EXHIBIT 10.20
NET LEASE AGREEMENT
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(Single Tenant)
For and in consideration of the rentals, covenants, and conditions hereinafter
set forth, Landlord hereby leases to Tenant, and Tenant hereby rents from
Landlord, the herein described Premises for the term, at the rental and subject
to and upon all of the terms, covenants and agreements set forth in this Net
Lease Agreement ("Lease"):
1. Summary of Lease Provisions.
1.1 Tenant: Integrated Device Technology International, Inc.,
a California corporation ("Tenant").
1.2 Landlord: S.I. Hahn, LLC, a California limited liability
company ("Landlord").
1.3 Date of Lease, for reference purposes only: February 16,
2000.
1.4 Premises: That certain building, consisting of forty eight
thousand (48,000) rentable square feet of space, more or less, located at 2901
Coronado Drive, in the City of Santa Clara, County of Santa Clara, State of
California, shown cross-hatched on the site plan attached hereto as Exhibit "A",
together with certain rights appurtenant thereto. (Paragraph 2.1)
1.5 Term: Eight (8) years, unless earlier terminated in
accordance with the terms of this Lease or extended pursuant to the terms of
Paragraph 3.5 below. (Paragraph 3)
1.6 Commencement Date: May 1, 2000, subject to the provisions
of Paragraph 3 below. (Paragraph 3)
1.7 Ending Date: April 30, 2008, subject to the provisions of
Paragraph 3 below. (Paragraph 3)
1.8 Rent: (Paragraph 4)
Months Initial Lease Term Monthly Rent NNN
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1-12 $86,400 ($1.80 psf)
13-24 $89,280 ($1.86 psf)
25-36 $92,160 ($1.92 psf)
37-48 $95,040 ($1.98 psf)
49-60 $97,920 ($2.04 psf)
61-72 $100,800 ($2.10 psf)
73-84 $103,680 ($2.16 psf)
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85-96 $106,650 ($2.22 psf)
Receipt of the first month's Rent is hereby acknowledged by Landlord.
The monthly Rent to be paid during the first year of the Extended Term (as
defined below) shall be determined in accordance with the terms of Paragraph
4.4. Every twelve calendar months during the Extended Term the monthly Rent
shall be increased by an additional $0.06 per rentable square foot comprising
the Premises. The first such adjustment shall occur on the first day of the
thirteenth month of the Extended Term. (Paragraph 4.4)
1.9 Use of Premises: light industrial and general office use
(Paragraph 6)
1.10 Security Deposit: Zero Dollars ($0.00)
1.11 Addresses for Notices:
To Landlord:
SI Hahn LLC
c/o SIH Investment, Inc.
21580 Stevens Creek Blvd., Suite 107
Cupertino, CA. 95014
Attn: Sang Hahn
To Tenant: To the Premises, with a courtesy copy to:
Integrated Device Technology International, Inc.
2975 Stender Way
Santa Clara, CA. 95054
Attn: General Counsel
1.12 Non-exclusive Right to Use No More than one hundred
seventy-five (175) parking spaces within the Common Area. (Paragraph 2.1)
1.13 Summary Provisions in General. Parenthetical references
in this Paragraph 1 to other paragraphs in this Lease are for convenience of
reference, and designate some of the other Lease paragraphs where applicable
provisions are set forth. All of the terms and conditions of each such
referenced paragraph shall be construed to be incorporated within and are made a
part of each of the above referring Summary of Lease Provisions. In the event of
any conflict between any Summary of Lease Provision as set forth above and the
balance of the Lease, the latter shall control.
2. Property Leased.
2.1 Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, upon the terms and conditions herein set forth,
that certain building ("Premises")
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referred to in Paragraph 1.4 above, shown cross-hatched on the site plan
attached hereto as Exhibit "A". In addition, Tenant shall have the following
rights with respect to the real property more particularly described in the
legal description attached as Exhibit "B" hereto and excluding the buildings
situated thereon ("Common Area"): (i) the non-exclusive right to use no more
than the number of parking spaces set forth in Paragraph 1.12 above, within the
Common Area (and not allocated for the exclusive use of another tenant of
Landlord); and (ii) such other rights as are necessary and convenient to
Tenant's possession of the Premises or performance of Tenant's obligations under
this Lease. Landlord agrees that it will not overburden the parking areas
comprising the Common Area by over-allocating the parking areas to other tenants
of Landlord. In addition, Landlord grants to Tenant a non-exclusive easement for
vehicular ingress and egress in and over the paved roadways in the Common Area
and pedestrian ingress and egress in and over the Common Area.
Landlord reserves the right to grant to tenants of the buildings or
improvements which now exist or may hereafter be constructed upon the Common
Area or upon real property owned by Landlord adjacent to the Common Area, and to
the agents, employees, servants, invitees, contractors, guests, employees,
servants, invitees, contractors, guests, customers and representatives of such
tenants or to any other user authorized by Landlord, the non-exclusive right to
use the Common Area for pedestrian and vehicular ingress and egress and
vehicular parking and the exclusive right to use parking spaces on the Common
Area.
2.2 Replacement of HVAC Units. The parties hereto acknowledge
and agree that there are five (5) HVAC units on the roof of the Building that
are currently fifteen years old or older (the "Older HVAC Units"). Such Older
HVAC Units are more particularly identified on the plan or list attached hereto
as EXHIBIT "G" and made a part hereof. If any Older HVAC Unit fails and requires
replacement or, using good business judgment, it becomes more cost effective to
replace an Older HVAC Unit than to maintain or repair it, Landlord shall replace
such applicable Older HVAC Unit(s) at Landlord's sole cost. The parties hereto
acknowledge that there are HVAC units on the roof of the Building that Tenant is
unlikely to use during the Lease Term (due to over capacity of the HVAC system
servicing the Building) and it is the intention of the parties that Landlord not
have to replace any HVAC units that will not be used by Tenant. Prior to the
Commencement Date of the Lease, Landlord and Tenant shall enter into good faith
negotiations to attempt to agree on the HVAC units, if any, that Tenant will not
be using during the Lease Term, and Landlord shall have the right, at Landlord's
sole cost, and following not less than forty-eight hours prior notice to Tenant,
to remove any such HVAC units that Tenants agree will not be used by Tenant
during the Lease Term.
2.3 Acceptance of Premises. By taking possession of the
Premises, Tenant shall be deemed to have accepted the Premises as being in good
and sanitary order, condition and repair and to have accepted the Premises in
their condition existing as of the date Tenant takes possession of the Premises,
subject to all applicable laws, covenants, conditions, restrictions, easements
and other matters of public record and the rules and regulations from time to
time promulgated by Landlord governing the use of the Premises and Common Area,
and further, to have accepted tenant improvements to be constructed by Landlord
(if any) as being completed in accordance with the plans and specifications for
such improvements, subject
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only to completion of items on Landlord's punch list. Prior to the Commencement
Date, Landlord and Tenant shall complete a walk-through of the Premises and
Landlord and Tenant shall agree on a punch list of any items (except HVAC units,
the replacement of which shall be governed by the terms of Paragraph 2.2 above)
within the Premises that are in need or repair or maintenance. Landlord agrees
to repair or maintain such items that are on the agreed upon punch list, at
Landlord's sole cost, within thirty (30) days following the Commencement Date
(except that if such punch list items cannot reasonably be repaired or
maintained with such thirty (30) day period, then Landlord shall commence such
repair or maintenance of the punch list items within such thirty day period and
diligently prosecute the same to completion). The preceding notwithstanding,
Tenant does not waive any claims of latent defects that may exist in the
Premises as of the Commencement Date, however, Landlord shall be under no
obligation to repair any latent defect in the Premises existing as of the
Commencement Date unless Tenant gives Landlord written notice of such defect
prior to the date six months following the Commencement Date. Tenant
acknowledges that, except as set forth in the following sentence, neither
Landlord nor Landlord's agents have made any representation or warranty as to
the suitability of the Premises for the conduct of Tenant's business, the
condition of the Premises, or the use or occupancy which may be made thereof and
Tenant has independently investigated and is satisfied that the Premises are
suitable for Tenant's intended use and that the Premises meets all governmental
requirements for such intended use. Landlord hereby represents to Tenant that,
to Landlord's actual knowledge, the Premises are not in violation of any law,
rule, regulation or ordinance applicable to the Premises.
The preceding paragraph notwithstanding, the parties hereto acknowledge
that Landlord intends to undertake some seismic upgrades of the Premises in the
future. As of the date of execution of this Lease, no plans or specifications
for such seismic upgrades have been prepared, nor has Landlord determined the
specific time or times when it may undertake such seismic upgrades. Any seismic
upgrades performed by Landlord with respect to the Premises shall not
unreasonably interfere with Tenant's use of the Premises. To Landlord's
knowledge, such seismic upgrades contemplated to be performed by Landlord are
not required to be performed to bring the Premises into compliance with
applicable building codes or laws, and instead Landlord may elect to perform
such seismic upgrades to further reduce its earthquake insurance premiums and to
improve Landlord's ability to obtain financing or refinancing secured by the
Premises. Landlord agrees that, if seismic upgrade of the Premises is required
to bring the Premises into compliance with building codes applicable to the
Premises at the time the Premises were initially constructed, then Landlord
shall be responsible for such seismic upgrades and Tenant shall not be obligated
to bear portion of the cost of such seismic upgrades.
If Tenant desires to construct or install, or cause to be constructed
or installed, any alterations, additions or improvements to the Premises and, in
connection with the same, seismic upgrades or structural reinforcement of the
Premises, or portion thereof, are required and are directly and physically
related to the alterations, additions or improvements to be constructed or
installed, or caused to be constructed or installed, by Tenant, then Tenant
shall bear one hundred percent (100%) of the cost of the seismic upgrades or
structural reinforcement of the Premises so required. Except as provided in the
immediately preceding sentence, Tenant shall not be obligated to pay for any
seismic upgrades or structural reinforcement of the Premises, or any portion
thereof. If Tenant applies to a governmental agency for approval of, or issuance
of a building permit in connection with, any proposed alteration, addition, or
improvement to the Premises, or any portion thereof, and such governmental
agency requires Tenant to undertake a seismic upgrade or structural
reinforcement of the
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Premises, or any portion thereof, in connection with such proposed alteration,
addition or improvement, then Tenant shall not be obligated to pay for the cost
of such seismic upgrade or structural reinforcement unless the same is directly
and physically related to the alteration, addition or improvement proposed to be
undertaken by Tenant.
3. Term.
3.1 Commencement Date. The term of this Lease ("Lease Term")
shall be for the period specified in Paragraph 1.5 above, commencing on the date
set forth in Paragraph 1.6 ("Commencement Date"). The expiration of the Lease
Term or sooner termination of this Lease is referred to herein as the "Lease
Termination".
3.2 Delay of Commencement Date. Landlord shall not be liable
for any damage or loss incurred by Tenant for Landlord's failure for whatever
cause to deliver possession of the Premises by any particular date (including
the Commencement Date), nor shall this Lease be void or voidable on account of
such failure to deliver possession of the Premises; provided that if Landlord
does not deliver possession of the Premises to Tenant by the date which is
ninety (90) days following the date the Commencement Date of this Lease, Tenant
shall have the right to terminate this Lease by written notice delivered to
Landlord within ten (10) days thereafter, and Landlord and Tenant shall be
relieved of their respective obligations hereunder. If the Commencement Date is
delayed beyond the date set forth in Paragraph 1.6 above (i.e. May 1, 2000)
because Landlord is not able to deliver possession of the Premises to Tenant on
or before such date, then (i) Tenant shall not be obligated to pay Rent under
this Lease until possession of the Premises is delivered to Tenant, (ii) the
Commencement Date shall be extended to the date Landlord delivers possession of
the Premises to Tenant (but in no event shall such Commencement Date be extended
later than six months from May 1, 2000), and (iii) all dates that are keyed off
of the Commencement Date (such as the Ending Date) shall be extended by the same
number of days as the Commencement Date is extended.
3.3 Early Occupancy. Landlord hereby agrees that Tenant may
enter the Premises prior to the Commencement Date (but only after the existing
tenant or lessee has vacated the Premises) to install its phone and other
communication systems therein, to fixturize and perform general clean up of the
Premises, and to otherwise conduct Tenant's business in the Premises, and in the
event Tenant so enters the Premises prior to the Commencement Date, Tenant shall
do so subject to all the terms and conditions hereof except that Tenant shall
not be obligated to pay Rentals provided for herein during such early occupancy
period. Tenant shall be obligated to commence paying Rentals as of the
Commencement Date of the Lease.
3.4 Intentionally Omitted.
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3.5 Option to Extend Term. Landlord hereby grants to Tenant
one (1) option to extend the initial Lease Term for a period of Two (2) years
(the "Extended Term"), on the following terms and conditions:
(a) Tenant shall give Landlord written notice of its
exercise of the option to extend the Lease Term no earlier than nine months nor
later than six (6) months before the date the Lease Term would end but for said
exercise. Time is of the essence.
(b) Tenant may not extend the Lease Term pursuant to
this Paragraph 3.5 if Tenant is in material default of any of its obligations
under this Lease as of the date of Tenant's notice of exercise of the option
(and such default has not been cured within the cure or grace period, if any,
applicable to such default), or if Tenant shall have assigned or otherwise
transferred its interest in this Lease and/or the Premises, whether or not
Landlord's consent to such assignment or transfer has been given, to any third
party other than an Affiliate of Tenant (as described in Paragraph 24.5 below).
If Tenant is in default under this Lease on the date that the applicable
Extended Term is to commence, then Landlord may elect to terminate this Lease,
notwithstanding any notice given by Tenant of an exercise of its option to
extend and such exercise of Tenant's option to extend the Lease Term shall be
void and of no force or effect.
(c) All terms and conditions of this Lease shall
apply during the Extended Term, except that the monthly base Rent for the
Extended Term shall be determined in accordance with Paragraph 4.4 below, Tenant
shall have no further options to extend the Lease Term beyond the Extended Term
described in this Paragraph 3.5 and Landlord shall have no obligation to
construct or install any tenant improvements in the Premises for the benefit of
the Tenant.
(d) Once Tenant delivers notice of its exercise of
the option to extend the Lease Term, Tenant may not withdraw such exercise and,
subject to the provisions of this Paragraph 3.5, such notice shall operate to
extend the Lease Term. The preceding to the contrary notwithstanding, if the
Rent payable during the Extended Term is determined pursuant to Paragraph 4.4(b)
below, and Tenant objects to the amount of such Rent as determined pursuant to
such Paragraph 4.4(b), then Tenant may elect to rescind its extension notice by
delivering to Landlord, within ten (10) days following the date Tenant is
informed of the amount of Rent determined pursuant to Paragraph 4.4(b), (i)
written notice of rescission, and (ii) an amount equal to the sum of (1) an
amount equal to the appraisal costs paid or incurred by Landlord pursuant to the
provisions of Paragraph 4.4(b) below, plus (2) the product obtained by
multiplying (x) the monthly base Rent determined pursuant to Paragraph 4.4(b),
by (y) six (6) (such sum being hereinafter referred to as the "Rescission Fee").
In the event such rescission notice is timely given and payment of such
Rescission Fee is timely made, then the Lease Term shall expire on the date the
Lease Term would otherwise have expired had Tenant not exercised its option to
extend the Lease Term. Time is of the essence with respect to the delivery of
the rescission notice and Rescission Fee. If Tenant does not deliver such
rescission notice and Rescission Fee to Landlord within the ten (10) day period
referred to above, then Tenant shall be deemed to have waived its right to
rescind the extension notice. Upon the extension of the Lease Term pursuant to
this Paragraph 3.5, the term "Term" as used in this Lease shall thereafter
include the Extended
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Term and the Ending Date of this Lease shall be the expiration date of the
Extended Term unless sooner terminated pursuant to the terms hereof.
4. Rent.
4.1 Rent. Tenant shall pay to Landlord as rent for the
Premises ("Rent"), in advance, on the first day of each calendar month,
commencing on the date specified in Paragraph 1.6 and continuing throughout the
Lease Term, the Rent set forth in Paragraph 1.8 above. Rent and Operating
Expenses shall be prorated, based on thirty (30) days per month, for any partial
month during the Lease Term. Rent and Operating Expenses shall be payable
without deduction, offset, prior notice or demand in lawful money of the United
States to Landlord at the address herein specified for purposes of notice or to
such other persons or such other places as Landlord may designate in writing.
4.2 Late Charge. Tenant hereby acknowledges that late payment
by Tenant to Landlord of Rent will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Landlord by the
terms of any mortgage or deed of trust covering the Premises. Accordingly,
Tenant shall pay to Landlord, as Additional Rent (as defined in Paragraph 4.3
below), without the necessity of prior notice or demand, a late charge equal to
five percent (5%) of any installment of Rent which is not received by Landlord
within ten (10) days after the due date for such installment. The preceding to
the contrary notwithstanding, Landlord agrees that, with respect to the first
late payment of Rent by Tenant in any twelve month period, Tenant shall not be
obligated to pay a late charge on such delinquent Rent unless Tenant fails or
refuses to pay such Rent within five (5) business days following receipt of
written notice to Tenant. Except with respect to the first delinquency in the
payment of Rent in a twelve month period, Landlord shall not be obligated to
give Tenant notice of delinquent Rent prior to imposing a late charge on such
delinquent Rent. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. In no event shall this provision for a late charge be deemed
to grant to Tenant a grace period or extension of time within which to pay any
installment of Rent or prevent Landlord from exercising any right or remedy
available to Landlord upon Tenant's failure to pay such installment of Rent when
due, including without limitation the right to terminate this Lease. In the
event any installment of Rent is not received by Landlord by the thirtieth
(30th) day after the due date for such installment, such installment shall bear
interest at the annual rate set forth in Paragraph 35 below, commencing on the
thirty-first (31st) day after the due date for such installment and continuing
until such installment is paid in full.
4.3 Additional Rent. All taxes, charges, costs and expenses
and other sums which Tenant is required to pay hereunder (together with all
interest and charges that may accrue thereon in the event of Tenant's failure to
pay the same), and all damages, costs and expenses which Landlord may incur by
reason of any Default by Tenant shall be deemed to be additional rent hereunder
("Additional Rent"). Additional Rent shall accrue commencing on the Commencement
Date. In the event of nonpayment by Tenant of any Additional Rent, Landlord
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shall have all the rights and remedies with respect thereto as Landlord has for
the nonpayment of Rent. The term "Rentals" as used in this Lease shall mean Rent
and Additional Rent.
4.4 Rent During Extended Term. If Tenant elects to extend the
Lease Term pursuant to Paragraph 3.5 above, the monthly base Rent for the first
year of the Extended Term shall be in an amount equal to ninety-five percent
(95%) of the fair market rental value of the Premises in relation to market
conditions at the time of the commencement of the Extended Term (including, but
not limited to, rental rates for comparable space with comparable tenant
improvements in Santa Clara County as of the commencement of the Extended Term
and taking into consideration any adjustments to rent based upon direct costs
(operating expenses) and taxes, load factors, and/or cost of living or other
rental adjustments; the relative strength of the tenants; the size of the space;
and any other factors which affect market rental values at the time of the
commencement of the Extended Term); however, the monthly base Rent during the
first year of the Extended Term shall in no event be lower than Seventy-eight
Thousand One Hundred Twenty Dollars ($78,120) (NNN) per month.
(a) Mutual Agreement. After timely receipt by
Landlord of Tenant's notice of exercise of the option to extend the Lease Term,
but not sooner than the date which is nine (9) months prior to the expiration of
the initial Lease Term, Landlord and Tenant shall have a period of fifteen (15)
days in which to agree on the monthly base Rent to be paid during the first year
of the Extended Term. If Landlord and Tenant agree on said monthly base Rent
during that period, they shall immediately execute an amendment to this Lease
stating the monthly base Rent for the first year of the Extended Term. If
Landlord and Tenant are unable to agree on the monthly base Rent for the first
year of the Extended Term as aforesaid, then the provisions of Subparagraph (b)
below shall apply.
(b) Appraisal. Within ten (10) days after the
expiration of the fifteen (15) day period described in Subparagraph (a) above,
each party at its cost and by giving notice to the other party, shall appoint an
M.A.I. real estate appraiser, with at least seven (7) years full-time commercial
appraisal experience in Santa Clara County, to appraise and set the fair market
rental value of the Premises. If a party does not appoint an appraiser within
ten (10) days after the other party has given notice of the name of its
appraiser, the single appraiser appointed shall be the sole appraiser and shall
set the fair market rental value. The cost of such sole appraiser shall be borne
equally by the parties. If two appraisers are appointed by the parties as
provided in this Subparagraph (b), the two appraisers shall meet promptly in an
attempt to set the fair market rental value. If they are unable to agree within
twenty (20) days after the last appraiser has been appointed, then the two
appraisers shall attempt to select a third appraiser meeting the qualifications
stated in this Subparagraph (b) within ten (10) days after the last day the two
appraisers are given to set the fair market rental value. If they are unable to
agree on the third appraiser, either of the parties to this Lease, by giving ten
(10) days notice to the other party, may apply to the presiding judge of the
Superior Court of Santa Clara County for the selection of a third appraiser who
meets the qualifications stated above. Each of the parties shall bear one-half
of the cost of appointing the third appraiser and of paying the third
appraiser's fee. The third appraiser, however selected, shall be a person who
has not previously acted in any capacity for either party. Within twenty (20)
days after the selection of the third appraiser, the majority of the appraisers
shall set the fair market rental
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value. If the majority of the appraisers are unable to set the fair market
rental value within said twenty (20) day period, the three appraisals shall be
added together and the total divided by three (3); the resulting quotient shall
be the fair market rental value and shall be deemed incorporated herein;
provided, however, that if any appraisal differs from the median appraisal by an
amount equal to more than ten percent (10%) of such median appraisal, that
appraisal shall be disregarded, and the average of the remaining appraisals (or
the remaining appraisal) shall be the fair market rental value. In establishing
the fair market rental value, the appraiser or appraisers shall consider the
factors referred to in above in this Subparagraph (b), without regard to the
existence of this Lease but taking into consideration the triple net nature of
this Lease. The appraiser shall have the right to include adjustments to the
monthly base Rent during the Extended Term as part of the fair market rental
value of the Premises.
Every twelve calendar months during the Extended Term the monthly base Rent
shall be increased by an additional $0.06 per rentable square foot comprising
the Premises. The first such adjustment shall occur on the first day of the
thirteenth month of the Extended Term.
5. Intentionally Omitted.
6. Use of Premises.
6.1 Permitted Uses. Tenant shall use the Premises and the
Common Area only in conformance with applicable Laws for the purposes set forth
in Paragraph 1.9 above, and for no other purpose without the prior written
consent of Landlord, which consent Landlord may withhold in its sole discretion.
Any change in use of the Premises or the Common Area without the prior written
consent of Landlord shall be a Default by Tenant. Tenant and Tenant's agents
shall comply with the provisions of any Declaration of Covenants, Conditions,
and Restrictions affecting the Premises and the Common Area.
6.2 Tenant to Comply with Legal Requirements. Tenant shall, at
its sole cost (except as otherwise expressly provided in this Lease), promptly
comply with all Laws relating to or affecting the use, occupational safety,
occupancy or condition of the Premises or the Common Area, now in force, or
which may hereafter be in force, including without limitation those relating to
utility usage and load or number of permissible occupants or users of the
Premises, whether or not the same are now contemplated by the parties; with the
provisions of all recorded documents affecting the Premises or the Common Area
insofar as the same relate to or affect the use, occupational safety, occupancy,
or condition of the Premises or the Common Area; and with the requirements of
any board of fire underwriters (or similar body now or hereafter constituted)
relating to or affecting the use, occupational safety, occupancy or condition of
the Premises or the Common Area. Tenant's obligations pursuant to this Paragraph
6.2 shall include without limitation maintaining or restoring the Premises and
making structural and non-structural alterations and additions in compliance and
conformity with all Laws and recorded documents relating to the use,
occupational safety, occupancy or condition of the Premises during the Lease
Term. At Landlord's option, Landlord may make the required alteration, addition
or change, and Tenant shall pay the cost thereof as Additional Rent. If any
portion of the Premises or Common Area is not in compliance with Laws as of the
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Commencement Date of this Lease, then Tenant shall not be responsible for
bringing the Premises or Common Area into compliance, nor shall Tenant be
obligated to pay any money to bring the Premises or Common Area into compliance.
With respect to any structural alterations or additions as may be hereafter
required due to a change in Laws and unrelated to (i) Tenant's specific use of
the Premises or the Common Area, (ii) Tenant's alterations, additions or
improvements to the Premises, or (iii) Tenant's acts or omissions, Tenant shall
be required to pay the amortized cost of such structural alteration or addition,
which amount shall be determined as follows: (a) all costs paid by Landlord to
construct such alteration or addition (including financing costs) shall be fully
amortized over the useful life of such alteration or addition (as determined by
Landlord in good faith) with interest on the unamortized balance at the
prevailing market rate Landlord would pay if it borrowed funds to construct such
alteration or addition from an institutional lender, and (b) as Additional Rent,
Tenant shall pay the entire monthly amortized payment with respect to such
structural alteration or addition. Tenant's obligation to make payments under
the immediately preceding sentence with respect to any structural alteration or
addition that is required due to a change in Laws and unrelated to (i) Tenant's
specific use of the Premises or Common Area, (ii) Tenant's alterations,
additions or improvements to the Premises, or (iii) Tenant's acts or omissions,
shall commence when such alteration or addition has been substantially completed
and shall cease upon the earlier of the expiration of the Lease Term (but not
upon a termination due to any Default on the part of Tenant) or the end of the
term over which the costs of constructing the particular alteration or addition
were amortized. Payments of such Additional Rent shall be made concurrently with
payments of Base Rent. Tenant shall pay 100% of the cost of any structural
alteration or addition that is required due to a change in Laws and related to
(i) Tenant's specific use of the Premises or Common Area, (ii) Tenant's
alterations, additions or improvements to the Premises, and (iii) Tenant's acts
or omissions. Tenant shall obtain prior to the Commencement Date any permits,
licenses or other authorizations required for the lawful operation of its
business at the Premises. The judgment of any court of competent jurisdiction or
the admission of Tenant in any action or proceeding against Tenant, regardless
of whether Landlord is a party thereto or not, that Tenant has violated such Law
or recorded document relating to the use, occupational safety, occupancy or
condition of the Premises or the Common Area shall be conclusive of the fact of
such violation by Tenant. Any alterations or additions undertaken by Tenant
pursuant to this Paragraph 6.2 shall be subject to the requirements of Paragraph
13.1 below.
6.3 Prohibited Uses. Tenant and Tenant's agents shall not
commit or suffer to be committed any waste upon the Premises. Tenant and
Tenant's agents shall not do or permit anything to be done in or about the
Premises or Common Area which will in any way obstruct or interfere with the
rights of any authorized users of the Common Area, or injure or annoy them.
Tenant shall not conduct or permit any auction or sale open to the public to be
held or conducted on or about the Premises or Common Area. Tenant and Tenant's
agents shall not use or allow the Premises to be used for any unlawful or
hazardous purpose or any purpose not permitted by this Lease, nor shall Tenant
or Tenant's agents cause, maintain, or permit any nuisance in, on or about the
Premises. Tenant and Tenant's agents shall not do or permit anything to be done
in or about the Premises or Common Area nor bring or keep anything in the
Premises or Common Area which will in any way increase the rate of any insurance
upon the Premises or Common Area or any part thereof or any of its contents, or
cause a cancellation of
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any insurance policy covering the Premises or Common Area or any part thereof or
any of its contents, nor shall Tenant or Tenant's agents keep, use or sell or
permit to be kept, used or sold in or about the Premises any articles which may
be prohibited by a standard form policy of fire insurance. In the event the rate
of any insurance upon the Premises or Common Area or any part thereof or any of
its contents is increased because of the acts or omissions of Tenant or Tenant's
agents, Tenant shall pay, as Additional Rent, the full cost of such increase to
the extent attributable solely to Tenant's or its agents' acts or omissions;
provided however this provision shall in no event be deemed to constitute a
waiver of Landlord's rights or remedies in connection with such increase. Tenant
and Tenant's agents shall not place any loads upon the floor, walls or ceiling
of the Premises which would endanger the Premises or the structural elements
thereof, nor place any harmful liquids in the drainage system of the Premises.
No waste materials or refuse shall be dumped upon or permitted to remain upon
any part of the Premises or Common Area except in enclosed trash containers. No
materials, supplies, equipment, finished products (or semi-finished products),
raw materials, or other articles of any nature shall be stored upon, or be
permitted to remain on, any portion of the Common Area.
Tenant shall not allow any activity which in the reasonable opinion of
Landlord is detrimental to the operation of the Common Area or to tenants of
Landlord in other buildings located on the Common Area or upon real property
owned by Landlord adjacent to the Common Area, including but not limited to any
picketing, work stoppage, or other concerted activity. Landlord shall have the
right to require Tenant, at Tenant's own expense and within a reasonable period
of time, to use Tenant's commercially reasonable efforts to terminate or control
any such picketing, work stoppage or other concerted activity to the extent
necessary to eliminate any interference with the operation of the Common Area or
such tenants. Failure by Tenant to use its commercially reasonable efforts to do
so shall be a Default by Tenant. Nothing contained in this paragraph shall be
construed as placing Landlord in an employer-employee relationship with any of
Tenant's employees or with any other employees who may be involved in such
activity.
6.4 Hazardous Materials. Neither Tenant nor Tenant's agents
shall permit the introduction, placement, use, storage, manufacture,
transportation, release or disposition (collectively "Release") of any Hazardous
Material(s) (defined below) on or about any portion of the Premises or Common
Area without the prior written consent of Landlord, which consent may be
withheld in the sole and absolute discretion of Landlord without any requirement
of reasonableness in the exercise of that discretion. Notwithstanding the
immediately preceding sentence to the contrary, Tenant may use de minimis
quantities of the types of materials which are technically classified as
Hazardous Materials but commonly used in domestic or office use to the extent
not in an amount, which, either individually or cumulatively, would be a
"reportable quantity" under any applicable Law. Tenant covenants that, at its
sole cost and expense, Tenant will comply with all applicable Laws with respect
to the Release of such permitted Hazardous Materials. Any Release beyond the
scope allowed in this paragraph shall be subject to Landlord's prior consent,
which may be withheld in Landlord's sole and absolute discretion, and shall
require an amendment to the Lease in the event Landlord does consent which shall
set forth the materials, scope of use, indemnification and any other matter
required by Landlord in Landlord's sole and absolute discretion. Tenant shall
indemnify, defend and
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hold Landlord and Landlord's agents harmless from and against any and all
claims, losses, damages, liabilities, or expenses arising in connection with the
Release of Hazardous Materials by Tenant, Tenant's agents or any other person
using the Premises during the Term of this Lease or during the term of Tenant's
prior lease of the Premises. Tenant's obligation to defend, hold harmless and
indemnify pursuant to this Paragraph 6 4 shall survive Lease Termination.
As used in this Lease, the term "Hazardous Materials" means any
chemical, substance, waste or material which has been or is hereafter determined
by any federal, state or local governmental authority to be capable of posing
risk of injury to health or safety, including without limitation, those
substances included within the definitions of "hazardous substances," "hazardous
materials," "toxic substances," or "solid waste" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Hazardous Materials
Transportation Act, as amended, and in the regulations promulgated pursuant to
said laws; those substances defined as "hazardous wastes" in section 25117 of
the California Health & Safety Code, or as "hazardous substances" in section
25316 of the California Health & Safety Code, as amended, and in the regulations
promulgated pursuant to said laws; those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and amendments thereto) or
designated by the Environmental Protection Agency (or any successor agency) as
hazardous substances (see, e.g., 40 CFR Part 302 and amendments thereto); such
other substances, materials and wastes which are or become regulated or become
classified as hazardous or toxic under any Laws, including without limitation
the California Health & Safety Code, Division 20, and Title 26 of the California
Code of Regulations; and any material, waste or substance which is (i)
petroleum, (ii) asbestos, (iii) polychlorinated biphenyls, (iv) designated as a
"hazardous substance" pursuant to section 311 of the Clean Water Act of 1977, 33
U.S.C. sections 1251 et seq. (33 U.S.C. ` 1321) or listed pursuant to section
307 of the Clean Water Act of 1977 (33 U.S.C. ` 1317), as amended; (v) flammable
explosives; (vi) radioactive materials; or (vii) radon gas.
7. Taxes.
7.1 Personal Property Taxes. Tenant shall cause Tenant's trade
fixtures, equipment, furnishings, furniture, merchandise, inventory, machinery,
appliances and other personal property installed or located on the Premises
(collectively the "personal property") to be assessed and billed separately from
the Premises. Tenant shall pay before delinquency any and all taxes, assessments
and public charges levied, assessed or imposed upon or against Tenant's personal
property. If any of Tenant's personal property shall be assessed with the real
property comprising the Common Area or with the Premises, Tenant shall pay to
Landlord, as Additional Rent, the amounts attributable to Tenant's personal
property within ten (10) days after receipt of a written statement from Landlord
setting forth the amount of such taxes, assessments and public charges
attributable to Tenant's personal property. Tenant shall comply with the
provisions of any Law which requires Tenant to file a report of Tenant's
personal property located on the Premises.
7.2 Other Taxes Payable Separately by Tenant. Tenant shall
pay, prior to delinquency, all privilege, sales, excise, use, business,
occupation, or other taxes, assessments,
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license fees or charges levied, assessed or imposed upon Tenant's business
operations conducted at the Premises.
7.3 Common Taxes.
(a) Definition of Taxes. The term "Taxes" as used in
this Lease shall collectively mean (to the extent any of the following are not
paid by Tenant pursuant to Paragraphs 7.1 and 7.2 above) all real estate taxes
and general and special assessments (including, but not limited to, assessments
for public improvements or benefit); personal property taxes; taxes based on
vehicles utilizing parking areas on the Common Area; taxes computed or based on
rental income or on the square footage of the Premises (including without
limitation any municipal business tax but excluding federal, state and municipal
net income taxes); taxes upon, allocable to, or measured by the area of the
Premises or the Rentals payable hereunder, including without limitation any
gross income, gross receipts, excise, or other tax levied by the state, any
political subdivision thereof, city or federal government with respect to the
receipt of such Rentals (but excluding federal, state and municipal net income
taxes); taxes upon or with respect to the use, possession, occupancy, leasing,
operation and management of the Premises or any portion thereof; taxes upon this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises; taxes imposed as a means of
controlling or abating environmental pollution or the use of energy or any
natural resource (including without limitation gas, electricity or water),
including, without limitation, any parking taxes, levies or charges or vehicular
regulations imposed by any governmental agency; environmental surcharges; excise
taxes; gross receipts taxes; sales and/or use taxes; employee taxes; water and
sewer taxes, levies, assessments and other charges in the nature of taxes or
assessments (including, but not limited to, assessments for public improvements
or benefit); and all other governmental, quasi-governmental or special district
impositions of any kind and nature whatsoever (excluding utility hook-up fees);
regardless of whether any of the foregoing are now customary or within the
contemplation of the parties hereto and regardless of whether resulting from
increased rate and/or valuation, or whether extraordinary or ordinary, general
or special, unforeseen or foreseen, or similar or dissimilar to any of the
foregoing and which during the Lease Term are laid, levied, assessed or imposed
upon Landlord and/or become a lien upon or chargeable against the Premises
and/or Common Area under or by virtue of any present or future laws, statutes,
ordinances, regulations, or other requirements of any governmental,
quasi-governmental or special district authority whatsoever. The term "Taxes"
shall not include reimbursement to Landlord of Landlord's net income taxes,
succession, transfer, gift, franchise, estate or inheritance taxes, but shall
include any increases in taxes based upon any change of ownership of the
Premises or Common Area. The term "environmental surcharges" shall include any
and all expenses, taxes, charges or penalties imposed by the Federal Department
of Energy, Federal Environmental Protection Agency, the Federal Clean Air Act,
or any regulations promulgated thereunder, or imposed by any other local, state
or federal governmental agency or entity now or hereafter vested with the power
to impose taxes, assessments or other types of surcharges as a means of
controlling or abating environmental pollution or the use of energy or any
natural resource in regard to the use, operation or occupancy of the Premises
and/or the Common Area. The term "Taxes" shall include (to the extent the same
are not paid by Tenant pursuant to Paragraphs 7.1 and 7.2 above), without
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limitation, all taxes, assessments, levies, fees, impositions or charges levied,
imposed, assessed, measured, or based in any manner whatsoever upon or with
respect to the use, possession, occupancy, leasing, operation or management of
the Premises and/or Common Area or in lieu of or equivalent to any Taxes set
forth in this Paragraph 7.3(a). In the event any such Taxes are payable by
Landlord and it shall not be lawful for Tenant to reimburse Landlord for such
Taxes, then the Rentals payable hereunder shall be increased to net Landlord the
same net Rental after imposition of any such Tax upon Landlord as would have
been payable to Landlord prior to the imposition of any such Tax.
(b) Operating Expenses. All Taxes which are levied or
assessed or which become a lien upon the Premises and/or Common Area or which
become due or accrue during the Lease Term shall be an Operating Expense, and
Tenant shall pay as Additional Rent each month during the Lease Term 1/12th of
such Taxes, based on Landlord's estimate thereof, pursuant to Paragraph 12
below. Taxes during any partial tax fiscal year(s) within the Lease Term shall
be prorated according to the ratio which the number of days during the Lease
Term or of actual occupancy of the Premises by Tenant, whichever is greater,
during such year bears to 365.
8. Insurance; Indemnity; Waiver.
8.1 Insurance by Landlord.
(a) Landlord shall, during the Lease Term, procure
and keep in force the following insurance, the cost of which shall be an
Operating Expense (subject to the limitation on earthquake insurance premium
pass-throughs as provided below), payable by Tenant pursuant to Paragraph 12
below:
(i) Property Insurance. "All risk" property
insurance, including, without limitation, coverage for boiler and machinery (if
applicable); sprinkler damage; vandalism; malicious mischief; full coverage
plate glass insurance; and demolition, increased cost of construction and
contingent liability from change in building laws on the Premises and Common
Area, including any improvements or fixtures constructed or installed on the
Premises and Common Area by Landlord. Such insurance shall be in the full amount
of the replacement cost of the foregoing, with reasonable deductible amounts,
which deductible amounts shall be an Operating Expense, payable by Tenant
pursuant to Paragraph 12. Such insurance shall also include rental income
insurance, insuring that one hundred percent (100%) of the Rentals (as the same
may be adjusted hereunder) will be paid to Landlord for a period of up to twelve
(12) months if the Premises are destroyed or damaged, or such longer period as
may be required by any beneficiary of a deed of trust or any mortgagee of any
mortgage affecting the Premises. Such "all risk" insurance may, at Landlord's
election, include coverage for earthquake and/or flood. Landlord agrees that the
annual earthquake insurance premium to be included as an Operating Expense (and
allocable solely to the Premises) shall not exceed Eight Thousand Eight Hundred
Fifty-seven and 65/100 Dollars ($8,857.65) per year, as such $8,857.65 shall be
increased by five percent (5%) per year during the Lease Term, including, the
Extended Term. Such property insurance maintained by Landlord shall not cover
any leasehold
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improvements installed in the Premises by Tenant at its expense, or Tenant's
equipment, trade fixtures inventory, fixtures or personal property located on or
in the Premises;
(ii) Liability Insurance. Comprehensive
general liability (lessor's risk) insurance against any and all claims for
personal injury, death or property damage occurring in or about the Premises or
Common Area. Such insurance shall have a combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence and Two Million Dollars
($2,000,000) aggregate; and
(iii) Other. Such other insurance as
Landlord deems reasonably necessary and prudent (as long as available at
commercially reasonable premiums).
8.2 Insurance by Tenant. Tenant shall, during the Lease Term,
at Tenant's sole cost and expense, procure and keep in force the following
insurance:
(a) Personal Property Insurance. "All risk" property
insurance, including, without limitation, coverage for boiler and machinery (if
applicable); sprinkler damage; vandalism; malicious mischief; and demolition,
increased cost of construction and contingent liability from changes in building
laws on all leasehold improvements installed in the Premises by Tenant at its
expense (if any) and on all equipment, trade fixtures, inventory, fixtures and
personal property located on or in the Premises, including improvements or
fixtures hereinafter constructed or installed on the Premises. Such insurance
shall be in an amount equal to the full replacement cost of the aggregate of the
foregoing and shall provide coverage comparable to the coverage in the standard
ISO all risk form, when such form is supplemented with the coverages required
above.
(b) Liability Insurance. Comprehensive general
liability insurance for the mutual benefit of Landlord and Tenant, against any
and all claims for personal injury, death or property damage occurring in or
about the Premises and Common Area, or arising out of Tenant's or Tenant's
agents' use of the Common Area, use or occupancy of the Premises or Tenant's
operations on the Premises. Such insurance shall have a combined single limit of
not less than Three Million Dollars ($3,000,000) per occurrence and Five Million
Dollars ($5,000,000) aggregate. Such insurance shall contain a cross-liability
(severability of interests) clause and an extended ("broad form") liability
endorsement, including blanket contractual coverage. The minimum limits
specified above are the minimum amounts required by Landlord, and may be revised
by Landlord from time to time to meet changed circumstances, including without
limitation to reflect (i) changes in the purchasing power of the dollar, (ii)
changes indicated by the amount of plaintiffs' verdicts in personal injury
actions in the State of California, or (iii) changes consistent with the
standards required by other landlords in the county in which the Premises are
located. Such liability insurance shall be primary and not contributing to any
insurance available to Landlord, and Landlord's insurance (if any) shall be in
excess thereto. Such insurance shall specifically insure Tenant's performance of
the indemnity, defense and hold harmless agreements contained in Paragraph 8.4,
although Tenant's obligations pursuant to Paragraph 8.4 shall not be limited to
the amount of any insurance
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required of or carried by Tenant under this Paragraph 8.2(b). Tenant shall be
responsible for insuring that the amount of insurance maintained by Tenant is
sufficient for Tenant's purposes.
(c) Other. Such other insurance as required by law,
including, without limitation, workers' compensation insurance.
(d) Form of the Policies. The policies required to be
maintained by Tenant pursuant to Paragraphs 8.2(a), (b), and (c) above shall be
with companies, on forms, with deductible amounts (if any), and loss payable
clauses satisfactory to Landlord, shall include Landlord and the beneficiary or
mortgagee of any deed of trust or mortgage encumbering the Premises and/or the
real property comprising the Common Area as additional insureds, and shall
provide that such parties may, although additional insureds recover for any loss
suffered by Tenant's negligence. Certified copies of policies or certificates of
insurance shall be delivered to Landlord prior to the Commencement Date: a new
policy or certificate shall be delivered to Landlord at least thirty (30) days
prior to the expiration date of the old policy. Tenant shall have the right to
provide insurance coverage which it is obligated to carry pursuant to the terms
hereof in a blanket policy, provided such blanket policy expressly affords
coverage to the Premises and to Tenant as required by this Lease. Tenant shall
obtain a written obligation on the part of Tenant's insurer(s) to notify
Landlord and any beneficiary or mortgagee of a deed of trust or mortgage
encumbering the Premises and/or the real property comprising the Common Area in
writing of any delinquency in premium payments and at least thirty (30) days
prior to any cancellation or modification of any policy. Tenant's policies shall
provide coverage on an occurrence basis and not on a claims made basis. In no
event shall the limits of any policies maintained by Tenant be considered as
limiting the liability of Tenant under this Lease.
8.3 Failure by Tenant to Obtain Insurance. If Tenant does not
take out the insurance required pursuant to Paragraph 8.2 or keep the same in
full force and effect, Landlord may, but shall not be obligated to, take out the
necessary insurance and pay the premium therefor, and Tenant shall repay to
Landlord, as Additional Rent, the amount so paid promptly upon demand. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
Additional Rent, any and all reasonable expenses (including attorneys' fees) and
damages which Landlord may sustain by reason of the failure of Tenant to obtain
and maintain such insurance, it being expressly declared that the expenses and
damages of Landlord shall not be limited to the amount of the premiums thereon.
8.4 Indemnification Tenant shall indemnify, hold harmless, and
defend Landlord (except to the extent of the negligence or willful misconduct of
Landlord or Landlord's agents, employees or contractors) against all claims,
losses, damages, actions, causes of action, penalties, demands, expenses or
liabilities for injury or death to any person or for damage to or loss of use of
any property arising out of any occurrence in, on or about the Premises or
Common Area, if and to the extent caused or contributed to by Tenant or Tenant's
agents, employees or contractors or arising out of any occurrence in, upon or at
the Premises or on account of the use, condition, occupational safety or
occupancy of the Premises. Tenant's indemnification, defense and hold harmless
obligations under this Lease shall include and apply to attorneys' fees,
investigation costs, and other costs actually incurred by Landlord. Tenant
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shall further indemnify, defend and hold harmless Landlord from and against any
and all claims, losses, damages, liabilities or expenses arising from any breach
or default in the performance of any obligation on Tenant's part to be performed
under the terms of this Lease. The provisions of this Paragraph 8.4 shall
survive Lease Termination with respect to any damage, injury, death, breach or
default occurring prior to such termination. This Lease is made on the express
condition that Landlord shall not be liable (in the absence of the negligence or
willful misconduct of Landlord or Landlord's agents, employees or contractors)
for, or suffer loss by reason of, injury to person or property, from whatever
cause, in any way connected with the condition, use, occupational safety or
occupancy of the Premises specifically including, without limitation, any
liability for injury to the person or property of Tenant or Tenant's agents.
Anything in this Lease to the contrary notwithstanding, under no circumstances
shall Landlord be liable to Tenant for any claims of lost profits, loss of
business or lost income.
8.5 Claims by Tenant. Landlord shall not be liable to Tenant,
and Tenant waives all claims against Landlord, for injury or death to any
person, damage to any property, or loss of use of any property in the Premises
or Common Area by and from all causes, including without limitation, any defect
in the Premises or Common Area and/or any damage or injury resulting from fire,
steam, electricity, gas, water or rain, which may leak or flow from or into any
part of the Premises, or from breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, whether the damage or injury results from conditions arising upon the
Premises or Common Area or from other sources. Landlord shall not be liable for
any damages arising from any act or neglect of any other user of the Common
Area. Tenant or Tenant's agents shall immediately notify Landlord in writing of
any known defect in the Premises or Common Area. The provisions of this
Paragraph 8.5 shall not apply to any damages, claims, losses, actions, causes of
action, penalties, demands, expenses, liabilities or injuries caused by the
negligence or willful misconduct of Landlord's agents, employees or contractors;
provided, however, under no circumstances shall Landlord be liable to Tenant for
claims of lost profits, loss of business or lost income.
8.6 Mutual Waiver of Subrogation. Landlord hereby releases
Tenant, and Tenant hereby releases Landlord, and their respective officers,
agents, employees and servants, from any and all claims or demands of damages,
loss, expense or injury to the Premises or the Common Area, or to the
furnishings, fixtures, equipment, inventory or other property of either Landlord
or Tenant in, about or upon the Premises or the Common Area, which is caused by
or results from perils, events or happenings which are the subject of insurance
carried by the respective parties pursuant to this Paragraph 8 and in force at
the time of any such loss, whether due to the negligence of the other party or
its agents and regardless of cause or origin; provided, however, that such
waiver shall be effective only to the extent permitted by the insurance covering
such loss, to the extent such insurance is not prejudiced thereby, and to the
extent insured against.
9. Utilities. Landlord agrees to provide, at its cost, water,
electricity and telephone service connections into the Premises; but Tenant
shall pay during the Lease Term and prior to delinquency all charges for water,
gas, light, heat, power, electricity, telephone or other
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communication service, janitorial service, trash pick-up, sewer and all other
services supplied to or consumed on the Premises (collectively the "Services")
and all taxes, levies, fees or surcharges therefor. Tenant shall arrange for
Services to be supplied to the Premises and shall contract for all of the
Services in Tenant's name prior to the Commencement Date. The Commencement Date
shall not be delayed by reason of any failure by Tenant to so contract for
Services. In the event that any of the Services cannot be separately billed or
metered to the Premises, or if any of the Services are not separately metered as
of the Commencement Date, the cost of such Services shall be an Operating
Expense and Tenant shall pay such cost to Landlord, as Additional Rent, as
provided in Paragraph 12 below, except that Tenant's proportionate share of such
Services shall be the percentage obtained by dividing the gross leasable square
footage contained in the Premises by the total gross leasable square footage
located in all buildings utilizing such Services. The lack or shortage of any
Services due to any cause whatsoever shall not affect any obligation of Tenant
hereunder, and Tenant shall faithfully keep and observe all the terms,
conditions and covenants of this Lease and pay all Rentals due hereunder, all
without diminution, credit or deduction. The immediately preceding sentence to
the contrary notwithstanding, Landlord agrees that if Services are curtailed or
suspended to the Premises as a result of the acts or negligence or willful
misconduct of Landlord for a period of forty-eight (48) consecutive hours during
the Lease Term, then Tenant's Rent payable hereunder shall be equitably abated
to the extent such curtailment or suspension of Services interferes with
Tenant's use of the Premises (as reasonably determined by Landlord and Tenant)
following such forty-eight (48) hour period until such Services are restored.
10. Repairs and Maintenance.
10.1 Landlord's Responsibilities. Subject to the provisions of
Paragraph 15 below, Landlord shall maintain in reasonably good order and repair
the structural roof and roof surface, structural (i.e. load bearing) and
exterior walls (including painting thereof) and foundations of the Premises,
except for any repairs required because of the wrongful act of Tenant or
Tenant's agents, which repairs shall be made at the expense of Tenant and as
Additional Rent. Tenant shall give prompt written notice to Landlord of any
known maintenance work required to be made by Landlord pursuant to this
Paragraph 10.1. The costs of repairs and maintenance which are the obligation of
Landlord hereunder shall be an Operating Expense and Tenant shall pay such costs
to Landlord as Additional Rent, as provided in Paragraph 12 below.
To the extent any labor dispute in which Tenant is involved or of which
Tenant is the object interferes with the performance of Landlord's duties
hereunder, Landlord shall be excused from the performance of such duties and
Tenant hereby waives any and all claims against Landlord for damages or losses
in regard to such duties.
10.2 Tenant's Responsibilities. Except as expressly provided
in Paragraph 10.1 above, Tenant shall, at its sole cost, maintain the entire
Premises and every part thereof, including without limitation, windows,
skylights, window frames, plate glass, freight docks, doors and related
hardware, interior walls and partitions, and the electrical, plumbing, lighting,
heating and air conditioning systems in good order, condition and repair. Tenant
shall deliver to
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Landlord, every six (6) months during the Lease Term, a certificate of
maintenance or its equivalent, signed by a licensed HVAC repair and maintenance
contractor and stating that the heating and air conditioning systems servicing
the Premises have been inspected, serviced and are in good order, condition and
repair. Tenant's failure to deliver said certificate or its equivalent within
thirty (30) days following written notice from Landlord that said certificate is
past due shall be a Default by Tenant. If Tenant fails to make repairs or
perform maintenance work required of Tenant hereunder within fifteen (15) days
after notice from Landlord specifying the need for such repairs or maintenance
work, Landlord or Landlord's agents may, in addition to all other rights and
remedies available hereunder or by law and without waiving any alternative
remedies, enter into the Premises and make such repairs and/or perform such
maintenance work. If Landlord makes such repairs and/or performs such
maintenance work, Tenant shall reimburse Landlord upon demand and as Additional
Rent, for the cost of such repairs and/or maintenance work. Landlord shall have
no liability to Tenant for any damage, inconvenience or interference with the
use of the Premises by Tenant or Tenant's agents as a result of Landlord
performing any such repairs or maintenance (unless such damage, inconvenience or
interference is caused by the gross negligence or willful misconduct of Landlord
or its agents, employees or contractors); provided, however, under no
circumstances shall Landlord be liable to Tenant for claims of lost profits,
loss of business or lost income. Tenant shall reimburse Landlord, on demand and
as Additional Rent, for the cost of damage to the Premises and/or Common Area
caused by Tenant or Tenant's agents, employees or contractors. Tenant expressly
waives the benefits of any statute now or hereafter in effect (including without
limitation the provisions of subsection 1 of Section 1932, Section 1941 and
Section 1942 of the California Civil Code and any similar law, statute or
ordinance now or hereafter in effect) which would otherwise afford Tenant the
right to make repairs at Landlord's expense (or to deduct the cost of such
repairs from Rentals due hereunder) or to terminate this Lease because of
Landlord's failure to keep the Premises in good and sanitary order.
11. Common Area.
11.1 In General. Subject to the terms and conditions of this
Lease and such rules and regulations as Landlord may from time to time
prescribe, Tenant and Tenant's agents shall have the nonexclusive right to use
during the Lease Term the access roads, sidewalks, landscaped areas and other
facilities on the Common Area. This right to use the Common Area shall terminate
upon Lease Termination. Neither Tenant nor Tenant's agents shall at any time
park or permit the parking of their vehicles in any portion of the Common Area
not designated by Landlord as a parking area.
Landlord reserves the right from time to time to make changes in the
shape, size, location, amount and extent of the Common Area. Landlord further
reserves the right to promulgate such reasonable rules and regulations relating
to the use of all or any portion of the Common Area and to amend such rules and
regulations from time to time, with or without advance notice, as Landlord may
deem appropriate. Any amendments to the rules and regulations shall be effective
as to Tenant, and binding on Tenant, upon delivery of a copy of such rules and
regulations to Tenant. Landlord agrees to apply such rules and regulations, and
all amendments thereto, in a non-discriminatory manner. Tenant and Tenant's
agents shall observe such rules
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and regulations and any failure by Tenant or Tenant's agents to observe and
comply with the rules and regulations shall be a Default by Tenant. Landlord
shall not be responsible for the nonperformance of the rules and regulations by
any tenants or occupants of the buildings or improvements which now exist or may
hereafter be constructed upon the Common Area or upon the real property owned by
Landlord adjacent to the Common Area or by any other user authorized by
Landlord.
Landlord furthermore reserves the right, after having given Tenant
reasonable notice, to have any vehicles owned by Tenant or Tenant's agents which
are parked in violation of the provisions of this Paragraph 11.1 or in violation
of Landlord's rules and regulations relating to parking, to be towed away at the
expense of the owner of the vehicle so towed.
Landlord shall have the right to close, at reasonable times, all or any
portion of the Common Area for any reasonable purpose, including without
limitation, the prevention of a dedication thereof, or the accrual of rights of
any person or public therein; however, such closure of the Common Area shall not
unreasonably impair Tenant's access to the Premises, Tenant's parking rights as
described in this Lease or Tenant's use of the Premises.
11.2 Maintenance by Landlord. Landlord shall operate, manage
and maintain the Common Area in good condition and repair and shall manage or
cause to be managed the Common Area to reasonable and customary standards. The
cost of such maintenance, operation and management, shall be an "Operating
Expense", and Tenant shall pay such costs to Landlord, as Additional Rent, as
provided in Paragraph 12 below.
12. Operating Expenses.
12.1 Definition. "Operating Expense" or "Operating Expenses"
as used in this Lease shall mean and include all items identified in other
paragraphs of this Lease as an Operating Expense and the total reasonable cost
paid or incurred by Landlord for the operation, maintenance, repair, and
management of the Premises and Common Area, which costs shall include, without
limitation: the cost of Services and utilities supplied to the Premises and
Common Area (to the extent the same are not separately charged or metered to
Tenant); water; sewage; fuel; electricity; lighting systems; professional
management fee (not to exceed four percent (4%) of the Premises' gross rental
income); fire protection systems; storm drainage and sanitary sewer systems;
HVAC including air conditioning (to the extent the heating and air conditioning
systems in the Premises are not maintained by Tenant at Tenant's sole cost and
expense); repairing the roof structure and roof surface; maintenance and repair
of the structural parts of the Premises (including foundation, floor slab and
load bearing walls); property and liability insurance covering the Premises and
any other insurance carried by Landlord pursuant to Paragraph 8 above; cleaning,
sweeping, striping, resurfacing of parking and driveway areas; cleaning the
Common Area following storms or other severe weather; cleaning and repairing of
sidewalks, curbs, stairways; costs related to irrigation systems; the cost of
complying with Laws, including, without limitation, maintenance, alterations and
repairs required in connection therewith; the cost of capital improvements made
to the Common Area amortized over the useful life of such capital improvements
(with interest on the unamortized balance at the
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prevailing market rate Landlord would pay if it borrowed funds to construct such
improvements from an institutional lender); costs related to landscape
maintenance; and the cost of contesting the validity or applicability of any
governmental enactments which may affect Operating Expenses. Because the Common
Area is used by more than one (1) building during the Lease Term, the term
"Operating Expenses" shall mean and include all of the Operating Expenses
allocable to the Premises and a proportionate share (based on the square footage
of gross leasable area in the Premises as a percentage of the total of square
footage of gross leasable area of the buildings utilizing the Common Area at the
time in question) of all Operating Expenses which are related to such buildings
in general and are not allocated to any one building utilizing the Common Area.
As of the date of execution of this Lease, the percentage that the square
footage of gross leasable area in the Premises bears to the total square footage
of gross leasable area of the buildings utilizing the Common Area is twenty-two
and fourteen hundredths percent (22.14%). Operating Expenses shall also include
an accounting and administrative fee equal to three percent (3%) of the total
Operating Expenses (excluding Taxes and insurance premiums). The specific
examples of Operating Expenses stated in this Paragraph 12.1 are in no way
intended to and shall not limit the costs comprising Operating Expenses, nor
shall such examples be deemed to obligate Landlord to incur such costs or to
provide such services or to take such actions except as Landlord may be
expressly required in other portions of this Lease, or except as Landlord, in
its sole discretion, may elect. All costs incurred by Landlord in good faith for
the operation, maintenance, repair and management of the Premises and Common
Area shall be deemed conclusively binding on Tenant.
12.1.1 Operating Expense Exclusions. Notwithstanding
anything to the contrary contained in this Lease, in no event shall Tenant have
any obligation to perform, to pay directly, or to reimburse Landlord for, all or
any portion of the following repairs, maintenance, improvements, replacements,
premiums, claims, losses, fees, commissions, charges, disbursements, attorneys'
fees, experts' fees, costs and expenses (collectively, "Costs"):
(a) Losses Caused by Others and Construction
Defects. Costs occasioned by the act, omission or violation of Law by Landlord
or its agents, employees or contractors, or costs arising out of the failure to
construct the Building, Premises, tenant improvements installed by Landlord in
the Premises, if any, or Common Areas in accordance with Laws and private
restrictions applicable at the time of construction thereof.
(b) Condemnation and Insurance Costs. Costs
occasioned by the exercise of the power of eminent domain, or increases in
insurance Costs caused by the activities of other tenants of buildings in the
Coronado Stender Project.
(c) Reimbursable Expenses. Costs for which
Landlord has a right of reimbursement from others, or Costs which Tenant pays
directly to a third person.
(d) Reserves. Depreciation, amortization or
other expense reserves.
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(e) Mortgages. Interest, charges and fees
incurred on debt, payments or mortgages and rent under ground leases.
(f) 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 Premises or Common Area or to remediate any
Hazardous Material contamination, and any judgments or other Costs incurred in
connection with any Hazardous Material exposure or release, except to the extent
such Costs are incurred by Landlord in accordance with Paragraph 6.4 or incurred
by Landlord or caused by reason of the storage, use or disposal of the Hazardous
Material in question by Tenant, its agents, employees, contractors or invitees.
(g) Management. Any fee, profit or
compensation retained by Landlord or its affiliates for management and
administration of the Premises or Common Area in excess of the management fee
and accounting fee specified in Paragraph 12.1 above.
(h) Violations. The cost of correcting any
code violations that occurred prior to the Commencement Date of the Lease Term.
(i) Benefits. Wages, salaries or other
compensation paid to any executive employees above the grade of building
manager.
12.2 Payment of Operating Expenses by Tenant. Tenant shall pay
the Operating Expenses to Landlord as Additional Rent and without deduction or
offset. Upon reasonable written request made by Tenant to Landlord, Landlord
shall provide Tenant with copies of invoices supporting the charges of Operating
Expenses; however, Tenant shall pay for the reasonable costs incurred by
Landlord in making copies of such invoices and the failure of Landlord, if
applicable, to timely furnish copies of such invoices to Tenant shall not excuse
or relieve Tenant of its obligation to pay Operating Expenses in accordance with
the terms of this Lease. Tenant's payment of Operating Expenses shall be based
upon Landlord's estimate of Operating Expenses and shall be payable in equal
monthly installments in advance on the first day of each calendar month
commencing with the month following receipt of Landlord's estimate (and subject
to Landlord's right to change the method of payment or right to change
Landlord's estimate not more often than once in any calendar year). Within one
hundred twenty (120) days after the end of each calendar year (or at Lease
Termination), or as soon thereafter as practicable under the circumstances,
Landlord shall furnish Tenant a statement showing the actual Operating Expenses
for the period to which Landlord's estimate pertains and shall concurrently
either bill Tenant for the balance due (payable upon demand by Landlord) or
credit Tenant's account for the excess previously paid (except if such statement
applies to the last year of the Lease Term and Tenant has overpaid its share of
Operating Expenses for such last year of the Lease Term, then Tenant shall be
paid the amount of such overpayment in cash following such reconciliation of
Operating Expenses in lieu of a credit to Tenant's account).
Notwithstanding anything to the contrary contained in this Lease,
within one hundred eighty (180) days after receipt by Tenant of Landlord's
statement of Operating Expenses
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prepared pursuant to Paragraph 12.2 hereof for any prior annual period during
the Lease Term, Tenant or its authorized representative shall have the right to
inspect the books of Landlord during the business hours of Landlord at
Landlord's office or, at Landlord's option, such other location as Landlord
reasonably may specify, for the purpose of verifying the information contained
in the statement. Unless Tenant asserts specific errors within one hundred
eighty (180) days after receipt of the statement, the statement shall be deemed
correct as between Landlord and Tenant, except as to individual components
subsequently determined to be in error by future audit.
13. Alterations.
13.1 In General. Tenant shall not make, or permit to be made,
any alterations, changes, enlargements, improvements or additions (collectively
"Alterations") in, on, about or to the Premises, or any part thereof, including
Alterations required pursuant to Paragraph 6.2, without the prior written
consent of Landlord and without acquiring and complying with the conditions of
all permits required for such Alterations by any governmental authority having
jurisdiction thereof. The term "Alterations" as used in this Paragraph 13 shall
also include all heating, lighting, electrical (including all wiring, conduit,
outlets, drops, buss ducts, main and subpanels), air conditioning, and
partitioning in the Premises made by Tenant, regardless of how affixed to the
Premises. The preceding to the contrary notwithstanding, Tenant shall be
permitted, without first obtaining Landlord's consent but upon giving prior
written notice to Landlord, to make non-structural Alterations to the Premises
during the Lease Term provided (i) the cost of making such non-structural
Alterations do not exceed $10,000 individually or $50,000 in the aggregate in
any lease year during the Lease Term, (ii) such non-structural Alterations do
not affect the structural integrity of the Premises or any of the building
systems, such as HVAC, mechanical, electrical or plumbing systems within the
building comprising the Premises, and (ii) such non-structural Alterations are
not visible from the exterior of the Premises. As a condition to the giving of
its consent to any Alterations (for which Landlord's consent is required
hereunder), Landlord may impose such requirements as Landlord may deem necessary
in its sole discretion, including without limitation, the manner in which the
work is done; a right of approval of the contractor by whom the work is to be
performed; the requirement that Tenant post a completion bond in an amount and
form satisfactory to Landlord; and the requirement that Tenant reimburse
Landlord, as Additional Rent, for Landlord's actual costs incurred in reviewing
any proposed Alteration, whether or not Landlord's consent is granted. All
Alterations made by Tenant shall be made at Tenant's sole cost and expense, in
accordance with the plans and specifications approved by Landlord. Tenant shall
give written notice to Landlord five (5) days prior to employing any laborer or
contractor to perform services related to, or receiving materials for use upon
the Premises, and prior to the commencement of any work of improvement on the
Premises. Any Alterations to the Premises made by Tenant shall be made in
accordance with applicable Laws and in a good and workmanlike manner. In making
any such Alterations, Tenant shall, at Tenant's sole cost and expense, file for
and secure and comply with any and all permits or approvals required by any
governmental departments or authorities having jurisdiction thereof and any
utility company having an interest therein. In no event shall Tenant make any
structural changes to the Premises or make any changes to the Premises which
would weaken or impair the structural integrity of the Premises.
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13.2 Removal Upon Lease Termination. At the time Tenant
requests Landlord's consent, Tenant shall request a decision from Landlord in
writing as to whether Landlord will require Tenant, at Tenant's expense, to
remove any such Alterations and restore the Premises to their prior condition at
Lease Termination. In the event Tenant fails to earlier obtain Landlord's
written decision as to whether Tenant will be required to remove any Alteration
(or in the event Landlord's consent to any Alterations is not required as
provided in Paragraph 13.1 above), then no less than ninety (90) nor more than
one hundred twenty (120) days prior to the expiration of the Lease Term, Tenant
by written notice to Landlord shall request Landlord to inform Tenant whether or
not Landlord desires to have any Alterations made to the Premises by Tenant
removed at Lease Termination. Following receipt of such notice or following
Tenant's earlier request for a decision as to whether Tenant's Alterations, or
any of them, will be required to be removed by Tenant, Landlord may elect to
have all or a portion of Tenant's Alterations removed from the Premises at Lease
Termination, and Tenant shall, at its sole cost and expense, remove at Lease
Termination such Alterations designated by Landlord for removal and repair all
damage to the Premises and Common Area arising from such removal. In the event
Tenant fails to so request Landlord's decision or fails to remove any
Alterations designated by Landlord for removal, Landlord may remove any
Alterations made to the Premises by Tenant and repair all damage to the Premises
and Common Area arising from such removal, and may recover from Tenant all costs
and expenses incurred thereby. Tenant's obligation to pay such costs and
expenses to Landlord shall survive Lease Termination (except Landlord shall be
deemed to have waived its right to receive such costs and expenses if Landlord
has not requested or demanded payment of such costs or expenses from Tenant by
written notice to Tenant delivered within one hundred eighty days following
Lease Termination). Unless Landlord elects to have Tenant remove (or, upon
Tenant's failure to obtain Landlord's decision, Landlord removes) any such
Alterations, all such Alterations, except for moveable furniture and trade
fixtures of Tenant not affixed to the Premises, shall become the property of
Landlord upon Lease Termination (without any payment therefor) and remain upon
and be surrendered with the Premises at Lease Termination.
13.3 Landlord's Improvements. All fixtures, improvements or
equipment which are installed, constructed on or attached to the Premises or
Common Area by Landlord shall be a part of the realty and belong to Landlord.
14. Default and Remedies.
14.1 Events of Default. The term "Default by Tenant" as used
in this Lease shall mean the occurrence of any of the following events:
(a) Tenant's failure to pay when due any Rentals;
(b) Tenant's abandonment of the Premises;
(c) Commencement and continuation for at least thirty
(30) days of any case, action or proceeding by, against or concerning Tenant
under any federal or state
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bankruptcy, insolvency or other debtor's relief law, including without
limitation, (i) a case under Title 11 of the United States Code concerning
Tenant, whether under Chapter 7, 11, or 13 of such Title or under any other
Chapter, or (ii) a case, action or proceeding seeking Tenant's financial
reorganization or an arrangement with any of Tenant's creditors;
(d) Voluntary or involuntary appointment of a
receiver, trustee, keeper, or other person who takes possession for more than
thirty (30) days of substantially all of Tenant's assets or of any asset used in
Tenant's business on the Premises, regardless of whether such appointment is as
a result of insolvency or any other cause;
(e) Execution of an assignment for the benefit of
creditors of substantially all assets of Tenant available by law for the
satisfaction of judgment creditors;
(f) Commencement of proceedings for winding up or
dissolving (whether voluntary or involuntary) the entity of Tenant, if Tenant is
a corporation or a partnership;
(g) Levy of a writ of attachment or execution on
Tenant's interest under this Lease, if such writ continues for a period of ten
(10) days;
(h) Transfer or attempted Transfer of this Lease or
the Premises by Tenant contrary to the provisions of Paragraph 24 below; or
(i) Breach by Tenant of any term, covenant,
condition, warranty, or other provision contained in this Lease or of any other
obligation owing or due to Landlord.
14.2 Remedies. Upon any Default by Tenant, Landlord shall have
the following remedies, in addition to all other rights and remedies provided by
law, to which Landlord may resort cumulatively, or in the alternative:
14.2.1 Termination. Upon any Default by Tenant,
Landlord shall have the right (but not the obligation) to give written notice to
Tenant of such default and terminate this Lease and Tenant's right to possession
of the Premises if (i) such default is in the payment of Rentals and is not
cured within five (5) days after any such notice, or, (ii) with respect to the
defaults referred to in subparagraphs 14.1(b), (e), (f), (h) and (i), such
default is not cured within thirty (30) days after any such notice (or if a
default under subparagraphs 14.1(b) or (i) cannot be reasonably cured within
thirty (30) days, if Tenant does not commence to cure the default within the
thirty (30) day period or does not diligently and in good faith prosecute the
cure to completion), or, (iii) with respect to the defaults specified in
subparagraphs 14.1(c) (d) and (g), such default is not cured within the
respective time periods specified in those subparagraphs. The parties agree that
any written notice given by Landlord to Tenant pursuant to this Paragraph 14.2.1
shall be sufficient notice for purposes of California Code of Civil Procedure
Section 1161 and Landlord shall not be required to give any additional notice in
order to be entitled to commence an unlawful detainer proceeding. Upon
termination of this Lease and
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Tenant's right to possession of the Premises, Landlord shall have the right to
recover from Tenant:
(a) The worth at the time of award of the
unpaid Rentals which had been earned at the time of termination;
(b) The worth at the time of award of the
amount by which the Rentals which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided;
(c) The worth at the time of award (computed
by discounting at the discount rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent) of the amount by which the Rentals for
the balance of the Lease Term after the time of award exceed the amount of such
rental loss that Tenant proves could be reasonably avoided;
(d) Any other amounts necessary to
compensate Landlord for all detriment proximately caused by the Default by
Tenant or which in the ordinary course of events would likely result.
(e) The "worth at the time of award" of the
amounts referred to in subparagraphs (a) and (b) of this Paragraph 14.2.1 is
computed by allowing interest at an annual rate equal to the greater of: ten
percent (10%); or five percent (5%) plus the rate established by the Federal
Reserve Bank of San Francisco, as of the twenty-fifth (25th) day of the month
immediately preceding the Default by Tenant, on advances to member banks under
Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter
from time to time amended, not to exceed the maximum rate allowable by law.
14.2.2 Continuance of Lease. Upon any Default by
Tenant and unless and until Landlord elects to terminate this Lease pursuant to
Paragraph 14.2.1 above, this Lease shall continue in effect after the Default by
Tenant and Landlord may enforce all its rights and remedies under this Lease,
including without limitation, the right to recover payment of Rentals as they
become due. Neither efforts by Landlord to mitigate damages caused by a Default
by Tenant nor the acceptance of any Rentals shall constitute a waiver by
Landlord of any of Landlord's rights or remedies, including the rights and
remedies specified in Paragraph 14.2.1 above. The Landlord shall have the remedy
described in California Civil Code Section 1951.4 (landlord may continue lease
in effect after tenant's breach and abandonment and recover rent as it becomes
due, if landlord has the right to sublet or assign, subject only to reasonable
limitations).
15. Damage or Destruction.
15.1 Definition of Terms. For the purposes of this Lease, the
term: (a) "Insured Casualty" means damage to or destruction of the Premises from
a cause actually insured against, for which the insurance proceeds paid or made
available to Landlord, together with the amount of deductible applicable to such
insured casualty (and which deductible shall be paid by Tenant to Landlord), are
sufficient to rebuild or restore the Premises under then-existing
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building codes to the condition existing immediately prior to the damage or
destruction; and (b) "Uninsured Casualty" means damage to or destruction of the
Premises from a cause not actually insured against, or from a cause actually
insured against but for which the insurance proceeds paid or made available to
Landlord are for any reason insufficient to rebuild or restore the Premises
under then-existing building codes to the condition existing immediately prior
to the damage or destruction, or from a cause actually insured against but for
which the insurance proceeds are not paid or made available to Landlord within
sixty (60) days of the event of damage or destruction.
15.2 Insured Casualty.
15.2.1 Rebuilding Required. In the event of an
Insured Casualty where the extent of damage or destruction is less than twenty
percent (20%) of the then full replacement cost of the Premises, Landlord shall
rebuild or restore the Premises to the condition existing immediately prior to
the damage or destruction, provided the damage or destruction was not a result
of a negligent or willful act of Tenant, and that there exist no governmental
codes or regulations that would interfere with Landlord's ability to so rebuild
or restore.
15.2.2 Landlord's Election. In the event of an
Insured Casualty where the extent of damage or destruction is equal to or
greater than twenty percent (20%) of the then full replacement cost of the
Premises, Landlord may, at its option and at its sole discretion, rebuild or
restore the Premises to the condition existing immediately prior to the damage
or destruction, or terminate this Lease. Landlord shall notify Tenant in writing
within forty-five (45) days after the event of damage or destruction of
Landlord's election to either rebuild or restore the Premises or terminate this
Lease.
15.2.3 Continuance of Lease. If Landlord is required
to rebuild or restore the Premises pursuant to Paragraph 15.2.1 or if Landlord
elects to rebuild or restore the Premises pursuant to Paragraph 15.2.2, this
Lease shall remain in effect and Tenant shall have no claim against Landlord for
compensation for inconvenience or loss of business during any period of repair
or restoration.
15.3 Uninsured Casualty.
15.3.1 Landlord's Election. In the event of an
Uninsured Casualty, Landlord may, at its option and at its sole discretion (i)
rebuild or restore the Premises as soon as reasonably possible at Landlord's
expense (unless the damage or destruction was caused by a negligent or willful
act of Tenant, in which event Tenant shall pay all costs of rebuilding or
restoring), in which event this Lease shall continue in full force and effect or
(ii) terminate this Lease, in which event Landlord shall give written notice to
Tenant within forty-five (45) days after the event of damage or destruction of
Landlord's election to terminate this Lease as of the date of the event of
damage or destruction, and if the damage or destruction was caused by a
negligent or willful act of Tenant, Tenant shall be liable therefor to Landlord.
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15.3.2 Tenant's Ability to Continue Lease. If
Landlord elects to terminate this Lease and the extent of damage or destruction
is less than twenty percent (20%) of the then full replacement cost of the
Premises or the proceeds paid or made available to Landlord are for any reason
insufficient to rebuild or restore the Premises under then-existing building
codes to the condition existing immediately prior to the damage or destruction,
and if there exist no governmental codes or regulations that would interfere
with Landlord's ability to so repair or restore, then Tenant may nevertheless
cause the Lease to continue in effect by (i) notifying Landlord in writing
within ten (10) days after Landlord's notice of termination of Tenant's
agreement to pay all costs of rebuilding or restoring not covered by insurance,
and (ii) providing Landlord with reasonable security for or assurance of such
payment. Tenant shall pay to Landlord in cash no later than thirty (30) days
prior to the date of commencement of construction the reasonable estimated cost
of rebuilding or restoring. In the event Tenant fails to pay such cost to
Landlord by the date specified, Landlord may immediately terminate the Lease and
recover from Tenant all costs incurred by Landlord in preparation for
construction. If the actual cost of rebuilding or restoring exceeds the
estimated cost of such work, Tenant shall pay the difference to Landlord in cash
upon notification by Landlord of the final cost. If the cost of rebuilding or
restoring is less than the estimated cost of such work, Tenant shall be entitled
to a refund of the difference upon completion of the rebuilding or restoring and
determination of final cost.
15.4 Tenant's Election. Notwithstanding anything to the
contrary contained in this Paragraph 15, Tenant may elect to terminate this
Lease in the event the Premises are damaged or destroyed and, in the reasonable
opinion of Landlord's architect or construction consultants, the restoration of
the Premises cannot be substantially completed within one hundred eighty (180)
days after the event of damage or destruction. Tenant's election shall be made
by written notice to Landlord within twenty (20) days after Tenant receives from
Landlord the estimate of the time needed to complete repair or restoration of
the Premises. If Tenant does not deliver said notice within said twenty (20) day
period, Tenant may not later terminate this Lease even if substantial completion
of the rebuilding or restoration occurs subsequent to said one hundred eighty
day period, provided that Landlord is proceeding with diligence to rebuild or
restore the Premises. The preceding sentence to the contrary notwithstanding, if
such rebuilding or restoration is not completed within two hundred forty (240)
days following the event of damage or destruction, then Tenant shall be allowed
to terminate this Lease (even if Landlord is proceeding with diligence to
rebuild or restore the Premises) by delivering written notice to Landlord within
twenty (20) days following such two hundred forty (240) day period. If Tenant
delivers said notice within said twenty (20) day period, this Lease shall
terminate as of the date of the event of damage or destruction.
15.5 Damage or Destruction Near End of Lease Term.
Notwithstanding anything to the contrary contained in this Paragraph 15, in the
event the Premises are damaged or destroyed in whole or in part (regardless of
the extent of damage) from any cause during the last twelve (12) months of the
Lease Term, Landlord may, at Landlord's option, terminate this Lease as of the
date of the event of damage or destruction by giving written notice to Tenant of
Landlord's election to do so within thirty (30) days after the event of such
damage or destruction. For purposes of this Paragraph 15.5, if Tenant has been
granted an option to extend
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or renew the Lease Term pursuant to another provision of this Lease, then the
damage or destruction shall be deemed to have occurred during the last twelve
(12) months of the Lease Term if Tenant fails to exercise its option to extend
or renew within twenty-five (25) days after the event of damage or destruction.
Notwithstanding anything to the contrary contained in this Paragraph 15, in the
event the Premises are damaged or destroyed in whole or in part (regardless of
the extent of damage) from any cause (other than the acts, omissions, negligence
or willful misconduct of Tenant or any of its agents, employees, licensees,
invitees, subtenants or contractors) during the last twelve (12) months of the
Lease Term and such repair or restoration cannot be completed at least six
months prior to the expiration of the Lease Term, Tenant may, at Tenant's
option, terminate this Lease as of the date of the event of damage or
destruction by giving written notice to Landlord of Tenant's election to do so
within thirty (30) days after the event of such damage or destruction.
15.6 Termination of Lease. The current Rent and Operating
Expenses shall be proportionately reduced during the period following the event
of damage or destruction until the date on which Tenant surrenders the Premises,
based upon the extent to which the damage or destruction interferes with
Tenant's business conducted in the Premises, as reasonably determined by
Landlord. The proceeds of insurance carried by Tenant pursuant to Paragraph 8.2
shall be paid to Landlord and Tenant, as their interests appear.
15.7 Abatement of Rentals. If the Premises are to be rebuilt
or restored pursuant to this Paragraph 15, the then current Rent and Operating
Expenses shall be proportionately reduced during the period of repair or
restoration, based upon the extent to which the making of repairs interferes
with Tenant's business conducted in the Premises, as reasonably determined by
Landlord.
15.8 Liability for Personal Property. In no event shall
Landlord have any liability for, nor shall it be required to repair or restore,
any injury or damage to any Alterations to the Premises made by Tenant, trade
fixtures, equipment, merchandise, furniture, or any other property installed by
Tenant or at the expense of Tenant. Subject to the provisions of Paragraph 8.6
above, the immediately preceding sentence shall not relieve Landlord from
liability for its negligent acts or willful misconduct. In no event, however,
shall Landlord be liable for any claims by Tenant of lost profits, loss of
business or lost income. If Landlord or Tenant do not elect to terminate this
Lease pursuant to this Paragraph 15, Tenant shall be obligated to promptly
rebuild or restore the same to the condition existing immediately prior to the
damage or destruction in accordance with the provisions of Paragraph 13.1.
15.9 Waiver of Civil Code Remedies. Landlord and Tenant
acknowledge that the rights and obligations of the parties upon damage or
destruction of the Premises are as set forth herein; therefore Tenant hereby
expressly waives any rights to terminate this Lease upon damage or destruction
of the Premises, except as specifically provided by this Lease, including
without limitation any rights pursuant to the provisions of subdivision 2 of
Section 1932 and subdivision 4 of Section 1933 of the California Civil Code, as
amended from time to time, and the provisions of any similar law hereinafter
enacted, which provisions relate to the termination of the hiring of a thing
upon its substantial damage or destruction.
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16. Condemnation.
16.1 Definition of Terms. For the purposes of this Lease, the
term: (a) "Taking" means a taking of the Premises or Common Area or damage
related to the exercise of the power of eminent domain and includes, without
limitation, a voluntary conveyance, in lieu of court proceedings, to any agency,
authority, public utility, person or corporate entity empowered to condemn
property; (b) "Total Taking" means the Taking of the entire Premises or so much
of the Premises or Common Area as to prevent or substantially impair the use
thereof by Tenant for the uses herein specified; provided, however, that in no
event shall the Taking of less than twenty percent (20%) of the Premises be
considered a Total Taking; (c) "Partial Taking" means the Taking of only a
portion of the Premises or Common Area which does not constitute a Total Taking;
(d) "Date of Taking" means the date upon which the title to the Premises or
Common Area or a portion thereof, passes to and vests in the condemnor or the
effective date of any order for possession if issued prior to the date title
vests in the condemnor; (e) "Award" means the amount of any award made,
consideration paid, or damages ordered as a result of a Taking.
16.2 Rights. The parties agree that in the event of a Taking
all rights between them or in and to an Award shall be as set forth herein.
16.3 Total Taking. In the event of a Total Taking during the
Lease Term: (a) the rights of Tenant under this Lease and the leasehold estate
of Tenant in and to the Premises shall cease and terminate as of the Date of
Taking; (b) Landlord shall refund to Tenant any prepaid Rent; (c) Tenant shall
pay Landlord any Rentals due Landlord under the Lease, prorated as of the Date
of Taking; (d) to the extent the Award is not payable to the beneficiary or
mortgagee of a deed of trust or mortgage affecting the Premises, Tenant shall
receive from the Award those portions of the Award attributable to trade
fixtures of Tenant, Alterations paid by Tenant and loss of goodwill, if any; (e)
the remainder of the Award shall be paid to and be the property of Landlord.
Tenant reserves the right to apply separately for compensation resulting from a
taking of Tenant's trade fixtures, Alterations paid by Tenant and loss of
goodwill, if any. If any portion of the award received by Landlord is directly
attributable to Tenant's trade fixtures, Alterations paid by Tenant or Tenant's
loss of goodwill, then Landlord shall promptly pay such portion of the award
attributable to such items to Tenant.
16.4 Partial Taking. In the event of a Partial Taking during
the Lease Term: (a) the rights of Tenant under the Lease and the leasehold
estate of Tenant in and to the portion of the Premises taken shall cease and
terminate as of the Date of Taking; (b) from and after the Date of Taking the
Rent shall be an amount equal to the product obtained by multiplying the then
current Rent by the quotient obtained by dividing the fair market value of the
Premises immediately after the Taking by the fair market value of the Premises
immediately prior to the Taking; (c) to the extent the Award is not payable to
the beneficiary or mortgagee of a deed of trust or mortgage affecting the
Premises, Tenant shall receive from the Award the portions of the Award
attributable to trade fixtures of Tenant, Alterations paid by Tenant and loss of
goodwill, if any; and (d) the remainder of the Award shall be paid to and be the
property of
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Landlord. Tenant reserves the right to apply separately for compensation
resulting from a taking of Tenant's trade fixtures, Alterations paid by Tenant
and loss of goodwill, if any. If any portion of the award received by Landlord
is directly attributable to Tenant's trade fixtures, Alterations paid by Tenant
or Tenant's loss of goodwill, then Landlord shall promptly pay such portion of
the award attributable to such items to Tenant. Each party waives the provisions
of California Code of Civil Procedure Section 1265.130 allowing either party to
petition the Superior Court to terminate this Lease in the event of a Partial
Taking.
17. Liens.
17.1 Premises to Be Free of Liens. Tenant shall pay for all
labor and services performed for, and all materials used by or furnished to
Tenant, Tenant's agents, or any contractor employed by Tenant with respect to
the Premises. Tenant shall indemnify, defend and hold Landlord harmless from and
keep the Premises and Common Area free from any liens, claims, demands,
encumbrances, or judgments, including all costs, liabilities and reasonable
attorneys' fees with respect thereto, created or suffered by reason of any labor
or services performed for, or materials used by or furnished to Tenant or
Tenant's agents or any contractor employed by Tenant with respect to the
Premises. Landlord shall have the right, at all times, to post and keep posted
on the Premises any notices permitted or required by law, or which Landlord
shall deem proper, for the protection of Landlord and the Premises and Common
Area, and any other party having an interest therein, from mechanics' and
materialmen's liens, including without limitation a notice of nonresponsibility.
In the event Tenant is required to post an improvement bond with a public agency
in connection with any work performed by Tenant on or to the Premises, Tenant
shall include Landlord as an additional obligee.
17.2 Notice of Lien, Bond. Should any claims of lien be filed
against, or any action be commenced affecting, the Premises, Tenant's interest
in the Premises or the Common Area, Tenant shall give Landlord notice of such
lien or action within seven (7) days after Tenant receives notice of the filing
of the lien or the commencement of the action. In the event that Tenant shall
not, within thirty (30) days following the imposition of any such lien, cause
such lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but not the obligation, to cause the same to be released by such
means as Landlord shall deem proper, including payment of the claim giving rise
to such lien or posting of a proper bond. All such sums paid by Landlord and all
expenses incurred by Landlord in connection therewith, including attorneys' fees
and costs, shall be payable to Landlord by Tenant as Additional Rent on demand.
18. Landlord's Right of Access to Premises. Landlord reserves and shall
have the right and Tenant and Tenant's agents shall permit Landlord and
Landlord's agents to enter the Premises at any reasonable time upon not less
than twenty-four hours advance notice (except in the event of an emergency) for
the purpose of (i) inspecting the Premises, (ii) performing Landlord's
maintenance and repair responsibilities set forth herein, (iii) posting notices
of non-responsibility, (iv) placing upon the Premises at any time "For Sale"
signs, (v) placing on the Premises ordinary "For Lease" signs at any time within
six (6) months prior to Lease Termination, or at any time Tenant is in default
hereunder and the applicable cure or grace period has expired with respect to
such default, or at such other times as agreed to by Landlord and Tenant, (vi)
protecting the Premises in the event of an emergency, (vii) exhibiting the
Premises to prospective purchasers or lenders, and (viii) exhibiting the
Premises to prospective tenants during the last six (6) months prior to Lease
Termination or at any time while a Tenant default is continuing following the
applicable cure or grace
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period. In the event of an emergency, Landlord shall have the right to use any
and all means which Landlord may deem proper to gain access to the Premises. Any
entry by Landlord pursuant to the provisions of this Paragraph 18 shall not
unreasonably impair Tenant's access to the Premises, Tenant's parking rights
under this Lease or Tenant's use of the Premises. Any entry to the Premises by
Landlord or Landlord's agents in accordance with this Paragraph 18 or any other
provision of this Lease shall not under any circumstances be construed or deemed
to be a forcible or unlawful entry into, or a detainer of the Premises, or an
eviction of Tenant from the Premises or any portion thereof nor give Tenant the
right to abate the Rentals payable under this Lease. Tenant hereby waives any
claims for damages for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned by Landlord's or Landlord's agents' entry into the
Premises as permitted by this Paragraph 18 or any other provision of this Lease
(except if such loss or damage results from Landlord's negligence or willful
misconduct). The preceding notwithstanding, under no circumstances shall
Landlord be liable to Tenant for any claims of lost profits, loss of business or
lost income.
19. Landlord's Right to Perform Tenant's Covenants. Except as otherwise
expressly provided herein, if Tenant shall at any time fail to make any payment
or perform any other act required to be made or performed by Tenant under this
Lease, Landlord may upon ten (10) days written notice to Tenant, but shall not
be obligated to and without waiving or releasing Tenant from any obligation
under this Lease, make such payment or perform such other act to the extent that
Landlord may deem desirable, and in connection therewith, pay expenses and
employ counsel. All sums so paid by Landlord and all penalties, interest and
costs in connection therewith shall be due and payable by Tenant as Additional
Rent upon demand.
20. Lender Requirements.
20.1 Subordination. This Lease, at Landlord's option, shall be
subject and subordinate to the lien of any mortgages or deeds of trust
(including all advances thereunder, renewals, replacements, modifications,
supplements, consolidations, and extensions thereof) in any amount(s) whatsoever
now or hereafter placed on or against or affecting the Premises and/or the real
property comprising the Common Area or Landlord's interest or estate therein,
without the necessity of the execution and delivery of any further instruments
on the part of Tenant to effectuate such subordination. If any mortgagee or
beneficiary shall elect to have this Lease prior to the lien of its mortgage or
deed of trust, and shall give written notice thereof to Tenant, this Lease shall
be deemed prior to such mortgage or deed of trust, whether this Lease is dated
prior or subsequent to the date of such mortgage or deed of trust or the date of
the recording thereof.
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20.2 Subordination Agreements. Tenant shall execute and
deliver without charge therefor, such further instruments evidencing
subordination of this Lease to the lien of any mortgages or deeds of trust
affecting the Premises and/or real property comprising the Common Area as may be
required by Landlord within fifteen (15) days following Landlord's request
therefor; provided that such mortgagee or beneficiary under such mortgage or
deed of trust agrees in writing that this Lease shall not be terminated in the
event of any foreclosure if Tenant is not in default under this Lease, and
provided further than any subordination, nondisturbance agreement required by a
mortgagee or beneficiary under a deed of trust shall be substantially in the
form of Exhibit E attached hereto and incorporated herein by this reference,
unless otherwise agreed to in writing by lender. Landlord agrees to reasonably
request of its existing lender holding a security interest in the Premises that
such lender execute a subordination, non-disturbance agreement in substantially
the form of Exhibit E attached hereto with respect to Tenant and this Lease.
This Lease and the effectiveness of the same shall not be conditioned, however,
on the execution of such subordination, non-disturbance agreement by Landlord's
lender.
20.3 Approval by Lenders. Tenant recognizes that the
provisions of this Lease may be subject to the approval of any financial
institution that may make a loan secured by a new or subsequent deed of trust or
mortgage affecting the Premises and/or real property comprising the Common Area.
If the financial institution should require, as a condition to such financing,
any modifications of this Lease in order to protect its security interest in the
Premises, including without limitation, modification of the provisions relating
to damage to and/or condemnation of the Premises, Tenant agrees to execute the
appropriate amendments; provided, however, that no modification shall
substantially change the size, location or dimension of the Premises, increase
the Rentals payable by Tenant hereunder or increase the obligations of Tenant
hereunder.
20.4 Attornment. In the event of foreclosure or the exercise
of the power of sale under any mortgage or deed of trust made by Landlord and
covering the Premises and/or real property comprising the Common Area, Tenant
shall attorn to the foreclosing lender and to the purchaser upon any such
foreclosure or sale and recognize such lender or such purchaser as the Landlord
under the Lease.
20.5 Estoppel Certificates.
(a) Delivery by Tenant. Tenant shall, within fifteen
(15) days following request by Landlord therefor and without charge, execute and
deliver to Landlord estoppel certificates and current financial statements of
Tenant reasonably requested by Landlord in connection with the sale or financing
of the Premises and/or real property comprising the Common Area, or reasonably
requested by any lender making a loan affecting the Premises and/or real
property comprising the Common Area. Landlord may require that Tenant deliver to
Landlord and/or such lender an estoppel certificate in the form of Exhibit F
attached hereto and incorporated herein by this reference. Any such estoppel
certificate may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises, and/or real property comprising the Common Area.
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(b) Nondelivery by Tenant. Tenant's failure to
deliver an estoppel certificate as required pursuant to Paragraph 20.5(a) above
shall be conclusive upon Tenant that (i) this Lease is in full force and effect,
without modification except as may be represented by Landlord and has not been
assigned, (ii) there are now no uncured defaults in Landlord's performance,
(iii) no Rentals have been paid in advance except those that are set forth in
this Lease, (iv) the improvements to be constructed on the Premises by Landlord
have been substantially completed except for punch list items which do not
prevent Tenant from using the Premises for its intended use, and (v) Tenant has
entered into occupancy of the Premises on such date as may be represented by
Landlord and is open and conducting business at the Premises. Tenant's failure
to deliver any financial statements or estoppel certificates as required
pursuant to Paragraph 20.5(a) above shall be a Default by Tenant.
21. Holding Over. This Lease shall terminate without further notice at
the expiration of the Lease Term. It is the desire of Landlord either to enter
into a new lease with Tenant for the Premises prior to the expiration of the
Lease Term, or to have Tenant vacate the Premises pursuant to Paragraph 35
below. Therefore, any holding over by Tenant after Lease Termination shall not
constitute a renewal or extension of the Lease Term, nor give Tenant any rights
in or to the Premises except as expressly provided in this Lease. Any holding
over after Lease Termination with the consent of Landlord shall be construed to
be a tenancy from month to month, at one hundred fifty percent (150%) of the
monthly Rent for the month preceding Lease Termination in addition to all
Additional Rent payable hereunder, and shall otherwise be on the terms and
conditions herein specified insofar as applicable. If Tenant remains in
possession of the Premises after Lease Termination without Landlord's consent
Tenant shall indemnify, defend and hold Landlord harmless from and against any
loss, damage, expense, claim or liability resulting from Tenant's failure to
surrender the Premises, including without limitation, any claims made by any
succeeding tenant based on delay in the availability of the Premises.
22. Notices. Any notice required or desired to be given under this
Lease shall be in writing, and all notices shall be given by personal delivery
or mailing. All notices personally given on Tenant may be delivered to any
person apparently in charge at the Premises, on any corporate officer or agent
of Tenant (including, without limitation, the General Counsel of Tenant) if
Tenant is a corporation, or on any one signatory party if more than one party
signs this Lease on behalf of Tenant; any notice so given shall be binding upon
all signatory parties as if served upon each such party personally. Any notice
given pursuant to this Paragraph 22 shall be deemed to have been given when
personally delivered, or if mailed, when seventy-two (72) hours have elapsed
from the time when such notice was deposited in the United States mail,
certified or registered mail and postage prepaid, addressed to the party at the
last address given for purposes of notice pursuant to the provisions of this
Paragraph 22. At the date of execution of this Lease, the addresses of Landlord
and Tenant are set forth in Paragraph 1.11 above.
23. Attorneys' Fees. In the event either party hereto shall bring any
action or legal proceeding for damages for an alleged breach of any provision of
this Lease, to recover Rentals, to enforce an indemnity defense or hold harmless
obligation, to terminate the tenancy of the
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Premises, or to enforce, protect, interpret, or establish any term, condition,
or covenant of this Lease or right or remedy of either party, the prevailing
party shall be entitled to recover, as a part of such action or proceeding,
reasonable attorneys' fees and court costs, including attorneys' fees and costs
for appeal, as may be fixed by the court or jury.
24. Assignment, Subletting and Hypothecation.
24.1 In General. Tenant shall not voluntarily sell, assign or
transfer all or any part of Tenant's interest in this Lease or in the Premises
or any part thereof, sublease all or any part of the Premises, or permit all or
any part of the Premises to be used by any person or entity other than Tenant or
Tenant's employees, except as specifically provided in this Paragraph 24.
24.2 Voluntary Assignment and Subletting.
(a) Notice to Landlord. Tenant shall, by written
notice, advise Landlord of Tenant's desire on a stated date (which date shall
not be less than thirty (30) days nor more than ninety (90) days after the date
of Tenant's notice) to assign this Lease or to sublet all or any part of the
Premises for any part of the Lease Term. Said notice shall state that the notice
constitutes an offer to terminate the Lease or Tenant's interest in the portion
of the Premises specified pursuant to Paragraph 24.2(b) if the notice applies to
a proposed assignment of the Lease or Tenant's interest therein, a proposed
sublease of all or any part of the Premises for more than fifty percent (50%) of
the remainder of the Lease Term, or a proposed sublease of more than fifty
percent (50%) of the Premises for any period. Tenant's notice shall state the
name, legal composition and address of the proposed assignee or subtenant, and
Tenant shall provide the following information to Landlord with said notice: a
true and complete copy of the proposed assignment agreement or sublease; a
financial statement of the proposed assignee or subtenant (certified as true and
correct by an officer or partner of the proposed assignee or subtenant) prepared
in accordance with generally accepted accounting principles within one year
prior to the proposed effective date of the assignment or sublease; the nature
of the proposed assignee's or subtenant's business to be carried on in the
Premises; the payments to be made or other consideration to be given on account
of the assignment or sublease; a current financial statement of Tenant; and such
other pertinent information as may be requested by Landlord, all in sufficient
detail to enable Landlord to evaluate the proposed assignment or sublease and
the prospective assignee or subtenant. Tenant's notice shall not be deemed to
have been served or given until such time as Tenant has provided Landlord with
all information reasonably requested by Landlord pursuant to this Paragraph
24.2. Tenant shall immediately notify Landlord of any modification to the
proposed terms of such assignment or sublease. Tenant may withdraw its notice at
any time prior to exercise by Landlord of Landlord's right to terminate as
described in Paragraph 24.2(b).
(b) Offer to Terminate. If Tenant notifies Landlord
of its desire to assign this Lease or any interest herein, to sublet all or any
part of the Premises for more than fifty percent (50%) of the remainder of the
Lease Term, or to sublet more than fifty percent (50%) of the Premises for any
period, Tenant's notice shall constitute an offer to terminate this Lease or
Tenant's interest in the portion of the Premises specified and Landlord shall
have the
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right, to be exercised by giving written notice to Tenant within ten (10) days
after receipt of Tenant's notice, to terminate the Lease (i) entirely, in the
event of a proposed assignment or a sublease of the entire Premises for the
remainder of the Lease Term, (ii) as to the portion of the Premises which is the
subject of a proposed sublease for more than fifty percent (50%) of the
remainder of the Lease Term, or (iii) as to the portion of the Premises which is
the subject of a proposed sublease of more than fifty percent (50%) of the
Premises for any period, as specified in Tenant's notice. For purposes of this
Paragraph 24.2(b), (i) the term of a proposed sublease shall include all options
to extend or renew, and (ii) a proposed sublease shall be deemed to be for the
remainder of the Lease Term if the term of the proposed sublease will expire
within one year prior to the end of the Lease Term. If Tenant's notice specifies
all of the Premises and Landlord elects to terminate, this Lease and the
obligations of Landlord and Tenant under this Lease shall terminate on the date
stated in the notice given by Tenant pursuant to Paragraph 24.2(a), except that
any obligations which have accrued and are unfulfilled as of such date and any
obligations under this Lease that expressly survive termination of this Lease
shall survive such termination. If Tenant's notice specifies less than all of
the Premises and Landlord elects to terminate, this Lease and the obligations of
Landlord and Tenant under this Lease shall terminate on the date stated solely
with respect to that portion of the Premises specified in Tenant's notice
(except that any obligations which have accrued and are unfulfilled with respect
to the terminated portion of the Premises as of such date and any obligations
under this Lease with respect to such terminated portion of the Premises that
expressly survive termination of this Lease shall survive such termination), and
Rent and all other costs and expenses payable by Tenant hereunder shall be
adjusted pro rata, based upon the number of net leasable square feet retained by
Tenant after the termination, compared to the total number of net leasable
square feet in the entire Premises excluding any areas of the Premises
designated in the proposed sublease for ingress and egress and common areas, if
any. The Lease as so amended shall continue thereafter in full force and effect.
Landlord and Tenant shall execute an amendment to this Lease specifying the new
Premises, the adjusted Rent, a reasonable method for apportioning maintenance
and operating obligations based on the multitenant nature of the Premises, and
Tenant's share of costs and expenses; provided, however, that failure by either
party to execute such an amendment shall not affect the validity of this Lease.
(c) Landlord's Consent. If Landlord does not exercise
its right to terminate pursuant to Paragraph 24.2(b) within ten (10) days after
receipt of Tenant's notice or if a proposed sublease is not subject to the
provisions of Paragraph 24.2(b), Landlord shall not unreasonably withhold its
consent to the proposed assignment or subletting, on the terms and conditions
specified in said notice. If Tenant's notice fails to state that it constitutes
an offer to terminate the Lease as may be required pursuant to Paragraph
24.2(a), such notice shall be deemed insufficient for the purposes of this
Paragraph 24.2, and Landlord may withhold its consent to the proposed assignment
or subletting in Landlord's absolute discretion. Without otherwise limiting the
criteria upon which Landlord may withhold its consent to any proposed assignment
or sublease, if Landlord withholds its consent where Tenant is in default at the
time of the giving of Tenant's notice or at any time thereafter, such
withholding of consent shall be presumptively reasonable. Landlord and Tenant
agree that fifty percent (50%) of any and all rent paid by an assignee or
subtenant, including, but not limited to, any rent in excess of the Rentals to
be paid under this Lease (prorated in the event of a sublease of less than the
entire
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Premises), shall be paid directly to Landlord, as Additional Rent, at the time
and place specified in this Lease. For the purposes of this Paragraph 24, the
term "rent" shall include any consideration of any kind received, or to be
received, by Tenant from an assignee or subtenant, if such sums are related to
Tenant's interest in this Lease or in the Premises, including, but not limited
to key money, bonus money, and payments (in excess of the fair market value
thereof) for Tenant's assets, fixtures, trade fixtures, inventory, accounts,
goodwill, equipment, furniture, general intangibles, and any capital stock or
other equity ownership interest of Tenant. Any assignment or subletting without
Landlord's consent shall be voidable at Landlord's option, and shall constitute
a Default by Tenant. Landlord's consent to any one assignment or sublease shall
not constitute a waiver of the provisions of this Paragraph 24 as to any
subsequent assignment or sublease nor a consent to any subsequent assignment or
sublease; further, Landlord's consent to an assignment or sublease shall not
release Tenant from Tenant's obligations under this Lease, and Tenant shall
remain jointly and severally liable with the assignee or subtenant.
(d) Assumption of Obligations. In the event Landlord
consents to any assignment, such consent shall be conditioned upon the assignee
expressly assuming and agreeing to be bound by each of Tenant's covenants,
agreements and obligations contained in this Lease, pursuant to a written
assignment and assumption agreement in a form reasonably approved by Landlord.
Landlord's consent to any assignment or sublease shall be evidenced by
Landlord's signature on said assignment and assumption agreement or on said
sublease or by a separate written consent. In the event Landlord consents to a
proposed assignment or sublease, such assignment or sublease shall be valid and
the assignee or subtenant shall have the right to take possession of the
Premises only if an executed original of the assignment or sublease is delivered
to Landlord, and such document contains the same terms and conditions as stated
in Tenant's notice to Landlord given pursuant to Paragraph 24.2(a) above, except
for any such modifications to which Landlord has consented in writing.
24.3 Collection of Rent. Tenant hereby irrevocably gives to
and confers upon Landlord, as security for Tenant's obligations under this
Lease, the right, power and authority to collect all rents from any assignee or
subtenant of all or any part of the Premises as permitted by this Paragraph 24,
or otherwise, and Landlord, as assignee of Tenant, or a receiver for Tenant
appointed on Landlord's application, may collect such rent and apply it toward
Tenant's obligations under this Lease; provided, however, that until the
occurrence of any Default by Tenant or except as provided by the provisions of
Paragraph 24.2(c) above, Tenant shall have the right to collect such rent. Upon
the occurrence of any Default by Tenant, Landlord may at any time without notice
in Landlord's own name sue for or otherwise collect such rent, including rent
past due and unpaid, and apply the same, less costs and expenses of operation
and collection, including reasonable attorneys' fees, toward Tenant's
obligations under this Lease. Landlord's collection of such rents shall not
constitute an acceptance by Landlord of attornment by such subtenants; in the
event of a Default by Tenant, Landlord shall have all rights provided by this
Lease and by law, and Landlord may, upon re-entry and taking possession of the
Premises, eject all parties in possession or eject some and not others, or eject
none, as Landlord shall determine in Landlord's sole discretion.
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24.4 No Bonus Value. It is the intent of the parties hereto
that this Lease shall confer upon Tenant only the right to use and occupy the
Premises, and to exercise such other rights as are conferred upon Tenant by this
Lease. The parties agree that, except to the extent provided in Paragraph
24.2(c) in which Landlord agrees to split equally excess rentals paid to Tenant,
this Lease is not intended to have a bonus value, nor to serve as a vehicle
whereby Tenant may profit by a future assignment or sublease of this Lease or
the right to use or occupy the Premises as a result of any favorable terms
contained herein or any future changes in the market for leased space. It is the
intent of the parties that any such bonus value that may attach to this Lease
shall be and remain, subject to the provisions of Paragraph 24.2(c), the
exclusive property of Landlord.
24.5 Corporations and Partnerships. If Tenant is a
partnership, any withdrawal or substitution (whether voluntary, involuntary, or
by operation of law and whether occurring at one time or over a period of time)
of any partner(s) owning fifty percent (50%) or more (cumulatively) of the
partnership, any assignment(s) of fifty percent (50%) or more (cumulatively) of
any interest in the capital or profits of the partnership, or the dissolution of
the partnership shall be deemed an assignment of this Lease requiring the prior
written consent of Landlord. If Tenant is a corporation, any dissolution,
merger, consolidation or other reorganization of Tenant, any sale or transfer
(or cumulative sales or transfers) of the capital stock of Tenant in excess of
fifty percent (50%), or any sale (or cumulative sales) of all of the assets of
Tenant shall be deemed an assignment of this Lease requiring the prior written
consent of Landlord. Any such withdrawal or substitution of partners or
assignment of any interest in or dissolution of a partnership tenant, and any
such sale of stock or assets of a corporate tenant without the prior written
consent of Landlord shall be a Default by Tenant hereunder. The foregoing
notwithstanding, (i) the sale or transfer of any or all of the capital stock of
a corporation, the capital stock of which is now or hereafter becomes publicly
traded, or (ii) the sale or transfer of this Lease to Tenant's parent company or
any affiliates or subsidiaries of Tenant's parent company, or (iii) the sale or
transfer of this Lease to an unaffiliated entity with whom Tenant or Tenant's
parent company or any affiliates or subsidiaries of Tenant's parent company have
a joint development or joint venture relationship, shall not be deemed an
assignment of this Lease, shall not require the prior written consent of
Landlord (but written notice of such sale or transfer shall be given by Tenant
to Landlord prior to or promptly following the date of such sale or transfer),
shall not give Landlord a right to recapture the Premises, or portion thereof,
which is the subject of such sale or transfer, and shall not entitle Landlord to
any bonus rent with respect to such sale or transfer. The parent company of
Tenant and any subsidiaries of the parent company of Tenant shall be deemed
"Affiliates" of Tenant.
24.6 Reasonable Provisions. Tenant expressly agrees that the
provisions of this Paragraph 24 are not unreasonable standards or conditions for
purposes of Section 1951.4(b)(2) of the California Civil Code, as amended from
time to time, under bankruptcy laws, or for any other purpose.
24.7 Attorney's Fees. Tenant shall pay, as Additional Rent,
Landlord's reasonable attorneys' fees for reviewing, investigating, processing
and/or documenting any
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requested assignment or sublease, whether or not Landlord's consent is granted
(but not to exceed $750).
24.8 Involuntary Transfer. No interest of Tenant in this Lease
shall be assignable, involuntarily or by operation of law, including, without
limitation, the transfer of this Lease by testacy or intestacy. Each of the
following acts shall be considered an involuntary assignment:
(a) If Tenant is or becomes bankrupt or insolvent,
makes an assignment for the benefit of creditors, or a proceeding under any
bankruptcy law is instituted in which Tenant is the bankrupt; or, if Tenant is a
partnership or consists of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt or insolvent, or
makes an assignment for the benefit of creditors;
(b) Levy of a writ of attachment or execution on this
Lease;
(c) Appointment of a receiver with authority to take
possession of the Premises in any proceeding or action to which Tenant is a
party; or
(d) Foreclosure of any lien affecting Tenant's
interest in the Premises, which lien was not consented to by Landlord pursuant
to Paragraph 24.9. An involuntary assignment shall constitute a Default by
Tenant and Landlord shall have the right to terminate this Lease, in which case
this Lease shall not be treated as an asset of Tenant. In the event the Lease is
not terminated, the provisions of Paragraph 24.2(c) regarding rents paid by an
assignee or subtenant and Paragraph 24.4 shall apply. If a writ of attachment or
execution is levied on this Lease, or if any involuntary proceeding in
bankruptcy is brought against Tenant or a receiver is appointed, Tenant shall
have sixty (60) days in which to cause the attachment or execution to be
removed, the involuntary proceeding dismissed, or the receiver removed.
24.9 Hypothecation. Tenant shall not hypothecate, mortgage or
encumber Tenant's interest in this Lease or in the Premises or otherwise use
this Lease as a security device in any manner without the consent of Landlord,
which consent Landlord may withhold in its sole and absolute discretion. Consent
by Landlord to any such hypothecation or creation of a lien or mortgage shall
not constitute consent to an assignment or other transfer of this Lease
following foreclosure of any permitted lien or mortgage.
24.10 Binding on Successors. The provisions of this Paragraph
24 expressly apply to all heirs, successors, sublessees, assignees and
transferees of Tenant.
25. Hazardous Materials.
25.1 Permitted Materials. Notwithstanding Paragraph 6.4 of the
Lease, Tenant may use, keep and store in the Premises those Hazardous Materials
listed on Exhibit "C" attached hereto, and such other Hazardous Materials which
may be approved by Landlord from time to time in Landlord's reasonable
discretion, in such quantities and volumes as are necessary to conduct Tenant's
business in the Premises ("Permitted Materials"). Permitted Materials shall
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be used, kept, stored, disposed of, removed, and transported in strict
compliance with all laws, ordinances, regulations, rules, orders, and policies
of any federal, state, county, municipal, or other governmental authority
(collectively, "Governmental Authority") having jurisdiction over Hazardous
Materials ("Environmental Laws"). Upon Landlord's reasonable, written request,
Tenant shall provide Landlord with an updated list of all Permitted Materials
used, kept, or stored in the Premises. Tenant shall promptly comply with any
law, ordinance, or regulation of any Governmental Authority requiring
modifications to the Premises or the improvements thereon that are intended to
protect the Premises and the environment against the release of Hazardous
Materials. Tenant shall obtain all necessary permits from applicable
Governmental Authorities required to maintain the Permitted Materials and shall
furnish Landlord, upon reasonable request by Landlord, with copies of such
permits or any plans, reports or other material required to be filed with any
Governmental Authority relating to the use of the Permitted Materials. Upon the
expiration or sooner termination of this Lease, Tenant covenants to remove from
the Premises or Common Area, at its sole cost and expense, any and all Hazardous
Materials then located on or about the Premises or Common Area due to a Release
of Hazardous Materials by Tenant or Tenant's agents.
Tenant and Tenant's agents shall not release or dispose, or allow the
release or disposal, of any Hazardous Materials, including Permitted Materials,
in, on, under, or in the vicinity of the Premises; provided, however, that
Tenant shall dispose, remove and transport from the Premises and Common Area any
and all Permitted Materials in accordance with all Environmental Laws. Tenant
shall immediately notify Landlord of any inquiry, test, investigation, or
enforcement proceeding by or against Tenant or the Premises or Common Area
concerning Hazardous Materials. Tenant acknowledges that Landlord shall have the
right, but not the obligation, in Landlord's own name, to participate in any
negotiations with any Governmental Authority with regard to Tenant's Release of
Hazardous Materials on the Premises or Common Area. Tenant shall, within five
(5) days after receipt by Tenant, submit to Landlord copies of all inquiries,
test and investigation results, and enforcement proceedings described above and
copies of all reports and responses thereto prepared by or on behalf of Tenant.
In connection with the transportation of any Hazardous Materials to or from the
Premises, Tenant shall list itself as the transporter and generator.
25.2 Landlord's Inspection Rights. Landlord shall have the
right, upon reasonable advance notice to Tenant, to inspect, investigate, sample
and/or monitor the Premises and Common Area, including any soil, water,
groundwater, or other sampling to the extent reasonably necessary to determine
whether Tenant is complying with the terms of this Lease with respect to
Hazardous Materials. In connection therewith, Tenant shall provide Landlord with
reasonable access to all portions of the Premises; provided, however, that
Landlord shall avoid any unreasonable interference with the operation of
Tenant's business on the Premises. All costs incurred by Landlord pursuant to
this subparagraph 25.2 above shall be reimbursed by Tenant to Landlord within
ten (10) days after Landlord's demand for payment if it is determined that a
Release of Hazardous Materials by Tenant or any of its agents, employees,
contractors or tenants has occurred. If Tenant fails to perform or does not
commence and thereafter diligently prosecute any obligation to be performed by
Tenant under this Lease with respect to Hazardous Materials within sixty (60)
days after the date of Tenant's receipt of Landlord's written notice of
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the obligation to be performed, Landlord shall have the right, but not the
obligation, without limitation upon any of Landlord's other rights or remedies
under this Lease or at law or in equity, to enter upon the Premises and perform
Tenant's obligations hereunder at Tenant's expense. All sums reasonably
disbursed, deposited, or incurred by Landlord in connection with the performance
of such obligation, including, but not limited to, all costs, expenses, and
actual attorneys' fees, shall be due and payable by Tenant to Landlord as an
item of additional rent on demand by Landlord, together with interest thereon at
the maximum rate allowed by law from the date of such demand until paid by
Tenant.
25.3 Investigation and Remediation. If Tenant or any of its
Agents Releases any Hazardous Materials in, on or under the Premises or any of
the Common Areas, Tenant shall promptly commence an investigation of the extent
of such Hazardous Materials contamination of the Premises and/or Common Areas.
Within sixty (60) days after completion of such investigation, Tenant shall also
prepare and submit to Landlord or within such period commence to prepare and
thereafter diligently complete and submit to Landlord a comprehensive plan
specifying the actions to be taken by Tenant to remediate the Hazardous
Materials to levels permitted by applicable Environmental Laws ("Remediation
Plan"). Any Remediation Plan shall be subject to the prior written approval of
Landlord, which approval shall not be unreasonably withheld or delayed. Within
thirty (30) days after Landlord's approval of the Remediation Plan, Tenant shall
commence and diligently prosecute to completion all such actions necessary to
remediate the Hazardous Materials in accordance with the Remediation Plan. Any
and all work performed pursuant to an Investigation Plan and/or Remediation Plan
shall be performed at Tenant's sole cost and expense.
25.4 Tenant's Indemnity. Tenant shall indemnify, defend, and
hold Landlord and Landlord's partners, employees, and agents harmless from and
against any and all claims, actions, suits, proceedings, orders, judgments,
losses, costs, damages, liabilities, or expenses (including, without limitation,
attorneys' fees and costs of investigation, remediation, and/or cleanup) arising
in connection with any Hazardous Materials Released by Tenant or any of Tenant's
Agents in, on, under, or in the vicinity of the Premises or the Common Area, or
any Hazardous Materials shipped thereto or therefrom, by Tenant or any of
Tenant's Agents including, without limitation, (a) the investigation or
remediation of Hazardous Materials Released by Tenant or any of Tenant's Agents
in, on, or under the Premises or Common Area and the removal, transportation,
and disposal of contaminated building materials, soils and/or groundwater
arising from the remediation of such contamination, whether voluntary or
required by any Governmental Authority; (b) ongoing monitoring of any Hazardous
Materials contamination Released by Tenant or any of Tenant's Agents in, on, or
under the Premises or Common Area, whether voluntary or required by any
Governmental Authority; (c) the migration of any Hazardous Materials
contamination Released by Tenant or any of Tenant's Agents to nearby properties,
(d) personal injury, death, or property damage arising out of the presence of
the Hazardous Materials contamination Released by Tenant or any of Tenant's
Agents in, on, or under the Premises or Common Area; (e) damage to or loss of
use of the Premises or Common Area or the environment or diminution in value of
the Premises or Common Area caused by the Release of Hazardous Materials by
Tenant or any of Tenant's Agents; and (f) fines, penalties, or other assessments
levied against the Premises or Common Area or Landlord as a result of the
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presence of the Hazardous Materials contamination caused by Tenant or any of
Tenant's Agents. The foregoing indemnity shall run to the benefit of Landlord,
its partners, directors, officers, employees, agents, and successors and
assigns, any existing or future lender who extends credit to Landlord, or its
successors and assigns, which credit is secured by a mortgage or deed of trust
on the Premises, any person or entity who acquires the interest of Landlord in
the Premises (except Tenant), and any person who acquires a lender's interest in
the Premises, either through foreclosure, deed in lieu of foreclosure, or
exercise of any rights or remedies under the documents governing a loan or
extension of credit.
25.5 Assignment and Subletting. It shall be presumptively
reasonable for Landlord to withhold its consent to any proposed assignment or
subletting if the proposed assignee or subtenant's use of the Premises would
require the storage, use, handling, generation, disposal or transportation of
Hazardous Materials other than the Permitted Materials unless such assignee or
subtenant submits to Landlord, prior to occupancy, a list of Permitted
Materials, which list shall be subject to the reasonable approval of Landlord.
25.6 Disclosures by Landlord. Landlord discloses to Tenant
that, pursuant to an Order or Orders imposed by the California Regional Water
Quality Control Board, certain remedial action has been undertaken or is being
undertaken in connection with certain portions of the Common Area or soils or
groundwater underlying such Common Area. The terms and conditions of that
certain Covenant to Restrict Use of Property executed by RREEF USA FUND-III, a
California Group Trust, and the California Regional Water Quality Control Board,
recorded December 30, 1991, concerning the remedial action referred to above is
incorporated herein by reference. The aforementioned recorded document affects
that property at 3050 Coronado Drive and the parking lot adjacent thereto].
Tenant hereby acknowledges that Landlord has delivered or made available to
Tenant, without representation as to accuracy or completeness, those certain
environmental reports or studies referred to in Exhibit "D" attached hereto.
Landlord hereby acknowledges and agrees that Tenant shall not be liable to
Landlord for the clean up or remediation of, or cost to clean up or remediate,
any Hazardous Materials existing on, in or under the Premises or the Common Area
as of the Commencement Date of this Lease (unless Tenant or any of its Agents
caused the Release of such pre-existing Hazardous Materials and/or Tenant or any
of its Agents exacerbates the pre-existing environmental condition of the
Premises or the Common Area, and in such latter case, Tenant shall only be
liable to the extent of damages, losses, liabilities, costs or expenses incurred
by Landlord as a result of such exacerbation of such pre-existing condition).
25.7 Environmental Assessments by Lender. Tenant shall permit
any lender who has made or will make a loan secured by a deed of trust or
mortgage affecting the Premises and/or real property comprising the Common Area,
and/or such lender's agents, employees and consultants, to enter onto the
Premises and/or the real property comprising the Common Area at reasonable times
and with reasonable notice to Tenant in order to perform and/or cause to perform
environmental testing and/or site assessments of such property, including,
without limitation, Phase II environmental assessments, to the extent permitted
under the deed or trust or mortgage and/or under any other loan documents
executed in connection with such deed of trust or mortgage, provided that the
performance and conduct of such environmental testing
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assessments shall not unreasonably interfere with Tenant's possession of the
Premises or otherwise impede the conduct of Tenant's operations on the Premises
and/or the real property comprising the Common Area.
25.8 Survival. The provisions of this Paragraph 25 shall
survive any termination of the Lease.
26. Successors. Subject to the provisions of Paragraph 24 above and
Paragraph 31.2(a) below, the covenants, conditions, and agreements contained in
this Lease shall be binding on the parties hereto and on their respective heirs,
successors and assigns.
27. Landlord Default; Mortgage Protection. Landlord shall not be in
default under this Lease unless Tenant shall have given Landlord written notice
of the breach and, within thirty (30) days after notice, Landlord has not cured
the breach or, if the breach is such that it cannot reasonably be cured under
the circumstances within thirty (30) days, has not commenced diligently to
prosecute the cure to completion. Any money judgment obtained by Tenant based
upon Landlord's breach of this Lease shall be satisfied only out of the proceeds
of the sale or disposition of Landlord's interest in the Premises (whether by
Landlord or by execution of judgment) or the rents, issues or profits therefrom.
In the event of any default on the part of Landlord under this Lease, Tenant
shall give notice by registered or certified mail to any beneficiary of a deed
of trust or any mortgagee of a mortgage affecting the Premises and/or the real
property comprising the Common Area whose address shall have been furnished to
Tenant, and shall offer such beneficiary or mortgagee a reasonable opportunity
to cure the default, including time to obtain possession of the Premises by
power of sale or judicial foreclosure, if such should prove necessary to effect
a cure.
28. Exhibits. All exhibits attached to this Lease shall be deemed to be
incorporated herein by the individual reference to each such exhibit, and all
such exhibits shall be deemed to be a part of this Lease as though set forth in
full in the body of the Lease.
29. Surrender of Lease Not Merger. The voluntary or other surrender of
this Lease by Tenant, or a mutual cancellation thereof, shall not work a merger
and shall, at the option of Landlord, terminate all or any existing subleases or
subtenants, or may, at the option of Landlord, operate as an assignment to
Landlord of any or all such subleases or subtenants.
30. Waiver. The waiver by Landlord of any breach of any term, covenant
or condition herein contained (or the acceptance by Landlord of any performance
by Tenant after the time the same shall become due) shall not be deemed to be a
waiver of such term, covenant or condition or any subsequent breach thereof or
of any other term, covenant or condition herein contained, unless otherwise
expressly agreed to by Landlord in writing. The acceptance by Landlord of any
sum less than that which is required to be paid by Tenant shall be deemed to
have been received only on account of the obligation for which it is paid (or
for which it is allocated by Landlord, in Landlord's absolute discretion, if
Tenant does not designate the obligation as to which the payment should be
credited), and shall not be deemed an accord and satisfaction notwithstanding
any provisions to the contrary written on any check or contained in
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any letter of transmittal. The acceptance by Landlord of any sum tendered by a
purported assignee or transferee of Tenant shall not be deemed a consent by
Landlord to any assignment or transfer of Tenant's interest herein. No custom or
practice which may arise between the parties hereto in the administration of the
terms of this Lease shall be construed as a waiver or diminution of Landlord's
right to demand performance by Tenant in strict accordance with the terms of
this Lease.
31. General.
31.1 Captions and Headings. The captions and paragraph
headings used in this Lease are for convenience of reference only. They shall
not be construed to limit or extend the meaning of any part of this Lease, and
shall not be deemed relevant in resolving any question of interpretation or
construction of any paragraph of this Lease.
31.2 Definitions.
(a) Landlord. The term Landlord as used in this
Lease, so far as the covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner at the time in
question of the fee title to the Premises. In the event of any transfer(s) of
such interest, the Landlord herein named (and in case of any subsequent
transfers or conveyances, the then grantor) shall have no further liability
under this Lease to Tenant except as to matters of liability which have accrued
and are unsatisfied as of the date of such transfer, it being intended that the
covenants and obligations contained in this Lease on the part of Landlord shall
be binding on Landlord and its successors and assigns only during and in respect
of their respective periods of ownership of the fee; provided that any funds in
the possession of Landlord or the then grantor and as to which Tenant has an
interest, less any deductions permitted by law or this Lease, shall be turned
over to the grantee. The covenants and obligations contained in this Lease on
the part of Landlord shall, subject to the provisions of this Paragraph 31.2(a),
be binding upon each Landlord and such Landlord's heirs, personal
representatives, successors and assigns only during its respective period of
ownership. Except as provided in this Paragraph 31.2(a), this Lease shall not be
affected by any transfer of Landlord's interest in the Premises, and Tenant
shall attorn to any transferee of Landlord provided that all of Landlord's
obligations hereunder are assumed in writing by such transferee.
(b) Agents. For purposes of this Lease and without
otherwise affecting the definition of the word "agent" or the meaning of an
"agency", the term "agents" shall be deemed to include the agents, employees,
officers, directors, servants, invitees, contractors, successors,
representatives subcontractors, guests, customers, suppliers, partners,
affiliated companies, and any other person or entity related in any way to the
respective party, Tenant or Landlord.
(c) Interpretation of Terms. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular. Words
in the neuter gender include the masculine and feminine and words in the
masculine or feminine gender include the neuter.
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31.3 Copies. Any executed copy of this Lease shall be deemed
an original for all purposes.
31.4 Time of Essence. Time is of the essence as to each and
every provision in this Lease requiring performance within a specified time,
except as to the conditions relating to the delivery of possession of the
Premises to Tenant.
31.5 Severability. In case any one or more of the provisions
contained herein shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Lease, but this Lease shall be
construed as if such invalid, illegal or unenforceable provision had not been
contained herein. However, if Tenant's obligation to pay the Rentals is
determined to be invalid or unenforceable, this Lease at the option of Landlord
shall terminate.
31.6 Governing Law. This Lease shall be construed and enforced
in accordance with the laws of the State of California.
31.7 Joint and Several Liability. If Tenant is more than one
person or entity, each such person or entity shall be jointly and severally
liable for the obligations of Tenant hereunder. If Tenant is a husband and wife,
the obligations hereunder shall extend to their sole and separate property as
well as community property.
31.8 Construction of Lease Provisions. Although printed
provisions of this Lease were prepared by Landlord, this Lease shall not be
construed either for or against Tenant or Landlord, but shall be construed in
accordance with the general tenor of the language to reach a fair and equitable
result.
31.9 Conditions. All agreements by Tenant contained in this
Lease, whether expressed as covenants or conditions, shall be construed to be
both covenants and conditions, conferring upon Landlord, in the event of a
breach thereof, the right to terminate this Lease.
31.10 Tenant's Financial Statements. Tenant hereby warrants
that all financial statements delivered by Tenant to Landlord are true, correct,
and complete, and prepared in accordance with generally accepted accounting
principles. Tenant acknowledges and agrees that Landlord is relying on such
financial statements in accepting this Lease, and that a breach of Tenant's
warranty as to such financial statements shall constitute a Default by Tenant.
31.11 Withholding of Landlord's Consent. Notwithstanding any
other provision of this Lease, where Tenant is required to obtain the consent
(whether written or oral) of Landlord to do any act, or to refrain from the
performance of any act, Tenant agrees that if Tenant is in default with respect
to any term, condition, covenant or provision of this Lease, then Landlord shall
be deemed to have acted reasonably in withholding its consent if said consent
is, in fact, withheld.
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32. Signs. Tenant shall not place or permit to be placed any sign or
decoration on the Common Area or the exterior of the Premises or that would be
visible from the exterior of the Premises, without the prior written consent of
Landlord, which consent may be withheld in Landlord's absolute discretion. The
preceding sentence to the contrary notwithstanding, Landlord acknowledges that
it has no objection to signage that is substantially similar to the signage
currently located at 2972 Stender Way, identifying the Tenant or its business,
provided such signage is otherwise in compliance with all recorded documents
affecting the Property, including but not limited to any Declaration of
Conditions, Covenants and Restrictions (as the same may be amended from time to
time), and applicable statutes, ordinances, rules and regulations of
governmental agencies having jurisdiction thereof. In no event shall any such
sign revolve, rotate, move or create the illusion of revolving, rotating or
moving or be internally illuminated and there shall be no exterior spotlighting
or other illumination on any such sign. Tenant, upon written notice by Landlord,
shall immediately remove any of Tenant's signs or decorations that are visible
from the exterior of the Premises or that Tenant has placed or permitted to be
placed on the Common Area or the exterior of the Premises without the prior
written consent of Landlord. If Tenant fails to so remove such sign or
decoration within five (5) days after Landlord's written notice, Landlord may
enter the Premises and remove such sign or decoration and Tenant shall pay
Landlord, as Additional Rent upon demand, the cost of such removal. All signs
placed on the Premises or Common Area by Tenant shall comply with all recorded
documents affecting the Premises, including but not limited to any Declaration
of Conditions, Covenants and Restrictions (as the same may be amended from time
to time); and applicable statutes, ordinances, rules and regulations of
governmental agencies having jurisdiction thereof. At Landlord's option, Tenant
shall at Lease Termination remove any sign which it has placed on the Premises
or the Common Area, and shall, at its sole cost, repair any damage caused by the
installation or removal of such sign.
33. Intentionally Omitted.
34. Landlord Not a Trustee. Landlord shall not be deemed to be a
trustee of any funds paid to Landlord by Tenant (or held by Landlord for Tenant)
pursuant to this Lease, including without limitation the Security Deposit.
Landlord shall not be required to keep any such funds separate from Landlord's
general funds. Any funds held by Landlord pursuant to this Lease shall not bear
interest.
35. Interest. Any payment due from Tenant to Landlord, except for Rent
received by Landlord within thirty (30) days after the same is due, shall bear
interest from the date of written notice from Landlord that such payment is past
due, at an annual rate equal to the greater of: ten percent (10%); or five
percent (5%) plus the rate established by the Federal Reserve Bank of San
Francisco, as of the twenty-fifth (25th) day of the month immediately preceding
the due date, on advances to member banks under Sections 13 and 13(a) of the
Federal Reserve Act, as now in effect or hereafter from time to time amended. In
addition, Tenant shall pay all costs and attorneys' fees incurred by Landlord in
the collection of such amounts.
36. Surrender of Premises. On the last day of the Lease Term or upon
the sooner termination of this Lease, Tenant shall, to the reasonable
satisfaction of Landlord, surrender the
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Premises (excluding the HVAC units or system servicing the Building which shall
be governed by the next sentence) to Landlord in the same condition as received
(reasonable wear and tear excepted), but subject to Tenant's obligation to
remove certain Alterations as provided in Paragraph 13.2 above and surrender
such other Alterations with the Premises as provided in the last sentence of
Paragraph 13.2. On the last day of the Lease Term or upon the sooner termination
of this Lease, Tenant shall, to the reasonable satisfaction of Landlord
surrender the air conditioning, ventilating and heating equipment (excluding the
Older HVAC Units and any HVAC units that are not used by Tenant during the Lease
Term) inspected, serviced and repaired by a reputable and licensed service firm.
Tenant shall remove all of Tenant's personal property and trade fixtures from
the Premises, and all property not so removed shall be deemed abandoned by
Tenant. Furthermore, Tenant shall immediately repair all damage to the Premises
and Common Area caused by any such removal. Landlord agrees to give Tenant
written notice if Tenant left any personal property in the Premises following
the expiration or earlier termination of the Lease Term. If the Premises are not
so surrendered at Lease Termination in the condition required by this Paragraph
36, Tenant shall indemnify, defend and hold Landlord harmless from and against
any loss, damage, expense, claim or liability resulting from delay by Tenant in
so surrendering the Premises including, without limitation, any claims made by
any succeeding tenant or losses to Landlord due to lost opportunities to lease
to succeeding tenants.
37. No Partnership or Joint Venture. Nothing in this Lease shall be
construed as creating a partnership or joint venture between Landlord, Tenant,
or any other party, or cause Landlord to be responsible for the debts or
obligations of Tenant or any other party.
38. Entire Agreement. Any agreements, warranties, or representations
not expressly contained herein shall in no way bind either Landlord or Tenant,
and Landlord and Tenant expressly waive all claims for damages by reason of any
statement, representation, warranty, promise or agreement, if any, not contained
in this Lease. This Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, agreements and understandings, whether
written or oral, between Landlord and its agents and Tenant and its agents with
respect to the Premises, Common Area or this Lease. This Lease constitutes the
entire agreement between the parties hereto and no addition to, or modification
of, any term or provision of this Lease shall be effective until and unless set
forth in a written instrument signed by both Landlord and Tenant.
39. Submission of Lease. Submission of this instrument for Tenant's
examination or execution does not constitute a reservation of space nor an
option to lease. This instrument shall not be effective until executed by both
Landlord and Tenant. Execution of this Lease by Tenant shall constitute an offer
by Tenant to lease the Premises, which offer shall be deemed accepted by
Landlord when this Lease is executed by Landlord and delivered to Tenant.
40. Quiet Enjoyment. Landlord covenants and agrees with Tenant that
upon Tenant paying Rentals and performing its covenants and conditions under the
Lease, Tenant shall and may peaceably and quietly have, hold and enjoy the
Premises for the Lease Term, subject, however, to the terms of this Lease and of
any mortgages or deeds of trust affecting the Premises and/or the real property
comprising the Common Area, and the rights reserved by
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Landlord hereunder. Any purchaser upon any foreclosure or exercise of the power
of sale under any mortgage or deed of trust made by Landlord and covering the
Premises to whom Tenant attorns pursuant to Paragraph 20.4 above shall be bound
by the terms of this Paragraph 40.
41. Authority. The undersigned parties hereby warrant that they have
proper authority and are empowered to execute this Lease on behalf of the
Landlord and Tenant, respectively. If Tenant is a corporation (or partnership),
each individual executing this Lease on behalf of said corporation (or
partnership) represents and warrants that he is duly authorized to execute and
deliver this Lease on behalf of said corporation in accordance with a duly
adopted resolution of the Board of Directors of said corporation or in
accordance with the by-laws of said corporation (or on behalf of said
partnership in accordance with the partnership agreement of such partnership),
and that this Lease is binding upon said corporation (or partnership) in
accordance with its terms. If Tenant is a corporation, Tenant shall upon
execution of this Lease, deliver to Landlord a certified copy of the resolution
of the Board of Directors of said corporation authorizing or ratifying the
execution of this Lease or a certificate of the Secretary of the said
corporation confirming the power and authority of the signatories of this Lease
(on behalf of Tenant) to execute and deliver this Lease on behalf of Tenant and
to bind Tenant to its terms. In the event Tenant should fail to deliver such
resolution or certificate to Landlord upon execution of this Lease, Landlord
shall not be deemed to have waived its right to require delivery of such
resolution or certificate, and at any time during the Lease Term Landlord may
request Tenant to deliver the same, and Tenant agrees it shall thereafter
promptly deliver such resolution or certificate to Landlord. If Tenant is a
corporation, Tenant warrants that:
(a) Tenant is a valid and existing corporation;
(b) Tenant is qualified to do business in California;
(c) All fees and all franchise and corporate taxes are paid to
date, and will be paid when due;
(d) All required forms and reports will be filed when due; and
(e) The signers of this Lease are properly authorized to
execute this Lease.
42. Building Plans. Tenant acknowledges that any plan of the Premises
and Common Area which may have been displayed or furnished to Tenant or which
may be a part of Exhibit "A" is tentative; Landlord may change the exterior of
the Premises and the shape, size, location, number, and extent of the Common
Area improvements shown on any such plan and eliminate or add any improvements
to the Common Area in Landlord's sole discretion; provided, however, that the
Premises shall be substantially as shown on such plan, Tenant's use and
enjoyment of the Premises shall not be unreasonably interfered with and any such
change to the Common Area shall not unreasonably interfere with Tenant's parking
rights under this Lease or access to the Premises.
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IN WITNESS WHEREOF, the parties have executed this Lease effective as
of the date set forth below.
LANDLORD: TENANT:
SI HAHN LLC, INTEGRATED DEVICE TECHNOLOGY
A California limited liability company INTERNATIONAL, INC.,
a California corporation
By: ________________________________ By:_______________________________
Sang Hahn
Title: Manager Title:____________________________
By:_______________________________
DATE:________________________________
Title:____________________________
DATE______________________________
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EXHIBITS
--------
A. Site Plan Paragraph 1.4 (Premises shown cross-hatched
and Common Area illustrated on such Site
Plan)
B. Legal Description Paragraph 2.1
C. List of Permitted
Hazardous Materials Paragraph 25
D. List of Environmental
Reports Paragraph 25.6
E. Form of Subordination,
Nondisturbance and
Attornment Agreement Paragraph 20.2
F. Form of Estoppel Certificate Paragraph 20.5
G. HVAC Plan or List Paragraph 2.2 (Showing location or
identification of Older HVAC Units)
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EXHIBIT C
LIST OF PERMITTED HAZARDOUS MATERIALS
[to be attached]
-1-
EXHIBIT D
LIST OF ENVIRONMENTAL REPORTS
[to be attached]
-1-
EXHIBIT G
SITE HVAC PLAN OR LIST SHOWING LOCATION OR
IDENTIFICATION OF OLDER HVAC UNITS
[to be attached]
-1-