be considered a Project Maintenance Cost.
6.4 Liens: Tenant shall keep the Leased Premises, the Building
and the Property free from any liens and shall pay when due all bills arising
out of any work performed, materials furnished, or obligations incurred by
Tenant, its agents, employees or contractors relating to the Leased Premises.
If any such claim of lien is recorded against Tenant's interest in this Lease,
the Leased Premises, the Building or the Project, Tenant shall bond against,
discharge or otherwise cause such lien to be entirely released within ten days
after the same has been so recorded.
ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT
7.1 By Tenant: Tenant shall not sublet the Leased Premises (or
any portion thereof) or assign or encumber its interest in this Lease, whether
voluntarily or by operation of Law, without Landlord's prior written consent
first obtained in accordance with the provisions of this Article 7. Any
attempted subletting, assignment or encumbrance without Landlord's prior
written consent, at Landlord's election, shall constitute a default by Tenant
under the terms of this Lease. The acceptance of rent by Landlord from any
person or entity other than Tenant, or the acceptance of rent by Landlord from
Tenant with knowledge of a violation of the provisions of this Article, shall
not be deemed to be a waiver by Landlord of any provision of this Article or
this Lease or to be a consent to any subletting by Tenant or any assignment or
encumbrance of Tenant's interest in this Lease.
7.2 Merger or Reorganization: If Tenant is a corporation, any
dissolution, merger, consolidation or other reorganization of Tenant, or the
sale or other transfer in the aggregate over the Lease Term of a controlling
percentage of the capital stock of Tenant, shall be deemed a voluntary
assignment of Tenant's interest in this Lease. The phrase "controlling
percentage" means the ownership of and the right to vote stock possessing more
than fifty percent of the total combined voting power of all classes of
Tenant's capital stock issued, outstanding and entitled to vote for the
election of directors. If Tenant is a partnership, a withdrawal or change,
whether voluntary, involuntary or by operation of Law, of any general partner,
or the dissolution of the partnership, shall be deemed a voluntary assignment
of Tenant's interest in this Lease.
7.3 Landlord's Election: If Tenant shall desire to assign its
interest under this Lease or to sublet the Leased Premises, Tenant must first
notify Landlord, in writing, of its intent to so assign or sublet, at least 15
days in advance of the date it intends to so assign its interest in this Lease
or sublet
20
the Leased Premises but not sooner than eighty days in advance of such date,
specifying in detail the terms of such proposed assignment or subletting,
including the name of the proposed assignee or sublessee, the proposed
assignee's or sublessee's intended use of the Leased PREMISES, a current
financial statement of such proposed assignee or sublessee and the form of
documents to be used in effectuating such assignment or subletting. Landlord
shall have a period of fifteen days following receipt of such notice within
which to do one of the following: either (i) consent to such requested
assignment or subletting subject to Tenant's compliance with the conditions set
forth in Article 7.4 below or (ii) refuse to so consent to such requested
assignment or subletting, provided that such consent shall not be unreasonably
refused. It shall not be unreasonable for Landlord to withhold its consent to
any proposed assignment or subletting if (i) the proposed assignee's or
subtenant's anticipated use of the Premises involves the storage, use or
disposal of a Hazardous Material; (ii) if the proposed assignee or subtenant
has been required by any prior landlord, lender or governmental authority to
clean up Hazardous Materials unlawfully discharged by the proposed assignee or
subtenant; or (iii) if the proposed assignee or subtenant is subject to
investigation or enforcement order or proceeding by any governmental authority
in connection with the use, disposal or storage of a Hazardous Material.
During said fifteen day period, Tenant covenants and agrees to supply to
Landlord, upon request, all necessary or relevant information which Landlord
may reasonably request respecting such proposed assignment or subletting and/or
the proposed assignee or sublessee.
7.4 Conditions to Landlord's Consent: If Landlord elects to
consent, or shall have been ordered to so consent by a court of competent
jurisdiction, to such requested assignment, subletting or encumbrance, such
consent shall be expressly conditioned upon the occurrence of each of the
conditions below set forth, and any purported assignment, subletting or
encumbrance made or ordered prior to the full and complete satisfaction of each
of the following conditions shall be void and, at the election of Landlord,
which election may be exercised at any time following such a purported
assignment, subletting or encumbrance but prior to the satisfaction of each of
the stated conditions, shall constitute a material default by Tenant under this
Lease giving Landlord the absolute right to terminate this Lease unless such
default is promptly cured by satisfying in full each such condition by the
assignee, sublessee or encumbrancer. The conditions are as follows:
A. Landlord having approved in form and substance the
assignment or sublease agreement (or the encumbrance agreement), which approval
shall not be unreasonably withheld by Landlord if the requirements of this
Article 7 are otherwise complied with.
B. Each such sublessee or assignee having agreed, in
writing satisfactory to Landlord and its counsel and for the benefit of
Landlord, to assume, to be bound by, and to perform the obligations of this
Lease to be performed by Tenant (or, in the case of an encumbrance, each such
encumbrancer having similarly agreed to assume, be bound by and to perform
Tenant's obligations upon a foreclosure or transfer in lieu thereof).
C. [Insert 7.4C]
21
D. Tenant having reimbursed to Landlord all reasonable
costs and attorneys fees incurred by Landlord in conjunction with the
processing and documentation of any such requested subletting, assignment or
encumbrance.
E. Tenant having delivered to Landlord a complete and
fully-executed duplicate original of such sublease agreement, assignment
agreement or encumbrance (as applicable) and all related agreements.
F. Tenant having paid, or having agreed in writing to
pay as to future payments, to Landlord 50% of all assignment consideration or
excess rentals to be paid to Tenant or to any other on Tenant's behalf or for
Tenant's benefit for such assignment or subletting as follows:
1. If Tenant assigns its interest under the
Lease and if all or a portion of the consideration for such assignment is
to be paid by the assignee at the time of the assignment, that Tenant shall
have paid to Landlord and Landlord shall have received an amount equal 50%
of the assignment consideration so paid or to be paid whichever is the
greater) at the time of the assignment by the assignee; or
2. If Tenant assigns its interest under this
Lease and if Tenant is to receive all or a portion of the consideration for
such assignment in future installments, that Tenant and Tenant's assignee
shall have entered into a written agreement with and for the benefit of
Landlord satisfactory to Landlord and its counsel whereby Tenant and
Tenant's assignee jointly agree to pay to Landlord an amount equal to 50%
of all such future assignment consideration installments to be paid by such
assignee as and when such assignment consideration is so paid.
3. If Tenant subleases the Leased Premises, that
Tenant and Tenant's sublessee shall have entered into a written agreement
with and for the benefit of Landlord satisfactory to Landlord and its
counsel whereby Tenant and Tenant's sublessee jointly agree to pay to
Landlord 50% of all excess rentals to be paid by such sublessee as and when
such excess rentals are so paid.
7.5 Assignment Consideration and Excess Rentals Defined: For
purposes of this Article, the term "assignment consideration" shall mean all
consideration to be paid by the assignee to Tenant or to any other on Tenant's
behalf or for Tenant's benefit as consideration for such assignment, less any
commissions paid by Tenant to a licensed real estate broker for arranging such
assignment (not to exceed then standard rates), and the term "excess rentals"
shall mean all consideration to be paid by the sublessee to Tenant or to any
other on Tenant's behalf or for Tenant's benefit for the sublease of the Leased
Premises in excess of the rent due Landlord under the terms of this Lease for
the same period, less any commission paid by Tenant to a licensed real estate
broker for arranging such sublease (not to exceed then standard rates). Tenant
agrees that the portion of any assignment consideration and/or excess rentals
arising from and assignment or subletting by Tenant which is to be paid to
Landlord pursuant to this Article now is and shall then be the property of
Landlord and not the property of Tenant.
7.6 Payments: All payments required by this Article to be made to
Landlord shall be made in cash in full as and when they become due. At the
time Tenant, Tenant's assignee or sublessee makes each such payment to
Landlord,
22
Tenant or Tenant's assignee or sublessee, as the case may be, shall deliver to
Landlord an itemized statement in reasonable detail showing the method by which
the amount due Landlord was calculated and certified by the party making such
payment as true and correct.
7.7 Good Faith: The rights granted to Tenant by this Article are
granted in consideration of Tenant's express covenant that all pertinent
allocations which are made by Tenant between the rental value of the Leased
Premises and the value of any of Tenant's personal property which may be
conveyed or leased concurrently with and which may reasonably be considered a
part of the same transaction as the permitted assignment or subletting shall be
made fairly, honestly and in good faith. If Tenant shall breach this Covenant
of Good Faith, Landlord may immediately declare Tenant to be in default under
the terms of this Lease and terminate this Lease and/or exercise any other
rights and remedies Landlord would have under the terms of this Lease in the
case of a material default by Tenant under this Lease.
7.8 Effect of Landlord's Consent: No subletting, assignment or
encumbrance, even with the consent of Landlord, shall relieve Tenant of its
personal and primary obligation to pay rent and to perform all of the
obligations to be performed by Tenant hereunder. Consent by Landlord to one or
more assignments or encumbrances of Tenant's interest in this Lease or to one
or more sublettings of the Leased Premises shall not be deemed to be a consent
to any subsequent assignment, encumbrance or subletting. If Landlord shall
have been ordered by a court of competent jurisdiction to consent to a
requested assignment or subletting, or such an assignment or subletting shall
have been ordered over the objection of Landlord, such assignment or subletting
shall not be binding between the assignee (or sublessee) and Landlord until
such time as all conditions set forth in Article 7.4 above have been fully
satisfied (to the extent not then satisfied) by the assignee or sublessee,
including, without limitation, the payment to Landlord of all agreed assignment
considerations and/or excess rentals then due Landlord.
ARTICLE 8
LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
8.1 Limitation on Landlord's Liability and Release: Landlord
shall not be liable to Tenant for, and Tenant hereby releases Landlord and its
partners and officers from, any and all liability, whether in contract, tort or
on any other basis, for any injury to or any damage sustained by Tenant, its
agents, employees, contractors or invitees; any damage to Tenant's property; or
any loss to Tenant's business, loss of Tenant's profits or other financial loss
of Tenant resulting from or attributable to the condition of, the management
of, the maintenance of, or the protection of the Leased Premises, the Building,
the Project or the Common Areas, including, without limitation, any such
injury, damage or loss resulting from (i) the failure, interruption, rationing
or other curtailment or cessation in the supply of electricity, water, gas or
other utility service to the Project, the Building or the Leased Premises; (ii)
the vandalism or forcible entry into the Building or the Leased Premises; (iii)
the penetration of water into or onto any portion of the Leased Premises
through roof leaks or otherwise; (iv) the failure to provide security and/or
adequate lighting in or about the Project, the Building or the Leased Premises;
(v) the existence of any design or construction defects within the Project, the
Building or the
23
Leased Premises; (vi) the failure of any mechanical systems to function
properly(such as the HVAC systems); or (vii) the blockage of access to any
portion of the Project, the Building or the Leased Premises, except to the
extent such damage was caused by Landlord's negligence or willful misconduct,
or Landlord's failure to perform an obligation expressly undertaken pursuant to
this Lease but only if Tenant shall have given Landlord prior written notice to
perform such obligation and Landlord shall have failed to perform such
obligation within a reasonable period of time following receipt of written
notice from Tenant to so perform such obligation. In this regard, Tenant
acknowledges that it is fully apprised of the provisions of Law relating to
releases, and particularly to those provisions contained in Section 1542 of the
California Civil Code which read as follows: A general release does not extend
to claims which the creditor does not know or suspect to exist in his favor at
the time of executing the release, which if known by him must have materially
affected his settlement with the debtor. Notwithstanding such statutory
provision, and for the purpose of implementing a full and complete release and
discharge, Tenant hereby (i) waives the benefit of such statutory provision and
(ii) acknowledges that, subject to the exceptions specifically set forth
herein, the release and discharge set forth in this Article is a full and
complete settlement and release and discharge of all claims and is intended to
include in its effect, without limitation, all claims which Tenant, as of the
date hereof, does not know of or suspect to exist in its favor.
8.2 Tenant's Indemnification of Landlord: [Insert 5.2] Tenant
shall defend, with competent counsel satisfactory to Landlord, any claims made
or legal actions filed or threatened by third parties against Landlord which
result in the death, bodily injury, personal injury, damage to property or
interference with contractual or other rights suffered by any third party,
(including other Tenants within the Project) which (i) occurred within the
Leased Premises or (ii) resulted from Tenant's use or occupancy of the Leased
Premises or the Common Areas or (iii) resulted from Tenant's activities in or
about the Leased Premises, the Building or the Project, and Tenant shall
indemnify and hold Landlord, Landlord's principals, employees and agents
harmless from any loss (including loss of rents by reason of vacant space which
otherwise would have been leased but for such activities), liabilities,
penalties, or expense whatsoever (including all legal fees incurred by Landlord
with respect to defending such claims) resulting therefrom, except to the
extent proximately caused by the active negligence or willful misconduct of
Landlord. This indemnity agreement shall survive until the latter to occur of
(i) the date of the expiration, or sooner termination, of this Lease, or (ii)
the date Tenant actually vacates the Leased Premises provided Tenant received
approval by Landlord for such vacating.
ARTICLE 9
INSURANCE
9.1 Tenant's Insurance: Tenant shall maintain insurance complying
with all of the following:
A. Tenant shall procure, pay for and keep in full force
and effect, at all times during the Lease Term, the following:
1. Commercial General Liability insurance
insuring Tenant against liability for bodily injury, death, property damage
and personal
24
injury occurring at the Leased Premises, or resulting from Tenant's use or
occupancy of the Leased Premises or the Building, Outside Areas, Property, or
Common Areas or resulting from Tenant's activities in or about the Leased
Premises. Such insurance shall be on an occurrence basis with a combined
single limit of liability of not less than the amount of Tenant's Required
Liability Coverage (as set forth in Article 1). The policy or policies shall
be endorsed to name Landlord and such others as are designated by Landlord as
additional insureds in the form equivalent to CG20111185 or successor and shall
contain the following additional endorsement: "The insurance afforded to the
additional insureds is primary insurance. If the additional insureds have
other insurance with is applicable to the loss on a contributing, excess or
contingent basis, the amount of this insurance company's liability under this
policy shall not be reduced by the existence of such other insurance. Any
insurance carried by the additional insureds shall be excess and non
contributing with the insurance provided by the Tenant." The policy shall not
be canceled or reduced without at least 30 days written notice to additional
insureds. If the policy insures more than one election, it shall be endorsed
to show that the limits and aggregate apply per location using endorsement
CG25041185 or successor. Tenant's policy shall also contain the severability
of interest and cross-liability endorsement or clauses.
2. Fire and property damage insurance in
so-called Special Form insuring Tenant against loss from physical damage to
Tenant's personal property, inventory, stock, trade fixtures and
improvements within the Leased Premises with coverage for the full actual
replacement cost thereof;
4. Boiler and Machinery insurance, if
applicable;
5. Product Liability insurance (including
without limitation Liquor Liability insurance for liability arising out of
the distribution, sale, or consumption of food and/or beverages including
alcoholic beverages at the Leased Premises for not less than the Tenant's
Required Liability Coverage as set forth in Article 1;
6. Workers' compensation insurance and any other
employee benefit insurance sufficient to comply with all Laws which policy
shall be endorsed to provide thirty (30) days written notice of
cancellation to Landlord;
7. With respect to making of alterations or the
construction of improvements or the like undertaken by Tenant, contingent
liability and builder's risk insurance, in an amount and with coverage
reasonably satisfactory to Landlord;
8. Business Income Insurance at a minimum of 50%
co-insurance including coverage for loss of business income due to damage
to equipment from perils covered under the so-called Special Form; and
9. Comprehensive Auto Liability insurance with a
combined single limit coverage of not less than the amount of Tenant's
Required Liability Coverage (as set forth in Article 1) for bodily injury
and/or property damage liability for: (a) Owned autos, (b) Hired or
borrowed autos, (c) Non-owned autos, (d) Auto blanket contractual form
CA0029. The policy
25
shall be endorsed to provide 30 days written notice of cancellation to
Landlord.
B. Each policy of liability insurance required to be
carried by Tenant pursuant to this Article or actually carried by Tenant with
respect to the Leased Premises or the Property (i) shall be in a form
reasonably satisfactory to Landlord, (ii) shall be provided by carriers
admitted to do business in the state of California, with a Best rating of
"A/VI" or better and/or reasonably acceptable to Landlord. Property insurance
shall contain a waiver and/or a permission to waive by the insurer any right of
subrogation against Landlord, its principals, employees, agents and contractors
which might arise by reason of any payment under such policy or by reason of
any act or omission of Landlord, its principals, employees, agents or
contractors.
C. Prior to the time Tenant or any of its contractors
enters the Leased Premises, Tenant shall deliver to the Landlord with respect
to each policy of insurance required to be carried by Tenant pursuant to this
Article, a certificate of the insurer certifying, in a form satisfactory to the
Landlord, that the policy has been issued and premium paid providing the
coverage required by this Article and containing the provisions herein.
Attached to such a certificate shall be endorsements naming Landlord as
additional insured, and including the wording under primary insurance above.
With respect to each renewal or replacement of any insurance, the requirements
of this Article must be complied with not less than 30 days prior to the
expiration or cancellation of the policy being renewed or replaced. Landlord
may at any reasonable time and from time-to-time inspect and/or copy and all
insurance policies required to be carried by Tenant pursuant to this article.
If Landlord's lender, insurance broker or advisor or counsel reasonably
determines at any time that the form or amount of coverage set forth in Article
9.1(A) for any policy of insurance Tenant is required to carry pursuant to this
Article is not adequate, then Tenant shall increase the amount of coverage for
such insurance to such greater amount or change the form as Landlord's lender,
insurance broker or advisor or counsel reasonably deems adequate (provided
however such increase level of coverage may not exceed the level of coverage
for such insurance commonly carried by comparable businesses similarly situated
and operating under similar circumstances).
D. The Commercial General Liability insurance carried by
Tenant shall specifically insure the performance by Tenant of the
Indemnification provisions set forth in Article 8.2 of this lease provided,
however, nothing contained in this Article 9 shall be construed to limit the
liability of Tenant under the Indemnification provisions set forth in said
Article 8.2.
9.2 Landlord's Insurance: With respect to insurance maintained by
Landlord:
A. Landlord shall maintain, as the minimum coverage
required of it by this Lease, property insurance in so- called "Special" form
insuring Landlord (and such others as Landlord may designate) against loss from
physical damage to the Building with coverage of not less than one hundred
percent of the full actual replacement cost thereof and against loss of rents
for a period of not less than twelve months. Such property damage insurance,
at Landlord's election but without any requirement on Landlord's behalf to do
so, (i) may be written in so-called Special Form, excluding only those perils
commonly excluded from such
26
coverage by Landlord's then property damage insurer; (ii) may provide coverage
for physical damage to the improvements so insured for up to the entire full
actual replacement cost thereof; (iii) may be endorsed to include separate
policies which may be carried to cover loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; (iv) may provide coverage for loss of rents for a period of up to twelve
months; and/or (v) may contain "deductibles" per occurrence in an amount
reasonably acceptable to Landlord. Landlord shall not be required to cause
such insurance to cover any of Tenant's personal property, inventory and trade
fixtures, or any modifications, alterations or improvements made or constructed
by Tenant to or within the Lease Premises.
B. Landlord shall maintain Commercial General Liability
insurance insuring Landlord (and such others as are designated by Landlord)
against liability for personal injury, bodily injury, death, and damage to
property occurring in, on or about, or resulting from the use or occupancy of
the Project, or any portion thereof, with combined single limit coverage of at
least Two Million Dollars.
9.3 Mutual Waiver of Subrogation: Landlord hereby releases
Tenant, and Tenant hereby releases Landlord and its respective partners and
officers, agents, employees and servants, from any and all liability for loss,
damage or injury to the property of the other in or about the Leased Premises
which is caused by or results from a peril or event or happening which would be
covered by insurance required to be carried under the terms of this Lease, or
is covered by insurance actually carried and in force at the time of the loss,
by the party sustaining such loss; provided, however, that such waiver shall be
effective only to the extent permitted by the insurance covering such loss.
ARTICLE 10
DAMAGE TO LEASED PREMISES
10.1 Landlord's Duty to Restore: If the Leased Premises are
damaged by any peril after the Effective Date of this Lease, Landlord shall
restore the Leased Premises, as and when required by this Article, unless this
Lease is terminated by Landlord pursuant to Article 10.2 or by Tenant pursuant
to Article 10.3. All insurance proceeds available from the fire and property
damage insurance carried by Landlord shall be paid to and become the property of
Landlord. If this Lease is terminated pursuant to either Article 10.2 or 10.3,
all insurance proceeds available from insurance carried by Tenant which cover
loss to property that is Landlord's property or would become Landlord's property
on termination of this Lease shall be paid to and become the property of
Landlord, and the remainder of such proceeds shall be paid to and become the
property of Tenant. If this Lease is not terminated pursuant to either Article
10.2 or 10.3, all insurance proceeds available from insurance carried by Tenant
which cover loss to property that is Landlord's property shall be paid to and
become the property of Landlord, and all proceeds available which cover loss to
property which would become the property of Landlord upon the termination of
this Lease shall be paid to and remain the property of Tenant. If this Lease is
not so terminated, then upon receipt of the insurance proceeds (if the loss is
covered by insurance) and the issuance of all necessary governmental permits,
Landlord shall commence and diligently prosecute to completion the restoration
of the Leased Premises, to the extent then allowed by Law, to substantially the
same
27
condition in which the Leased Premises existed as of the Lease Commencement
Date. Landlord's obligation to restore shall be limited to the Leased Premises
and interior improvements constructed by Landlord. Landlord shall have no
obligation to restore any other improvements to the Leased Premises or any of
Tenant's personal property, inventory or trade fixtures. Upon completion of
the restoration by Landlord, Tenant shall forthwith replace or fully repair all
of Tenant's personal property, inventory, trade fixtures and other improvements
constructed by Tenant to like or similar condition as existed at the time of
such damage or destruction.
10.2 Landlord's Right to Terminate: Landlord shall have the option
to terminate this Lease in the event any of the following occurs, which option
may be exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:
A. The Building is damaged by any peril covered by valid
and collectible insurance actually carried by Landlord and in force at the time
of such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the insurance
proceeds available form insurance actually carried by Landlord plus deductibles
relating thereto paid by Tenant or (ii) seventy-five percent of the then actual
replacement cost thereof;
B. The Building is damaged by an uninsured peril, which
peril Landlord was required to insure against pursuant to the provisions of
Article 9 of this Lease, to such an extent that the estimated cost to restore
the Building exceeds the lesser of (i) the insurance proceeds which would have
been available had Landlord carried such required insurance plus deductibles
relating thereto paid by Tenant, or (ii) seventy-five percent of the then
actual replacement cost thereof;
C. The Building is damaged by an uninsured peril, which
peril Landlord was not required to insure against pursuant to the provisions of
Article 9 of this Lease, to any extent.
D. The Building is damaged by any peril and, because of
the Laws then in force, the Building (i) can not be restored at reasonable cost
or (ii) if restored, can not be used for the same use being made thereof before
such damage.
10.3 Tenant's Right to Terminate: If the Leased Premises are
damaged by any peril and Landlord does not elect to terminate this Lease or is
not entitled to terminate this Lease pursuant to this Article, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written opinion
of Landlord's architect or construction consultant as to when the restoration
work required of Landlord may be complete. Tenant shall have the option to
terminate this Lease in the event any of the following occurs, which option may
be exercised in the case of A or B below only be delivery to Landlord of a
written notice of election to terminate within 30 days after Tenant receives
from Landlord the estimate of the time needed to complete such restoration:
A. The Leased Premises are damaged by any peril and, in
the reasonable opinion of Landlord's architect or construction consultant, the
restoration of the Leased Premises cannot be substantially completed within
nine months after the date of such notice from Landlord; or
28
B. The Leased Premises are damaged by any peril within
nine months of the last day of the Lease Term and, in the reasonable opinion of
Landlord's architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within ninety days after the date
such restoration is commenced.
10.4 Tenant's Waiver: Landlord and Tenant agree that the
provisions of Article 10.3 above, captioned "Tenant's Right to Terminate," are
intended to supersede and replace the provisions contained in California Civil
Code, Section 1932, Subdivision 2, and California Civil Code, Section 1934, and
accordingly, Tenant hereby waives the provision of said Civil Code Sections and
the provisions of any successor Code Sections or similar Laws hereinafter
enacted.
10.5 Abatement of Rent: In the event of damage to the Leased
Premises which does not result in the termination of this Lease, the Base
Monthly Rent (and any Additional Rent) shall be temporarily abated during the
period of restoration in proportion to the degree to which Tenant's use of the
Leased Premises is impaired by such damage.
ARTICLE 11
CONDEMNATION
11.1 Landlord's Right to Terminate: Subject to Article 11.3,
Landlord shall have the option to terminate this Lease if, as a result of a
taking by means of the exercise of the power of eminent domain (including
inverse condemnation and/or a voluntary sale or transfer by Landlord under
threat of condemnation to an entity having the power of eminent domain), (i) all
or any part of the Leased Premises is so taken, (ii) more than thirty-three and
one-third percent of the Buildings leasable area is so taken, (iii) more than
thirty-three and one-third percent of the common Area is so taken, or (iv)
because of the Laws then in force, the Leased Premises may not be used for the
same use being made thereof before such taking, whether or not restored as
required by Article 11.4 below. Any such option to terminate by Landlord must be
exercisable within a reasonable period of time, to be effective as of the date
possession is taken by the condemnor.
11.2 Tenant's Right to Terminate: Subject to Article 11.3, Tenant
shall have the option to terminate this Lease if, as a result of any taking by
means of the exercise of the power of eminent domain (including inverse
condemnation and/or a voluntary sale or transfer by Landlord to an entity having
the power of eminent domain under threat of condemnation), (i) all of the Leased
Premises is so taken, (ii) thirty-three and one-third percent or more of the
Leased Premises is so taken and the part of the Leased Premises that remains
cannot, within a reasonable period of time, be made reasonably suitable for the
continued operation of the Tenant's business, or (iii) there is a taking of a
portion of the Common Area and, as a result of such taking, Landlord cannot
provide parking spaces within the Project (or within a reasonable distance
therefrom) equal in number to at least sixty-six and two- thirds percent of
Tenant's Number of Parking Spaces (as set forth in Article 1), whether by
rearrangement of the remaining parking areas in the Common Area (including, if
Landlord elects, construction of multi-dock parking structures or restriping for
compact cars where permitted by
29
Law), or by providing alternative parking facilities on other land within
reasonable walking distance of the Leased Premises. Tenant must exercise such
option within a reasonable period of time, to be effective on the later to
occur of (i) the date that possession of that portion of the Common Area or the
Leased Premises that is condemned is taken by the condemnor or (ii) the date
Tenant vacates the Leased Premises.
11.3 Temporary Taking: If any portion of the Leased Premises is
temporarily taken for one year or less, this Lease shall remain in effect. If
any portion of the Leased Premises is temporarily taken for a period which
either exceeds one year or which extends beyond the natural expiration of the
Lease Term, then Landlord and Tenant shall each independently have the option to
terminate this Lease, effective on the date possession is taken by the
condemnor.
11.4 Restoration and Abatement of Rent: If any part of the Leased
Premises is taken by condemnation and this Lease is not terminated, then
Landlord shall repair any damage occasioned thereby to the remainder of the
Leased Premises to a condition reasonably suitable for Tenant's continued
operations and otherwise, to the extent practicable, in the manner and to the
extent provided in Article 10.1. As of the date possession is taken by the
condemning authority, (i) the Base Monthly Rent shall be reduced in the same
proportion that the area of that part of the Leased Premises so taken (less any
addition to the area of the Leased Premises by reason of any reconstruction)
bears to the area of the Leased Premises immediately prior to such taking, and
(ii) Tenant's Proportionate Share shall be appropriately adjusted.
11.5 Division of Condemnation Award: Any award made for any
condemnation of the Project, the Building, the Common Areas or the Leased
Premises, or any portion thereof, shall belong to and be paid to Landlord, and
Tenant hereby assigns to Landlord all of its right, title and interest in any
such award; provided, however, that Tenant shall be entitled to receive any
condemnation award that is made directly to Tenant (i) for the taking of
personal property, inventory or trade fixtures belonging to Tenant, (ii) for the
interruption of Tenant's business or its moving costs, (iii) for loss of
Tenant's goodwill, or (iv) for any temporary taking where this Lease is not
terminated as a result of such taking. The rights of Landlord and Tenant
regarding any condemnation shall be determined as provided in this Article, and
each party hereby waives the provisions of Section 1265.130 of the California
Code of Civil Procedures, and the provisions of any similar law hereinafter
enacted, allowing either party to petition the Superior Court to terminate this
Lease and/or allocating condemnation awards between Landlord and Tenant in the
event of a taking of the Leased Premises.
ARTICLE 12
DEFAULT AND REMEDIES
12.1 Events of Tenant's Default: Tenant shall be in default of its
obligations under this [Insert 12.1A] Lease if any of the following events
occur:
A. Tenant shall have failed to pay Base Monthly Rent or
any Additional Rent when due; or
30
B. Tenant shall have done or permitted to have been done
any act, use or thing in its use, occupancy or possession of the Leased
Premises or in its use of the Common Areas which is prohibited by the terms of
this Lease; or [Insert 12.1B]
C. Tenant shall have failed to perform any term,
covenant or condition of this Lease, except those requiring the payment of Base
Monthly Rent or Additional Rent, within ten days after written notice from
Landlord to Tenant specifying the nature of such failure and requesting Tenant
to perform same. [Insert 12.1C]
D. Tenant shall have sublet the Leased Premises or
assigned or encumbered its interest in this Lease in violation of the
provisions contained in Article 7, whether voluntarily or by operation of Law;
or
E. Tenant shall have failed to continuously occupy the
Leased Premises for a period of 10 consecutive days; or [Insert 12.1E]
F. Tenant or any Guarantor of this Lease shall have
permitted or suffered the sequestration or attachment of, or execution on, or
the appointment of a custodian or receiver with respect to, all or any
substantial part of the property or assets of Tenant (or such Guarantor) or any
property or asset essential to the conduct of Tenant's (or such Guarantor's)
business, and Tenant (or such Guarantor) shall have failed to obtain a return
or release of the same within thirty days thereafter, or prior to sale pursuant
to such sequestration, attachment or levy, whichever is earlier; or
G. Tenant or any Guarantor of this Lease shall have made
a general assignment of all or a substantial part of its assets for the benefit
of its creditors; or
H. Tenant or any Guarantor of this Lease shall have
allowed (or sought) to have entered against it a decree or order which: (i)
grants or constitutes an order for relief, appointment of a trustee, or
confirmation of a reorganization plan under the bankruptcy laws of the United
States; (ii) approves as properly filed a petition seeking liquidation or
reorganization under said bankruptcy laws or any other debtor's relief law or
similar statue of the United States or any state thereof; or (iii) otherwise
directs the winding up or liquidation of Tenant; provided, however, if any
decree or order was entered without Tenant's consent or over Tenant's
objection, Landlord may not terminate this Lease pursuant to this Subarticle if
such decree or order is rescinded or reversed within thirty days after its
original entry.
I. Tenant or any Guarantor of this Lease shall have
availed itself of the protection of any debtor's relief law, moratorium law or
other similar Law which does not require the prior entry of a decree or order.
12.2 Landlord's Remedies: In the event of any default by Tenant,
and without limiting Landlord's right to indemnification as provided in Article
8.2, Landlord shall have the following remedies, in addition to all other rights
and remedies provided by Law or otherwise provided in this Lease, to which
Landlord may resort cumulatively, or in the alternative:
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A. Landlord may, at Landlord's election, keep this Lease
in effect and enforce, by an action at law or in equity all of its rights and
remedies under this Lease including, without limitation, (i) the right to
recover the rent and other sums as they become due by appropriate legal action,
(ii) the right to make payments required of Tenant, or perform Tenant's
obligations and be reimbursed by Tenant for the cost thereof with interest at
the then maximum rate of interest not prohibited by Law from the date the sum
is paid by Landlord until Landlord is reimbursed by Tenant, and (iii) the
remedies of injunctive relief and specific performance to prevent Tenant from
violating the terms of this Lease and/or to compel Tenant to perform its
obligations under this Lease, as the case may be.
B. Landlord may, at Landlord's election, terminate this
Lease by giving Tenant written notice of termination, in which event this Lease
shall terminate on the date set forth for termination in such notice. Any
termination under this Subarticle shall not relieve Tenant from its obligation
to pay to Landlord all Base Monthly Rent and Additional Rent then or thereafter
due, or any other sums due or thereafter accruing to Landlord, or from any
claim against Tenant for damages previously accrued or then or thereafter
accruing. In no event shall any one or more of the following actions by
Landlord, in the absence of a written election by Landlord to terminate this
Lease, constitute a termination of this Lease:
1. Appointment of a receiver or keeper in order
to protect Landlord's interest hereunder;
2. Consent to any subletting of the Leased
Premises or assignment of this Lease by Tenant, whether pursuant to the
provisions hereof or otherwise; or
3. Any other action by Landlord or Landlord's
agents intended to mitigate the adverse effects of any breach of this Lease
by Tenant, including, without limitation, any action taken to maintain and
preserve the Leased Premises or any action taken to relet the Leased
Premises, or any portion thereof, for the account of Tenant and in the name
of Tenant.
C. In the event Tenant breaches this Lease and abandons
the Leased Premises, Landlord may terminate this lease, but this Lease shall
not terminate unless Landlord gives Tenant written notice of termination. No
act by or on behalf of Landlord intended to mitigate the adverse effect of such
breach, including those described by Subarticles B(1), (2) and (3) immediately
preceding, shall constitute a termination of Tenant's right to possession
unless Landlord gives Tenant written notice of termination. If Landlord does
not terminate this Lease by giving written notice of termination, Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover rent as it becomes due under this Lease as provided in California Civil
Code Section 1951.4, as in effect on the Effective Date of this Lease.
D. In the event Landlord terminates this Lease, Landlord
shall be entitled, at Landlord's election, to damages in an amount as set forth
in California Civil Code Section 1951.2, as in effect on the Effective Date of
this Lease. For purposes of computing damages pursuant to said Section 1951.2,
an interest rate equal to the maximum rate of interest then not prohibited by
Law shall be used where permitted. Such damages shall include, without
limitation:
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1. The worth at the time of award of the amount
by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided, computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus
one percent; and
2. Any other amount necessary to compensate
Landlord for all detriment proximately caused by Tenant's failure to
perform Tenant's obligations under this Lease, or which in the ordinary
course of things would be likely to result therefrom, including, without
limitation, the following: (i) expenses for cleaning, repairing or
restoring the Leased Premises; (ii) expenses for altering, remodeling or
otherwise improving the Leased Premises for the purpose of reletting,
including removal of existing leasehold improvements and/or installation of
additional leasehold improvements (regardless of how the same is funded,
including reduction of rent, a direct payment or allowance to a new tenant,
or otherwise); (iii) broker's fees [Insert 12.20(z)], advertising costs and
other expenses of reletting the Leased Premises; (iv) costs of carrying the
Leased Premises, which costs would have been billed to Tenant as Additional
Rent had Tenant not defaulted and which include, but are not limited to;
taxes, insurance premiums, landscape maintenance, HVAC maintenance, utility
charges and security precautions; (v) expenses incurred in removing,
disposing of and/or storing any of Tenant's personal property, inventory or
trade fixtures remaining therein; (vi) attorney's fees, expert witness
fees, court costs and other reasonable expenses incurred by Landlord (but
not limited to taxable costs) in retaking possession of the Leased
Premises, establishing damages hereunder, and re-leasing the Leased
Premises; and (vii) any other expenses, costs or damages otherwise incurred
or suffered as a result of Tenant's default.
12.3 Landlord's Default and Tenant's Remedies: In the event
Landlord fails to perform any of its obligations under this Lease, Landlord
shall nevertheless not be in default under the terms of this Lease until such
time as Tenant shall have first given Landlord written notice specifying the
nature of such failure to perform its obligations, and then only after Landlord
shall have had a reasonable period of time following its receipt of such notice
within which to perform such obligations. In the event of Landlord's default as
above set forth, then, and only then, Tenant shall have the following remedies
only:
A. Tenant may then proceed in equity or at law to compel
Landlord to perform its obligations and/or to recover damages proximately
caused by such failure to perform (except as and to the extent Tenant has
waived its right to damages as provided in this Lease).
B. Tenant, at its option, may then cure any default of
Landlord at Landlord's cost. If, pursuant to this Subarticle, Tenant
reasonably pays any sum to any third party or does any act that requires the
payment of any sum to any third party at any time by reason of Landlord's
default the sum paid by Tenant shall be immediately due from Landlord to Tenant
at the time Tenant supplies Landlord with an invoice therefore (provided such
invoice sets forth and is accompanied by a written statement of Tenant setting
forth in reasonable detail the amount paid, the party to whom it was paid, the
date it was paid, and the reasons giving rise to such payment), together with
interest at twelve percent per annum from the date of such invoice until Tenant
is reimbursed by Landlord.
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Tenant may not offset such sums against any installment of rent due Landlord
under the terms of this Lease.
12.4 Limitation on Tenant's Recourse: If Landlord is a
corporation, trust, partnership, joint venture, unincorporated association, or
other form of business entity, Tenant agrees that (i) the obligations of
Landlord under this Lease shall not constitute personal obligations of the
officers, directors, trustees, partners, joint venturers, members, owners,
stockholders, or other principals of such business entity and (ii) Tenant shall
have recourse only to the assets of such business entity for the satisfaction of
such obligations and not against the assets of such officers, directors,
trustees, partners, joint venturers, members, owners, stockholders or principals
(other than to the extent of their interest in the assets owned by such business
entity). Additionally, if Landlord is a partnership, then Tenant covenants and
agrees:
A. No partner of Landlord shall be sued or named as a
party in any suit or action brought by Tenant with respect to any alleged
breach of this lease (except to the extent necessary to secure jurisdiction
over the partnership and then only for that sole purpose);
B. No service of process shall be made against any
partner of Landlord except for the sole purpose of securing jurisdiction over
the partnership; and
C. No writ of execution shall be levied against the
assets of any partner of Landlord other than to the extent of his interest in
the assets of the partnership. Tenant further agrees that each of the
foregoing covenants and agreements shall be enforceable by Landlord and by any
partner of Landlord and shall be applicable to any actual or alleged
misrepresentation or non- disclosure made respecting this Lease or the Leased
Premises or any actual or alleged failure, default or breach of any covenant or
agreement either expressly or implicitly contained in this Lease or imposed by
statute or at common law.
12.5 Tenant's Waiver: Landlord and Tenant agree that the
provisions of Article 12.3 above are intended to supersede and replace the
provisions of California Civil Code 1932(l), 1941 and 1942, and accordingly,
Tenant hereby waives the provisions of Section 1932(l), 1941 and 1942 of the
California Civil Code and/or any similar or successor Law regarding Tenant's
right to terminate this Lease or to make repairs and deduct the expenses of such
repairs from the rent due under this Lease. Tenant hereby waives any right of
redemption or relief from forfeiture under the Laws of the State of California,
or under any other present or future Law, in the event Tenant is evicted or
Landlord takes possession of the Leased Premises by reason of any default by
Tenant.
ARTICLE 13
GENERAL PROVISIONS
13.1 Taxes on Tenant's Property: Tenant shall pay before
delinquency any and all taxes, assessments, license fees, use fees, permit fees
and public charges of whatever nature or description levied, assessed or
imposed against Tenant or Landlord by a governmental agency arising out of,
caused by reason of or based upon Tenant's estate in this Lease, Tenant's
ownership of property, improvements made by Tenant to the Leased Premises,
improvements made by Landlord for Tenant's use within the Leased Premises,
Tenant's use (or estimated use) of
34
public facilities or services or Tenant's consumption (or estimated
consumption) of public utilities, energy, water or other resources. On demand
by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these
payments. If any such taxes, assessments, fees or public charges are levied
against Landlord, Landlord's property, the Building or the Project, or if the
assessed value of the Building or the Project is increased by the inclusion
therein of a value placed upon same, then Landlord, after giving written notice
to Tenant, shall have the right, regardless of the validity thereof, to pay
such taxes, assessment, fee or public charge and bill Tenant, as Additional
Rent, the amount of such taxes, assessment, fee or public charge so paid on
Tenant's behalf. Tenant shall, within ten days from the date it receives an
invoice from Landlord setting forth the amount of such taxes, assessment, fee
or public charge so levied, pay to Landlord, as Additional Rent, the amount set
forth in said invoice. Failure by Tenant to pay the amount so invoiced within
said ten day period shall be conclusively deemed a default by Tenant under this
Lease. Tenant shall have the right, and with Landlord's full cooperation if
Tenant is not then in default under the terms of this Lease, to bring suit in
any court of competent jurisdiction to recover from the taxing authority the
amount of any such taxes, assessment, fee or public charge so paid.
13.2 Holding Over: This Lease shall terminate without further
notice on the Lease Expiration Date (as set forth in ARTICLE 1). Any holding
over by Tenant after expiration of the Lease Term shall neither constitute a
renewal nor extension of this Lease nor give Tenant any rights in or to the
Leased Premises except as expressly provided in this Article. Any such holding
over shall be deemed an unlawful detainer of the Leased Premises unless Landlord
has consented to same. Any such holding over to which Landlord has consented
shall be construed to be a tenancy from month to month, on the same terms and
conditions herein specified insofar as applicable, except that the Base Monthly
Rent shall be increased to an amount equal to one hundred fifty percent of the
Base Monthly Rent payable during the last full month immediately preceding such
holding over.
13.3 Subordination to Mortgages: This Lease is subject and
subordinate to all underlying ground leases and to all mortgages and deeds of
trust which affect the Building and are of public record as of the Effective
Date of this Lease, and to all renewals, modifications, consolidations,
replacements and extensions thereof. However, if the lessor under any such
ground lease or any Lender holding any such mortgage or deed of trust shall
advise Landlord that it desires or requires this Lease to be made prior and
superior thereto, then, upon written request of Landlord to Tenant, Tenant shall
promptly execute, acknowledge and deliver any and all documents or instruments
which Landlord and such lessor or Lender deem necessary or desirable to make
this Lease prior thereto. Tenant hereby consents to Landlord's ground leasing
the land underlying the Building and/or encumbering the Building as security for
future loans on such terms as Landlord shall desire, all of which future ground
leases, mortgages or deeds of trust shall be subject and subordinate to this
Lease. However, if any lessor under any such future ground lease or any Lender
holding such future mortgage or deed of trust shall desire or require that this
Lease be made subject and subordinate to such future ground lease, mortgage or
deed of trust, then Tenant agrees, within ten days after Landlord's written
request therefore, to execute, acknowledge and deliver to Landlord any and all
documents or instruments requested by Landlord or such lessor or Lender as may
be necessary or proper to assure the subordination of this Lease to such future
ground lease, mortgage or deed of trust; but only if such lessor or Lender
agrees to recognize Tenant's
35
rights under this Lease and not to disturb Tenant's quiet possession of the
Leased Premises so long as Tenant is not in default under this Lease.
13.4 Tenant's Attornment Upon Foreclosure: Tenant shall, upon
request, attorn (i) to any purchaser of the Building at any foreclosure sale or
private sale conducted pursuant to any security instrument encumbering the
Building, (ii) to any grantee or transferee designated in any deed given in lieu
of foreclosure of any security interest encumbering the Building, or (iii) to
the lessor under any underlying ground lease of the land underlying the
Building, should such ground lease be terminated; provided that such purchaser,
grantee or lessor recognizes Tenant's rights under this Lease.
13.5 Mortgagee Protection: In the event of any default on the part
of Landlord, Tenant will give notice by registered mail to any Lender or lessor
under any underlying ground lease who shall have requested, in writing, to
Tenant that it be provided with such notice, and Tenant shall offer such Lender
or lessor a reasonable opportunity to cure the default, including time to obtain
possession of the Leased Premises by power of sale or judicial foreclosure or
other appropriate legal proceedings if reasonably necessary to effect a cure.
13.6 Estoppel Certificates: Tenant will, following any request by
Landlord, promptly execute and deliver to Landlord an estoppel certificate (i)
certifying that this Lease is unmodified and in full force and effect, or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect, (ii) stating the date to
which the rent and other charges are paid in advance, if any, (iii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying such defaults if any are claimed,
and (iv) certifying such other information about this Lease as may be reasonably
requested by Landlord. Tenant's failure to execute and deliver such estoppel
certificate within ten days after Landlord's request therefore shall be a
material default by Tenant under this Lease, and Landlord shall have all of the
rights and remedies available to Landlord as Landlord would otherwise have in
the case of any other material default by Tenant, including the right to
terminate this Lease and sue for damages proximately caused thereby, it being
agreed and understood by Tenant that Tenant's failure to so deliver such
estoppel certificate in a timely manner could result in Landlord being unable to
perform committed obligations to other third parties which were made by Landlord
in reliance upon this covenant of Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Article may be relied upon by any Lender or
purchaser or prospective Lender or purchaser of the Building, the Project, or
any interest therein.
13.7 Tenant's Financial Information: Tenant shall, within ten
business days after Landlord's request therefore, deliver to Landlord a copy of
a current financial statement, including an income statement and balance sheet,
and any such other information reasonably requested by Landlord regarding
Tenant's financial condition. Tenant acknowledges that Landlord has and will
rely on the truth and accuracy of the information provided by Tenant to Landlord
both prior to and during the term of the Lease. Landlord shall be entitled to
disclose such financial statements or other information to its Lender, to any
present or prospective principal of or investor in Landlord, or to any
prospective Lender or purchaser of the Building, the Project or any portion
thereof or interest therein. Any such financial statement or other information
which is marked
36
"confidential" or "company secrets" (or is otherwise similarly marked by
Tenant) shall be confidential and shall not be disclosed by Landlord to any
third party except as specifically provided in this Article, unless the same
becomes a part of the public domain without the fault of Landlord. (Insert
13.7)
13.8 Transfer by Landlord: Landlord and its successors in interest
shall have the right to transfer their interest in the Building, the Project, or
any portion thereof at any time and to any person or entity. In the event of any
such transfer, the Landlord originally named herein (and in the case of any
subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved, without any further act by any person or entity, of
all liability for the performance of the obligations of the Landlord hereunder
which may accrue after the date of such transfer and (ii) shall be relieved of
all liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer if its transferee agrees to
assume and perform all such prior obligations of the Landlord hereunder. Tenant
shall attorn to any such transferee. After the date of any such transfer, the
term "Landlord" as used herein shall mean the transferee of such interest in the
Building or the Project.
13.9 Force Majeure: The obligations of each of the parties under
this Lease (other than the obligation to pay money) shall be temporarily excused
if such party is prevented or delayed in performing such obligation by reason of
any strikes, lockouts or labor disputes; inability to obtain labor, materials,
fuels or reasonable substitutes therefore; governmental restrictions,
regulations, controls, action or inaction; civil commotion; inclement weather,
fire or other acts of God; or other causes (except financial inability) beyond
the reasonable control of the party obligated to perform (including acts or
omissions of the other party for a period equal to the period of any such
prevention, delay or stoppage.
13.10 Notices: Any notice required or desired to be given by a
party regarding this Lease shall be in writing and shall be personally served,
or in lieu of personal service may be given by: (i) delivery by Federal Express,
United Parcel Service or similar commercial service, (ii) electronic facsimile
transmission, or (iii) by depositing such notice in the United States mail,
postage prepaid, addressed to the other party as follows:
A. If addressed to Landlord, to Landlord at its Address
for Notices (as set forth in Article 1).
B. If addressed to Tenant, to Tenant at its Address for
Notices (as set forth in Article 1).
Any notice given by registered mail shall be deemed to have been given on the
third business day after its deposit in the United States mail. Any notice
given by certified mail shall be deemed given on the date receipt was
acknowledged to the postal authorities. Any notice given by mail other than
registered or certified mail shall be deemed given only if received by the
other party, and then on the date of receipt. In the event of notice by
electronic facsimile transmission or commercial carrier, notice shall be deemed
received on the date of confirmation documented by the transmission or carrier.
Each party may, by written notice to the other in the manner aforesaid, change
the address to which notices addressed to it shall thereafter be mailed.
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13.11 Attorneys' Fees: In the event any party shall bring any
action, arbitration proceeding or legal proceeding alleging a breach of any
provision of this Lease to recover rent, to terminate this Lease, or to
enforce, protect, determine or establish any term or covenant of this Lease or
rights or duties hereunder of either party, the prevailing party shall be
entitled to recover from the non-prevailing party as a part of such action or
proceeding, or in a separate action for that purpose brought within one year
from the determination of such proceeding, reasonable attorneys' fees, expert
witness fees, court costs and other reasonable expenses incurred by the
prevailing party. In the event that Landlord shall be required to retain
counsel to enforce any provision of this Lease, and if Tenant shall thereafter
cure (or desire to cure) such default, Landlord shall be conclusively deemed
the prevailing party, and Tenant shall pay to Landlord all attorneys' fees,
expert witness fees, court costs and other reasonable expenses so incurred by
Landlord promptly upon demand. Landlord may enforce this provision by either
(i) requiring Tenant to pay such fees and costs as a condition to curing its
default or (ii) bringing a separate action to enforce such payment, it being
agreed by and between Landlord and Tenant that Tenant's failure to pay such
fees and costs upon demand shall constitute a breach of this Lease in the same
manner as a failure by Tenant to pay the Base Monthly Rent, giving Landlord the
same rights and remedies as if Tenant failed to pay the Base Monthly Rent.
13.12 Definitions: Any term that is given a special meaning by any
provision in this Lease shall, unless otherwise specifically stated, have such
meaning whenever used in this Lease or any Addenda or amendment hereto. In
addition to the terms defined in Article 1, the following terms shall have the
following means:
A. Real Property Taxes: The term "Real Property Tax" or
Real Property Taxes" shall each mean (i) all taxes, assessments, levies and
other charges of any kind or nature whatsoever, general and specific, foreseen
and unforeseen (including all installments of principal and interest required
to pay any general or special assessments for public improvements and any
increases resulting from reassessments caused by any change in ownership or new
construction), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or indirect
power to tax or levy assessments, which are levied or assessed for whatever
reason against the Project or any portion thereof, or Landlord's interest
therein, or the fixtures, equipment and other property of Landlord that is an
integral part of the Project and located thereon, or Landlord's business of
owning, leasing or managing the Project or the gross receipts, income or
rentals from the Project; (ii) all charges, levies or fees imposed by any
governmental authority against Landlord by reason of or based upon the use of
or number of parking spaces within the Project, the amount of public services
or public utilities used or consumed (e.g. water, gas, electricity, sewage or
surface water disposal) at the Project, the number of persons employed by
tenants of the Project, the size (whether measured in area, volume, number of
tenants or whatever) or the value of the Project, or the type of use or uses
conducted within the Project; and (iii) all costs and fees (including
attorneys' fees) incurred by Landlord in contesting any Real Property Tax and
in negotiating with public authorities as to any Real Property Tax. If, at any
time during the Lease Term, the taxation or assessment of the Project
prevailing as of the Effective Date of this Lease shall be altered so that in
lieu of or in addition to any Real Property Tax described above there
38
shall be levied, assessed or imposed (whether by reason of a change in the
method of taxation or assessment, creation of a new tax or charge, or any other
cause) an alternate, substitute, or additional tax or charge (i) on the value,
size, use or occupancy of the Project or Landlord's interest therein or (ii) on
or measured by the gross receipts, income or rentals from the Project, or on
Landlord's business of owning, leasing or managing the Project or (iii)
computed in any manner with respect to the operation of the Project, then any
such tax or charge, however designated, shall be included within the meaning of
the terms "Real Property Tax" or "Real Property Taxes" for purposes of this
Lease. If any Real Property Tax is partly based upon property or rents
unrelated to the Project, then only that part of such Real Property Tax that is
fairly allocable to the Project shall be included within the meaning of the
terms "Real Property Tax" or "Real Property Taxes". Notwithstanding the
foregoing, the terms "Real Property Tax" or "Real Property Taxes" shall not
include estate, inheritance, transfer, gift or franchise taxes of Landlord or
the federal or state income tax imposed on Landlord's income from all sources.
B. Landlord's Insurance Costs: The term "Landlord's
Insurance Costs" shall mean the costs to Landlord to carry and maintain the
policies of fire and property damage insurance, including quake and flood, for
the Project and general liability insurance required, or permitted, to be
carried by Landlord pursuant to Article 9, together with any deductible amounts
paid by Landlord upon the occurrence of any insured casualty or loss.
C. Project Maintenance Costs: The term "Project
Maintenance Costs" shall mean all costs and expenses (except Landlord's
Insurance Costs and Real Property Taxes) paid or incurred by Landlord in
protecting, operating, maintaining, repairing and preserving the Project and
all parts thereof, including without limitation, (i) professional management
fees (equal to three percent of the annualized Base Monthly Rent), (ii) the
amortizing portion of any costs incurred by Landlord in the making of any
modifications, alterations or improvements as set forth in Article 6, which are
so amortized during the Lease Term, (iii) costs of complying with governmental
regulations governing Tenant's use of Hazardous Materials, and Landlord's costs
of monitoring Tenant's use of Hazardous Materials including fees charged by
Landlord's consultants to periodically inspect the Premises and the Property,
and (iv) such other costs as may be paid or incurred with respect to operating,
maintaining and preserving the Project, such as repairing replacing and
resurfacing the exterior surfaces of the buildings (including roofs),
repairing, replacing, and resurfacing paved areas, repairing structural parts
of the buildings, cleaning, maintaining, repairing, or replacing the interior
of the Leased Premises both during the Lease Term and upon the termination of
the Lease, and maintaining, repairing or replacing, when necessary electrical,
plumbing, sewer, drainage, heating, ventilating and air conditioning systems
serving the buildings, providing utilities to the common areas, maintenance,
repair, replacement, or installation of lighting fixtures, directional or other
signs and signals, irrigation or drainage systems, trees, shrubs, materials,
maintenance of all landscaped areas, and depreciation and financing costs on
maintenance and operating machinery and equipment (if owned) and rental paid
for such machinery and equipment (if leased).
D. Ready for Occupancy: The term "Ready for Occupancy"
shall mean the date upon which (i) the Leased Premises are available for
Tenant's occupancy in a broom clean condition and (ii) the improvements, if
any, to be made to the Leased Premises by Landlord as a condition to Tenant's
obligation to accept
39
possession of the Leased Premises have been substantially completed and the
appropriate governmental building department (i.e. the City building
department, if the Project is located within a City, or otherwise the County
building department) shall have approved the construction of the improvements
as substantially complete or is willing to so approve the construction of such
improvements as substantially complete subject only to compliance with
specified conditions which are the responsibility of Tenant to satisfy or is
willing to allow Tenant to occupy subject to its receiving assurances that
specified work will be completed.
E. Tenant's Proportionate Share: The term "Tenant's
Proportionate Share" or "Tenant's Share", as used with respect to an item
pertaining to the Building, shall each mean that percentage obtained by
dividing the leasable square footage contained within the Leased Premises (as
set forth in Article 1) by the total leasable square footage contained within
the Building as the same from time to time exists or, as used with respect to
an item pertaining to the Project, shall each mean that percentage obtained by
dividing the leasable square footage contained within the Leased Premises (as
set forth in Article 1) by the total leasable square footage contained within
the Project as the same from time to time exists, unless, as to any given item,
such a percentage allocation unfairly burdens or benefits a given tenant(s), in
which case Landlord shall have the exclusive right to equitably allocate such
item so as to not unfairly burden or benefit any given tenant(s). Landlord's
determination of any such special allocation shall be final and binding upon
Tenant unless made in bad faith.
F. Building's Proportionate Share: The term "Building's
Proportionate Share" or "Building's Share" shall each mean that percentage
which is obtained by dividing the leasable square footage contained within the
Building by the leasable square footage contained with all buildings located
within the Project, unless, as to any given item, such a percentage allocation
unfairly burdens or benefits a given building(s), in which case Landlord shall
have the exclusive right to equitably allocate such item so as to not unfairly
burden or benefit any given building(s). Landlord's determination of any such
special allocation shall be final and binding upon Tenant unless made in bad
faith.
G. Building Operating Expenses: The term "Building
Operating Expenses" shall mean and include the Building's Share of all Real
Property Taxes, plus the Building's Share of all Landlord's Insurance Costs,
plus the Building's Share of all Project Maintenance Costs.
H. Law: The term "Law" shall mean any judicial decision
and any statute, constitution, ordinance, resolution, regulation, rule,
administrative order, or other requirement of any municipal, county, state,
federal, or other governmental agency or authority having jurisdiction over the
parties to this Lease, the Leased Premises, the Building or the Project, or any
of them in effect either at the Effective Date of this Lease or at any time
during the Lease Term, including, without limitation, any regulation, order, or
policy of any quasi-official entity or body (e.g. a board of fire examiners or
a public utility or special district).
I. Lender: The term "Lender" shall mean the holder of
any Note or other evidence of indebtedness secured by the Project or any
portion thereof.
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J. Private Restrictions: The term "Private
Restrictions" shall mean all recorded covenants, conditions and restrictions,
private agreements, easements, and any other recorded instruments affecting the
use of the Project, as they may exist from time to time.
K. Rent: The term "rent" shall mean collectively Base
Monthly Rent and all Additional Rent.
13.13 General Waivers: One party's consent to or approval of any
act by the other party, requiring the first party's consent or approval shall
not be deemed to waive or render unnecessary the first party's consent to or
approval of any subsequent similar act by the other party. No waiver of any
provision hereof or any breach of any provision hereof shall be effective
unless in writing and signed by the waiving party. The receipt by Landlord of
any rent or payment with or without knowledge of the breach of any other
provision hereof shall not be deemed a waiver of any such breach. No waiver of
any provision of this Lease shall be deemed a continuing waiver unless such
waiver specifically states so in writing and is signed by both Landlord and
Tenant. No delay or omission in the exercise of any right or remedy accruing
to either party upon any breach by the other party under this Lease shall
impair such right or remedy or be construed as a waiver of any such breach
theretofore or thereafter occurring. The waiver by either party of any breach
of any provision of this Lease shall not be deemed to be a waiver of any
subsequent breach of the same or any other provisions herein contained.
13.14 Miscellaneous: Should any provision of this Lease prove to be
invalid or illegal, such invalidity or illegality shall in no way affect,
impair or invalidate any other provision hereof, and such remaining provisions
shall remain in full force and effect. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance
is a factor. Any copy of this Lease which is executed by the parties shall be
deemed an original for all purposes. This Lease shall, subject to the
provisions regarding assignment, apply to and bind the respective heirs,
successors, executors, administrators and assigns of Landlord and Tenant. The
term "party" shall mean Landlord or Tenant as the context implies. If Tenant
consists of more than one person or entity, then all members of Tenant shall be
jointly and severally liable hereunder. This Lease shall be construed and
enforced in accordance with the Laws of the State in which the Leased Premises
are located. The language in all parts of this Lease shall in all cases be
construed as a whole according to its fair meaning, and not strictly for or
against either Landlord or Tenant. The captions used in this Lease are for
convenience only and shall not be considered in the construction or
interpretation of any provision hereof. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a partnership
or corporation or joint venture, and the singular includes the plural. The
terms "must", "shall", "will" and "agree" are mandatory. The term "may" is
permissive. When a party is required to do something by this Lease, it shall
do so at its sole cost and expense without right of reimbursement from the
other party unless specific provision is made therefore. Where Tenant is
obligated not to perform any act or is not permitted to perform any act, Tenant
is also obligated to restrain any others reasonably within its control,
including agents, invitees, contractors, subcontractors and employees, from
performing said act. Landlord shall not become or be deemed a partner or joint
venturer with Tenant by reason of any of the provisions of this Lease.
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ARTICLE 14
CORPORATE AUTHORITY
BROKERS AND ENTIRE AGREEMENT
14.1 Corporate Authority: If Tenant is a corporation, each
individual executing this Lease on behalf of said corporation represents and
warrants that Tenant is validly formed and duly authorized and existing, that
Tenant is qualified to do business in the State in which the Leased Premises are
located, that Tenant has the full right and legal authority to enter into this
Lease, that he or she is duly authorized to execute and deliver this Lease on
behalf of Tenant in accordance with the bylaws and/or a board of directors'
resolution of Tenant, and that this Lease is binding upon Tenant in accordance
with its terms. Tenant shall, within thirty days after execution of this Lease,
deliver to Landlord a certified copy of the resolution of its board of directors
authorizing or ratifying the execution of this Lease.
14.2 Brokerage Commissions: Tenant warrants that it has not had
any dealings with any real estate broker(s), leasing agent(s), finder(s) or
salesmen, other than those persons or entities named in Article I as the
"Brokers" with respect to the lease by it of the Leased Premises pursuant to
this Lease, and that it will indemnify, defend with competent counsel, and hold
Landlord harmless from any liabilities for the payment of any real estate
brokerage commissions, leasing commissions or finder's fees claimed by any other
real estate broker(s), leasing agent(s), finder(s) or salesmen to be earned or
due and payable by reason of Tenant's agreement or promise (implied or
otherwise) to pay (or have Landlord pay) such a commission or finder's fee by
reason of its leasing the Leased Premises pursuant to this Lease.
14.3 Entire Agreement: This Lease, the Exhibits (as described in
Article 1) and the Addenda (as described in Article 1), which Exhibits and
Addenda are by this reference incorporated herein, constitute the entire
agreement between the parties, and there are no other agreements, understandings
or representations between the parties relating to the lease by Landlord of the
Leased Premises to Tenant, except as expressed herein. No subsequent changes,
modifications or additions to this Lease shall be binding upon the parties
unless in writing and signed by both Landlord and Tenant.
14.4 Landlord's Representations: Tenant acknowledges that neither
Landlord nor any of its agents made any representations or warranties respecting
the Project, the Building or the Leased Premises, upon which Tenant relied in
entering into this Lease, which are not expressly set forth in this Lease.
Tenant further acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for Tenant's
intended use under existing law or (ii) the suitability of the Leased Premises
for the conduct of Tenant's business or (iii) the exact square footage of the
Leased Premises, and that Tenant relied solely upon its own investigations
respecting said matters. Tenant expressly waives any and all claims for damage
by reason of any statement, representation, warranty, promise or other agreement
of Landlord or Landlord's agent(s), if any, not contained in this Lease or in
any Addenda hereto. IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the
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respective dates below set forth with the intent to be legally bound thereby as
of the Effective Date of this Lease.
AS LANDLORD: AS TENANT:
By: By:
Title: Title:
By: By:
Title: Title:
Dated: Dated:
If Tenant is a CORPORATION, the authorized officers must sign on behalf
of the corporation and indicate the capacity in which they are signing. This
Lease must be executed by the chairman of the board, president or vice
president, and the secretary, assistant secretary, the chief financial officer
or assistant treasurer, unless the bylaws or a resolution of the board of
directors shall otherwise provide, in which event a certified copy of the bylaws
or a certified copy of the resolution, as the case may be, must be attached to
this Lease.
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FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE ( Addendum ) is made to that Industrial
Space Lease dated as of November 9, 1995 (the Lease ) by and between Renco
Associates, a California partnership (as Landlord ), and Weitek Corporation, a
California corporation (as Tenant ), for the lease of space located at 2801
Orchard Parkway in San Jose, California (the Leased Premises ).
Unless otherwise expressly provided herein, all terms which are given
a special definition by the Lease that are used herein are intended to be used
with the definition given to them by the Lease. The provisions of the Lease
shall remain in full force and effect except as specifically amended hereby.
In the event of any inconsistency between the Lease and this Addendum, the
terms of this Addendum shall prevail.
The paragraphs below are numbered to correspond to the paragraph,
article or exhibit number or letter of the Lease to which they relate. The
parties hereto agree that, notwithstanding anything in the Lease, the Lease is
amended, changed and modified by the following provisions, which are hereby
added to the Lease:
1, 2.1, 2.3, 2.5, 4.7, 4.8, & 4.11. Condition of Premises and
Completion of Tenant Improvements: As of the Lease Commencement Date, except for
punchlist items which do not materially interfere with the use of the Premises
by Tenant, (i) the structural components, electrical, sewer, water, heating,
ventilating, air conditioning, life safety, and fire protection systems, and the
roof of the Building shall be watertight and in good operating condition, order
and repair, (ii) the Project shall comply with all laws, rules, requirements,
and building codes applicable thereto, and (iii) the Tenant Improvements shall
be completed in accordance with Exhibits "B" and "C". Landlord shall correct any
punchlist (which shall be prepared by Landlord and Tenant within thirty (30)
days from the actual Lease Commencement Date) or such longer time as may be
reasonably required to complete the correction. In no event shall the expiration
of the Punchlist Period, Tenant's failure to specify any punchlist item,
Tenant's acceptance of the Premises or actual commencement of the Lease waive
Tenant's right to require compliance with the foregoing.
1.1T. The Base Monthly Rent: The Base Monthly Rent shall be increased
at the end of the thirty fourth (34th) month of the Lease Term by multiplying
the Base Monthly Rent for the thirty fourth (34th) month times a fraction the
numerator of which shall be the Consumer Price Index published immediately prior
to the period including the thirty fourth (34th) month of the Term and the
denominator of which shall be the Consumer Price Index published immediately
prior to the first (1st) month of the Lease Term. In no event, however, shall
the Base Monthly Rent for the thirty fifth (35th) and succeeding months of the
Lease Term be less than the quantity of one and eighty-five thousandths (1.085)
multiplied times the Base Monthly Rent for the first thirty four (34) months of
the Lease Term nor more than one and one hundred ninety eight thousandths
(1.198) multiplied times the Base Monthly Rent for the first thirty four (34)
months of the Lease Term.
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The term "Consumer Price Index" shall mean the Consumer Price Index,
All Urban Consumers, Subgroup "All Items", for the San Francisco-Oakland-San
Jose Area (1982-1984=100), now being published by the United States Department
of Labor, Bureau of Labor Statistics. If the Consumer Price Index is changed
so that the base year is altered from that used as of the Lease Commencement
Date, then the Consumer Price Index shall be converted in accordance with the
conversion factor published by the United States Department of Labor, Bureau of
Labor Statistics, to obtain the same result that would have been obtained had
the base year not been changed. If no conversion factor is available, or if
the Consumer Price Index is otherwise changed, revised or discontinued for any
reason, there shall be substituted in lieu thereof and the term "Consumer Price
Index" shall thereafter refer to the most nearly comparable official price
index of the United States Government reasonably designated by Landlord in
order to obtain substantially the same result for any adjustment required by
this Lease as would have been obtained had the original Consumer Price Index
not been changed, revised or discontinued.
2.1 Leased Premises: Tenant acknowledges that a closet on the
second floor contains telephone wiring for the adjacent tenant. Tenant shall
not have access to the closet, and Tenant shall provide access to the closet
for the adjacent tenant during normal business hours and subject to prior
notice.
2.3 & 2.7. Entry Prior to Lease Commencement Date: Provided Lessee
does not adversely affect the construction of the Tenant Improvements, Lessee,
during the construction of the Tenant Improvements and without any obligation
to pay Base Monthly Rent or Additional Rent, may enter the Leased Premises and
the Building for the purpose of fitting-up the Leased Premises for its use,
including, without limitation, installing its equipment, data,
telecommunications and cabling systems, and trade fixtures.
2.5 Acceptance of Possession: The terms of this section regarding
Tenant's Punchlist Period shall be subject to the sections in this Addendum
relating to the Punch List.
2.6. Surrender. Subject to section 4.14E, Tenant's obligation to
surrender the Leased Premises shall be fulfilled if Tenant surrenders
possession of the Leased Premises in the condition existing at the lease
Commencement Date, excepting ordinary wear and tear, acts of God, casualties,
condemnation, and alterations which Tenant may leave on the Leased Premises
pursuant to Section 6.1 of the Lease. Tenant shall perform all work required
to be done inside the Leased Premises and Landlord shall perform (and Tenant
shall reimburse Tenant's Proportionate Share of) any work required to be done
outside the Leased Premises provided that such work is required to be paid for
by Tenant pursuant to section 2.6 or other sections of the Lease.
3.4. and Tenant has received written notice that Base Monthly Rent
and/or Additional Rent are due.
In the event of a billing for Additional Rent that is not concurrent
with a billing for Base Monthly Rent, Landlord shall provide Tenant with the
billing and a notice of delinquency requiring payment within six (6) days from
the delivery to Tenant of a delinquency notice. No late fee shall be charged,
nor shall Tenant be in default under the terms of this Lease unless payment is
not received within the six day period.
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4.2 without the prior written consent of Landlord which consent shall
not be unreasonably withheld.
4.4 in an area provided by Landlord
4.6 Signs: Landlord shall permit Tenant to install exterior
signage which is consistent with the design of the Building and which does not
violate the requirements of the City of San Jose or the CC&R's of Orchard Park
relating to such signage.
4.7 of record or provided to Tenant as of the date of this Lease
4.12 & 5.3. Landlord shall not voluntarily cooperate with
governmental agencies in such a manor that materially interferes with the
conduct of Tenant's business or results in an additional cost or expense to
Tenant.
4.14 Environmental: Notwithstanding anything to the contrary in
this Lease, Tenant shall have no liability under any provision of the Lease and
Landlord hereby waives and releases Tenant, its stockholders, officers,
directors, employees, successors, subtenants and assigns from and against all
liabilities, claims, suits, judgments, damages, costs, and expenses (including
attorneys' and experts' fees) arising out of or in connection with
Contamination (as herein defined) (i) present in, on, under or about the
Project as of the Lease Commencement Date, or (ii) which is caused by Landlord,
any other tenant of the Project, or their respective agents, employees,
representatives, contractors, invitees, subtenants or assigns. Although Tenant
shall be liable to the full extent provided in this Lease for any Contamination
caused in, on or about the Project during the Lease Term by Tenant or its
agents, employees, contractors, invitees, permitees, subtenants, and assigns,
all other Contamination in the Common Area shall be deemed a Project
Maintenance Cost. As used herein the term Contamination shall mean the
presence of Hazardous Materials in the soil, air, improvements, groundwater,
surface water or building materials. The foregoing shall survive the
expiration or sooner termination of this Lease.
Removal of Hazardous Materials, whether in the Leased Premises or
elsewhere shall not be a capital repair or improvement and to the extent
payable by Tenant hereunder shall not be subject to the limit on costs to be
paid for by Tenant pursuant to section 13.12C or any other section of this
Addendum.
4.14C. Tenant may use small quantities of office and janitorial
cleaning supplies.
4.14E Tenant's obligation to remove Hazardous Materials upon the
expiration or sooner termination of the Lease Term shall be limited to removal
of Hazardous Materials caused by Tenant, its agents, contractors, invitees,
permitees, employees, contractors, subtenants, and assigns. Tenant shall also
be obligated to pay Tenant's Proportionate Share of Building Operating Expenses
which pursuant to section 4.14 of this Addendum include costs to remove certain
Contamination in the Common Area.
5.1.B & 13.12.C. Landlord's Maintenance. Subject to the Tenant
reimbursement Provisions of this Lease, Landlord shall maintain in good
condition and repair (i) the roof membrane, and utility and HVAC systems
located outside
46
the demising walls of the Leased Premises, and (ii) the Common Area. Tenant's
obligation to reimburse Landlord for its Proportionate Share of the costs
incurred by Landlord to perform maintenance shall be determined in accordance
with the other provisions of this Lease; provided, however, that Tenant shall
not be required to reimburse Landlord for the cost of structural repairs to the
roof structure, foundation, walls, floors, subflooring or other structural
portions of the Project. This provision shall not apply to normal maintenance
including painting of structural portions of the Project which costs Tenant
shall pay its Proportionate Share. Tenant shall also pay the cost of repairs
or replacement of the water proofing material in accordance with section 13.12
C. This section is subject to the ceiling on the cost of repairs and
replacements contained in the noted section of this Addendum.
6.1 & 6.2 Alterations by Tenant. Notwithstanding anything in this
Section, Tenant may make alterations, modifications, or improvements
("Alterations") to the Leased Premises without obtaining Landlord's prior
approval provided that Tenant complies with all of the following: (i) the
Alterations shall not exceed a total cost of ten thousand dollars ($10,000.00)
in any twelve (12) month period, (ii) Tenant's Alterations shall not remove any
improvements constructed by Landlord, (iii) Tenant's Alterations shall not
effect the structure of the building, and (iv) Tenant shall provide
architectural drawings to Landlord, obtain appropriate governmental approvals
and otherwise comply with the terms of this Lease regarding construction of
improvements. Landlord may elect to require Tenant to remove any Alterations
made by Tenant to the Leased Premises. Upon request at the time Tenant
requests approval of the Alteration, Landlord shall decide whether it will
reserve the right to require such removal of an Alteration and, thereafter,
Landlord shall be bound by its election.
Article 7. If Tenant is a publicly traded corporation, or Tenant is
not a publicly traded corporation but the Lease does not represent
substantially all of the assets of Tenant, then Landlord's consent shall not be
required for any assignment or sublease (i) made in connection with a merger,
consolidation, or other reorganization of Tenant, (ii) made in connection with
a sale of substantially all of the assets of Tenant, or (iii) involving any
corporation which controls, is controlled by, or is under common control with
Tenant. For the purpose of the Lease, if Tenant is a corporation, the sale, or
other transfer of Tenant's capital stock shall not be deemed an assignment,
subletting, or any other transfer of the Lease or the Leased Premises. In the
case of any of the above-described transfers, Tenant shall not be obligated to
pay any assignment consideration or excess rentals to Landlord. The following
costs shall be deducted from (a) all consideration received by Tenant with
respect to an assignment and (b) all consideration received by Tenant in excess
of rent due to Landlord under the Lease for the same period with respect to
subletting, to determine the meaning of the terms "assignment consideration" or
"excess rentals" (i) any commissions paid by Tenant to a licensed real estate
broker for arranging such sublease or assignment (not to exceed then standard
rates); reasonable legal fees; (iii) any costs of retro-fit or restoration
necessary for a subtenant or assignee which work Landlord determines in its
reasonable judgment has continuing value to the Leased Premises.
7.4C. Tenant shall not be in default under Article 12 of this Lease.
8.2. This indemnity shall not apply to Landlord's negligence or
willful misconduct.
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12.1.A. Monetary Default: Tenant shall not be deemed to be in default
under this lease for failure to pay Base Monthly Rent and/or Additional Rent
unless Tenant's failure to pay continues for six (6) calendar days after
Tenant's receipt of written notice that the amount is due, nor for any other
failure to pay amounts owing to Landlord unless Tenants failure to Pay
continues for six (6) calendar days after Tenant's receives written notice that
the amount is due. In the event of a billing for additional Rent that is not
concurrent with a billing for Base Monthly Rent, Tenant shall not be in default
unless Tenant has failed to pay the amount of the billing within six (6) days
after Tenants receipt of a delinquency notice stating that Tenant has failed to
pay the amount when first due.
12.1.B & 12.1.C. Nonmonetary Default: Tenant shall not be in default
under Sections 12.1.B or C of the Lease, if Tenant promptly commences to cure
such breach and completes said cure within the shortest reasonable time period.
12.1E Abandonment: Tenant shall not be in default under Section 12.1.E
unless Tenant shall have failed to continuously occupy the Leased Premises for a
period of ten (10) consecutive days and failed to maintain reasonable security
measures with respect to the Leased Premises.
12.2D(2). applicable to the remaining Term of this Lease
13.7. Provided that so long as Tenant is a public corporation,
Tenant shall only be required to provide Landlord with financial information
that is publicly available.
13.12B. Tenant shall not be required to pay the cost of Landlord's
insurance premiums for earth quake and flood insurance coverage to the extent
that the annual insurance for earth quake and flood insurance coverage exceeds
eight (8) times the annual cost of the total of all other insurance premiums
(fire, rental, liability, etc.).
At this time Landlord's insurance policy generally provides for a deductible of
five thousand dollars ($5,000.00) for casualties other than earth quake and
flood and a deductible of ten percent (10%) of replacement cost for earth quake
and flood. In the event that these deductibles more than double, Landlord
shall notify Tenant of the increased deductibles. Nothing in this section
shall alter Landlord's insurance rights, requirements, options or alternatives
as contained in this Lease nor shall Landlord's failure to advise Tenant of the
change in deductible amounts limit Landlord's right to collect any insurance
deductible amount from Tenant.
13.12C. Project Maintenance Costs: The following shall not be included
as Project Maintenance Costs, and Tenant shall not be required to pay for any
repairs, maintenance, costs, expenses of any type in connection with the
following:
(1) restorations and repairs of property
then owned by Landlord following any casualty or
otherwise covered by insurance actually carried by
Landlord (or which would be covered by insurance
Landlord is required to carry), other than the
deductible amount of any insurance carried (or which
should
48
have been carried by Landlord) with respect to damage
and destruction of the Leased Premises.
(2) items for which Landlord has
received reimbursement from others (such as other
tenants, contractors, warrantors, or insurers).
(3) Landlord's breach of this Lease,
willful misconduct, active negligence or violation of
any law, rule, regulation, or statute.
(4) items fairly attributable only to
other tenant(s) of the Projects including, utility or
service supplied by Landlord to other occupants of
the Project, or costs incurred in connection with
negotiations or disputes with such tenants).
4.7, 4.8, 5.1, 6.3, and 13.12C. The following shall modify sections
4.7, 4.8, 5.1, 6.3, and 13.12C of the Lease:
Capital Repairs and Improvements. If any capital repair or
replacement is needed for the Leased Premises or if any capital improvement to
the Leased Premises is required because of any law, code, rule, or regulation
made applicable to the Leased Premises after the Lease Commencement Date (other
than as a consequence of (i) Tenant's application for any permit or
governmental approval, (ii) Tenant's making any modifications, alterations, or
improvements to or within the Leased Premises, or (iii) as a consequence of
Tenant's peculiar use of the Leased Premises), then, notwithstanding any
provision of this Lease to the contrary, Landlord shall promptly undertake and
complete such capital repair, replacement or improvement and Tenant's liability
for reimbursement to Landlord shall be determined in accordance with the
following:
Tenant shall pay Tenant's Proportionate Share up to fifteen thousand
dollars ($15,000.00) and the balance of the cost, if any, shall be amortized
over the useful life of the capital repair or replacement and Tenant shall pay
the amortized amount together with interest at the annual rate of twelve
percent (12%) per annum. Tenant's amortization payments shall be made on a
monthly basis as Additional Rent, and the payments shall continue as during the
Term of this Lease (including extensions) until the excess cost of the repair
or replacement is amortized.
Notwithstanding anything to the contrary in this Lease, in the event
of any repair or replacement of the roof, parking areas, HVAC, electrical, or
plumbing systems of the Leased Premises, or the Project, which repair or
replacement is customarily considered to be of a capital nature under generally
accepted accounting principals with a life of not less than five (5) years
ahead if Tenants Proportionate Share of the cost for the repair or replacement
is in excess of fifteen thousand dollars ($15,000.00), then, Tenant shall pay
Tenant's Proportionate Share up to fifteen thousand dollars ($15;000.00) and
the balance of the cost, if any, shall be amortized over the useful life of the
repair or replacement and Tenant shall pay the amortized amount together with
interest at the annual rate of twelve percent (12%) per annum. Tenants
amortization payments shall be made on a monthly basis as Additional Rent, and
the payments shall continue as during the Term of this Lease (including
extensions) until the excess cost of the repair or replacement is amortized.
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The printed form of the Lease has been amended to delete certain
requirements for Tenant to maintain certain areas outside the Leased Premises
and not under the direct control of Tenant and the requirement for Tenant to
maintain, repair or replace glass inside and outside the Leased Premises. It
is the intent of the parties that Landlord shall perform maintenance outside
the Leased Premises and Landlord shall maintain glass inside and outside the
Leased Premises, but Tenant shall reimburse Landlord for the entire cost or
Tenant's Proportionate Share of the cost (as appropriate) for maintenance,
repair, or replacement of these items. Accordingly, Landlord and Tenant affirm
that, subject to the limits of the preceding paragraph Tenant shall pay the
entire cost (including any insurance deductibles) of repairs and maintenance
for items inside the Leased Premises (including glass items that exclusively
benefit Tenant and Tenant shall pay its Proportionate Share (again subject to
the preceding paragraph) of maintenance, repairs, or replacements of the areas
outside the Leased Premises. In the event that Landlord does not carry
insurance for plate glass, Tenant shall pay the uninsured cost of replacement
of glass both inside the Leased Premises and on the parameter of the Leased
Premises.
15. Letter of Credit: At the time Tenant enters into this Lease,
Tenant shall post an irrevocable commercial letter of credit in the amount of
two hundred fifty thousand dollars ($250,000.00) from a national bank
reasonably acceptable to Landlord in a form acceptable to Landlord in its sole
discretion. The letter of credit shall secure a portion of Tenant's
obligations under the terms of this Lease. Landlord may draw on the letter of
credit in full or in part in the event Tenant defaults under the terms of this
Lease or in the event the term of the letter of credit is less than thirty (30)
days and Tenant has not provided Landlord with a replacement letter of credit
in the same amount with a term of the lesser of one year or the remaining term
of this Lease. In the event of a default by Tenant Landlord shall specify the
estimated monetary amount for the default, and Landlord shall draw that amount
under the letter of credit. The letter of credit will provide for multiple
partial draws. The bank providing the letter of credit shall not question
Landlord's determination of the monetary value for the default. Landlord shall
return the letter of credit to Tenant at such time as all of the following have
occurred: (i) Tenant has reported net after tax income from operations during a
period of eight 8 consecutive quarters with a total of at least six million
dollars ($6,000,000.00), (ii) Tenant has cash and short term investments of not
less than eight million dollars ($8,000,000.00) in total, (iii) Tenant's ratio
of current assets divided by current liabilities is at least two and five
tenths (2.5), (iv) Tenant reports shareholders' equity of at least fifteen
million dollars ($15,000,000.00), (v) Tenant is not in default under the Lease
under Article 12, and (vi) Tenant has not been in default in the payment of
Base Monthly Rent or Additional Rent more than two (2) times in the immediately
preceding twelve (12) month period.
16. Option to Renew: Landlord hereby grants to Tenant one (1)
option to renew the Lease for an additional term of five (5) years (the
"Renewal Term") with the option commencing on the Lease Expiration Date (the
"First Renewal Commencement Date") and ending five (5) years thereafter (the
"First Renewal Expiration Date").
A. The lease of the Leased Premises for the Renewal Term
shall be on the same terms and conditions as set forth in the Lease, except:
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1. That the rental for the Leased Premises
during the Renewal Term shall be as set forth below in Paragraph 3, and
2. That the Security Deposit shall be increased
to the rental amount determined in Paragraph 3 (the "Increased Security
Deposit-Amount").
B. Tenant shall notify Landlord of Tenant's exercise of
its right to renew the Lease for the Renewal Term only by giving to Landlord
written notice not sooner than eight (8) months prior to the Renewal
Commencement Date and not later than six (6) months prior to the Renewal
Commencement Date (time is expressly of the essence to Landlord). Any
attempted exercise of this Option made other than within the time period stated
or in the manner stated shall be void and of no force or effect. In the event
that Tenant does not or is not entitled to exercise its option Tenant shall
have no further rights hereunder.
C. If Tenant shall have properly and timely exercised
its right to renew the term of the Lease, the term of the Lease shall be so
extended for the Renewal Term on the same terms and conditions contained in the
Lease; provided, however, the Base Monthly Rent for each month of the Renewal
Term shall be calculated as follows: The new Base Monthly Rent for the Renewal
Term shall be the greater of: (i) the Base Monthly Rent being paid by Tenant to
Landlord during the final full month of the final year of the initial Lease
Term, or (ii) the then Monthly Market Rental Rate for the Leased Premises.
D. The term "Then Monthly Market Rental Rate" shall be
determined by mutual agreement between Landlord and Tenant or, in the event
such agreement cannot be made within twenty (20) days from the date Tenant
shall have exercised this option, Landlord and Tenant shall each notify the
other of the appointment of a real estate appraiser with at least five (5)
years full-time commercial industrial appraisal experience in Santa Clara
County to appraise and determine the fair market monthly rental rate for the
Leased Premises, in their then existing condition for the use specified in the
Lease, to a qualified tenant ready, willing and able to lease the Leased
Premises for a term-equal to the Renewal Term.
In determining the Then Monthly Market Rental Rate, the parties shall
include any adjustments in monthly rental amounts then customary in the market
place and shall exclude from the opinion of rent the value of interior
improvements paid for and constructed by Tenant. The parties shall also take
into consideration any amounts then being paid by Tenant to amortize any
capital improvements performed by Landlord during the initial term of the
Lease.
If either party does not appoint an appraiser within twenty (20)
days after the other party has given notice of the name of its appraiser, the
other party can then apply to the President of the Santa Clara County Real
Estate Board or the presiding Judge of the Superior Court of that County for
the selection of a second appraiser who meets the qualifications stated above.
The failing party shall bear the cost of appointing the second appraiser and of
paying the second appraiser's fee. The two appraisers shall attempt to
establish the Then Monthly Market Rental Rate for the Leased Premises. If the
two appraisers are unable to agree on the Then Monthly Market Rental Rate for
the Leased Premises within twenty (20) days after the second appraiser has been
selected or appointed, then the two appraisers shall attempt to select a third
appraiser meeting the
51
qualifications stated above. If they fail to agree on a third appraiser,
either party can follow the above procedure for having an appraiser appointed
by the Real Estate Board or a judiciary. Each of the parties shall bear
one-half (1/2) of the cost of appointing the third appraiser and of paying the
third appraiser's fee. Unless the three appraisers are able to agree on the
Then Monthly Market Rental Rate for the Leased Premises within twenty (20) days
after the selection or appointment of the third appraiser, the two appraisal
amounts being calculated most closely together, after having discarded the
appraisal amount which most greatly varies from the other two appraisal
amounts, shall be added together then divided by two (2). The resulting rental
amount shall be defined as the Then Monthly Market Rental Rate for the Leased
Premises. In no event, however, shall the resulting Then Monthly Market Rental
Rate for the Renewal Term be less than the Base Monthly Rent paid during the
final full month of the initial Lease Term.
18. Right of First Refusal: Provided that Tenant is not in default
of the terms of this Lease pursuant to Article 12, then in the event that
during the Term of this Lease, or any extension period hereof, any of the
Building not leased to Tenant, should become available for lease, Landlord
thereby agrees to provide written notice thereof to Tenant, and Tenant shall
have a right of first refusal on such premises. Landlord shall give to Tenant
written notice of the terms upon which Landlord intends to lease the space to
another tenant. Tenant shall have seven (7) days from the date of said notice
to accept or reject Landlord's offer and, should Tenant fail to respond within
such period of time or refuse to lease the space, said offer shall be deemed
rejected. Upon rejection of Landlord's offer, expressly or by lapse of the
seven (7) day period, Landlord may proceed to rent said space to a third party
on terms not more favorable to the tenant than those offered to Tenant. In the
event Tenant accepts Landlord's offer, Tenant shall enter into a lease on the
terms contained in Landlord's offer and the other terms and conditions of this
Lease not inconsistent with said offered terms.
Exhibit C. If the Leased Premises are damaged or destroyed after
execution of this Lease but prior to the Lease Commencement Date, and if in the
reasonable opinion of Landlord's architect the Leased Premises cannot be
restored to the condition existing immediately prior to the destructive event
within nine (9) months following the Destructive event, Tenant may terminate
this Lease and Landlord shall pay to Tenant all sums previously paid by Tenant,
including without limitation, all amounts paid to Landlord for the construction
of the Tenant Improvements, provided, however, that Landlord shall retain any
amounts paid to a real estate broker for this transaction. The Tenant
Improvements shall be constructed in accordance with all Laws and the plan
attached hereto as Exhibit "B". Upon completion, the Tenant Improvements shall
comply with the approved plans therefore. Landlord shall use all reasonable
efforts to substantially complete the Tenant Improvements as soon as reasonably
possible.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Addendum To Lease with the intent, to be legally bound thereby, to be effective
as of the date the second party signs this First Addendum To Lease.
AS LANDLORD AS TENANT
Renco Associates Weitek Corporation
a California partnership a California corporation
52
By: By:
Title: Partner Title:
By: Date:
Title: Partner
Dated:
53
EXHIBIT "C"
TENANT IMPROVEMENT AGREEMENT
INTERIOR ALLOWANCE
Design and Construction of Improvements in and about the Leased
Premises ("Tenant Improvements ): Landlord agrees to construct within, under,
and above the building housing the Leased Promises certain "Tenant Improvements"
(or "Interior Improvements) as described in Exhibit "B" and as set forth in this
Exhibit "C" in accordance with the schedule described herein. The Tenant
Improvements shall be similar in type and quality to the general purpose
interior improvements previously installed by Landlord in the building. Landlord
shall install interior finishes including carpet, paint, tile, acoustical tile
ceiling, floor and wall cover, doors and hardware all with a quality and color
similar to those previously installed in the building. Subject to Landlord's
reasonable approval Tenant shall have the flexibility to design a floor plan
that suits Tenant's needs so long as Tenant's plan preserves the general purpose
nature of the building.
The term "general purpose improvements" is intended to mean those
improvements (and, the configuration of such improvements) that can be used by
a majority of users who have or are likely to locate in Landlord's building and
includes all the Tenant Improvements specifically shown on Exhibit B attached
hereto. Special purpose improvements include but are not limited to the
following: raised computer floors, compressed air systems, gas or liquid
distribution systems, haylon fire extinguishing systems, excess or redundant
HVAC equipment or distribution systems, flammable or solvent storage or waste
systems, special electrical systems (anything other than duplex plugs on office
walls), lighting levels in excess of Title 24 limitations, redundant or backup
electrical power, telephone systems, alarm systems, public address systems,
fire sprinkler monitoring equipment, computer cabling, burn in rooms, sound
insulated rooms, plumbing other than for domestic use, special cabinetry, clean
rooms, window covering, moveable partitions, equipment used in eating or food
handling facilities, materials (or the arrangement of materials) that are
unique to one segment of users (such as semiconductor manufacturers), the
connection of Tenant's equipment to building HVAC, electric, or plumbing
systems ("fit up"), and the like. Subject to Landlord's approval, Tenant at
its sole cost and expense shall install all required improvements and fixtures
to provide for any Hazardous Materials.
Landlord shall pay for the cost of general purpose Tenant improvements
up to a maximum of three hundred thousand dollars ($300,000.00), the
"Allowance". The Allowance shall have two components. An amount not to exceed
two hundred forty thousand dollars ($240,000.00) may be used for general
purpose interior improvements An amount not to exceed sixty thousand dollars
($60,000.00) may be used to construct a new entry at the front (east) side of
the building. If Tenant elects not to have Landlord construct an entrance on
the east side of the building, Landlord will make available a total of ten
thousand dollars ($10,000.00) from the component of the Allowance for the entry
to construct alterations to the existing entry on the south side of the
building. In no event shall Landlord be required to spend more than two
hundred forty thousand dollars ($240,00.00) for the cost of interior
improvements nor more than sixty thousand dollars ($60,000.00) for an entry on
the east side, nor more than ten thousand dollars ($10,000.00) for an entry on
the south side of the building. Landlord
54
shall not be required to construct both a new entry on the east and remodel the
existing entry on the south side. The allowance for the cost of construction
of interior improvements shall also be used to pay the cost to split the
building for use by two tenants which costs shall include the cost of a
demising wall, and the cost to separately meter gas and electric service and
the cost to split the existing HVAC and electrical systems for use by two
tenants.
Tenant agrees to pay the entire cost of Tenant Improvements in excess
of the Allowance. In the event that the actual cost of construction of
Interior Improvements is less than the Allowance, the Base Monthly Rent payable
by Tenant shall be reduced by an amount equal to eight tenths of one percent
(0.8%) times the amount of the difference between the amount of the Allowance
and the amount actually spent by Landlord.
After the adjustment to Base Monthly Rent becomes ascertainable,
Landlord and Tenant shall specify the same in writing by attaching an amendment
to this Lease. In the event the cost of any Tenant Improvements approved by
Tenant in accordance with this Agreement exceeds the Allowance as provided
above, Tenant shall pay such excess amount within five (5) days of receipt of a
written statement from Landlord therefore. Landlord may require Tenant to pay
such excess amount prior to, and as a condition of, the commencement of
construction of the improvements. If at any time during the design or
construction of Tenant Improvements Tenant requests changes in the scope of
Tenant Improvements which changes increase the cost of the work above what
Landlord has agreed to spend, then Tenant shall pay to Landlord Tenant's share
of the cost of improvements above the Allowance, and Tenant shall pay the
amount due within five (5) days from receipt of a written statement from
Landlord. All amounts due from Tenant as provided herein shall be considered
as "rent" and all amounts due shall be subject to the terms of the Lease. In
the event that Tenant fails to make any payment within the required time
period, Tenant shall pay interest and late charges on the delinquent amount in
accordance with Section 3 of the Lease. In addition, should any amounts not be
paid when due, Landlord may suspend the construction of Interior Improvements
until said amounts have been paid. Each day that Tenant is late in its
payments as provided herein shall be a Delay Day.
(a) Tenant's Schematic Plan: Landlord's architect has
prepared a Schematic Plan for construction of the improvements which plan is
approved by Landlord and Tenant and is attached hereto as Exhibit "B".
(b) Construction Drawings for the Tenant Improvements
("Construction Drawings"): Landlord's Architect shall prepare Construction
Drawings based on the approved Schematic Plan and deliver to Tenant the
Construction Drawings which reflect the requirements of the approved Schematic
Plan. Within five (5) days from receipt of the Construction Drawings, Tenant
shall review the Construction Drawings and deliver any proposed changes to
Landlord. If Tenant does not deliver to Landlord any proposed changes to the
Construction Drawings within such five (5) day period, Tenant shall be deemed
to have approved the Construction Drawings as submitted. If Tenant does
deliver to Landlord any proposed changes to the Construction Drawings within
such five (5) day period, the parties shall thereupon endeavor to agree upon
the changes to be made to the Construction Drawings. When Landlord and Tenant
agree upon the Construction Drawings, a representative of each party shall sign
the same. Any changes in the Construction Drawings shall only be made pursuant
to the provisions of subsection (d) of this Exhibit "C". If the parties are
unable to agree
55
upon the Construction Drawings within five (5) days after Tenant delivers its
proposed changes to Landlord, Landlord may terminate this Lease, and upon
termination Landlord shall refund to Tenant all amounts previously paid to
Landlord (except such amounts that the parties have elsewhere agreed are
non-refundable for other reasons) after first deducting therefrom Landlord's
costs for brokerage commissions, legal fees, architect's fees, and other third
party costs in connection with the preparation of the Lease, the design and/or
construction of Tenant Improvements, and other costs related to the transaction
with Tenant. In the event that Tenant's deposits are not sufficient to pay
Landlord's actual third party costs, Tenant shall pay to Landlord the amount by
which Tenant's deposits are not sufficient to cover Landlord's third party
costs. Notwithstanding anything above to the contrary, each party agrees to
approve the Construction Drawings to the extent that they are prepared in
accordance with the Approved Schematic Plan.
(c) Time for Construction of Tenant Improvements:
Promptly following approval of the Construction Drawings by Landlord and
Tenant, Landlord shall apply for and use its best efforts to obtain the
necessary building permits to allow the construction of the Tenant
Improvements. Promptly following the issuance of the necessary building
permits, Landlord shall commence construction of the Tenant Improvements and
shall use its best efforts to complete the improvements within thirty (30) days
following the issuance of the necessary building permits; provided , however,
that Landlord shall be excused for a delay in the completion of construction of
the Tenant Improvements for such period of time as construction is delayed
because of any fault or neglect of Tenant, because of changes requested by
Tenant, because of any law, regulation, ordinance, or order of any public
agency, or because of acts of God, labor disputes, strikes, inability to obtain
materials or labor, fires, floods, inclement weather, earthquakes, epidemics,
quarantine, restrictions, freight embargoes, acts of public agencies, or other
causes or contingencies beyond the control of Landlord.
(d) Changes, Delays: The design and construction process
specified above is intended to assist Tenant in the definition of its
improvements so that the drawings can be completed as quickly as possible and,
once the drawings are complete, the work may progress without interruption and
be completed and ready for occupancy by Tenant at the soonest possible date.
Despite the best efforts of both parties, Landlord recognizes that Tenant, for
its own reasons, may want to delay providing its Conceptual Plan, alter or
delay the approval of the Schematic Plan or the Construction Drawings, or
otherwise delay the design, approval, construction, and/or completion of the
Tenant Improvements. Landlord and Tenant agree on the need to establish a
procedure to make such changes or permit such delays so that Tenant may obtain
the improvements it desires and Landlord may be compensated for the cost it
incurs either through delays or as the result of additional costs incurred
because of changes required by Tenant. In consideration of the above, Landlord
and Tenant agree as follows:
If Tenant falls to pay funds due pursuant to the terms of this
Exhibit, fails to deliver Tenant's Conceptual Plan (or any other information
requested by Landlord) by the date specified above (or if no date is specified
then within five (5) days following request by Landlord), or fails to approve
the Schematic Plan or the Construction Drawings within the time provided for
such approval, or otherwise delays the construction of the Tenant Improvements,
then Tenant shall be charged a Delay Day (as defined below) for each day that
the payment, design,
56
construction, approval, or completion of Tenant Improvements is so delayed or
postponed. If Tenant after its initial approval of Construction Drawings
delivers any proposed change to the Construction Drawings which in Landlord's
reasonable judgment would delay completion of construction of the Tenant
Improvements as indicated in the Construction Drawings prepared by Landlord's
Architect, Landlord may require Tenant, at Tenant's election, to either (a)
agree to accept a Delay Day for each day that Landlord reasonably believes that
the design, approval, construction, or completion of the improvements shall be
delayed, or (b) delete such proposed change. If Tenant fails to deliver its
written agreement pursuant to (1) above within two (2) days after Landlord
notifies Tenant of the fact that such proposed change will result in a delay in
construction, Tenant shall be deemed to have elected to delete the proposed
change.
Tenant shall be solely responsible for the design, approval, and
payment of the costs of construction of any and all work, fixtures, or
materials required for Tenant's transportation, storage, use, and disposal of
Hazardous Materials, which Hazardous Materials shall only enter the Property or
any portion thereof pursuant to the terms of the Lease. Tenant shall also be
solely responsible for the design, approval, and payment of the costs of
construction for any and all work, fixtures, or materials required for the
handling, service, or provision of food on the Premises and the monitoring of
the fire sprinkler system serving the Premises. Landlord's work is limited to
the construction of building components as shown on Construction Drawings
approved by Landlord and Tenant. Landlord's work (and the funds that Landlord
has agreed to spend) specifically exclude any and all fees charged by
governmental agencies for Tenants use of Hazardous Materials or Tenants service
of food which fees include but are not limited to: sewer or sanitary district
fees, health department fees, air quality fees, excess water usage fees, and
the like. Any and all such fees shall be paid by Tenant to the appropriate
governmental agency. In the event that the design, approval, construction, or
completion of any work to be performed by Landlord is delayed directly or
indirectly for any reason as a result of (i) Tenant's use of Hazardous
Materials, (ii) Tenant's handling or intention to handle food or provide food
service, or (iii) Tenant's failure to provide a fire sprinkler monitoring
system that satisfies governmental regulations, then Tenant shall be charged a
Delay Day for each and every day that the specification, design, approval,
construction, or completion of Landlord's work is delayed.
(e) Delay Days Defined: A Delay Day is each and every
single day that Tenant is late in providing any funds required pursuant to the
terms of this Exhibit, or providing any information requested by Landlord or
required to be provided to Landlord by the terms of this Exhibit. Where no
time or date is specified for any information requested of Tenant by Landlord,
then the required time period shall be five (5) days from Landlord's request
for information. A Delay Day shall also be each and every day that Tenant
through its actions, interference, or otherwise delays the approval,
specification, design, construction, or completion of Interior Improvements.
For the purposes of this section, any information requested of Tenant by any of
Landlord's consultants, contractors, subcontractors, architects, or agents
shall be the same as if it were requested directly by Landlord. The sum of all
such Delay Days shall be the "Total Delay Days".
(f) Acceleration of Lease Commencement Date: The Lease
Commencement Date shall be accelerated by one (1) day for each and every Tenant
57
caused Delay Day so that Landlord shall cause the Base Monthly Rent and
Additional Rent to commence prior to the completion of construction of the
Tenant Improvements. The Lease Commencement Date shall occur on that date
which precedes the date that the Leased Premises are actually Ready for
Occupancy by the Total Delay Days.
(g) Cost of Tenant Improvements: As used in the Lease
and the Lease Exhibits, the "Cost of Tenant Improvements" shall include all
costs paid or incurred by Landlord in connection with the design, approval,
and/or construction of the Tenant Improvements (or any improvements) as shown
on the Construction Drawings (as they may be amended), including but not
limited to:
(1) The fees of architects, engineers,
consultants, utility companies, or governmental agencies for the design,
supervision, construction or approval of improvements or alterations to the
basic Building, which improvements or alterations are requested by Tenant or
required by Tenant's use,
(2) The costs and charges by Landlord's general
contractor, subcontractors, material suppliers, labors, and employees who
provide goods and services for the actual construction of Tenant's Improvements
or Building alterations requested or required by Tenant for its use of the
Leased Premises. In the event that Landlord (or an affiliate of Landlord) acts
as a general contractor or subcontractor, Landlord may charge all of its direct
costs as well as a construction management fee, profit, and/or overhead, which
charge shall equal eight percent (8%) times the total cost of the work.
(3) Direct costs of procuring and installing the
improvements or items required for Tenant's use of the Leased Premises
including, but not limited to: building permits (but excluding the cost of the
"shell" building permit), inspections, filings, taxes, governmental fees; any
installation, connection or service fees required to provide utility service to
the Building or into the Leased Premises (such costs to be prorated where
required based on Tenant's floor area), the cost of utility service or security
service, or any service or material provided to the Building during the
construction of Tenant Improvements,
(4) Costs of cleaning the Building during the
course of construction of the improvements,
(5) Costs of performance or payment bond
premiums,
(6) All other costs and expenses incurred by
Landlord in connection with such construction.
EXHIBIT D
ACCEPTANCE AGREEMENT
This Acceptance Agreement is made as of _______, 1994, by and between
the parties hereto with regard to that Lease dated __________, 1994, by and
between ___________, a California general partnership, as Landlord
58
("Landlord"), and ____________, a _________ corporation, as Tenant ("Tenant"),
affecting those premises commonly known as __________, located at ___________
in the City of __________, State of California ("the Premises"). The parties
agree as follows:
1. All improvements required to be constructed by Landlord by the
Lease have been completed in accordance with the terms of the Lease and are
hereby accepted by Tenant, subject to the completion of punchlist items
identified on Exhibit A attached hereto.
2. Possession of the Premises has been delivered to Tenant and
Tenant has accepted and taken possession of the Premises.
3. The Lease Commencement Date is ________, 1994.
4. The Lease Term shall expire on ________, 19__, unless sooner
terminated according to the terms of the Lease or by mutual agreement.
5. The Base Monthly Rent due pursuant to the Lease is as follows:
___________ thru __________ __________
___________ thru __________ __________
___________ thru __________ __________
6. Landlord has received a Security Deposit in the amount of
______ Dollars ($___________).
7. Landlord has received Prepaid Rent in the amount of _______
Dollars ($___________), which shall be applied to the first installment(s) of
Base Monthly Rent.
8. The Lease is in full force and effect, neither party is in
default of its obligations under the Lease, and Tenant has no setoffs, claims,
or defenses to the enforcement of the Lease.
AS LANDLORD: AS TENANT:
a California general partnership a __________ corporation
By: By:
Title: General Partner Title:
59
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE ("Amendment") dated for reference
purposes as of February 5, 1996 is made to that Industrial Space Lease dated as
of November 9, 1995, (the "Lease") by and between Weitek Corporation, a
California Corporation as ("Tenant"), and Renco Associates, a California
general partnership as ("Landlord"), for the lease of space located at 2801
Orchard Parkway in San Jose, California (the "Leased Promises"). The parties
hereto agree that the Lease is amended, changed and modified by the following
provisions, which are hereby added to the Lease:
Unless otherwise expressly provided herein, all terms which are given
a special definition by the Lease that are used herein are intended to be used
with the definition given to them by the Lease. The provisions of the Lease
shall remain in full force and effect except as specifically amended hereby.
In the event of any inconsistency between the Lease and this Amendment, the
terms of this Amendment shall prevail.
1.1 E Lease Commencement Date: The Actual Lease Commencement Date is January
22, 1996.
1.1 T. Base Monthly Rent: As a result of cost savings in the construction of
interior improvements the Base Monthly Rent is hereby reduced by the
amount of $156.00 per month for each month or the Lease Term. The
Base Monthly Rent shall be as follows:
Thirty-two thousand nine hundred fifty-six dollars and no cents
($32,956.00) for each of the first thirty four (34) months of the
Lease Term. Pursuant to the terms of the Lease, the Base Monthly Rent
shall be increased pursuant to section 1.lT of the Addendum at the end
of the thirty fourth (34th) month of the Lease Term.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Amendment To Lease with the intent to be legally bound thereby, to be
effective as of the date the second party signs this First Amendment
To Lease.
AS LANDLORD: AS TENANT:
Renco Associates Weitek Corporation
a California general partnership a California corporation
By: By:
Title: General Partner Title:
By: By:
Title: Title:
Dated: February 13, 1996 Dated: February 7, 1996