EXHIBIT 10.8
LEASE AGREEMENT
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1. Parties. This lease is made by and between PM-DE
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_______________________ , a California General Partnership , ("Landlord") , and
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Nanometrics Incorporated , a California corporation ("Tenant") .
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2. Premises. Landlord hereby leases to Tenant and Tenant hereby leases
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from Landlord, upon the terms and conditions herein after set forth, those
certain premises (the "Premises") situated in the City of Sunnyvale , County of
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Santa Clara, State of California, described as follows: approximately Thirty
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Four Thousand Six Hundred Ninety Seven (34,697 )square feet of floor space
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commonly known as 310 DeGuigne Avenue, Sunnyvale, CA, located in the building
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(the "Building"), as shown cross-hatched on the site plan (the "Site Plan")
attached hereto as Exhibit "A". The Building is located on a larger parcel (the
"Parcel" containing other buildings (the "Buildings") as shown on the Site Plan,
which Parcel is described in Exhibit "B" attached hereto. In the event Landlord
subdivides the Parcel in the future into two (2) or more legal parcels, the term
"Parcel" shall thereafter refer to the legal parcel on which the Premises are
located. Landlord shall not be required to make any alterations, additions or
improvements to the Premises and the Premises shall be leased to Tenant in an
"as-is" condition.
3. Term. The term of this Lease ("Lease Term") shall be for Five (5)
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years, commencing on May 1, , 1992 (the "Commencement Date") and ending on
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April 30, , 1997 unless sooner terminated pursuant to any provision hereof.
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Notwithstanding said scheduled Commencement Date, if for any reason Landlord
cannot deliver possession of the Premises to Tenant on said date, Landlord shall
not be subject to any liability therefor, nor shall such failure affect the
validity of this Lease or the obligations of Tenant hereunder, but in such case
Tenant shall not be obligated to pay rent until possession of the Premises is
tendered to Tenant and the commencement and termination dates of this lease
shall be revised to conform to the date of landlord's delivery of possession.
In the event Landlord shall permit Tenant to occupy the Premises prior to the
Commencement Date, such occupancy shall be subject to all the provisions of this
Lease, including the obligation to pay the Monthly Installment of rent, and
Common Area Charges.
4. Rent.
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A. Time of Payment. Tenant shall pay to Landlord as rent for the
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Premises the sum specified in Paragraph 4.B below (the "Monthly Installment")
each month in advance on the first day of each calendar month, without deduction
or offset, prior notice or demand, commencing on the Commencement Date and
continuing through the term of this Lease, together with such additional rents
as are payable by Tenant to Landlord under the terms of this Lease. The
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Monthly Installment for any period during the Lease Term which period is less
than one (1) full month shall be a prorata portion of the Monthly Installment
based upon a thirty (30) day month.
B. Monthly Installment. The Monthly Installment of rent payable
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each month during the period from May 1 , 19 92 through and including April
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30 , 1997, shall be the sum of Twenty Nine Thousand Four Hundred Ninety Two &
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45/100 Dollars $29,492.45 ) per month.
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C. Late Charge. Tenant acknowledges that late payment by Tenant to
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Landlord of rent and other sums due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Landlord by the
terms of any mortgage or deed of trust covering the Premises. Accordingly, if
any installment of rent or any other sum due from Tenant shall not be received
by Landlord within ten (10) days after such amount shall be due, Tenant to
Landlord as additional rent, a late charge equal to Three percent (3%) of such
overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant.
D. Additional Rent. All taxes, insurance premiums, Common Area
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Charges, late charges, costs and expenses which Tenant is required to pay
hereunder, together with all interest and penalties that may accrue thereon in
the event of Tenant's failure to pay such amounts, shall be deemed to be
additional rent ("Additional Rent") and shall be paid in addition to the Monthly
Installment of rent, and, in the event of nonpayment by Tenant, Landlord shall
have all of the rights and remedies with respect thereto as Landlord has for the
nonpayment of the Monthly Installment of rent.
E. Place of Payment Rent shall be payable in lawful money of the
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United States of America to Landlord at 511 Division Street, Campbell CA 99008
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- ------------ or to such other person(s) or at such other place(s) as Landlord
may designate in writing.
F. Advance Payment. Concurrently with the execution of this Lease,
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Tenant shall pay to Landlord the sum of Twenty Nine Thousand Four Hundred Ninety
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Two & 45/100 Dollars ($29,492.45 ) to be applied to the Monthly Installment of
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rent first accruing under this Lease.
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5. Security Deposit. Tenant shall deposit the sum of Twenty Nine
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Thousand Four Hundred Ninety-Two & 45/100 Dollars ($29,492.45 ) (the
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"Security Deposit") upon execution of this Lease, to secure the faithful
performance by Tenant of each term, covenant and condition of this Lease. If
Tenant shall at any time fail to make any payment or fail to keep or perform any
term, covenant or condition on its part to be made or performed or kept under
this, Lease, Landlord may, but shall not be obligated to and without waiving or
releasing Tenant from any obligation under this Lease, use, apply or retain the
whole or any part of the Security Deposit (A) to the extent of any sum due to
Landlord; (B) to make any required payment on Tenant's behalf; In such event,
Tenant shall, within five (5) days of written demand by Landlord, remit to
Landlord sufficient funds to restore the Security Deposit to its original sum.
No interest shall accrue on the Security Deposit. Landlord shall not be required
to keep the Security Deposit separate from its general funds. Should Tenant
comply with all the terms, covenants, and conditions of this Lease and at the
end of the term of this Lease leave the Premises in the condition required by
this Lease, then said Security Deposit, less any sums owing to Landlord, shall
be returned to Tenant within thirty (30) days after the termination of this
Lease and vacancy of the Premises by Tenant.
6. Use of Premises. Tenant shall use the Premises only in conformance
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with applicable governmental laws, regulations, rules and ordinances for the
purpose of Office, R&D, Mfg and warehousing
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and for no other purpose. Tenant shall indemnify, protect, defend , and hold
Landlord harmless against any loss, expense, damage, attorneys' fees or
liability arising out of the failure of Tenant to comply with any applicable
law. Tenant shall not commit or suffer to be committed, any waste upon the
Premises, or any nuisance, or other acts or things which may disturb the quiet
enjoyment of any other tenant in the buildings adjacent to the Premises, or
allow any sale by auction upon the Premises, or allow the Premises to be used
for any unlawful purpose, or place any loads upon the floor, walls or ceiling
which endanger the structure, or place any harmful liquids in the drainage
system of the Building. No waste materials or refuse shall be dumped upon or
permitted to remain upon any part of the Premises outside of the Building
proper, except in trash containers placed inside exterior enclosures designated
for that purpose by Landlord. No materials, supplies, equipment, finished
products or semifinished products, raw materials or articles of any nature shall
be stored upon or permitted to remain on any portion of the Premises outside of
the Building proper. Tenant shall strictly comply with the provisions of
Paragraph 39 below.
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7. Taxes and Assessments.
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A. Tenant's Property. Tenant shall pay before delinquency any and
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all taxes and assessments, license fees and public charges levied, assessed or
imposed upon or against Tenant's fixtures, equipment, furnishings, furniture,
appliances and personal property installed or located on or within the Premises.
Tenant shall cause said fixtures, equipment, furnishings, furniture, appliances
and personal property to be assessed and billed separately from the real
property of Landlord. If any of Tenant's said personal property shall be
assessed with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written statement
from Landlord setting forth the taxes applicable to Tenant's property.
B. Property Taxes. Tenant shall pay, as additional rent, its Pro
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Rata Share (as defined below) of all Property Taxes levied or assessed with
respect to the land comprising the Parcel and with respect to all buildings and
improvements located on the Parcel which become due or accrue during the term of
this Lease. Tenant shall pay such Property Taxes to Landlord within twenty (20)
days after receipt of billing. Provided that Landlord bills Tenant at least
thirty (30) days prior to the delinquency date of such Property Taxes, Tenant
shall pay such Property Taxes to Landlord at least ten (10) days prior to the
delinquency date, and if Tenant fails to do so, Tenant shall reimburse Landlord,
on demand, for all interest, late fees and penalties that the taxing authority
charges Landlord. In the event Landlord's mortgagee requires an impound for
Property Taxes, then on the first day of each month during the Lease Term,
Tenant shall pay Landlord one twelfth (1/12) of its annual share of such
Property Taxes. Tenant's liability hereunder shall be prorated to reflect the
Commencement and termination dates of this Lease.
As used in this Lease, the term "Tenant's Pro Rata Share" shall mean a
fraction, expressed as a percentage, the numerator of which is the number of
square feet of floor space contained in the Premises and the denominator of
which is the number of square feet of floor space contained in all of the
Buildings located on the Parcel (which square footage Landlord warrants is equal
to 93,385). As of the Commencement Date, Tenant's Pro Rata Share is Thirty Seven
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point one five percent (37.15 %).
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For the purpose of this Lease, "Property Taxes" means and includes all
taxes, assessments (including, but not limited to, assessments for public
improvements or benefits), taxes based on vehicles utilizing parking areas,
taxes based or measured by the rent paid, payable or received under this Lease,
taxes on the value, use, or occupancy of the Premises, the Buildings and/or the
Parcel, Environmental Surcharges, and all other governmental
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impositions and charges of every kind and nature whatsoever, whether or not
customary or within the contemplation of the parties hereto and regardless of
whether the same shall be extraordinary or ordinary, general or special,
unforeseen or foreseen, or similar or dissimilar to any of the foregoing which,
at any time during the Lease Term, shall be applicable to the Premises, the
Buildings and/or the Parcel or assessed, levied or imposed upon the Premises,
the Buildings and/or the Parcel, or become due and payable and a lien or charge
upon the Premises, the Buildings and/or the Parcel, or any part thereof, under
or by virtue of any present or future laws, statutes, ordinances, regulations or
other requirements of any governmental authority whatsoever. The term
"Environmental Surcharges" shall mean and include any and all expenses, taxes,
charges or penalties imposed by the Federal Department of Energy, the Federal
Environmental Protection Agency, the Federal Clean Air Act, or any regulations
promulgated thereunder or any other local, state or federal governmental agency
or entity now or hereafter vested with the power to impose taxes, assessments,
or other types of surcharges as a means of controlling or abating environmental
pollution or the use of energy provided, however, that Environmental Surcharges
shall include only those assessments that are applicable to property generally
and not those related to the cleanup or remediation of Hazardous Materials on
the Parcel which were not introduced onto the Parcel by Tenant. The term
"Property Taxes" shall not include any federal, state or local net income,
estate, or inheritance tax imposed on Landlord.
C. Other Taxes: Tenant shall, as additional rent, pay or reimburse
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Landlord for any tax based upon, allocable to, or measured by the area of the
Premises or the Buildings or the Parcel; or by the rent paid, payable or
received under this Lease; any tax upon or with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy of the Premises or any portion thereof; any privilege tax, excise tax,
business and occupation tax, gross receipts tax, sales and/or use tax, water
tax, sewer tax, employee tax, occupational license tax imposed upon Landlord or
Tenant with respect to the Premises; any tax upon this transaction or any
document to which Tenant is a party creating or transferring an interest or an
estate in the Premises.
8. Insurance.
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A. Indemnity. Tenant agrees to indemnify, protect and defend
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Landlord against and hold Landlord harmless from any and all claims, causes of
action, judgments, obligations or liabilities, and all reasonable expenses
incurred in investigating or resisting the same (including reasonable attorneys'
fees), on account of, or arising out of, the operation, maintenance, use or
occupancy of the Premises and all areas appurtenant thereto by Tenant, except
that this indemnity shall not apply to any such claims, etc. arising out of the
negligence or willful misconduct of Landlord. This Lease is made on the express
understanding that Landlord shall not be liable for, or suffer loss by reason
of, injury to person or property, from what ever cause (except for active
negligence or willful misconduct of Landlord), which in any way may be connected
with the operation, use or occupancy of the Premises specifically including,
without limitation, any liability for injury to the person or property of
Tenant, its agents, officers, employees, licensees and invitees.
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B. Liability Insurance. Tenant shall, at Tenant's expense, obtain
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and keep in force during the term of this Lease a policy of comprehensive public
liability insurance insuring Landlord and Tenant against claims and liabilities
arising out of the operation, use, or occupancy of the Premises and all areas
appurtenant thereto, including parking areas. Such insurance shall be in an
amount of not less than Three Million Dollars ($3,000,000.00) for bodily injury
or death as a result of any one occurrence and Five Hundred Thousand Dollars
($500,000.00) for damage to property as a result of any one occurrence. The
insurance shall be with companies approved by Landlord, which approval Landlord
agrees not to withhold unreasonably. Tenant shall deliver to Landlord, prior to
possession, and at least thirty (30) days prior to the expiration thereof, a
certificate of insurance evidencing the existence of the policy required
hereunder and such certificate shall certify that the policy (1) names Land lord
as an additional insured, (2) shall not be canceled or altered without thirty
(30) days prior written notice to Landlord, (3) insures performance of the
indemnity set forth in Paragraph 8.A above, (4) the coverage is primary and any
coverage by Landlord is in excess thereto and (5) contains a cross-liability
endorsement. Landlord may maintain a policy or policies of comprehensive
general liability insurance insuring Landlord (and such others as are reasonably
designated by Landlord), against liability for personal injury, bodily injury,
death and damage to property occurring or resulting from an occurrence in, on or
about the Premises or the Common Area, with such limits of coverage as Landlord
may from time to time determine are reasonably necessary for its protection that
is usual and customary. The cost of any such liability insurance maintained by
Landlord shall be a Common Area Charge and Tenant shall pay, as additional rent,
Pro Rata Share of such cost to Landlord as provided in Paragraph 12 below.
C. Property Insurance. Landlord shall obtain and keep in force
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during the term of this Lease a policy or policies of insurance covering loss or
damage to the Premises and the Buildings, in the amount of the full replacement
value thereof, providing protection against those perils included within the
classification of "all risk" insurance, plus a policy of rental income insurance
in the amount of one hundred percent (100%) of twelve (12) months rent
(including, without limitation, sums payable as Additional Rent), plus, at
Landlord's option, flood insurance and earthquake insurance, and any other
coverages which may be required from time to time by Landlord's mortgagee.
Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord on the Premises. Tenant shall, within thirty (30) days
after receipt of billing, pay to Landlord as additional rent Tenant's Pro Rata
Share of the full cost of such insurance procured and maintained by Landlord.
Tenant acknowledges that such insurance procured by Landlord shall contain a
deductible which reduces Tenant's cost for such insurance and, in the event of
loss or damage, Tenant shall be required to pay to Landlord the amount of such
deductible.
D. Tenant's Insurance; Release of Landlord. Tenant
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acknowledges that the insurance to be maintained by Landlord on the Premises
pursuant to Subparagraph C above will not insure any of Tenant's property.
Accordingly, Tenant, at Tenant's own expense, shall maintain in full force and
effect on all of its fixtures, equipment, leasehold improvements and personal
property in the Premises, a policy of "All Risk" coverage insurance to the
extent of at least ninety percent (90%) of their insurable value. Tenant hereby
releases Landlord, and its partners, officers, agents, employees, and servants,
from any and all claims, demands, losses, expenses or injuries to the Premises
or to the furnishings, in, about, or upon the Premises, which are caused by
perils, events or happenings where the same are covered by the insurance
required by this Lease or which are the subject of insurance carried by Tenant
and in force at the time of such loss.
9. Utilities. Tenant shall pay for all water, gas, light, heat, power,
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electricity, telephone, trash pick-up, sewer charges and all other services
supplied to or consumed on the Premises, and all taxes and surcharges thereon.
In addition, the cost of any utility service supplied to the Common Area or not
separately metered to the Premises shall be a Common Area Charge and Tenant
shall pay its Pro Rata share of such costs to Landlord as provided in Paragraph
12 below.
10. Repairs and Maintenance
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A. Landlord's Repairs. Subject to provisions of Paragraph 16,
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Landlord shall keep the structural elements and exterior walls of the Building
in good order, condition and repair. Landlord shall not, however, be required
to maintain, repair or replace the interior surface of exterior walls, nor shall
Landlord be required to maintain, repair or replace windows, door, skylights or
plate glass. Landlord shall have no obligation to make repairs under this
subparagraph until a reasonable time after receipt of written notice from Tenant
of the need for such repairs. Tenant shall reimburse Landlord, as additional
rent, within Thirty (30) days after receipt of billing, for the cost of such
repairs and maintenance which are the obligation of Landlord hereunder, provided
however, that Tenant shall not be required to reimburse Landlord for the cost of
maintenance and repairs of the structural elements of the Building unless such
maintenance or repair is required because of the negligence or willful
misconduct of Tenant or its employees, The term "Structural Elements" of the
Building" shall mean and be limited to the foundation, footings, floor slab (but
not flooring) , structural walls, and roof structure (but not roofing or roof
membrane).
b. Tenant's Repairs. Except as expressly provided in Subparagraph A
above, Tenant shall, at its sole cost, keep and maintain the entire Premises and
every part thereof, including without limitation, the windows, window frames,
plate glass, glazing, skylights, roofing and roof membrane truck doors, doors
and all door hardware, the
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walls and partitions, and the electrical, plumbing, lighting, heating,
ventilating and air conditioning systems and equipment in good order, condition
and repair. The term "repair" shall include replacements, restorations and/or
renewals when necessary as well as painting. Tenant's obligation shall extend to
all alterations, additions and improvements to the Premises, and all fixtures
and appurtenances therein and thereto. Tenant shall, at all times during the
Lease Term, have in effect a service contract for the maintenance of the
heating, ventilating and air conditioning ("HVAC") equipment with an HVAC repair
and maintenance contractor approved by Landlord. The HVAC service contract shall
provide for periodic inspection and servicing at least once every three (3)
months during the term hereof, and Tenant shall provide Landlord with a copy of
such contract and all periodic service reports.
Should Tenant fail to commence to make repairs required of Tenant hereunder
forthwith upon thirty (30) days notice from Landlord or should Tenant fail
thereafter to diligently complete the repairs, Landlord, addition to all other
remedies available hereunder or by law and without waiving any alternative
remedies, may make the same, and that event, Tenant shall reimburse Landlord as
additional rent the cost of such maintenance or repairs within Thirty (30) days
written demand by Landlord.
Landlord shall have no maintenance or repair obligations whatsoever with
respect to the Premises except as expressly provided in Paragraphs 10.A and 11.
Tenant hereby expressly waives the provisions of Subsection 1 of Section 1932
and Sections 1941 and 1942 of the Civil Code of California and all rights to
make repairs at the expense of Landlord as provided in Section 1942 of said
Civil Code. There shall be no allowance to Tenant for diminution of rental
value, and no liability on the part of Landlord by reason of inconvenience,
annoyance or injury to business arising from the making of, or the failure to
make, any repairs, alterations, decorations, additions or improvements in or to
any portion of the Premises or the Building or Common Area (or any of the areas
used in connection with the operation thereof, or in or to any fixtures,
appurtenances or equipment), or by reason of the negligence of Tenant or any
other tenant or occupant of the Parcel. In no event shall Landlord be
responsible for any consequential damages arising or alleged to have arisen from
any of the foregoing matters. Tenant hereby agrees that Landlord shall not be
liable for injury to Tenant's business or any loss of income therefrom or for
damage to the goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitees, customers, or any other person in or about the Premises,
the Building, or the Common Area, nor shall Landlord be liable for injury to the
person of Tenant, Tenant's employees, agents or contractors whether such damage
or injury is caused by or results from fire, steam , electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires., appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause other than the negligence or willful misconduct of
Landlord or a breach of Landlord's obligations hereunder, whether the said
damage or injury results from conditions arising upon the Premises or upon other
portions of
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the Building, or from other sources or places and regardless of whether the
cause of such damage or injury or the means of repairing the same is
inaccessible to Tenant. Landlord shall not be liable for any damages arising
from any act or neglect of any other tenant, if any, of the Building or the
Parcel.
11. Common Area. Subject to the terms and conditions of this Lease and
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such rules and regulations as Landlord may from time to time prescribe, Tenant
and Tenant's employees, invitees and customers shall, in common with other
occupants of the Parcel, and their respective employees, invitees and customers,
and others entitled to the use thereof, have the non-exclusive right to use the
access roads, parking areas and facilities provided and designated by Landlord
for the general use and convenience of the occupants of the Parcel, which areas
and facilities are referred to herein as "Common Area." This right shall
terminate upon the termination of this Lease. Landlord reserves the right from
time to time to make changes in the shape, size, location, amount and extent of
the Common Area. Landlord further reserves the right to promulgate such
reasonable rules and regulations relating to the use of the Common Area, and any
part or parts thereof, as Landlord may deem appropriate for the best interest of
the occupants of the Parcel. The rules and regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant, and Tenant shall abide by them
and cooperate in their observance. Such rules and regulations may be amended by
Landlord from time to time, with or without advance notice, and all amendments
shall be effective upon delivery of a copy of them to Tenant. Tenant shall have
the non-exclusive use of no more than One Hundred Eighteen (118) of the parking
spaces in the Common Area as designated from time to time by Landlord. Tenant
shall not at any time park or permit the parking of Tenant's trucks or other
vehicles, or the trucks or other vehicles of others, adjacent to loading areas
so as to interfere in any way with the use of such areas, nor shall Tenant at
any time park or permit the parking of Tenant's vehicles or trucks, or the
vehicles or trucks of Tenant's suppliers or others, in any portion of the Common
Area not designated by Landlord for such use by Tenant. Tenant shall not
abandon any inoperative vehicles or equipment on any portion of the Common Area.
Tenant shall make no alterations, improvements or additions to the Common Area
notwithstanding the above, Landlord understands and agrees to work with Tenant
to enable Tenant to provide an outside covered area for a smoking area for its
employees.
Landlord shall operate, manage, insure, maintain and repair the Common Area
in good order, condition and repair. The manner in which the Common Area shall
be maintained and the expenditures for such maintenance shall be at the
reasonable discretion of Landlord. The cost of such repair, maintenance,
operation, insurance and management, including without limitation, maintenance
and repair of landscaping, irrigation systems, paving, sidewalks, fences, and
lighting, shall be a Common Area Charge and Tenant shall pay to Landlord its pro
rata share of such costs as provided in Paragraph 12 below.
12. Common Area Charges. Tenant shall pay to Landlord, as additional
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rent, upon demand but not more often than once each calendar month, an amount
equal to its Pro Rata Share of the Common
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Area Charges as defined in Paragraphs 8.B, 9, 11 and 13 of this Lease. Tenant
acknowledges and agrees that the Common Area Charges shall include an additional
Three percent (3%) of the actual expenditures in order to compensate Landlord
for accounting management and processing services.
13. Alterations. Tenant shall not make, or suffer to be made, any
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alterations, improvements or additions over $10,000 in, on, about Premises or
any part thereof, without the prior written consent of Landlord and without a
valid building permit issued by the appropriate governmental authority. As a
condition to giving such consent, Landlord may require at the time consent is
given that Tenant agree to remove any such alterations, improvements or
additions at the termination of this Lease, and to restore the Premises to their
prior condition. Unless Landlord requires that Tenant remove any such
alteration, improvement or addition, any alteration, addition or improvement to
the Premises, except movable furniture and trade fixtures not affixed to the
Premises, shall become the property of Landlord upon termination of the Lease
and shall remain upon and be surrendered with the Premises at the termination of
this Lease. Without limiting the generality of the foregoing, all heating,
lighting, electrical (including all wiring, conduit, outlets, drops, buss ducts,
main and subpanels, air conditioning, partitioning, drapery, and carpet
installations made by Tenant regardless of how affixed to the Premises, together
with all other additions, alterations and improvements that have become an
integral part of the Building, shall be and become the property of the Landlord
upon termination of the Lease, and shall not be deemed trade fixtures, and shall
remain upon and be surrendered with the Premises at the termination of this
Lease.
If, during the term hereof, any alteration, addition or change of any sort
to all or any portion of the Premises is required by law, regulation, ordinance
or order of any public agency, Tenant shall promptly make the same at its sole
cost and expense. If during the term hereof, any alteration, addition, or
change to the Common Area is required by law, regulation, ordinance or order of
any public agency, Landlord shall make the same and the cost of such alteration,
addition or change shall be a Common Area Charge and Tenant shall pay its share
of said cost to Landlord as provided in Paragraph 12 above.
14. Acceptance of the Premises. By entry and taking possession of the
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Premises pursuant to this Lease, Tenant accepts the Premises as being in good
and sanitary order, condition and repair and accepts the Premises in their
condition existing as of the date of such entry, and Tenant further accepts the
tenant improvements to be constructed by Landlord, if any, as being completed in
accordance with the plans and specifications for such improvements. except for
punch list items list to be provided within two weeks after early occupancy and
work to be completed prior to lease commencement or as soon thereafter that is
reasonably possible. Tenant acknowledges that neither the Landlord nor
Landlord's agents has made any representation or warranty as to the suitability
of the Premises to the conduct of Tenant's business. Any agreements, warranties
or representations not expressly contained herein shall in no way bind
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either Landlord or Tenant, and Landlord and Tenant expressly waive all claims
for damages by reason of any statement, representation, warranty, promise or
agreement, if any, not contained in this Lease. This Lease constitutes the
entire understanding between the parties hereto and no addition to, or
modification of, any term or provision of this Lease shall be effective until
set forth in a writing signed by both Landlord and Tenant.
15. Default.
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A. Events of Default. A breach of this Lease shall exist if any of
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the following events (hereinafter referred to as "Event of Default") shall
occur:
(1) Default in the payment when due of any installment of rent or
other payment required to be made by Tenant hereunder, where such default shall
not have been cured within five (5) days after written notice of such default is
given to Tenant;
(2) Tenant's failure to perform any other term, covenant or
condition contained in this Lease where such failure shall have continued for
twenty (20) days after written notice of such failure is given to Tenant;
(3) Tenant's vacating or abandonment of the Premises;
(4) Tenant's assignment of its assets for the benefit of its
creditors; except for financing personal property or equipment.
(5) The sequestration of, attachment of, or execution on, any
substantial part of the property of Tenant or on any property essential to the
conduct of Tenant's business, shall have occurred and Tenant shall have failed
to obtain a return or release of such property within thirty (30) days
thereafter, or prior to sale pursuant to such sequestration, attachment or levy,
whichever is earlier;
(6) Tenant or any guarantor of Tenant's obligations hereunder
shall commence any case, proceeding or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts under any law relating to bankruptcy, insolvency, reorganization or relief
of debtors, or seek appointment of a receiver, trustee, custodian, or other
similar official for it or for all or any substantial part of its property;
(7) Tenant or any such guarantor shall take any corporate action
to authorize any of the actions set forth in Clause 6 above; or
(8) Any case, proceeding or other action against Tenant or any
guarantor of Tenant's obligations hereunder shall be
11
commenced seeking to have an order for relief entered against it as debtor, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property, and such case, proceeding or other action
(add) results in the entry of an order for relief against it which is not fully
stayed within seven (7) business days after the entry thereof or (ii) remains
undismissed for a period of forty-five (45) days.
B. Remedies. Upon any Event of Default, Landlord shall have the
--------
following remedies, in addition to all other rights and remedies provided by
law, to which Landlord may resort cumulatively, or in the alternative:
(1) Recovery of Rent. Landlord shall be entitled to keep this
----------------
Lease in full force and effect (whether or not Tenant shall have abandoned the
Premises) and to enforce all of its rights and remedies under this Lease,
including the right to recover rent and other sums as they become due , plus
interest at the Permitted Rate (as defined in Paragraph 33 below) from the due
date of each installment of rent or other sum until paid.
(2) Termination. Landlord may terminate this Lease by giving
-----------
Tenant written notice of termination. On the giving of the notice all of
Tenant's rights in the Premises and the Building and Parcel shall terminate.
Upon the giving of the notice of termination, Tenant shall surrender and vacate
the Premises in the condition required by Paragraph 34, and Landlord may re-
enter and take possession of the Premises and all the remaining improvements or
property and eject Tenant or any of Tenant's subtenants, assignees or other
person or persons claiming any right under or through Tenant or eject some and
not others or eject none. This Lease may also be terminated by a judgment
specifically providing for termination. Any termination under this paragraph
shall not release Tenant from the payment of any sum then due Landlord or from
any claim for damages or rent previously accrued or then accruing against
Tenant. In no event shall any one or more of the following actions by Landlord
constitute a termination of this Lease:
(a) maintenance and preservation of the Premises;
(b) efforts to relet the Premises;
(c) appointment of a receiver in order to protect Landlord's
interest hereunder;
(d) consent to any subletting of the Premises or assignment
of this Lease by Tenant, whether pursuant to provisions hereof concerning
subletting and assignment or
12
otherwise; or
(e) any other action by Landlord or Landlord's agents
intended to mitigate the adverse effects from any breach of this Lease by
Tenant.
(3) Damages. In the event this Lease is terminated pursuant to
-------
subparagraph 15.B.2 above, or otherwise, Landlord shall be entitled to damages
in the following sums:
(a) the worth at the time of award of the unpaid rent which
has been earned at the time of termination; plus
(b) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus
(c) the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; and
(d) any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom including, without limitation, the following: (i) expenses for
cleaning, repairing or restoring the premises; (iii) real estate broker's fees,
advertising costs; (iv) costs of carrying the premises such as taxes and
insurance premiums thereon, utilities and security precautions; (v) expenses in
retaking possession of the premises; (vi) attorneys' fees and court costs; and
(vii) any unamortized real estate brokerage commission paid in connection with
this Lease.
(e) The "worth at the time of award" of the amounts referred
to in subparagraphs (a) and (b) of this paragraph, is computed by allowing
interest at the permitted Rate. The "worth at the time of award of the amounts
referred to in subparagraph (c) of this Paragraph is computed by discounting
such amount at the discount rate of the Federal Reserve Board of San Francisco
at the time of award plus one percent (1%). The term "rent" as used in this
paragraph shall include all sums required to be paid by Tenant to Landlord
pursuant to the terms of this Lease.
16. Destruction. In the event that any portion of the premises are
-----------
destroyed or damaged by an uninsured peril, Landlord
13
or Tenant may, upon written notice to the other, given within thirty (30) days
after the occurrence of such damage or destruction, elect to terminate this
Lease; provided, however, that either party may, within thirty (30) days after
receipt of such notice, elect to make any required repairs and/or restoration at
such party's sole cost and expense, in which event this lease shall remain in
full force and effect, and the party having made such election to restore or
repair shall thereafter diligently proceed with such repairs and/or restoration.
In the event the Premises are damaged or destroyed from any insured peril
to the extent of fifty percent (50%) or more of the then replacement cost of the
Premises, Landlord may, upon written notice to Tenant, given within Twenty (20)
days after the occurrence of such damage or destruction, elect to terminate this
lease. If Landlord does not give such notice in writing within such period,
Landlord shall be deemed to have elected to rebuild or restore the Premises, in
which event Landlord shall, at its expense, promptly rebuild or restore the
Premises to their condition prior to the damage or destruction and Tenant shall
pay to Landlord upon commencement of reconstruction the amount of any deductible
from the insurance policy applicable to the Premises.
In the event the Premises are damaged or destroyed from any insured peril
to the extent of less than fifty percent (50%) of the then replacement cost of
the Premises, Landlord shall, at Landlord's expense, promptly rebuild or restore
the Premises to their condition prior to the damage or destruction and Tenant
shall pay to Landlord upon commencement of reconstruction the amount of any
deductible from the insurance policy.
In the event that, pursuant to the foregoing provisions, Landlord is to
rebuild or restore the Premises, Landlord shall, within Twenty (20) days after
the occurrence of such damage or destruction, provide Tenant with written notice
of the time required for such repair or restoration. If such period is longer
than One Hundred Twenty (120) days from the issuance of a building permit,
Tenant may, within thirty (30) days after receipt of Landlord's notice, elect to
terminate the lease by giving written notice to Landlord of such election,
whereupon the lease shall immediately terminate. The period of time for
Landlord to complete the repair or restoration shall be extended for delays
caused by the fault or neglect of Tenant or because of acts of God, labor
disputes, strikes, fires, freight embargoes rainy or stormy weather, inability
to obtain materials, supplies or fuels. Landlord's obligation to repair or
restore the Premises shall not include restoration of Tenant's trade fixtures,
equipment, merchandise, or any improvements, alterations or additions made by
Tenant to the Premises.
Unless this Lease is terminated pursuant to the foregoing
14
provisions, this Lease shall remain in full force and effect; provided, however,
that during any period of repairs or restoration, rent and all other amounts to
be paid by Tenant on account of the Premises and this Lease shall be abated in
proportion to the area of the Premises rendered not reasonably suitable for the
conduct of Tenant's business thereon. Tenant hereby expressly waives the
provisions of Section 1932, Subdivision 2 and Section 1933, Subdivision 4 of the
California Civil Code.
17. Condemnation.
------------
A. Definition of Terms. For the purposes of this Lease, the term (1)
-------------------
"Taking" means a taking of the Premises or damage to the Premises related to the
exercise of the power of eminent domain and includes a voluntary conveyance, in
lieu of court proceedings, to any agency, authority, public utility, person or
corporate entity empowered to condemn property; (2) "Total Taking" means the
taking of the entire Premises or so much of the Premises as to prevent or
substantially impair the use thereof by Tenant for the uses herein specified;
provided, however, in no event shall a Taking of less than ten percent (10%) of
the Premises be deemed a Total Taking unless such 10% Taking is such that it is
not reasonably possible for Tenant to access and use the remainder of the
Premises for its intended purpose. (3) "Partial Taking" means the taking of only
a portion of the Premises which does not constitute a Total Taking; (4) "Date of
Taking" means the date upon which the title to the Premises, or a portion
thereof, passes to and vests in the condemnor or the effective date of any order
for possession if issued prior to the date title vests in the condemnor; and (5)
"Award" means the amount of any award made, consideration paid, or damages
ordered as a result of a Taking.
B. Rights. The parties agree that in the event of a Taking all
------
rights between them or in and to an Award shall be as set forth herein and
Tenant shall have no right to any Award except as set forth herein.
C. Total Taking. In the event of a Total Taking during the term
------------
hereof (1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the Premises shall cease and terminate as of the Date of
Taking; (2) Landlord shall refund to Tenant any prepaid rent; (3) Tenant shall
pay Landlord any rent or charges due Landlord under the lease, each prorated as
of the Date of Taking; (4) Tenant shall receive from Landlord those portions of
the Award attributable to trade fixtures of Tenant and for moving expenses of
Tenant; and (5) the remainder of the Award shall be paid to and be the property
of Landlord.
D. Partial Taking. In the event of a Partial Taking during the term
--------------
hereof (1) the rights of Tenant under the lease and the leasehold estate of
Tenant in and to the portion of the Premises taken shall cease and terminate as
of the Date of Taking; (2) from and after the Date of Taking the Monthly
Installment of rent shall be an amount equal to the product obtained by
multiplying the Monthly Installment of rent immediately prior to the Taking by a
fraction, the numerator of which is the number of
15
square feet contained in the Premises after the Taking and the denominator of
which is the number of square feet contained in the Premises prior to the
Taking; (3) Tenant shall receive from the Award the portions of the Award
attributable to trade fixtures of Tenant; and (4) the remainder of the Award
shall be paid to and be the property of Landlord.
18. Mechanics' Lien. Tenant shall (A) pay for all labor and services
---------------
performed for, materials used by or furnished to, Tenant or any contractor
employed by Tenant with respect to the Premises; (B) indemnify, defend, protect
and hold Landlord and the Premises harmless and free from any liens, claims,
liabilities, demands, encumbrances, or judgments created or suffered by reason
of any labor or services performed for, materials used by or furnished to,
Tenant or any contractor employed by Tenant with respect to the Premises; (C)
give notice to Landlord in writing five (5) days prior to employing any laborer
or contractor to perform services related to, or receiving materials for use
upon the Premises; and (D) permit Landlord to post a notice of nonresponsibility
in accordance with the statutory requirements of California Civil Code Section
3094 or any amendment thereof. In the event Tenant is required to post an
improvement bond with a public agency in connection with the above, Tenant
agrees to include Landlord as an additional obligee.
19. Inspection of the Premises. Tenant shall permit Landlord and its
--------------------------
agents to enter the Premises at any reasonable time with 24 hours notice and to
occur during normal business hours for the purpose of inspecting the same,
performing Landlord's maintenance and repair responsibilities, posting a notice
of non-responsibility for alterations, additions or repairs and at any time
within Thirty (30) days prior to expiration of this lease, to place upon the
Premises, ordinary "For lease" or "For Sale" signs.
20. Compliance with Laws. Tenant shall, at its own cost, comply with all
--------------------
of the requirements of all municipal, county, state and federal authorities now
in force, or which nay hereafter be in force, pertaining to Tenant's use and
occupancy of the Premises, and shall faithfully observe all municipal, county,
state and federal law, statutes or ordinances now in force or which may
hereafter be in force. The judgment of any court of competent jurisdiction or
the admission of Tenant in any action or proceeding against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such ordinance
or statute in the use and occupancy of the Premises shall be conclusive of the
fact that such violation by Tenant has occurred.
21. Subordination. The following provisions shall govern the relationship
-------------
of this Lease to any underlying lease, mortgage or deed of trust which now or
hereafter affects the Premises, the Building and/or the Parcel, or Landlord's
interest or estate therein (the "Project") and any renewal, modification,
consolidation, replacement, or extension thereof (a "Security Instrument").
16
A. Priority. This Lease is subject and subordinate to all Security
--------
Instruments existing as of the Commencement Date. However, if any lender so
requires, this Lease shall become prior and superior to any such Security
Instrument.
B. Subsequent Security Instruments. At Landlord's election, this
-------------------------------
lease shall become subject and subordinate to any Security Instrument created
after the Commencement Date. Notwithstanding such subordination, Tenant's right
to quiet possession of the Premises shall not be disturbed so long as Tenant is
not in default and performs all of its obligations under this lease, unless this
Lease is otherwise terminated pursuant to its terms.
C. Documents. Tenant shall execute any document or instrument
---------
required by Landlord or any Lender to make this Lease either prior or
subordinate to a Security Instrument, which may include such other matters as
the Lender customarily requires in connection with such agreements, including
provisions that the lender not be liable for (1) the return of the Security
Deposit unless the lender receives it from Landlord, and (2) any defaults on the
part of Landlord occurring prior to the time that the Lender takes possession of
the Project in connection with the enforcement of its Security Instrument.
Tenant's failure to execute any such document or instrument as is usual and
customary within ten (10) days after written demand therefor shall constitute a
default by Tenant.
D. Tenant's Attornment. Tenant shall attorn (1) to any purchaser
-------------------
of the Premises at any foreclosure sale or private sale conducted pursuant to
any Security Instrument encumbering the Project; (2) to any grantee or
transferee designated in any deed given in lieu of foreclosure; or (3) to the
lessor under any underlying ground lease should such ground lease be terminated.
E. lender. The term "Lender" shall mean (1) any beneficiary,
------
mortgagee, secured party, or other holder of any deed of trust, mortgage, or
other written security device or agreement affecting the Project; and (2) any
lessor under any underlying lease under which Landlord holds its interest in the
Project.
22. Holding Over. This Lease shall terminate without further notice at
------------
the expiration of the Lease Term. Any holding over by Tenant after expiration
shall not constitute a renewal or extension or give Tenant any rights in or to
the Premises except as expressly provided in this Lease. Any holding over after
the expiration with the consent of Landlord shall be construed to be a tenancy
from month to month, at one hundred twenty five (125%) percent of the monthly
rent for the last month of the Lease Term, and shall otherwise be on the terms
and conditions herein specified insofar as applicable.
17
23. Notices. Any notice required or desired to be given under this lease
-------
shall be in writing with copies directed as indicated below and shall be
personally served or given by mail. Any notice given by mail shall be deemed to
have been given when five (5) business days have elapsed from the time such
notice was deposited in the United States mails, certified and postage prepaid,
addressed to the party to be served with a copy as indicated herein at the last
address given by that party to the other party under the provisions of this
Paragraph. At the date of execution of this Lease, the address of Landlord is:
South Bay Construction & Development Co.
-----------------------------------
511 Division Street
-------------------
Campbell CA 95008
-----------------
and the address of Tenant is:
Nanometrics
-----------
310 DeGuigne Avenue
-------------------
Sunnyvale CA 94089
------------------
24. Attorneys' Fees. In the event either party shall bring any action or
---------------
legal proceeding for damages for any alleged breach of any provision of this
Lease, to recover rent or possession of the Premises, to terminate this lease,
or to enforce, protect or establish any term or covenant of this lease or right
or remedy of either party, the prevailing party shall be entitled to recover as
a part of such action or proceeding, reasonable attorneys' fees and court costs,
including attorneys' fees and costs for appeal, as nay be fixed by the court or
jury. The term "prevailing party" shall mean the party who received
substantially the relief requested, whether by settlement, dismissal, summary
judgment, judgment, or otherwise.
25. Nonassignment.
-------------
A. Landlord's Consent Required. Tenant's interest in this lease
---------------------------
is not assignable, by operation of law or otherwise, nor shall Tenant have the
right to sublet the Premises, transfer any interest of Tenant therein or permit
any use of the Premises by another party, without the prior written consent of
Landlord to such assignment, subletting, transfer or use, which consent Land
lord agrees not to withhold unreasonably subject to the provisions of
Subparagraph B below. A consent to one assignment, subletting, occupancy or use
by another party shall not be deemed to be a consent to any subsequent
assignment, subletting, occupancy or use by another party. Any assignment or
subletting without such consent shall be void and shall, at the option of
Landlord, terminate this lease.
Landlord's waiver or consent to any assignment or subletting
18
hereunder shall not relieve Tenant from any obligation under this Lease unless
the consent shall so provide.
B. Transferee Information Required. If Tenant desires to assign its
-------------------------------
interest in this Lease or sublet the Premises, or transfer any interest of
Tenant therein, or permit the use of the Premises by another party (hereinafter
collectively referred to as a "Transfer"), Tenant shall give Landlord at least
thirty (30) days prior written notice of the proposed Transfer and of the terms
of such proposed Transfer, including, but not limited to, the name and legal
composition of the proposed transferee, a financial statement of the proposed
transferee, the nature of the proposed transferee's business to be carried on in
the Premises, the payment to be made or other consideration to be given to
Tenant on account of the Transfer, and such other pertinent information as may
be requested by Landlord, all in sufficient detail to enable Landlord to
evaluate the proposed Transfer and the prospective transferee. It is the intent
of the parties hereto that this Lease shall confer upon Tenant only the right to
use and occupy the Premises, and to exercise such other rights as are conferred
upon Tenant by this Lease. The parties agree that this Lease is not intended to
have a bonus value nor to serve as a vehicle whereby Tenant may profit by a
future Transfer of this Lease or the right to use or occupy the Premises as a
result of any favorable terms contained herein, or future changes in the market
for leased space. It is the intent of the parties that any such bonus value
that may attach to this Lease shall be and remain the exclusive property of
Landlord. Accordingly, in the event Tenant seeks to Transfer its interest in
this Lease or the Premises, Landlord shall have the following options, which may
be exercised at its sole choice without limiting Landlord in the exercise of any
other right or remedy which Landlord may have by reason of such proposed
Transfer:
(1) Landlord may elect to terminate this Lease effective as of
the proposed effective date of the proposed Transfer and release Tenant from any
further liability hereunder accruing after such termination date by giving
Tenant written notice of such termination within twenty (20) days after receipt
by Landlord of Tenant's notice of intent to transfer as provided above. If
Landlord makes such election to terminate this Lease, Tenant may withdraw its
request to Transfer, in which case this Lease shall continue in full force and
effect, or Tenant shall surrender the Premises, in accordance with Paragraph 34,
on or before the effective termination date; or
(2) Landlord may consent to the proposed Transfer on the
condition that Tenant agrees to pay to Landlord, as additional rent, any and all
rents or other consideration (including key money) received by Tenant from the
transferee by reason of such Transfer in excess of the rent payable by Tenant to
Landlord under this Lease (less any brokerage commissions or advertising
expenses incurred by Tenant in connection with the Transfer). Tenant expressly
agrees that the foregoing is a reasonable condition for obtaining Landlord's
consent to any Transfer; or
(3) Landlord may reasonably withhold its consent to
19
the proposed transfer.
26. Successors. The covenants and agreements contained in this Lease
----------
shall be binding on the parties hereto and on their respective heirs, successors
and assigns (to the extent the Lease is assignable).
27. Mortgagee Protection. In the event of any default on the part of
--------------------
Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage encumbering the
Premises, whose address shall have been furnished to Tenant, and shall offer
such beneficiary or mortgagee a reasonable opportunity to cure the default,
including time to obtain possession of the Premises by power of sale or judicial
foreclosure, if such should prove necessary to effect a
cure.
28. Landlord Loan or Sale. Tenant agrees within ten (10) days
---------------------
following request by Landlord to (A) execute and deliver to Landlord any
documents, including estoppel certificates presented to Tenant by Landlord, (i)
certifying that this Lease is unmodified and in full force and effect and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, and (iii) evidencing the status of the Lease as
may be required either by a lender making a loan to Landlord to be secured by a
deed of trust or mortgage covering the Premises or a purchaser of the Premises
from Landlord and (B) to deliver to Landlord the financial statement of Tenant
with an opinion of a certified public accountant, including a balance sheet and
profit and loss statement, for the last completed fiscal year all prepared in
accordance with generally accepted accounting principles consistently applied.
Tenant's failure to deliver an estoppel certificate within the time period
described above shall be an Event of Default under this Lease.
29. Surrender of Lease Not Merger. The voluntary or other
-----------------------------
surrender of this Lease by Tenant, or a mutual cancellation thereof, shall not
work a merger and shall, at the option of Landlord, terminate all or any
existing subleases or subtenants, or operate as an assignment to Landlord of any
or all such subleases or subtenants.
30. Waiver. The waiver by Landlord or Tenant of any breach of any
------
term, covenant or condition herein contained shall not be deemed to be a waiver
of such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained.
31. General.
-------
A. Captions. The captions and paragraph headings used in this
--------
Lease are for the purposes of convenience only. They shall not be construed to
limit or extend the meaning of any part of this
20
Lease, or be used to interpret specific sections. The word(s) enclosed in
quotation marks shall be construed as defined terms for purposes of this Lease.
As used in this Lease, the masculine, feminine and neuter and the singular or
plural number shall each be deemed to include the other whenever the context so
requires.
B. Definition of Landlord. The term LANDLORD as used in this
----------------------
Lease, so far as the covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner at the time in
question of the fee title of the Premises, and in the event of any transfer or
transfers of the title of such fee, the Landlord herein named (and in case of
any subsequent transfers or conveyances, the then grantor) shall after the date
of such transfer or conveyance be automatically freed and relieved of all
liability with respect to performance of any covenants or obligations on the
part of Landlord contained in this Lease, thereafter to be performed; provided
that any funds in the hands of Landlord or the then grantor at the tine of such
transfer, in which Tenant has an interest, shall be turned over to the grantee
and provided further that the grantee agrees in writing to perform the
obligations of Landlord hereunder. It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject as
aforesaid, be binding upon each Landlord, its heirs, personal representatives,
successors and assigns only during its respective period of ownership.
C. Time of Essence. Time is of the essence for the
---------------
performance of each tern, covenant and condition of this Lease.
D. Severability. In case any one or more of the provisions
------------
contained herein, except for the payment of rent, shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Lease, but this ease shall be construed as if such invalid, illegal or
unenforceable provision had not been contained herein. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
E. Joint and Several Liability. If Tenant is more than one
---------------------------
person or entity, each such person or entity shall be jointly and severally
liable for the obligations of Tenant hereunder.
F. Law. The term "law" shall mean any judicial decision,
---
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirement of any government agency or authority having
jurisdiction over the parties to this Lease or the Premises or both, in effect
at the Commencement Date of this Lease or any time during the Lease Term,
including, without limitation, any regulation, order, or policy of any quasi-
official entity or body (e.g., board of fire examiners, public utility or
special district).
32. Sign. Tenant shall not place or permit to be placed any sign or
----
decoration on the land or the exterior of the Building without the prior written
consent of Landlord. Tenant, upon written notice by Landlord, shall immediately
remove any sign or
21
decoration that Tenant has placed or permitted to be placed on the land or the
exterior of the Building without the prior written consent of Landlord, and if
Tenant fails to so remove such sign or decoration within five (5) days after
Landlord's written notice, Landlord may enter upon the Premises and remove said
sign or decoration and Tenant agrees to pay Landlord, as additional rent upon
demand, the cost of such removal. At the termination of this Lease, Tenant shall
remove any sign which it has placed on the Parcel or Building and shall repair
any damage caused by the installation or removal of such sign.
33. Interest on Past Due Obligations. Any Monthly Installment of
--------------------------------
rent or any other sum due from Tenant under this Lease which is receive Landlord
after the date the same is due shall bear interest from Thirty days after said
due date until paid, at an annual rate equal to the lesser of (the "Permitted
Rate"): (1) twelve percent (12%); or (2) five percent (5%) plus the rate
established by the Federal Reserve Bank of San Francisco, as of the twenty-fifth
(25th) day of the month immediately preceding the due date, on advances to
member banks under Sections 13 and 13(a) of the Federal Reserve Act, as now in
effect or hereafter from time to time amended. Payment of such interest shall
not excuse or cure any default by Tenant. In addition, Tenant shall pay all
costs and attorneys' fees incurred by Landlord in collection of such amounts.
34. Surrender of the Premises. On the last day of the term hereof,
-------------------------
or on the sooner termination of this Lease, Tenant shall surrender the Premises
to Landlord in their condition existing as of the Commencement Date of this
Lease, ordinary wear and tear excepted, with all originally painted interior
walls washed, and other interior walls cleaned, and repaired or replaced, all
carpets shampooed and cleaned, the air conditioning and heating equipment
serviced and repaired by a reputable and licensed service firm, all floors
cleaned and waxed, all to the reasonable satisfaction of Landlord. Tenant shall
remove all of Tenant's personal property and trade fixtures from the Premises,
and all property not so removed shall be deemed abandoned by Tenant. Tenant, at
its sole cost, shall repair any damage to the Premises caused by the removal of
Tenant's personal property, machinery and equipment, which repair shall include,
without limitation, the patching and filling of holes and repair of structural
damage. If the Premises are not so surrendered at the termination of this Lease,
Tenant shall indemnify, defend, protect and hold Landlord harmless from and
against loss or liability resulting from delay by Tenant in so surrendering the
Premises including without limitation, any claims made by any succeeding tenant
or losses to Landlord due to lost opportunities to lease to succeeding tenants.
35. Authority. The undersigned parties hereby warrant that they have
---------
proper authority and are empowered to execute this Lease on behalf of Landlord
and Tenant, respectively.
36. C. C. & R.'s. This Lease is made subject to all matters of
------------
public record affecting title to the property of which the
22
Premises are a part. Tenant shall abide by and comply with all private
conditions, covenants and restrictions of public record now or hereafter
affecting the Premises and any amendment thereof, including, but not limited to,
the following:
None
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
______________________________________________________________________________.
All assessments and charges which are imposed, levied or assessed
against the Parcel and Buildings pursuant to the above-described covenants,
conditions and restrictions shall be a Common Area Charge and Tenant shall pay
its share of such assessments and charges to Landlord as provided in Paragraph
12 above.
37. Brokers. Tenant represents and warrants to Landlord that it has
-------
not dealt with any broker respecting this transaction and hereby agrees to
indemnify and hold Landlord harmless from and against any brokerage commission
or fee, obligation, claim or damage (including attorneys' fees) paid or incurred
respecting any broker claiming through Tenant or with which/whom Tenant has
dealt except Dave Marley of Wayne Mascia.
38. Limitation on Landlord's Liability. Tenant, for itself and its
----------------------------------
successors and assigns (to the extent this Lease is assignable), hereby agrees
that in the event of any actual, or alleged, breach or default by Landlord under
this Lease that:
(A) Tenant's sole and exclusive remedy against Landlord shall be
as against Landlord's interest in the Building and the parcel;
(B) No partner of Landlord shall be sued or named in a party in
a suit or action (except as may be necessary to secure jurisdiction of the
partnership);
(C) No service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the partnership);
(D) No partner of Landlord shall be required to answer or
otherwise plead to any service of process;
(E) No judgment will be taken against any partner of Landlord;
(F) Any judgment taken against any partner of Landlord may be
vacated and set aside at any time nunc pro tunc;
(G) No writ of execution will ever be levied against the assets
of any partner of Landlord;
(H) The covenants and agreements of Tenant set forth in this
Section 38 shall be enforceable by Landlord and any partner of
23
Landlord.
39. Hazardous Material.
------------------
A. Definitions. As used herein, the term "Hazardous Material"
-----------
shall mean any substance or material which has been determined by any state,
federal or local governmental authority to be capable of posing a risk of injury
to health, safety or property including all of those materials and substances
designated as hazardous or toxic by the Environmental Protection Agency, the
California Water Quality Control Board, the Department of Labor, the California
Department of Industrial Relations, the Department of Transportation, the
Department of Agriculture, the Consumer Product Safety Commission, the
Department of Health and Human Services, the Food and Drug Agency or any other
governmental agency now or hereafter authorized to regulate materials and
substances in the environment. Without limiting the generality of the foregoing,
the term "Hazardous Material" shall include all of those materials and
substances defined as "Toxic Materials" in Sections 66680 through 66685 of Title
22 of the California Code of Regulations, Division 4, Chapter 30, as the same
shall be amended from time to time.
B. Use Restriction. Subject to the terms and conditions set
---------------
forth herein, Landlord acknowledges that so long as Nanometrics, Inc. is the
----------------
tenant under this Lease, Tenant shall be permitted to use and store in the
Premises those materials described in Paragraph G below, in the quantities set
forth in said Paragraph. Except as specifically allowed in this Lease, Tenant
shall not cause or permit any Hazardous Material to be used, stored, generated,
discharged, transported to or from, or disposed of in or about the Premises, or
any other land or improvements in the vicinity of the Premises. The appearance
of any Hazardous Material that is not permitted by this Lease in or about the
Premises shall be deemed an Event of Default under Paragraph 15 above. Without
limiting the generality of the foregoing, Tenant, at its sole cost, shall comply
with all laws relating to the storage, use, generation, transport, discharge and
disposal of Hazardous Materials. If the presence of Hazardous Materials on the
Premises caused or permitted by Tenant results in contamination of the Premises
or any soil, air, ground or surface waters under, through, over, on, in or about
the Premises, Tenant, at its expense, shall promptly take all actions necessary
to return the Premises and/or the surrounding real and personal property to the
condition existing prior to the appearance of such Hazardous Material.
Tenant shall defend, protect, hold harmless and indemnify Landlord and
its agents and employees with respect to all actions, claims, losses, fines,
penalties, fees, costs, damages and liabilities (including but not limited to
attorneys' and consultants' fees) arising out of or in connection with any
Hazardous Material used, generated, discharged, transported to or from, stored,
or disposed of in, on, under, over, through or about
24
the Premises and/or the surrounding real and personal property Tenant shall not
suffer any lien to be recorded against the Premises as a consequence of a
Hazardous Material, including any so called state, federal or local "super fund"
lien related to the "clean up" of a Hazardous Material in, over, on, under,
through, or about the Premises.
C. Compliance. Tenant shall immediately notify Landlord of any
----------
inquiry, test, investigation, enforcement proceeding by or against Tenant or the
Premises concerning a Hazardous Material. Tenant acknowledges that Landlord, as
the owner of the Property, at its election, shall have the sole right, at
Tenant's expense, to negotiate, defend, approve and appeal any action taken or
order issued with regard to any Hazardous Material(s) by any applicable
governmental authority. Landlord shall have the right to appoint a consultant,
at Tenant's expense, to conduct an investigation to determine whether Hazardous
Materials are being used, generated, discharged, transported to or from, stored
or disposed of in, on, over, through, or about the Premises, in an appropriate
and lawful manner. Tenant, at its expense, shall comply with all
recommendations of the consultant.
D. Assignment and Subletting. It shall not be unreason able
-------------------------
for Landlord to withhold its consent to any proposed assignment or subletting if
(1) the proposed assignee's or subtenant's anticipated use of the Premises
involves the storage, generation, discharge, transport, use or disposal of any
Hazardous Material; (2) if the proposed assignee or subtenant has been required
by any prior landlord, lender or governmental authority to "clean up" or
remediate any Hazardous Material; (3) if the proposed assignee or subtenant is
subject to investigation or enforcement order or proceeding by any governmental
authority in connection with the use, generation, discharge, transport, disposal
or storage of any Hazardous Material.
E. Surrender. Upon the expiration or earlier termination of
---------
the Lease, Tenant, at its sole cost, shall remove all Hazardous Materials from
the Premises and the surrounding real and personal property which were brought
on the Premises or the property by Tenant. If Tenant fails to so surrender the
Premises, Tenant shall indemnify, protect, defend and hold Landlord harmless
from and against all damages resulting from Tenant's failure to surrender the
Premises as required by this Paragraph, including, without limitation, any
actions, claims, losses, liabilities, fees (including but not limited to
attorneys' and consultants' fees), fines, costs, penalties, or damages in
connection with the condition of the Premises including, without limitation,
damages occasioned by the inability to relet the Premises or a reduction in the
fair market and/or rental value of the Premises by reason of the existence of
introduction by Tenant of Hazardous Materials in, on, over, under, through or
around the
25
Premises.
F. Holding Over. If any action off any kind is required to be
------------
taken by any governmental authority to clean-up, remove, remediate or monitor
Hazardous Materials from the Premises which were introduced onto the Premises by
Tenant and such action is not completed prior to the expiration or earlier
termination of the Lease, Tenant shall be deemed to have impermissibly held over
until such time as such required action is completed, and Landlord shall be
entitled to all damages directly or indirectly incurred in connection with such
holding over, including without limitation, damages occasioned by the inability
to re-let the Premises or a reduction of the fair market and/or rental value of
the Premises.
G. Materials. Check none if applicable: ___________
---------
Materials Quantity
--------- --------
LIST TO BE PROVIDED PRIOR TO OCCUPANCY.
------------------------------------------
____________________ _________________
____________________ _________________
H. Provision Survive Termination. The provisions off this
-----------------------------
Paragraph 39 shall survive the expiration or termination of this Lease.
I. The provisions of this Paragraph 39 are intended to govern
the rights and liabilities of the Landlord and Tenant hereunder respecting
Hazardous Materials to the exclusion of any other provisions in this Lease that
right otherwise be deemed applicable. The provisions of this Paragraph 39 shall
be controlling with respect to any provisions in this Lease that are
inconsistent with this Paragraph 39.
40. Landlord at its sole cost and expense shall perform additional hazardous
materials testing on the Parcel to establish a "Hazardous Materials Baseline"
prior to Tenant Occupancy. Tenant shall receive a copy of such report and an
opportunity to review it prior to Tenant's occupancy.
41. Landlord warrants that as of the Commencement Date of this Lease all
mechanical, plumbing and electrical units will be in proper working order and
that the roof shall be water tight.
26
42. Option to Extend
----------------
a. Provided that Lessee has not committed an uncured Event of Default
under this Lease at the time of exercise of this Option, Lessee shall have
one (1) option to extend the term of this Lease (the "Option") for a period
of five (5) years. Said Option shall be exercised only by written notice
delivered to Lessor no later than one hundred eighty (180) days prior to
the expiration date of the then existing term of this Lease. In all
respects, the terms, covenants and conditions of this Lease shall remain
unchanged during the Option Term, except that the Monthly Installment of
rent payable during the Option Term, shall be increased in accordance with
the provisions of subparagraph 42b below, and except that there shall be no
further Option to extend the term of this Lease at the end of the Option
term.
b. The Monthly Installment of rent payable during each Option Term shall
be ninety five percent (95%) of the Fair Market Rental for the Premises as
of the first day of the Option Term. In no event shall the rental paid
during the Option Term be less than the preio months rent.
c. Determination of Fair Market Rental. Promptly following the exercise of
the Option, the parties shall meet and endeavor to agree upon the Fair
Market Rental of the Premises as of the first day of the Option Term. In
determining the Fair Market Rental for the Premises, the Premises shall be
compared only to buildings of a similar quality and size and with similar
improvements and amenities in the Sunnyvale area shall be considered. Any
alterations made at the expense of Tenant shall not be considered in
determining the Fair Market Rental for the Premises. If, within fifteen
(15) days after exercise of the Option, the parties cannot agree upon the
Fair Market Rental for the Premises as of the first day of the Option Term,
the parties shall submit the matter to binding appraisal in accordance with
the following procedures.
d. Appraisal. Within thirty (30) days after exercise of the Option, the
parties shall either (a) jointly appoint an appraiser for this purpose or
(b) failing this joint action, separately designate a disinterested
appraiser. No person shall be appointed or designated an appraiser unless
they have at least five (5) years experience in appraising major commercial
properties in the Sunnyvale area and is a member of a recognized society of
real estate appraisers. If, within thirty (30) days after their
appointment, the two appraisers reach agreement on the Fair Market Rental
for the Premises as of the first day of the Option Term in question, that
value shall be binding and conclusive upon the parties. If the two
appraisers thus appointed cannot reach agreement on the question presented
thirty (30) days after their appointment, then the appraisers thus
appointed shall appoint a third disinterested appraiser having like
qualifications. If within thirty (30) days after the appointment of the
third appraiser, a majority of the appraisers agree on the Fair Market
Rental of the Premises as of the first day of the Option Term, that value
shall be binding and conclusive upon the parties. If within thirty (30)
days after the appointment of the third appraiser a majority of the
appraisers cannot reach agreement on the question presented, then the three
appraisers shall submit their independent appraisal to the parties, and the
appraisal farthest from the median of the three appraisals shall be
disregarded and the mean average of the remaining two appraisals shall be
deemed to be the Fair Market Rental of the Premises as of the first day of
the Option Term and shall be binding and conclusive upon the parties. Each
party shall pay the fees and expenses of the appraiser appointed by it and
shall share equally the fees and expenses of the third appraiser. If the
two appraisers appointed by the parties cannot agree on tile appointment of
the third appraiser, they or either of them shall give notice of such
failure to agree to the parties and if the parties fail to agree upon the
selection of such third appraiser within ten (10) days after the appraisers
appointed by the parties give such notice, then either of the parties, upon
notice to the other party, may request such appointment by the American
Arbitration Association , or on its failure, refusal or inability to act,
may apply for such appointment to the presiding judge of the Superior Court
of the Santa Clara County, State of California.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates
set forth below.
TENANT: Nanometrics, Incorporated
_______________________________________,
a California corporation
--------------------------
Dated: 2/25/92 By: /s/ Vincent J. Coates
---------- ------------------------------------
Name: Vincent J. Coates
----------------------------------
Title: Chairman & CEO
---------------------------------
LANDLORD: PM-DE
_______________________________________,
a California general partnership
--------------------------
Dated: 3/5/92 By: /s/ W. Leslie Pelio
---------- ------------------------------------
Name: W. Leslie Pelio
----------------------------------
Title: General Partner
-------------------------------
Dated: 3/5/92 By: /s/ James D. Mair
---------- ------------------------------------
Name: James D. Mair
----------------------------------
Title: General Partner
-------------------------------
27
EXHIBIT "A"
[MAP APPEARS HERE]
EXHIBIT "A"
W.LESLIE PELIO & ASSOCIATES SOUTH BAY
================================================================================
SOUTH BAY CONSTRUCTION & DEVELOPMENT COMPANY
For Information Contact:
Jim Mair (408) 379-0400
Les Pelio (408) 379-4000
Exhibit B
Improvements
Landlord shall construct certain interior improvements (the "Improvements") in
the Premises prior to the commencement of the term of this Lease in accordance
with the Approved Plans to be developed as provided in Paragraph 1 below,
subject to the following terms and conditions:
1. Tenant shall take delivery of Premises in an "as-is" condition excepting
for any and all touch-up and clean-up of Premises. Landlord at its sole cost
and expense and prior to the Commencement Date shall remove all chemical-related
items from the premises and restore the premises to the level of cleanliness
(the base line) that existed prior to installation of those items. Landlord
shall remove any inconvenient or obstructive pipes, fittings, values or other
items related to the chemical delivery systems, and Landlord will retain
responsibility for maintenance and repair and hold Tenant harmless as to any
hazardous material liability in connection with these chemical systems that
remain. At Landlord's sole cost and expense, Nanometrics will be provided with a
clean room of class 1000 or better included in the facility at time of occupancy
and if the clean room is not class 1000 or better, then any modifications
required to make a class 1000 clean room shall be immediately performed by
Landlord at Landlord's sole cost and expense. Nanometrics shall have the right
to verify class 1000 or better compliance prior to occupancy.
TENANT LANDLORD:
Nanometrics, Incorporated PM-DE, a California
a California corporation General Partnership
By: /s/ Vincent J. Coates By:__________________________
---------------------------
Name: Vincent J. Coates Name:________________________
--------------------------
Title: CHAIRMAN & CEO Title: ______________________
-------------------------
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE (Addendum") is dated as of FEB 25, 1992,
------------
1992, and is made between PM-DE, a California general partnership ("Landlord")
and Nanometrics incorporated, a California corporation ("Tenant") to be a part
of that certain Lease, of even date herewith between Landlord and Tenant (herein
the "Lease Form"). Landlord and Tenant agree that the Lease Form is modified
and supplemented by this Addendum.
1. Acceptance of Premises: Notwithstanding anything to the contrary in the
----------------------
Lease Form, Tenant's acceptance of the Premises shall not be deemed a waiver of
Tenant's right to have defects in the Premises repaired at Landlord's sole
expense. Tenant shall give notice to Landlord whenever any such defect becomes
reasonably apparent, and Landlord shall repair such defect as soon as
practicable.
2. Compliance with Laws: Notwithstanding anything to the contrary in the
---------- ---- ----
Lease Form, Tenant shall not be required to construct or pay the cost of
complying with any laws requiring construction of improvements in the premises
which are properly capitalized under generally accepted accounting principles,
unless such compliance is necessitated solely because of Tenant's particular use
of the Premises or Tenant's construction of new improvements.
Landlord shall be responsible for the repair not regular maintenance,
however, for a period of one (1) year after commencement for all H.V.A.C.
equipment, electrical equipment and roofing and roof membrane, provided said
repair is not necessarily due to neglect or damage by Tenant.
3. Property Taxes: Notwithstanding anything to the contrary in the Lease
-------- -----
Form, in no event shall Tenant have any obligation to pay any portion of any
increases in Property Taxes resulting from a voluntary or involuntary change of
ownership of the Building or the Parcel of which the Premises are a part during
the original lease term only
4. Alterations: Notwithstanding anything to the contrary in the Lease
-----------
Form, Tenant may construct nonstructural alterations, additions and improvements
("Alterations") in the Premises without Landlord's prior approval, if the cost
of such work does not exceed Ten Thousand Dollars ($10,000). If Landlord's
consent is required for an Alteration and Landlord does not notify Tenant in
writing of its approval or disapproval within thirty (30) days following
Tenant's request for approval, then Landlord shall be deemed to have approved
the proposed Alteration. Except for Alterations which cannot be removed without
structural injury to the Premises, at any
1
time Tenant may remove the Alterations from the Premises, provided Tenant
repairs all damage caused by such removal.
5. Hazardous Materials/Landlord Indemnity: Landlord shall indemnify,
--------- ------------------ ---------
protect and hold harmless Tenant, its employees, agents and contractors, from
and against all third party claims, suits, judgments, costs, damages,
liabilities, investigations, detoxifications, removals and expenses of every
type and nature, directly or indirectly arising out of or in connection with any
Hazardous Material existing on or under the Premises as of the Commencement
Date.
6. Waiver of subrogation: Notwithstanding anything to the contrary in the
------ -- -----------
Lease Form, the parties hereto release each other and their respective agents,
employees, successors, assignees and subtenants from all liability for injury to
any person or damage to any property that is caused by or results from a risk
which is actually insured against, or which is required to be insured against
under this Lease, without regard to the negligence or willful misconduct of the
entity so released. Each party shall use its best efforts to cause each
insurance policy it obtains to provide that the insurer thereunder waives all
right of recovery by way of subrogation as required herein in connection with
any injury or damage covered by the policy. If such insurance policy cannot be
obtained with such waiver of subrogation, or if such waiver of subrogation is
only available at additional cost and the party for whose benefit the waiver is
not obtained does not pay such additional cost, the party obtaining such
insurance shall immediately notify the other party of that fact.
7. Assignment And Subletting: Notwithstanding anything to the contrary in
-------------------------
the Lease Form, Tenant may, without Landlord's prior written consent and without
any participation by Landlord in assignment and subletting proceeds, sublet the
Premises or assign the Lease to: (i) a subsidiary, affiliate, or corporation
controlled or under common control with Tenant; (ii) a successor corporation
related to Tenant by merger; or (iii) a purchaser of substantially all of
Tenant's assets. For the purpose of this Lease, sale of Tenant's capital stock
through any public ex change shall not be deemed an assignment, subletting, or
any other transfer of the Lease or the Premises. If Landlord's consent to any
proposed assignment or subletting is required and not given or withheld within
fourteen (14) days following Tenant's request for consent, such consent shall be
deemed given.
8. Subordination: Notwithstanding anything to the contrary in the Lease
-------------
Form, this Lease shall not be subject to or subordinate to any ground lease or
to any lien, mortgage, deed of trust, or security interest hereafter affecting
the Premises, nor shall Tenant be required to execute any documents
subordinating this Lease, unless the ground lessor, lender or other holder of
the interest to which
2
this Lease shall be subordinated contemporaneously executes a recognition and
nondisturbance agreement which (i) provides that this lease shall not be
terminated so long as Tenant is not in default under this Lease.
9. Effect of Addendum: Each term used herein with initial capital letters
------ --------
shall have the meaning ascribed to such term in the Lease Form unless
specifically otherwise defined herein. In the event of any inconsistency
between this First Addendum and the Lease Form, the terms of this First Addendum
shall prevail.
LANDLORD: TENANT:
PM-DE, a California NANOMETRICS CORPORATION,
general partnership a California corporation
By: /s/ JAMES D. MAIR By: /s/ VINCENT J. COATES
---------------------------- -------------------------
Title: GEN PARTNER Title: CHAIRMAN & CEO
------------------------- ----------------------
Date: 3-5-92 Date: FEB 25 1992
-------------------------- -----------------------