EXHIBIT 10.30
LEASE
THIS LEASE is made this 30 day of October 1995, by and between
BERKSHIRE-NEWBURY LIMITED PARTNERSHIP, a Massachusetts limited partnership with
a principal office at 1500 Main Street, Springfield, Massachusetts, or its
Assignee, ("Landlord"), and GENUS, INC., a California corporation with a place
of business at 4 Mulliken Way, Newburyport, Massachusetts ("Tenant").
W I T N E S S E T H:
1. PREMISES
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord,
upon and subject to the terms and provisions of this Lease, the building
premises consisting of approximately Seventy Thousand (70,000) square feet (the
"Building") and the real estate on which the building is to be located, which is
Lot 62 Stanley Tucker Drive, Newburyport, Massachusetts (the "Property"), as
more particularly described on EXHIBIT A attached hereto and incorporated herein
(the Building and the Property are collectively called the "Premises").
2. TERM OF LEASE
The primary term of this Lease ("Initial Term") shall be for seventeen (17)
years commencing on the Commencement Date (as hereinafter defined) and ending on
the day immediately preceding the 18th anniversary of the Commencement Date.
Provided Tenant is not in default under this Lease at the time of its
exercise of any option to extend. Tenant shall have the option of extending the
term of this Lease for four (4) additional periods of five (5) years each upon
written notice to Landlord at least nine (9) months prior to the end of the
Initial Term of this Lease and upon not less than three (3) months written
notice prior to the expiration of each option period hereunder. As used herein
the term "Lease Term" shall mean the Initial Term plus any extension of the term
of this Lease in accordance with this paragraph.
If the rent during any extended term is determined by appraisal and if
Tenant does not, in its sole discretion, approve the rental amount established
by such appraisal, Tenant may rescind its exercise of the Option by giving
Landlord written notice of such election to rescind within ten (10) days after
receipt of all appraisals, but only if all of the following are met: If Tenant
rescinds its exercise of the Option, then (i) the Lease shall terminate on the
ninetieth (90th) day after Tenant's notice of rescission or on the date the
Lease would have otherwise terminated absent Tenant's exercise of the Option,
whichever date is later; and (ii) Tenant shall pay all costs and expenses of the
appraisal, and (iii) Tenant shall pay rent during that ninety (90) day period in
the amount Tenant would have paid for that period, had Tenant not rescinded the
extension.
3. RENT
(a) BASE RENT. From and after the Commencement Date (as defined herein),
Tenant agrees to pay to Landlord at the following address: 1500 Main Street,
Suite 2012, Springfield, MA 01115, or as directed by Landlord, without notice,
demand, offset or deduction except as provided herein, on the Commencement Date
and thereafter, semiannually, in advance, on the first day of January and July
of each and every calendar year during the Lease Term, prorated for any partial
year, one-half of the following sums equal to the annual base rent ("Base
Rent"):
LEASE YEAR*
INITIAL TERM ANNUAL BASE RENT
- -------------------------------------------------------- --------------------------------------------------------
For Lease Years 1-5 $805,000 +/- (12.3846% times (Construction Cost** minus
$6,500,000))***
For Lease Years 6-10 $925,750 +/- (14.2423% times (Construction Cost** minus
$6,500,000))***
For Lease Years 11-15 $975,038 +/- (14.9544% times (Construction Cost** minus
$6,500,000))***
For Lease Years 16-17 $805,000 +/- (12.3846% times (Construction Cost** minus
$6,500,000))***
3. RENT (CONTINUED)
LEASE YEAR*
OPTION TERM ANNUAL BASE RENT
- -------------------------------------------------------- --------------------------------------------------------
For First Option Term (Lease Years 18-22) Greater of (a) 95% of fair market value****
For Second Option Term (Lease Years 23-27)
For Third Option Term (Lease Years 28-32) (as determined on the first day of each option term), or
For Fourth Option Term (Lease Years 33-37) (b) the Base Rent payable for the 1st year of the
Initial Term
As used in this Section the following terms shall have the following
meanings:
*"LEASE YEAR" is a year commencing on the Commencement Date (or an
anniversary thereof) and ending on the date immediately preceding the next
succeeding anniversary of the Commencement Date.
**"CONSTRUCTION COST" is defined in the Improvement Agreement executed
concurrently herewith by Landlord and Tenant.
***When the Construction Cost has been determined, the total thereof shall be
compared to $6,500,000 and the Annual Rent for the Initial Term shall be
adjusted in accordance with the foregoing formulas, upward if the
Construction Cost exceeds $6,500,000, and downward, if the Construction Cost
is less than $6,500,000.
****"FAIR MARKET VALUE" shall be determined at the time of Tenant's exercise of
each option to extend. Upon Tenant's written notice of the exercise of an
option to extend, Landlord and Tenant shall attempt to determine and agree
on fair market value rental for the Premises. Fair market value shall mean
that rental rate currently being charged for comparable manufacturing
facilities in the region, exclusive of the Specialized Improvements, as
defined in EXHIBIT B or as otherwise designated pursuant to the Improvement
Agreement (which are constructed by Landlord, but amortized in the Annual
Rent during the Initial Term), and exclusive of any other improvements in
the Premises that are installed after the Substantial Completion of the
Improvements (as defined in the Improvements Agreement) at Tenant's cost. In
the event Landlord and Tenant cannot agree on said fair market value, each
party shall select a MAI appraiser with experience in commercial valuations
of this nature in the region who shall attempt to agree upon the fair market
value within 20 days and, if they cannot agree the two (2) appraisers
selected shall select a third. In such events the three (3) appraisers shall
each determine fair market value rental for the Premises and the average of
the three (3) shall constitute fair market value for purposes of Base Rent
during said option term. The costs of such appraisers shall be borne equally
by each party.
(b) COMMENCEMENT DATE. Tenant's obligation to pay rent hereunder shall
commence on the earlier of when Landlord delivers to Tenant the Premises with
the Improvements Substantially Completed as defined in the Improvement Agreement
or Tenant actually occupies the Premises for the purposes of conducting its
manufacturing business (herein the "Commencement Date").
(c) ADDITIONAL RENT. Tenant shall pay all expenses related to the repair,
replacement (structural or otherwise), the operation and maintenance of the
Premises, including without limitation real property taxes and insurance
premiums, as additional rent hereunder (the "Additional Rent").
(d) ABSOLUTE NET LEASE. It is the intention of the parties that the rent
payable hereunder shall be absolutely net to Landlord, so that this Lease shall
yield to Landlord the net annual rent specified herein during the Lease Term,
and that all costs, expenses and obligations of every kind and nature whatsoever
relating to the Premises and its physical structures shall be paid by Tenant.
Without limiting any other provision of this Lease, it is expressly understood
and agreed that all repairs, replacements, real estate taxes, operating
expenses, insurance premiums, and all other amounts that Tenant is required to
pay hereunder, together with all interest and penalties that may accrue thereon,
shall be deemed to be Additional Rent, and in the event of nonpayment thereof by
Tenant, Landlord
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3. RENT (CONTINUED)
shall have all of the rights and remedies with respect thereto as would accrue
to Landlord for nonpayment of Base Rent. As used in this Lease, "Rent" shall
mean the Base Rent plus Additional Rent. It is expressly understood and agreed
that Landlord shall have no obligation for any cost or expense associated with
the Premises during the Initial Term of the Lease or any extensions thereof.
(e) LIMITATION ON EXPENSES. Notwithstanding anything to the contrary in
this Lease or the Improvement Agreement, Landlord at its sole expense shall pay
and be solely responsible for the following "Costs":
(i) LOSSES CAUSED BY OTHERS. Costs occasioned by the act, omission or
violation of Law by Landlord or its, agents, employees or contractors, or
by the Landlord's or its contractor's violation of this Lease or any loan or
construction contract relating to this Lease or the Improvements.
(ii) INSURANCE, CASUALTIES AND CONDEMNATIONS. Except to the extent of
any shortfall in insurance proceeds caused by Tenant's breach of its
obligations under Section 11, Costs occasioned by fire, acts of God, or
other casualties and Costs occasioned by the exercise of the power of
eminent domain.
(iii) CAPITAL IMPROVEMENTS. The Construction Costs or any other cost or
expenses incurred by the Landlord to construct the Improvements in
accordance with the Improvements Agreement.
(iv) REIMBURSABLE EXPENSES. Costs for which Landlord has a right of
reimbursement from others.
(v) LEASING EXPENSES. Fees, commissions, attorneys' fees, Costs or
other disbursements incurred in connection with negotiations of this
Lease or any financing agreement or construction agreement relating to the
Improvements.
(vi) RESERVES. Depreciation, amortization or other expense reserves.
(vii) MORTGAGES. Interest, charges, attorneys' fees, fees, and other
charges incurred by Landlord in connection with the financing of the
construction of the Improvements or on any other debt, payments on mortgages
and rent under ground leases.
(viii) HAZARDOUS MATERIALS. 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 Premise, or the soil, groundwater, air, or building materials of
the Improvements, and any judgments or other Costs incurred in connection
with any Hazardous Material exposure or releases, but only to the extent
caused that the Hazardous Material present on the Property or the soil,
groundwater, surface water, air or building materials thereof on the
Commencement Date.
(f) LATE CHARGE. In the event any Annual Base Rent payment is not paid
within fifteen (15) days of its due date, Tenant shall pay Landlord a late
charge equal to two percent (2%) of such payment per month, which late charge
shall be deemed to be due and collectible as Additional Rent hereunder.
4. ADDITIONAL RENT -- TAXES, UTILITIES
(a) Tenant shall pay, as Additional Rent, all general and special taxes,
including all real estate taxes, assessments for local improvements and other
governmental charges which may be charged, assessed, or imposed upon the
Premises. Said payments shall be made directly to the taxing authority with
evidence of payment submitted to Landlord within thirty (30) days of such
payment. Any special assessments by a governmental authority may be paid over
time periods acceptable to said governmental authority, subject to Landlord's
reasonable consent. Landlord shall forward all tax bills to Tenant upon its
receipt of such bills.
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4. ADDITIONAL RENT -- TAXES, UTILITIES (CONTINUED)
(b) Tenant shall pay all license fees which may be imposed upon the
business of Tenant conducted upon the Premises.
(c) Tenant shall pay, as Additional Rent and before the same shall become
delinquent, for the maintenance and repair of all grounds, building, parking and
driveways or service roads within the Premises and all of its requirements for
utilities, including, but not limited to, heat, electricity, telephone, water
and sewer use. Tenant shall cause all such utility accounts to be issued or
transferred into its name immediately upon commencement of this Lease.
(d) Taxes and charges shall be equitably adjusted for and with respect to
the first and last partial tax year (if any) of the Lease Term. Where the
applicable tax bills and computations are not available prior to the end of the
term hereof, a tentative computation shall be made on the basis of the previous
year's taxes payable by Tenant, with a final adjustment to be made between
Landlord and Tenant promptly after all bills and computations are available for
such period.
(e) Tenant will have the right to contest the amount or validity, in whole
or in part, of any tax by appropriate proceedings diligently conducted in good
faith. Upon the termination of those proceedings, Tenant will pay the amount of
the tax or part of the tax as finally determined, the payment of which may have
been deferred during the prosecution of the proceedings, together with any
costs, fees, interest, penalties, or other related liabilities. Landlord will
not be required to join in any contest or proceedings unless the provisions of
any law or regulations then in effect require that the proceedings be brought by
or in the name of Landlord. In that event, Landlord will join in the proceedings
or permit them to be brought in its name; however, Landlord will not be
subjected to any liability for the payment of any costs or expenses in
connection with any contest or proceedings, and Tenant will indemnify Landlord
against and save Landlord harmless from any of those costs and expenses.
(f) Tenant will not be obligated to pay local, state or federal net income
taxes assessed against Landlord; local, state or federal capital levy of
Landlord; or sales, excise, franchise, gift, estate, succession, inheritance or
transfer taxes of Landlord.
5. USE OF PROPERTY
(a) During the term of this Lease, Tenant shall use the Premises for
purposes of manufacturing of components and equipment for the semiconductor
industry and any other use permitted by law as a matter of right and in
compliance with all governmental regulations.
(b) Tenant agrees that during the Lease Term:
(i) No auction, fire or bankruptcy sales may be conducted within the
Premises without the prior written consent of Landlord;
(ii)Tenant shall provide at its expense for the collection of trash and
refuse on a timely basis and all refuse shall be kept in cans,
dumpsters and similar appropriate storage at all times;
(iii)
Tenant shall at all times fully and adequately heat the Premises so
as to prevent damage to the Premises, the Building and any
structures, fixtures or equipment located at the Premises;
(iv)Tenant may place on the exterior of the Premises (including, but
without limitation, windows, doors and entrance lobbies) any signs
provided they shall be in compliance with all zoning, building or other
regulations;
(v) Tenant shall not perform any act or carry on any practice which may
injure the Property or cause any offensive odors or loud noise other
than those necessarily a function of Tenant's operations, or constitute a
nuisance or menace to any other persons;
(vi)Tenant shall not use or permit the Property to be used for any
unlawful purpose and will obtain all necessary permits or licenses
required for its use of the Property;
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5. USE OF PROPERTY (CONTINUED)
(vii)
Tenant has, at the termination of this Lease, the option to remove
its possessions and possessions of others (including, if there is
then no uncured Event of Default under Section 14 hereof all of Tenant's
Specialized Improvements, as identified on EXHIBIT B or otherwise designated
pursuant to the Improvement Agreement), as the same may be amended by Tenant
from time to time and leave the Premises in the same condition as at the
Commencement Date of the Lease, excepting only reasonable wear and tear,
damage by fire or casualty, eminent domain, Hazardous Materials which were
not placed on the Premises by Tenant, and alterations which Landlord has
previously agreed in writing may be surrendered; and
(viii)
Tenant shall be responsible at its expense for snow removal from the
walks, drives, entrances, exits and parking areas on a timely basis.
6. HAZARDOUS SUBSTANCES
(a) Tenant shall duly comply with the requirements of all applicable
environmental, health, safety and sanitation laws, ordinances, codes, rules and
regulations and interpretations and orders of regulatory and administrative
authority with respect to its use, storage, and release of Hazardous Materials.
(b) Tenant shall not use, handle or store or dispose of any Hazardous
Materials in or about the Premises except as reasonably required in Tenant's
business judgment for its operation of its business and then strictly in
accordance with all applicable laws and regulations. If during the Lease Term
the release or disposal of Hazardous Materials anywhere on the Premises by
Tenant, its agent, employee, contractor, invitee, or any other person for whom
Tenant is legally responsible (including, without limitation, a third party who
comes onto the surface of the Premises and releases a Hazardous Material into
the soil, ground water, surface water, ambient air or building materials of the
Premises during the Lease Term), results in (1) contamination of the soil,
ambient air, surface water or ground water with Hazardous Materials in excess of
legally permitted levels ("Tenant's Contamination") or (2) loss or damage to
person(s) or property, then Tenant agrees to respond in accordance with the
following paragraph:
Tenant shall (i) notify Landlord immediately of any contamination, claim of
contamination, loss or damage, and (ii) after consultation and approval by
Landlord, Tenant shall at its sole expense clean up Tenant's Contamination in
full compliance with all applicable statutes, regulations and standards. No
consent or approval of Landlord shall in any way be construed as imposing upon
Landlord any liability for the means, methods or manner of removal, containment
or other compliance with applicable law for and with respect to the foregoing.
(c) In the event that Tenant does not comply with the provisions of Section
6(b), and in addition to its other rights hereunder, Landlord shall have the
right (but not the obligation), upon 30 calendar days advance notice to Tenant,
except in the case of an emergency (in which case reasonable notice shall be
given to the extent reasonably possible), to cause the illegal release to be
contained and/or removed on behalf of Tenant. The contractors selected by
Landlord shall have the right to enter upon the Premises with such persons,
machinery and equipment as they shall reasonably deem necessary for the purpose
and undertake such remedial containment and cleanup actions as they shall
reasonably deem appropriate, without thereby incurring any liability to Tenant
on account thereof. Tenant shall reasonably cooperate with any such contractors
and render such assistance to such contractors as may be requested to facilitate
the remedial containment and cleanup actions. Tenant shall be liable to Landlord
for all costs and expenses, including all reasonable attorneys' fees reasonably
incurred on account of such remedial action undertaken on Tenant's behalf as a
consequence of Tenant's default and shall reimburse Landlord therefor on demand.
(d) Tenant shall indemnify, defend and hold harmless Landlord from and
against all loss, liability, damage and expense, including costs associated with
administrative and judicial proceedings and attorneys' fees, ever suffered or
incurred by Landlord to the extent caused by
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6. HAZARDOUS SUBSTANCES (CONTINUED)
(i) Tenant's failure at any time during the Lease Term to comply with any
environmental, health, safety or sanitation laws, ordinances, codes,
rules or regulations or interpretations or orders of regulatory or
administrative authorities with respect thereto as required by this Lease;
(ii) any release of Hazardous Materials in violation of applicable
Environmental Law on, upon or into the Property occurring during this Lease
by Tenant, its agent, employee, contractor, or any other person for whom
Tenant is legally responsible (including, without limitation, a third party
who comes onto the surface of the Premises and releases a Hazardous Material
into the soil, ground water, surface water, ambient air or building
materials of the Premises during the Lease Term); (iii) any and all damage
to natural resources or real property and/or harm or injury to persons
resulting or alleged to have resulted from such failure to comply as
described in subpart (i) and/or such release as described in subpart (ii)
hereof, and (iv) any release of a Hazardous Material into the soil,
groundwater, surface water, ambient air or building materials of the
Property during the Lease Term, whether by Tenant, or its agent, employee,
contractor, invitee, or any other person for whom Tenant is legally
responsible (including, without limitation, a third party who comes onto the
surface of the Premises and releases a Hazardous Material into the soil,
ground water, surface water, ambient air or building materials of the
Premises during the Lease Term). Notwithstanding the foregoing and any other
thing to the contrary in this Lease, Tenant shall not be liable for any
migration of a Hazardous Material from other property to this Property.
Tenant acknowledges that its obligations and liabilities under this Section
shall survive the expiration or earlier termination of this Lease. If Tenant
fails to meet its obligations to Landlord under this Section, Landlord shall
have the remedies provided in Section 14.
(e) Neither Landlord nor any employee or agent of Landlord or entity under
its control has or will generate, store or spill upon, dispose of or transfer to
or from the Premises any hazardous waste materials.
Landlord shall indemnify and hold Tenant (including any successor to or
assignee of Tenant) harmless from and against all loss, cost, liability, damage
and expense, including reasonable attorneys' fees and the costs of litigation
arising from any hazardous waste materials in or on the Premises due to the
presence of any Hazardous Material in the soil, groundwater, ambient air or
buildings materials of the Improvements on the Commencement date, or any act,
omission or negligence of Landlord, or its employee, contractor, invitee, or
other person for whom Landlord is legally responsible. Landlord acknowledges
that its obligations and liabilities under this Section shall survive the
expiration or earlier termination of this Lease.
Within the time permitted by applicable law, Landlord, at its sole cost,
shall perform or cause to be performed, any investigation, remediation, removal
action, detoxification of the Premises, and shall comply with any Environmental
Law, relating to any Hazardous Material present at on or about the Premises or
the soil, air, improvements, groundwater, surface water, or building materials
thereof on the Commencement Date.
(f) Except to the extent of Tenant's failure to perform its obligations
under this Lease concerning Hazardous Materials, Landlord, for itself hereby
waives and releases all Claims against Tenant and each Tenant Indemnitee, and
all rights to join Tenant or any Tenant Indemnitee in any litigation or
proceeding (including without limitation any Claim arising under CERCLA, the
Resource Conservation and Recovery Act or any other state or federal
Environmental Law), arising out of or in connection with any matter arising in
connection with a Hazardous Material on or about the Premises except to the
extent expressly provided in subsections 6(a) through 6(d) above,
(g) Except as disclosed in the reports attached hereto as EXHIBIT D, true
and correct copies of which have been delivered by Landlord to Tenant, to the
best knowledge of Landlord: (i) no Hazardous Material is present on Premises, or
the soil, surface water or groundwater thereof; (ii) no underground storage
tanks or asbestos containing building materials are present on the Premise; and
(iii) no action,
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6. HAZARDOUS SUBSTANCES (CONTINUED)
proceeding, or claim is pending or threatened regarding the Premise concerning
any Hazardous Material or pursuant to any Environmental Law. Landlord has
delivered to Tenant all reports and environmental assessments of the Premises
conducted at the request of or otherwise available to Landlord and Landlord has
complied with all environmental disclosure obligations imposed upon Landlord by
applicable Law with respect to this transaction.
(h) As used in this Lease, the term "Hazardous Material" shall mean any
material or substance that is now or hereafter prohibited or regulated by any
statute, law, rule, regulation or ordinance or that is now or hereafter
designated by any governmental authority to be radioactive, toxic, hazardous or
otherwise a danger to health, reproduction or the environment. As used herein
"Environmental Laws" shall mean all local, state, or federal laws, statutes,
ordinances, rules, regulations, judgments, injunctions, stipulations, decrees,
orders, permits, approvals, treaties, or protocols now or hereafter enacted,
issued or promulgated by any governmental authority which relate to any
Hazardous Material or to the use, handling, transportation, production,
disposal, discharge, release, emission, sale, or storage of, or the exposure of
any person to, a Hazardous Material.
7. MAINTENANCE, REPAIR, ALTERATIONS AND REMOVALS
(a) Except as otherwise provided in this Lease, Tenant shall, at its sole
expense, keep neat and clean and maintain in good order, condition and repair
the Premises and every part thereof, including, without limitation, the
foundations, roof and drains and structural portions of the Premises, the
exterior and interior portions of air conditioning, heating, sprinkler (if any)
and electrical systems, all doors, windows, plate and glass surrounding the
Premises, all plumbing and sewage facilities within the Premises, fixtures and
interior walls, floors, ceilings and signs.
(b) Subject to the express provisions of this Lease, Tenant shall keep the
Property in a clean, sanitary and safe condition in accordance with the laws of
the Commonwealth of Massachusetts and ordinances of the Town of Newburyport, and
in accordance with all directions, rules and regulations of the Health Officer,
Fire Marshall, Building Inspector and other proper officers of the governmental
agencies having jurisdiction thereover.
(c) Except as otherwise expressly provided in this Lease, Landlord shall
not be responsible for maintaining or making any improvements or repairs of any
kind upon the Property, but this paragraph is not intended to refer to damage by
fire or other insured risk to the Premises, provision for which is hereafter
made. Notwithstanding anything to the contrary in this Lease, Landlord shall
perform and construct, and Tenant shall have no responsibility to perform or
construct, any repair, maintenance or improvement (i) necessitated by the acts
or omissions of Landlord, or its agents, employees, or contractors, (ii)
required as a consequence of any violation of law, private servitude encumbering
the Premises, or construction defect in the Improvements caused by Landlord or
its agent, employee or contractor, and (iii) for which Landlord has a right of
reimbursement from others. Tenant's obligation, if any, to reimburse Landlord
for the costs of such repairs, maintenance and improvements shall be governed by
the other provisions of this Lease.
(d) Tenant shall not make any alterations or other structural or capital
improvements or additions upon the Premises ("Alterations") without first
obtaining, in each instance, the written consent of Landlord which shall not be
unreasonably withheld. Notwithstanding the foregoing, Tenant shall have the
right to make any and all Alteration to the interior space of the Premises, so
long as such Alterations do not impact the structural integrity of the Premises.
Notwithstanding anything to the contrary in this Lease, all Alterations, trade
fixtures and personal property installed in the Premises at Tenant's expense
("Tenant's Property") shall at all times remain Tenant's property and Tenant
shall be entitled to all depreciation, amortization and other tax benefits with
respect thereto. Except for Alterations which cannot be removed without
structural injury to the Premises, at any time Tenant may remove Tenant's
Property from the Premises, provided Tenant repairs all damage caused by such
removal. Landlord shall have no lien or other interest whatsoever in any item
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7. MAINTENANCE, REPAIR, ALTERATIONS AND REMOVALS (CONTINUED)
of Tenant's Property, or any portion thereof or interest therein located in the
Premises or elsewhere, and Landlord hereby waives all such liens and interests.
Within ten (10) days following Tenant's request, Landlord shall execute
documents in form reasonably acceptable to Tenant to evidence Landlord's waiver
of any right, title, lien or interest in Tenant's Property located at the
Premises.
(e) Except as expressly provided in this Lease, Landlord has not made and
does not make any representation or warranty as to any matter affecting or
relating to the Premises, including but not limited to the physical condition
thereof, and Tenant acknowledges that no such representation or warranty has
been made and agrees to lease the Premises in "AS IS" condition as of the date
of this Lease, subject to the completion of Landlord's construction and delivery
obligations and its assignment of warranties as set forth in the Improvement
Agreement, and subject to all of the Landlord's other obligations hereunder.
8. [INTENTIONALLY DELETED.]
9. LANDLORD'S ACCESS TO PREMISES
(a) Landlord and its designees shall have the right to enter upon the
Premises at all reasonable hours and upon reasonable notice (except in an
emergency) for the purpose of inspecting the same. If repairs are required to be
made by Tenant pursuant to this Lease, Landlord may demand that Tenant make the
same forthwith, and if Tenant refuses or neglects to commence such repairs and
complete the same with reasonable dispatch, after such demand, Landlord may (but
shall not be required to) make or cause such repairs to be made. If Landlord
makes or causes such repairs to be made, Tenant shall within seven (7) days
following demand of Landlord pay to Landlord the cost thereof reasonably
incurred by Landlord, and if it shall default in such payment, Landlord shall
have the remedies provided in Section 14.
(b) For a period commencing nine (9) months prior to the termination of the
Lease Term (including any extension thereof), upon written notice to Tenant,
Landlord may have reasonable access to the Premises for the purpose of
exhibiting the same to prospective tenants.
10. INDEMNIFICATION; PUBLIC LIABILITY INSURANCE; WORKERS' COMPENSATION
INSURANCE
(a) Subject to Section 10(e), below, Tenant shall indemnify and save
harmless Landlord from and against all claims of whatever nature to the extent
arising from (i) any act, omission or negligence occurring on the Premises
during the Lease Term, or (ii) any negligent act or omission by Tenant, or
Tenant's agents, employees, contractors, invitees, or other persons for whom
Tenant is legally responsible wherever occurring during the Lease Term. This
indemnity and hold harmless agreement shall include indemnity against all costs,
expenses and liabilities reasonably incurred in or in connection with any such
claim or proceeding brought thereon, and the defense thereof.
(b) Tenant shall maintain in full force during the Lease Term a policy or
public liability insurance insuring all Tenant's indemnities described in this
Section 10. Under such policy Landlord (and such other persons as are in privity
of estate with Landlord as may be set out in notice from time to time delivered
to Tenant) and Tenant shall be named as insureds. Each such policy shall be non-
cancellable with respect to Landlord and Landlord's said designees without
thirty (30) days' prior written notice to Landlord, and a duplicate original or
certificate thereof shall be delivered to Landlord at the beginning of the Lease
Term and upon request thereafter. he minimum limits of liability of such
insurance shall be ONE MILLION DOLLARS ($1,000,000.00) per occurrence for
personal injury (or death) and [THREE MILLION DOLLARS ($3,000,000.00)] per
occurrence with respect to damage to property.
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10. INDEMNIFICATION; PUBLIC LIABILITY INSURANCE; WORKERS' COMPENSATION
INSURANCE (CONTINUED)
In the event Tenant fails to provide such insurance, Landlord may purchase
such insurance and Tenant agrees that within seven (7) days following demand of
Landlord it will pay to Landlord the cost thereof, and if it shall default in
such payment, Landlord shall have the remedies provided in Section 14.
(c) Tenant shall maintain all workers' compensation and other insurance in
compliance with all applicable laws.
(d) Tenant shall use and occupy the Premises at its own risk, and Landlord
shall have no responsibility or liability for any loss of or damage to fixtures
or other personal property of Tenant.
(e) Notwithstanding anything to the contrary in this Lease, Tenant shall
neither release Landlord from, nor indemnify Landlord with respect to: (i) the
negligence or willful misconduct of Landlord, or its employees, agents,
contractors, or other persons for whom Landlord is legally liable; or (ii) a
breach of Landlord's obligations or representations under this Lease, or (iii) a
violation of any law, rule or regulation by Landlord, its agents, contractors,
employees, or other persons for whom Landlord is legally liable. Landlord shall
indemnify and save harmless Tenant from and against all claims of whatever
nature to the extent arising from (i) any act, omission or negligence occurring
on the Premises prior to or after the Lease Term, or (ii) any negligent act or
omission by Landlord, or Landlord's agents, employees, contractors, invitees, or
other persons for whom Landlord is legally responsible wherever occurring during
the Lease Term. This indemnity and hold harmless agreement shall include
indemnity against all costs, expenses and liabilities incurred in or in
connection with any such claim or proceeding brought thereon, and the defense
thereof.
11. PROPERTY INSURANCE
(a) Tenant shall keep, at its expense (which shall be deemed additional
rent), the Premises insured against loss or damage by fire with the usual
extended coverage endorsements in amounts not less than one hundred percent
(100%) of the full replacement value thereof above foundation walls.
(b) Tenant shall keep Tenant's own fixtures, merchandise and equipment
insured against loss or damage by fire, vandalism and theft with the usual
extended coverage endorsements, in such amounts and with such insurance carriers
as Tenant shall determine. It is understood and agreed that Tenant assumes all
risk of damage to its own property arising from any cause whatsoever, including,
without limitation, loss by theft or otherwise.
(c) Insofar as and to the extent that the following provision may be
effective without invalidating or making it impossible to secure insurance
coverage obtainable from responsible insurance companies doing business in the
Commonwealth of Massachusetts (even though extra premium may result therefrom),
Landlord and Tenant mutually agree that with respect to any loss which is
covered by insurance then being carried by them, respectively, or which would be
covered by a standard form of full replacement cost, extended coverage, all-risk
casualty insurance, each releases the other and their respective officers,
directors, employees, successors and assigns of and from any and all claims with
respect to such loss; and they further mutually agree that their respective
insurance policies shall provide that the insurer waives its right to be
subrogated to the rights of the insured against the other party or its agents,
servants or employees for any loss payable under the policy and that the
insurance shall not be validated by reason of the insured's waiver of
subrogation. In the event that an extra premium is payable by either party as a
result of this provision, the other party shall reimburse the party paying such
premium for the amount of such extra premium. If either party is unable to
obtain a waiver of subrogation from its insurer, the said party shall name the
other as an additional insured on their casualty insurance.
9
12. DAMAGE TO PROPERTY
(a) In case during the Lease Term the Premises shall be damaged by fire or
other casualty Landlord shall proceed forthwith to repair such damage and
restore the Premises to substantially their condition at the time of such damage
subject to any zoning laws then in existence, but Landlord shall not be
responsible for any delay which may result from any cause beyond Landlord's
reasonable control and Landlord shall not be required to commence such work
until it receives any proceeds it will receive with respect to the loss.
Landlord and Tenant shall use all reasonable efforts to obtain such proceeds
within a reasonable time. In no event shall Landlord be obligated to pay for any
such repairs or restoration in excess of available insurance proceeds.
(b) If damage to the Premises is not covered by the insurance Tenant is
required to carry pursuant to Section 11 and the cost to restore such damage
exceeds 20% of the replacement cost of the Premises, then Landlord, within sixty
(60) days after the occurrence of such event may give written notice to Tenant
of its election to terminate this Lease, unless Tenant agrees in its discretion
to reimburse the Landlord for the amount of such uncovered costs in excess of
20% of the replacement cost of the Premises.
(c) If the Premises are damaged to such an extent that the restoration
thereof is not reasonably estimated to be completed within 180 days following
the destructive event or if the restoration of the Premises is for any reason
not actually completed within 180 days following the destructive event, then
Tenant shall have the right to terminate this Lease by delivery of written
notice to Landlord.
(d) In the event that the provisions of Section 12(a), (b ), or (c) shall
become applicable, the Base Rent shall be abated or reduced proportionately to
the interference with the Tenant's use of the Premises caused by the casualty
(and Landlord shall return a pro rata portion of the semi-annual advance Base
Rent payment) during any period in which, by reason of such damage or
destruction, there is substantial interference with the operation of the
business of Tenant in the Premises, having regard to the extent to which Tenant
may be required to discontinue its business in the Premises, and such abatement
or reduction shall continue for the period commencing with such destruction or
damage and ending with the completion by Landlord of such repair or
reconstruction as Landlord is obligated to complete. In the event of termination
of this Lease pursuant to this Section 12, this Lease and the Lease Term hereof
shall cease and come to an end within a reasonable time after notice of
termination as is required to permit Tenant to remove its property from the
Premises.
13. EMINENT DOMAIN
(a) If the Premises, or such portion thereof as to render the balance (when
reconstructed) unsuitable for the purposes of Tenant, shall be taken by
condemnation or right of eminent domain, Tenant, upon written notice to
Landlord, shall be entitled to terminate this Lease, provided that such notice
is given not later than sixty (60) days after Tenant has been deprived of
possession. Should any part of the Premises be so taken or condemned, and should
this Lease not be terminated in accordance with the foregoing provision,
Landlord covenants and agrees promptly after such taking or condemnation, and
the determination of Landlord's award therein, to expend so much as may be
necessary of the net amount which may be awarded to Landlord in such
condemnation proceedings in restoring the Premises to an architectural unit as
nearly like their condition prior to such taking as shall be practicable. Should
the net amount so awarded to Landlord be insufficient to cover the cost of
restoring the Premises, as estimated by Landlord's architect, Landlord may, but
shall not be obligated to, supply the amount of such insufficiency and restore
said Premises as above provided, with all reasonable diligence, or Landlord may
terminate this Lease, if Tenant does not supply the necessary additional funds
or agree to a reduction in the Landlord's restoration obligation. Where Tenant
has not already exercised any right of termination accorded to it under the
foregoing portion of this paragraph, Landlord shall notify Tenant of Landlord's
election not later than ninety (90) days after the final determination of the
amount of the award.
10
13. EMINENT DOMAIN (CONTINUED)
(b) Out of any award for any taking of the Premises, in condemnation
proceedings or by right of eminent domain, Landlord shall be entitled to receive
and retain the amounts awarded for such Premises and for Landlord's loss of
Landlord's estate in this Lease. Tenant shall (i) execute any instruments of
assignment as may be reasonably required by Landlord, (ii) join in any petition
for recovery of damages as Landlord may reasonably request, and (iii) turn over
to Landlord any damages that may be recovered in any proceeding which are the
property of Landlord under this Section. Tenant shall be entitled to receive and
retain any amounts which may be specifically awarded to it in any such
condemnation proceedings, because of the taking of its trade fixtures or
furniture and its leasehold improvements loss of goodwill, severance damages,
and moving costs to the extent Tenant was not reimbursed for the same by
Landlord.
(c) In the event of any such taking of the Premises, the minimum rent or a
fair and just proportion thereof, according to the nature and extent of the
damage sustained, shall be suspended or abated, and Landlord shall return a pro
rata portion of the semiannual advance Base Rent payment to Tenant.
14. DEFAULT AND LANDLORD'S REMEDIES
(a) Any one of the following shall be deemed to be a "Default" or an "Event
of Default":
(i) Failure on the part of Tenant to make payment of rent or any other
monetary amount due under this Lease within thirty (30) days after
written notice that such payment is past due.
(ii)With respect to a non-monetary default under this Lease, failure of
Tenant to cure the same within thirty (30) days from the time of
receipt of written notice of default from Landlord or such additional period
reasonably required to cure the default. With respect to defaults requiring
more than thirty (30) days to cure, Tenant shall be obligated to commence
forthwith and to complete as soon as reasonably possible the curing of such
default; and if Tenant fails so to do, the same shall be deemed to be an
Event of Default.
(iii)
The occurrence of any of the following events: (1) the estate hereby
created being taken on execution or by other process of law; (2)
Tenant being judicially declared bankrupt or insolvent according to law; (3)
a general assignment being made of the property of Tenant for the benefit of
creditors; (4) a receiver, guardian, conservator, trustee in involuntary
bankruptcy or other similar officer being appointed to take charge of all or
any substantial part of Tenant's property by a court of competent
jurisdiction; or (5) Tenant executing a trust mortgage, or a petition being
filed by or against Tenant in bankruptcy, or for reorganization or for
arrangements under any provisions of the Bankruptcy Act now or hereafter
enacted, providing a plan for a debtor to settle, satisfy or extend the time
for the payment of debts, and such petition shall not have been dismissed
within thirty (30) days.
(b) Should any Event of Default occur then, notwithstanding any license of
any former breach of covenant or waiver of the benefit hereof or consent in a
former instance, Landlord lawfully may, in addition to any remedies otherwise
available to Landlord, immediately or at any time thereafter, upon ten (10) days
prior written notice, enter into and upon the Premises or any part thereof in
the name of the whole and repossess the same as of Landlord's former estate, and
expel Tenant and those claiming through or under it and remove its or their
effects (forcibly as permitted by applicable law if necessary) without being
deemed guilty of any manner of trespass, and without prejudice to any remedies
which might otherwise be used for arrears of rent or preceding breach of
covenant and/or Landlord may send written notice to Tenant terminating the Lease
Term; and upon the first to occur of: (i) entry as aforesaid; or (ii) the
thirtieth (30th) day following mailing of such notice of termination, this Lease
shall terminate.
(c) Tenant shall, notwithstanding any termination of this Lease as
aforesaid or any entry or re-entry by Landlord, whether by summary proceedings,
termination or otherwise, pay and be liable for
11
14. DEFAULT AND LANDLORD'S REMEDIES (CONTINUED)
on the days originally fixed herein for the payment thereof, amounts equal to
the several installments of rent and other charges reserved as they would, under
the terms of this Lease, become due if this Lease had not been terminated or if
Landlord had not entered or re-entered, as aforesaid, and whether the Premises
be relet or remain vacant, in whole or in part, or for a period less than the
remainder of the Lease Term, and for the whole thereof; but Landlord agrees to
use reasonable efforts to relet the Premises and in the event the Premises be
relet by Landlord, Tenant shall be entitled to a credit in the net amount of
rent received by Landlord in reletting, after deduction of all expenses
reasonably incurred in reletting the Premises (including, without limitation,
remodeling costs, brokerage fees, attorneys' fees, repairing, cleaning, moving
and storage costs, and the like), and in collecting the rent in connection
therewith.
Nevertheless, in case of such termination Landlord at its election which may
be made or changed at any time without notice shall be entitled to collect and
receive from Tenant such sum or sums to which it may be entitled as rent
hereunder for the balance of the Lease Term, or demand and receive from Tenant
indemnity against loss of the aforesaid rent hereunder for the balance of the
Lease Term, or collect and receive from Tenant as damages a sum which at the
time of such termination represents the difference between the fair rental value
of the Premises and the rent herein stated for the balance of the Lease Term,
which difference shall be discounted to its present value, or to enforce such
other remedies as are available to it by law.
In any event, in the event of default Tenant shall be liable to Landlord for
all expenses reasonably incurred in connection with such default, including
those described in the first paragraph of this Section and including reasonable
attorneys' fees.
(d) Landlord shall in no event be in default in the performance of any of
Landlord's obligations hereunder unless and until Landlord shall have failed to
perform such obligations within thirty (30) days or such additional time as is
reasonably required to correct any such default after notice by Tenant to
Landlord properly specifying wherein Landlord has failed to perform any such
obligation. If Landlord is in default under this Lease, Landlord shall (i) be
responsible for its reasonable costs and expenses which relate to its default
(including court costs and Tenant's attorneys' fees), and (ii) return a pro rata
portion of the semi-annual advance Base Rent payment to Tenant, if Tenant is
permitted to terminate the Lease.
(e) If Tenant abandons or vacates the Premises, any property left by Tenant
shall be deemed abandoned and Landlord shall have the right to dispose thereof
without accountability to Tenant as permitted by law.
(f) Landlord shall use its best efforts to mitigate any damages resulting
from any default by Tenant, and Tenant shall not in any event be liable for any
damages reasonably mitigable by Landlord.
15. REPRESENTATIONS OF TENANT
Tenant represents and warrants to Landlord that it is a corporation which is
duly organized, validly existing and in good standing under the laws of the
State of California, with all required power and authority to execute this Lease
and perform its obligations hereunder and such performance will not violate or
result in a default under any contract, mortgage, lien, judgment or order to
which Tenant is a party or by which Tenant is bound.
16. RIGHT OF FIRST REFUSAL
In the event Landlord shall receive an offer to purchase, ground lease, or
otherwise acquire the legal and/or beneficial ownership interest in the
Premises, or any interest therein, in whole or in part ("Offer of Purchase")
during the Lease Term, or any extension thereof, and the offer of purchase shall
be satisfactory to Landlord, Landlord shall give Tenant the privilege of
purchasing the Premises or the interest or portion thereof to be acquired at the
price and on the terms of the offer so made. This
12
16. RIGHT OF FIRST REFUSAL (CONTINUED)
privilege shall be given by a notice sent to Tenant at the Premises by
registered mail, requiring Tenant to accept the offer in writing and to sign a
suitable contract to purchase the Premises within the period of fifteen (15)
days after the mailing of the notice.
The failure of Tenant to accept the offer to purchase or sign a contract
within the period provided shall waive Tenant's rights under this Section on
that occasion, but shall not waive Tenant's right to first refusal on other
occasions, and Landlord shall be at liberty to sell the Premises to any other
person, firm or corporation. Any subsequent sale, except to Tenant, shall be
subject to this Lease and any renewals or extensions hereof and to this Section
18. The successor in interest to Landlord shall not disturb Tenant's possession
under this Lease if Tenant is not in default hereunder and shall perform all
Landlord's unperformed obligations.
This right of first refusal shall not apply to any transfer by Landlord of
the property to any person who controls, is under common control with, or is
controlled by Landlord or to Landlord's spouse or lineal descendants (or to a
trust or other legal entity exclusively for their benefit) for estate planning
purposes, provided such transferees shall thereafter be subject to this Section
18 with respect to subsequent transfers.
17. MISCELLANEOUS PROVISIONS
(a) SUBLEASE AND ASSIGNMENT. Tenant shall not sublease any more than
thirty percent (30%) of the square footage of the Leased Premises or assign this
Lease or any of its rights hereunder without the express prior written approval
of Landlord, which consent may not be unreasonably withheld and shall be deemed
given if not reasonably withheld in writing within 10 days following delivery to
Landlord of a written request for consent. In the event Landlord consents to an
assignment or a sublease, Tenant shall remain fully liable for the obligations
of Tenant hereunder, including, without limitation, the obligation to pay the
rent and other amounts provided under this Lease. Consent by Landlord to any
such sublease shall not be deemed to be a consent to a subsequent sublease nor
shall any sublessee have any further right to sublease. Notwithstanding anything
to the contrary in the Lease Form, Tenant may, without Landlord's prior written
consent and without any participation by Landlord in assignment and subletting
proceeds, sublet the Premises or assign the Lease to: (i) a subsidiary,
affiliate, division or corporation controlling, controlled by or under common
control with Tenant; or (ii) a successor corporation related to Tenant by
merger, consolidation, nonbankruptcy reorganization, or government action. For
the purpose of this Lease, sale of Tenant's capital stock through any public
exchange shall not be deemed an assignment, subletting, or any other transfer of
the Lease or the Premises.
(b) WAIVER. Failure on the part of either party to complain of any action
or non-action on the part of Tenant, no matter how long the same may continue,
shall never be deemed to be a waiver by Landlord of any of its rights hereunder.
No waiver at any time of any of the provisions hereof by either party shall be
construed as a waiver of any of the other provisions hereof, and no waiver at
any time of any of the provisions hereof shall be construed as a waiver at any
subsequent time of the same provisions. The consent or approval of a party to or
of any action by Tenant requiring Landlord's consent or approval shall not be
deemed to waive or render unnecessary consent or approval to or of any
subsequent similar act.
No payment, or acceptance, of a lesser amount than shall be due shall be
treated otherwise than as a payment on account. The acceptance of a check for a
lesser amount with an endorsement or statement thereon, or upon any letter
accompanying such check, that such lesser amount is payment in full, shall be
given no effect, and a party may accept such check without prejudice to any
other rights or remedies which the party may have.
(c) COVENANT OF QUIET ENVIRONMENT. Tenant, subject to the terms and
provisions of this Lease on payment of the rent and observing, keeping and
performing all of the terms and provisions of this Lease on its part to be
observed, kept and performed, shall lawfully, peaceably and quietly have, hold,
13
17. MISCELLANEOUS PROVISIONS (CONTINUED)
occupy and enjoy the Premises during the Lease Term without hindrance or
ejection by any persons lawfully claiming under Landlord; but it is understood
and agreed that this covenant and any and all other covenants of Landlord
contained in this Lease shall be binding upon Landlord and Landlord's successors
only with respect to breaches occurring during Landlord's and Landlord's
successors' respective ownership of Landlord's interest hereunder. Subject to
Landlord's duty to complete the Improvements, it is further understood and
agreed that with respect to any services to be furnished, neither Landlord or
Tenant shall in no event be liable for failure to furnish the same when
prevented from so doing by strike, lockout, breakdown, accident, order or
regulation of or by any governmental authority, or failure of supply, or
inability by the exercise of reasonable diligence to obtain supplies, parts or
employees necessary to furnish such services, or because of war or other
emergency, or for any cause beyond their reasonable control, or for any cause
due to any act or neglect of the other party or its servants, agents, employees,
licensees, contractors or any person claiming by, through or under the other
party.
(d) STATUS REPORT. Recognizing that both parties may find it necessary to
establish to third parties, such as accountants, banks, mortgagees, or the like,
the then current status of performance hereunder, either party, on the written
request of the other made from time to time, will promptly furnish a written
statement of the status of any matter pertaining to this Lease, which the other
party reasonably requests.
(e) NOTICE TO MORTGAGEE. After receiving written notice from any person,
firm or other entity, that it holds a mortgage (which term shall include a deed
of trust) which includes as part of the mortgaged premises the Premises, Tenant
shall, so long as such mortgage is outstanding, be required to give to such
holder the same notice as is required to be given to Landlord under the terms of
this Lease, but such notice may be given by Tenant to Landlord and such holder
concurrently. It is further agreed that such holder shall have the same
opportunity to cure any default, and the same time within which to affect such
curing, as is available to Landlord; and if necessary to cure such a default,
such holder shall have access to the Premises.
(f) ASSIGNMENT OF RENTS. With reference to any assignment by Landlord of
Landlord's interest in this Lease, or the rents payable hereunder, conditional
in nature or otherwise, which assignment is made to the holder of a mortgage or
deed of trust on the Premises, Tenant agrees:
(i) that the execution thereof by Landlord, and the acceptance thereof by
such holder, shall never be deemed an assumption by such holder of
any of the obligations of Landlord hereunder, unless such holder shall, by
written notice sent to Tenant, specifically otherwise elect;
(ii)that, except as aforesaid, such holder shall be treated as having
assumed Landlord's obligations hereunder only upon foreclosure of
such holder's mortgage or deed of trust and the taking of possession of the
Premises by such holder; and
(iii)
Tenant shall, at the request of Landlord, execute a consent to any
such assignment of the Lease and an agreement to attorn to such
mortgagee in the event of its exercise of its right under the assignment.
(g) LEASE SUBORDINATE TO MORTGAGE. The rights and interest of Tenant under
this Lease shall be subject and subordinate to any mortgages or deeds of trust
that may hereafter be placed upon the Premises and to any and all advances to be
made thereunder, and to the interest thereon, and all renewals, modifications,
replacements and extensions thereof, if the mortgagee or trustee named in said
mortgages or deeds of trust shall elect by written notice delivered to Tenant at
the time the encumbrance is created to subject and subordinate the rights and
interest of Tenant under this Lease to the lien of its mortgage or deed of
trust; provided, however, that said mortgagee agrees to execute an agreement
providing, in substance, that in consideration of Tenant's written agreement to
continue occupancy under the same terms and conditions of this Lease and to
attorn to mortgagee, the right of
14
17. MISCELLANEOUS PROVISIONS (CONTINUED)
possession of Tenant to the Premises and Tenant's rights arising out of this
Lease, shall not be disturbed by the mortgagee in the exercise of its rights
under the mortgage or deed provided that Tenant shall not be in default
hereunder. In the event of such election, and upon notification by such
mortgagee or trustee to Tenant to that effect and delivery of a recognition and
non-disturbance agreement in a form reasonably acceptable to Tenant, the rights
and interest of Tenant under this Lease shall be deemed to be subordinate to the
lien of said mortgage or deed of trust, whether this Lease is dated prior to or
subsequent to the date of said mortgage or deed of trust, and no further
instrument of subordination shall be necessary; provided, however, that Tenant
shall execute and deliver whatever instruments said mortgagee or trustee may
reasonably require for such purposes, and in the event Tenant fails so to do
within twenty (20) days after demand in writing, Tenant does hereby make,
constitute and irrevocably appoint Landlord as its attorney-in-fact and in its
name, place and stead so to do.
(h) MECHANICS' LIENS. Tenant shall immediately discharge (either by
payment or by filing of the necessary bond, or otherwise) any mechanic's,
materialmen's or other lien against the Property and/or Landlord's interest
therein, which liens may arise out of any payment due for, or purported to be
due for, any labor, services, materials, supplies or equipment alleged to have
been furnished to or for Tenant after completion of the Improvements in, upon or
about the Property. Landlord shall immediately discharge (either by payment or
by filing of the necessary bond, or otherwise) any mechanic's, materialmen's or
other lien against the Premises and/or Tenant's interest therein, which liens
may arise out of any payment due for, or purported to be due for, any labor,
services, materials, supplies or equipment alleged to have been furnished to or
for Landlord in, upon or about the Premises.
(i) NO BROKERS. Tenant and Landlord warrant and represent that neither has
dealt with any broker in connection with the consummation of this Lease other
than Mr. Clifford Hurley of the Leggat Company, Inc., 1 Liberty Square, Boston,
Massachusetts. Landlord shall pay any commission due to said broker.
(j) INVALIDITY OF PARTICULAR PROVISIONS. If any term or provision of this
Lease, or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each term and provision of this Lease shall be valid and be
enforced to the fullest extent permitted by law.
(k) PROVISIONS BINDING. Except as herein otherwise expressly provided, the
terms hereof shall be binding upon and shall inure to the benefit of the heirs,
executors, administrators, successors and assigns, respectively, of Landlord and
Tenant. The reference contained to successors and assigns of Tenant is not
intended to constitute a consent to assignment by Tenant not permitted by this
Lease, but as reference only to those instances permitted by this Lease.
(l) RECORDING. Tenant shall not record the Lease, but the parties shall
execute and record a Notice of Lease (and the rights of first refusal and the
options hereunder) in recordable form and complying with applicable
Massachusetts laws, and reasonably satisfactory to Tenant's and Landlord's
attorneys. In no event shall such document set forth the rental or other charges
payable by Tenant under this Lease; and such document shall expressly state that
it is executed pursuant to the provisions contained in this Lease, and is not
intended to vary the terms and conditions of this Lease.
15
17. MISCELLANEOUS PROVISIONS (CONTINUED)
(m) NOTICES. All notices shall be in writing and delivered by certified
mail or personal delivery, to the parties at the addresses set forth below, or
to such other address or addresses as the parties may from time to time
hereafter designate:
Landlord: G. Christopher Peznola
Berkshire Acquisition Corporation
1500 Main Street, Suite 2012
Springfield, MA 01115
With copy to:
Robinson Donovan Madden & Barry, P.C.
1500 Main Street, Suite 1600
Springfield, MA 01115
Attn: Robert P. Cunningham, Esq.
Tenant: Division Controller
Genus, Inc.
Ion Technology Division
4 Mulliken Way
Newburyport, MA 01950
With copies to:
Genus, Inc.
1139 Karlstad Dr.
Sunnyvale, CA 94089
Attn: Chief Financial Officer
and
Wilson, Sonsini, Goodrich & Rosati, P.C.
650 Page Mill Road
Palo Alto, CA 94304-1050
Attn: Real Estate Dept.
(n) HEADINGS. The headings throughout this instrument are for convenience
and reference only, and the words contained therein shall in no way be held to
explain, modify, amplify or aid in the interpretation, construction or meaning
of the provisions of this Lease.
(o) ENTIRE AGREEMENT. All negotiations, consideration, representations and
understandings between Landlord and Tenant are incorporated in this Lease, the
Improvement Agreement, and in the schedules and exhibits attached hereto and
thereto, all of which are hereby incorporated herein by this reference and all
of which may be modified or altered only by agreement in writing between
Landlord and Tenant. No act or omission of any employee or agent of Landlord
shall alter, change or modify any of the provisions hereof.
(p) GOVERNING LAW. This Lease shall be governed exclusively by the
provisions hereof and by the laws of the Commonwealth of Massachusetts, as the
same may from time to time exist.
18. ACQUISITION OF PROPERTY
Concurrently herewith Landlord shall forthwith enter into a Purchase and
Sale Agreement with the Newburyport Area Industrial Development Corporation, in
form and substance reasonably satisfactory to Tenant (the "Purchase Agreement"),
for the 10.62 acres of land in the Lord Dexter Industrial Park, known as Lot 62,
Stanley Tucker Drive, Newburyport, Massachusetts, as more particularly described
in EXHIBIT A to this Lease (the "Property"). Landlord shall perform its
obligations under the Purchase Agreement so that the purchase may close on or
before September 30,
16
18. ACQUISITION OF PROPERTY (CONTINUED)
1995. Landlord hereby acknowledges that there are no conditions precedent to the
Landlord's obligation to purchase the Property under the Purchase Agreement,
other than that Landlord obtains record and marketable title to the Property
from the seller thereof, with only those exceptions to title permitted by the
Purchase Agreement.
19. PREPAID RENT & SECURITY DEPOSIT
Concurrently with the Landlord's acquisition of the Premises pursuant to the
Purchase and Sale Agreement, the Tenant shall deposit into escrow, for delivery
to Landlord on the Commencement Date, (1) good funds in the amount of Five
Hundred Thousand Dollars ($500,000.00) as prepayment of the last Base Rent
payable during the Initial Term (the "Prepaid Rent") and (2) a letter of credit
"Security Deposit" or evidence of a cash "Security Deposit" with a custodian
complying with the requirements of this paragraph. Within three (3) days
following delivery of written notice to the escrow holder that the Commencement
Date has occurred, the escrow holder shall deliver the Prepaid Rent and the
letter of credit Security Deposit or evidence of the cash custodial Security
Deposit, as the case may be, to the Landlord. Tenant shall promptly execute such
documents as the Landlord shall reasonably request to accomplish such delivery
of the Prepaid Rent and such Security Deposit items to the Landlord.
The Prepaid Rent shall be retained by Landlord as a prepayment of the last
Base Rent payable during the Initial Term of this Lease. The Security Deposit
shall be held by the Landlord or the custodian, as security for Tenant's
performance of its obligations hereunder, and not as prepayment of rent.
Tenant shall provide the Security Deposit in one of the following forms, or
combination thereof from time to time, at its option:
(1)Tenant shall deliver to the Landlord, at Tenant's sole cost, an
irrevocable letter of credit in the form attached hereto as EXHIBIT E (an
"ILC") which (i) is drawn upon a financial institution reasonably acceptable to
Landlord, (ii) is irrevocable, unconditional and transferrable, (iii) is for a
term of at least twelve (12) months, and (iv) may be drawn upon by Landlord at
sight upon submission of a declaration by an officer of Landlord, under penalty
of perjury, declaring that the Landlord is entitled to draw upon the ILC. If
Tenant provides Landlord with an ILC meeting the foregoing requirements, then
any cash being held as a Security Deposit in excess of the total Security
Deposit requirements stated below shall be returned to Tenant upon demand.
(2)Tenant shall deposit with a financial institution selected by Tenant and
reasonably acceptable to Landlord, cash or federally insured bonds and/or
notes to be held by such institution in accordance with a pledge and custodial
agreement in the form of attached EXHIBIT C. All interest accruing on any such
deposit shall be paid to Tenant as earned.
The Security Deposit shall be in the following amounts during the following
time periods of the Lease Term:
Commencement Date until the Fifth Anniversary
of the Commencement Date $ 2,800,000
Fifth Anniversary of the Commencement Date
until the Tenth Anniversary of the
Commencement Date $ 1,850,000
Tenth Anniversary of the Commencement Date
until the Thirteenth Anniversary of the
Commencement Date $ 900,000
Thirteenth Anniversary of the Commencement
Date until the Fourteenth Anniversary of the
Commencement Date $ 500,000
After the Fourteenth Anniversary of the
Commencement Date $ 0
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19. PREPAID RENT & SECURITY DEPOSIT (CONTINUED)
Landlord may from time to time draw upon the Security Deposit, if, but only
if, one of the following "Drawing Conditions" is satisfied:
(1) FIRST DRAWING CONDITION. The Tenant fails to pay any Base Rent payable
under this Lease within thirty (30) days following notice to Tenant that the
amount is past due, and as of the date of the notice of such past due rent the
most recent public financial statement filing in Tenant's 10K or 10Q filed with
the Securities Exchange Commission ("SEC") reflects an amount of shareholder
equity of less than Twenty-Five Million Dollars ($25,000,000.00). In the event
Tenant becomes a private company and no longer files with the SEC, such
shareholder equity shall be measured based on audited annual financial
statements prepared in accordance with generally accepted accounting principles.
(2) SECOND DRAWING CONDITION. The Tenant fails to pay any Base Rent
payable under this Lease within thirty (30) days following notice to Tenant that
the amount is past due.
(3) THIRD DRAWING CONDITION. Landlord has not received a renewed ILC nor
an ILC commitment issued for a minimum of an additional one (1) year period as
of the date which is fourteen (14) days prior to the then stated expiration date
of the ILC.
In the event of the First Drawing Condition set forth above occurs, the
Landlord shall have the right to draw upon the ILC and retain the proceeds of
said ILC or other form of Security Deposit held hereunder as payment for
Tenant's violation of the security provision set forth herein. In no event,
however, shall any payments rendered hereunder be construed as liquidated
damages and Landlord shall have all rights at law and in equity reserved;
provided, however, that the amount of the Security Deposit paid to Landlord
shall reduce, but not below zero, the amount of damages which may be owing by
Tenant to Landlord on account of the Event of Default.
In the event the Second Drawing Condition occurs, the Landlord shall have
the right to draw upon the ILC and retain the amount of proceeds of said ILC or
other form of Security Deposit held hereunder equal to the amount of past due
Base Rent payable under the terms of the Lease plus reasonable costs of
collection thereof with the balance of the ILC proceeds to be remitted to
Landlord's lender, Shawmut Bank, N.A. (the "Custodian"), as custodian. Such
proceeds shall be held by Custodian in escrow under the Pledge and Custodial
Agreement as required for any non-ILC Security Deposit hereunder unless and
until the ILC is replaced with another ILC complying with this section. If the
amount of said past due Base Rent plus costs is not reimbursed by Tenant in the
form of a replacement ILC or additional Security Deposit to the Custodian for a
period of sixty (60) days following notice to Tenant that the amount of Base
Rent is past due, then, upon written notice from Landlord, the remaining
proceeds of the ILC or other form of Security Deposit held by Custodian shall be
immediately remitted to Landlord as payment for Tenant's violation of the
security provision set forth herein and treated in the manner described above as
if the First Drawing Condition occurred.
If the Third Drawing Condition is satisfied, all of the proceeds of the ILC
may be drawn for immediate remittance to Custodian and such proceeds shall be
held by Custodian in escrow under the Pledge and Custodial Agreement as required
for any non-ILC Security Deposit hereunder, unless and until the ILC is replaced
with another ILC complying with this Section.
In the event the Security Deposit or any portion thereof is applied by
Landlord to cure any failure of the Tenant to pay Base Rent owing by the Tenant
hereunder, Tenant agrees to restore the deposit to the full amount thereof upon
demand. The Security Deposit (or so much of it that has not been applied to cure
Tenant's default in accordance with this paragraph) shall be returned to Tenant
within fourteen (14) days following the expiration of the Lease Term.
If Landlord transfers the Premises during the Lease Term, Landlord shall
deliver the Security Deposit to the transferee of Landlord's interest, in which
event the transferring Landlord will be released from all liability for the
return of the Security Deposit.
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19. PREPAID RENT & SECURITY DEPOSIT (CONTINUED)
In the event Tenant fails to pay any Base Rent payable under this Lease
within thirty (30) days following notice to Tenant that the amount is past due,
but Tenant's shareholder equity is determined in the First Drawing Condition
stated above to be greater than Twenty-Five Million Dollars ($25,000,000.00),
then the parties agree that the Security Deposit (including any ILC constituting
the Security Deposit) shall continue to be maintained and survive any Default by
Tenant under this Lease. In addition, if any such Default in a Base Rent payment
occurs, then the amortization of the amount of the Security Deposit as the Lease
Term elapses, as specified above, shall be suspended for the time period of any
such Default. Upon cure of the Default, the Security Deposit may be reduced in
accordance with the foregoing schedule.
The obligations of this Section 19 shall survive any expiration of
termination of this Lease.
20. [INTENTIONALLY DELETED.]
21. [INTENTIONALLY DELETED.]
22. ATTORNEYS' FEES
Notwithstanding anything to the contrary in the Lease Form, if either
Landlord or Tenant shall bring any action or legal proceeding for an alleged
breach of any provision of this Lease, to recover rent, to terminate this Lease
or otherwise to enforce, protect or establish any term or covenant of this
Lease, the prevailing party shall be entitled to recover as a part of such
action or proceeding, or in a separate action brought for that purpose,
reasonable attorneys' fees, court costs, and expert fees as may be fixed by the
court. "Prevailing party" as used in this Paragraph includes a party who
dismisses an action for recovery hereunder in exchange for sums allegedly due,
performance of covenants allegedly breached or considerations substantially
equal to the relief sought in the action.
23. TENANT'S RIGHTS ON TERMINATION
Landlord acknowledges that the Property was designated by Tenant for
acquisition by Landlord. Accordingly, if this Lease terminates prior to the
Commencement Date because Landlord is unwilling or unable to complete the
Improvements in accordance with this Lease and the Improvement Agreement for
causes other than the Default of Tenant, then Tenant shall have the option to
purchase the Premises (including the Property and the Improvements then
existing) from Landlord. This option may be exercised at anytime prior to the
twentieth (20th) day following delivery of Landlord's notice to Tenant that the
Lease has terminated and that if Tenant does not exercise the option herein
granted within twenty (20) days following delivery of said notice then such
option shall be deemed waived. Upon exercise by Tenant of its option to purchase
the Landlord shall sell the Premises to the Tenant and the Tenant shall purchase
the Premises from the Landlord. To facilitate such purchase the parties shall
execute a purchase agreement memorializing their obligations and containing any
other provisions required to complete the conveyance in accordance with local
custom; provided, however that if the parties cannot agree upon such customary
terms within ten (10) days following either party's request for an agreement,
then the customary terms shall be determined by the presiding judge of the Essex
County court having jurisdiction over the Premises in the State of
Massachusetts. The purchase shall close on the forty-fifth (45th) day following
delivery to Landlord of Tenant's exercise notice. The purchase price of the
property shall be equal to that portion of the Construction Cost (as defined in
the Improvement Agreement) actually paid or incurred by the Landlord prior to
the date of the closing of the sale of the Premises to the Tenant, less any
damages legally recoverable by Tenant on account of Landlord's default. Title to
the Premises shall be delivered to Tenant in the condition received by Landlord
from the Seller, as evidenced by a title insurance policy in the form obtained
by Landlord when it purchased the Property from said seller.
[SIGNATURE BLOCKS ON NEXT PAGE]
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WITNESS the execution hereof, under seal, in any number of counterpart
copies, each of which counterpart copies shall be deemed to be an original for
all purposes as of the day and year first above written.
BERKSHIRE-NEWBURYPORT LIMITED
PARTNERSHIP, Landlord
By
- -------------------------------------------- -------------------------------------------
Witness OSCAR N. PLOTKIN, President of
Newburyport General Corp.,
its general partner
GENUS, INC., Tenant
By
- -------------------------------------------- -------------------------------------------
Witness Its
--------------------------------------------
[ATTACH NOTARY ACKNOWLEDGMENTS AND SEAL AS REQUIRED BY LAW]
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EXHIBIT A
LEASED PREMISES
21
EXHIBIT B
TENANT'S "SPECIALIZED IMPROVEMENTS"
[NEED TO ATTACH INITIAL LIST -- LIST WILL BE AUGMENTED AT TENANT'S REQUEST,
IF CONSTRUCTION COST EXCEEDS [COST ESTIMATE]]
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EXHIBIT C
[ATTACH FORM OF PLEDGE & CUSTODIAL AGREEMENT]
23
EXHIBIT D
[ATTACH ENVIRONMENTAL REPORTS]
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EXHIBIT E
[ATTACH FORM OF IRREVOCABLE LETTER OF CREDIT]
25