Lease Agreement
by and between
CALWEST INDUSTRIAL PROPERTIES, LLC
as LANDLORD
and
HMT TECHNOLOGY CORPORATION
as TENANT
TABLE OF CONTENTS
ARTICLE
P
A
G
E
REFERENCE
PAGE.............................................................
IV
1. USE AND RESTRICTIONS ON
USE.................................................. 1
2.
TERM....................................................................
....... 2
4. RENT ADJUSTMENTS 2
5. SECURITY DEPOSIT 5
6. ALTERATIONS 5
7. REPAIR 6
8. LIENS 7
9. ASSIGNMENT AND SUBLETTING 8
10. INDEMNIFICATION 10
11. INSURANCE 10
12. WAIVER OF SUBROGATION 11
13. SERVICES AND UTILITIES 11
14. HOLDING OVER 11
15. SUBORDINATION 12
16. RULES AND REGULATIONS 12
17. REENTRY BY LANDLORD 12
18. DEFAULT 13
19. REMEDIES 14
20. TENANRS BANKRUPTCY OR INSOLVENCY 15
21. QUIET ENJOYMENT 16
22. DAMAGE BY FIRE, ETC 16
23. EMINENT DOMAIN 17
24. SALE BY LANDLORD 18
25. ESTOPPEL CERTIFICATES 18
26. SURRENDER OF PREMISES 18
27. NOTICES 19
28. TAXES PAYABLE BY TENANT 19
29. COMMON AREA 20
30. DEFFNED TERMS AND HEADINGS 21
31. TENANT'S AUTHORITY 21
32. COMMISSIONS 21
33. TIME AND APPLICABLE LAW 22
34. SUCCESSORS AND ASSIGNS 22
35. ENTIRE AGREEMENT 22
36. EXAMINATION NOT OPTION 22
37. RECORDATION 22
38. AUTHORIZATION OF FINANCIAL INFORMATION 22
39. TENANPS PROPORTIONATE SHARE 23
40. SCHEDULE OF RENTS 23
41. LIMITATION OF LANDLORD'S LIABILITY 23
42. LEGAL EXPENSES 23
EXHIBIT A - PREMISES
EXHIBIT B - INITLKL ALTERATIONS
EXHIBIT C - RULES AND REGULATIONS
BUILDING:
PROJECT:
LANDLORD:
LANDLORD'S ADDRESS:
TENANT:
TENANT'S ADDRESS:
LEASE REFERENCE DATE
PREMISES:
PREMISES RENTABLE AREA:
USE:
COMMENCEMENT DATE:
LEASE TERMINATION DATE:
TERM OF LEASE:
LA: 1022535.5
336994-650007
MISSION INDUSTRIAL PARK MULTI-TENANT INDUSTRIAL NET LEASE REFERENCE PAGE
843 Auburn Court
Fremont, California 94538
Mission Business Park, Fremont, California
(See Exhibit A for site plan of the Project)
CalWest Industrial Properties LLC, a California
limited liability company
CalWest Industrial Properties, LLC c/o The RREEF Funds 6735 Sierra
Court, Suite A
Dublin, California 94568
HMT Technology Corporation
HMT Technology Corporation
1055 Page Avenue
Fremont, California 94538
Attn: Martin Monciardini
April 22, 1999
843 Auburn Court, Fremont, California 94538 (See Exhibit A, on which the
Premises are hatched in black)
Approximately 60,312 square feet
The Premises shall be used and occupied as a data center, with general
administration, storage, and other legally related uses.
May 16,1999
May 15, 2004
Five (5) years beginning on the Commencement Date and ending on the
Termination Date (unless sooner terminated pursuant to this Lease).
INITIAL ANNUAL BASE RENT (Article 3):
INITIAL MONTHLY INSTALLMENT OF
ANNUAL RENT (Article 3):
TENANT'S PROPORTIONATE SHARE:
$484,908.48 (See also Article 40 "SCHEDULE OF
RENTS
$40,409.04 (See also Article 40 "SCHEDULE OF
IZEWS.")
14.02% of the Project
60,312 rentable square feet of 430,104 total rentable
square feet
REAL ESTATE BROKER DUE COMMISSION:
SECURITY DEPOSIT:
ASSIGNMENT/SUBLETTING FEE:
tenants Representatives: Wayne Mascia Associates
Landlord's Representatives: Insignia/ESG
$47,646.00
$100.00
SECURITY DEPOSIT:
ASSIGNMENT/SUBLETTING FEE:
The Reference Page information is incorporated into and made part of the
Lease. In the event of any conflict between any Reference Page
information and this Lease, this Lease shall control. The Lease
includes Exhibits "A" through "C", all of which are made a part hereof.
LANDLORD:
CALWEST INDUSTRIAL PROPERTIES, LLC,
a California limited liability company
By: RREEF AMERICA, L.L.C.,
a Delaware limited liability company Its Manager
By: - 0/
By: Stephen King
Title: Vice President, Ass Man
TENANT:
HMT Technology corporation
BY: ( .
Title: 1/@ @/-- -/ -
By:
Title:
- -ement Dated:
Dated:
LEASE
By this Lease Landlord leases to Tenant and Tenant leases from
Landlord the Building as set forth and described on the Reference Page
(the "Premises"), which is located in the Project. The Reference Page,
including all terms defined thereon, is incorporated as part of this
Lease.
1. USE AND RESTRICTIONS ON USE.
1.1 The Premises are to be used solely for the purposes stated
on the Reference Page. Tenant shall not do or permit anything to be
done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Project
or injure, annoy, or disturb them or allow the Premises to be used for
any improper, immoral, unlawful, or objectionable purpose. Tenant shall
not do, permit or suffer in, on, or about the Premises the sale of any
alcoholic liquor without the written consent of Landlord first obtained,
or the commission of any waste. Tenant shall comply with all
governmental laws, ordinances and regulations applicable to the use of
the Premises and its occupancy and shall promptly comply with all
governmental orders and directions for the correction, prevention and
abatement of any violations in or upon, or in connection with, the
Premises, all at Tenants sole expense. Notwithstanding the foregoing or
any other terms to the contrary in this Lease, Landlord, subject to
Landlord receiving Tenant's Proportionate Share of Direct Expenses,
shall be responsible for compliance with any laws, codes, ordinances or
other governmental directives requiring structural modifications to the
Premises or which require the installation of an elevator in the
Premises, unless required as a result of any improvements or alterations
made by or on behalf of Tenant to the Premises, a change of use by
Tenant of the Premises or as a result of the negligence or willful
misconduct of Tenant or any of its employees, agents or contractors.
Tenant shall not do or permit anything to be done on or about the
Premises or bring or keep anything into the Premises which will in any
way increase the rate of, invalidate or prevent the procuring of any
insurance protecting against loss or damage to the Building or any of
its contents by fire or other casualty or against liability for damage
to property or injury to persons in or about the Building or any part
thereof.
1.2 Tenant shall not, and shall not direct, suffer or permit any
of its agents, contractors, employees, licensees or invitees to at any
time handle, use, manufacture, store or dispose of in or about the
Premises or the Building any (collectively "Hazardous Materials")
flammables, explosives, radioactive materials, hazardous wastes or
materials, toxic wastes or materials, or other similar substances,
petroleum products or derivatives or any substance subject to regulation
by or under any federal, state and local laws and ordinances relating to
the protection of the environment or the keeping, use or disposition of
environmentally hazardous materials, substances, or wastes, presently in
effect or hereafter adopted, all amendments to any of them, and all
rules and regulations issued pursuant to any of such laws or ordinances
(collectively "Environmental Laws"), nor shall Tenant suffer or permit
any Hazardous Materials to be used in any manner not fully in compliance
with all Environmental Laws, in the Premises or the Building and
appurtenant land or allow the environment to become contaminated with
any Hazardous Materials. Notwithstanding the foregoing, Tenant may
handle, store, use or dispose of products containing small quantities of
Hazardous Materials (such as aerosol cans containing insecticides, toner
for copiers, paints, paint remover and the like) to the extent customary
and necessary for the use of the Premises for general office purposes;
provided that Tenant shall always handle, store, use, and dispose of any
such Hazardous Materials in a safe and lawful manner and never allow
such Hazardous Materials to contaminate the Premises, Building and
appurtenant land or the environment. Tenant shall protect, defend,
indemnify and hold each and all of the Landlord Entities (as defined in
Article 30) harmless from and against any and all loss, claims,
liability or costs (including court costs and attorney's fees) incurred
by reason of any failure of Tenant to fully comply with all applicable
Environmental Laws, or the presence, handling, use or disposition in or
from the Premises of any Hazardous Materials (even though permissible
under all applicable Environmental Laws or the provisions of this
Lease), or by reason of any failure of Tenant to keep, observe, or
perform any provision of this Section 1.2.
2. TERM.
2.1 The Term of this Lease shall begin on the Commencement Date as shown
on the Reference Page.
Tenant is currently in possession of the Premises pursuant to a
Sublease, which expires with the existing lease
for the Premises on the day immediately prior to the Commencement Date.
3. RENT.
3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time
to time by paying the
Monthly Installment of Rent then in effect on or before the first day of
each full calendar month during the Term,
except that the first month's rent shall be paid upon the execution of
this Lease. The Monthly Installment of Rent in effect at any time shall
be one-twelfth of the Annual Rent in effect at such time. Rent for any
period during the Term which is less than a full month shall be a
prorated portion of the Monthly Installment of Rent based upon a thirty
(30) day month. Said rent shall be paid to Landlord, without deduction
or offset and without notice or demand, at the Landlord's address, as
set forth on the Reference Page, or to such other person or at such
other place as Landlord may from time to time designate in writing.
3.2 Tenant recognizes that late payment of any rent or other sum
due under this Lease will result in administrative expense to Landlord,
the extent of which additional expense is extremely difficult and
economically impractical to ascertain. Tenant therefore agrees that if
rent or any other sum is not paid when due and payable pursuant to this
Lease, a late charge shall be imposed in an amount equal to the greater
of.- (a) Fifty Dollars ($50.00), or (b) a sum equal to three percent
(3%) per month of the unpaid rent or other payment. In addition, any
rent or any other sum that is not paid to Landlord when due shall bear
interest from the date due until paid at the lesser of twelve percent
(12%)per annum or diem maximum rate permitted by law. The provisions of
this Section 3.2 in no way relieve Tenant of the obligation to pay rent
or other payments on or before the date on which they are due, nor do
the terms of this Section 3.2 in any way affect Landlord's remedies
pursuant to Article 19 in the event said rent or other payment is unpaid
after date due.
4. RENT ADJUSTMENTS.
4.1 For the purpose of this Article 4, the following terms are
defined as follows:
4.1.1 Lease Year: Each calendar year falling partly or
wholly within the Term.
4.1.2 Direct Expenses: All direct costs of operation,
maintenance, repair and management of the Project (including the amount
of any credits which Landlord may grant to particular tenants of the
Project in lieu of providing any standard services or paying any
standard costs described in this Section 4.1.2 for similar tenants), as
determined in accordance with generally accepted accounting principles,
including the following costs by way of illustration, but not
limitation: repair, replacement, and maintenance of roof, foundation and
exterior walls of the buildings (including the Building) in the Project;
periodic painting of the buildings (including the Building) of the
Project; periodic cleaning of the exterior windows of the buildings
(including the Building) in the Project; repair, replacement, operation
and maintenance of all common area of the Project (including, without
limitation, sweeping, maintenance services, repairs to and replacement
of asphalt paving, bumper-s, striping, light bulbs, light standards,
monument and directional signs and lighting systems, perimeter walls,
retaining walls, sidewalks, planters ' landscaping and sprinkler systems
in planting areas); water and sewer charges; insurance charges of or
relating to all insurance policies and endorsements deemed by Landlord
to be reasonably necessary or desirable and relating in any manner to
the protection, preservation, or operation of the Project or any part
thereof, utility costs, including, but not limited to, the cost of heat,
light, power, steam, gas, and waste disposal not supplied directly to a
tenant; the cost of janitorial services with respect to all common area
of the Project; the cost of security and alarm services (including any
central station signaling system) with respect to all common area of the
Project; window cleaning costs; labor costs; costs and expenses of
managing the Project including
Management fees; air conditioning maintenance costs; elevator
maintenance fees and supplies; material costs; equipment costs including
the cost of maintenance, repair and service agreements and rental and
leasing costs; purchase costs of equipment other than capital items;
current rental and leasing costs of items which would be amortizable
capital items if purchased; tool costs; licenses, permits and inspection
fees; wages and salaries; employee benefits and payroll taxes;
accounting and legal fees; any sales, use or service taxes incurred in
connection therewith. Landlord and Tenant agree that all capital
expenses incurred by Landlord for capital improvements, replacements or
equipment to the Project shall be amortized and included as Direct
Expenses, except for capital expenses incurred by Landlord after the
date of this Lease to bring the Project into compliance with any
governmental laws, regulations or ordinances in effect as of such date,
where the Project was not in compliance with such governmental laws,
regulations and ordinances as of the date of this Lease. All capital
expenses (to the extent included in Direct Expenses) shall be amortized
over the reasonable life of such improvements, replacements or equipment
in accordance with generally accepted accounting principles, with
interest on the unamortized amount at one per-cent (I%) in excess of the
prime lending rate announced from time to time as such by The Northern
Trust Company of Chicago, Illinois. Notwithstanding any terms to the
contrary contained in this Lease, the following shall not be included
within Direct Expenses: (a) leasing commissions, attorneys' fees, costs,
disbursements and other expenses incurred in connection with
negotiations or disputes with tenants, or in connection with leasing,
renovating, or improving space for tenants or other occupants or
prospective tenants or other occupants of the Building; (b) the cost of
any service sold to any tenant (including Tenant) or other occupant for
which Landlord is reimbursed as an additional charge or rental over and
above the basic rent and escalations payable under the lease with that
tenant; (c) any depreciation on the Building or Project; (d) costs of a
capital nature relating to the structural integrity of the exterior
walls and foundation of the Building, unless caused by any improvements
or alterations made by or on behalf of Tenant to the Premises or the
negligence or willful misconduct of Tenant or any of its employees,
agents or contractors; (e) expenses in connection with services or other
benefits of a type that are not provided to Tenant but which are
provided another tenant or occupant of the Building or Project; (f)
except for any management fees paid to Landlord's subsidiaries or
affiliates, overhead profit increments paid to Landlord's subsidiaries
or affiliates for services on or to the Building or for supplies or
other materials to the extent that the cost of the services, supplies or
other materials exceeds 105% of the cost that would have been paid had
the services, supplies, or materials been provided by unaffiliated
parties on a competitive basis; (g) except as otherwise provided in this
Lease, all interest, loan fees and other carrying costs related to any
mortgage or deed of trust and all rental and other payments due under
any ground or underlying lease, or any lease for any equipment
ordinarily considered to be of a capital nature; (h) any compensation
paid to clerks, attendants or other persons in commercial concessions
operated by Landlord; (i) advertising and promotional expenditures; 6)
costs of repairs and other work occasioned by fire, windstorm or other
casualty to the extent of any insurance proceeds received by Landlord
for the casualty; (k)any fines or penalties incurred due to violations
by Landlord of any governmental rule or authority, this Lease or any
other lease in the Project; (1) management fees to the extent they
exceed 5% of all other Direct Expenses; (m) costs for sculpture,
paintings or other objects of art (nor insurance thereon or
extraordinary security in connection therewith); (n) wages, salaries, or
other compensation paid to any executive employees above the grade of
building manager-, (o) the cost of connecting any building code or other
violations which were violations prior to the Commencement Date; and (p)
the cost of containing, removing or otherwise remediating any Hazardous
Materials from the Project (including the underlying land and ground
water) (including, without limitation, asbestos and "PCB's") where such
contamination was not caused by Tenant, except for costs incurred by
Landlord for the spot removal of Hazardous Materials (which are
considered to be supplies or products ordinarily used in the operation,
maintenance, repair and management of the Project) from the Project.
4.1.3 Taxes: Real estate taxes and any other taxes, charges
and assessments which are levied with respect to the Building or the
land appurtenant to the Building, or with respect to any improvements,
fixtures and equipment or other property of Landlord, real or personal,
located in the Building and used in connection with the operation of the
Building and said land and any payments to any ground lessor in
reimbursement of tax payments made by such lessor. Taxes shall not
include any corporate franchise, or estate, inheritance or net income
tax, or tax imposed upon any transfer by Landlord of its interest in
this Lease or the Building.
4.2 Tenant shall pay as additional rent for each Lease Year (a)
Tenants Proportionate Share of Direct Expenses incurred for such Lease
Year and (b) all Taxes incurred for such Lease Year. For purposes of
the preceding sentence, Tenant's Proportionate Share of Direct Expenses
shall be as shown on the Reference Page, except Tenant's Proportionate
Share of Direct Expenses with respect to any capital replacements
included within Direct Expenses shall be limited to those related to the
Building, which Tenant shall be responsible for paying in their
entirety.
4.3 The annual determination of Direct Expenses shall be made by
Landlord and, if certified by a nationally recognized firm of public
accountants selected by Landlord, shall be binding upon Landlord and
Tenant. Tenant may review the books and records supporting such
determination in the office of Landlord, or Landlord's agent during
normal business hours, upon giving Landlord five (5) days advance
written notice within sixty (60) days after receipt of such
determination, but in no event more often than once in any one year
period.
4.4 Prior to the actual determination thereof for a Lease Year,
Landlord may from time to time estimate Tenant's liability for Direct
Expenses and/or Taxes under Section 4.2, Article 6 and Article 28 for
the Lease Year or portion thereof Landlord will give Tenant written
notification of the amount of such estimate and Tenant agrees that it
will pay, by increase of its Monthly Installments of Rent due in such
Lease Year, additional rent in the amount of such estimate. Any such
increased rate of Monthly Installments of Rent pursuant to this Section
4.4 shall remain in effect until further written notification to Tenant
pursuant hereto. Notwithstanding any terms in the preceding to the
contrary, Tenant has requested, and Landlord has agreed, to permit
Tenant, commencing with the installment of Taxes which will become due
on November 1, 1999 and delinquent if not paid on or before December 10,
1999, to pay all Taxes which become due from and after November 1, 1999
directly to the taxing authorities; provided, however, if Tenant fails
at any time to pay any Taxes to the taxing authorities required by this
sentence prior to delinquency, Tenant's right to pay Taxes directly to
the taxing authorities shall cease and be of no further force or effect
and Tenant shall thereafter pay Taxes to Landlord on an estimated basis
in accordance with the provisions of this Section 4.4 (other than this
sentence). For so long as Tenant pays Taxes directly to the taxing
authorities under this Section 4.4, Tenant shall provide Landlord prior
to the date such Taxes become delinquent with evidence satisfactory to
Landlord that such Taxes have been paid.
4.5 When the above mentioned actual determination of Tenants
liability for Direct Expenses and/or
Taxes is made for any Lease Year and when Tenant is so notified in
writing, then:
4.5.1 If the total additional rent Tenant actually paid
pursuant to Section 4.3 on account of Direct Expenses and/or Taxes for
the Lease Year is less than Tenants liability for Direct Expenses and/or
Taxes, then Tenant shall pay such deficiency to Landlord as additional
rent in one lump sum within thirty (30) days of receipt of Landlord's
bill therefor; and
4.5.2 If the total additional rent Tenant actually paid
pursuant to Section 4.3 on account of Direct Expenses and/or Taxes for
the Lease Year is more than Tenants liability for Direct Expenses and/or
Taxes, then Landlord shall credit the difference against the then next
due payments to be made by Tenant under this Article 4. Tenant shall not
be entitled to a credit by reason of actual Direct Expenses and/or Taxes
in any Lease Year being less than Direct Expenses and/or Taxes in the
Base Year (Direct Expenses and/or Taxes).
4.6 If the Commencement Date is other than January I or if the
Termination Date is other than December 3 1, Tenants liability for
Direct Expenses and Taxes for the Lease Year in which said Date occurs
shall be prorated based upon a three hundred sixty-five (365) day year.
5. SECURITY DEPOSIT.
Tenant shall deposit the Security Deposit with Landlord upon the
execution of this Lease. Said sum shall be held by Landlord as security
for the faithfull performance by Tenant of all the terms, covenants and
conditions of this Lease to be kept and performed by Tenant and not as
an advance rental deposit or as a measure of Landlord's damage in case
of Tenants default. If Tenant defaults with respect to any provision of
this Lease, Landlord may use any part of the Security Deposit for the
payment of any rent or any other sum in default, or for the payment of
any amount which Landlord may spend or become obligated to spend by
reason of Tenant's default, or to compensate Landlord for any other loss
or damage which Landlord may suffer by reason of Tenant's default. If
any portion is so used, Tenant shall within five (5) business days after
written demand therefor, deposit with Landlord an amount sufficient to
restore the Security Deposit to its original amount and Tenant's failure
to do -so shall be a material breach of this Lease. Except to such
extent, if any, as shall be required by law, Landlord shall not be
required to keep the Security Deposit separate from its general funds,
and Tenant shall not be entitled to interest on such deposit. The
Security Deposit or any balance thereof that has not been applied in
accordance with this Section 5 shall be returned to Tenant after
termination of this Lease in accordance with applicable laws.
6. ALTERATIONS.
6.1 Except for those, if any, specifically provided for in
Exhibit B to this Lease (which shall be subject to the provisions of
Exhibit B and the other provisions of this Lease, except this Section 6.
1) and except for those alterations, additions and improvements
described in the last sentence of this Section 6. 1, Tenant shall not
make or suffer to be made any alterations, additions, or improvements,
including, but not limited to, the attachment of any fixtures or
equipment in, on, or to the Premises or any part thereof or the making
of any improvements as required by Article 7, without the prior written
consent of Landlord, which shall not be unreasonably withheld; provided,
however, that Landlord may withhold its consent, in its sole discretion,
if any of the proposed alterations, additions or improvements (a)
require any structural modification to the Building, (b) affect the
exterior appearance of the Building or any Building systems, (c) result
in any Hazardous Materials being handled, used, stored or disposed of in
or about the Premises or the Building or appurtenant land or (d) trigger
in any other portion of the Project compliance with any legal
requirement that Tenant does not agree in writing to make and pay for at
Tenant's sole cost and expense (collectively, "Structural Alterations").
When applying for such consent, Tenant shall, if requested by Landlord,
furnish complete plans and specifications for such alterations,
additions and improvements. Notwithstanding any terms in this Lease to
the contrary, Tenant after the initial installation of Tenant's
improvements in the Premises may, without Landlord's prior written
consent, but upon written notice to Landlord describing in reasonable
detail the alterations, additions and/or improvements to be made to the
Premises, make alterations, additions and improvements to the Premises
which do not cost in excess of $ 1 0,000 per Lease Year, provided the
proposed alterations, additions and improvements do not involve the
making of any Structural Alterations to the Premises or any other
portion of the Project.
6.2 In the event Landlord consents to the making of any such
alteration, addition or improvement by Tenant the same shall be made
using Landlord's contractor (unless Landlord agrees otherwise) at
Tenants sole cost and expense. In lieu of Landlord's contractor, Tenant
may use a contractor selected by Tenant, subject to Landlord's prior
written approval of the contractor. If Tenant shall employ any
contractor other than Landlord's contractor and such other contractor or
any subcontractor of such other contractor shall employ any non-union
labor or supplier, Tenant shall be responsible for and hold Landlord
harmless from any and all delays, damages and extra costs suffered by
Landlord as a result of any dispute with any labor unions concerning the
wage, hours, terms or conditions of the employment of any such labor.
In any event Landlord may charge Tenant a reasonable charge to cover its
inspection and supervision costs and costs related to the review and
approval of Tenants plans and specifications as it relates to such
proposed work (except no charge shall be charged by Landlord in
connection with Tenants initial improvement work).
6.3 All alterations, additions or improvements proposed by
Tenant shall be constructed in accordance with all government laws,
ordinances, rules and regulations and Tenant shall, prior to
construction, provide the additional insurance required under Article II
in such case, and also all such assurances to Landlord, including but
not limited to, waivers of lien, surety company performance bonds and
personal guaranties of individuals of substance as Landlord shall
reasonably require to assure payment of the costs thereof and to protect
Landlord and the Building and appurtenant land against any loss from any
mechanic's, materialmen's or other liens. Tenant shall pay in addition
to any sums due pursuant to Article 4, any increase in real estate taxes
attributable to any such alteration, addition or improvement for so
long, during the Term, as such increase is ascertainable; at Landlord's
election said sums shall be paid in the same way as sums due under
Article 4.
6.4 All alterations, additions, and improvements in, on, or to
the Premises made or installed by Tenant, including carpeting, shall be
and remain the property of Tenant during the Term but, excepting
furniture, furnishings, movable partitions of less than full height from
floor to ceiling and other trade fixtures, shall become a part of the
realty and belong to Landlord without compensation to Tenant upon the
expiration or sooner termination of the Term, at which time title shall
pass to Landlord under this Lease as by a bill of sale, unless Landlord
elects otherwise. Upon such election by Landlord, Tenant shall upon
demand by Landlord, at Tenant's sole cost and expense, forthwith and
with all due diligence remove any such alterations, additions or
improvements which are designated by Landlord to be removed, and Tenant
shall forthwith and with all due diligence, at its sole cost and
expense, repair and restore the Premises to their original condition,
reasonable wear and tear and damage by fire or other casualty excepted.
Notwithstanding the foregoing, Tenant shall not be required to remove
any of its initial tenant improvements to the Premises installed
pursuant to Exhibit B, provided Tenant has kept, maintained and repaired
such improvements as required by this Lease (including, without
limitation, Sections 7.3 and 26.2).
7. REPAIR.
7.1 Tenant accepts the Premises as being in good order,
condition and repair and in the condition in which Landlord is obligated
to deliver them. It is hereby understood and agreed that no
representations respecting the condition of the Premises or the Building
have been made by Landlord to Tenant, except as specifically set forth
in this Lease. Landlord shall not be liable for any failure to make any
repairs or to perform any maintenance unless such failure shall persist
for an unreasonable time after written notice of the need of such
repairs or maintenance is given to Landlord by Tenant.
7.2 Tenant hereby waives and releases its right to make repairs
at Landlord's expense under Section 1941 and 1942 of the California
Civil Code and its right to terminate the Lease under Section 1932(l) of
the California Civil Code or under any similar law, statute or ordinance
now or hereafter in effect.
7.3 Except as otherwise provided in Section 7.6, Tenant shall at
its own cost and expense keep and maintain all parts of the Building and
improvements in good condition, promptly making all necessary repairs
and replacements, whether ordinary or extraordinary, with materials and
workmanship of the same character, kind and quality as the original
(including, but not limited to, repair and replacement of all fixtures
installed by Tenant's water heaters exclusively serving the Premises,
windows, glass and plate glass, doors, exterior stairs, skylights, any
special office entries, interior walls and finish work, floors and floor
coverings, heating and air conditioning systems exclusively serving the
Premises, electrical systems and fixtures, sprinkler systems, dock
boards, truck doors, dock bumpers, plumbing work and fixtures, and
performance of regular removal of trash and debris). Tenant, as part of
its obligations hereunder shall keep the Premises in a clean and
sanitary condition. Tenant will, as far as possible keep all such parts
of the Premises from deterioration due to ordinary wear and tear falling
temporarily out of repair, and upon termination of this Lease in any way
Tenant will yield up the Premises to Landlord in good condition and
repair, loss by fire or other casualty excepted (but not excepting any
damage to glass). Tenant shall, at its own cost and expense, repair any
damage to the Premises or the Building resulting from and/or caused in
whole or in part by the negligence or misconduct of Tenant, its agents,
employees, invitees,
or any other person entering upon the Premises as a result of Tenant's
business activities or caused by Tenant's
default hereunder.
7.4 Except as provided in Articles 22 and 23, there shall be no
abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenants
business arising from the making of any repairs, alterations or
improvements in or to any portion of the Building or the Premises or to
fixtures, appurtenances and equipment in the Building. Except to the
extent, if any, prohibited by law, Tenant waives the right to make
repairs at Landlord's expense under any law, statute or ordinance now or
hereafter in effect.
7.5 Tenant shall, at its own cost and expense, enter into a
regularly scheduled preventive maintenance/service contract with a
maintenance contractor approved by Landlord for servicing all heating
and air conditioning systems and equipment serving the Premises (and a
copy thereof shall be furnished to Landlord). The service contract must
include all services suggested by the equipment manufacturer in the
operation/maintenance manual and must become effective within thirty
(30) days of the date Tenant takes possession of the Premises. Landlord
may, upon notice to Tenant, enter into such a maintenance/ service
contract on behalf of Tenant, or perform the work and in either case,
charge Tenant the cost thereof along with a reasonable amount for
Landlord's overhead. Notwithstanding any terms in the preceding to the
contrary, Tenant has requested, and Landlord has agreed, to initially
waive the requirement that Tenant enter into a service contract;
however, if Landlord at any time during the Term determines that any of
the heating and air conditioning systems servicing the Premises are not
being maintained in good condition and repair, Landlord's waiver shall
be of no further force or effect and Tenant shall thereafter comply with
the provisions of this Section 7.5 (other than this sentence) and
Landlord shall have all rights hereunder if Tenant fails to so comply.
7.6 Landlord shall, subject to receiving Tenants Proportionate
Share of Direct Expenses, and subject to the last sentence of Section
7.3, Article 22 and Article 23, maintain in good condition and repair
the roof (excluding any skylights, but including as needed any
replacement thereof), exterior walls and foundation of the Building and
paint the exterior of the Building and clean the exterior windows of the
Building as and when such painting or window cleaning, as the case may
be, becomes necessary in Landlord's sole discretion. Landlord shall not
be required to make any repairs to the roof, exterior walls or
foundation unless and until Tenant has notified Landlord in writing of
the need for such repair and Landlord shall have a reasonable period of
time thereafter to commence and complete such repair, if warranted. The
cost of any maintenance and repairs on the part of Landlord provided for
in this Section 7.6 shall be considered part of Direct Expenses, except
to the extent excluded therefrom under Section 4.1.2 and except that
repairs which Landlord deems arise out of any improvements or
alterations made by or on behalf of Tenant to the Premises or the
negligence or willful misconduct of Tenant or any of its employees,
agents or contractors shall be made at the expense of Tenant.
Landlord's obligations to so repair and maintain the Premises shall be
limited to the cost of effecting such repair and maintenance and in no
event shall Landlord be liable for any costs or expenses in excess of
said amounts, including, but not limited to, any consequential damages,
opportunity costs or lost profits incurred or suffered by Tenant.
8. LIENS.
Tenant shall keep the Premises, the Building, the Project and
appurtenant land and Tenants leasehold interest in the Premises free
from any liens arising out of any services, work or materials performed,
furnished, or contracted for by Tenant, or obligations incurred by
Tenant. In the event that Tenant shall not, within ten (10) days
following the imposition of any such lien, either cause the same to be
released of record or provide Landlord with insurance against the same
issued by a major title insurance company or such other protection
against the same as Landlord shall accept, Landlord shall have the right
to cause the same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums
paid by Landlord and all expenses incurred by it in connection therewith
shall be considered additional rent and shall be payable to it by Tenant
on demand. Landlord shall have the right at all times to post and keep
posted on the Premises any notices
permitted or required by law, or that Landlord shall deem proper, for
the protection of Landlord, the Premises, the Building, the Project and
any other party having an interest therein, from mechanics' and
materialmen's liens, and Tenant shall give to Landlord at least five
business days prior notice of commencement of any construction on the
Premises.
9. ASSIGNMENT AND SUBLETTING.
9.1 Tenant shall not have the right to assign or pledge this
Lease or to sublet the whole or any part of the Premises whether
voluntarily or by operation of law, or permit the use or occupancy of
the Premises by anyone other than Tenant, and shall not make, suffer or
permit such assignment, subleasing or occupancy without the prior
written consent of Landlord, which consent shall not be unreasonably
withheld or delayed, subject-to Landlord's right to recapture the
Premises or any portion thereof set forth in Section 9.3 below and said
restrictions shall be binding upon any and all assignees of the Lease
and subtenants of the Premises. In the event Tenant desires to sublet
or permit such occupancy of, the Premises, or any portion thereof, or
assign this Lease, Tenant shall give written notice thereof to Landlord
at least @ (30) days but no more than one hundred twenty (I 20) days
prior to the proposed commencement date of such subletting or
assignment, which notice shall set forth the name of the proposed
subtenant or assignee, the relevant terms of any sublease or assignment
and copies of financial reports and other relevant financial reports and
other relevant financial information of the proposed subtenant or
assignee.
9.2 Notwithstanding any assignment or subletting, permitted or
otherwise, Tenant shall at all times remain directly, primarily and
fully responsible and liable for the payment of the rent specified in
this Lease and for compliance with all of its other obligations under
the terms, provisions and covenants of this Lease. Upon the occurrence
of an Event of Default, if the Premises or any part of them are then
assigned or sublet, Landlord, in addition to any other remedies provided
in this Lease or provided by law, may, at its option, collect directly
from such assignee or subtenant all rents due and becoming due to Tenant
under such assignment or sublease and apply such rent against any sums
due to Landlord from Tenant under this Lease, and no such collection
shall be construed to constitute a novation or release of Tenant from
the further performance of Tenant's obligations under this Lease.
9.3 In addition to Landlord's right to approve of any subtenant
or assignee, Landlord shall have the option, in its sole discretion, in
the event of any proposed subletting or assignment, to terminate this
Lease, or in the case of a proposed subletting of less than the entire
Premises, to recapture the portion of the Premises to be sublet, as of
the date the subletting or assignment is to be effective. The option
shall be exercised, if at all, by Landlord giving Tenant written notice
given by Landlord to Tenant within twenty (20) days following Landlord's
receipt of Tenant's written notice as required above. If this Lease
shall be terminated with respect to the entire Premises pursuant to this
Section, the Term of this Lease shall end on the date stated in Tenant's
notice as the effective date of the sublease or assignment as if that
date had been originally fixed in this Lease for the expiration of the
Term. If Landlord recaptures under this Section only a portion of the
Premises, the rent to be paid from time to time during the unexpired
Term shall abate proportionately based on the proportion by which the
approximate square footage of the remaining portion of the Premises
shall be less than that of the Premises as of the date immediately prior
to such recapture. Tenant shall, at Tenants own cost and expense,
discharge in full any outstanding commission obligation on the part of
Landlord with respect to this Lease, and any commissions which may be
due and owing as a result of any proposed assignment or subletting,
whether or not the Premises are recaptured pursuant to this Section 9.3
and rented by Landlord to the proposed tenant or any other tenant.
Notwithstanding any terms to the contrary in this Section 9.3, this
Section 9.3 shall not be applicable to any sublettings of portions of
the Premises to the extent the sublettings at any one time cover in the
aggregate less dm fifty (50%) percent of the total square footage of the
Premises and provided that the term of any subletting to which the
provisions of this Section 9.3 shall not apply does not and could not by
its terms exceed six (6) months (including all extensions and renewals).
9.4 In the event that Tenant sells, sublets, assigns or
transfers this Lease, Tenant shall pay to Landlord as additional rent an
amount equal to fifty percent (50%) of any Increased Rent (as defined
below) when and as such Increased Rent is received by Tenant. As used
in this Section, "Increased Rent" shall mean the excess of (i) all rent
and other consideration which Tenant is entitled to receive by reason of
any sale, sublease, assignment or other transfer of this Lease, after
deducting therefrom any reasonable, third party costs incurred by Tenant
in effecting the offer (including, without limitation, broker
commissions and tenant improvement allowances paid by Tenant in
connection with the transfer) over (ii) the rent otherwise payable by
Tenant under this Lease at such time. For purposes of the foregoing,
any consideration received by Tenant in forin other than cash shall be
valued
at its fair market value as determined by Landlord in good faith.
- -
9.5 Notwithstanding any other provision hereof, Tenant
shall have no right to make (and Landlord
shall have the absolute right to refuse consent to and such refusal
shall be deemed "reasonable" for all purposes
hereunder) any assignment of this Lease or sublease of any portion of
the Premises if at the time of either Tenant's
notice of the proposed assignment or sublease or the proposed
commencement date thereof, there shall exist any uncured default of
Tenant or matter which will become a default of Tenant with passage of
time unless cured; or if the proposed assignee or sublessee is an
entity: (a) with which Landlord is already in negotiation as evidenced
by the issuance of a written proposal; (b) is already an occupant of the
Building unless Landlord is unable to provide the amount of space
required by such occupant; (c) is a govermental agency; (d) is
incompatible with the character of occupancy of the Building; or (e)
would subject the Premises to a use which would: (i) involve increased
personnel or wear upon the Building; (ii) violate any exclusive right
granted to another tenant of the Building; (iii) require any addition to
or modification of the Premises or the Building in order to comply with
building code or other governmental requirements; or, (iv) involves a
violation of Section 1.2. Tenant expressly agrees that Landlord shall
have the absolute right to refuse consent to any such assignment or
sublease and that for the purposes of any statutory or other requirement
of reasonableness on the part of Landlord such refusal shall be
reasonable.
9.6 Upon any request to assign or sublett Tenant will pay
to Landlord the Assignment/Subletting Fee
plus, on demand, a sum equal to all of Landlord's reasonable costs,
including reasonable attorney's fees, incurred
in investigating and considering any proposed or purported assignment
or pledge of this Lease or sublease of any
of the Premises, regardless of whether Landlord shall consent to,
refuse consent, or determine that Landlord's
consent is not required for, such assignment, pledge or sublease. Any
purported sale, assignment, mortgage,
transfer of this Lease or subletting which does not comply with the
provisions of this Article 9 shall be void.
9.7 If Tenant is a corporation (other than a public company
whose stock is traded on the New York Stock or other nationally
recognized stock exchange), partnership or trust, any transfer or
transfers of or change or changes within any twelve month period in the
number of the outstanding voting shares of the corporation, the general
partnership interests in the partnership or the identity of the persons
or entities controlling the activities of such partnership or trust
resulting in the persons or entities owning or controlling a majority of
such shares, partnership interests or activities of such partnership or
trust at the beginning of such period no longer having such ownership or
control shall be regarded as equivalent to an assignment of this Lease
to the persons or entities acquiring such ownership or control and shall
be subject to all the provisions of this Article 9 to the such extent
and for all intents and purposes as though such an assignment.
9.8 Notwithstanding any terms in this Lease to the contrary,
Tenant may assign the Lease at any time, or sublease all or part of the
Premises, without the receipt of Landlord's consent but upon notice to
Landlord, to (a) an entity which is controlled by, controls, or is under
common control with, Tenant (an "Affiliate"), or which owns or is owned
by an Affiliate, (b) an entity with which Tenant merges or consolidates,
or (c) a purchaser of all or substantially all of Tenants stock or
assets, so long as such transaction was not entered into as a subterfuge
to avoid the obligations and restrictions of the Lease; provided,
however, in any of the foregoing instances, the successor entity must
expressly assume Tenants obligations under this Lease and, in addition,
must be adequately
capitalized and have a net worth reasonably anticipated to be adequate
to meet Tenant's obligations under this Lease. The term "control," as
used in this Section, shall mean the ownership, direct or indirect, of
the power to direct or cause the direction of the management and
policies of a person or entity, whether through the ownership of voting
securities, by contract or otherwise. In no event shall Tenant be
released of any liability hereunder as a result of any such assignment
or subletting. Notwithstanding any terms in Sections 9.3 and 9.4 to the
contrary, the terms of Sections 9.3 and 9.4 shall not be applicable to
any assignment or subletting effectuated pursuant to this Section 9.8.
10. INDEMNIFICATION.
10.1 None of the Landlord Entities shall be liable and Tenant
hereby waives all claims against them for any damage to any property or
any injury to any person in or about the Premises by or from any cause
whatsoever (including without limiting the foregoing, rain or water
leakage of any character from the roof, windows, walls, basement, pipes,
plumbing works or appliances, the Premises not being in good condition
or repair, gas, fire, oil, electricity or theft), except to the extent
caused by or arising from the negligence or willful misconduct of
Landlord or its agents, employees or contractors. Except to the extent
caused by or arising from the negligence or willful misconduct of
Landlord or its agents, employees or contractors and subject to the
provisions of Article 12, Tenant shall protect, indemnify and hold the
Landlord Entities harmless from and against any and all loss, claims,
liability or costs (including court costs and attorney's fees)
("Liabilities") incurred by reason of (a) any damage to any property
(including but not limited to property of any Landlord Entity) or any
injury (including but not limited to death) to any person occurring in,
on or about the Premises to the extent that such injury or damage shall
be caused by or arise from any actual or alleged act, neglect, fault, or
omission by or of Tenant, its agents, servants, employees, invitees, or
visitors to meet any standards imposed by any duty with respect to the
injury or damage; (b) the conduct or management of any work or thing
whatsoever done by the Tenant in or about the Premises or from
transactions of the Tenant concerning the Premises; (c) Tenant's failure
to comply with any and all governmental laws, ordinances and regulations
applicable to the condition or use of the Premises or its occupancy; or
(d) any breach or default on the part of Tenant in the performance of
any covenant or agreement on the part of the Tenant to be performed
pursuant to this Lease.
10.2 Subject to the provisions of Article 12 and Article 42,
Landlord shall protect indemnify and hold Tenant harmless from any
Liabilities incurred by Tenant to the extent caused by or arising from
the negligence or willful misconduct of Landlord or any of its agents,
employees or contractors; provided, however, Landlord shall not be
liable under any circumstances for consequential or punitive damages
(including, but not limited to, damages for any injury or inconvenience
to or interference with Tenant's business or any loss of occupancy or
quiet enjoyment of the Premises).
10.3 The provisions of this Article shall survive the termination of
this Lease with respect to any
claims or liability accruing prior to such termination.
II. INSURANCE.
11.1 Tenant shall keep in force throughout the Term: (a) a
Commercial General Liability insurance policy or policies to protect the
Landlord Entities against any liability to the public or to any invitee
of Tenant or a Landlord Entity incidental to the use of or resulting
from any accident occurring in or upon the Premises with a limit of not
less than S 1,000,000.00 per occurrence and not less than $2,000,000.00
in the annual aggregate, or such larger amount as Landlord may prudently
require from time to time, covering bodily injury and property damage
liability and $1,000,000 products/completed operations aggregate; (b)
Business Auto Liability covering owned, non-owned and hired vehicles
with a limit of not less than $1,000,000 per accident; (c) insurance
protecting against liability under Worker's Compensation Laws with
limits at least as required by statute; (d) Employers Liability with
limits of $500,000 each accident, $500,000 disease policy limit,
$500,000 disease-mh employee; (e) All Risk or Special Form coverage
protecting Tenant against loss of or damage to Tenants
alterations, additions, improvements, carpeting, floor coverings,
panelings, decorations, fixtures, inventory and other business personal
property situated in or about the Premises to the full replacement value
of the property so insured; and, (f) Business Interruption Insurance
with limit of liability representing loss of at least approximately six
months of income.
11.2 Each of the aforesaid policies shall (a) be provided
at Tenant's expense; (b) name the Landlord
and the building management company, if any, as additional insureds;
(c) be issued by an insurance company with
a minimum Best's rating of "A:Vll" during the Term; and (d) provide
that said insurance shall not be cancelled
unless thirty (30) days prior written notice (ten days for non-payment
of premium) shall have been given to
Landlord; and said policy or policies or certificates thereof shall be
delivered to Landlord by Tenant upon the
Commencement Date and at least five (5) business days after each renewal
of said insurance. -
11.3 Whenever Tenant shall undertake any alterations, additions
or improvements in, to or about the Premises ("Work") the aforesaid
insurance protection must extend to and include injuries to persons and
damage to property arising in connection with such Work, without
limitation including liability under any applicable structural work act,
and such other insurance as Landlord shall require; and the policies of
or certificates evidencing such insurance must be delivered to Landlord
prior to the commencement of any such Work.
12. WAIVER OF SUBROGATION.
So long as their respective insurers so permit, Tenant and Landlord
hereby mutually waive their respective rights of recovery against each
other for any loss insured by fire, extended coverage, All Risks or
other insurance now or hereafter existing for the benefit of the
respective party but only to the extent of the net insurance proceeds
payable under such policies. Each party shall obtain any special
endorsements required by their insurer to evidence compliance with the
aforementioned waiver.
13. SERVICES AND UTILITIES.
Tenant shall pay for all water, gas, heat, light, power, telephone,
sewer, sprinkler system charges and other utilities and services used on
or from the Premises, together with any taxes, penalties, and surcharges
or the like pertaining thereto and any maintenance charges for
utilities. Tenant shall furnish the Premises with all electric light
bulbs, tubes and ballasts battery packs for emergency lighting and fire
extinguishers, as necessary. If any such services are not separately
metered to Tenant Tenant shall pay such proportion of all charges
jointly metered with other premises as determined by Landlord in its
reasonable discretion. Any such charges paid by Landlord and assessed
against Tenant shall be payable to Landlord five (5) days after written
demand therefor and shall be additional rent hereunder. Except as
otherwise provided in Section 10.2, Landlord shall in no event be liable
for any interruption or failure of utility services on or to the
Premises.
14. HOLDING OVER.
Tenant shall pay Landlord for each day Tenant retains possession of the
Premises or part of them after termination of this Lease by lapse of
time or otherwise at the rate ("Holdover Rate") which shall be 150% of
the greater of.(a) the amount of the Annual Rent for the last period
prior to the date of such termination plus all Rent Adjustments under
Article 4; and, (b) the then market rental value of the Premises as
reasonably determined by Landlord assuming a new lease of the Premises
of the then usual duration and other terms, in either case promted on a
daily basis, and also pay all damages sustained by Landlord by reason of
such retention. If Landlord gives notice to Tenant of Landlord's
election to that effect, such holding over shall constitute renewal of
this Lease for a period from month to month or one year, whichever shall
be specified in such notice, in either case at the Holdover Rate, but if
the Landlord does not so elect, no such renewal shall result
notwithstanding acceptance by Landlord of any sums due hereunder after
such termination; and instead, a tenancy at sufferance at the Holdover
Rate shall be deemed to have been created. In any event, no provision
of this Article 14 shall be deemed to waive
Landlord's right of reentry or any other right under this Lease or at
law.
15. SUBORDINATION.
Subject to Tenants receipt of a commercially reasonable non-disturbance
agreement without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this
Lease shall be subject and subordinate at all times to ground or
underlying leases and to the lien of any mortgages or deeds of trust now
or hereafter placed on, against or affecting the Building, Landlord's
interest or estate in the Building, or any ground or underlying lease;
provided, however, that if the lessor, mortgagee, trustee, or holder of
any such mortgage or deed of trust elects to have Tenant's interest in
this Lease be superior to any such instrument, then, by notice to
Tenant, this Lease shall be deemed superior, whether this Lease was
executed before or after said instrument. Notwithstanding the
foregoing, Tenant covenants and agrees to execute and deliver upon
demand such further instruments evidencing such subordination or
superiority of this Lease as may be required by Landlord, subject to
Tenant's receipt of a commercially reasonable non-disturbance agreement.
16. RULES AND REGULATIONS.
Tenant shall faithfully observe and comply with all the rules and
regulations as set forth in Exhibit C to this Lease and all reasonable
modifications of and additions to them from time to time put into effect
by Landlord. Landlord shall not be responsible to Tenant for the non-
performance by any other tenant or occupant of the Building of any such
rules and regulations. Landlord shall use reasonable efforts to enforce
all such rules and regulations in a non-discriminatory manner but
Landlord shall not be liable to Tenant if it fails to do so.
17. REENTRY BY LANDLORD.
17.1 Landlord reserves and shall at all times upon not less than
forty-eight (48) hours advance notice to Tenant (except in an emergency,
in which event no notice shall be required) have the right to re-enter
the Premises to inspect the same, to show said Premises to prospective
purchasers, mortgagees or tenants, and to alter, improve or repair the
Premises and any portion of the Building, without abatement of rent, and
may for that purpose erect, use and maintain scaffolding, pipes,
conduits and other necessary structures and open any wall, ceiling or
floor in and through the Building and Premises where reasonably required
by the character of the work to be performed, provided entrance to the
Premises shall not be blocked thereby, and further provided that the
business of Tenant shall not be interfered with unreasonably.
17.2 Landlord shall have the right at any time to change the
arrangement and/or locations of any exterior entrances and windows,
stairs or toilets to comply with applicable laws and to change the name,
number or designation by which the Building is commonly known. In the
event that Landlord damages any portion of any wall or wall covering,
ceiling, or floor or floor covering within the Premises, Landlord shall
repair or replace the damaged portion to match the original as nearly as
commercially reasonable but shall not be required to repair or replace
more than the portion actually damaged.
17.3 Tenant hereby waives any claim 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, except as otherwise
provided in Section 10.2, any other loss occasioned by any action of
Landlord authorized by this Article 17. Tenant agrees to reimburse
Landlord, on demand, as additional rent, for any expenses which Landlord
may incur in thus effecting compliance with Tenants obligations under
this Lease.
17.4 Tenant has advised Landlord that Tenant will operate in the
Premises twenty-four (24) hours per day, seven (7) days per week. As a
result, Landlord has initially waived the requirement that Tenant
provide Landlord with a key to unlock all of the doors of the Premises,
excluding Tenants vaults and safes or special
security areas (designated in advance); however, Tenant agrees that if
Tenant ceases to operate in the Premises twenty-four (24) hours per day,
seven (7) days per week, Tenant shall promptly provide to Landlord a key
with which to unlock all of the doors in the Premises, excluding
Tenant's vaults and safes or special security areas (designated in
advance) and Landlord may thereafter retain such key. Landlord shall
have the right to use any and all means which Landlord may deem paper to
open said doors in an emergency to obtain entry to any portion of the
Premises. As to any portion to which access can not be had by means of
a key or keys in Landlord's possession, Landlord is authorized to gain
access by such means as Landlord shall elect and the cost of repairing
any damage occurring in doing so shall be borne by Tenant and paid to
Landlord as additional rent upon demand.
18. DEFAULT.
18.1 Except as otherwise provided in Article 20, the following events
shall be deemed to be Events
of Default under this Lease:
18.1.1 Tenant shall fail to pay when due any sum of
money becoming due to be paid to Landlord under this Lease, whether such
sum be any installment of the rent reserved by this Lease, any other
amount treated as additional rent under this Lease, or any other payment
or reimbursement to Landlord required by this Lease, whether or not
treated as additional rent under this Lease, and such failure shall
continue for a period of five days after written notice that such
payment was not made when due, but if any such notice shall be given,
for the twelve month period commencing with the date of such notice, the
failure to pay within five days after due any additional sum of money
becoming due to be paid to Landlord under this Lease during such period
shall be an Event of Default, without notice.
18.1.2 Tenant shall fail to comply with any term,
provision or covenant of this Lease which is not provided for in another
Section of this Article and shall not cure such failure within twenty
(20) days (forthwith, if the failure involves a hazardous condition)
after written notice of such failure to Tenant; provided, however, that
if the nature of such failure is such that it cannot be reasonably cured
within twenty (20) days, then Tenant shall not be in default if Tenant
commences to cure the default within such twenty (20) day period and
thereafter diligently prosecutes the same to completion.
18.1.3 Tenant shall fail to vacate the Premises immediately upon
termination of this Lease,
by lapse of time or otherwise, or upon termination of Tenants right to
possession only.
18.1.4 Tenant shall become insolvent, admit in writing
its inability to pay its debts generally as they become due, file a
petition in bankruptcy or a petition to take advantage of any insolvency
statute, make an assignment for the benefit of creditors, make a
transfer in fraud of creditors, apply for or consent to the appointment
of a receiver of itself or of the whole or any substantial part of its
property, or file a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws, as now in effect or
hereafter amended, or any other applicable law or statute of the United
States or any state thereof.
18.1.5 A court of competent jurisdiction shall enter an
order, judgment or decree adjudicating Tenant bankrupt, or appointing a
receiver of Tenant, or of the whole or any substantial part of its
property, without the consent of Tenant or approving a petition filed
against Tenant seeking reorganization or arrangement of Tenant under the
bankruptcy laws of the United States, as now in effect or hereafter
amended, or any state thereof, and such order, judgment or decree shall
not be vacated or set aside or stayed within sixty (60) days from the
date of entry thereof.
19. REMEDIES.
19.1 Upon the occurrence of any of such events of default
described in Article 18.1 or elsewhere in
this Lease, Landlord shall have the following rights and remedies in
addition to all other rights or remedies
available to Landlord in law or equity:
19.1.1 The rights and remedies provided by California
Civil Code Section 1951.2, including, but not limited to, the right to
terminate Tenant's right to possession of the Premises and to recover
the worth at the time of award of the amount by which the unpaid rent
for the balance of the Term after the time of award exceeds the amount
of rental loss for the same period that the Tenant proves could be
reasonably avoided, - as computed pursuant to subsection (b) of said
Section 1951.2;
19.1.2 The rights and remedies provided by California
Civil Code Section 1951.4, that allows Landlord to continue this Lease
in effect and to enforce all of its rights and remedies under this
Lease, including the right to recover rent as it becomes due, for so
long as Landlord does not terminate Tenant's right to possession;
provided, however, if Landlord elects to exercise its remedies described
in this subsection and Landlord does not terminate this Lease, and if
Tenant requests Landlord's consent to an assignment of this Lease or a
sublease of the Premises at such time as Tenant is in default, Landlord
shall not unreasonably withhold its consent to such assignment or
sublease. Acts of maintenance or preservation, efforts to relet the
Premises or the appointment of a receiver upon Landlord's initiative to
protect its interest under this Lease shall not constitute a termination
of Tenant's right to possession;
19.1.3 The right to terminate this Lease by giving notices to Tenant in
accordance with
Applicable law;
19.1.4 The right and power, as attorney-in-fact for
Tenant, to enter the Premises and remove therefrom all persons and
property, to store such property in a public warehouse or elsewhere at
the cost of and for the account of Tenant, and to sell such property and
apply the proceeds therefrom pursuant to applicable California law.
Landlord, as attorney-in-fact for Tenant, may from time to time sublet
the Premises or any part thereof for such term or terms (which may
extend beyond the Term) and at such rent and such other terms as
Landlord in its sole discretion may deem advisable, with the right to
make alterations and repairs to the Premises. Upon each such
subletting, (I) Tenant shall be immediately liable for payment to
Landlord of, in addition to indebtedness other than rent due hereunder,
the cost of such subletting and such alterations and repairs incurred by
Landlord and the amount, if any, by which the rent for the period of
such subletting (to the extent such period does not exceed the Term)
exceeds the amount to be paid as rent for the Premises for such period,
or (ii) at the option of Landlord, rents received from such subletting
shall be applied, first, to payment of any indebtedness other than rent
due hereunder from Tenant to Landlord; second, to the payment of any
costs of such subletting and of such alterations and repairs; third, to
payment of rent due and unpaid hereunder; and the residue, if any, shall
be held by Landlord and applied in payment of future rent as the same
become due hereunder. If Tenant has been credited with any rent to be
received by such subletting under clause (i) and such rent shall not be
promptly paid to Landlord by the subtenant(s), or if such rentals
received from such subletting under clause (ii) during any month are
less than those to be paid during that month by Tenant hereunder, Tenant
shall pay any such deficiency to Landlord. Such deficiency shall be
calculated and paid monthly. For all purposes set forth in this
subparagraph, Landlord is hereby irrevocably appointed attorney-in-fact
for Tenant, with power of substitution. No taking of possession of the
Premises by Landlord, as attorney-in-fact for Tenant, shall be construed
as an election on its part to terminate this Lease unless a written
notice of such intention is given to Tenant. Notwithstanding any such
subletting without termination, Landlord may at any time thereafter
elect to terminate this Lease for such previous breach; and
19.1.5 The right to have a receiver appointed for
Tenant upon application by Landlord, to take possession of the Premises
and to apply any rental collected from the Premises and to exercise all
other rights and remedies granted to Landlord as attorney-in-fact for
Tenant pursuant to subparagraph 19.1.4.
19.1.6 For purposes of this Article 19: "worth at the
time of award" shall be computed by allowing interest at a per annum
rate of ten percent and rent with respect to each month shall be deemed
to be a monthly rental arrived at by adding (i) one twelfth of the
Annual Rent, plus (ii) an amount equal to the monthly average of all the
percentage rental received by or payable to Landlord during the period
that Tenant was conducting Tenant's business in the Premises in the
manner and to the extent required by this Lease, plus (iii) one twelfth
of any items of additional rent paid or payable by Tenant hereunder
during the 12 consecutive month period prior to the month in which
tenants default occurs or one twelfth of the annualized amount of the
additional rent paid or payable and the last day of the calendar month
prior to the month in which such default occurs, if such default occurs
during the first 12 calendar months of the Term).
19.2 If, on account of any breach or default by Tenant in
Tenant's obligations under the terms and conditions of this Lease, it
shall become necessary or appropriate for Landlord to employ or consult
with an attorney concerning or to enforce or defend any of Landlord's
rights or remedies arising under this Lease, Tenant agrees to pay all
Landlord's reasonable attorney's fees so incurred in accordance with
Section 41. Tenant expressly waives any right to: (a) trial by jury;
and (b) service of any notice required by any present or future law or
ordinance applicable to landlords or tenants but not required by the
terms of this Lease.
19.3 Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies provided in this Lease or any other
remedies provided by law (all such remedies being cumulative), nor shall
pursuit of any remedy provided in this Lease constitute a forfeiture or
waiver of any rent due to Landlord under this Lease or of any damages
accruing to Landlord by reason of the violation of any of the terms,
provisions and covenants contained in this Lease.
19.4 No act or thing done by Landlord or its agents during the
Term shall be deemed a termination of this Lease or an acceptance of the
surrender of the Premises, and no agreement to terminate this Lease or
accept a surrender of said Premises shall be valid, unless in writing
signed by Landlord. No waiver by Landlord of any violation or breach of
any of the terms, provisions and covenants contained in this Lease shall
be deemed or construed to constitute a waiver of any other violation or
breach of any of the terms, provisions and covenants contained in this
Lease. Landlord's acceptance of the payment of rental or other payments
after the occurrence of an Event of Default shall not be construed as a
waiver of such Default, unless Landlord so notifies Tenant in writing.
Forbearance by Landlord in enforcing one or more of the remedies
provided in this Lease upon an Event of Default shall not be deemed or
construed to constitute a waiver of such Default or of Landlords right
to enforce any such remedies with respect to such Default or any
subsequent Default.
20. TENANTS BANKRUPTCY OR INSOLVENCY.
20.1 If at any time and for so long as Tenant shall be subjected
to the provisions of the United States Bankruptcy Code or other law of
the United States or any state thereof for the protection of debtors as
in effect at such time (each a "Debtor's Law"):
20.1.1 Tenant, Tenant as debtor-in-possession, and any
trustee or receiver of tenants assets (each a "Tenant's
Representative") shall have no greater right to assume or assign
this Lease or any interest in this Lease, or to sublease any of the
Premises than accorded to Tenant in Article 9, except to the extent
Landlord shall be required to permit such assumption, assignment or
sublease by the provisions of such Debtor's Law. Without
I- limitation of the generality of the foregoing, any right of any
Tenants Representative to assume or assign this Lease or to
sublease any of the Premises shall be subject to the conditions
that:
20.1.1.1 Such Debtors Law shall provide to Tenant's
Representative a right of assumption of this Lease which Tenant's
Representative shall have timely exercised and Tenant's Representative
shall have fully cured any default of Tenant under this Lease.
20.1.1.2 Tenant's Representative or the proposed
assignee, as the case shall be, shall have deposited with Landlord as
security for the timely payment of rent an amount equal to the larger
of. (a) three months' Rent and other monetary charges accruing under
this Lease; and (b) any sum specified in Article 5; and shall have
provided Landlord with adequate other assurance of the future
performance of the obligations of the Tenant under this Lease. Without
limitation, such assurances shall include, at least, in the case of
assumption of this Lease, demonstration to the satisfaction of the
Landlord that tenants Representative has and will continue to have
sufficient unencumbered assets after the payment of all secured
obligations and administrative expenses to assure Landlord that Tenants
Representative will have sufficient funds to fulfill the obligations of
Tenant under this Lease; and, in the case of assignment, submission of
current financial statements of the proposed assignee, audited by an
independent certified public accountant reasonably acceptable to
Landlord-d and showing a net worth and working capital in amounts
determined by Landlord to be sufficient to assure the future performance
by such assignee of all of the Tenant's obligations under this Lease.
20.1.1.3 The assumption or any contemplated
assignment of this Lease or subleasing any part of the Premises, as
shall be the case, will not breach any provision in any other lease,
mortgage, financing agreement or other agreement by which Landlord is
bound.
20.1.1.4 Landlord shall have, or would have had
absent the Debtor's Law, no right under Article 9 to refuse consent to
the proposed assignment or sublease by reason of the identity or nature
of the proposed assignee or sublessee or the proposed use of the
Premises concerned.
21. QUIET ENJOYMENT.
Landlord represents and warrants that it has full right and authority to
enter into this Lease and that Tenant, while paying the rental and
performing its other covenants and agreements contained in this Lease,
shall peaceably and quietly have, hold and enjoy the Premises for the
Term without hindrance or molestation from Landlord subject to the terms
and provisions of this Lease. Landlord shall not be liable for any
interference or disturbance by other tenants or third persons, nor shall
Tenant be released from any of the obligations of this Lease because of
such interference or disturbance.
22. DAMAGE BY FIRE, ETC.
22.1 In the event the Premises or the Building are damaged by
fire or other cause and in Landlord's reasonable estimation such damage
can be materially restored within one hundred eighty (180) days,
Landlord shall forthwith repair the same and this Lease shall remain in
full force and effect, except that Tenant shall be entitled to a
proportionate abatement in rent from the date of such damage. Such
abatement of rent shall be made pro rata in accordance with the extent
to which the damage and the making of such repairs shall interfere with
the use and occupancy by Tenant of the Premises from time to time.
Within thirty (30) days from the date of such damage, Landlord shall
notify Tenant in writing, of Landlords reasonable estimation of the
length of time with which material restoration can be made, and
Landlords determination shall be binding on Tenant. For purposes of
this Lease, the Building or Premises shall be deemed "materially
restored" if they are in such condition as would not prevent or
materially interfere with tenants use of the Premises for the purpose
for which it was being used immediately before such damage.
22.2 If such repairs cannot, in Landlord's reasonable estimation,
be made within one hundred eighty (I 80) days, Landlord and Tenant shall
each have the option of giving the other, at any time with thirty (30)
days after such damage, notice terminating this Lease as of the date of
such damage. In the event of the giving of such
notice, this Lease shall expire and all interest of the Tenant in the
Premises shall terminate as of the date of such damage as if such date
had been originally fixed in this Lease for the expiration of the Term.
In the event that neither Landlord nor Tenant exercises its option to
terminate this Lease, then Landlord shall repair or restore such damage,
this Lease continuing in full force and effect, and the rent hereunder
shall be proportionately abated as provided in Section 22 1. 1.
22.3 Landlord shall not be required to repair or replace any
damage or loss by or from fire or other cause to any panelings,
decorations, partitions, additions, railings, ceilings, floor coverings,
office fixtures or any other property or improvements installed on the
Premises or belonging to Tenant. Any insurance which may be carried by
Landlord or Tenant against loss or damage to the Building or Premises
shall be for the sole benefit - of the party carrying such insurance and
under its sole control.
22.4 In the event that Landlord should fail to complete such
repairs and material restoration within thirty (30) days after the date
estimated by Landlord therefor as extended by this Section 22.4, Tenant
may at its option and as its sole remedy terminate this Lease by
delivering written notice to Landlord, within fifteen (I 5) days after
the expiration of said period of time, whereupon the Lease shall end on
the date of such notice or such later date fixed in such notice as if
the date of such notice was the date originally fixed in this Lease for
the expiration of the Term; provided, however, that if construction is
delayed because of changes, deletions or additions in construction
requested by Tenant, strikes, lockouts, casualties, Acts of God, war,
material or labor shortages, government regulation or control or other
causes beyond the reasonable control of Landlord, the period for
restoration, repair or rebuilding shall be extended for the amount of
time Landlord is so delayed.
22.5 Notwithstanding anything to the contrary contained in this
Article: (a) Landlord shall not have any obligation whatsoever to
repair, reconstruct, or restore the Premises when the damages resulting
from any casualty covered by the provisions of this Article 22 occur
during the last twelve (I 2) months of the Ten-n or any extension
thereof, but if Landlord determines not to repair such damages Landlord
shall notify Tenant and if such damages shall render any material
portion of the Premises untenantable Tenant shall have the right to
terminate this Lease by notice to Landlord within fifteen (15) days
after receipt of Landlord's notice; and (b) in the event the holder of
any indebtedness secured by a mortgage or deed of trust covering the
Premises or Building requires that any insurance proceeds be applied to
such indebtedness, then Landlord shall have the right to terminate this
Lease by delivering written notice of termination to Tenant within
fifteen (I 5) days after such requirement is made by any such holder,
whereupon this Lease shall end on the date of such damage as if the date
of such damage were the date originally fixed in this Lease for the
expiration of the Term.
22.6 In the event of any damage or destruction to the Building or
Premises by any peril covered by the provisions of this Article 22, it
shall be Tenant's responsibility to properly secure the Premises and
upon notice from Landlord to remove forthwith, at its sole cost and
expense, such portion of all of the property belonging to Tenant or its
licensees from such portion or all of the Building or Premises as
Landlord shall request.
22.7 The provisions of this Lease, including this Article,
constitute an express agreement between
Landlord and Tenant with respect to any and all damage to, or
destruction of, all or any part of the Premises or the Building and any
statute or regulation of the State of California, including, without
limitation, Sections 1932 (2) and 1934(4) of the California Civil Code,
with respect to any rights or obligations concerning damage or
destruction in the absence of an express agreement between the parties,
and any other statute or regulation, now or hereafter in effect, shall
have no application to the Lease or any damage or destruction to all or
any part of the Premises or the Building.
23. EMINENT DOMAIN.
If all or any substantial part of the Premises shall be taken or
appropriated by any public or quasi-public authority
under the power of eminent domain, or conveyance in lieu of such
appropriation, either party to this Lease shall
have the right, at its option, of giving the other, at any time within
thirty (30) days after such taking, notice terminating this Lease,
except that Tenant may only terminate this Lease by reason of taking or
appropriation, if such taking or appropriation shall be so substantial
as to materially interfere with Tenant's use and occupancy of the
Premises. If neither party to this Lease shall so elect to ter7ninate
this Lease, the rental thereafter to be paid shall be adjusted on a fair
and equitable basis under the circumstances. In addition to the lights
of Landlord above, if any substantial part of the Building shall be
taken or appropriated by any public or quasi-public authority under the
power of eminent domain or conveyance in lieu thereof, and regardless of
whether the Premises or any part thereof are so taken or appropriated,
Landlord shall have the right, at its sole option, to terminate this
Lease. Landlord shall be entitled to any and all income, rent award, or
any interest whatsoever in or upon any such sum, which may be paid or
made in connection with any such public or quasi-public use or purpose,
and Tenant hereby assigns to Landlord any interest it may have in or
claim to all or any part of such sums, other than any separate award
which may be made with respect to Tenant's trade fixtures and moving
expenses; Tenant shall make no claim for the value of any unexpired
Term. Notwithstanding any terms to the contrary in this Lease, upon any
condemnation of all or any portion of the Premises, Tenant shall have
the right to prosecute any claim directly against the condemning
authority for loss of business, damage to, and cost of removal of trade
fixtures, furniture and other personal property belonging to Tenant;
provided, however, that no such claims shall diminish or adversely
affect Landlord's award.
24. SALE BY LANDLORD.
In event of a sale or conveyance by Landlord of the Building, the same
shall operate to release Landlord from any future liability upon any of
the covenants or conditions, expressed or implied, contained in this
Lease in favor of Tenant, and in such event Tenant agrees to look solely
to the responsibility of the successor in interest of Landlord in and to
this Lease. Except as set forth in this Article 24, this Lease shall
not be affected by any such sale and Tenant agrees to attom to the
purchaser or assignee. If any security has been given by Tenant to
secure the faithful performance of any of the covenants of this Lease,
Landlord shall transfer or deliver said security to the extent then
being held by Landlord, as such, to Landlord's successor in interest and
thereupon Landlord shall be discharged from any further liability with
regard to said security.
25. ESTOPPEL CERTIFICATES.
Within ten (IO) days following any written request which Landlord may
make from time to time, Tenant shall execute and deliver to Landlord or
mortgagee or prospective mortgagee a sworn statement certifying: (a) the
date of commencement of this Lease; (b) the fact that this Lease is
unmodified and in full force and effect (or, if there have been
modifications to this Lease, that this Lease is in full force and
effect, as modified, and stating the date and nature of such
modifications); (c) the date to which the rent and other sums payable
under this Lease have been paid; (d) the fact that there are no current
defaults under this Lease by either Landlord or Tenant except as
specified in Tenant's statement; and (e) such other matters as may be
reasonably requested by Landlord. Landlord and Tenant intend that any
statement delivered pursuant to this Article 25 may be relied upon by
any mortgagee, beneficiary or purchaser and Tenant shall be liable for
all loss, cost or expense resulting from the failure of any sale or
funding of any loan caused by any material misstatement contained in
such estoppel certificate. Tenant irrevocably agrees that if Tenant
fails to execute and deliver such certificate within such ten (10) day
period Landlord or Landlord's beneficiary or agent may execute and
deliver such certificate on Tenants behalf, and that such certificate
shall be fully binding on Tenant.
26. SURRENDER OF PREMISES.
26.1 Tenant shall, at least thirty (30) days before the last day
of the Term, arrange to meet Landlord for a joint inspection of the
Premises. In the event of tenants failure to arrange such joint
inspection to be held prior to vacating the Premises, Landlord's
inspection at or after Tenant's vacating the Premises shall be
conclusively deemed correct for purposes of determining Tenant's
responsibility for repairs and restoration.
26.2 At the end of the Term or any renewal of the Term or other
sooner termination of this Lease, Tenant will peaceably deliver up to
Landlord possession of the Premises, together with all improvements or
additions upon or belonging to the same, by whomsoever made, in the same
conditions received or first installed, broom clean and free of all
debris, excepting only ordinary wear and tear and damage by fire or
other casualty. Tenant may, and at Landlord's request shall, at Tenants
sole cost remove upon termination of this Lease, any and all furniture,
furnishings, movable partitions of less than full height from floor to
ceiling, trade fixtures and other property installed by Tenant, title to
which shall not be in or pass automatically to Landlord upon such
termination, repairing all damage caused by such removal. Property not
so removed shall, unless requested to be removed, be deemed abandoned by
the Tenant and title to the same shall thereupon pass to Landlord under
this Lease as by a bill of sale. All other alterations, additions and
improvements in, on or to the Premises shall be dealt with and disposed
of as provided in Article 6. Notwithstanding any terms in this Lease to
the contrary, Tenant shall not be obligated to remove any alterations,
additions, improvements or utility installations that were installed in
the Premises prior to the Commencement Date.
26.3 All obligations of Tenant under this Lease not fully
performed as of the expiration or earlier termination of the Term shall
survive the expiration or earlier termination of the Term. In the event
that tenants failure to perform in any material respect prevents
Landlord from releasing the Premises, Tenant shall continue to pay rent
pursuant to the provisions of Article 14 until such performance is
complete. Upon the expiration or earlier termination of the Ten-n,
Tenant shall pay to Landlord the amount, as estimated by Landlord,
necessary to repair and restore the Premises as provided in this Lease
and/or to discharge Tenant's obligation for unpaid amounts due or to
become due to Landlord. All such amounts shall be used and held by
Landlord for payment of such obligations of Tenant with Tenant being
liable for any additional costs upon demand by Landlord, or with any
excess to be returned to Tenant within thirty (30) days following
expiration of the Term and tenants vacation of the Premises. Any
otherwise unused Security Deposit shall be credited against the amount
payable by Tenant under this Lease.
27. NOTICES.
Any notice or document required or permitted to be delivered under this
Lease shall be addressed to the intended recipient, shall be transmitted
personally, by fully prepaid registered or certified United States Mail
return receipt requested, or by reputable independent contract delivery
service furnishing a written record of attempted or actual delivery, and
shall be deemed to be delivered when tendered for delivery to the
addressee at its address set forth on the Reference Page, or at such
other address as it has then last specified by written notice delivered
in accordance with this Article 26, or if to Tenant at either its
aforesaid address or its last known registered office or home of a
general partner or individual owner, whether or not actually accepted or
received by the addressee.
28. TAXES PAYABLE BY TENANT.
In addition to rent and other charges to be paid by Tenant under this
Lease, Tenant shall reimburse to Landlord, upon demand, any and all
taxes payable by Landlord (other than net income taxes) whether or not
now customary or within the contemplation of the parties to this Lease:
(a) upon, allocable to, or measured by or on the gross or net rent
payable under this Lease, including without limitation any gross income
tax or excise tax levied by the State, any political subdivision
thereof, or the Federal Government with respect to the receipt of such
rent; (b) upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy of the
Premises or any portion thereof, including any sales, use or service tax
imposed - as a result thereof; (c) upon or measured by the tenants gross
receipts or payroll or the value of Tenant's equipment, furniture,
fixtures and other personal property of Tenant or leasehold
improvements, alterations or additions located in the Premises; or (d)
upon this transaction or any document to which Tenant is a party
creating or offering any interest of Tenant in this Lease or the
Premises. In addition to the foregoing, Tenant agrees to pay, before
delinquency, any and all taxes levied or assessed against Tenant and
which become payable during the term hereof upon tenants equipment,
furniture, fixtures and other personal property of Tenant located in the
Premises. Notwithstanding any terms in this Section 28 to the contrary,
the taxes that may be reimbursed to Landlord hereunder may be paid to
the applicable authority directly by Tenant subject to the same
requirements and limitations as are set forth in Section 4.4 with
respect to the payment of Taxes.
29. COMMON AREA.
29.1 Landlord hereby grants to Tenant, in common with Landlord
and all persons, firms and corporations conducting business in the
Project and their respective customers, guests, licensees, invitees,
subtenants, employees and agents, the right to use the common area
within the Project for vehicular parking (subject to the limitations set
forth in Section 29.6), for pedestrian and vehicular ingress, egress and
travel, such nonexclusive license and right to be appurtenant to
Tenant's leasehold estate created by this Lease. As used in this Lease,
"common area" means all areas and facilities within the Project,
exclusive of the Premises and other portions of the Project leased (or
to be leased) exclusively to other tenants, but, including, without
limitation, parking areas, access and perimeter roads, sidewalks,
landscaped areas and facilities.
29.2 All common area within the Project and all improvements
located from time to time within the common area shall at all times be
subject to the exclusive control and management of the Landlord.
Landlord shall have the fight to construct, maintain and operate
lighting facilities within the common area; to police the common area
from time to time; to change the area, level, location and arrangement
of the parking areas and other improvements within the common area; to
restrict parking by tenants, their officers, agents and employees to
employee parking areas; to close all or any portion of the common area
or improvements therein to such extent as may, in the opinion of counsel
for Landlord, be legally sufficient to prevent a dedication thereof or
the accrual of any rights to any person or to the public therein; to
close temporarily all or any portion of the common area and/or the
improvements thereon; to discourage noncustomer parking; and to do and
perform such other acts in and to the common area and improvements
thereon as, in the use of good business judgment, Landlord shall
determine to be advisable.
29.3 Landlord shall manage, operate, maintain and repair (or
cause to be managed, operated, maintained and repaired) the common area
of the Project in good condition, as reasonably determined by Landlord.
The cost of such management, operation, maintenance and repair of the
common area shall be included as part of Direct Expenses to the extent
provided in Section 4. No part of the common area may be used for the
storage of any items, including without limitation, vehicles, materials,
inventory and equipment. All trash and other refuse shall be placed in
designated receptacles. No work of any kind, including, but not limited
to, painting, drying, cleaning, repairing, manufacturing, assembling,
cutting merchandising or displaying shall be permitted upon the common
area.
29.4 All common area of the Project and improvements located
thereon which Tenant is permitted to use and occupy pursuant to the
provisions of this Lease are to be used and occupied under a revocable
license and right, and if any such license be revoked, or if the amount
of such areas be diminished, Landlord shall not be subject to any
liability nor shall Tenant be entitled to compensation or diminution or
abatement of rent, and such revocation or diminution of such areas shall
not be deemed constructive or actual eviction. It is understood and
agreed that the condemnation or other taking or appropriation by any
public or quasi-public authority, or sale in lieu of condemnation, of
all or any portion of the common area shall not constitute a violation
of Landlords agreements hereunder, and Tenant shall not be entitled to
participate in or make any claim for any award or other condemnation
proceeds arising from any such taking or appropriation of the common
area.
29.5 Landlord reserves the right to install, use, maintain,
repair, alter or relocate, expand and replace
any common area of the Project; provided, however, Landlord shall not
unreasonably interfere with Tenants use
of the Premises and the parking rights granted to Tenant herein. Such
right of Landlord shall include, but shall
not be limited to, designating from time to time certain portions of the
common area of the Project as exclusively
for the benefit of certain tenants in the Project.
29.6 In connection with this Lease, Tenant shall have the right
to use on a non-exclusive, first come, first serve basis, up to 200
parking spaces within the common area of the Project. Tenant shall not
use more parking spaces than such number. All parking spaces shall be
used only for parking by vehicles no larger than full size passenger
automobiles or pick-up trucks. Tenant shall not permit or allow any
vehicles that belong to or are controlled by Tenant or Tenant's
employees, suppliers, shippers, customers, or invitees to be loaded,
unloaded, or parked in areas other than those designated by Landlord for
such activities. If Tenant permits or allows any of the prohibited
activities described above, then Landlord shall have the right, without
notice, in addition to such other rights and remedies that Landlord may
have, to remove or tow away the vehicle involved and charge the cost to
Tenant, which cost shall be immediately payable upon demand by Landlord.
Parking shall be limited to striped parking stalls, and no parking shall
be permitted in any driveways, accessways or in any area which would
prohibit or impede the free flow of traffic within the common area.
There shall be no ovemight parking of any vehicles of any kind (except
for parking of Tenant's employees that work overnight), and vehicles
which have been abandoned or parking in violation of the terms hereof
may be towed away at the owner's expense.
30. DEFINED TERMS AND HEADINGS.
The Article headings shown in this Lease are for convenience of
reference and shall in no way define, increase, limit or describe the
scope or intent of any provision of this Lease. Any indemnification or
insurance of Landlord shall apply to and inure to the benefit of all the
following "Landlord Entities", being Landlord, Landlord's investment
manager, and the trustees, boards of directors, officers, general
partners, beneficiaries, stockholders, employees and agents of each of
them. Any option granted to Landlord shall also include or be
exercisable by Landlord's trustee, beneficiary, agents and employees, as
the case may be. The terms "Tenant" and "Landlord" or any pronoun used
in place thereof shall indicate and include the masculine or feminine,
the singular or plural number, individuals, firms or corporations, and
each of their respective successors, executors, administrators and
permitted assigns, according to the context hereof The ten-n "rentable
area" shall mean the rentable area of the Premises or the Building as
calculated by the Landlord on the basis of the plans and specifications
of the Building including a proportionate share of any common areas.
Tenant hereby accepts and agrees to be bound by the figures for the
rentable square footage of the Premises and tenants Proportionate Share
shown on the Reference Page.
31. TENANT'S AUTHORITY.
If Tenant sips as a corporation each of the persons executing this Lease
on behalf of Tenant represents and warrants that Tenant has been and is
qualified to do business in the state in which the Building is located,
that the corporation has full right and authority to enter into this
Lease, and that all persons signing on behalf of the corporation were
authorized to do so by appropriate corporate actions. If Tenant signs
as a partnership, trust or other legal entity, each of the persons
executing this Lease on behalf of Tenant represents and warrants that
Tenant has complied with all applicable laws, rules and governmental
regulations relative to its right to do business in the state and that
such entity on behalf of the Tenant was authorized to do so by any and
all appropriate partnership, trust or other actions. Tenant agrees to
furnish promptly upon request a corporate resolution, proof of due
authorization by partners, or other appropriate documentation evidencing
the due authorization of Tenant to enter into this Lease.
32. COMMISSIONS.
Each of the parties represents and warrants to the other that it has not
dealt with any broker or finder in connection
with this Lease, except as described on the Reference Page.
33. TIME AND APPLICABLE LAW.
Time is of the essence of this Lease and all of its provisions. This
Lease shall in all respects be governed by the
laws of the state in which the Building is located.
34. SUCCESSORS AND ASSIGNS.
Subject to the provisions of Article 9, the terms, covenants and
conditions contained in this Lease shall be binding upon and inure to
the benefit of the heirs, successors, executors, administrators and
assigns of the parties to this Lease.
35. ENTIRE AGREEMENT.
This Lease, together with its exhibits, contains all agreements of the
parties to this Lease and supersedes any previous negotiations. There
have been no representations made by the Landlord or understandings made
between the parties other than those set forth in this Lease and its
exhibits. This Lease may not be modified except by a written instrument
duly executed by the parties to this Lease.
36. EXAMINATION NOT OPTION.
Submission of this Lease shall not be deemed to be a reservation of the
Premises. Landlord shall not be bound by this Lease until it has
received a copy of this Lease duly executed by Tenant and has delivered
to Tenant a copy of this Lease duly executed by Landlord, and until such
delivery Landlord reserves the right to exhibit and lease the Premises
to other prospective tenants. Notwithstanding anything contained in
this Lease to the contrary, Landlord may withhold delivery of possession
of the Premises from Tenant until such time as Tenant has paid to
Landlord any security deposit required by Article 5, the first month's
rent as set forth in Article 3 and any sum owed pursuant to this Lease.
37. RECORDATION.
Tenant shall not record or register this Lease or a short form
memorandum hereof without the prior written
consent of Landlord, and then shall pay all charges and taxes incident
such recording or registration.
38. AUTHORIZATION OF FINANCIAL INFORMATION.
Tenant authorizes Landlord to order a consumer credit report and to
verify other credit information, including past and present loans,
extensions of credit and landlord references. This authorization
includes the reverification of any of the information that the Landlord
shall be originally authorized to obtain and verify and such information
may be obtained and verified by Landlord's agents and/or affiliates and
any investors and/or assigns. Except in any circumstance where Tenant
is in default hereunder (in which case there shall be no limitation on
the frequency in which Landlord may request financial statements from
Tenant), Landlord shall not request, and Tenant shall not be obligated
to provide tenants financial statements more than once every six (6)
months. Landlord agrees to use reasonable efforts to keep information
contained in such financial statements to the extent the same are not
public information in confidence (except as otherwise required by
applicable law), and to use such information only for purposes related
to this Lease or the financing, refinancing or sale of all or any
portion of the Project. Furthermore, Tenant's obligation with respect
to financial statements shall be limited to Tenants financial statements
existing as of the time of the request.
39. TENANRS PROPORTIONATE SHARE.
Tenant's Proportionate Share is defined as the percentage obtained by
dividing the number of square feet in the Leased Premises by the total
number of leasable square feet at property. In the event that the
number of square feet in either the Leased Premises or the entire
property is modified, Tenant's Proportionate Share shall thereafter be
adjusted accordingly.
40. SCHEDULE OF RENTS.
Lease Year
1 2 3 4 5
Total Rent ($/Month) 40,409.04 42,218.40 44,027.76 45,837.12 47,646.48
41. LIMITATION OF LANDLORD'S LIABILITY.
Redress for any claim against Landlord under this Lease shall be limited
to and enforceable only against and to the extent of Landlord's interest
in the Building. The obligations of Landlord under this Lease are not
intended to and shall not be personally binding on, nor shall any resort
be had to the private properties of, any of its trustees or board of
directors and officers, as the case may be, its investment manager, the
general partners thereof, or any beneficiaries, stockholders, employees,
or agents of Landlord or the investment manager.
42. LEGAL EXPENSES.
If either party brings an action or proceeding to enforce the terms
hereof or declare rights hereunder, the "Prevailing Party" (as
hereinafter defined) in any such action or proceeding, or appeal
thereon, shall be entitled to recover its reasonable attorneys' fees and
other related expenses (including, without imitation, paralegal fees,
court filing and process fees, and investigative fees and charges).
Such fees may be awarded in the same suit or recovered in a separate
suit, whether or not such action or proceeding is pursued to decision or
judgment. The term "Prevailing Party" shall mean a party who
substantially obtains or defeats the relief sought as the case may be,
whether by compromise, settlement, judgment or the abandonment by the
other party of its claim or defense.
LANDLORD: TENANT:
CALWEST INDUSTRIAL PROPERTIES, LLC, HMT Technology
Corporation
a California limited liability company
By: RREEF AMERICA, L.L.C., By: a Delaware limited
liability I company Title:
By:
Its Manager
By: Stephen King
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By:
Title:
@ @ @ 2 4
Title: Vice President, Asset Management Dated:
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Dated: k
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Initials
EXHIBIT "A"
attached to and made a part of the Lease bearing the Lease Reference
Date of April 22, 1999 between CALWEST INDUSTRIAL PROPERTIES, LLC, a
California limited liability company, as Landlord and HMT TECHNOLOGY
CORPORATION, as Tenant, for the Premises commonly known as Mission
Industrial Park.
PREMISES
Exhibit A is intended only to show the general layout of the Premises as
of the beginning of the Term of this Lease. It does not in any way
supersede any of Landlord's rights set forth in Section 17.2 with
respect to arrangements and/or locations of public parts of the Building
and changes in such arrangements and/or locations. It is not to scale;
any measurements or distances shown should be taken as approximate.
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EXHIBIT "B"
attached to and Made a Part of the Lease Bearing the Lease Reference
Date of April 22, 1999 between CALWEST FNDUSTRIAL PROPERTIES, LLC, a
California limited liability company, as Landlord and HMT TECHNOLOGY
CORPORATION, as Tenant, for the Premises commonly known as Mission
Industrial Park.
INITIAL ALTERATIONS
Between the date this Lease is executed by Landlord and Tenant and May
31, 2000, Tenant, at Tenant's sole cost and expense, shall make such
initial tenant improvements in the Premises as Tenant deems necessary or
advisable, subject to Landlord's prior written approval of such
improvements, which approval shall not be unreasonably withheld. Tenant
shall prepare and submit to Landlord for Landlord's approval plans and
specifications for the initial tenant improvements, which approval shall
not be unreasonably withheld. All initial tenant improvements shall be
made in accordance with, and comply and otherwise be subject to, the
provisions of the Lease (except Section 6. 1) and shall in all respects
comply with all laws related thereto.
As an inducement to Tenant to make the initial tenant improvements,
Landlord shall provide to Tenant, in accordance with this paragraph, a
tenant improvement allowance in the amount of up to $45,234 to reimburse
Tenant for the costs of the initial tenant improvements. Provided
Tenant is not in default under this Lease, the tenant improvement
allowance (or so much thereof as may have been utilized by Tenant
between the date this Lease is executed by Landlord and Tenant and May
31, 2000 as evidenced by bills marked paid for the initial tenant
improvements submitted to Landlord) shall be paid by Landlord to Tenant
within thirty (30) days after the date Tenant provides to Landlord final
mechanics' lien waivers for all contractors, subcontractors and material
suppliers who have established lien rights and bills marked paid for all
of Tenant's initial tenant improvements in the Premises; provided,
however, Landlord shall have no obligation to provide Tenant any amount
of the tenant improvement allowance that has not been disbursed to
Tenant pursuant to the preceding by June 30, 2000.
EXHIBIT "C"
attached to and made a part of the lease bearing the lease reference
date of April 22, 1999, by and between CALWEST INDUSTRLKL PROPERTIES,
LLC, a California limited liability company, as Landlord, and HMT
TECHNOLOGY CORPORATION, as Tenant, for the Premises commonly known as
Mission Industrial Park.
RULES AND REGULATIONS
I . No sign, placard, picture, advertisement, name or notice shall be
installed or displayed on any part of the . outside or inside of the
Building without the prior written consent of the Landlord, which
consent shall not be unreasonably withheld. Landlord shall have the
right to remove, at Tenant's expense and without notice, any sign
installed or displayed in violation of this rule. All approved signs or
lettering on doors and walls shall be printed, painted, affixed or
inscribed at the expense of Tenant by a person or vendor chosen by
Landlord. In addition, Landlord reserves the right to change from time
to time the format of the signs or lettering and to require previously
approved signs or lettering to be appropriately altered.
2. If Landlord objects in writing to any curtains, blinds, shades or
screens attached to or hung in or used in connection with any window or
door of the Premises, Tenant shall immediately discontinue such use. No
awning shall be permitted on any part of the Premises. Tenant shall not
place anything or allow anything to be placed against or near any glass
partitions or doors or windows which may appear unsightly, in the
opinion of Landlord, from outside the Premises.
3. No birds, fish or animals shall be brought into or kept in or
about the Building.
4. Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, elevators, escalators or stairways of the Building. The
halls, passages, exits, entrances, elevators and stairways are not for
the general public, and Landlord shall in all cases retain the right to
control and prevent access thereto of all persons whose presence in the
judgment of Landlord would be prejudicial to the safety, character,
reputation and interests of the Building and its tenants provided that
nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of
its business, unless such persons are engaged in illegal activities. No
tenant and no employee or invitee or any tenant shall go upon the roof
of the Building.
5. Tenant shall have the right to use in common with other tenants or
occupants of the Building the parking facilities of the Building, as
shown on Exhibit A, if any, as designated from time to time by Landlord.
Tenant shall not at any time park or permit the parking of Tenant's
vehicles, or the vehicles of others, adjacent to loading areas or so as
to interfere in any way with the use of such areas. Tenant shall not
park or permit to be parked any inoperative vehicles or equipment on any
portion of the parking or loading areas. Tenant agrees not to
overburden the parking facilities and agrees to cooperate with Landlord
and other tenants in the use of parking facilities. Landlord reserves
the right in its absolute discretion to determine whether parking
facilities are becoming crowded and, in such event, to allocate and
assign parking spaces among Tenant and other tenants.
6. Tenant shall not place a load upon any floor which exceeds the
load per square foot which such floor was
designed to carry and which is allowed by law. Landlord shall have the
right to reasonably prescribe the weight,
size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects
shall, stand on such platforms as determined by Landlord to be necessary
to properly distribute the weight. Business machines and mechanical
equipment belonging to Tenant which cause noise or vibration that may be
transmitted to the structure of the Building or to any space therein to
such a degree as to be reasonably objectionable to Landlord or to any
tenants shall be placed and maintained by Tenant, at Tenant's expense,
on vibration eliminators or other devices sufficient to eliminate noise
or vibration. The persons employed to move such equipment in or out of
the Building must be reasonably acceptable to Landlord. Landlord will
not be responsible for loss of, or damage to, any such equipment or
other property from any cause, and all damage
to the Building by maintaining or moving such equipment or other
property shall be repaired at the expense of
Tenant.
7. Tenant shall close and lock the doors of its Premises and entirely
shut off all water faucets or other water apparatus and electricity, gas
or air outlets before Tenant and its employees leave the Premises.
Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for
noncompliance with this rule.
8. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, no foreign substance of any kind whatsoever shall be thrown
therein, and the expense of any breakage, stoppage or damage resulting
from the violation of this rule shall be borne by the Tenant who, or
whose employees or invitees, shall have caused it.
9. Except as approved by Landlord, Tenant shall not install any radio
or television antenna, loudspeaker or other device on the roof or
exterior walls of the Building. Tenant shall not interfere with radio
or television broadcasting or reception from or in the Building or
elsewhere.
10. Except as approved by Landlord or otherwise permitted under the
Lease, Tenant shall not mark, drive
nails, screw or drill into the partitions, woodwork or plaster or in
any way deface the Premises. Tenant shall not
cut or bore holes for wires. Tenant shall not affix any floor covering
to the floor of the Premises in any manner
except as approved by Landlord. Tenant shall repair any damage
resulting from noncompliance with this rule.
II. Tenant shall store all its trash and garbage within its Premises.
Tenant shall not place into any tech box or receptacle any material
which cannot be disposed of in the ordinary and customary manner of
trash and garbage disposal. All garbage and refuse disposal shall be
made in accordance with directions issued from time to time by Landlord.
12. No cooking shall be done or permitted by any Tenant on the
Premises, except that use by the Tenant of Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar
beverages shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state and city laws, codes,
ordinances, rules and regulations.
13. Tenant shall not use the name of the Building in connection with
or in promoting or advertising the
business of Tenant except as Tenant's address.
14. The requirements of Tenant will be attended to only upon
appropriate application to the office of the Building by an authorized
individual. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special
instructions from Landlord, and no employee of Landlord will admit any
person (Tenant or otherwise) to any space without specific instructions
from Landlord.
15. Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or tenants, but no such waiver
by Landlord shall be construed as a waiver of such Rules and Regulations
in favor or any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all
of the tenants of the Building.
16. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or
amend, in whole or in part, the terms, covenants, agreements and
conditions of any lease of premises in the
Building.
17. Landlord reserves the right to make such other and reasonable
rules and regulations as in its judgement
may from time to time be needed for safety and security, for care and
cleanliness of the Building and for the
preservation of good order therein. Tenant agrees to abide by all such
rules and regulations here in above stated
And any additional rules and regulations which are adopted.
18. Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant's employees, agents,
clients, customers, invitees and guests.