LEASE
BY AND BETWEEN
W. F. BATTON & CO., INC., LESSOR
AND
NOVELLUS SYSTEMS, INC., LESSEE
Northpointe Business Center
3590 North First Street
San Jose, California
September 26, 1995
TABLE OF CONTENTS
PARAGRAPH PAGE
1 Hiring . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 Initial Term . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 Option to Extend . . . . . . . . . . . . . . . . . . . . . . . 3
4 Security Deposit . . . . . . . . . . . . . . . . . . . . . . . 3
5 Monthly Base Rent. . . . . . . . . . . . . . . . . . . . . . . 4
6 Additional Rent; Increases in Operating Expenses and Taxes . . 7
7 Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . .12
8 Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
9 Hazardous Materials. . . . . . . . . . . . . . . . . . . . . .13
10 Taxes on Lessee's Property . . . . . . . . . . . . . . . . . .14
11 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . .15
12 Indemnification. . . . . . . . . . . . . . . . . . . . . . . .16
13 Construction of Leasehold Improvements . . . . . . . . . . . .16
14 Maintenance and Repairs; Alterations . . . . . . . . . . . . .17
15 Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . .19
16 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
17 Assignment and Subletting. . . . . . . . . . . . . . . . . . .20
18 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
19 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . .23
20 Damage or Destruction. . . . . . . . . . . . . . . . . . . . .24
21 Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . .26
22 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . .27
23 Lessee's Personal Property . . . . . . . . . . . . . . . . . .28
24 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .28
25 Estoppel Certificate . . . . . . . . . . . . . . . . . . . . .29
26 Parking . . . . . . . . . . . . . . . . . . . . . . . . . . 29
27 Real Estate Brokers. . . . . . . . . . . . . . . . . . . . . .29
28 Expansion Space. . . . . . . . . . . . . . . . . . . . . . . .29
29 Subordination. . . . . . . . . . . . . . . . . . . . . . . . .30
30 No Termination Right . . . . . . . . . . . . . . . . . . . . .30
31 Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . .30
32 Lessor's Entry . . . . . . . . . . . . . . . . . . . . . . . .31
33 Reasonable Expenditures. . . . . . . . . . . . . . . . . . . .31
34 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . .31
35 General Provisions . . . . . . . . . . . . . . . . . . . . . .31
SCHEDULE OF EXHIBITS
Exhibit "A" - Legal Description
Exhibit "B" - the Premises
Exhibit "C" - Leasehold Improvements
L E A S E
THIS LEASE is made and entered into as of September 26, 1995 by and between
W. F. BATTON & CO., INC., a California corporation, hereafter referred to as
"Lessor," and NOVELLUS SYSTEMS, INC., a California corporation, hereafter
referred to as "Lessee."
The parties agree as follows:
1. HIRING.
(a) Lessor hereby leases to Lessee, and Lessee leases and hires from
Lessor, those certain premises consisting of approximately Six Thousand Two
Hundred Sixty-eight (6,268) rentable square feet (the "premises") located on the
third floor of that certain building commonly known as Northpointe Business
Center, 3590 North First Street, San Jose, California (the "Building"). This
Lease shall be for the term, at the rental, and upon the covenants and
conditions contained herein. The building is located on Parcel One of the real
property described on EXHIBIT "A" attached hereto and incorporated by reference
herein. The premises are shown as the shaded area on EXHIBIT "B" attached
hereto and incorporated by reference herein.
(b) The Building contains Eighty-six Thousand Seven Hundred Thirteen
(86,713) rentable square feet.
(c) The real property referred to above, including the Hetch Hetchy
Lease area used for additional parking area for the tenants of the Building,
together with the Building and all other improvements now or hereafter located
on said real property, are hereafter called the "Complex."
(d) The portion of the real property referred to above not covered by
the Building is hereafter called the "Outside Areas."
(e) "Lessee's Share" as used in this Lease shall mean the percentage
calculated by dividing the total number of rentable square feet of the premises
by the total number of rentable square feet in the Building. The parties agree
that Lessee's Share shall be 7.23% based upon the premises consisting of
approximately Six Thousand Two Hundred Sixty-eight (6,268) rentable square feet
(6,268/86,713).
2. INITIAL TERM,
(a) The initial term of this Lease (the "initial term") shall
commence (the "Commencement Date") five (5) days after written notice from
Lessor to Lessee of the first to occur of (1) the date a notice of completion
for the Lessee Interior Improvements constructed by Lessor is filed by Lessor;
or (2) the date the City of San Jose completes a final inspection and approves
the Lessee Interior Improvements so completed in accordance with the building
permit; or (3) the date Lessor's architect and general contractor have both
certified in writing to Lessee that the Lessee Interior Improvements have been
substantially completed in accordance with the plans; or (4) the date on which
the Lessee occupies the premises. The parties shall cooperate in attempting to
cause the Lessee Interior Improvements to be completed on or about October 15,
1995. Lessee agrees to accept possession of the premises and to occupy the
premises when possession is delivered by Lessor, provided that the Lessee
Interior Improvements have been substantially completed by Lessor. The initial
term of this Lease shall expire, unless sooner terminated, on the last day of
the sixtieth (60th) full calendar month after the Commencement Date.
(b) If Lessor is unable to deliver possession of the premises to
Lessee pursuant to Paragraph 2(a) by October 15, 1995 for any reason, Lessor
shall not be liable for any damage to Lessee caused by the delay in delivering
possession, and this Lease shall not be void or voidable nor shall Lessee be
relieved of any obligation hereunder; provided, that, unless Lessee agrees in
writing, in no event shall Lessor deliver possession of the premises after
November 30, 1995 plus the period equal to any delays in completing the Lessee
Interior Improvements caused by Lessee or caused by strikes, labor disputes or
work stoppages, unavailability or delay in delivery of materials, inclement
weather, acts of God, or other causes beyond Lessor's control (collectively,
"excusable delays"). In the event that Lessor has not delivered possession of
the premises to Lessee by November 30, 1995, plus the period of excusable
delays, Lessee may terminate this Lease by giving written notice to Lessor
within thirty (30) days thereafter. Upon such termination, Lessor and Lessee
shall be discharged from all obligations hereunder, and Lessor shall return
within ten (10) days of receipt of such notice of termination any and all money
previously deposited by Lessee in connection herewith. In the event that
delivery of possession of the premises is delayed beyond November 30, 1995 by
excusable delays, Lessor, in addition to all other rights and remedies, may in
its discretion extend the Commencement Date of this Lease by the period of such
delay (including beyond November 30, 1995).
(c) Lessee's acceptance of the premises shall not be deemed a waiver
of Lessee's right to have defects in the Lessee Interior Improvements or the
premises repaired at Lessor's sole expense during the first twelve (12) months
of the initial term. Lessee shall give written notice to Lessor whenever any
such defect becomes reasonably apparent, and
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provided that such written notice is given to Lessor within twelve (12) months
after the Commencement Date, Lessor shall repair such defect as soon as
practicable. Lessor also hereby assigns to Lessee all warranties with respect to
the premises which would reduce Lessee's maintenance obligations hereunder and
Lessor shall cooperate with Lessee to enforce all such warranties.
3. OPTION TO EXTEND. Lessor hereby grants to Lessee one (1) option to
extend the lease term for one (1) period of thirty-six (36) calendar months
immediately following the expiration of the initial lease term. Lessee may
exercise the foregoing option to extend by giving written notice of exercise to
Lessor at least six (6) months, but not more than twelve (12) months prior to
the expiration of the initial term; provided that if Lessee is currently in
default under this Lease at the time of exercise of the option, such notice
shall be void and of no force or effect. The option extension period, if
exercised, shall be upon the same terms and conditions as the initial term,
except that the Monthly Base Rent during the option period shall be determined
as set forth in Paragraphs 5(d) and 5(e) below, and there shall be no additional
option to extend. The option to extend granted to Lessee by this Paragraph 3 is
granted for Lessee's personal benefit only, and shall be exercisable only by
Novellus Systems, Inc. Said option may not be assigned or transferred by
Novellus Systems, Inc. to any assignee or sublessee. Notwithstanding anything
to the contrary contained above, Lessee shall be entitled to transfer the option
to extend granted by this Paragraph 3 pursuant to a permitted transfer without
Lessor's prior written consent as set forth in Paragraph 17(i) hereof.
4. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution
hereof the sum of Fifteen Thousand Dollars ($15,000) as a security deposit as
security for Lessee's faithful performance of Lessee's obligations under this
Lease. If Lessee fails to pay Monthly Base Rent, Additional Rent, or other
charges due hereunder, or otherwise defaults under this Lease (as default is
defined in Paragraph 22), Lessor may use, apply or retain all or any portion of
the security deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, cost, expense, loss or damage (including
reasonable attorneys' fees) which Lessor may suffer or incur by reason thereof.
If Lessor uses or applies all or any portion of the security deposit, Lessee
shall within ten (10) days after written request therefor deposit moneys with
Lessor sufficient to restore the security deposit to the full amount required by
this Lease. Lessor shall not be required to keep all or any part, of the
security deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the premises, return to Lessee (or, at Lessee's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the security
deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the security deposit shall be considered to be
held in trust, to
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bear interest or other increment of its use, or to be prepayment for any moneys
to be paid by lessee under this lease.
5. MONTHLY BASE RENT.
(a) Lessee shall pay to lessor for each full calendar month during
the initial thirty (30) calendar months of the lease term, plus the partial
month if any at the commencement of the lease term, Monthly Base Rent of Ten
Thousand Six Hundred Fifty-Five and Sixty Hundredths Dollars ($10,655.60) per
month. Upon the execution and delivery of this lease by Lessor and Lessee,
Lessee shall pay to Lessor the sum of Ten Thousand Six Hundred Fifty-five and
Sixty Hundredths Dollars ($10,655.60) representing the Monthly Base Rent for the
first month of the lease term. Monthly Base Rent for any partial calendar month
at the commencement of the lease term shall be payable at the rate of Three
Hundred Fifty-five and Sixty Hundredths Dollars ($355.18) per day.
(b) Lessee shall pay to Lessor for each calendar month during the
period beginning with the thirty-first (31st) full calendar month of the lease
term and continuing through the Sixtieth (60th) full calendar month of the lease
term, Monthly Base Rent of Eleven Thousand Five Hundred Thirty-three and Twelve
Hundredths Dollars ($11,533.12) per month.
(c) Monthly Base Rent is determined on a full service basis and
includes the Base Operating Expenses (including standard electrical service) and
Base Taxes referred to in Paragraph 6(b) hereof.
(d) The Monthly Base Rent for the premises during the option
extension period shall be an amount equal to the then existing fair market rent
of the premises as of the commencement date of the option extension period ("The
Option Monthly Base Rent"), but in no event shall the Option Monthly Base Rent
be less than the Monthly Base Rent in effect for the last month of the initial
lease term. The fair market rent for the premises for the option extension
period shall be determined by comparison with comparables (including typical
market concessions) for similar class "A" buildings in the Santa Clara area.
Said Option Monthly Base Rent for the option extension period shall be
established by agreement between the Lessor and Lessee, if possible, and by the
process of appraisal if the parties cannot reach agreement.
At least six (6) months, but not more than twelve (12) months, prior
to the expiration of the initial lease term, Lessee shall deliver notice to
Lessor of Lessee's determination of the ammount of the fair market Monthly Base
Rent of the premises as of the commencement of the option term, which shall in
no event be less than the Monthly Base
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Rent in effect at the expiration of the initial term; provided that, in the
event Lessee has no intention of exercising the option to extend the lease term,
then Lessee shall have no obligation to deliver notice to Lessor of Lessee's
determination. If Lessor disagrees with Lessee's determination of the amount of
the fair market Monthly Base Rent of the premises, Lessor shall so notify Lessee
within thirty (30) days after Lessor receives Lessee's notice of exercise of the
option to extend the lease term.
In the event that Lessee timely gives notice to Lessor of Lessee's
election to exercise the option to extend the lease term and Lessor does not
give Lessee notice in writing that Lessor disagrees with Lessee's determination
of fair market rent within the time period referred to above, Lessor and Lessee
shall execute an amendment to this Lease stating that the initial Monthly Base
Rent for the premises during the option extension period shall be equal to the
amount of Lessee's determination.
If Lessor notifies Lessee that Lessor disagrees with Lessee's
determination of the fair market rent for the premises within thirty (30) days
after Lessor receives Lessee's notice of exercise of option, then the two
parties shall confer for an additional period of ten (10) days to attempt in
good faith to reach agreement upon the fair market rent for the premises.
If after the expiration of said additional ten (10) day period the
parties have not reached a written agreement as to the amount of the fair market
rent for the premises, then such fair market rent shall be determined by
appraisal as provided in subparagraph (e) below, subject to the condition that
the Monthly Base Rent for the option extension period shall not be less than the
Monthly Base Rent in effect at the expiration of the initial term.
(e) If it becomes necessary to determine by appraisal the fair market
Monthly Base Rent for the premises as of the commencement of the option term,
real estate appraiser(s), each of whom shall be members of the American
Institute of Real Estate Appraisers (AIREA), with at least five (5) years' full-
time commercial real estate appraisal experience in the San Jose, California
Area, shall be appointed and shall act in accordance with the procedures set
forth below.
Either party may demand an appraisal by giving written notice to the
other party, which demand to be effective must state the name, address, and
qualifications of an appraiser selected by the party demanding an appraisal (the
"Notifying Party"). Within ten (10) days following the Notifying Party's
appraisal demand, the other party (the "Non-Notifying Party") shall either
approve the appraiser selected by the notifying party or select a second
properly qualified appraiser by giving written notice of the name, address, and
qualification of said appraiser to the Notifying Party. If the Non-Notifying
Party fails
5
to select an appraiser within the ten (10) day period, the appraiser selected by
the Notifying Party shall be deemed selected by both parties and no other
appraiser shall be selected. If two appraisers are selected, they shall select
a third appropriately qualified appraiser within five (5) days of being
selected. If the two appraisers fail to select a third qualified appraiser
within such five (5) day period, then the third appraiser shall be appointed by
the then Presiding Judge of the Superior Court of Santa Clara County.
If only one appraiser is selected, that appraiser shall notify
the parties in simple letter form of its determination of the fair market
Monthly Base Rent for the premises within fifteen (15) days following his
selection, which appraisal shall be conclusively determinative and binding on
the parties as the appraised current fair market rental for the premises.
If multiple appraisers are selected, each appraiser shall within
ten (10) days of being selected make his determination of the current fair
market Monthly Base Rent for the premises in simple letter form. If two (2) or
more of the appraisers agree on the rent for the premises, such agreement shall
be determinative and binding upon the parties. If multiple appraisers are
selected and two (2) appraisers are unable to agree on the rent, the parties
shall then determine the fair market Monthly Base Rent for the premises by
taking the mean average of the appraisals; provided, that any high or low
appraisal, differing from the middle appraisal by more than ten percent (10%) of
the middle appraisal, shall be disregarded in calculating the average.
The appraisers' determination of the current fair market Monthly
Base Rent of the premises shall be based on the criteria refeffed to in
Paragraph 5(d)(1) above.
If only one appraiser is selected, then each party shall pay one-
half of the fees and expenses of that appraiser. If three appraisers are
selected, each party shall bear the fees and expenses of the appraiser it
selects and one-half of the fees and expenses of the third appraiser.
Thereafter, in the event that Lessee timely gives notice to
Lessor to extend the term of this Lease to include the option extension period,
Lessor and Lessee shall execute an amendment to this Lease stating that the
Monthly Base Rent for the premises during the option extension period shall be
equal to the greater of (1) the Monthly Base Rent as determined by appraisal;
or (2) the Monthly Base Rent in effect at the expiration of the initial term.
6
6. ADDITIONAL RENT: INCREASES IN OPERATING EXPENSES AND TAXES.
(a) If Operating Expenses and/or Taxes for any calendar year
during the term of this Lease after the calendar year 1996 exceed Base Operating
Expenses and/or Base Taxes as defined in Paragraph 6(d) hereof, Lessee shall pay
to Lessor, as "Additional Rent," Lessee's Share of such increase in Operating
Expenses and Taxes in accordance with Paragraph 6(f) hereof.
(b) "Base Operating Expenses" and "Base Taxes" shall mean the
actual Operating Expenses and Taxes of the Complex for the calendar year 1996,
adjusted to reflect a ninety-five percent (95%) occupancy rate of the Complex
throughout such year.
(c) "Operating Expenses," as used herein, shall include all
direct costs of management, operation, maintenance, repair and replacement, of
the Complex and providing services to tenants of the Building as determined by
standard accounting practices (unless excluded by this Lease) including, but not
limited to:
Personal property taxes related to the Complex; fees and
assessments payable to Northpointe Business Park Association; rental and other
charges for the Hetch Hetchy lease which is used as additional parking area for
the Complex; any parking taxes or levies; a pro rata portion of the salaries and
wages of all employees of Lessor engaged in the operation and administration of
the Complex, in an aggregate amount not to exceed the amount of five percent
(5%) of the total of all other monthly Operating Expenses exclusive of such
amount of salaries and wages; water and sewer charges; waste disposal; insurance
premiums for insurance coverages maintained by Lessor pursuant to Paragraph 11
(b) hereof; license, permit, and inspection fees; charges for electricity,
heating, air conditioning, gas, and any other utilities (including, without
limitation, any temporary or permanent utility surcharge or other exaction);
security; janitorial services and maintenance contracts; painting and repairing,
interior and exterior; maintenance and replacement of floor and window
coverings; repair, maintenance, and replacement of air-conditioning, heating,
mechanical and electrical systems, elevators, plumbing and sewage systems;
landscaping and gardening of Outside Areas; glazing; repair, maintenance,
cleaning, sweeping, striping, and resurfacing of the parking area; supplies,
materials, equipment and tools in the maintenance of the Complex; costs for
accounting services incurred in the calculation of Operating Expenses and Taxes
and Lessee's Share thereof as defined herein; and the cost of any other capital
expenditures for any improvements or changes to the Building which are required
by laws, ordinances, or other governmental regulations adopted after the
Commencement Date or for any items which are intended to and have the effect of
reducing Operating Expenses; provided, however, that in the event Lessor makes
such capital improvements, Lessor shall amortize its investment in said
improvements (together with interest on the unamortized
7
balance at the rate equal to the effective rate of interest on Lessor's bank
line of credit at the time of completion of said improvements, but in no event
in excess of ten percent (10%) per annum) as an Operating Expense in accordance
with standard accounting practices, except that with respect to capital
improvements made to save Operating Expenses such amortization shall not be at a
rate greater than the anticipated savings in Operating Expenses. Operating
Expenses shall also include any other expense or charge, whether or not
described herein not specifically excluded by other provisions of this Lease,
which in accordance with generally accepted accounting and management practices
would be considered an expense of managing, operating, maintaining, and
repairing the Complex.
(d) Real property taxes and assessments upon the Complex, during
each lease year or partial lease year during the term of this Lease are
referred to herein as "Taxes."
As used herein, "Taxes" shall mean:
(1) all real estate taxes, assessments and any other taxes
levied or assessed against the Complex including the underlying realty, the
Building, all improvements located thereon, and the Hetch Hetchy Lease area
(together with any increase in Taxes resulting from a reassessment following any
transfer of ownership of the Complex); and
(2) all other taxes which may be levied in lieu of real
estate taxes, assessments, and other fees, charges, and levies, general and
special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind
and nature by any authority having the direct or indirect power to tax,
including without limitation any governmental authority or any improvement or
other district or division thereof, for public improvements, services, benefits,
or environmental matters which are assessed, levied, confirmed, imposed, or
become a lien (i) upon the Complex, and/or any legal or equitable interest of
Lessor in any part thereof; or (ii) upon this transaction or any document to
which Lessee is a party creating or transferring any interest in the premises;
and (iii) any tax or excise, however described, imposed in addition to, or in
substitution partially or totally of, any tax previously included within the
definition of "Taxes" or any tax the nature of which was previously included in
the definition "Taxes."
Not included within the definition of "Taxes" are any net
income, profits, transfer, franchise, capital stock, estate or inheritance taxes
imposed by any governmental authority; late payment penalties or interest,
provided that Lessee is not in default in the payment of Monthly Base Rent or
Additional Rent; or any increase in Taxes which are the result of leasehold
improvements for another tenant of the Complex which are substantially in excess
of building standard improvements.
8
With respect to any assessments which may be levied against
or upon the Complex, or the underlying realty thereof, which under the laws then
in force may be evidenced by improvement or other bonds, or may be paid in
annual installments, only the amount of such annual installment (with
appropriate proration of any partial year) and statutory interest shall be
included within the computation of the annual Taxes levied against the Complex,
the Building and improvements thereon, and the underlying realty thereof.
(e) The following costs ("Costs") shall be excluded from the
definition of Operating Costs, and no portion of the Lessee Improvement
Allowance or Additional Lessee Improvement Allowance be applied to such Costs:
(1) Costs occasioned by the act, omission or violation of
law by Lessor, any other occupant of the Complex, or their respective agents,
employees or contractors.
(2) Costs for which Lessor has a right of reimbursement
from others.
(3) Costs (i) arising from the disproportionate use of any
utility or service supplied by Lessor to any other occupant of the Complex, or
(ii) associated with utilities and services of a type not provided to Lessee.
(4) The cost of any renovation, improvement, painting or
redecorating of any portion of the Complex not a common area or not made
available for Lessee's use in common with other Tenants.
(5) Fees, commissions, attorneys' fees, costs or other
disbursements incurred in connection with negotiations or disputes with any
other occupant of the Complex and costs arising from the violation by Lessor or
any occupant of the Complex (other than Lessee) of the terms and conditions of
any lease or other agreement.
(6) Depreciation, amortization or other expense reserves.
(7) Interest, charges and fees incurred on debt, payments
on mortgages and rent under ground leases (except for the rent payable under
the Hetch Hetchy Lease for additional parking in the Complex).
(8) Costs incurred in connection with the operation of any
parking or commercial concession within the Complex.
(9) Advertising or promotional costs.
9
(10) Amortization of the cost of improvements by
Lessor to the Building or to the Complex which would properly be capitalized
under generally accepted accounting principles, except to the extent that
Lessee's share of such cost during any twelve-month period of this Lease is
equitably determined based on Lessee's usage and amortized over the useful life
of the capital item in question.
(11) Costs incurred in repairing, maintaining or replacing
any structural elements of the Building and the Complex for which Lessor is
responsible pursuant to Paragraph 14(a) hereof.
(12) Lease payments for capital machinery and equipment,
such as air conditioners, elevators, and the like.
(13) (i) Insurance costs for coverage not customarily
paid by tenants of similar projects in the vicinity of the premises, (ii)
increases in insurance costs caused by activities of another occupant of the
Complex, (iii) insurance deductibles in excess of $10,000 on all casualty
insurance other than earthquake, and (iv) earthquake insurance annual premium in
excess of Thirty Thousand Dollars ($30,000) for 1996, increased by not more than
five percent (5%) per year thereafter, provided that the portion of the
earthquake insurance deductible in excess of $10,000 shall be amortized over the
useful life of the improvement restored and the earthquake insurance deductible
shall not exceed ten percent (10%) of the replacement cost.
(14) Costs of sculptures, paintings and other art objects.
(15) Costs incurred to investigate the presence of any
Hazardous Material, costs to respond to any claim of Hazardous Material
contamination or damage, costs to remove any Hazardous Material from the Complex
and any judgments or other costs incurred in connection with any Hazardous
Material exposure or releases, except to the extent resulting from the breach by
Lessee of any provision of this Lease or caused by the storage, use, release or
disposal of the Hazardous Material in question by Lessee or by any employee,
agent, or contractor of Lessee.
(16) Any executive salary of any officer or employee of
Lessor, or any fee, profit or compensation retained by Lessor or its affiliates
for management and administration of the Complex in excess of the maximum sum
specified in Paragraph 6(c) of this Lease.
(17) General corporate overhead and general and
administrative expenses of Lessor, except as specifically provided in Paragraph
6(c).
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(18) Leasing expenses and broker commissions payable by
Lessor;
(19) The cost of maintenance and repair work at the Complex
to repair damage or loss caused by risk a or casualty for which Lessor is
obligated to carry insurance pursuant to Paragraph 11(b) (excluding earthquake
or flood).
(20) Costs and expenses for which Lessee reimburses Lessor
directly or which Lessee pays directly to a third person.
(f) As close as reasonably possible to the end of each calendar
year commencing with the calendar year 1996, Lessor shall notify Lessee of any
increases in Operating Expenses and/or Taxes over Base Operating Expenses and
Base Taxes estimated by Lessor for the following calendar year. Commencing on
the first day of January of each calendar year after 1996 for which Lessor has
estimated increases in Operating Expenses and/or Taxes, and on the first day of
every month thereafter in such year, Lessee shall pay to Lessor, as Additional
Rent, one-twelfth (1/12th) of Lessee's Share of the estimated increases. If at
any time during any such calendar year, it appears to Lessor that the Operating
Expenses or Taxes for such year will vary from Lessor's estimate, Lessor may, by
written notice to Lessee, revise Lessor's estimate for such year and the
Additional Rent payments by Lessee for such year shall thereafter be based upon
such revised estimate. Lessor shall furnish to Lessee with such revised
estimate written verification showing that the actual Operating Expenses or
Taxes are greater than Lessor's estimate. The increase in the monthly
installments of Additional Rent resulting from Lessor's revised estimate shall
not be retroactive, but the Additional Rent for each calendar year shall be
subject to adjustment between Lessor and Lessee after the close of the calendar
year, as provided below.
As soon as possible after each calendar year for which Lessee has
made estimated payments or is liable for increases in Operating Expenses and/or
Taxes, Lessor shall furnish Lessee a statement (the "Operating Statement") with
respect to such year, prepared by an employee or agent of Lessor, showing
Operating Expenses and Taxes, the increase in Operating Expenses and/or Taxes
over Base Operating Expenses and/or Base Taxes, Lessee's Share of such increase,
and the total payments made by Lessee on the basis of any previous estimate of
such increases. Unless Lessee raises any objections to the Operating Statement
within ninety (90) days after receipt of the same, such statement shall
conclusively be deemed correct and Lessee shall have no right thereafter to
dispute such statement or any item therein or the computation of increases of
Operating Expenses. If Lessee does object to such statement, Lessor shall
provide Lessee with reasonable verification of the figures shown on the
statement and the parties agree to negotiate in good faith to resolve any
disputes. If Lessee and Lessor cannot reach agreement within fifteen
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(15) days after Lessee's objection, the Operating Statement shall be reviewed by
an independent certified public accountant reasonably acceptable to both parties
who shall be appointed within thirty (30) days of the expiration of such fifteen
(15) day period, whose determination as to the actual Operating Expenses shall
be made within thirty (30) days of appointment and shall be final and binding
upon the parties and whose fees and expenses shall be borne (1) entirely by
Lessor if Lessee's Share of the Operating Expenses shown on Lessor's Operating
Statement is one hundred five percent (105%) or more of Lessee's Share of
Operating Expenses as determined by the accountant; (2) one-half by Lessor and
one-half by Lessee if the overcharge of Lessee on Lessor's Operating Statement
is less than five percent (5%) but more than one percent (1%); or (3) entirely
by Lessee if the overcharge of Lessee on Lessor's Operating Statement is one
percent (1%) or less. Any amounts due Lessor or Lessee shall be paid in the
manner set forth below. If Lessee objects to Lessor's Operating Statement,
Lessee shall continue to pay on a monthly basis Lessee's share of the increase
in Operating Expenses based upon the prior year's Operating Statement until the
dispute is resolved as provided above.
If Lessee's Share for the year as finally determined exceeds the
total payments made by Lessee based on Lessor's estimates, Lessee shall pay to
Lessor the deficiency, including Lessee's share of the cost of the audit, within
fifteen (15) days after Lessee's receipt of Lessor's Operating Statement. If
the total payments made by Lessee based on Lessor's estimate of the increases in
Operating Expenses and/or Taxes exceed Lessee's Share of the increases, as
determined by Lessor, Lessee's extra payment (but not more than Lessee's Share
of such increases) shall be credited against payments of Additional Rent next
due hereunder.
Notwithstanding the termination of this Lease, within thirty (30)
days after Lessee's receipt of Lessor's Operating Statement regarding the
determination of increases in Operating Expenses and/or Taxes for the calendar
year in which this Lease terminates, Lessee shall pay to Lessor or shall receive
from Lessor, as the case may be, an amount equal to the difference between
Lessee's Share (prorated to the expiration date or the termination date of this
Lease) of the increases in Operating Expenses and/or Taxes for such year, as
finally determined by Lessor, and the amount previously paid by Lessee toward
such increases.
7. PAYMENT OF RENT.
(a) All rent shall be due and payable in lawful money of the
United States of America at the address of Lessor set forth in Paragraph 24,
"Notices," without deduction or offset and without prior demand or notice,
unless otherwise specified herein. Monthly Base Rent and Additional Rent shall
be payable monthly, in advance, on the first day of each calendar month.
Lessee's obligation to pay rent for any partial month at the commencement
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of the lease term shall be as provided in Paragraph 5(a) hereof and rent for any
partial month at the expiration or termination of the lease term shall be
prorated on the basis of a thirty (30) day month.
(b) If any installment of Monthly Base Rent, Additional Rent or
any other sum due from Lessee is not received by Lessor within five (5) days
after Lessor's notice to Lessee that such amount has not been received when due,
Lessee shall pay to Lessor an additional sum equal to five percent (5%) of the
amount overdue as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Lessor will incur by
reason of the late payment by Lessee. Acceptance of any late charge shall not
constitute a waiver of Lessee's default with respect to the overdue amount. Any
amount not paid within ten (10) days after Lessee's receipt of written notice
that such amount is due shall bear interest from the date due until paid at the
lesser rate of (i) the prime rate of interest plus one percent (1%) or (ii) the
maximum rate allowed by law in addition to the late payment charge.
Initials: Lessor WFB Lessee JM
8. USE. Lessee shall use and occupy the premises for general office use
and for such other lawful purposes reasonably related thereto which are
permitted by applicable zoning regulations, and for no other use or purpose
without Lessor's prior written consent. Lessor warrants to Lessee that under
zoning laws in effect as of the Commencement Date of this Lease the premises may
be used by Lessee for general office use.
9. HAZARDOUS MATERIALS.
(a) Lessor represents and warrants to Lessee to the best of
Lessor's actual knowledge without having made any independent investigation (1)
that any use, storage, treatment or transportation of "Hazardous Materials" (as
defined below) which has occurred in or on the premises, the Building or the
Complex prior to the date hereof has been in substantial compliance with all
applicable federal, state, and local laws, regulations and ordinances; (2) that
no release, leak, discharge, spill, disposal or emission of Hazardous Materials
has occurred in, on or under the premises, the Building or the Complex; and (3)
that the premises, the Building and the Complex are free of Hazardous Materials
as of the date hereof and will be free of Hazardous Materials upon the
commencement of the term of this Lease. As used herein, the term "Hazardous
Materials" shall mean any hazardous or toxic substance, material or waste which
is or becomes regulated by any local environmental authority, the State of
California or the United States government.
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(b) Lessor shall indemnify, defend and hold Lessee harmless from any
and all claims, damages, fines, judgments, penalties, costs, liabilities or
losses (including, without limitation, any and all sums paid for settlement of
claims, attorneys' fees, consultant and expert fees) arising before, during or
after the term (as such may be extended) from or in connection with the presence
of Hazardous Materials in or on the premises, the Building or the Complex,
unless the (1) Hazardous Materials are present in whole or in part as a result
of the breach of this Lease, negligence, willful misconduct, or other acts of
Lessee, Lessee's agents, employees, contractors or invitees; or (2) such
Hazardous Materials are present in whole or in part as a result of the acts or
omissions of other tenants or occupants of the Complex or their agents,
employees, contractors, or invitees, or (3) such Hazardous Materials have
flowed, diffused, migrated, or percolated into, onto, or under the premises, the
Building, or the Complex from other property. Without limitation of the
foregoing, this indemnification shall include any and all costs incurred due to
any investigation of the site or any cleanup, removal or restoration mandated by
a federal, state or local agency or political subdivision, unless the Hazardous
Materials are present solely as a result of negligence, willful misconduct or
other acts of Lessee, Lessee's agents, employees, contractors or invitees. This
indemnification shall specifically include any and all costs due to Hazardous
Materials which flow, diffuse, migrate or percolate into, onto or under the
premises, the Building or the Complex after the term commences and this
indemnification shall survive the expiration or earlier termination of this
Lease.
(c) Lessee and Lessee's agents, employees, and contractors shall not
cause any Hazardous Materials to be discharged into the plumbing or sewage
system of the Building or into or onto the land underlying or adjacent to the
Building in violation of any applicable law. Lessee shall indemnify, defend and
hold Lessor harmless from any and all claims, damages, fines, judgments,
penalties, costs, liabilities or losses (including, without limitation, any and
all sums paid for settlement of claims, attorneys' fees, consultant and expert
fees) arising during or after the term (as such may be extended) from or in
connection with the presence of Hazardous Materials in or on the premises, the
Building or the Complex as a result of the breach of the foregoing covenant, or
as a result of the negligence, willful misconduct or other acts of Lessee,
Lessee's agents, employees, and contractors or invitees. Without limitation of
the foregoing, this indemnification shall include any and all costs incurred due
to any investigation of the site or any cleanup, removal or restoration mandated
by a federal, state or local agency or political subdivision. The foregoing
indemnity shall survive the expiration or earlier termination of this Lease.
10. TAXES ON LESSEE'S PROPERTY. Lessee shall pay before delinquency
any and all taxes, assessments, license fees, and public charges levied,
assessed, or imposed and which become payable during the initial lease term and
any extension thereof upon Lessee's equipment, fixtures, furniture, and personal
property installed or located in the premises.
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11. INSURANCE.
(a) Lessee shall, at Lessee's sole cost and expense, provide and keep
in force during the initial lease term and any extension thereof, and for the
benefit of Lessor and Lessee, a general liability insurance policy with a
recognized casualty insurance company qualified to do business in California,
insuring Lessor and Lessee against any and all liability occasioned by any
occurrence in, on, about, or related to the premises, or arising out of the
condition, use, occupancy, alteration or maintenance of the premises, having a
combined single limit for both bodily injury and property damage in an amount
not less than Two Million Dollars ($2,000,000). Lessee agrees to furnish
certificates of insurance to Lessor naming Lessor as an additional insured upon
the written request of Lessor.
(b) Lessor shall obtain and carry in Lessor's name, as insured, as an
Operating Expense of the Complex as provided in Paragraph 6(c), during the
initial lease term and any extended term, standard fire and extended coverage
insurance (with rental loss insurance coverage for a period of one year), public
liability and property damage insurance, and insurance against such other risks
or casualties as Lessor shall determine, including, but not limited to,
earthquake insurance, insuring Lessor's interest in the Complex (including
leasehold improvements installed at Lessor's expense) in an amount not less than
the full replacement cost of the Building and improvements from time to time.
The proceeds of any such insurance shall be payable solely to Lessor and Lessee
shall have no right or interest therein. Lessor shall have no obligation to
insure against loss by Lessee to Lessee's leasehold improvements installed at
Lessee's expense, or Lessee's equipment, fixtures, furniture, or other personal
property of Lessee in or about the premises occurring from any cause whatsoever.
(c) The parties release each other, and their respective authorized
representatives, from any claims for damage to any person or to the premises and
to the fixtures, personal property, Lessee's improvements, and alterations of
either Lessor or Lessee in or on the premises that are caused by or result from
risks required by this Lease to be insured against or actually insured against
under any insurance policies carried by the parties and in force at the time of
any such damage. Lessor shall not be required to maintain plate glass
insurance.
(d) Each party shall cause each insurance policy obtained by it to
provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by any
policy. Neither party shall be liable to the other for any damage caused by
fire or any of the risks insured against under any insurance policy required by
this Lease.
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If any insurance policy cannot be obtained with a waiver of
subrogation, or is obtainable only by the payment of an additional premium
charge above that charged by insurance companies issuing policies without waiver
of subrogation, the party undertaking to obtain the insurance shall notify the
other party of this fact. The other party shall have a period of ten (10) days
after receiving the notice either to place the insurance with a company that is
reasonably satisfactory to the other party and that will carry the insurance
with a waiver of subrogation, or to agree to pay the additional premium if such
a policy is obtainable at additional cost. If the insurance cannot be obtained
or the party in whose favor a waiver of subrogation is desired refuses to pay
the additional premium charged, the other party is relieved of the obligation to
obtain a waiver of subrogation rights with respect to the particular insurance
involved.
12. INDEMNIFICATION.
(a) Lessee waives all claims against Lessor for damages to property,
or to goods, wares, and merchandise stored in, upon, or about the premises, and
for injuries to persons in, upon, or about the premises from any cause arising
at any time, except as may be caused by the negligence or willful misconduct of
Lessor or its employees, agents or contractors. Lessee agrees to indemnify and
hold Lessor exempt and harmless from and against any and all claims for damage
or injury to any person or property arising from the use or occupancy of the
premises by Lessee or from the failure of Lessee to keep the premises in good
condition as herein provided, unless caused by the negligence or willful
misconduct of Lessor or its employees, agents, or contractors.
(b) Except as may be caused by the negligence or willful misconduct
of Lessor or its employees, agents, or contractors, Lessor shall not be liable
to Lessee for any damage because of any act or negligence of any owner or
occupant of adjoining or contiguous property, nor for overflow, breakage, or
leakage of water, steam, gas, or electricity from pipes, wires, or otherwise.
Except as otherwise herein provided, Lessee will pay for damage to the premises
caused by the misuse or neglect of the premises by Lessee or its employees,
agents, or contractors, including, but not limited to, the breakage of glass in
the premises. Any damage to the premises caused by other tenants shall be paid
for by such other tenants or by Lessor.
13. CONSTRUCTION OF LEASEHOLD IMPROVEMENTS.
(a) Prior to commencement of the initial lease term and prior to the
occupancy of the premises by Lessee, Lessor shall cause to be constructed and
completed at Lessor's expense the leasehold improvements to the premises
described on Exhibit "C" attached hereto and incorporated by reference herein.
Lessor shall cause such improvements
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to be constructed promptly and diligently in a first class and workmanlike
manner. Lessor hereby represents and warrants to Lessee and covenants that the
premises (upon completion of such buildout), the Building, the parking area and
all other common areas appurtenant to the Building are and shall be, as of the
Commencement Date, in substantial compliance with all applicable laws,
ordinances, orders, regulations, and codes, except that with respect to the
Americans with Disabilities Act Lessor represents and warrants to Lessee and
covenants only that Lessor has made a good faith effort to cause the premises,
the Building, the parking area, and the common areas appurtenant to the Building
to comply therewith.
(b) Subject to the provisions of Paragraph 2(c) hereof, by accepting
possession of the premises Lessee shall be deemed to have acknowledged that the
premises are in good order and satisfactory condition, except as provided for
elsewhere in this Lease. Lessee waives all right to make repairs at the expense
of Lessor or to deduct the cost thereof from the rent, and Lessee waives all,
rights under Section 1941 and 1942 of the Civil Code of the State of California.
At the termination of this Lease, Lessee shall surrender the premises in a clean
and good condition, except for ordinary wear and tear and except for damage
caused by casualty, the elements, or acts of God.
14. MAINTENANCE AND REPAIRS; ALTERATIONS.
(a) Lessor shall, at Lessor's sole expense, keep in good order,
condition, and repair and replace when necessary, the roof, and the structural
elements of the foundation and exterior walls (except the interior faces
thereof), of the Building, and other structural elements of the Building and the
Complex as "structural elements" are defined in building codes applicable to the
Building.
(b) Lessor shall repair and maintain, as an Operating Expense
pursuant to Paragraph 6 hereof, the exterior entrances, all glass and window
moldings, and the common areas of the Building, and all partitions, doors, door
jambs, door closers, door hardware, fixtures, equipment, and appurtenances
thereof, including all electrical, lighting, heating, plumbing, and air
conditioning systems serving the premises, except for reasonable use and wear
and except for any damage caused by any act or negligence of Lessee or its
employees, agents, invitees, licensees, or contractors. In the event Lessee
provides Lessor with written notice of the need for any repairs, Lessor shall
commence any such repairs promptly following receipt by Lessor of such notice
and Lessor shall diligently prosecute such repairs to completion. Lessor shall
execute and maintain in force a service contract with an authorized air
conditioning service company and shall provide five-day a week janitorial
service to the premises. Lessor shall also repair and maintain as an Operating
Expense pursuant to Paragraph 6 hereof, the Outside Areas of the Complex,
including the landscaping, walkways, and parking area.
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(c) Subject to the foregoing and except as provided elsewhere in
this Lease, Lessee shall at all times at Lessee's expense keep the premises in
good and safe order, condition, and repair. Subject to the release of claims
and waiver of subrogation contained in Paragraphs 11 (c) and 11 (d), if Lessor
is required to make any repairs by reason of Lessee's negligent acts or omission
to act, Lessor may add the cost of such repairs to the next installment of rent
which shall thereafter become due, and Lessee shall promptly pay the same upon
receipt of an invoice therefor. Lessor shall exercise its good faith diligent
efforts to construct all Lessee Interior Improvements so that the Building and
the premises substantially comply with the Americans With Disabilities Act
("ADA"). Lessor shall hold Lessee harmless from any responsibility or cost
related to compliance with ADA, except for any alterations or additions to the
premises made by Lessee at Lessee's expense.
(d) Following completion of construction of the leasehold
improvements pursuant to Paragraph 13 hereof, Lessee shall not make any
additional alterations, improvements, or additions to the premises without
obtaining Lessor's prior written consent thereto. Lessor may condition its
consent to Lessee agreeing to remove any such alterations upon expiration of the
lease term and Lessee agreeing to restore the premises to its condition prior to
such alterations at Lessee's expense. Lessor shall advise Lessee in writing at
the time consent is granted whether Lessor reserves the right to require Lessee
to remove any alterations from the premises upon termination of this Lease or
else Lessor shall be deemed to have waived such right with respect to such
alterations.
Notwithstanding the preceding subparagraph to the contrary,
Lessee shall have the right to remove any of Lessee's leasehold improvements
which were paid for solely by Lessee, and provided that Lessee notifies Lessor
in writing prior to the installation on the premises of such leasehold
improvements that Lessee intends to remove such improvements upon the expiration
of the lease term. In the event of Lessee's removal of such leasehold
improvements, Lessee at Lessee's expense, shall immediately repair any damage to
the premises caused by such removal.
All alterations, trade fixtures and personal property installed
in the premises solely at Lessee's expense ("Lessee's Property) shall at all
times remain Lessee's property and Lessee shall be entitled to all depreciation,
amortization and other tax benefits with respect thereto. Except for
alterations, trade fixtures and personal property which cannot be removed
without structural injury to the premises, at any time Lessee may remove
Lessee's trade fixtures and personal property from the premises, provided Lessee
repairs all damage caused by such removal.
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Lessor shall execute and deliver to Lessee upon request a lieu
waiver relating to Lessee's Property in form approved by Lessor and its counsel,
provided that such lieu waiver is consistent with the foregoing provisions of
this Paragraph 14(d).
(e) Lessee, at Lessee's sole cost and expense, shall promptly
and properly observe and comply with all present and future orders, regulations,
rules, laws, and ordinances of all governmental agencies or authorities, and the
Board of Fire Underwriters, except that Lessee shall not be required to make any
structural changes or repairs or other repairs or changes of any nature which
would be considered a capital expenditure under generally accepted accounting
principles to the premises at Lessee's expense unless such structural repairs or
changes are required by reason of the specific nature of the use of the premises
by Lessee.
15. UTILITIES.
(a) Lessor shall, as an Operating Expense of the operation of
the Building pursuant to Paragraph 6(c) hereof, provide reasonable quantities of
electricity, gas, water, heat and air conditioning service Monday through Friday
during business hours from 8:00 a.m. to 6:00 p.m., except recognized holidays,
five-day a week janitorial service (comparable to janitorial service provided in
other Class A office buildings in the vicinity of the Complex), and refuse pick-
up service to the premises. Lessee, at its option, may contract for its own
janitorial service for Lessee's premises, provided that such service is
performed on a regular basis by a recognized professional janitorial service
firm. In such event, Lessor shall no longer bill Lessee for janitorial services
to the premises. Lessor shall provide Lessee and the premises with electricity
(overhead lighting and electrical outlets) without Lessee incurring any hourly
charges therefor.
(b) Lessor shall provide Lessee and the premises with heating
and air conditioning service, in addition to the hours set forth in subparagraph
(a) above, to the extent that such service is requested by Lessee. In the event
of such a request by Lessee, Lessee shall pay to Lessor monthly with Operating
Expenses Lessor's charge for such additional heating and air conditioning
service. Lessor's charge may be based on an hourly rate, which may include a
reasonable depreciation factor or replacement reserve for the system on account
of said additional hours of operation. As of the Commencement Date Lessor is
charging additional heating and air conditioning service at a minimum of
Twenty-five Dollars ($25.00) per hour for each pod/wing of the Building. Lessor
agrees that such hourly rate shall be established at an amount which will
reimburse Lessor for the actual cost to Lessor to supply the service plus a
reasonable reserve for depreciation or replacement of the HVAC equipment, but
without a profit to Lessor.
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(c) Lessor shall not be liable to Lessee for any interruption or
failure of any utility services to the Building or the premises which is not
caused by Lessor's willful acts or gross negligence; provided however, that if
service to the premises is interrupted for more than four (4) consecutive
business days, Lessee's Monthly Base Rent shall be abated proportionately on a
daily basis until service is restored.
16. LIENS. Lessee agrees to keep the premises and the Complex free
from all liens arising out of any work performed, materials furnished, or
obligations incurred by Lessee. Lessee shall give Lessor at least ten (1O) days
prior written notice before commencing any work of improvement on the premises.
Lessor shall have the right to post notices of non-responsibility with respect
to any such work.
17. ASSIGNMENT AND SUBLETTING.
(a) Lessee shall not assign this Lease, or any interest,
voluntarily or involuntarily, and shall not sublet the premises or any part
thereof, or any right or privilege appurtenant thereto, or suffer any other
person (the agents and servants of Lessee excepted) to occupy or use the
premises, or any portion thereof, without the prior written consent of Lessor in
each instance pursuant to the terms and conditions set forth below, which
consent shall not be unreasonably withheld.
(b) Prior to any assignment or sublease which Lessee desires to
make, Lessee shall provide to Lessor the name and address of the proposed
assignee or sublessee, and true and complete copies of all documents relating to
Lessee's prospective agreement to assign or sublease, a copy of a current
financial statement for such proposed assignee or sublessee, and shall specify
all consideration to be received by Lessee for such assignment or sublease in
the form of lump sum payments, installments of rent, or otherwise. For purposes
of this Paragraph 17, the term "consideration" shall include all money or other
consideration to be received by Lessee for such assignment or sublease. Within
fifteen (15) days after the receipt of such documentation and other
information, Lessor shall (1) notify Lessee in writing that Lessor elects to
consent to the proposed assignment or sublease subject to the terms and
conditions hereinafter set forth, or (2) notify Lessee in writing that Lessor
refuses such consent, specifying reasonable grounds for such refusal.
In deciding whether to consent to any proposed assignment or
sublease, Lessor may in its sole discretion consider the following criteria:
(1) In Lessor's reasonable judgment, the proposed assignee
or subtenant is engaged in such a business, that the premises, or the relevant
part thereof, will be used in such a manner which complies with Paragraph 8
hereof entitled "Use."
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(2) The proposed assignee or subtenant is a reputable
entity or individual with sufficient financial net worth so as to reasonably
indicate that it will be able to meet its obligations under this Lease or the
sublease in a timely manner;
(3) The proposed assignee or subtenant is not a person or
entity with whom Lessor is then negotiating to lease space in the Building; and
(4) The proposed assignment or sublease shall be in form
reasonably satisfactory to Lessor and Lessor's counsel.
(c) As a condition to Lessor's granting its consent to any
assignment or sublease, (1) Lessor may require that Lessee pay to Lessor, as and
when received by Lessee, fifty percent (50%) of the amount of any excess of the
consideration to be received by Lessee in connection with said assignment or
sublease over and above the rental amount fixed by this Lease and payable by
Lessee to Lessor, after deducting actual marketing costs and reasonable costs of
repair or rehabilitation of the premises and tenant improvement costs incurred
by Lessee in consummating such assignment or sublease; (2) Lessee and the
proposed assignee or sublessee shall demonstrate to Lessor's reasonable
satisfaction that each of the criteria referred to in subparagraph (b) above is
satisfied; and (3) Lessor may require a cash security deposit to be paid to
Lessor by an assignee in the amount of one month's Basic Rent, unless Lessor is
then holding the security deposit referred to in Paragraph 4.
(d) Each assignment or sublease agreement to which Lessor has
consented shall be an instrument in writing in form satisfactory to Lessor, and
shall be executed by both Lessee and the assignee or sublessee, as the case may
be. Each such assignment or sublease agreement shall recite that it is and
shall be subject and subordinate to the provisions of this Lease, that the
assignee or sublessee accepts such assignment or sublease and, except as
otherwise set forth in a sublease approved by Lessor, agrees to perform all of
the obligations of Lessee hereunder (to the extent such obligations relate to
the portion of the premises assigned or subleased), and that the termination of
this Lease shall, at Lessor's sole election, constitute a termination of every
such assignment or sublease.
(e) In the event Lessor shall consent to an assignment or
sublease, Lessee shall nonetheless remain primarily liable for all obligations
and liabilities of Lessee under this Lease, including but not limited to the
payment of rent. Lessee agrees to reimburse Lessor upon demand for reasonable
attorneys' fees incurred by Lessor in connection with the negotiation, review,
and documentation of any such requested assignment or sublease not to exceed
$1,000.
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(f) Lessee hereby stipulates that the foregoing terms and
conditions are reasonable.
(g) Any dissolution, or the transfer, either all at once or in a
series of related transfers, of a controlling percentage of the capital stock of
Lessee, or the sale, or series of sales within any one (1) year period, of all
or substantially all of Lessee's assets located in, on, or about the premises,
shall be deemed an assignment. The phrase "controlling percentage" means the
ownership of, and the right to vote, stock possessing at least fifty-one percent
(51%) of the total combined voting power of all classes of Lessee's capital
stock issued, outstanding, and entitled to vote for the election of directors.
Notwithstanding the foregoing, Lessee shall have the right to assign, sublease,
transfer to a subsidiary, parent, or affiliated company or to a successor by
merger, subject to the provisions of subparagraph (i) below.
(h) Any assignment or subletting described in subparagraph (g)
above shall be subject to the provisions for assignment and subletting set forth
in this Paragraph 17.
(i) Notwithstanding the foregoing, Lessee may, without Lessor's
prior written consent and without any participation by Lessor in assignment and
subletting proceeds, sublet the premises or assign this Lease to: (1) a
subsidiary, affiliate, division or corporation controlled or under common
control with Lessee; (2) a successor corporation related to Lessee by merger,
consolidation, nonautomatic reorganization, or government action; or (3) a
purchaser of substantially all of Lessee's assets located in the premises.
Lessee's foregoing rights to assign this Lease shall be subject to the following
conditions: (1) Lessee shall not be in default hereunder; (2) the transferee or
successor entity shall expressly assume Lessee's obligations hereunder; and (3)
Lessor may require that the transferee or successor entity post a security
deposit in an amount equal to the Monthly Base Rent then in effect hereunder to
assure performance of its obligations hereunder, unless Lessor is then holding
the security deposit referred to in Paragraph 4. For the purpose of this Lease,
sale of Lessee's capital stock through any public offering shall not be deemed
an assignment, subletting, or any other transfer of the Lease or the premises.
Lessor's consent to any proposed assignment or subletting shall not be
unreasonably withheld.
(j) Subject to the provisions of this Paragraph 17, any
assignment or sublease without Lessor's prior written consent shall at Lessor's
election be void, and shall constitute a default by Lessee hereunder. The
consent by Lessor to any assignment or sublease shall not constitute a waiver of
the provisions of this Paragraph 17, including the requirement of Lessor's prior
written consent, with respect to any subsequent assignment or sublease. If
Lessee shall purport to assign this Lease, or sublease all or any portion of the
premises, or permit any person or persons other than Lessee to occupy the
premises, without
22
Lessor's prior written consent, Lessor may collect rent from the person or
persons then or thereafter occupying the premises and apply the net amount
collected to the rent reserved herein, but no such collection shall be deemed a
waiver of Lessor's rights and remedies under this Paragraph 17, or the
acceptance of any such purported assignee, sublessee, or occupant, or a release
of Lessee from the further performance by Lessee of covenants on the part of
Lessee herein contained.
(k) Lessee shall not hypothecate or encumber its interest under
this Lease or any rights of Lessee hereunder, or enter into any license or
concession agreement respecting all or any portion of the premises, without
Lessor's prior written consent which consent shall not unreasonably be withheld,
subject to the terms and conditions referred to in Paragraph 17(c) above, and
Lessee's granting of any such encumbrance, license, or concession agreement
shall constitute an assignment for purposes of this Paragraph 17.
(l) In the event of any sale or exchange of the premises by
Lessor and assignment of this Lease by Lessor, Lessor shall, upon providing
Lessee with written confirmation that Lessor has delivered any security deposit
held by Lessor to Lessor's successor in interest, be and hereby is entirely
relieved of all liability under any and all of Lessor's covenants and
obligations contained in or derived from this Lease with respect to the period
commencing with the consummation of the sale or exchange and assignment.
(m) The parties acknowledge that Lessor has the remedy described
in California Civil Code Section 1951.4 (Lessor may continue the Lease in effect
after Lessee's breach and abandonment and recover rent as it becomes due, if
Lessee has right to sublet or assign, subject only to reasonable limitations.)
18. WAIVER. The waiver by Lessor or Lessee of any breach of any
term, covenant, or condition contained herein shall not be deemed to be a waiver
of such term, covenant, or condition of any subsequent breach of the same or any
other term, covenant or condition contained herein. The subsequent acceptance
of rent hereunder by Lessor shall not be deemed to be a waiver of any preceding
breach by Lessee of any term, covenant, or condition of this Lease, other than
the failure of Lessee to pay the particular rent so accepted, regardless of
Lessor's knowledge of such preceding breach at the time of acceptance of such
rent.
19. HOLDING OVER. Lessee shall vacate the premiscs and deliver the
same to Lessor upon the expiration or sooner termination of this Lease. In the
event of holding over by Lessee after the expiration of termination of this
Lease, such hold over shall be on a month-to-month tenancy and all of the terms
and provisions of this Lease shall be applicable during such period, except that
Lessee shall pay Lessor as Monthly Base Rent during such
23
holdover an amount equal to one hundred twenty-five percent (125%) of the
Monthly Base Rent in effect at the expiration of the term. If such holdover is
without Lessor's written consent, Lessee shall be liable to Lessor for all
costs, expenses, and consequential damages incurred by Lessor as a result of
such holdover. The rental payable during such holdover period shall be payable
to Lessor on demand.
20. DAMAGE OR DESTRUCTION.
(a) In the event of a total destruction of the Building and
improvements during the lease term from any cause, either party may elect to
terminate this Lease by giving written notice of termination to the other party
within thirty (30) days after the casualty occurs. A total destruction shall be
deemed to have occurred for this purpose if the Building and improvements of the
Complex are destroyed to the extent of seventy-five percent (75%) or more of the
replacement cost thereof. If the Lease is not terminated, Lessor shall repair
and restore the premises in a diligent manner and this Lease shall continue in
full force and effect, except that Monthly Base Rent and Additional Rent shall
be abated in accordance with Paragraph 20(e) below.
(b) In the event of a partial destruction of the Building and
improvements of the Complex to an extent not exceeding twenty-five percent (25%)
of the replacement cost thereof and if the damage thereto can be repaired,
reconstructed, or restored within a period of one hundred twenty (120) days from
the date of such casualty, and if the casualty is from a cause which is insured
under Lessor's fire and extended coverage insurance, or is insured under any
other coverage then carried by Lessor, and Lessor receives proceeds of insurance
sufficient to repair and restore the Building and improvements, Lessor shall
forthwith repair the same, and this Lease shall continue in full force and
effect, except that Monthly Base Rent and Additional Rent shall be abated in
accordance with Paragraph 20(e) below. If any of the foregoing conditions is
not met, Lessor shall have the option of either repairing and restoring the
Building and improvements, or terminating this Lease by giving written notice of
termination to Lessee within thirty (30) days after the casualty, subject to the
provisions of Paragraph 20(d).
(c) In the event of a partial destruction of the Building and
improvements of the Complex to an extent equal to or exceeding twenty-five
percent (25%) but less than seventy-five percent (75%) of the replacement cost
thereof, or if the damage thereto cannot be repaired, reconstructed, or restored
within a period of one hundred eighty (180) days from the date of such
casualty, either Lessor or Lessee may terminate this Lease by giving written
notice of termination to the other within thirty (30) days after the
casualty.
24
Furthermore, if such casualty is from a cause which is not
insured under Lessor's fire and extended coverage insurance, or is not insured
under any other insurance carried by Lessor, or if the proceeds of insurance
received by Lessor are not sufficient to repair and restore the Building and
improvements, Lessor may elect to repair and restore the Building and
improvements (provided that Lessee has not elected to terminate this Lease
pursuant to the first sentence of this Paragraph 20(c)), or Lessor may terminate
this Lease by giving written notice of termination to Lessee. Lessor's election
to repair and restore the Building and improvements or to terminate this Lease,
shall be made and written notice thereof shall be given to Lessee within thirty
(30) days after the casualty. Notwithstanding the foregoing, (1) if Lessor has
not obtained all necessary governmental permits for the restoration and
commenced construction of the restoration within ninety (90) days after the
casualty, Lessee may terminate this Lease by written notice to Lessor given at
any time prior to the actual commencement of construction of the restoration; or
(2) if Lessor elects to repair and restore the Building and improvements under
subparagraph (b) or (c) above, but the repairs and restoration are not
substantially completed within one hundred eighty (I 80) days after the
casualty, Lessee may terminate this Lease by written notice to Lessor given
within thirty (30) days after the expiration of said period of one hundred
eighty (180) days after the casualty.
If this Lease is not terminated by Lessor or Lessee pursuant to
the foregoing provisions, Lessor shall complete the repairs in a diligent manner
and this Lease shall continue in full force and effect, except that Monthly Base
Rent and Additional Rent shall be abated in accordance with Paragraph 20(e)
below.
(d) In the case of damage which is not required to be covered by
insurance, or in case the casualty is covered by insurance but the proceeds are
insufficient to cover the entire cost of restoration, Lessor shall not have the
right to terminate this Lease, (i) if repair or restoration would cost less than
two percent (2%) of the replacement cost of the Building, or (ii) if Lessee
agrees to pay the cost of repair in excess of two percent (2%) of the
replacement cost and Lessee delivers said sum to Lessor within ten (10) days
after receipt of a written request therefor from Lessor.
(e) In the event of repair, reconstruction, or restoration as
provided herein, the Monthly Base Rent and Additional Rent shall be abated
proportionally in the ratio which the Lessee's use of the premises is impaired
during the period of such repair, reconstruction, or restoration.
(f) With respect to any destruction of the Complex which Lessor
is obligated to repair, or may elect to repair, under the terms of this
Paragraph 20, the provisions of Section 1932, Subdivision 2, and of Section
1933, Subdivision 4, of the Civil
25
Code of the State of California are waived by the parties. Lessor's obligation
to repair and restore the Complex shall be limited to the improvements
originally constructed by Lessor at Lessor's expense. Lessee shall repair or
replace, at Lessee's expense, all leasehold improvements, fixtures, and
equipment installed by Lessee or paid for by Lessee. Lessor's time for
completion of the repairs and restoration of the Complex shall be extended by a
period equal to any delays caused by strikes, labor disputes, unavailability of
materials, inclement weather, acts of God, or other causes beyond Lessor's
control.
(g) In the event of termination of this Lease pursuant to any of the
provisions of this Paragraph 20, the monthly rent shall be apportioned on a per
diem basis and shall be paid to the date of the casualty. In no event shall
Lessor be liable to Lessee for any damages resulting to Lessee from the
occurrence of such casualty, or from the repairing or restoration of the
Building and improvements, or from the termination of this Lease as provided
herein, nor shall Lessee be relieved thereby from any of Lessee's obligations
hereunder, except to the extent and upon the conditions expressly set forth in
this Paragraph 20.
21. EMINENT DOMAIN.
(a) If the whole or any substantial part of the building or
appurtenant real property owned by Lessor shall be taken or condemned by any
competent public authority for any public use or purpose, the term of this Lease
shall end upon, and not before, the date when the possession of the part so
taken shall be required for such use or purpose. Rent shall be apportioned as
of the date of such termination. Lessee shall be entitled to receive any
damages awarded by the court for (i) leasehold improvements installed at
Lessee's expense or other property owned by Lessee, and (ii) reasonable costs of
moving by Lessee to another location in the San Francisco Bay Area. The entire
balance of the award shall be the property of Lessor.
(b) If there is a partial taking of the premises by eminent domain
which is not a substantial part of the Building and the balance of the premises
remains reasonably suitable for continued use and occupancy by Lessee for the
purposes referred to in Paragraph 8, Lessor shall complete any necessary repairs
in a diligent manner and this Lease shall remain in full force and effect with a
just and proportionate abatement of the Monthly Base Rent and Additional Rent,
to reflect the number of square feet of the premises taken and the number of
square feet remaining. If after a partial taking, the premises and parking are
not reasonably suitable for Lessee's continued use and occupancy for the uses
permitted herein, Lessee may terminate this Lease effective on the date
possession is taken. Subject to the provisions of Paragraph 21 (a), the entire
award for such taking shall be the property of Lessor.
26
22. REMEDIES. If Lessee fails to make any payment of any sum due under
this Lease for ten (10) days after receipt by Lessee of written notice from
Lessor; or if Lessee breaches any other term of this Lease for thirty (30) days
after receipt by Lessee of written notice from Lessor (or for a reasonable time
if such default is incapable of cure within thirty (30) days, and if Lessee is
diligently proceeding to cure such default); or if Lessee's interest herein, or
any part thereof, is assigned or transferred, either voluntarily or by operation
of law (except as expressly permitted by other provisions of this Lease); or if
Lessee makes a general assignment for the benefit of its creditors; or if this
Lease is rejected (i) by a bankruptcy trustee for Lessee, (ii) by Lessee as
debtor in possession, or (iii) by failure of Lessee as a bankrupt debtor to act
timely in assuming or rejecting this Lease; then any of such events shall
constitute a default and breach of this Lease by Lessee and Lessor may, at its
option, elect the remedies specified in either subparagraph (a) or (b) below.
Any such rejection of this Lease referred to above shall not cause an automatic
termination of this Lease. Whenever in this Lease reference is made to a
default by Lessee, such reference shall refer to a Lessee's default as defined
in this Paragraph 22.
(a) Lessor may repossess the premises and remove all persons and
property therefrom. If Lessor repossesses the premises because of a breach of
this Lease, this Lease shall terminate and Lessor may recover from Lessee:
(1) the worth at the time of award of the unpaid rent which had
been earned at the time of termination including interest thereon at a rate
equal to the Federal discount rate plus one percent (1%) per annum, or the
maximum legal rate of interest, whichever is less, from the time of termination
until paid;
(2) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Lessee proves could have been
reasonably avoided, including interest thereon at a rate equal to the Federal
discount rate plus one percent (1%) per annum, or the maximum legal rate of
interest, whichever is less, from the time of termination until paid;
(3) 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 for the same period that Lessee proves could be
reasonably avoided; and
(4) any other amount necessary to compensate Lessor for all the
detriment proximately caused by Lessee's breach or by Lessee's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom.
27
(b) If Lessor does not repossess the premises, then this Lease shall
continue in effect for so long as Lessor does not terminate Lessee's right to
possession and Lessor may enforce all of its rights and remedies under this
Lease, including the right to recover the rent and other sums due from Lessee
hereunder. For the purposes of this Paragraph 22, the following do not
constitute a repossession of the premises by Lessor or a termination of the
Lease by Lessor:
(1) Acts of maintenance or preservation by Lessor or efforts by
Lessor to relet the premises; or
(2) The appointment of a receiver by Lessor to protect Lessor's
interests under this Lease.
23. LESSEE'S PERSONAL PROPERTY. If any personal property of Lessee remains
on the premises after (1) Lessor terminates this Lease pursuant to Paragraph 22
above following a breach of this Lease by Lessee, or (2) after the expiration of
the Lease term or after the termination of this Lease pursuant to any other
provisions hereof, Lessor shall give written notice thereof to Lessee pursuant
to applicable law. Lessor shall thereafter release, store, and dispose of any
such personal property of Lessee in accordance with the provisions of applicable
law.
24. NOTICES. All notices, statements, demands, requests, or consents
given hereunder by either party to the other shall be in writing and shall be
personally delivered or sent by United States mail, registered or certified,
return receipt requested, postage prepaid, and addressed to the parties as
follows:
Lessor: W.F. Batton & Co., Inc.
1190 East Meadow Drive
Palo Alto, California 94303
Lessee: Novellus Systems, Inc.
3590 North First Street
San Jose, California 95134
or to such other address as either party may have furnished to the other as a
place for the service of notice.
28
25. ESTOPPEL CERTIFICATE. Lessee and Lessor shall within fifteen (15)
days following request by the other party (the "Requesting Party"), execute and
deliver to the Requesting Party an estoppel certificate, in the form presented
by the Requesting Party (1) certifying that this Lease has not been modified and
certifying that this Lease is 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; (2) stating the date to which the rent and other
charges are paid in advance, if at all; (3) stating the amount of any security
deposit held by Lessor; (4) acknowledging that there are not, to the responding
party's knowledge, any uncured defaults on the part of the Requesting Party
hereunder, or if there are uncured defaults on the part of the Requesting Party,
stating the nature of such uncured defaults; and (5) evidencing the status of
this Lease as may be reasonably required either by a lender making a loan to
Lessor to be secured by a deed of trust or mortgage encumbering the premises or
a purchaser of the premises from Lessor or as reasonably required by the
Requesting Party. The responding party's failure to deliver an estoppel
certificate within ten(10)days following such request shall be an event of
default under this Lease.
26. Parking. Lessee shall have the right to use in common with other
tenants or occupants of the Complex Lessee's proportionate share of the parking
facilities of the Complex, subject to such rules and regulations for such
parking facilities which may be established or altered by Lessor at any time or
from time to time during the lease term, provided that such rules and
regulations shall not unreasonably interfere with Lessee's parking rights.
Vehicles of Lessee or its employees shall not park in driveways or occupy
parking spaces or other areas reserved for any use such as handicap parking,
visitors, deliveries, or loading. Subject to the foregoing, Lessee shall be
entitled to the non-exclusive use of twenty-three (23) parking spaces based upon
Lessee's occupancy of Six Thousand Two Hundred Sixty-eight (6,268) rentable
square feet (3.68 x 6,268).
27. REAL ESTATE BROKERS. Lessor shall pay a leasing commission to CPS, a
Commercial Real Estate Company ("CPS"), representative of Lessor, pursuant to a
separate commission agreement with said broker. Except for the foregoing, each
party represents to the other that it has not had any dealings with any real
estate broker, finder, or other person with respect to this Lease, and each
party shall hold harmless the other party from all damages, expenses, and
liabilities resulting from any claims that may be asserted against the other
party by any broker, finder, or other person with whom the other party has or
purportedly has dealt.
28. EXPANSION SPACE. Subject to the renewal rights of the existing tenants
occupying other space in the Building, Lessor shall deliver to Lessee written
notice of the availability of space for lease in the Building and the rental and
other terms of conditions on which said space is offered for lease by Lessor.
If Lessee elects to lease such space at such
29
rental and upon said terms and conditions, Lessee shall deliver written notice
to Lessor of Lessee's acceptance and agreement to lease such space for such
rental and upon said terms and conditions within three (3) business days after
receipt by Lessee of the notice of availability of said space. Lessee shall
have no right to lease such space if Lessee fails to deliver such written notice
to Lessor within said period of three (3) days.
29. SUBORDINATION. This Lease, without any further instrument, shall at
all times be subject and subordinate to any and all now effective or hereafter
executed ground or underlying leases, and to any and all mortgages and deeds of
trust which may now or hereafter affect Lessor's estate in the real property of
which the premises form a part, and to all advances made or hereafter to be made
upon the security thereof, and to all renewals, modifications, consolidations,
replacements and extensions thereof, provided, however, this Lease shall not be
subject to or subordinate to any such mortgage or deed of trust unless the
holder of such interest to which this Lease shall be subordinated executes a
recognition and non-disturbance agreement which provides (1) that this Lease
shall not be terminated so long as Lessee is not in default under this Lease,
and (2) that upon acquiring title to the Complex by foreclosure or otherwise
such holder shall recognize all of Lessee's rights hereunder which accrue
thereafter. In confirmation of such subordination, Lessee shall promptly
execute any certificate or other instrument which Lessor may deem proper to
evidence such subordination, without expense to Lessor; provided, however, that
if any person or persons purchasing or otherwise acquiring the real property of
which the premises form a part by any ground lease termination, or any sale,
sales and/or other proceedings under such mortgages and/or deeds of trust, shall
elect to continue this lease in full force and effect in the same manner and
with like effect as if such person or persons had been named as Lessor herein,
then this Lease shall continue in full force and effect as aforesaid, and Lessee
hereby attorns and agrees to attorn to such person or persons. Lessor shall use
its reasonable good faith efforts to cause any existing lender to execute a
recognition and non-disturbance agreement within thirty (30) days of the
execution of this Lease.
30. NO TERMINATION RIGHT. Except as otherwise expressly set forth in this
Lease, Lessee shall not have the right to terminate this Lease as a result of
any default by Lessor and Lessee's remedies shall be limited to damages and/or
injunction. Lessee expressly waives the defense of constructive eviction.
31. APPROVALS. Notwithstanding anything to the contrary in this Lease,
whenever this Lease requires an approval, consent, designation, determination or
judgment by either Lessor or Lessee, such approval, consent, designation,
determination, or judgment (including, without limiting the generality of the
foregoing, those required in connection with assignment and subletting) shall
not be unreasonably withheld or delayed and in exercising any right or remedy
hereunder, each party shall at all times act reasonably and in good faith.
30
32. LESSOR'S ENTRY. Lessor and Lessor's agents, except in the case of an
emergency, shall provide Lessee with twenty-four (24) hours' notice prior to
entry of the premises. Such entry by Lessor and Lessor's agents shall not
impair Lessee's operations more than reasonably necessary. Lessor and Lessor's
agents shall at all times be accompanied by Lessee during any such entry except
in case of emergency and except for janitorial work.
33. REASONABLE EXPENDITURES. Notwithstanding anything to the contrary in
this Lease, any expenditure by a party permitted or required under this Lease,
for which such party is entitled to demand and does demand reimbursement from
the other party, shall be limited to the fair market value of the goods and
services involved, shall be reasonably incurred, and shall be substantiated by
documentary evidence available for inspection and review by the other party or
its representative during normal business hours.
34. ATTORNEYS' FEES. If any action at law or in equity shall be brought
to recover any rent under this Lease, or for or on account of any breach of or
to enforce or interpret any of the provisions of this Lease or for recovery of
the possession of the Premises, the prevailing party shall be entitled to
recover from the other party costs of suit and reasonable attorneys' fees, the
amount of which shall be fixed by the court and shall be made a part of any
judgment rendered.
35. GENERAL PROVISIONS.
(a) Nothing contained in this Lease shall be deemed or construed by
the parties hereto or by any third person to create the relationship of
principal and agent or of partnership or of joint venture of any association
between Lessor and Lessee, and neither the method of computation of rent nor any
other provisions contained in this Lease nor any acts of the parties hereto
shall be deemed to create any relationship between Lessor and Lessee other than
the relationship of landlord and tenant.
(b) Whenever the consent of a party is required as a condition to any
action pursuant to any provision of this Lease such consent shall not be
unreasonably withheld or delayed.
(c) Each and all of the provisions of this Lease shall be binding
upon and inure to the benefit of the parties hereto, and except as otherwise
specifically provided elsewhere in this Lease, their respective heirs,
executors, administrators, successors, and assigns, subject at all times,
nevertheless, to all agreements and restrictions contained elsewhere in this
Lease with respect to the assignment, transfer, encumbering, or subletting of
all or any part of Lessee's interest in this Lease.
31
(d) The captions of the paragraphs of this Lease are for convenience
only and shall not be considered or referred to in resolving questions of
interpretation or construction.
(e) This Lease is and shall be considered to be the only agreement
between the parties hereto and their representatives and agents. All
negotiations and oral agreements acceptable to both parties have been merged
into and are included herein. There are no other representations or warranties
between the parties and all reliance with respect to representations is solely
upon the representations and agreements contained in this instrument.
(f) The laws of the State of California shall govern the validity,
performance, and enforcement of this Lease. Notwithstanding which of the
parties may be deemed to have prepared this Lease, this Lease shall not be
interpreted either for or against Lessor or Lessee, but this Lease shall be
interpreted in accordance with the general tenor of the language in an effort to
reach an equitable result.
(g) Time is of the essence with respect to the performance of each of
the covenants and agreements contained in this Lease.
(h) Lessee hereby expressly waives any and all rights of redemption
granted by or under any present or future law in the event of Lessee being
evicted or dispossessed for any cause, or in the event of Lessor obtaining
possession of the premises by reason of the breach by Lessee of any of the
covenants and conditions of the Lease or otherwise. The rights given to Lessor
herein are in addition to any rights that may be given to Lessor by any statute
or otherwise.
(i) Any provision or provisions of this Lease which shall prove to be
invalid, void or illegal, shall in no way affect, impair, or invalidate any
other provisions hereof, and the remaining provisions hereof shall nevertheless
remain in full force and effect.
(j) Because Lessee is a corporation, this Lease must be executed by
the President and/or the Vice President of the corporation, unless the Bylaws or
a resolution of the Board of Directors shall otherwise provided, in which event
the Bylaws or a certified copy of the resolution, as the case may be, must be
furnished.
(k) Delivery of this Lease, duly executed by Lessee, constitute an
offer to lease the premises as herein set forth, and under no circumstances
shall such delivery be deemed to create an option or reservation to lease the
premises for the benefit of Lessee.
32
This Lease shall only become effective and binding upon execution hereof by
Lessor and delivery of a signed copy to Lessee.
(1) Lessor shall provide monument signage for the Complex upon which
Lessee's name shall be shown, subject to the signage rights of the existing
tenants in the Building.
IN WITNESS WHEREOF, the Lessor and Lessee have duly executed this Lease as
of the date first set forth herein.
"Lessor"
W. F. BATTON & CO., INC.,
a California corporation
By /s/ W. F. Batton
------------------
Its President
----------
"Lessee"
NOVELLUS SYSTEMS, INC.,
a California corporation
By /s/ John. P. Root
-------------------
Its Treasurer
------------
33
LEGAL DESCRIPTION:
All that real property situate in the City of San Jose, County of Santa Clara,
State of California, described as follows:
PARCEL ONE:
LOT 14, as shown on that certain Map of Tract No. 7544, which map was filed for
record in the office of the Recorder of the County of Santa Clara, State of
California on March 7, 1984 in Book 525 of Maps, page(s) 45 and 46, and the
Certificate of Correction recorded August 8, 1985 in Book J422, page 1784,
Official Records.
Excepting therefrom that portion conveyed to the Santa Clara County Transit
District by deed recorded May 28, 1987 in Book K165, page 2153 of Official
Records, described as follows:
Beginning at the Southwesterly corner of Lot 14, as said Lot is shown on said
Tract Map; thence Easterly along the dividing line between Lot 14 and the Lands
of the City and County of San Francisco, as shown on said Tract Map, N. 66 deg.
00' 56" E. 210.13 feet to the true point of beginning of this description;
thence continuing Easterly along said dividing line N. 66 deg. 00' 56" E. 68.00
feet; thence Northerly at right angles N. 23 deg. 59' 04" W. 40.00 feet to a
point on a line that is parallel with and 40.00 feet, measured at right angles,
Northerly of the said Southerly line of Lot 14; thence Westerly along said
parallel line S. 23 deg. 59' 04" E. 40.00 feet to the true point of beginning.
Also excepting therefrom that portion that conveyed to the Santa Clara County
Transit District by Grant Deed recorded September 6, 1990 in Book L471, page
1534, Official Records, described as follows:
All that portion situated in the City of San Jose, County of Santa Clara, State
of California and being a portion of Lot 14, as said Lot is shown on that
certain Tract No. 7544, filed in Book 525 of Maps, pages 45 and 46, Records of
Santa Clara County, California, and more particularly described as follows:
Beginning at the Southwesterly corner of Lot 14, as said Lot is shown on said
Tract Map; thence easterly along the dividing line between Lot 14 and the lands
of the City and County of San Francisco, as shown on said Tract Map, N. 66 deg.
00' 56" E. 205.13 feet to the true point of beginning of this description;
thence continuing Easterly along said dividing line N. 66 deg. 00' 56" E. 5.00
feet; thence Northerly at right angles N. 23 deg. 59' 04" W. 40.00 feet to a
point on a line that is parallel with and 40.00 feet, measured at right angles
Northerly of the said Southerly line of Lot 14; thence Westerly along said
parallel line S. 66 deg. 00' 56" W. 5.00 feet; thence Southerly at right angles
S. 23 deg. 59' 04" E. 40.00 feet to the true point of the beginning.
PARCEL TWO:
A non-exclusive easement for the parking of vehicles on that certain portion
EXHIBIT "A"
Page 2
of the real property commonly known as the Hetch Hetchy right-of-way as granted
in that certain instrument recorded May 16, 1986 in Book J695, page 1295,
Official Records.
ARB No. ht
3590 North First Street, San Jose
Third Floor
[FLOOR PLAN]
North Tower
13,425+/- Rentable Square Feet
[FLOOR PLAN]
South Tower
12,905+/- Rentable Square Feet
[LOGO]
EXHIBIT B
DEVCON CONSTRUCTION INC.
SCHEDULE OF VALUES
JOB #= NAME: NOVELLUS
------
SITE= NORTHPOINTE 3rd FLR WEST
DRAWING= OCT 8/30 SPACE PLAN
AREA= SF DATE:9/6 ESTIMATE #1
-------
ITEM TOTAL
-------------------------------------
1 SUPERVISION & LAYOUT $1,600
2 TEMPORARY FACILITIES 200
3 CLEAN UP 600
4 DEMOLITION 1,900
5 CABINETS & MILLWORK 2,200
6 DOORS/FRAMES/ 550
7 DRYWALL & FRAMING 1,800
8 ACOUSTICAL CEILING 600
9 FLOORCOVERING 3,800
10 PAINT 600
11 PLUMBING 4,000
12 FIRE SPRINKLERS 500
13 HVAC 300
14 ELECTRICAL 1,700
15 SYSTEM PTM CONNECTION 500 ALLOWANCE
--------
SUB TOTAL $20,850
CONTRACTORS O.H. & PROFIT 1,043
ARCHITECTURAL DESIGN COSTS 0
TESTING & INSPECTION 0
CONSULTANT FEES 0
PLAN CHECK/PERMIT FEES 0
LABOR LIABILITY INSURANCE 0
-------
-------
JOB TOTAL $22,693
ALTERNATES
#1 - RECARPET ENTIRE SUITE ADD $40,193
#2 - REPAINT ENTIRE SUITE ADD 3,500
QUALIFICATIONS
ALL WORK TO BE DONE DURING REGULAR HOURS.
COFFEE SINK WASTE LINE WILL NOT FIT INTO 2ND FLOOR ABOVE-CEILING SPACE.
WE ASSUME BLDG DEPT WILL ALLOW WASTE LINE TO BE PUMPED OVERHEAD.
ALLOWANCE INCLUDED TO CONNECT SYSTEM PARTITIONS TO EXISTING OVERHEAD
JUNCTION BOXES.
NEW CARPET LABS ASSUMED TO BE LEAD OVER EXISTING VCT.
WE ASSUME THIS WORK TO BE DONE WITHOUT PERMITS
EXISTING RVAC/ELECTRICAL IMPROVEMENTS ASSUMED TO BE ADEQUATE.
INCLUSIONS
PHONE/DATA CABLING
ADDITIONAL ELECTRICAL POWER
SECURITY SYSTEM
REVISED ELECTRICAL METERING
EXHIBIT "C"