Exhibit 10.14
LEASE AGREEMENT
by and between
AETNA LIFE INSURANCE COMPANY,
a Connecticut corporation
as Landlord
and
HINE DESIGN, INC.,
a California corporation
as Tenant
dated August 4, 1995
LEASE AGREEMENT
BASIC LEASE INFORMATION
1.
LEASE AGREEMENT
BASIC LEASE INFORMATION
Lease Date: August 4, 1995
Landlord: AETNA LIFE INSURANCE COMPANY, a Connecticut corporation
Landlord's Address: c/o Aetna Investment Group
Kodak Cancer
1740 Technology Drive. Suite 600
San Jose, California 95110
Tenant: HINE DESIGN, INC.,
a California corporation
Tenant's Address: 241 E. Java Drive
Sunnyvale, California 94089
Building: 241 E. Java Drive
Sunnyvale, California 94089
Premises: The building indicated above, containing approximately
Forty Five Thousand One Hundred Twenty (45,120)
rentable square feet
Months of Term: Sixty (60) months
Monthly Base Rent: Months Sq. Ft. Monthly Rate Monthly Rent
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1-6 45,120 $0.50 $ 22,560.00
7-12 45,120 $0.56 $ 25,267.20
13-24 45,120 $0.69 $ 31,132.80
25-36 45,120 $0.71 $32, 035.20
37-48 45,120 $0.74 $ 33,388.80
49-60 45,120 $0.74 $ 33,388.80
Prepaid Rent: Twenty Two Thousand Five Hundred Sixty Dollars
($22,560.00)
Month To Which
Prepaid Rent Applied; First (1st) month of the Term
Security Deposit: Forty Thousand Dollars ($40,000.00)
Permitted Uses; Administrative offices, research and development, and
manufacturing facilities
Brokers: CPS Catalyst Real Estate Group
Tenant Improvements Six Hundred Fifty Two Thousand Four Hundred Dollars
Allowance: ($652,400)
Tenant Improvements Up to Two Hundred Twenty Five Thousand Six Hundred
Loan: Dollars ($225,600)
2.
Architect: ______________________________________________________
Exhibits: Exhibit A Diagram of the Premises
Exhibit B Tenant Improvements
Exhibit B-1 Final Plans and Specifications for Tenant
Improvements
Exhibit C Commencement Date Memorandum
3.
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between Landlord and
Tenant on the Lease Date. The defined terms used in this Lease which are defined
in the Basic Lease Information attached to this Lease Agreement ("Basic Lease
Information") shall have the meaning and definition given them in the Basic
Lease Information. The Basic Lease information, the exhibits, and this Lease
Agreement are and shall be construed as a single instrument and are referred to
herein as the "Lease".
1. DEMISE: in consideration for the rents and all other charges and
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payments payable by Tenant, and for the agreements, terms and conditions to be
performed by Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND
TENANT DOES HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below
(the "Premises"), upon the agreements, terms and conditions of this Lease for
the Term hereinafter stated.
2. PREMISES: The Premises demised by this Lease is the building specified
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in the Basic Lease Information. The Premises contains the square footage
specified in the Basic Lease Information. The location and dimensions of the
Premises are depicted on Exhibit A, which is attached hereto and incorporated
herein by this reference. Tenant shall have the non-exclusive right to use the
parking and other common areas on the real property on which the Premises is
situated (the ''Property''). No easement for light or air is incorporated in
the Premises.
The Premises demised by this Lease shall also include the Tenant
Improvements (as that term is defined on Exhibit B, attached hereto and
incorporated herein by this reference) to be constructed by Landlord within the
interior of the Premises. Landlord shall construct the Tenant Improvements on
the terms and conditions set forth in Exhibit B. Landlord and Tenant agree to
and shall be bound by the terms and conditions of Exhibit B.
3. TERM: The term of this Lease (the "Term") shall be for the period of
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months specified in the Basic Lease Information, commencing on the earliest to
occur of the following dates (the "Commencement Date"):
(a) The date Landlord files a Notice of Completion for the Tenant
Improvements;
(b) The date the Tenant Improvements are approved by the appropriate
governmental agency as being in accordance with its building code and the
building permit issued for such improvements, as evidenced by the issuance, of a
final building inspection approval; or
(c) The date Landlord's architect and general contractor have both
certified in writing to Tenant that the Tenant improvements have been
substantially completed in accordance with the plans and specifications
therefor; or
(d) The date Tenant commences occupancy of the Premises; provided,
however, that Tenant shall not be deemed to have commenced occupancy of the
Premises if
4.
Tenant enters upon the Premises solely for the purpose of constructing its Clean
Rooms (as hereinafter defined) in accordance with Section 7(c) below; when the
Commencement Date has been determined pursuant to the foregoing. Landlord and
Tenant shall promptly execute a Commencement Date Memorandum in the form
attached hereto as Exhibit C.
Notwithstanding anything in this Section 3 to the contrary, the
date determined pursuant to Sections 3 (a) through (c) above shall not be
earlier than. February 1, 1996.
The date on which the Term of this Lease expires shall be
referred to herein as the "Expiration Date."
4. RENT
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(a) Base Rent. Tenant shall pay to Landlord, in advance on the first
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day of each month, without further notice or demand and without offset or
deduction, the monthly installments of rent specified in the Basic Lease
Information (the "Base Rent").
Upon execution of this Lease, Tenant shall pay to Landlord the Prepaid
Rent specified in the Basic Lease Information to be applied toward Base Rent for
the month of the Term specified in the Basic Lease Information.
(b) Additional Rent. This Lease is intended to be a net Lease; and
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subject to Paragraph 12(c) below, the Rent owing hereunder is to be paid by
Tenant absolutely net of all costs and expenses relating to Landlord's ownership
of the Property and the Premises. The provisions of this Paragraph 4 (b) for
the payment of Expenses (as hereinafter defined) are intended to pass on to
Tenant all such costs and expenses. In addition to the Base Rent, Tenant shall
pay to Landlord, in accordance with this Paragraph 4, all costs and expenses
paid or incurred by Landlord in connection with the management, operation,
maintenance and repair of the Property and the Premises (the "Expenses"),
including, without limitation, all the following items related to the Premises,
the Property, and/or the Outside Areas (as defined in Paragraph 4 (b)(3)) (the
"Additional Rent"):
(1) Taxes and Assessments. All real estate taxes and
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assessments. Real estate taxes and assessments shall include any form of
assessment, license, fee, tax, levy, penalty (if a result of Tenant's
delinquency), or tax (other than net income, estate, succession, inheritance,
transfer or franchise taxes), imposed by any authority having the direct or
indirect power to tax, or by any city, county, state or federal government or
any improvement or other district or division thereof, whether such tax is (i)
determined by the area of the Premises or the Property or any part thereof, or
the Rent and other sums payable hereunder by Tenant or by other tenants,
including, but not limited to, any gross income or excise tax levied by any of
the foregoing authorities with respect to receipt of Rent or other sums due
under this Lease; (ii) upon any legal or equitable interest of Landlord in the
Premises or the Property, or any part thereof; (iii) upon this transaction or
any document to which Tenant is a party creating or transferring any interest in
the Premises or the Property; (iv) levied or assessed in lieu of, in
substitution for, or in addition to, existing or additional taxes against the
Premises or the Property, whether or not now customary or within the
contemplation of the parties or (v)
5.
surcharged against the parking area; provided, however, that all special
assessments which can be paid by Landlord in installments shall be paid by
Landlord in the maximum number of installments permitted by law and shall not be
included within the definition of real property taxes except the installment
shall be included in the calendar year in which such installment is actually
paid. Tenant and Landlord acknowledge that Proposition 13 was adopted by the
voters of the State of California in the June, 1978 election and that
assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such purposes as fire protection, street, sidewalk, road, utility
construction and maintenance, refuse removal and for other governmental services
which may formerly have been provided without charge to property owners or
occupants. It is the intention of the parties that all new and increased
assessments, taxes, fees, levies and charges due to Proposition 13 or any other
cause are to be included within the definition of real property taxes for
purposes of this Lease.
(2) Insurance. All insurance premiums including premiums
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for "all risk" fire and extended coverage (including earthquake endorsements)
insurance for the Premises, public liability insurance, other insurance as
Landlord deems necessary, and any deductibles paid under policies of any such
insurance.
(3) Outside Area Expenses. All costs to maintain, repair,
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replace, supervise, insure (including provision of public liability insurance)
and administer the areas outside of the Premises ("Outside Areas"), including
parking areas, landscaping (including maintenance contracts), sprinkler systems,
sidewalks, driveways, curbs, lighting systems, and utilities for Outside Areas.
(4) Parking Charges. Any parking charges or other costs
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levied, assessed or imposed by, or at the direction of, or resulting from
statutes or regulations, or interpretations thereof, promulgated by any
governmental authority or insurer in connection with the use or occupancy of the
Premises, the outside Areas and/or the Property.
(5) Maintenance and Repair of Premises. Except for costs
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which are the responsibility of Landlord pursuant to Section 12(c) below, all
costs to maintain, repair, and replace the Premises including without
limitation, the roof coverings of the Premises, the heating, ventilation, and
air conditioning ("HVAC") systems serving the Premises (including the cost of
maintenance contracts) and all utility and plumbing systems, fixtures and
equipment serving the Premises but which are located in the Outside Areas.
Notwithstanding anything to the contrary contained in this Lease, with respect
to all sums payable by Tenant as Additional Rent hereunder (including, without
limitation outside Area expenses and costs to maintain and repair the Premises
pursuant to Paragraph 12 hereof) for the repair or replacement of any item in
connection with the physical operation of the Premises (i.e., HVAC roof membrane
or coverings, plumbing, electrical and utility systems and parking area) which
is a capital item the repair or replacement of which properly would be
capitalized under generally accepted accounting principles consistently applied
("GAAP"), Tenant shall be required to pay as Additional Rent only the prorata
share of the cost of the item falling due within the term (including any Renewal
Term, as such term is hereinafter defined based upon the amortization of such
cost over the useful life of such item, as reasonably determined by Landlord in
accordance with GAAP.
6.
(6) Management and Administration. All costs for
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management and administration of the Premises and the Property, including a
property management fee, accounting, auditing, billing, postage, employee
benefits, payroll taxes, etc.
(c) Payment of Additional Rent.
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(1) Upon commencement of this Lease, Landlord shall submit
to Tenant an estimate of monthly Additional Rent for the period between the
Commencement Date and the following December 31 and Tenant shall pay such
estimated Additional Rent on a monthly basis concurrently with the payment of
the Base Rent. Tenant shall continue to make said monthly payments until
notified by Landlord of a change therein. By March 1 of each calendar year,
Landlord shall endeavor to provide to Tenant a statement ("Expense Statement")
showing the actual Additional Rent due to Landlord for the prior calendar year,
prorated from the Commencement Date during the first year. If the total of the
monthly payments of Additional Rent that Tenant has made for the prior calendar
year is less than the actual Additional Rent chargeable to Tenant for such prior
calendar year, then Tenant shall pay the difference in a lump sum within ten
(10) days after receipt of such Expense Statement from Landlord. Any overpayment
by Tenant of Additional Rent for the prior calendar year shall be credited
towards the Additional Rent next due.
(2) The actual Additional Rent for the prior calendar year
shall be used for purposes of calculating Tenant's monthly payment of estimated
Additional Rent for the current year, subject to adjustment as provided above,
except that in any year in which resurfacing of the parking area or material
roof repairs are planned, Landlord may include the estimated cost of such work
in the estimated monthly Additional Rent. Landlord shall make the final
determination of Additional Rent for the year in which this Lease terminates as
soon as possible after termination of such year. Tenant shall remain liable for
payment of any amount due to Landlord in excess of the estimated Additional Rent
previously paid by Tenant, and, conversely, Landlord shall promptly return to
Tenant any overpayment, even though the Term has expired and Tenant has vacated
the Premises. Failure of Landlord to submit Expense Statements as called for
herein shall not be deemed a waiver of Tenant's obligation to pay Additional
Rent as herein provided.
(3) Notwithstanding anything in this Paragraph 4(c) to the
contrary, following the delivery by Landlord of each Expense Statement, Tenant
shall have a period of ninety (90) days to review and audit Landlord's books and
records regarding such Expense Statement, such review or audit to take place
during normal business hours in Landlord's offices and to be completed within
seven (7) days after the commencement thereof. If Tenant does not so review or
audit Landlord's books and records, Landlord's Expense Statement shall be final
and binding upon Tenant. In the event that Tenant determines on the basis of its
review of Landlord's books and records that the amount of Expenses paid by
Tenant pursuant to this Paragraph 4 for the period covered by such Expense
Statement is less than or greater than the actual amount properly payable by
Tenant under the terms of this Lease, Tenant shall promptly pay any deficiency
to Landlord or Landlord shall promptly refund any excess payment to Tenant, as
the case may be; provided, however, that if Landlord disagrees with the results
of Tenant's audit, the dispute shall be submitted to an independent nationally
recognized accounting firm mutually agreed upon by Landlord and Tenant and the
determination of such
7.
accounting firm shall be binding upon the parties. If the independent accounting
firm determines that the amount of Tenant's payments of Expenses for such period
is less than or greater than the actual amount properly payable by Tenant under
the terms of this Lease, Tenant shall promptly pay any deficiency to Landlord or
Landlord shall promptly refund any excess payment to Tenant, as the case may be.
Tenant shall pay the cost of its audit of Landlord's books and records. The
costs of any independent accounting firm shall be paid by Tenant unless such
firm determines that the overpayment of Expenses by Tenant, if any, equals ten
percent (10%) or more of the Expenses actually payable by Tenant for the period
covered by the audit, in which case, Landlord shall pay the costs of such
independent accounting firm.
(d) General Payment Terms. The Base Rent, Additional Rent and all
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other sums Payable by Tenant to Landlord hereunder (including, without
limitation, installments of principal and interest due under the Tenant
Improvements Loan, as defined in Exhibit B hereto) are referred to as the
"Rent". All Rent shall be paid without deduction, offset or abatement in lawful
money of the United States of America. Checks are to be made payable to ALIC
SA87 IODCG AAF REI 3261 and shall be Mailed to: Lock Box 66268, El Monte,
California 91735-6268, or to such other person or place as Landlord may, from
time to time, designate to Tenant in writing. Rent for any partial month during
the Term shall be prorated for the portion thereof falling due within the Term.
5. LATE CHARGE: Notwithstanding any other provision of this Lease, Tenant
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hereby acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain if any Rent or
other sums due from Tenant are not received by Landlord or by Landlord's
designated agent within ten (10) days after their due date, then Tenant shall
pay to Landlord a late charge equal to ten percent (10%) of such overdue amount,
plus any attorneys' fees incurred by Landlord by reason of Tenant's failure to
pay Rent and/or other charges when due hereunder. Landlord and Tenant hereby
agree that such late charges represent a fair and reasonable estimate of the
cost that Landlord will incur by reason of Tenant's late payment, Landlord's
acceptance of such late charges shall not constitute a waiver of Tenant's
default with respect to such overdue amount or estop Landlord from exercising
any of the other rights and remedies granted under this Lease.
Initials: Landlord _____ Tenant _____
6. SECURITY DEPOSIT: Concurrently with Tenant's execution of the Lease,
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Tenant shall deposit with Landlord the Security Deposit specified in the Basic
Lease Information as security for the full and faithful performance of each and
every term, covenant and condition of this Lease. Landlord may use, apply or
retain the whole or any part of the Security Deposit as may be reasonably
necessary (a) to remedy Tenant's default in the payment of any Rent, (b) to
repair damage to the Premises caused by Tenant, (c) to clean the Premises upon
termination of this Lease, (d) to reimburse Landlord for the payment of any
amount which Landlord may reasonably spend or be required to spend by reason of
Tenant's default, or (e) to compensate Landlord for any other loss or damage
which Landlord may suffer by reason of Tenant's default. Should Tenant
faithfully and fully comply with all of the terms, covenants and conditions of
this Lease, within thirty (30) days following the expiration of the Term, the
Security Deposit or any balance thereof shall be returned to Tenant or, at the
option of Landlord, to the last assignee of
8.
Tenant's interest in this Lease. Landlord shall not be required to keep the
Security Deposit separate from its general funds and Tenant shall not be
entitled to any interest on such deposit. If Landlord so uses or applies all or
any portion of said deposit, within five (5) days after written demand therefor
Tenant shall deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the full extent of the above amount, and Tenant's failure to
do so shall be a default under this Lease. In the event Landlord transfers its
interest in this Lease, Landlord shall transfer the then remaining amount of the
Security Deposit to Landlord's successor in interest, and thereafter Landlord
shall have no further liability to Tenant with respect to such Security Deposit.
7. POSSESSION:
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(a) Tenant's Right of Possession. Subject to Paragraph 7(b), Tenant
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shall be entitled to possession of the Premises upon commencement of the Term.
(b) Delay in Delivering Possession. If for any reason whatsoever,
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Landlord cannot deliver possession of the Premises to Tenant at the commencement
of the Term, this Lease shall not be void or voidable, nor shall Landlord, or
Landlord's agents, be liable to Tenant for any loss or damage resulting
therefrom. Tenant shall not be liable for Rent until Landlord delivers
possession of the Premises to Tenant. The expiration date of the Term shall be
extended by the same number of days that Tenant's possession of the Premises was
delayed.
(c) Early Access. Tenant shall have the right to construct modular
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"clean rooms" (collectively, the "Clean Rooms") in the Premises prior to the
Commencement Date pursuant to plans and specifications hereinafter approved in
writing by Landlord and otherwise in strict accordance with the terms and
conditions of Section 11 below. In furtherance of the foregoing, and
notwithstanding anything to the contrary contained in Section 7(a), Tenant shall
have the right to enter upon the Premises at such times as shall be acceptable
to Landlord during the ninety (90) day period preceding the Commencement Date to
construct the Clean Rooms, provided, however, that Landlord shall not be liable
to Tenant or its employees or agents for any loss or damage to property, or
injury to person, arising from or related to the construction of the Tenant
Improvements. Tenant shall take all reasonable precautions to protect against
such loss, damage or injury during the construction of the Tenant Improvements,
and shall not interfere with such construction. Tenant shall cooperate with all
reasonable directives of Landlord in order to minimize any disruption or delay
in completion of the Tenant Improvements. Tenant's entry upon the Premises
pursuant to this Section 7(c) shall be subject to all of the terms and
conditions of this Lease, excepting only the covenant to pay Rent.
8. USE OF PREMISES:
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(a) Permitted Uses. The Premises shall be used for the Permitted
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Uses specified in the Basic Lease Information and for no other use. The Premises
shall not be used to create any nuisance or trespass, for any illegal, purpose,
for any purpose not permitted by applicable laws and regulations, or for any
purpose that would vitiate the insurance or increase the premiums for insurance
on the premises. Tenant agrees not to overload the floor(s) of the Premises.
9.
(b) Compliance with Governmental Regulations. Tenant shall, at
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Tenant's expense, faithfully observe and comply with all municipal, state and
federal statutes, rules, regulations, ordinances, requirements, and orders now
in force or which may hereafter be in force pertaining to the Premises or
Tenant's use thereof, including without limitation, any statutes, rules,
regulations, ordinances, requirements, or orders requiring installation of fire
sprinkler systems, seismic reinforcement and related alterations, and removal of
asbestos, whether substantial in cost or otherwise, and all recorded covenants,
conditions and restrictions affecting the Property ("Private Restrictions") now
in force or which may hereafter be in force; provided, however, that Tenant
shall not be required to make structural changes to the Premises not related to
specific use of the Premises unless the requirement for such changes is imposed
as a result of any improvements or additions made or proposed to be made at
Tenant's request. 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 rule, regulation,
ordinance, statute or Private Restrictions, shall be conclusive of that fact as
between Landlord and Tenant.
9. ACCEPTANCE OF PREMISES: By entry hereunder, Tenant accepts the
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Premises as suitable for Tenant's intended use and as being in good and sanitary
operating order, condition and repair, AS IS, and without representation or
warranty by Landlord as to the condition, use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed
by Landlord and Tenant. Notwithstanding anything in this Lease to the contrary,
including, without limitation, anything contained in this Paragraph 9 or in
Paragraph 12 below, Landlord shall cause the HVAC, electrical and plumbing
systems (collectively, the "Building Systems") serving the Premises to be in
good working order and the roof on the Premises to be in good condition for a
period of one hundred twenty (120) days after the Commencement Date. Any repair
work to the Building Systems or the roof during such period shall be the sole
cost and expense of Landlord and shall not be charged to Tenant as Additional
Rent under Paragraph 4(b) above.
10. SURRENDER: Tenant agrees that on the last day of the Term, or on the
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sooner termination of this Lease, Tenant shall surrender the Premises to
Landlord (a) in good condition and repair (damage by Acts of God, fire, and
normal wear and tear excepted), but with all interior walls painted or cleaned
so they appear painted, any carpets cleaned, and with all floors cleaned and
waxed, together with all alterations, additions and improvements which may have
been made in or on the Premises; except that Tenant shall remove trade fixtures
put in at the expense of Tenant and any alterations, additions and improvements
as to which Landlord has, prior to the date of surrender, consented to or
requested removal; and (b) otherwise in accordance with Paragraph 32 (f).
Tenant shall repair all damage caused by such removal and otherwise restore the
Premises in accordance with the preceding sentence at Tenant's sole cost and
expense. On or before the expiration or sooner termination of this Lease,
Tenant shall remove all of Tenant's personal property from the Premises. All
property of Tenant not so removed, unless such non-removal is consented to by
Landlord, shall be deemed abandoned by Tenant, provided that in such event
Tenant shall remain liable to Landlord for all costs incurred in storing and
disposing of such abandoned property of Tenant. It the Premises are not
surrendered at the end of the Term or sooner termination of this Lease, and in
accordance with the provisions of this Paragraph 10 and of Paragraph 32 (f),
Tenant shall indemnify, defend and hold Landlord harmless from and against any
and all loss or liability resulting from delay by Tenant in so
10.
surrendering the Premises including, without limitation, any loss or liability
resulting from any claim against Landlord made by any succeeding tenant founded
on or resulting from such delay and losses to Landlord due to lost opportunities
to lease any portion of the Premises to succeeding tenants, together with, in
each case, actual attorneys' fees and costs.
11. ALTERATIONS AND ADDITIONS:
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(a) Tenant shall not make, or permit to be made, any alteration or
addition to the Premises, or any part thereof, without the prior written consent
of Landlord, such consent not to be unreasonably withheld.
(b) Any alteration or addition to the Premises shall be at Tenant's
sole cost and expense, in compliance with all applicable laws and requirements
requested by Landlord, and in accordance with plans and specifications approved
in writing by Landlord, and shall be constructed and installed by a contractor
approved in writing by Landlord.
(c) In the event Landlord consents to a proposed alteration or
addition, such consent shall include Landlord's advice whether or not such
proposed alteration or addition shall be required to be removed at the
expiration or termination of this Lease. If Landlord fails so to advise Tenant
regarding whether or not a proposed alteration or addition may be removed at the
expiration or termination of this Lease, then Tenant shall be required to
surrender the alteration or addition to Landlord with the Premises, without
compensation to Tenant, at the expiration or termination of this Lease. All
additions, alterations or improvements, including, but not limited to, heating,
lighting, electrical, air conditioning, fixed partitioning, drapery, wall
covering and paneling, built-in cabinet work and carpeting installations made by
Tenant, together with all property that has become an integral part of the
Premises, shall at once be and become the property of Landlord, and shall not be
deemed trade fixtures.
(d) Tenant agrees not to proceed to make such alterations or
additions, notwithstanding consent from Landlord to do so, until five (5) days
after Tenant's receipt of such consent, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work.
12. MAINTENANCE OF PREMISES:
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(a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its
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sole expense, (1) keep and maintain in good order and condition, repair, and
replace the Premises, and every part thereof, including glass, windows, window
frames, skylights, interior and exterior doors and door frames, and the interior
of the Premises, (excepting only those portions of the Premises to be maintained
by Landlord, as provided in Paragraph 12(c) below), (2) keep and maintain in
good order and condition, repair, and replace all utility and plumbing systems,
fixtures and equipment, including without limitation electricity, gas, water,
and sewer, located in or on the Premises, and furnish all expendables, including
light bulbs, paper goods and soaps, used in the Premises, (3) repair all damage
to the Premises or the Outside Areas caused by the negligence or willful
misconduct of Tenant or its agents, employees, contractors or invitees
11.
Tenant shall not do anything to cause any damage, deterioration or unsightliness
to the Premises and the outside Areas.
(b) Landlord's Right to Maintain and Repair at Tenant's Expense.
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Notwithstanding the foregoing, Landlord shall have the right, but not the
obligation, at Tenant's expense, to enter the Premises and perform Tenant's
maintenance, repair and replacement work. Within ten (10) days after invoice
thereof or from Landlord, Tenant shall pay all costs and expenses incurred by
Landlord in connection with such maintenance, repair and replacement work.
(c) Maintenance by Landlord. Subject to the provisions of Paragraphs
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12(a), 22 and 23, and further subject to Tenant's obligation under Paragraph 4
to reimburse Landlord, in the form of Additional Rent, for the cost and expense
of the following items, Landlord agrees to repair and maintain the following
items: the roof coverings (provided that Tenant installs no additional air
conditioning or other equipment on the roof that damages the roof coverings);
the HVAC systems serving the Premises; the utility and plumbing systems,
fixtures, and equipment located outside the Premises; and the parking areas,
pavement, landscaping, sprinkler systems, sidewalks, driveways, curbs, and
lighting systems in the outside Areas. Subject to the provisions of Paragraphs
12(a), 22 and 23, Landlord, at its own cost and expense, agrees to repair and
maintain the following items: the structural portions of the roof, provided that
Tenant installs no additional air conditioning or other equipment on the roof
that damages structural portions of the roof (and specifically excluding the
roof coverings), the foundation, the footings, the floor slab, the load bearing
walls, and the exterior walls (excluding any glass therein) of the Premises.
Landlord shall not be required to repair or maintain conditions created due to
any act, negligence or omission of Tenant or its agents, contractors, employees
or invitees. Landlord's obligation hereunder to repair and maintain is subject
to the condition precedent that Landlord shall have received written notice of
the need for such repairs and maintenance. Tenant shall promptly report in
writing to Landlord any defective condition known to it which Landlord is
required to repair, and failure to so report such defects shall make Tenant
responsible to Landlord for any liability incurred by Landlord by reason of such
condition.
(d) Tenant's Waiver of Rights. Tenant hereby expressly waives all
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rights to make repairs at the expense of Landlord or to terminate this Lease, as
provided for in California Civil Code Sections 1941 and 1942, and 1932 (1),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.
(e) Construction Warranties. To the extent Tenant is required to
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maintain and repair the Premises or any portion thereof pursuant to Paragraph
12(a) above and such maintenance and repair is covered by any warranty actually
obtained by Landlord in connection with the construction of the Tenant
Improvements, Landlord shall enforce such warranty or shall assign such warranty
to Tenant and permit Tenant to enforce the same.
13. LANDLORD'S INSURANCE: Landlord shall purchase and keep in force fire,
--------------------
extended coverage and "all risk" insurance covering the Premises. Tenant shall,
at its sole cost and expense, comply with any and all reasonable requirements
pertaining to the Premises of any insurer necessary for the maintenance of
reasonable fire and public liability insurance, covering the Premises and the
appurtenances. Landlord, at Tenant's cost, may maintain "Loss of Rents"
12.
insurance, insuring that the Rent will be paid in a timely manner to Landlord
for a period of at least twelve (12) months if the Premises are destroyed or
rendered unusable or inaccessible by any cause insured against under this Lease.
14. TENANT'S INSURANCE:
------------------
(a) Public Liability Insurance. Tenant shall, at Tenant's expense,
--------------------------
secure and keep in force a "broad form" public liability insurance and property
damage policy covering the Premises, insuring Tenant, and naming Landlord and
its lenders as additional insureds, against any liability arising out of the
ownership, use, occupancy or maintenance of the Premises. The minimum limit of
coverage of such policy shall be in the amount of not less than Three Million
Dollars ($3,000,000.00) for injury or death of one person in any one accident or
occurrence and in the amount of not less than Three Million Dollars
($3,000,000.00) for injury or death of more than one person in any one accident
or occurrence, shall include an extended liability providing contractual
liability coverage (which shall include coverage for Tenant's Indemnification
obligations in this Lease), and shall contain a severability of interest clause
or a cross liability endorsement. Such insurance shall further insure Landlord
and Tenant against liability for property damage of at least Three Million
Dollars ($3,000,000.00). The limit of any insurance shall not limit the
liability of Tenant hereunder. No policy shall be cancellable or subject to
reduction of coverage, and loss payable clauses shall be subject to Landlord's
approval. Such policies of insurance shall be issued as, primary policies and
not contributing with or in excess of coverage that Landlord may carry, by an
insurance company authorized to do business in the State of California for the
issuance of such type of insurance coverage and rated A:XIII or better in Best's
Key Rating Guide. A copy of said policy or a certificate evidencing to
Landlord's reasonable satisfaction that such insurance is in affect shall be
delivered to Landlord upon commencement of the Term, and thereafter whenever
Landlord shall reasonably request.
(b) Personal Property Insurance. Tenant shall maintain in full force
---------------------------
and effect on all of its fixtures and equipment on the Premises, a policy or
policies of fire and extended coverage insurance with standard coverage
endorsement to the extent of the full replacement cost thereof. During the term
of this Lease the proceeds from any such policy or policies of insurance shall
be used for the repair or replacement of the fixtures and equipment so insured.
Landlord shall have no interest in the insurance upon Tenant's equipment and
fixtures and will sign all documents reasonably necessary in connection with the
settlement of any claim or loss by Tenant. Landlord will not carry insurance on
Tenant's possessions. Tenant shall furnish Landlord with a certificate
evidencing to Landlord's reasonable satisfaction that such insurance is in
effect, and whenever required, shall satisfy Landlord that such policy is in
full force and effect.
15. INDEMNIFICATION:
---------------
(a) Of Landlord. Tenant shall indemnify and hold harmless Landlord
-----------
and agents, employees, partners, shareholders, directors, invitees, and
independent contractors (collectively "Agents") of Landlord against and from any
and all claims, liabilities, judgments, costs, demands, causes of action and
expenses (including, without limitation, reasonable attorneys, fees) arising
from (i) Tenant's use of the Premises or from any activity done, permitted or
suffered by Tenant in or about the Premises or the Property, and (2) any act,
neglect, fault,
13.
willful misconduct or omission of Tenant, or Tenant's Agents or from any breach
or default in the terms of this Lease by Tenant, and (3) any action or
proceeding brought on account of any matter in items (1) or (2). If any action
or proceeding is brought against Landlord by reason of any such claim, upon
notice from Landlord, Tenant shall defend the same at expense by counsel
reasonably satisfactory to Landlord. As a material part of the consideration to
Landlord, Tenant hereby assumes all risk of damage to property or injury to
persons in or about the Premises from any cause whatsoever (except that which is
caused by the sole active negligence or willful misconduct by Landlord or its
Agents or by the failure of Landlord to observe any of the terms and conditions
of this Lease, if such failure has persisted for an unreasonable period of time
after written notice of such failure), and Tenant hereby waives all claims in
respect thereof against Landlord.
(b) Of Tenant: Landlord shall indemnify and hold harmless Tenant and
---------
its Agents against and from any and all claims, liabilities, judgments, costs,
demands, causes of action and expenses (including, without limitation,
reasonable attorneys' fees) arising from (1) the sole active negligence or
willful misconduct of Landlord, and (2) any action or proceeding brought on
account of any matter in item (1). If any action or proceeding is brought
against Tenant by reason of any such claim, upon notice from Tenant, Landlord
shall defend the same at Landlord's expense by counsel reasonably satisfactory
to Tenant.
(c) Survival. The obligations of Landlord and Tenant under this
--------
Paragraph 15 shall survive any termination of this Lease.
(d) No Impairment of Insurance. The foregoing indemnity shall not
--------------------------
relieve any insurance carrier of its obligations under any policies required to
be carried by either party pursuant to this Lease, to the extent that such
policies cover the peril or occurrence that results in the claim that is subject
to the foregoing indemnity.
16. SUBROGATION: Landlord and Tenant hereby mutually waive any claim
-----------
against the other during the Term for any injury to person or loss or damage to
any of their property located on or about the Premises or the Property that is
caused by or results from perils covered by insurance carried by the respective
parties, to the extent of the proceeds of such insurance actually received with
respect to such injury, loss or damage, whether or not due to the negligence of
the other party or its agents. Because the foregoing waivers will preclude the
assignment of any claim by way of subrogation to an insurance company or any
other person, each party now agrees to immediately give to its insurer written
notice of the terms of these mutual waivers and shall have their insurance
policies endorsed to prevent the invalidation of the insurance coverage because
of these waivers. Nothing in this Paragraph shall relieve a party of liability
to the other for failure to carry insurance required by this Lease.
17. ABANDONMENT: Tenant shall not abandon the Premises at any time during
-----------
the Term. In the event of abandonment, the rights and remedies of Tenant and
Landlord shall be determined in accordance with the applicable California
statutes in affect at the time of abandonment.
14.
18. FREE FROM LIENS: Tenant shall keep the Premises and the Property free
---------------
from any liens arising out of any work performed, materials furnished, or
obligations incurred by or for Tenant.
19. ADVERTISEMENTS AND SIGNS: Tenant shall have the right to place an
------------------------
identification sign on the exterior of the Premises at Tenant's sole cost and
expense, subject to Landlord's prior written approval of the location, size and
design of such sign, and subject further to compliance with Landlord's signage
program, any CC&Rs affecting the Premises and all applicable laws, including,
without limitation, all laws, codes and ordinances of the City of Sunnyvale.
Tenant shall not place or permit to be placed in, upon, or about the Premises or
the Property any advertisements or notices and will not conduct, or permit to be
conducted, any sale by auction on the Premises or otherwise on the Property.
Tenant shall remove any sign placed on the Premises by Tenant upon the
expiration of the Term or sooner termination of this Lease, and Tenant shall
repair any damage or injury to the premises or the Property caused thereby, all
at Tenant's expense. If any signs are not removed, or necessary repairs not
made, Landlord shall have the right to remove the signs and repair any damage or
injury to the Premises or the Property at Tenant's sole cost and expense
20. UTILITIES: Tenant shall pay for all water, gas, heat, light, power,
---------
telephone service and all other materials and services supplied to the Premises.
If Tenant fails to pay for any of the foregoing when due, Landlord may pay the
same and add such amount to the Rent.
21. ENTRY BY LANDLORD: Tenant shall permit Landlord and its Agents to
-----------------
enter into and upon the Premises at all reasonable times, upon reasonable notice
(except in the case of an emergency, for which no notice shall be required), and
subject to Tenant's reasonable security arrangements, for the purpose of
inspecting the same or showing the Premises to prospective purchasers, lenders
or tenants or to alter, improve, maintain and repair the Premises as required or
permitted of Landlord under the terms hereof, without any rebate of Rent and
without any liability to Tenant for any loss of occupation or quiet enjoyment of
the Premises thereby occasioned (except for actual damages resulting from the
negligence or willful misconduct of Landlord or its agents); and Tenant shall
permit Landlord to post notices of non-responsibility and ordinary "for sale" or
"for lease" signs, provided that Landlord may post such "for lease" signs and
exhibit the Premises to prospective tenants only during the six (6) months prior
to termination of this Lease. No such entry shall be construed to be a forcible
or unlawful entry in or a detainer of, the Premises, or an eviction of Tenant
from the Premises.
22. DESTRUCTION AND DAMAGE:
----------------------
(a) If the Premises is damaged by fire or other perils covered by
extended coverage insurance, Landlord shall, at Landlord's option:
(1) In the event of total destruction (which shall mean
destruction or damage in excess of twenty-five percent (25%) of the full
insurable value thereof) of the Premises, elect either to commence promptly to
repair and restore the Premises and prosecute the same diligently to completion,
in which event this Lease shall remain in full force and effect; or not to
repair or restore the Premises, in which event this Lease shall terminate.
Landlord shall give Tenant written notice of its intention within sixty (60)
days after the
15.
occurrence of such destruction. If Landlord elects not to restore the Premises,
this Lease shall be deemed to have terminated as of the date of such total
destruction.
(2) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Premises for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction and, if the damage thereto is such that the Premises
may be substantially repaired or restored to its condition arising immediately
prior to such damage or destruction within one hundred eighty (180) days from
the date of such destruction, Landlord shall commence and proceed diligently
with the work of repair and restoration, in which event the Lease shall continue
in full force and effect. If such repair and restoration requires longer than
one hundred eighty (180) days or if the insurance proceeds therefor (plus any
amounts Tenant may elect or is obligated to contribute) are not sufficient to
cover the cost of such repair and restoration, Landlord may elect either to so
repair and restore, in which event the Lease shall continue in full force and
effect, or not to repair or restore, in which event the Lease shall terminate.
In either case, Landlord shall give written notice to Tenant of its intention
within sixty (60) days after the destruction occurs. If Landlord elects not to
restore the Premises, this Lease shall be deemed to have terminated as of the
date of such partial destruction.
(3) Notwithstanding anything to the contrary contained in
this Paragraph, in the event of damage to the Premises occurring during the last
twelve (12) months of the Term, Landlord may elect to terminate this Lease by
written notice of such election given to Tenant within thirty (30) days after
the damage occurs.
(b) If the Premises are damaged by any peril not covered by extended
coverage insurance, and the cost to repair such damage exceeds any amount Tenant
may agree to contribute, Landlord may elect either to commence promptly to
repair and restore the Premises and prosecute the same diligently to completion,
in which event this Lease shall remain in full force and effect; or not to
repair or restore the Premises, in which event this Lease shall terminate.
Landlord shall give Tenant written notice of its intention within sixty (60)
days after the occurrence of such damage. If Landlord elects not to restore the
Premises, this Lease shall be deemed to have terminated as of the date on which
Tenant surrenders possession of the Premises to Landlord, except that if the
damage to the Premises materially impairs Tenant's ability to continue its
business operations in the Premises, then this Lease shall be deemed to have
terminated as of the date such damage occurred.
(c) In the event of repair and restoration as herein provided, the
monthly installments of Base Rent shall be abated proportionately in the ratio
which Tenant's use of the Premises is impaired during the period of such repair
or restoration, to the extent of rental abatement insurance proceeds received by
Landlord. Tenant shall not be entitled to any compensation or damages for loss
of use of the whole or any part of the Premises and/or any inconvenience or
annoyance occasioned by such damage, repair or restoration.
(d) If Landlord is obligated to or elects to repair or restore as
herein provided, Landlord shall repair or restore only those portions of the
Premises which were originally provided at Landlord's expense, substantially to
their condition existing immediately prior to the
16.
occurrence of the damage or destruction; and Tenant shall promptly repair and
restore, at Tenant's expense, Tenant's fixtures, improvements, alterations and
additions in and to the Premises which were not provided at Landlord's expense.
(e) Tenant hereby waives the provisions of California Civil Code
Section 1932 (2) and Section 1933 (4) which permit termination of a lease upon
destruction of the leased premises, and the provisions of any similar law now or
hereinafter in effect, and the provisions of this Paragraph 22 shall govern
exclusively in case of such destruction.
23. CONDEMNATION: If twenty-five percent (25%) or more of the Premises or
------------
the parking area for the Premises is taken for any public or quasi-public
purpose by any lawful governmental power or authority, by exercise of the right
of appropriation, inverse condemnation, condemnation or eminent domain, or sold
to prevent such taking (each such event being referred to as a "Condemnation"),
Landlord may, at its option, terminate this Lease as of the date title vests in
the condemning party. If the Premises after any Condemnation and any repairs by
Landlord would be untenantable for the conduct of Tenant's business operations,
Tenant shall have the right to terminate this Lease as of the date title vests
in the condemning party. If either party elects to terminate this Lease as
provided herein, such election shall be made by written notice to the other
party given within thirty (30) days after the nature and extent of such
condemnation have been finally determined, Tenant stall not because of such
taking assess any claim against Landlord. Landlord shall be entitled to receive
the proceeds of all Condemnation awards, and Tenant hereby assigns to Landlord
all of its interest in such awards. If less than twenty-five percent (25%) of
the Premises or the parking area is taken, Landlord at its option may terminate
this Lease, It neither Landlord nor Tenant elects to terminate this Lease to the
extent permitted above, Landlord shall promptly proceed to restore the Premises
to the extent of any Condemnation award received by Landlord, to substantially
the same condition as existed prior to such Condemnation, allowing for the
reasonable effects of such' Condemnation, and a proportionate abatement shall be
made to the Base Rent corresponding to the time during which, and to the portion
of the floor area of the Premises (adjusted for any increase thereto resulting
from any reconstruction) of which, Tenant is deprived on account of such
Condemnation and restoration. The provisions of California Code of Civil
Procedure Section 1265.130, which allows either party to petition the Superior
Court to terminate the Lease in the event of a partial taking of the Premises,
and any other applicable law now or hereafter enacted, are hereby waived by
Landlord and Tenant.
24. ASSIGNMENT AND SUBLETTING:
-------------------------
(a) Tenant shall not voluntarily or by operation of law, (1)
mortgage, pledge, hypothecate or encumber this Lease or any interest herein, (2)
assign or transfer this Lease or any interest herein, sublease the Premises or
any part thereof, or any right or privilege appurtenant thereto, or allow any
other person (the employees, agents and invitees of Tenant excepted) to occupy
or use the Premises, or any portion thereof, without firs obtaining the written
consent of Landlord, which consent shall not be withheld unreasonably. When
Tenant requests Landlord's consent to such assignment or subletting, it shall
notify Landlord in writing of the name and address of the proposed assignee or
subtenant and the nature and character of the business of the proposed assignee
or subtenant and shall provide current financial statements for the proposed
assignee or subtenant prepared in accordance: with GAAP. Tenant shall also
provide Landlord
17.
with a copy of the proposed sublease or assignment agreement, including all
material terms and conditions thereof. Landlord shall have the option, to be
exercised within thirty (30) days of receipt of the foregoing, to (1) cancel
this Lease as of the commencement date stated in the proposed sublease or
assignment, (2) acquire from Tenant the interest, or any portion thereof, in
this Lease and/or the Premises that Tenant proposes to assign or sublease, on
the same terms and conditions as stated in the proposed sublet or assignment
agreement (3) consent to the proposed assignment or sublease, or (4) refuse its
consent to the proposed assignment or sublease, providing that such consent
shall not be unreasonably withheld.
(b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord may take into account the reputation and credit
worthiness of the proposed assignee or subtenant, the character of the business
proposed to be conducted in the Premises or portion thereof sought to be
subleased, and the potential impact of the proposed assignment or sublease on
the economic value of the Premises. In any event, Landlord may withhold its
consent to any assignment or sublease, if the actual use proposed to be
conducted in the Premises or portion thereof conflicts with the provisions of
Paragraph 8(a) or (b) above, or (2) the proposed assignment or sublease requires
alterations, improvements or additions to the Premises or portions thereof.
(c) If Landlord approves an assignment or subletting as herein
provided, Tenant shall pay to Landlord, as Additional Rent, the difference, if
any, between (1) the Base Rent plus Additional Rent allocable to that part of
the Premises affected by such assignment or sublease pursuant to the provisions
of this Lease, and (2) the rent and any additional rent payable by the assignee
or sublessee to Tenant, after deducting the costs incurred by Tenant in
connection with any such assignment or sublease. The assignment or sublease
agreement, as the case may be, after approval by Landlord, shall not be amended
without Landlord's prior written consent, and shall contain a provision
directing the assignee or subtenant to pay the rent and ocher mums due
thereunder directly to Landlord upon receiving written notice from Landlord that
Tenant is in default under this Lease with respect to the payment of rent.
Landlord's collection of such rent and other sums shall not constitute an
acceptance by Landlord of attornment by such assignee or subtenant. A consent
to one assignment subletting, occupation or use shall not be deemed to be a
consent to any other or subsequent assignment, subletting, occupation or use,
and consent to any assignment or subletting shall in no way relieve Tenant of
any liability under this Lease. Any assignment or subletting without Landlord's
consent shall be void, and shall, at the option of Landlord, constitute a
Default under this Lease.
(d) Tenant shall pay Landlord's reasonable fees (including, without
limitation, the fees of Landlord's counsel), incurred in connection with
Landlord's review and processing of documents regarding any proposed assignment
or sublease.
(e) Tenant acknowledges and agrees that the restrictions, conditions
and limitations imposed by this Paragraph 24 an Tenant's ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or a part-
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that the Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this
18.
Lease or any interest herein, to sublet the Premises or any part thereof, to
transfer or assign any right or privilege appurtenant to the Premises, or to
allow any other person to occupy or use the Premises or any portion thereof.
25. TENANT'S DEFAULT: The occurrence of any of the following; events
----------------
shall constitute an event of default on the part of Tenant; ("Default 11"):
(a) The abandonment of the Premises by Tenant;
(b) Failure to pay any installment or any other monies due and
payable hereunder, said failure continuing for a period of three (3) days after
the same is due;
(c) A general assignment by Tenant: for the benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant, the
filing of a voluntary petition for an arrangement, the filing of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by Tenant's creditors, said involuntary petition remaining undischarged
for a period of sixty (60) days;
(e) Receivership, attachment, or other judicial seizure of
substantially all of Tenant's assets on the Premises, such attachment or other
seizure remaining undismissed or undischarged for a period of sixty (60) days
after the levy thereof;
(f) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraph 30 or 31 or 42;
(g) An assignment or sublease, or attempt assignment or sublease, of
this Lease or the Premises by Tenant contrary to the provision of Paragraph 24,
unless much assignment or sublease is expressly conditioned upon Tenant having
received Landlord's consent thereto;
(h) Failure of Tenant to restore the Security Deposit to the amount
and within the time period provided in Paragraph 6 above;
(i) Failure in the performance of any of Tenant's covenants,
agreements or obligations hereunder (except those failures specified as events
of Default in other Paragraphs of, this Paragraph 25, which shall be governed by
such other Paragraphs), which failure continues, for ten (10) days after written
notice thereof from Landlord to Tenant provided that, if Tenant has exercised
reasonable diligence to cure such failure and such failure cannot be cured
within such ten (10) day period despite reasonable diligence, Tenant shall not
he in default under this subparagraph unless Tenant fails thereafter diligently
and continuously to prosecute the cure to completion; and
(j) Chronic delinquency by Tenant in the payment of Rent, or any
other periodic payments required to be paid by Tenant under this Lease. "Chronic
delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within three (3) days after
written notice thereof for any three (3) months (consecutive
19.
or nonconsecutive) during any twelve (12) month period. In the event of a
Chronic Delinquency, in addition to Landlord's other remedies for Default
provided in this Lease, at Landlord's option, Landlord shall have the right to
require that Rent be paid by Tenant quarterly, in advance.
Tenant agrees that any notice given by Landlord pursuant to Paragraph
25(i) or (j) above shall satisfy the requirements for notice under California
Cod of Civil Procedure Section 1161, and Landlord shall not be required to give
any additional notice in order to be entitled to commence an unlawful detainer
proceeding.
26. LANDLORD'S REMEDIES:
-------------------
(a) Termination. In the event of any Default by Tenant, then in
-----------
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate. In the event that Landlord shall elect to so terminate
this Lease then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and
any other sums-due and payable which have been earned at the time of such
termination; plus
(2) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable which would have been earned
after termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which
the unpaid Rent and any other sums due and payable for the balance of the term
of this Lease after the time of award exceeds the amount of such rental loss
that Tenant proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course would be likely to
result therefrom, including, without limitation, any costs or expenses incurred
by Landlord (i) in retaking possession of the Premises; (ii) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering or
rehabilitating the Premises or any portion thereof, including such acts for
reletting to a new tenant or tenants; (iii) for leasing commissions; or (iv) for
any other costs necessary or appropriate to relet the Premises; plus
(5) such reasonable attorneys, fees incurred by Landlord as
a result of a Default, and costs in the event suit is filed by Landlord to
enforce such remedy; and plum
(6) at Landlord's election; such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate
20.
permitted by law, whichever is less. As Used in subparagraph (3) above, the
"worth at the time of award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award,
plus one percent (1%). Tenant waives redemption or relief from forfeiture under
California Code of Civil Procedure Sections 1174 and 1179, or under any other
present or future law, in the event Tenant is evicted or Landlord takes
possession of the Premises by reason of any Default of Tenant hereunder.
(b) Continuation of Lease. In the event of any Default by Tenant,
---------------------
then in addition to any other remedies available to Landlord at law or in equity
and under this Lease, Landlord shall have the remedy described in California
Civil Code Section 1951-4 (Landlord may continue this Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, provided
Tenant has the right to sublet or assign, subject only to reasonable
limitations).
(c) Re-entry. In the event of any Default by Tenant, Landlord shall
--------
also have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.
(d) Reletting. In the event of the abandonment of the Premises by
---------
Tenant or in the event that Landlord shall elect to re-enter as provided in
Paragraph 26(c) or shall take possession of the Premises pursuant to legal
proceeding or pursuant to any notice provided by law, then if Landlord does not
elect to terminate this Lease as provided in Paragraph 26 (a) Landlord may from
time to time, without terminating this Lease, relet the Premises or any part
thereof for such term or terms and at such rental or rentals and upon such other
terms and conditions as Landlord in its sole discretion May deem advisable with
the right to make alterations and repairs to the Premises. In the event that
Landlord shall elect to so relet, then rentals received by Landlord from such
reletting shall be applied in the following order; (1) to reasonable attorneys,
fees incurred by Landlord as a result of a Default and costs in the event suit
is filed by Landlord to enforce such remedies; (2) to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord; (3) to the
payment of any costs of such reletting; (4) to the payment of the costs of any
alterations and repairs to the Premises; (5) to the payment of Rent due and
unpaid hereunder; and (6) the residue, if any, stall be hold by Landlord and
applied in payment of future Rent and other gums payable by Tenant hereunder as
the same may become due and payable hereunder. Should that portion of such
rentals received from such reletting during any month, which is applied to the
payment of Rent hereunder, be less than the Rent payable during the month by
Tenant hereunder, then Tenant, shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
(e) Termination. No re-entry or taking of possession of the Premises
-----------
by Landlord pursuant to this Paragraph 26 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination
21.
by Landlord because of any Default by Tenant, Landlord may at any time after
such reletting elect to terminate this Lease for any such Default.
(f) Cumulative Remedies. The remedies herein provided are not
-------------------
exclusive and Landlord shall have any and all other remedies provided herein or
by law or in equity.
(g) No Surrender. No act or conduct of Landlord, whether consisting
------------
of the acceptance of the keys to the Premises, or otherwise, shall be deemed to
be or y constitute an acceptance of the surrender of the Premises by Tenant
prior to the expiration of the Term, and such acceptance by Landlord of
surrender by Tenant shall only flow from and must be evidenced by a written
acknowledgment of acceptance of surrender signed by Landlord. The surrender of
this Lease by Tenant, voluntarily or otherwise, shall not work a merger unless
Landlord cleats in writing that such merger take place, but shall operate as an
assignment to Landlord of any and all existing subleases, Or Landlord may, at
its option, elect in writing to treat such surrender as a merger terminating
Tenant's estate under this Lease, and thereupon Landlord may terminate any or
all such subleases by notifying the sublessee of its election so to do within
five (5) days after such surrender.
27. ATTORNEY'S FEES: If either party hereto fails to perform any of its
---------------
obligations under this Lease or if any dispute arises between the parties hereto
concerning the meaning or interpretation of any provision of this Lease then the
defaulting party or the party not prevailing in such dispute, as the case may
be, shall pay any and all cost expenses incurred by the Other party on
account of such default and/or in enforcing or establishing its rights
hereunder, including, without limitation, court costs and reasonable attorneys,
fees and disbursements. Any such attorneys, fees and other expenses incurred by
either party in enforcing a judgment in its favor under this Lease shall
separately from and in addition to any other be recoverable amount included in
such judgment, and such attorneys' fees obligation is intended to be severable
from the other provisions of this Lease and to survive and not be merged into
any such judgment.
28. TAXES: Tenant shall be liable for and shall pay, prior to delinquency,
-----
all taxes levied against personal property and trade or business fixtures of
Tenant. If any alteration, addition or improvement installed by Tenant pursuant
to Paragraph 11, or any personal property, trade fixture or other property of
Tenant, is assessed and taxed with the Property, Tenant shall pay such taxes to
Landlord within ten (10) days after delivery to Tenant of a statement therefor.
29. EFFECT OF CONVEYANCE: The term "Landlord" as used in this Lease, means
--------------------
only the owner for the time being of the Property containing the Premises, so
that, in the event of any sale of the Property or the Premises, Landlord shall
be and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder accruing from and after the transfer, and it shall be deemed
and construed, without further agreement between the parties and the purchaser
at any such sale, that the purchaser of the Property or the Premises has assumed
and agreed to carry out any and all covenants and obligations of Landlord
hereunder.
30. TENANT'S ESTOPPEL CERTIFICATE: From time to time, upon written
-----------------------------
request of Landlord, Tenant shall execute, acknowledge and deliver to Landlord
or its designee, a written certificate stating (a) the date this Lease was
executed, the Commencement Date of the Term and the date the Term expires; (b)
the date Tenant entered into occupancy of the Premises;
22.
(c) the amount of Rent and the date to which such Rent has been paid; (d) that
this Lease is in full force and affect and has not been assigned, modified,
supplemented or amended in any way (or, if assigned, modified, supplemented or
amended, specifying the date and terms of any agreement so affecting this
Lease); (e) that this Lease represents the entire agreement between the parties
with respect to Tenant's right to use and occupy the Premises (or specifying
such other agreements, if any); (f) that all obligations under this Lease to be
performed by Landlord as of the date of such certificate have been satisfied (or
specifying those as to which Tenant claims that Landlord has yet to perform);
(g) that all required contributions by Landlord to Tenant on account of Tenant's
improvements have been received (or stating exceptions thereto); (h) that on
such date there exist no defenses off sets that Tenant has against the
enforcement of this Lease by Landlord (or stating exceptions thereto); (i) that
no Rent or other sum payable by Tenant hereunder has been paid more than one (1)
month in advance (or stating exceptions thereto); (j) that security has been
deposited with Landlord, stating the amount thereof; and (k) any other matters
evidencing the status of this Lease that may be required either by a lender
making a loan to Landlord to be secured by a deed of trust covering the Premises
or by a purchaser of the Premises. Any such certificate delivered pursuant to
this Paragraph 30 may be relied upon by a prospective purchaser of Landlord's
interest or a mortgagee of Landlord's interest or assignee of any mortgage upon
Landlord's interest in the Premises. If Tenant shall fail to provide such
certificate within ten (10) days of receipt by Tenant of a written request by
Landlord as herein provided, such failure shall, at Landlord's election,
constitute a Default under his Lease, and Tenant shall be deemed to have given
such certificate as above provided without modification and shall be deemed to
have admitted the accuracy of any information supplied by Landlord to a
prospective purchaser or mortgagee.
31. SUBORDINATION: Landlord shall have the right to cause this Lease to
-------------
be and remain subject and subordinate to any and all mortgages, deeds of trust
and ground leases, if any ("Encumbrances") that are now or may hereafter be
executed covering the Premises, or any renewal, modifications, consolidations,
replacements or extensions thereof, for the full amount of all advances made or
to be made thereunder and without regard to the time or character of such
advances, together with interest thereon and subject to all the terms and
provisions thereof; provided only, that in the event of termination of any such
ground lease or upon the foreclosure of any such mortgage or deed of trust, so
long as Tenant is not in default, the holder thereof ("Holder") shall agree to
recognize Tenant's rights under this Lease as long as Tenant shall pay the Rent
and observe and perform all the provisions of this Lease to be observed and
performed by Tenant. Within ten (10) days after Landlord's written request,
Tenant shall execute, acknowledge and deliver any and all reasonable documents
required by Landlord or the Holder to effectuate such subordination. If Tenant
fails to do so, such failure shall constitute a Default by Tenant under this
Lease. Notwithstanding anything to the contrary set forth in this Paragraph 31,
Tenant hereby attorns and agrees to attorn to any person or entity purchasing or
otherwise acquiring the Premises at any sale or other proceeding or pursuant to
the exercise of any other rights, powers or remedies under such Encumbrance.
32. ENVIRONMENTAL COVENANTS:
-----------------------
(a) As used in this Lease, the term "Hazardous Materials" shall mean
and include any substance that is or contains (a) any 'hazardous substance" as
now hereafter defined in Section 101(14) of the Comprehensive Environmental
Response, Compensation, and Liability
23.
Act 1980, as amended ("CERCLA") (42 U.S.C. 5 9601 et seq.) or any regulations
promulgated under CERCLA; (b) any "hazardous waste" as now hereafter defined in
the Resource Conservation and Recovery Act, as amended ("RCRA") (42 U.S.C.
Section 6901 et seq.) or any regulations promulgated under RCRA; (c) any
substance now or hereafter regulated by the Toxic Substances Control Act, as
amended ("TSCA") (15 U.S.C. Section 2601 et seq.) or any regulations
promulgated under TSCA; (d) petroleum, petroleum by-products, gasoline, diesel
fuel, or other petroleum hydrocarbons; (e) asbestos and asbestos-containing
material, in any form, whether triable or non-triable; (f) polychlorinated
biphenyls; (g) lead and lead-containing materials; or (h) any additional
substance, material or waste (A) the presence of which on or about the Premises
requires reporting, investigation or remediation under any Environmental Laws
(as hereinafter defined), (ii) causes or threatens to cause. A nuisance on the
Premises or any adjacent property or sea or threatens to pose a hazard to the
health or safety of persons on the Premises or any adjacent property, or (iii)
which, if it emanated or migrated from the Premise could constitute a trespass,
or (B) which is now or is hereafter classified or considered to be hazardous or
toxic under any Environmental Laws.
(b) As used in this Lease, the term "Environmental Laws" shall mean
and include (a) CERCLA, CRA and TSCA; and (b) any other federal, state or local
laws ordinances, statutes, codes, rules, regulations, orders or decrees now or
hereinafter in effect relating to pollution, (ii) the protection or regulation
of human health, natural resources or the environment, (iii) the treatment,
storage or disposal of Hazardous Materials, or (iv) the emission, discharge,
release or threatened release of Hazardous Materials into the environment.
(c) Tenant agrees that during its use and occupancy of the Premises
it will (a) not permit Hazardous Materials to be present on or about the
Premises except in a manner and quantity necessary to the ordinary performance
of Tenant's business or (ii) release, discharge or dispose of any Hazardous
materials on, in, at, under, or emanating from, the Premises or the Property;
(b) comply with all Environmental Laws relating to the Premises and; the use
of Hazardous Materials on or about the Premises and not engage in or permit
others to engage in any activity at the Premises in violation, of any
Environmental Laws; and (c) immediately notify Landlord of (i) any inquiry,
test, investigation or enforcement proceeding by any governmental agency or
authority against Tenant, Landlord or the Premises relating to any Hazardous
Materials or under any Environmental Laws or (ii) the occurrence of any event or
existence of any condition that would cause a breach of any of the covenants set
forth in this Section 32.
(d) If Tenant's use of Hazardous Materials on or about the Premises
results in a release, discharge or disposal of Hazardous Materials on, in, at,
under, or emanating from, the Premises or the Property, Tenant agrees to
investigate, clean up, remove or remediate such Hazardous materials in full
compliance with (a) the requirements of (i) all Environmental Laws and (ii) any
governmental agency or authority responsible for the enforcement of any
Environmental Laws; and (b) any additional requirements of Landlord that are
reasonably necessary to protect the value of the Premises or the Property.
(e) Upon reasonable notice to Tenant, Landlord may inspect the
Premises for the purpose of determining whether there exists on the Premise any
Hazardous Material or other condition or activity that is in violation of the
requirements of this Lease or of any Environmental Laws. Tenant will supply to
Landlord such historical and operational
24.
information regarding the Premises as may be reasonably requested to facilitate
any such inspection and will make available for meetings appropriate personnel
having knowledge of such matters. Tenant agrees to give Landlord at least sixty
(60) days, prior notice of its intention to vacate the Premises so that Landlord
will have an opportunity to perform such an inspection prior to such vacation.
The right granted to Landlord herein to perform inspections shall not create a
duty on Landlord's part to inspect the Premises, or liability on the part of
Landlord for Tenant's use, storage or disposal of Hazardous Materials, it being
understood that Tenant shall be solely responsible for all liability in
connection therewith.
(f) Landlord shall have the right, but not the obligation, prior or
subsequent to an event of default, without in any way limiting Landlord's other
rights and remedies under this Lease to enter upon the Premises, or to take
such other actions as it deems necessary or advisable, to investigate, clean up,
remove or remediate any Hazardous materials or contamination by Hazardous
Materials present on in, at, under, or emanating from, the Premises or the
Property in violation of Tenant's obligations under this Lease or under any
Environmental Laws. Notwithstanding any other provision of this Lease, Landlord
shall also have the right, at its election. In its own name or as Tenant's
agent, to negotiate, defend, approve and appeal, at Tenant's expense, any action
taken or order issued by any governmental agency or authority with regard to any
such Hazardous Materials or contamination by Hazardous Materials. All costs and
expenses paid or incurred by Landlord in the exercise of the rights set forth in
this Subsection 32 (f) shall be payable by Tenant upon demand.
(g) Tenant shall surrender the Premises to Landlord upon the
expiration or earlier termination of this Lease free of debris, waste or
Hazardous Materials placed on or about the Premises by Tenant or its agents,
employees, contractors or invitees, and in a condition which complies with all
Environmental Laws.
(h) Tenant agrees to indemnify and hold harmless Landlord from and
against any and all claims, losses (including, without limitation, loss in value
of the Premises or the Property, liabilities and expenses (including attorney's
fees) sustained by Landlord attributable to (i) any Hazardous materials placed
on or about the Premises by Tenant or its agents, employees, contractors or
invitees or (ii) Tenant's breach of any provision of this Section 32.
(i) The provisions of this Section 32 shall survive the expiration or
earlier termination of this Lease.
33. NOTICES: All notices and demands which may or are to be required or
-------
permitted to be given to either party by the other hereunder shall be in writing
and shall be sent by United States mail, postage prepaid, certified, or by
personal delivery or overnight courier, addressed to the addressee at the
address for such addressee as specified in the Basic Lease information, or to
such other place as such party may from time to time designate in a notice to
the other party given as provided herein, or by telex or telecopy at the number
therefor designated by the addressee in a written notice given as provided
herein. Notice shall be deemed given upon the earlier of actual receipt or the
third day following deposit in the United States mail in the Manner described
above.
25.
34. WAIVER: The waiver of any breach of any term, covenant or condition of
------
this Lease shall riot 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. The subsequent acceptance of Rent by Landlord
shall not be deemed to be a waiver of any preceding breach by Tenant, other than
the failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of such
Rent. No delay or omission in the exercise of any right or remedy of Landlord
on any Default by Tenant shall impair such a right or remedy or be construed as
a waiver. Any waiver by Landlord of any Default must be in writing and shall
not be a waiver of other Default concerning the same or any other provisions of
this Lease.
35. HOLDING OVER: Any holding over after the expiration of the Term,
------------
without the express written consent of Landlord, shall constitute a Default and,
without limiting Landlord's remedies provided in this Lease, such holding over
shall be construed to be a tenancy at sufferance, at a rental rate of one
hundred fifty percent, (150%) of the Base Rent last due in this Lease, plus
Additional Rent, and shall otherwise be on the terms and conditions herein
specified, so far as applicable.
36. SUCCESSORS AND ASSIGNS: The terms, covenants and conditions of this
----------------------
Lease shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of all of the parties
hereto. If Tenant shall consist of more than one entity or person, the
obligations of Tenant under this Lease shall be joint and several.
37. TIME: Time is of the essence of this Lease and each and every term,
----
condition and provision herein.
38. BROKERS: Landlord and Tenant each represents and warrants to the other
-------
that neither it nor its officer; or agents nor anyone acting on its behalf has
dealt with any real estate broker except the Broker(s) specified in the Basic
Lease Information in the negotiating or making of this Lease, and each party
agrees to indemnity and hold harmless the other from any claim or claims, and
costs and expense including attorneys' fees, incurred by the indemnified party
in conjunction with any such claim or claims of any broker or brokers to a
commission in connection with this Lease as a result of the actions of the
indemnifying party.
39. LIMITATION OF LIABILITY: Tenant agrees that, in the event of any
-----------------------
default or breach by Landlord with respect to any of the terms of the Lease to
be observed and performed by Landlord (a) Tenant shall look solely to the estate
and property of Landlord or any successor in interest in the Property and the
Premises, for the satisfaction of Tenant's remedies for the collection of a
judgment (or other judicial process) requiring the payment of money by Landlord;
(b) no other property or assets of Landlord, its partners, shareholder,
officers, directors or any successor in interest shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant's
remedies; (c) no personal liability shall at any time be asserted or enforceable
against Landlord's partners or successors in interest (except to the extent
permitted in (a) above) , or against Landlord's shareholders, officers or
directors, or their respective partners, shareholders, officers, directors or
successors in interest; and (d) no judgment will be taken against any partner,
shareholder, officer or director of Landlord- The provisions of this
26.
section shall apply only to the Landlord and the parties herein described, and
shall not be for the benefit of any insurer nor any other third party.
40. FINANCIAL STATEMENTS: Within thirty (30) days after Landlord's
--------------------
request, Tenant shall deliver to Landlord the then current financial statements
of Tenant (including interim periods following the end of the last fiscal year
for which annual statements are available), prepared or compiled by a certified
public accountant, including a balance sheet and profit and loss statement for
the most recent prior year, all prepared in accordance with GAAP.
41. RULES AND REGULATIONS: Tenant agrees to comply with such reasonable
---------------------
rules and regulations as Landlord may adopt from time to time for the orderly
and proper operating of the Premises and parking and other common areas. Such
rules may include but shall not be limited to the following: (a) restriction of
employee parking to a limited, designated area or areas; and (b) regulation of
the removal, storage and disposal of Tenant's refuse and other rubbish at the
sole cost and expense of Tenant. The rules and regulations shall be binding
upon Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
responsible to Tenant for the failure of any other person to observe and abide
by any of said rules and regulations,
42. MORTGAGEE PROTECTION:
--------------------
(a) Modifications for Lender. If, in connection with obtaining
------------------------
financing for the Premises or any portion thereof, Landlord's lender shall
request reasonable modifications to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent to such
modifications, provided such modifications do not materially adversely affect
Tenant's rights or increase Tenant's obligations under this Lease.
(b) Rights to Cure. Tenant agrees to give to any trust deed or
--------------
mortgage holder ("Holder"), by registered mail, at the same time as it is given
to Landlord, a copy of any notice of default given to Landlord, provided that
prior to such notice Tenant has been notified, in writing, (by way of notice of
assignment of rents and leases, or otherwise) of the address of such Holder.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease; then the Holder shall have an
additional twenty (20) days after expiration of such period, or after receipt of
such notice from Tenant (if such notice to the Holder is required by this
Paragraph 42 (b) whichever shall last occur within which to cure such default or
if such default cannot he cured within that time, then such additional time as
may be necessary if within such twenty (20) days, any Holder has commenced and
is diligently pursuing the remedies necessary to cure such default (including
but not limited to commencement of foreclosure, proceedings, if necessary to
effect such cure), in which event this Lease shall not be terminated.
43. ENTIRE AGREEMENT: This Lease, including the Exhibits and any Addenda
----------------
attached hereto, which are hereby incorporated herein by this reference,
contains the entire agreement of the parties hereto, and no representations,
inducements, promises or agreements, oral or otherwise, between the parties,
not embodied herein or therein, shall of any force and effect.
27.
44. INTEREST: Any installment of Rent and any other sum due from Tenant
--------
under this Lease which is not received by Landlord within ten (10) days from
when the same is due shall bear interest from such tenth (10th) day until paid
at an annual rate equal to the maximum rate of interest permitted by law.
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.
45. CONSTRUCTION: This Lease shall be construed and interpreted in
------------
accordance with the laws of the state of California. The parties acknowledge
and agree that no rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall be employed in the interpretation
of this Lease, including the Exhibits and any Addenda attached hereto. All
captions in this Lease are for reference only and shall not be used in the
interpretation of this Lease. Whenever required by the context of this Lease,
the singular shall include the plural, the masculine shall include the feminine,
and vice versa. If any provision of this Lease shall be determined to be
illegal or unenforceable, such determination shall not affect any of her
provision of this Lease and all such other provisions shall remain in full force
and effect.
46. REPRESENTATIONS AND WARRANTIES OF TENANT: Tenant hereby makes the
----------------------------------------
following representations and warranties, each of which is material and being
relied up on by Landlord, is true in all respects as of the date of this Lease,
and shall survive the expiration or termination of the Lease.
(a) If Tenant in an entity, Tenant is duly organized, validly
existing and in good standing under the laws of the state of its organization
and the persons executing this Lease on behalf of Tenant have the full right and
authority to execute this Lease on behalf of Tenant and to bind Tenant without
the consent or approval of any other person or entity. Tenant has full power,
capacity, authority and legal right to execute and deliver this Lease and to
perform all of its obligations hereunder. This Lease is a legal, valid and
binding obligation of Tenant, enforceable in accordance with its terms.
(b) Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by any creditors, (3) suffered the appointment of a
receiver to take possession of all or substantially all of its assets, (4)
suffered the attachment or other judicial seizure of all or substantially all of
its assets, (5) admitted in writing its inability to pay its debts as they come
due, or (6) made an offer of settlement, extension or composition to its
creditors generally.
(c) Tenant presently maintains working capital (as defined in Section
47 below) in an amount sufficient to satisfy the requirements of said
section 47.
47. WORKING CAPITAL. Throughout the Term of this Lease, including,
---------------
without limitation, any Renewal-Term, Tenant shall at all times maintain working
capital in an amount equal to twenty percent (20%) of Tenant's net sales
(calculated in accordance with GAAP). For purposes of this section 47, "working
capital" means the sum of Tenant's current assets, less the sum of Tenant's
current liabilities, all determined in accordance with GAAP.
28.
48. RENEWAL OPTIONS. Tenant shall have two (2.) options (the "First
---------------
Renewal Option" and the "Second Renewal Option," respectively, and collectively,
the Renewal Options") to extend the Term for successive periods of three (3)
years each beyond the Expiration Date (the "First Renewal Term" and the "Second
Renewal Term," respectively and collectively, the "Renewal Terms") The Renewal
Options shall be effective only if Tenant is not in Default under this Lease,
nor has any event occurred which with the giving of notice or the passage of
time, or both, would constitute a Default hereunder, either at the time of
exercise of the respective Renewal Option or the time of commencement of the
respective Renewal Term. The Second Renewal option shall be effective only if
Tenant has previously validly exercised the First Renewal Option and occupied
the Premises throughout the First Renewal Term. The Renewal Options must be
exercised, if at all, by written notice from Tenant to Landlord given not more
than nine (9) months nor less than six (6) months prior to the expiration of the
initial Term or the First Renewal Term, as the case may be. Any such notice
given by Tenant to Landlord shall be irrevocable, if Tenant fails to exercise
the Renewal Options in a timely manner as provided for above, the Renewal
Options shall be void. The Renewal Terms shall be upon the same terms and
conditions as the initial Term, except that the annual Base Rent during the
Renewal Terms shall be equal to the prevailing market rate for space in well
located, high visibility buildings in Moffett Park comparable to the Premises in
size, condition (excluding, however, for purposes of determining prevailing
market rate, the value of any Tenant Improvements or Alterations paid for
directly by Tenant and not funded out of the Tenant Improvements Allowance, the
Tenant Improvements Deposit or Tenant Improvements Loan, as such terms are
defined in Exhibit B hereto), quality and type, and with a comparable landlord
(taking into account, among other things, the availability of tenant improvement
dollars) at the commencement of the respective Renewal Term; provided, however,
that the Base Rent payable hereunder during the First Renewal Term shall not be
less than eighty-eight cents ($0.88) per rentable square foot per month, and,
provided further, that the Base Rent during the Second Renewal Term shall not be
less than the Base Rent payable hereunder at the end of the First Renewal Term.
As used herein, the term "prevailing mark shall mean the base annual rental
for such comparable space, taking into account any additional rental and all
other payments and escalations payable hereunder and by tenants under leases of
such comparable space.' If Tenant disputes Landlord's determination of the
prevailing market rate, Tenant shall so notify the Landlord within ten (10) days
following Landlord's notice to Tenant of the prevailing market rate and such
dispute shall be resolved as follows:
(a) Within thirty (30) days following Tenant's notice to Landlord of
Tenant's dispute of Landlord's determination of the prevailing market rate.
Landlord and Tenant shall meet no less than two (2) times, at a mutually
agreeable time and place, to attempt to resolve any such disagreement.
(b) if within this thirty (30) day period Landlord and Tenant cannot
reach agreement as to the prevailing market rate, they shall each select one
appraiser to determine the prevailing market rate. Each such appraiser shall
arrive at a determination of the prevailing market rate and submit his
conclusions to Landlord and Tenant within thirty (30) days of the expiration of
the thirty (30) day consultation period described in paragraph (a) above.
(c) if only one appraisal is submitted within the requisite time
period, it shall be deemed to be the prevailing market rate. If both appraisals
are submitted within such time
29.
period, and if the two appraisals so submitted differ by less than ten (10)
percent of the higher of the two, the average of the two shall be the prevailing
market rate. If the two appraisals differ by more than ten (10) percent of the
higher of the two, then the two appraisers shall immediately select a third
appraisers who will within thirty (30) days of his selection make a
determination of the prevailing market rate and submit such determination to
Landlord and Tenant. This third appraisal will then be averaged with the closer
of the two previous appraisals and the result shall be the prevailing market
rate.
(d) All appraisers specified pursuant her to shall be licensed real
estate brokers in the State of California with not less than five (5) years,
experience appraising commercial and industrial properties in the County of
Santa Clara. Each party shall pay the cost of the appraiser selected by such
party and one-half (1/2) of the cost of the third appraiser plus one-half (1/2)
of any other costs incurred in connection with the appraisal.
Landlord and Tenant have executed and delivered this Lease as of the
Lease Date specified in the Basic Lease Information.
LANDLORD: TENANT:
AETNA LIFE INSURANCE COMPANY, HINE DESIGN, INC.,
a Connecticut corporation a California corporation
By: /s/ Joseph E. Gankler By:
------------------------------- -----------------------------
Print Joseph E. Gankler Print Scott C. Kennedy
---------------------------- -----------------------------
Name: Name:______________________________
Its: Asst. Vice Pres. Its: Controller
------------------------------- ------------------------------
By:________________________________
Print:_____________________________
Name:______________________________
Its:_______________________________
30.
EXHIBIT B
TENANT IMPROVEMENTS
This exhibit, entitled "Tenant Improvements", is and shall constitute
EXHIBIT B to the Lease Agreement, dated as of the Lease Date, by and between
Landlord and Tenant for the Premises. The terms and conditions of this EXHIBIT
B are hereby incorporated into and are made a part of the Lease. Capitalized
term used, but not otherwise defined, in this EXHIBIT B have the meanings
ascribed to such terms in the Lease.
1. Tenant Improvements. Subject to the conditions set forth below,
-------------------
Landlord agrees to construct certain Tenant Improvements in the Premises
pursuant to the terms of this EXHIBIT B.
2. Definition. "Tenant Improvements" as used in the Lease and this
----------
EXHIBIT B shall include only those improvements within the interior portions of
the Premises which are depicted on the Final Plans and Specifications (hereafter
defined in Paragraph 3) or described hereinbelow. "Tenant Improvements" shall
specifically not include any alterations, additions, or improvements installed
or constructed by Tenant, and any of Tenant's personal property or trade
fixtures.
The Tenant Improvements may include:
(a) Partitioning, doors, floor coverings, finishes, ceilings, wall
coverings and painting, millwork and similar items.
(b) Electrical wiring, lighting fixtures, outlets and switches, and
other electrical work,
(c) Duct work, terminal boxes, defusers and accessories required for
the completion of the heating, ventilation and air conditioning systems serving
the Premises, including the cost of meter and key central for after-hour air
conditioning.
(d) Any additional Tenant requirements including, but not limited to
odor control, special heating ventilation and air conditioning, noise or
vibration control or other special systems.
(e) All fire and life safety control systems such as fire walls,
sprinklers, halon, fire alarms, including piping, wiring and accessories
installed within and serving the Premises.
(f) All plumbing, fixtures, pipes, and accessories to be installed
within and serving the Premises.
3. Plans and Specifications. Landlord shall retain the architect
------------------------
specified in the Basic Lease information ("Architect") for the preparation of
preliminary and final working architectural and engineering plans and
specifications for the Tenant Improvements ("Final Plans aid Specifications")
Landlord reserves the right to substitute for the Architect another architect of
its selection. Tenant shall cooperate diligently with the Architect and shall
furnish within ten (10)
31.
days after request therefor, all information required by the Architect for
completion of the Final Plans and Specifications, and shall provide (in writing,
if requested by Landlord). Not later than three (3) business days after request
therefor, any approval or disapproval of preliminary or Final Plans and
Specifications which Tenant is permitted to give under this EXHIBIT B. Landlord
and Tenant shall indicate their approval of the Final Plans and Specifications
by initialing them and attaching them to the Lease as EXHIBIT B-1. Upon
completion of the Final Plans and Specifications and approval thereof by
Landlord and Tenant, Landlord will obtain subcontractor trade bids and furnish a
cost breakdown to Tenant. In the event the estimated Tenant Improvements Cost
(hereafter defined in Paragraph 8), based on such bids and the reasonably
anticipated costs of other items constituting the Tenant Improvements Cost,
exceeds the sum of the Tenant Improvements Allowance (hereafter defined in
Paragraph 5) the Tenant Improvements Deposit (hereinafter defined in Paragraph
6), and the Tenant Improvements Loan (hereinafter defined in Paragraph 7) plug
any amounts which Tenant desires to pay as an Excess Tenant Improvements cost
(hereafter defined in Paragraph 9) ("Tenant's T.I. Budget, at Tenant's request,
the Final Plans and Specifications may be revised once, at Tenant's cost and
expense. Any such revisions shall be subject to Landlord's approval, and the
amended Final Plans and Specifications, as approved by Landlord and Tenant,
shall thereafter be deemed to be the Final Plans and Specifications for the
Tenant Improvements. The amended Final Plans and Specifications shall be
approved by Tenant (in writing, if requested by Landlord) not later than three
(3) days after Landlord's request therefor. Landlord shall thereafter submit
such amended Final Plans and specifications to the contractor (as hereinafter
defined) and subcontractors for rebidding, and shall furnish a cost breakdown to
Tenant. If the estimated Tenant improvements cost, as determined by the bids
based on the amended Final Plans and Specifications and the reasonably
anticipated costs of other items constituting the Tenant Improvements Cost,
result in an Excess Tenant Improvement Cost, then Tenant shall pay such Excess
Tenant Improvements Cost as and when required by Paragraph 9. Tenant's failure
to approve or disapprove any matters which Tenant shall be entitled to approve
or disapprove pursuant to this Paragraph 3 shall be conclusively deemed to be
approval of same try Tenant.
4. Landlord to Construct Improvements. When the Final Plans and
----------------------------------
Specifications (as amended, if required by Paragraph 3 above) have been approved
by Landlord and Tenant, Landlord shall submit such Final Plans and
Specifications to all governmental authorities having rights of approval over
the Tenant improvement work and shall apply for all governmental approvals and
building permits. Subject to satisfaction of all conditions precedent and
subsequent to its obligations under this EXHIBIT B, and further subject to the
provisions of Paragraph 9, Landlord shall thereafter cause the Contractor to
commence and proceed to complete construction of the Tenant Improvements. As
used herein, "Contractor" means a licensed contractor selected by Landlord for
the construction of the Tenant Improvements. Landlord shall consider Tenant's
recommendations regarding the selection of such Contractor, but Landlord
reserves the right to make the final decision regarding the Contractor in its
sole discretion.
5. Tenant Improvements Allowance. Landlord shall provide an allowance
-----------------------------
for the planning and construction of the Tenant Improvements in the amount
specified in the Basic Lease Information ("Tenant Improvements Allowance").
Subject to Paragraph 7. The Tenant Improvements Allowance shall be the maximum
contribution by Landlord for the Tenant Improvements Cost, as defined in
Paragraph B. Should the actual cost of planning and
32.
constructing those Tenant improvements depicted and the Final Plans and
Specifications be less than the Tenant Improvements Allowance, the Tenant
Improvements Allowance shall be reduced to an amount equal to said actual cost.
6. Tenant Improvements Deposit. Concurrently with the execution of this
---------------------------
Lease by Landlord and Tenant, Tenant shall deposit with Landlord the sum of Two
Hundred Fifty Thousand Dollars ($250,000) (the "Tenant Improvement Deposit,") to
be applied toward the Tenant Improvements Cost. The Tenant Improvements Deposit
shall be held in an interest-bearing account (the "Account") in the name of
Landlord at a bank or other financial institution mutually acceptable to
Landlord and Tenant and all interest earned thereon shall accrue for the account
of Tenant and shall be disbursed to Tenant upon the completion of the Tenant
Improvements. Landlord shall have the right to unilaterally withdraw funds from
the Account from time to time to pay the Tenant improvements Cost after the
Tenant Improvements Allowance has been fully disbursed, and prior to any
disbursements under the Tenant Improvements Loan. Should the actual Tenant
Improvements Cost be less than the sum of the Tenant Improvements Allowance and
the Tenant improvements Deposit, then any funds remaining in the Account shall
be retained by Landlord and shall be deemed Additional Rent under the Lease.
7. Tenant Improvements Loan. Landlord agrees to loan to Tenant up to
------------------------
Two Hundred Twenty Five Thousand Six Hundred Dollars ($225,600) for Tenant
Improvements (the "Tenant Improvements Loan") after the Tenant Improvements
Allowance and the Tenant Improvements Deposit have been fully disbursed. The
Tenant Improvements Loan shall be repayable by Tenant to Landlord in
substantially equal self-amortizing installments over the initial Term of the
Lease, together with interest on the balance outstanding from time to time at
the rate of twelve percent (12%) per annum. Notwithstanding anything herein to
the contrary, in the event the Lease shall terminate for any reason prior to the
scheduled expiration thereof, the Tenant Improvements Loan and all accrued and
unpaid interest thereon shall immediately become due and payable in full.
8. Tenant improvements Cost. The Tenant Improvements Cost ("Tenant
------------------------
Improvements Cost") shall include all costs and expenses associated with the
design, preparation, approval and construction of the Tenant Improvements,
including, but not limited, to the following:
(a) All costs of preliminary and final architectural and engineering
plans and specifications for the Tenant Improvements, and engineering costs
associated with completion of the State of California energy utilization
calculations under Title 24 legislation;
(b) All costs of obtaining building permits and other necessary
authorizations from local governmental authorities;
(c) All costs of interior design and finish schedule plans and
specifications including as-built drawings;
(d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee for
33.
overhead and profit and the cost, of all on-site supervisory and
administrative staff, office, equipment and temporary services rendered by
Landlord's contractor in connection with construction of the Tenant
Improvements;
(e) All fees payable to the Architect and Landlord's engineering firm
if they are required by Tenant to redesign any portion of the Tenant
Improvements following Tenant's approval of the Final Plans and Specifications;
and
(f) Utility connection fees.
In no event shall the Tenant Improvements Cost include any costs of procuring,
constructing or installing in the Premises any of Tenant's personal property or
trade fixtures.
9. Excess Tenant Improvements Cost. If the Tenant Improvements Cost in
-------------------------------
more than the sum of the Tenant Improvements. Allowance, the Tenant
Improvements Deposit and the Tenant Improvements Loan, then the difference
between the Tenant Improvements Cost and the sum of the Tenant Improvements
Deposit, the Tenant Improvements Allowance and the Tenant Improvements Loan
("Excess Tenant Improvements Cost") shall be paid by Tenant to Landlord in cash,
within ten (10) days of delivery of statements from Landlord and Tenant
therefor. If construction of the Tenant Improvements will result in Excess
Tenant Improvements Cost, Landlord shall not be obligated to commence
construction of the Tenant Improvements if payment of the Excess Tenant
Improvements Costs by Tenant is not received within ten (10) days after delivery
by Landlord to Tenant of a statement therefor; provided, however, that Landlord
may, at its option, commence construction of the Tenant Improvements, in which
event Tenant shall pay the Excess Tenant Improvements Cost within ten (10) days
after delivery by Landlord to Tenant of the statement therefor If Landlord so
elects to commence construction of the Tenant Improvements or has already
commenced construction of the Tenant Improvements when there occurs an Excess
Tenant Improvements cost, then Landlord shall be entitled to suspend or
terminate construction of the Tenant Improvements if payment by Tenant to
Landlord of the Excess Tenant Improvement Costs has not been received within ten
(10) days after delivery by Landlord to Tenant of a statement therefor.
10. Change Request. When the Final Plans and Specifications have been
--------------
approved by Landlord, there shall be no changes without Landlord's prior written
consent except for (a) necessary on-site installation variations or minor
changes necessary to comply with building codes and other governmental
regulations; (b) one revision, if requested by Tenant, to adjust the estimated
Tenant Improvements Cost to Tenant's T. I. Budget therefor, as permitted by
Paragraph 3 above; and (c) changes approved in writing by both parties. Any
costs related to such governmentally required or requested and approved changes
shall be added to the Tenant Improvements Cost and, to the extent such cost
results in Excess Tenant Improvements Cost, shall be paid for by Tenant as and
with any Excess Tenant Improvements Cost as set forth in Paragraph 9. The
billing for such additional costs to Tenant shall be accompanied by evidence of
the amounts billed as is customarily used in the business, Costs related to
changes shall include, without, limitation, any architectural or design fees,
and Landlord Is general contractor's price for affecting the change.
34.
11. Roof. Notwithstanding anything in the Lease or this Exhibit B to the
---- ---------
contrary, Landlord shall install a new roof on the Premises prior to the
Commencement Date. The cost of such roof shall be paid out of Landlord's own
funds and shall not be debited against the Tenant Improvements Allowance, Tenant
Improvements Deposit or Tenant Improvements Loan.
12. HVAC Improvements.
-----------------
A. Repair and Replacement of Existing HVAC Units. Prior to the
---------------------------------------------
Commencement Date, Landlord shall, at its sole cost and expense, repair the
existing HVAC units serving the Premises which are deemed repairable by the
Contractor (such units being hereinafter referred to as the "Repairable Units").
The remaining HVAC units shall be replaced by Landlord with new units (the
"Replacement Units") prior to the Commencement Date, provided that Tenant shall
pay to Landlord as Additional Rent its prorata share of the cost of the
Replacement units falling due within tie Term (including any Renewal Terms)
based upon the amortization of such cost over the useful life of the Replacement
Units, as reasonably determined by Landlord accordance with GAAP. In the event
Tenant desires Landlord to replace (rather than to repair) the Repairable Units,
then Landlord shall so replace such Repairable Units with a Replacement Units
prior to the Commencement Date provided that Tenant shall pay to Landlord as
Additional Rent its prorata share of the cost of the Replacement Units falling
due within the Term in the manner previously described in this Paragraph 12.A.
B. Installation of Additional HVAC Units. In the event that, as
-------------------------------------
part of the Tenant Improvements, Tenant requests that Landlord install any
additional HVAC units in the Premises (in addition to the existing HVAC units,
which shall be repaired and/or replaced in accordance with Paragraph 12.A above)
or any additional related equipment to provide additional air-handling capacity
for Tenant's specific use of the Premises, then the cost of such additional
HVAC units and equipment shall be part of the Tenant Improvements cost and shall
be paid for out of the Tenant Improvements Allowance, the Tenant Improvements
Deposit and the Tenant Improvements Loan. At Tenant's request, such additional
HVAC units and equipment serving the clean Rooms will be refurbished or
reconditioned (rather than new) units; provided, however, that if Tenant so
elects to install refurbished or reconditioned (rather than new) units, then at
the request of Landlord made at any time prior to the expiration of the Term,
Tenant shall be required to remove such refurbished or reconditioned units from
the Premises on or before the Expiration Date and to repair and restore any
damage to the Premises resulting from such removal.
13. Termination. If the Lease is terminated prior to completion of the
-----------
Tenant Improvements for any reason due to the Default of Tenant under the Lease,
in addition to any other damages available to Landlord, Tenant shall pay to
Landlord, within five (5) days of receipt of a statement therefor, all costs
incurred by Landlord through the date of termination in connection with the
Tenant Improvements (collectively, "Landlord's Costs"), without limiting the
foregoing, upon such termination, Landlord shall have the right to withdraw
funds from the Account to pay Landlord's Costs and/or to complete the Tenant
Improvements or to remove the Tenant Improvements theretofore constructed by
Landlord in the Premises. Landlord shall have the right to terminate the Lease,
upon written notice to Tenant, if Landlord is unable to obtain a building permit
for the Tenant Improvements within one hundred twenty (120) days from the date
the Lease is mutually executed.
35.
14. Interest. Any payments required to be made by Tenant hereunder which
--------
are not paid when due shall bear interest at the maximum rate permitted by law
from the due date therefor until paid.
15. Disclaimer. Landlord shall have no liability to Tenant in the event
----------
construction of the Tenant improvements is delayed or prevented due to any cause
beyond Landlord's reasonable control. If Tenant is entitled or permitted to
enter the Premises prior to completion of the Tenant Improvements, Landlord
shall not be liable to Tenant or its employees or agents for any loss or damage
to property, or injury to person, arising from or related to construction of the
Tenant Improvements. Tenant shall take all reasonable precautions to protect
against such loss, damage or injury during construction of the Tenant
Improvements, and shall not interfere with the conduct of the Tenant Improvement
work. Tenant shall cooperate with all reasonable directives of Landlord and
Landlord's contractor in order to minimize any disruption or delay in completion
of the Tenant Improvements work.
36.
EXHIBIT B-1
FINAL PLANS AND SPECIFICATIONS
Reference is hereby made to that certain Lease Agreement dated August
4, 1995 by and between Aetna Life Insurance Company, a Connecticut corporation,
as landlord ("Landlord"), and Hine Design, Inc., a California corporation, as
tenant ("Tenant"), ("Lease Agreement").
The Final Plans and Specifications (as defined in Exhibit B to the
Lease Agreement) consists of the following described drawings, specifications
and other documents:
Title of Drawing, Specification
or Other Document Date
- -------------------------------- ------------------
The Final Plans and Specifications have been initialed by both
Landlord and Tenant and are on file with Landlord.
Initials; Landlord______________ Tenant________________
37.
EXHIBIT C
COMMENCEMENT DATE MEMORANDUM
LANDLORD AETNA LIFE INSURANCE COMPANY DESIGN, INC.
TENANT: HINE DESIGN, INC.
LEASE DATE August 4, 1995
PREMISES: Located at 241 E. Java Drive,
Sunnyvale, California
Tenant hereby accepts the Premises as being in the condition required
under the Lease, with all Tenant Improvements completed (except for minor
punchlist items which Landlord agrees to complete).
The Commencement Date of the above referenced Lease is hereby
established as 1-29-96.
TENANT:
HINE DESIGN, INC.,
A California corporation
By /s/ Dominic J. Credi
-----------------------------------
Print_________________________________
Name: Dominic J. Credi
Its___________________________________
Approved and Agreed:
AETNA LIFE COMPANY,
a Connecticut corporation
By_________________________________
Print______________________________
Name:______________________________
Its________________________________
TENANT FILE___________________________
38.