NET LEASE AGREEMENT
(Single Tenant)
by and between
CERPROBE CORPORATION,
a Delaware Corporation
("Tenant")
and
REALTEC PROPERTIES I, L.P.,
a California Limited Parntership
("Landlord")
TABLE OF CONTENTS
1. Summary of Lease Provisions............................................. 1
1.13 Summary Provisions in General................................ 2
2. Property Leased......................................................... 2
2.1 Premises..................................................... 2
2.2 Improvements................................................. 2
2.3 Acceptance of Premises....................................... 3
3. Term.................................................................... 3
3.1 Commencement Date............................................ 3
3.2 Delay of Commencement Date................................... 4
3.3 Early Occupancy.............................................. 4
3.4 Tenant to Physically Occupy Premises......................... 4
3.5 Option to Extend Lease Term.................................. 5
4. Rent.................................................................... 5
4.1 Rent......................................................... 5
4.2 Late Charge.................................................. 5
4.3 Additional Rent.............................................. 6
4.4 Cost of Living Adjustment.................................... 6
4.5 Rent During Extended Term.................................... 6
5. Security, Deposit....................................................... 7
6. Use of Premises......................................................... 8
6.1 Permitted Uses............................................... 8
6.2 Tenant to Comply with Legal Requirements..................... 8
6.3 Prohibited Uses.............................................. 8
6.4 Hazardous Materials.......................................... 9
7. Taxes.................................................................. 10
7.1 Personal Property Taxes..................................... 10
7.2 Other Taxes Payable Separately by Tenant.................... 10
7.3 Common Taxes................................................ 11
(a) Definition of Taxes..................................... 11
(b) Operating Expense....................................... 11
8. Insurance; Indemnity; Waiver........................................... 12
8.1 Insurance by Landlord....................................... 12
(a) Property Insurance...................................... 12
(b) Liability Insurance..................................... 12
(c) Other................................................... 13
8.2 Insurance by Tenant......................................... 13
(a) Personal Property Insurance............................. 13
(b) Liability Insurance..................................... 13
(c) Other................................................... 13
(d) Form of the Policies.................................... 13
8.3 Failure by Tenant to Obtain Insurance....................... 13
8.4 Indemnification............................................. 13
8.5 Claims by Tenant............................................ 13
8.6 Mutual Waiver of Subrogation................................ 14
9. Utilities.............................................................. 14
10. Repairs and Maintenance................................................ 14
10.1 Landlord's Responsibilities................................. 14
10.2 Tenant's Responsibilities................................... 14
11. Common Area............................................................ 15
11.1 In General.................................................. 15
11.2 Maintenance by Landlord..................................... 15
12. Operating Expenses..................................................... 16
12.1 Definition.................................................. 16
12.2 Payment of Operating Expenses by Tenant..................... 16
12.3 Exclusions From Common Area Charges......................... 17
(a) Losses Caused by Others and Construction Defects........ 17
(b) Condemnation Costs...................................... 17
(c) Reimbursable Expenses................................... 17
(d) Reserves................................................ 17
(e) Mortgages............................................... 17
(f) Hazardous Materials..................................... 17
(g) Management.............................................. 17
(h) Capital Improvements Required by Law.................... 17
13. Alterations and Improvements........................................... 17
13.1 In General ................................................. 18
13.2 Removal Upon Lease Termination.............................. 18
13.3 Landlord's Improvements..................................... 18
14. Default and Remedies................................................... 18
14.1 Events of Default........................................... 18
14.2 Remedies.................................................... 19
14.2.1 Termination......................................... 19
14.2.2 Continuance of Lease................................ 20
15. Damage or Destruction.................................................. 20
15.1 Definition of Terms......................................... 20
15.2 Insured Casualty............................................ 21
15.2.1 Rebuilding Required................................. 21
15.2.2 Landlord's Election................................. 21
15.2.3 Continuance of Lease................................ 21
15.3 Uninsured Casualty.......................................... 21
15.3.1 Landlord's Election................................. 21
15.3.2 Tenant's Ability to Continue Lease.................. 21
15.4 Tenant's Election........................................... 21
15.5 Damage or Destruction Near End of Lease .................... 22
15.6 Termination of Lease........................................ 22
15.7 Abatement of Rentals........................................ 22
15.8 Liability for Personal Property............................. 22
15.9 Waiver of Civil Code Remedies............................... 22
16. Condemnation........................................................... 22
16.1 Definition of Terms......................................... 22
16.2 Rights...................................................... 23
16.3 Total Taking................................................ 23
16.4 Partial Taking.............................................. 23
17. Liens.................................................................. 23
17.1 Premises to Be Free of Liens................................ 23
17.2 Notice of Lien; Bond........................................ 23
18. Landlord's Right of Access to Premises................................. 24
19. Landlord's Right to Perform Tenant's Covenants......................... 24
20. Lender Requirements.................................................... 24
20.1 Subordination............................................... 24
20.2 Subordination Agreements.................................... 24
20.3 Approval by Lenders......................................... 25
20.4 Attornment.................................................. 25
20.5 Estoppel Certificates and Financial Statements.............. 25
(a) Delivery by Tenant...................................... 25
(b) Nondelivery by Tenant................................... 25
21. Holding Over........................................................... 26
22. Notices................................................................ 26
23. Attorneys' Fees........................................................ 26
24. Assignment, Subletting and Hypothecation............................... 26
24.1 In General.................................................. 26
24.2 Voluntary Assignment and Subletting......................... 27
(a) Notice to Landlord...................................... 27
(b) Offer to Terminate...................................... 27
(c) Landlord's Consent...................................... 27
(d) Assumption of Obligations............................... 28
24.3 Collection of Rent.......................................... 28
24.4 Corporations and Partnerships............................... 28
24.5 Reasonable Provisions....................................... 28
24.6 Attorneys' Fees............................................. 29
24.7 Involuntary Transfer........................................ 29
24.8 Hypothecation............................................... 29
24.9 Binding on Successors....................................... 29
25. Successors............................................................. 29
26. Landlord Default; Mortgagee Protection................................. 29
27. Exhibits............................................................... 29
28. Surrender of Lease Not Merger.......................................... 30
29. Waiver................................................................. 30
30. General................................................................ 30
30.1 Captions and Headings....................................... 30
30.2 Definitions................................................. 30
(a) Landlord................................................ 30
(b) Agents.................................................. 30
(c) Interpretation of Terms................................. 30
30.3 Copies...................................................... 31
30.4 Time of Essence............................................. 31
30.5 Severability................................................ 31
30.6 Governing Law............................................... 31
30.7 Joint and Several Liability................................. 31
30.8 Construction of Lease Provisions............................ 31
30.9 Tenant's Financial Statements............................... 31
30.10 Withholding of Landlord's Consent........................... 31
31. Signs.................................................................. 31
32. Landlord as Party Defendant............................................ 32
33. Landlord Not a Trustee................................................. 32
34. Interest............................................................... 32
35. Surrender of Premises.................................................. 32
36. No Partnership or Joint Venture........................................ 32
37. Entire Agreement....................................................... 32
38. Submission of Lease.................................................... 32
39. Quiet Enjoyment........................................................ 33
40. Authority.............................................................. 33
41. Addendum............................................................... 34
NET LEASE AGREEMENT
(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 following 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, including Landlord's right to recover the Premises pursuant
to Paragraph 24 below ("Lease"):
1. Summary of Lease Provisions.
1..l Tenant: CERPROBE CORPORATION, a Delaware Corporation,
("Tenant").
1..2 Landlord: REALTEC PROPERTIES I, L.P., a California
Limited Partnership, ("Landlord").
l..3 Date of Lease, for reference purposes only: July 17,
1995.
l..4 Premises: That certain building located in the City of
San Jose, County of Santa Clara, State of California,
shown cross-hatched on the site plan attached hereto as
Exhibit A, and commonly referred to as 30 West Montague
Expressway.
1..5 Term: Seven (7) Years and One (1) Month (Paragraph 3)
One (1) Five (5) Year Option (Paragraph 3.5)
1..6 Commencement Date: August 1, 1995, subject to the
provisions of Paragraph 3 below. (Paragraph 3)
l..7 Ending Date: August 30, 2002, unless sooner terminated
pursuant to the terms of this Lease. (Paragraph 3)
l..8 Rent: (Paragraph 4)
August 1, 1995 to August 30,1995 $0.00
September 1, 1995 to August 30, 2002 $25,627.00/Per Month
Cost of Living Adjustment: Every Twelve (12) calendar
months during Lease Term. First such adjustment on the
first day of the Fourteenth (14th) month of the Lease
Term. (Paragraph 4.4)
Rent During Option Period: (Paragraph 4.5)
Receipt of the Second (2nd) month's Rent is hereby
acknowledged by Landlord.
1..9 Use of Premises: General office, storage, distribution,
marketing, and other related legal uses. (Paragraph 6)
1..10 Security Deposit: Thirty Thousand Dollars ($30,000.00)
(Paragraph 5)
1..11 Addresses for Notices:
To Landlord: Realtec Properties I, L.P.
987 University Avenue, Suite 3
Los Gatos, CA 95030
To Tenant: To the Premises, with a
courtesy copy to:
C. Zane Close
600 South Rockford Drive
Tempe, Arizona 85281
1..12 Nonexclusive Right to Use No More Than: One Hundred
Thirty-Two (132) 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 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") 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 (if
applicable) and outlined in red on Exhibit A ("Common Area"): (i) the exclusive
right to use no more than the number of parking spaces set forth in Paragraph
1.12 above, as shown on Exhibit A, the location of which may be redesignated
from time to time by Landlord; (ii) the nonexclusive right to use any other
parking spaces within the Common Area not allocated for the exclusive use of
another tenant of Landlord; and (iii) such other rights as are necessary and
convenient to Tenant's possession of the Premises or performance of Tenant's
obligations under this Lease. (Notwithstanding the number of parking spaces
designated for Tenant's exclusive use, in the event by reason of any rule,
regulation, order, law, statute, ordinance or other requirement of any
governmental or quasi-governmental authority now or hereafter in effect
(collectively, "Laws") relating to or affecting parking on the Common Area, or
any other cause beyond Landlord's reasonable control, Landlord is required to
reduce the number of parking spaces on the Common Area, Landlord shall have the
right to proportionately reduce the number of parking spaces designated herein
for Tenant's exclusive use.) 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 (excluding only that portion of the Common Area designated herein for
Tenant's exclusive use for vehicular parking).
2..2 Improvements. The improvements to be constructed by Landlord
for Tenant's use in the Premises are set forth in detail on the attached Exhibit
C. The work described in Exhibit C includes any additional improvements to the
Premises and/or the Common Area that may be required pursuant to Title 24 and
Title III of the Americans with Disabilities Act of 1990, 42 U.S.C. section
12101 et. seq., and the regulations promulgated thereunder (the "ADA") by reason
of the construction of the improvements in the Premises.
In the event of changes to any of the work set forth in Exhibit C
(whether such changes are required by any public agency, or by reason of any
error or omission in plans because of information provided to Landlord by
Tenant, or because requested in writing by Tenant and accepted in writing by
Landlord), Tenant shall pay to Landlord Landlord's costs related to such changes
before work in regard to such changes is commenced; provided, however, in no
event shall Landlord's failure to demand such payment before commencement of
work in regard to such changes, or Tenant's failure to pay for the same before
commencement of work in regard to such changes be deemed to be a waiver of
Landlord's right to require or enforce collection of such payment for changes at
any time thereafter. Landlord's costs related to the changes shall include,
without limitation, all architectural, contractor, and engineering expenses, and
the cost of all building and other permits and inspection fees. Tenant
acknowledges that Landlord or a person or entity related to Landlord and/or
controlled by Landlord may serve as Landlord's architect, engineer and/or
contractor in regard to the above-described work and in the event of any
changes, Landlord's costs shall be deemed to include architect, engineering
and/or contractor expenses at the rates charged to third parties by Landlord
and/or such related person or entity for such services, unless otherwise
expressly provided in this Lease.
Since any construction work on the Premises by Tenant prior to
substantial completion of the work required of Landlord pursuant to this
Paragraph 2.2 may interfere with the work required of Landlord or with
Landlord's ability to obtain a certificate of occupancy (or equivalent)
therefor, any such work by Tenant shall be subject to the provisions of
Paragraph 13.1 hereof, and Landlord may in its reasonable discretion withhold
its consent to any such work by Tenant.
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 reasonable rules and regulations from
time to time promulgated by Landlord (and non-discriminatorily applied)
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 only
to completion of items on Landlord's punch list. Tenant acknowledges that
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. In addition, except for such improvements as
may be included in Exhibit C, Landlord makes no representation or warranty as to
the compliance of the Premises or the Common Area with the requirements of the
ADA.
Notwithstanding anything to the contrary contained in this Lease,
Tenant's acceptance of the Premises or submission of a "punchlist" shall not be
deemed a waiver of Tenant's right to have defects in the improvements
constructed by Landlord pursuant to Paragraph 2.2 or in the Premises repaired at
no cost to Tenant. Tenant shall give notice to Landlord whenever any such defect
becomes reasonably apparent, and Landlord shall repair the defect as soon as
practicable. Landlord also hereby assigns to Tenant all warranties with respect
to the Premises, including warranties that would reduce Tenant's maintenance
obligations under this Lease, and shall cooperate with Tenant to enforce such
warranties. Finally, notwithstanding anything to the contrary contained in this
Lease, as of the Commencement Date, the roof (including roof screens and
membrane), plumbing, electrical (including all outlets), heating and air
conditioning systems in the Premises shall be in good working order and repair.
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"); provided, however, in the
event any improvements to be constructed by Landlord, as set forth on Exhibit C,
are not completed by the aforesaid Commencement Date or are completed prior to
such Commencement Date, then the Commencement Date shall be deemed to be the
date on which the improvements to be constructed by Landlord are substantially
completed. Such improvements shall be deemed to be substantially completed upon
the occurrence of the earlier of the following:
(a) The date on which all improvements to be constructed 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 the
appropriate governmental approvals for occupancy of the Premises have been
issued; or
(b) The date on which all improvements to be constructed by
Landlord would have been substantially completed except for such work as
Landlord is required to perform but which is delayed because of any of the
following (each, a "Tenant Delay"): (i) fault or neglect of Tenant, acts of
Tenant or Tenant's agents (including without limitation delays caused by work
done on the Premises by Tenant or Tenant's agents or by acts of Tenant's
contractors or subcontractors); (ii) delays caused by change orders requested by
Tenant or required because of any errors or omissions in plans submitted by
Tenant; and (iii) such work as Landlord is required to perform but cannot
complete until Tenant performs necessary portions of construction work it has
elected or is required to do; or
(c) The date Tenant opens for business in the Premises.
If the improvements to be constructed by Landlord are deemed to be
substantially completed pursuant to Paragraph 3.1(b) above, Tenant acknowledges
that the Commencement Date shall occur, and therefore Tenant's obligation to pay
Rentals shall commence, earlier than the date of actual completion of such
improvements. The improvements to be constructed by Landlord shall be deemed to
be substantially completed one day earlier than the date of actual completion
for each day that actual completion is delayed by reason of a Tenant Delay.
If the Commencement Date is a date other than the date set forth
in Paragraph 1.6, then the Ending Date set forth in Paragraph 1.7, the rental
adjustment dates set forth in Paragraph 1.8 and any other certain dates
specified herein shall be adjusted accordingly. When the Commencement Date.
Ending Date, rental adjustment dates, and such other dates become ascertainable,
Landlord and Tenant shall specify the same in writing, in the form of the
attached Exhibit D, which writing shall be deemed incorporated herein. Tenant's
failure to execute and deliver the letter attached hereto as Exhibit D within
thirty (30) days after Tenant receives written request from Landlord to do so
(subject to any legitimate disagreement by Tenant with the terms thereof. which
both parties shall use reasonable efforts to resolve) shall be a Default by
Tenant hereunder. 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 from the date this Lease is executed by both parties, Tenant shall
have the right to terminate this Lease by written notice delivered to Landlord
within five (5) days thereafter, and Landlord and Tenant shall be relieved of
their respective obligations hereunder; provided further that said ninety (90)
day period shall be extended by the number of days work on the Premises is
delayed due to fault or neglect of Tenant, acts of Tenant or Tenant's agents, or
due to acts of God, labor disputes, strikes, fires, rainy or stormy weather,
acts or failures to act of public agencies, inability to obtain labor or
materials, earthquake, war, insurrection, riots and other causes beyond
Landlord's reasonable control, excluding, however, delays caused solely by
Landlord, its agents, employees, contractors or invitees.
3..3 Early Occupancy. If Tenant takes possession of the Premises
prior to the Commencement Date, Tenant shall do so subject to all of the terms
and conditions hereof and shall pay the Rentals provided for herein.
3..4 Tenant to Physically Occupy Premises. Tenant shall, no later
than thirty (30) days after the Commencement Date, go into actual physical
occupancy of the Premises and open the Premises for business in accordance with
the uses specified in Paragraph 6 below; provided, however, the date of Tenant's
physical occupancy of the Premises shall in no event extend the Commencement
Date, the Lease Termination date or the date the payment of Rentals hereunder
commences. Time is of the essence.
3..5 Option to Extend Lease Term. In consideration for Tenant
never having been in default under this Lease, Landlord hereby grants to Tenant
the option to extend the Lease Term for a period of Five (5) years ("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 two hundred ten
(210) days nor later than one hundred eighty (180) days 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 has been in default in the performance of any of the
terms and conditions of this Lease at any time prior to the date of Tenant's
notice of exercise of this option, 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. If Tenant is
in default under this Lease on the date that the 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.
(c) All terms and conditions of this Lease shall apply
during the Extended Term, except that the Rent for the Extended Term shall be
determined in accordance with Paragraph 4.4.
(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. Upon the extension of the Lease Term pursuant to this
Paragraph 3.5, the term "Lease Term" as used in this Lease shall thereafter
include the Extended Term and the Lease Termination date shall be the expiration
date of the Extended Term.
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 until
adjusted pursuant to Paragraph 4.4 below the Rent set forth in Paragraph 1.8
above. Rent shall be prorated, based on thirty (30) days per month, for any
partial month during the Lease Term. Rent 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 ten percent (10%) of
any installment of Rent which is not received by Landlord within ten (10) days
after the due date for such installment. 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
34 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 reasonable 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 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 Cost of Living Adjustment. The Rent payable hereunder shall
be adjusted pursuant to this Paragraph 4.4, at the times specified in Paragraph
1.8, and the Rent as adjusted shall be payable monthly pursuant to the terms of
Paragraph 4.1 above until the next adjustment under this Paragraph 4.4. As used
herein the term "Adjustment Date" shall mean the effective date of a Rent
adjustment pursuant to this Paragraph 4.4. As of each Adjustment Date, the Rent
shall be increased to a sum equal to the product obtained by multiplying the
then current Rent by a fraction, the numerator of which is the New Index as of
the applicable Adjustment Date and the denominator of which is the Initial
Index. In the event the New Index is not available on the Adjustment Date,
Landlord shall notify Tenant of the adjustment as soon as the New Index becomes
available, and Tenant shall immediately pay any amount that has accrued since
the Adjustment Date. For the purposes of adjusting the Rent as provided in this
Paragraph 4.4, the following definitions shall apply:
(a) "Index" means the Consumer Price Index (all items) for
All Urban Consumers as published by the United States Department of Labor,
Bureau of Labor Statistics, for the San Francisco, Oakland, San Jose, California
Area (1982-1984=100);
(b) "Initial Index" means in regard to the first adjustment
pursuant to this Paragraph 4.4, the Index published for the month nearest but
prior to the Commencement Date and in regard to all subsequent adjustments, the
Index published nearest but prior to the immediately preceding Adjustment Date;
(c) "New Index" means the Index published nearest but prior
to the applicable Adjustment Date.
(d) The Cost of Living Adjustment shall not be less than
Four Percent (4%) nor more than Six Percent (6%) per annual adjustment.
If, at any time when the Rent is to be adjusted as provided above,
the Index is changed so that the base year differs from the base year used for
the Initial Index, the Index shall be converted in accordance with the
conversion factor published by the United States Department of Labor, Bureau of
Labor Statistics. In the event the Index is otherwise changed or discontinued
during the Lease Term, the most nearly comparable official price index of the
United States Government (as determined in Landlord's reasonable discretion)
shall be used for computing the adjustments to Rent. In no event shall the Rent
following any adjustment pursuant to this Paragraph 4.4 be less than the current
Rent immediately prior to the applicable Adjustment Date.
4..5 Rent During Extended Term. If Tenant elects to extend the
Lease Term pursuant to Paragraph 3.5 the Rent for the Extended Term shall be 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 extension
(including, but not limited to, rental rates for comparable space with
comparable tenant improvements and taking into consideration any adjustments to
rent based upon direct costs (operating expenses) and taxes, load factors,
financing charges, 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 extension), subject to annual
cost of living adjustments as called for in Paragraph 4.4 of the Lease;
provided, that the Rent for the First Year of the Extended Term shall in no
event be lower than the Rent for the last Lease Year of the original term. The
Rent for the Extended Term shall be determined as follows:
(a) Mutual Agreement. After timely receipt by Landlord of
Tenant's notice of exercise of the option to extend the Lease Term, Landlord and
Tenant shall have a period of thirty (30) days in which to agree on the Rent and
any cost of living adjustment for the Extended Term. If Landlord and Tenant
agree on said Rent during that period, they shall immediately execute an
amendment to this Lease stating the Rent and any cost of living adjustment for
the Extended Term. If Landlord and Tenant are unable to agree on the Rent and
any cost of living adjustment for the Extended Term as aforesaid, the provisions
of Paragraph 4.4(b) shall apply.
(b) Appraisal. Within five (5) days after the expiration of
the thirty (30) day period described in Paragraph 4.4(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 five (5) years full-time commercial appraisal
experience in the area in which the Premises are located, to appraise and set
the fair market rental value of the Premises and determine market cost of living
adjustments, if any. If a party does not appoint an appraiser within five (5)
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 and determine market cost of living adjustments, if any. 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 Paragraph, the two
appraisers shall meet promptly and attempt to set the fair market rental value
and determine market cost of living adjustments, if any. If they are unable to
agree within twenty (20) days after the last appraiser has been appointed, then
the two appraisers shall select a third appraiser meeting the qualifications
stated in this Paragraph 4.4(b) within ten (10) days after the last day the two
appraisers are given to set the fair market rental value and determine market
cost of living adjustments, if any. 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 (1/2) 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 value and determine market cost of living adjustments, if
any. If the majority of the appraisers are unable to set the fair market rental
value and determine market cost of living adjustments, if any, within said
twenty (20) day period, the three value appraisals shall be added together and
the total divided by three; the resulting quotient shall be the fair market
rental value. Ninety-five percent (95%) of said amount shall be the Rent for the
Extended Term. 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.
The appraisers shall jointly determine any market cost of living adjustment to
be applied to said amount during the Extended Term. In establishing the fair
market rental value and market cost of living adjustments, if any, the appraiser
or appraisers shall consider the reasonable market rental value for the highest
and best use for the Premises (including, but not limited to, rental rates for
comparable space with comparable tenant improvements and any adjustments to rent
based upon direct costs (operating expenses) and taxes, load factors, financing
charges, and/or cost of living or other rental adjustments the relative strength
of the tenants; and the size of the space); without regard to the existence of
this Lease but taking into consideration the absolute nature of this Lease.
5. Security Deposit
5. Security Deposit. Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord a security deposit ("Security
Deposit") in the amount set forth in Paragraph 1.10 above. The Security Deposit
shall be held by Landlord as security for the faithful performance by Tenant of
each and every term, covenant and condition of this Lease applicable to Tenant,
and not as prepayment of Rent. If Tenant shall at any time fail to keep or
perform any term, covenant or condition of this Lease applicable to Tenant,
including, without limitation, the payment of Rentals or those provisions
requiring Tenant to repair damage to the Premises caused by Tenant or to
surrender the Premises in the condition required pursuant to Paragraph 35 below,
Landlord may, but shall not be obligated to and without waiving or releasing
Tenant from any obligation under this Lease, use, apply or retain the whole or
any part of the Security Deposit reasonably necessary for the payment of any
amount which Landlord may spend by reason of Tenant's default or as necessary to
compensate Landlord for any loss or damage which Landlord may suffer by reason
of Tenant's default. In the event Landlord uses or applies any portion of the
Security Deposit, Tenant shall, within five (5) business days after written
demand by Landlord, remit to Landlord sufficient funds to restore the Security
Deposit to its original sum. Failure by Tenant to so remit funds shall be a
Default by Tenant. Should Tenant comply with all of the terms, covenants and
conditions of this Lease applicable to Tenant, the balance of the Security
Deposit shall be returned to Tenant within fourteen (14) days after Lease
Termination and surrender of the Premises by Tenant; provided, however, if any
portion of the Security Deposit is to be applied to repair damages to the
Premises caused by Tenant or Tenant's agents, to clean the Premises, or to
remove alterations and restore the Premises pursuant to Paragraph 13.2 below,
then the balance of the Security Deposit shall be returned to Tenant no later
than thirty (30) days after the date Landlord receives possession of the
Premises.
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 shall not be unreasonably withheld or delayed,
provided that such other use is in conformance with applicable Laws. 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, promptly comply with all Laws relating to or affecting Tenant's
particular use or occupancy 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 Tenant's particular use or occupancy of
the Premises or use of the Common Area; and with the requirements of any board
of fire underwriters (or similar body now or hereafter constituted) relating to
or affecting Tenant's particular use or occupancy of the Premises or use of the
Common Area. Tenant's obligations pursuant to this Paragraph 6.2 shall include,
without limitation, maintaining or restoring the Premises and the Common Area
and making structural and non-structural alterations and additions in compliance
and conformity with all Laws and recorded documents (including, without
limitation, alterations or additions to the Premises and/or Common Area that are
required pursuant to the ADA), each relating to Tenant's particular use or
occupancy of the Premises during the Lease Term or alterations made to the
Premises 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. At Landlord's option, Landlord may make the required alteration, addition
or change, and Tenant shall pay the cost thereof as Additional Rent. The
foregoing notwithstanding, Landlord shall make any alteration or addition
required to bring the Premises or the Common Area into compliance with legal
requirements in effect at the time the Premises, any improvements installed
therein by Landlord, or the Common Area, respectively, were originally
constructed. The cost of any structural alterations as may be hereafter required
due to a change in laws and unrelated to Tenant's specific use of the Premises
shall be the responsibility of Landlord.
Tenant shall obtain prior to taking possession of the Premises 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 Tenant's particular use
or occupancy of the Premises or use of the Common Area shall be conclusive of
the fact of such violation by Tenant.
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 occupants of neighboring property, 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, immoral 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 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 Tenant's particular use of the Premises or that of Tenant's agents,
Tenant shall pay, as Additional Rent, the full cost of such increase; provided
however this provision shall in no event be deemed to constitute a waiver of
Landlord's right to declare a default hereunder by reason of the act or conduct
of Tenant or Tenant's agents causing such increase or of any other rights or
remedies of Landlord in connection therewith. 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 designated for that purpose by
Landlord. No materials, supplies, equipment, finished products (or semifinished
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.
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 by Tenant, its
agents, employees, contractors or invitees 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 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 in violation of Hazardous Materials Laws by Tenant, Tenant's agents or
any other person using the Premises with Tenant's knowledge and consent or
authorization. Tenant's obligation to defend, hold harmless and indemnify
pursuant to this Paragraph 6.4 shall survive Lease Termination.
The foregoing indemnity shall not apply to, and Tenant shall not
be responsible for, the presence of Hazardous Materials on, under, or about the
Premises or Common Area to the extent caused by any third parties or by Landlord
or Landlord's employees, agents, contractors or invitees.
Notwithstanding anything to the contrary contained in this Lease,
Landlord hereby represents and warrants to Tenant that, to the best of
Landlord's knowledge, (i) the Premises and the Common Area are in compliance
with all laws regarding Hazardous Materials ("Hazardous Materials Laws"); (ii)
no asbestos-containing materials exist in or on the Premises or the Common Area;
and (iii) any handling, transportation, storage or use of Hazardous Materials
that occurred in the Premises or the Common Area prior to the Commencement Date
is now in compliance with all Hazardous Materials Laws. Landlord farther
represents and warrants that, to the best of Landlord's knowledge, no litigation
has been brought or threatened, nor any settlements reached with any
governmental or private party, concerning the actual or alleged presence of
Hazardous Materials on or about the Premises or the Common Area, nor has
Landlord received any notice of any violation, or alleged violation, of any
Hazardous Materials Laws, pending claims or pending investigations with respect
to the presence of Hazardous Materials on or about the Premises or the Common
Area. Landlord's representations and warranties set forth in this paragraph
shall survive termination of this Lease.
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. ss. 1321) or listed pursuant to section
307 of the Clean Water Act of 1977 (33 U.S.C. ss. 1317), as amended (v)
flammable explosives (vi) radioactive materials; or (vii) radon gas.
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. Unless a previous inspection has
disclosed a violation by Tenant of the covenants contained in this Paragraph
6.4, such inspections, investigations, sampling and/or monitoring shall be
performed not more often than semi-annually. 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 in performing such inspections, investigation, sampling and/or
monitoring shall be reimbursed by Tenant to Landlord as Additional Rent within
ten (10) days after Landlord's demand for payment.
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 thirty (30) 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
(or reimburse Landlord, as Additional Rent, if Landlord is assessed), prior to
delinquency or within thirty (30) days after receipt of Landlord's statement
thereof, any and all taxes, levies, assessments or surcharges payable by
Landlord or Tenant and relating to this Lease or the Premises (other than
Landlord's net income, succession, transfer, gift, franchise, estate or
inheritance taxes, and Taxes, as that term is defined in Paragraph 7.3(a)
below, payable as an Operating Expense), whether or not now customary or within
the contemplation of the parties hereto, whether or not now in force or which
may hereafter become effective, including but not limited to taxes:
(a) Upon, allocable to, or measured by the area of the
Premises or the Rentals payable hereunder, including without limitation any
gross rental 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;
(b) Upon or with respect to the use, possession, occupancy,
leasing, operation and management of the Premises or any portion thereof;
(c) Upon this transaction or any document to which Tenant
is a party creating or transferring an interest or an estate in the Premises; or
(d) 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. Tenant shall also pay, prior to delinquency, all privilege,
sales, excise, use, business, occupation, or other taxes, assessments, license
fees or charges levied, assessed or imposed upon Tenant's business operations
conducted at the Premises.
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.
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); environmental surcharges; excise taxes; gross rental 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; 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 "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 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.
Notwithstanding anything to the contrary contained in this
Lease, Tenant shall not be required to pay any portion of any tax or assessment
(i) in excess of the amount which would be payable if the tax or assessment were
paid in installments over the longest possible term; or (ii) imposed on land and
improvements other than the Common Area.
(b) Operation Expense. 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. Landlord shall, during the Lease Term,
procure and keep in force the following insurance, the cost of which shall be an
Operating Expense, payable by Tenant pursuant to Paragraph 12 below:
(a) Property Insurance. "All risk" property insurance,
including, without limitation, 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
insurance shall not cover any leasehold 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;
(b) 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 Three Million
Dollars ($3,000,000) per occurrence and Five Million Dollars ($5,000,000)
aggregate; and
(c) Other. Such other insurance as Landlord deems necessary
and prudent.
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 aid
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 One
Million Dollars ($1,000,000) per occurrence and Three Million Dollars
($3,000,000) 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 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 reasonably 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 ten (10) business 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 reasonable
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 with competent counsel reasonably satisfactory to Landlord
(except for Landlord's negligence or willful misconduct, or that of its agents,
employees, contractors or invitees) against all claims, losses, damages,
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 caused or contributed to by Tenant or Tenant's
agents, 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 reasonable attorneys' fees, investigation costs, and
other costs actually incurred by Landlord. Tenant 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. Except as set forth in this Paragraph 8.4,
this Lease is made on the express condition that Landlord shall not be liable
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.
8..5 Claims by Tenant. Except as expressly provided in Paragraph
8.4, 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. Neither Landlord nor Tenant shall be liable for any damages
arising from any act or negligence 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 damage or injury caused by Landlord's willful misconduct
or negligence, or that of its agents, employees, contractors or invitees.
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. Tenant shall pay during the Lease Term and prior to
delinquency all charges for water, gas, light, heat, power, electricity,
telephone or other communication service, janitorial service, trash pick-up,
sewer and all other services supplied to Tenant or consumed by Tenant 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
(except for a lack or shortage proximately caused by the negligent acts or
willful misconduct Landlord or that of its agents, employees, contractors or
invitees) 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.
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, roof membrane, structural and exterior walls (including
painting thereof) and foundations of the Premises. In addition, Landlord shall
maintain the service contract (covering periodic inspection and servicing) for
the heating and air conditioning systems of the Premises. 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 (i) repairs and
maintenance of the roof membrane, (ii) periodic inspection and regular servicing
of the heating and air conditioning systems of the Premises, and (iii) painting
the exterior of the Premises 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. The costs of maintenance,
repair, and replacement of the structural parts of the Premises (including
foundations, floor slab, load bearing walls and roof structure) which are the
obligation of Landlord hereunder shall be at the cost and expense of Landlord
and shall not be an Operating Expense, 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.
10..2 Tenant's Responsibilities. Except as expressly provided in
Paragraph 10.1 above, and subject to the provisions of Paragraph 2.3 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's obligations with respect to the
heating and air conditioning systems of the Premises shall include the
replacement of components thereof. If Tenant fails to make repairs or perform
maintenance work required of Tenant hereunder within fourteen (14) days after
written 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 use
reasonable efforts to avoid causing any inconvenience to Tenant or interference
with the use of the Premises by Tenant or Tenant's agents during the performance
of any such repairs or maintenance. 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 (except for the negligent acts or willful misconduct Landlord or
that of its agents, employees, contractors or invitees). 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. 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 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. Tenant and Tenant's
agents shall observe such rules 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.
Provided that Tenant's use, occupancy and enjoyment of the
Premises or access to the Premises is not unreasonably interfered with, 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.
11..2 Maintenance by Landlord. Landlord shall maintain the Common
Area in good repair and condition and shall manage the Common Area to reasonable
and customary standards. The expenditures for such maintenance shall be at the
reasonable discretion of Landlord. The cost of such maintenance shall be an
"Operating Expense", and Tenant shall pay such costs to Landlord, as Additional
Rent, as provided in Paragraph 12 below. Alternatively, Landlord may elect at
any time, at its option, to require Tenant to operate, manage and maintain all
or any portion of the Common Area. If Landlord so elects, Tenant shall operate,
manage and maintain that portion of the Common Area designated by Landlord at
Tenant's sole cost and expense.
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 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;
trash removal; fuel; electricity; heat; lighting systems; fire protection
systems; storm drainage and sanitary sewer systems; periodic inspection and
regular servicing of the heating and air conditioning systems of the Premises;
maintaining, repairing and replacing the roof membrane; property and liability
insurance covering the Premises and any other insurance carried by Landlord
pursuant to Paragraph 8 above; window cleaning; 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 (subject to the provisions of Paragraph 12.3 hereof); costs
related to landscape maintenance; and the cost of contesting the validity or
applicability of any governmental enactments which may affect Operating
Expenses. If the Common Area is used by more than one (1) building at any time
during the Lease Term, then 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. Operating Expenses shall also
include a management fee to Landlord in an amount equal to ten percent (10%) of
the total Operating Expenses. The cost of (i) capital repair items (i.e., items
which Landlord is required to capitalize and not expense in the current year for
federal income tax purposes), (ii) replacement of the roof membrane, (iii)
resurfacing the parking lot, and (iv) repainting the exterior of the Premises,
shall be amortized at ten percent (10%) over the useful life of the repair or
item, and be paid monthly by Tenant from the date of installation or repair
through Lease Termination.
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 reasonable discretion, may elect. All reasonable
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.
Notwithstanding anything to the contrary contained in this Lease,
within thirty (30) days after receipt by Tenant of Landlord's statement of
Operating Expenses 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 thirty
(30) 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.
12..2 Payment of Operation Expenses by Tenant. Prior to the
Commencement Date, and annually thereafter, Landlord shall deliver to Tenant an
estimate of Operating Expenses for the succeeding year. 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 on the date specified in Paragraph 1.6 and
continuing throughout the Lease Term. Tenant shall pay the Operating Expenses to
Landlord as Additional Rent and without deduction or offset.
Landlord shall revise its estimate of Operating Expenses on an
annual basis, and Landlord may adjust the amount of Tenant's monthly installment
in the event of a material change in Operating Expenses during any year.
Landlord shall furnish Tenant an annual statement (and a statement within one
hundred eighty (180) days after Lease Termination) 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.
Alternatively, Operating Expenses actually incurred or paid by
Landlord but not theretofore billed to Tenant, as invoiced by Landlord, shall be
payable by Tenant within ten (10) days after receipt of Landlord's invoice, but
not more often than once each calendar month.
12..3 Exclusions From Common Area Charges. 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 Landlord's
agents, employees or contractors, or Costs to correct any construction defect in
the Premises (other than alterations constructed by Tenant), or costs arising
out of the failure to construct the Premises, tenant improvements installed by
Landlord pursuant to Paragraph 2.2, or Common Areas in accordance with Laws and
private restrictions applicable at the time of construction thereof.
(b) Condemnation Costs. Costs occasioned by the exercise of
the power of eminent domain.
(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.
(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 in
excess of the management fee and accounting fee specified in Paragraph 12.1.
(h) Capital Improvements Required by Law. Costs for
structural alterations required by Law that do not relate solely to Tenant's
particular use or occupancy of the Premises, and Costs of retrofitting any part
of the Common Area in order to comply with the ADA (other than as they be
required in connection with the improvements installed by Landlord pursuant to
Paragraph 2.2.).
13. Alterations and Improvements.
13..1 In General. Tenant shall not make, or permit to be made, any
alterations, removals, 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 (which consent shall not be unreasonably
withheld or delayed) 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. As a condition to the giving of its consent, Landlord may impose such
reasonable requirements as Landlord reasonably may deem necessary, 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 reasonably satisfactory to
Landlord; and the requirement that Tenant reimburse Landlord, as Additional
Rent, for Landlord's actual costs for outside consultants incurred in reviewing
any proposed Alteration, whether or not Landlord's consent is granted. In the
event Landlord consents to the making of any Alterations by Tenant, the same
shall be made by Tenant 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 first-class 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.
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, 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 of such
Alterations by Tenant removed at Lease Termination. Following receipt of such
notice, Landlord may elect to have all or a portion of such 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 such 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 reasonable costs and expenses incurred thereby. Tenant's obligation
to pay such costs and expenses to Landlord shall survive 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, personal property and equipment, 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) Commencement and continuation for at least sixty (60)
days of any case, action or proceeding by, against or concerning Tenant under
any federal or state 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;
(c) Voluntary or involuntary appointment of a receiver,
trustee, keeper, or other person who takes possession for more than sixty (60)
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
(d) Execution of an assignment for the benefit of creditors
of substantially all assets of Tenant available by law for the satisfaction of
judgment creditors;
(e) Commencement of proceedings for winding up or
dissolving (whether voluntary or involuntary) the entity of Tenant, if Tenant is
a corporation or a partnership
(f) Levy of a writ of attachment or execution on Tenant's
interest under this Lease, if such writ continues for a period of thirty (30)
days;
(g) Transfer or attempted Transfer of this Lease or the
Premises by Tenant contrary to the provisions of Paragraph 24 below; or
(h) 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 die 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 seven (7) days after any such notice, or, (ii) with respect to the
defaults referred to in subparagraphs 14.1(d), (e), (g) and (h), such default is
not cured within thirty (30) days after any such notice (or if a default under
subparagraph 14.1(h) cannot be reasonably cured within thirty (30) clays, 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(b), (c) and
(f), such default is not cured within the respective time periods specified in
those subparagraphs. The parties agree that any 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 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, including without limitation the
following:
(i) Expenses in retaking possession of the Premises;
(ii) Expenses for cleaning, repairing or restoring
the Premises;
(iii) Any unamortized real estate brokerage
commission paid in connection with this Lease;
(iv) Expenses for removing, transporting, and
storing any of Tenant's property left at the Premises (although Landlord shall
have no obligation to remove, transport, or store any such property);
(v) Expenses of reletting the Premises, including
without limitation, brokerage commissions and reasonable attorneys' fees;
(vi) Reasonable attorneys' fees and court costs; and
(vii) Costs of carrying the Premises such as
repairs, maintenance, taxes and insurance premiums, utilities and security
precautions (if any).
(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.
l4..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.l 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.
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, or required by this Lease to be insured
against, for which the insurance proceeds paid or made available to Landlord are
sufficient to rebuild or restore the Premises under then-existing 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 not required to be 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 ninety (90) 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-five
percent (25%) 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-five percent (25%) 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 sixty (60) 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 sixty (60) 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.
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-five percent (25%) 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 reasonable 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
Land1ord'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 ten (10) 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 ten (10) 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
(180) day period, provided that Landlord is proceeding with diligence to rebuild
or restore the Premises. If Tenant delivers said notice within said ten (10) 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 or Tenant may, at its option, terminate this Lease as of
the date of the event of damage or destruction by giving written notice to the
other of its 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 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 (20) days after the event
of damage or destruction.
15..6 Termination of Lease. If the Lease is terminated pursuant to
this Paragraph 15, the unused balance of the Security Deposit shall be refunded
to Tenant. The current Rent 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 and Tenant, to the extent such loss is covered
as an insured peril by the insurance carried by Landlord pursuant to Paragraph
8.1. All other Rentals due hereunder shall continue unaffected during such
period. 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 Rentals 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 and Tenant, to
the extent such loss is covered as an insured peril by the insurance carried, or
required to be carried, by Landlord pursuant to Paragraph 8.1.
15..8 Liability for Personal Property. Except for the negligent
acts or willful misconduct Landlord or that of its agents, employees,
contractors or invitees, 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. 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.
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; and (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 and the unused
balance of the Security Deposit (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; and (e) the
remainder of the Award shall be paid to and be the property of Landlord. Nothing
contained in this Paragraph 16.3 shall be deemed to deny Tenant its right to
recover awards made by the condemning authority for moving costs, relocation
costs, and costs attributable to goodwill and leasehold improvements installed
by 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; and (d) the remainder of the Award
shall be paid to and be the property of Landlord. 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. Nothing contained in this Paragraph 16.4 shall be deemed to
deny Tenant its right to recover awards made by the condemning authority for
moving costs, relocation costs, and costs attributable to goodwill and leasehold
improvements installed by Tenant.
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 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 non-responsibility. 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 five (5) business 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 twenty (20) 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 during normal
business hours (except in the event of an emergency) and subject to any security
measures of Tenant that are applied to visitors to the Premises on a
non-discriminatory basis for the purpose of (i) inspecting the Premises, (ii)
performing Landlord's maintenance and repair responsibilities set forth herein,
(iii) posting notices of nonresponsibility, (iv) placing upon the Premises at
any time "For Sale" signs, (v) placing on the Premises ordinary "For Lease"
signs at any time within one hundred eighty (180) days prior to Lease
Termination, or at any time Tenant is in uncured default hereunder, or at such
other times as agreed to by Landlord and Tenant, (vi) protecting the Premises in
the event of an emergency, and (vii) exhibiting the Premises to prospective
purchasers or lenders at any reasonable time or to prospective tenants within
one hundred eighty (180) days prior to Lease Termination. In the event of an
emergency, Landlord shall have the right to use any and all means which Landlord
reasonably may deem proper to gain access to 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. Except
to the extent caused by the negligence or willful misconduct of Landlord, its
agents, employees, contractors or invitees, 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.
Notwithstanding anything to the contrary contained in this Lease, Landlord and
Landlord's agents, except in the case of emergency, shall provide Tenant with
twenty-four (24) hours' notice prior to entry of the Premises. Any entry by
Landlord and Landlord's agents shall not impair Tenant's operations more than
reasonably necessary, and Tenant shall have the right to have an employee
accompany Landlord at all times that Landlord is present on the Premises.
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 reasonable sums so paid by Landlord and all penalties,
interest and reasonable costs in connection therewith shall be due and payable
by Tenant as Additional Rent upon demand.
20. Lender Requirements.
20..l 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.
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 ten (10) 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 or modified in any material way in the
event of any foreclosure if Tenant is not in default under this Lease. Failure
of Tenant to execute such instruments evidencing subordination of this Lease
shall constitute a Default by Tenant hereunder.
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 negotiate in
good faith with Landlord and such financial institution to agree on mutually
acceptable modifications and execute the appropriate amendments; provided,
however, that no modification shall substantially change the size, location or
dimension of the Premises, or increase the Rentals payable by Tenant hereunder.
If Tenant refuses to execute any such amendment, Landlord may, in Landlord's
reasonable discretion, terminate this Lease.
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 purchaser upon any such foreclosure or sale and recognize
such purchaser as the Landlord under this Lease, provided such purchaser
expressly agrees in writing to be bound by the terms of the Lease, including,
but not limited to, the quiet enjoyment provisions of Paragraph 39.
20..5 Estoppel Certificates and Financial Statements.
(a) Delivery by Tenant. Tenant shall, within ten (10)
business days following request by Landlord therefor and without charge, execute
and deliver to Landlord any and all documents, 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 requested by any lender making a loan affecting
the Premises and/or real property comprising the Common Area. Landlord may
require that Tenant in any estoppel certificate shall (i) certify that this
Lease is unmodified and in full force and effect (or, if modified, state the
nature of such modification and certify that this Lease, as so modified, is in
full force and effect) and has not been assigned, (ii) certify the date to which
Rentals are paid in advance, if any, (iii) acknowledge that there are not, to
Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or
specify such defaults if claimed, (iv) evidence the status of this Lease as may
be required either by a lender making a loan to Landlord to be secured by a deed
of trust or mortgage covering the Premises and/or real property comprising the
Common Area or a purchaser of the Premises and/or real property comprising the
Common Area from Landlord, (v) warrant that in the event any beneficiary of any
security instrument encumbering the Premises and/or real property comprising the
Common Area forecloses on the security instrument or sells the Premises and/or
real property comprising the Common Area pursuant to any power of sale contained
in such security instrument, such beneficiary shall not be liable for the
Security Deposit, unless the Security Deposit actually has been received by the
beneficiary from Landlord, (vi) certify the date Tenant entered into occupancy
of the Premises and that Tenant is conducting business at the Premises, (vii)
certify that all 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 (viii) certify such
other matters relating to the Lease and/or Premises as may be reasonably
requested by a lender making a loan to Landlord or a purchaser of the Premises
and/or real property comprising the Common Area from Landlord. 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.
Any financial statements of Tenant shall include an opinion of a certified
public accountant (if available) and a balance sheet and profit and loss
statement for the most recent fiscal year, or a reasonable substitute for the
form of such financial information, all prepared in accordance with generally
accepted accounting principles consistently applied.
(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) no beneficiary of any security instrument encumbering the Premises and/or
real property comprising the Common Area shall be liable for the Security
Deposit in the event of a foreclosure or sale under such security instrument,
unless the Security Deposit actually has been received by the beneficiary from
Landlord, (v) 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 (vi) 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, estoppel certificates or other documents 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 upon expiration of the Lease
Term 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 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 three (3) business days 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 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 reasonable attorneys' fees and costs for appeal, as may be fixed by
the court or jury. Notwithstanding anything to the contrary contained in this
Lease, "prevailing party" as used in this paragraph shall include the party who
dismisses an action for recovery hereunder in exchange for sums allegedly due,
performance of covenants allegedly breached or considerations substantially
equal to the relief sought in the action.
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 fifteen (15) 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 pursuant to Paragraph 24.2(b) if the
notice applies to a proposed assignment of the Lease or Tenant's interest
herein. 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 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 or after 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 Tenant's interest herein, Tenant's notice shall
constitute an offer to terminate this Lease and Landlord shall have the right,
to be exercised by giving written notice to Tenant within fifteen (15) days
after receipt of Tenant's notice, to terminate the Lease. If Landlord elects to
terminate, then within ten (10) days after receipt of Landlord's election,
Tenant shall have the right to rescind its request to assign, and this Lease
shall continue in full force and effect. If Tenant does not rescind its request,
this Lease shall terminate on the date stated in the notice given by Tenant
pursuant to Paragraph 24.2(a), subject to any obligations which have accrued and
are unfulfilled as of such date.
(c) Landlord's Consent. If Landlord does not exercise its
right to terminate pursuant to Paragraph 24.2(b) within fifteen (15) days after
receipt of Tenant's notice or if Tenant proposes a sublease, Landlord shall not
unreasonably withhold or delay 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 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, or where the net worth of the proposed assignee
(according to generally accepted accounting principles) is less than the greater
of (i) the net worth of Tenant immediately prior to the assignment (ii) or the
net worth of Tenant at the time this Lease is executed, such withholding of
consent shall be presumptively reasonable. Fifty percent (50%) of any and all
rent paid by an assignee or subtenant in excess of the Rentals to be paid under
this Lease (prorated in the event of a sublease of less than the entire
Premises), after Tenant's deduction therefrom of all reasonable costs to effect
the assignment or subletting, including without limitation, brokerage
commissions, attorneys' fees, and the cost of leasehold improvements or
alterations installed or redecorating performed by Tenant for the sublessee,
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 assuring 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, subject to applicable cure periods, 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.
24..4 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, 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, shall not be deemed an assignment of this Lease.
Notwithstanding anything to the contrary contained in this Lease,
Tenant, without Landlord's prior written consent (but with notice to Landlord),
may sublet the Premises or assign this Lease to (i) a subsidiary, affiliate,
division or corporation controlled by or under common control with Tenant; (ii)
a successor corporation related to Tenant by merger, consolidation,
non-bankruptcy reorganization or government action; or (iii) a purchaser of
substantially all of Tenant's assets located at the Premises, provided that in
either of the latter two instances the successor or purchaser has a net worth
not less than the net worth of Tenant at the tinge that Tenant executes this
Lease (each, a "Permitted Assignee"). Notwithstanding that a Transfer is made to
a Permitted Assignee, Tenant shall not be released from any of its obligations
under this Lease and such Permitted Assignee shall be required to assume all of
Tenant's obligations hereunder as a condition to such transfer being permitted
without Landlord's prior written consent.
24..5 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..6 Attorneys' Fees. Tenant shall pay, as Additional Rent,
Landlord's reasonable attorneys fees for reviewing, investigating, processing
and/or documenting any requested assignment or sublease, whether or not
Landlord's consent is granted.
24..7 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
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..8 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..9 Binding on Successors. The provisions of this Paragraph 24
expressly apply to all heirs, successors, sublessees, assignees and transferees
of Tenant.
25. Successors. Subject to the provisions of Paragraph 24 above and
Paragraph 30.2(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.
26. 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). 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.
27. 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.
28. 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.
29. 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 reasonable 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 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.
30. General.
30..1 Captions and Headlines. 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.
30..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 30.2(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 30.2(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.
30..3 Copies. Any executed copy of this Lease shall be deemed an
original for all purposes.
30..4 Time of Essence. Time is of the essence as to each and every
provision in this Lease requiring performance within a specified time.
30..5 Severabilitv. 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.
30..6 Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California.
30..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.
30..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.
30..9 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.
Notwithstanding anything to the contrary contained in this Lease, Landlord shall
keep confidential all such financial information received from Tenant, except
that Landlord may provide such financial information to Landlord's lenders or
prospective lenders with respect to the Premises.
30..10 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.
31. 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 shall not be unreasonably withheld or delayed. Tenant
may place "for lease" signs in connection with efforts to assign or sublease the
Premises, subject to the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed; provided that all such signs shall be
removed not later than the one hundred eightieth (180th) day prior to Lease
Termination. 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, or which
remain beyond the one hundred eightieth (180th) day prior to Lease Termination.
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: the
sign criteria attached hereto as Exhibit E, if applicable (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.
32. Landlord as Party Defendant. If, by reason of any act or omission
by Tenant or Tenant's agents, Landlord is made a party defendant concerning this
Lease, the Premises, or the Common Area, Tenant shall indemnify Landlord against
all liability actually incurred (or threatened against) Landlord as a party
defendant, including all damages, costs and reasonable attorneys' fees.
33. 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.
34. 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 due until paid, 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
reasonable attorneys' fees incurred by Landlord in the collection of such
amounts.
35. 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 Premises to Landlord in good condition
(reasonable wear and tear, acts of God, casualty, condemnation, Hazardous
Materials other than those stored, used or disposed of by Tenant, its agents,
employees, contractors or invitees, and alterations concerning which Landlord
has not reserved the right to require removal excepted) with all originally
painted interior walls washed, or re-painted if marked or damaged, and other
interior walls cleaned and repaired or replaced, all carpets cleaned and in good
condition, the air conditioning, ventilating and heating equipment inspected,
serviced and repaired by a reputable and licensed service firm (unless Landlord
has elected to maintain heating and air conditioning systems pursuant to
Paragraph 10. 1 above), and all floors cleaned and waxed. 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. If the Premises are not so surrendered at Lease Termination,
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.
36. 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.
37. 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.
38. 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.
39. 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 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 39.
40. 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, and this Lease is not
executed by two corporate officers, Tenant shall upon execution of this Lease,
deliver to Landlord evidence of the authority of the individual executing this
Lease on behalf of Tenant to execute this Lease on behalf of Tenant. In the
event Tenant should fail to deliver such evidence to Landlord upon execution of
this Lease, Landlord shall not be deemed to have waived its right to require
delivery of such evidence, 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 evidence 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.
41. Addendum. Paragraphs 42 through 42 are added hereto and made a part
of this Lease.
IN WITNESS WHEREOF, the parties have executed this Lease effective as of
the date set forth below.
LANDLORD: TENANT:
REALTEC PROPERTIES I, L.P., a CERPROBE CORPORATION, a
California Limited Partnership Delaware corporation
By Thomas P. Masters By C. Zane Close
----------------------------- ------------------------------
Title: General Partner Title President & C.E.O.
---------------------------
Date 7/19/95 Date July 18, 1995
------------------------ -----------------------
By Henry Wong
-----------------------------
Title V.P. Manufacturing
------------------------
Date July 18, 1995
--------------------------
EXHIBITS
A Site Plan Paragraph 1.4 (Premises shown cross-hatched
and Common Area outlined in red pursuant to
Paragraph 2.1)
B Legal Description Paragraph 2.1
C Improvements Paragraph 2.2
D Commencement Date Letter Paragraph 3.1
E Sign Criteria Paragraph 31
EXHIBIT "A"
Site Plan
Montague Expressway
Orchard Drive --MAP-- North First Street
Orchard Partnership
EXHIBIT "C"
Tenant Improvements
Landlord shall provide an allowance of $26,820 for removal of existing carpet
and the replacement of same with new carpet. Said Allowance is based on Shaw
Carpet "Bellemeade". Any additional costs to Landlord shall be reimbursed by
Tenant.
EXHIBIT "D"
Commencement Date Letter
Date
_____________________________
_____________________________
_____________________________
_____________________________
Re:
Dear _______________________ ;
In regard to that certain Lease dated __________________________________, by and
between _______________________as Landlord, and ______________________________,
as Tenant, this letter shall confirm our understandings and agreements relative
to the Lease commencement date.
Notwithstanding anything to the contrary contained in the Lease it is agreed
that the Lease commenced on _____________________________ and shall terminate on
______________________________ .
Please acknowledge receipt of this letter and your Agreement and Approval of the
foregoing, by signing below and return one copy of this letter to our office.
Very truly yours,
EXHIBIT "E"
Signage
Tenant shall be entitled the use of the monument sign located on the corner of
Montague Expressway and Orchard Drive subject to Landlord's approval.
In the event Tenant fails to so request Landlord's decision or fails to remove
any such Signage designated by landlord for removal, Landlord may remove any
Signage to the Premises by Tenant, restore the Premises to their prior condition
and repair all damage to the Premises and Common Area arising from such removal,
and may recover from Tenant all reasonable costs and expenses incurred thereby.