COMMERCIAL SUB-SUBLEASE (BUILDING 6)
BETWEEN
X-X TSMD INC., as Tenant
and
XXXXXXX-XXXXXXX COMPANY, as Landlord
SUMMARY INFORMATION (FOR CONVENIENCE ONLY; NOT PART OF THE LEASE)
Premises Address: 0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx
Total Area of Premises: Approximately 63,000 square feet
Term: Thirty-Six (36) Months
Commencement Date: October 31, 1997
Expiration Date: October 31, 2000
Options: None
Landlord Contact: Tenant Contact
Treasurer TSMD Acquisition Corp.
Xxxxxxx-Xxxxxxx Company c/o Mentmore Holdings, Inc.
0000 Xxxxxxxx Xxxxxx 0000 Xxxxxxxx, 00xx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000 Xxx Xxxx, XX 00000-0000
Telephone: (000) 000-0000 Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
COMMERCIAL LEASE
TABLE OF CONTENTS
Page(s)
1. BASIC PROVISIONS.......................................................2
1.1 Premises.......................................................2
(a) Description...............................................2
(b) Master Lease and Sublease.................................2
(c) Termination of Greater Estates............................3
(d) Conditions Precedent......................................3
1.2 Term...........................................................3
1.3 Base Rent......................................................3
1.4 Permitted Use..................................................4
1.5 Parking........................................................4
1.6 Exhibits And Addenda...........................................4
2. PREMISES...............................................................4
2.1 Letting........................................................4
2.2 Condition......................................................4
2.3 Compliance With Covenants, Restrictions And Applicable Law.....5
2.4 Termination Option.............................................5
3. [INTENTIONALLY OMITTED]................................................5
4. RENT...................................................................5
4.1 Base Rent......................................................5
5. HAZARDOUS SUBSTANCES...................................................6
5.1 Definition.....................................................6
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5.2 Landlord Representations.......................................6
5.3 Landlord Indemnification.......................................7
5.4 Tenant's Use...................................................7
5.5 Environmental Communications...................................8
5.6 Survival.......................................................8
5.7 Inspection; Compliance.........................................8
6. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES
AND ALTERATIONS........................................................8
6.1 Tenant's Obligations...........................................8
6.2 Landlord's Obligations.........................................9
6.3 Utility Installations; Trade Fixtures; Alterations.............9
(a) Definitions; Consent Required.............................9
(b) Consent..................................................10
(c) Indemnification..........................................10
6.4 Ownership; Surrender..........................................11
(a) Ownership................................................11
(b) Surrender................................................11
7. INSURANCE; INDEMNITY..................................................11
7.1 Landlord Insurance............................................11
7.2 Tenant Insurance..............................................11
7.3 Insurance Policies............................................11
7.4 Waiver Of Subrogation.........................................12
7.5 Indemnity.....................................................12
8. DAMAGE OR DESTRUCTION.................................................12
8.1 Termination; Restoration......................................12
8.2 Waive Statutes................................................13
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9. REAL PROPERTY TAXES...................................................13
9.1 Payment Of Taxes..............................................13
10. UTILITIES.............................................................13
10.1 Utilities.....................................................13
10.2 Telephone Services............................................14
11. ASSIGNMENT AND SUBLETTING.............................................14
11.1 Tenant's Right To Assign Or Sublet............................14
11.2 Tenant's Right To Assign for Financing Purposes...............14
11.3 Consent of the Ground Lessor and the Master Lessor............15
12. BREACH; REMEDIES......................................................15
12.1 Breach........................................................15
12.2 Remedies......................................................16
12.3 Breach By Landlord............................................17
13. CONDEMNATION..........................................................18
13.1 Termination; Restoration......................................18
13.2 Award.........................................................18
13.3 Waive Statutes................................................18
14. BROKERS...............................................................19
15. TENANCY STATEMENT.....................................................19
16. LANDLORD'S LIABILITY..................................................19
17. SEVERABILITY..........................................................19
18. INTEREST ON PAST-DUE OBLIGATIONS......................................20
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19. TIME OF ESSENCE.......................................................20
20. RENT DEFINED..........................................................20
21. NO PRIOR OR OTHER AGREEMENTS..........................................20
22. NOTICES...............................................................20
23. WAIVERS...............................................................21
24. RECORDING.............................................................21
25. CUMULATIVE REMEDIES...................................................21
26. BINDING EFFECT; CHOICE OF LAW.........................................21
27. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE............................21
27.1 Subordination.................................................21
27.2 Attornment....................................................22
27.3 Self-Executing................................................22
27.4 No Merger.....................................................22
28. ATTORNEYS' FEES.......................................................22
29. LANDLORD'S ACCESS.....................................................23
30. SIGNS.................................................................23
31. HOLDING OVER..........................................................23
32. QUIET POSSESSION......................................................23
33. CONSENTS..............................................................23
34. PERFORMANCE UNDER PROTEST.............................................24
35. AUTHORITY.............................................................24
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36. CONFLICT..............................................................24
37. OFFER.................................................................24
38. AMENDMENTS............................................................24
39. WAIVER OF STATUTORY LIEN..............................................24
40. MULTIPLE PARTIES......................................................25
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COMMERCIAL SUB-SUBLEASE (BUILDING 6)
This Commercial Sub-Sublease (Building 6) ("Lease") dated, for reference
purposes only, October 31, 1997, is made by and between XXXXXXX-XXXXXXX COMPANY,
a California corporation ("Landlord"), and X-X TSMD INC., a California
corporation and a wholly-owned subsidiary of Landlord ("Tenant"). Tenant and
Landlord are referred to collectively as the "Parties," or individually as a
"Party".
RECITALS
WHEREAS, Landlord, Tenant and TSMD Acquisition Corp., a Delaware
corporation ("TSMD Acquisition"), have entered into a Stock Purchase Agreement,
dated as of August 29, 1997 ("Purchase Agreement"), whereby TSMD Acquisition has
agreed to purchase, and Landlord has agreed to sell, all of the outstanding
stock of Tenant; and
WHEREAS, reference is made to that certain Lease dated as of September 1,
1972 (as amended to date, "Ground Lease") by and between The Board of Trustees
of the Xxxxxx Xxxxxxxx Junior University, a body having corporate powers under
the laws of the State of California ("Ground Lessor"), and Landlord, as
predecessor in interest to Morrco Properties Company., a California limited
partnership ("Master Lessor"); and
WHEREAS, reference is made to that certain Lease and Agreement (as amended
to date, the "Master Lease") dated as of October 31, 1975, between Master
Lessor, and Landlord, as Sublessee thereunder; and
WHEREAS, pursuant to the Purchase Agreement, Landlord desires to sub-
sublet to Tenant a portion, which portion is shown on Exhibit A-1 which is
attached hereto, of the "Leased Premises", as defined in the Master Lease (the
"Premises"); and
WHEREAS, TSMD Acquisition and Tenant desire that Tenant sub-sublet such
Premises from Landlord; and
WHEREAS, the execution of this Agreement is a condition to the closing of
the purchase and sale of the outstanding stock of Tenant under the Purchase
Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties agree as follows:
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1. BASIC PROVISIONS.
1.1 Premises.
(a) Description. The Premises are located in the City of Palo
Alto, County of Santa Xxxxx, State of California, on that certain
tract of real property (the "Land") more fully described on Exhibit A
hereto. A site plan is attached hereto as Exhibit A-1 setting forth
the Premises as outlined within the buildings containing the Premises
(the "Building"). The right to use and enjoy the Premises hereunder
shall include a license in favor of Tenant to use and enjoy the areas
within the Building or on the Land designed for common usage by
tenants or other occupants of the Building (the "Common Area"),
including, but not limited to, sidewalks, entryways, parking areas,
elevators, common corridors and restroom facilities, for all
reasonable purposes, including, but not limited to, ingress, egress
and loading, subject to such rules and regulations as Landlord may
reasonably establish with respect to such usage.
(b) Master Lease and Sublease. Tenant understands that this Lease
is a lesser estate that exists under the leasehold estates created by
the Ground Lease and the Master Lease, and that, as a matter of law,
this Lease is subject to all the provisions of the Ground Lease and
the Master Lease. Notwithstanding the foregoing, the Parties agree, as
between themselves (this means that Landlord covenants the following
to Tenant, but that Tenant and Landlord acknowledge that such covenant
will not limit the rights or remedies of Ground Lessor or Master
Lessor), that Landlord will continue to satisfy all of the terms and
conditions of the Master Lease and the Ground Lease, as imposed upon
the subtenant under the Master Lease, except as expressly otherwise
provided in this Lease. In addition to any consents or approvals of
Landlord that may be required under the provisions of this Lease
(excepting only the consent of the Ground Lessor to this Lease, which
consent has been obtained by Landlord), Tenant understands that the
approval of the Ground Lessor or the Master Lessor may also be
required under the provisions of the Ground Lease or the Master Lease,
as applicable. In such event, Landlord will so advise Tenant at the
time that Tenant seeks the consent or approval of Landlord hereunder,
and, to the extent that Landlord has granted its own consent or
approval under the provisions of this Lease, Landlord shall use
reasonable efforts to obtain the consent or approval of the Ground
Lessor or the Master Lessor under the Ground Lease or the Master
Lease, as applicable. Notwithstanding the foregoing, Tenant
understands and acknowledges that those actions that require the
consent or approval of the Ground Lessor or the Master Lessor under
the Ground Lease or the Master Lease, as applicable, cannot be
undertaken without such consent or approval, and if Landlord, despite
its reasonable efforts, is unable to obtain such consent or approval,
Tenant shall not undertake any such action. In addition, to the
extent, at any time, Landlord advises Tenant in writingthat the Ground
Lessor or the Master Lessor is then alleging that any action
undertaken by Tenant is in
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violation of the terms of the Ground Lease or the Master Lease, as
applicable, Tenant and Landlord shall reasonably cooperate to remedy
any actual violation in any manner that will allow Tenant to continue
the Business upon the Premises.
(c) Termination of Greater Estates. If Landlord's interest in the
Master Lease terminates for any reason, this Lease shall also
terminate. Notwithstanding such termination, the parties shall have
their rights and remedies as are available at law and in equity
following any such termination of this Lease, including, without
limitation, for any breach of the covenant of quiet possession set
forth in Section 32 below (unless Tenant is then in Breach under the
terms of this Lease). If such termination of this Lease does not
result from the following two events, however, then Landlord shall in
no event be liable for any consequential damages or lost profits of
Tenant resulting from such termination: (i) the failure of Landlord to
satisfy its obligations under the Master Lease, including, without
limitation, those obligations under the Ground Lease which are imposed
upon Landlord under the provisions of the Master Lease (but expressly
excluding any obligations that are to be satisfied by Tenant under the
provisions of this Lease), or (ii) the expiration or termination of
the term of the Master Lease because of Landlord's consensual
agreement with the Master Lessor.
(d) Conditions Precedent. A condition precedent to the
effectiveness of this Lease will be Landlord's obtaining any consent
hereto that may be required under the provisions of the Ground Lease
or the Master Lease. Landlord will use commercially reasonable efforts
to obtain such consents as quickly as possible. Landlord shall keep
Tenant informed of its efforts to obtain such consents. A further
condition precedent to the effectiveness of this Lease will be the
closing of the transaction contemplated by the Purchase Agreement.
1.2 Term. The term of this Lease shall be thirty-six (36) months
("Lease Term"), commencing October 31, 1997 ("Commencement Date"), and
ending October 31, 2000 ("Expiration Date"), or on any such earlier
date as this Lease may be terminated pursuant to its express
provisions. Landlord will deliver the Premises to Tenant in its
currently existing condition on or before the Commencement Date.
Tenant shall have no right or option to extend the Lease Term.
1.3 Base Rent. The monthly base rent for the Lease Term shall be
the amount ("Base Rent") that is equal to the product of Two and Three
Hundredths Dollars ($2.03)--multiplied by the rentable square footage
of the Premises. Tenant shall pay the Base Rent applicable to the
first full or partial calendar month of the Lease Term to Landlord on
the first day of the Lease Term. Thereafter, the Base Rent shall be
payable on the first (1st) calendar day of each month. (See Article 4
for further provisions). Base Rent will remain fixed throughout the
Lease Term. To the extent that the first month of the Lease Term
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or the last month of the Lease Term is a partial month, Base Rent for
such month shall be prorated based upon the actual number of days in
such month.
1.4 Permitted Use. The Premises are to be used by Tenant for
continuing to operate the Business (as defined in the Purchase
Agreement, together with any reasonable extensions thereof that are
not prohibited under the provisions of the Purchase Agreement), and
for no other purpose. Tenant understands that there are limitations on
the permitted use of the leased premises set forth in the Ground Lease
and in the Master Lease. Therefore, Tenant shall not change the nature
of the Business (with the Business defined to include any such
reasonable extensions thereto as provided above) in any material
manner, to the extent that the Business is conducted upon the
Premises. Notwithstanding anything to the contrary in this Section
1.4, Landlord warrants that the operation of the Business will not
violate any of the provisions of this Section 1.4.
1.5 Parking. Tenant and its employees, invitees and licensees
shall be entitled to common use of all of the parking areas on the
Land available for use by Landlord and its employees, invitees and
licensees, but subject to the same restrictions that apply to use of
the parking areas by Landlord and its employees, invitees and
licensees (such as visitor parking areas, van pool areas, and handicap
parking areas).
1.6 Exhibits And Addenda. The following Exhibits and Addenda are
attached hereto and incorporated herein by reference:
Exhibit A -- The Land
Exhibit A-1 -- Site Plan
Exhibit B -- Telephone Service
2. PREMISES.
2.1 Letting. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, the Premises, for the Lease Term, at the rental,
and upon all of the terms, covenants and conditions set forth in this
Lease. Unless otherwise provided herein, any statement of square
footage set forth in this Lease, or that may have been used in
calculating rental, is an approximation which Landlord and Tenant
agree is reasonable, and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 Condition. Landlord shall deliver the Premises to Tenant
clean and free of debris on or before the Commencement Date. Landlord
warrants to Tenant that the foundation, roof and other structural
elements of the Building, and the building systems, including, without
limitation, existing plumbing, fire sprinkler system, lighting,
heating, ventilation, air conditioning and loading doors, if any, in
the Premises are suitable for, and can support, the operation of the
Business as
4
of the date of this Lease. Landlord has endeavored, prior to the date
of this Lease, to reconfigure the Building at Landlord's sole cost to
permit the Business to be conducted within the Premises. To the extent
that further reconfigurations are required for the conduct of the
Business within the Premises (whether because of requirements of
Applicable Law existing as of this date or because the parties
overlooked requirements of the Business, but not merely for cosmetic
effect), then Landlord shall perform such additional reconfiguration
at Landlord's cost as quickly as commercially reasonably possible
under the circumstances. To the extent that the cost of any such
additional reconfiguration can be achieved at material cost savings by
causing the work to occur over a longer period of time, Landlord and
Tenant shall reasonably cooperate to allow such longer period of time
to be used so long as allowing such additional period of time does not
impair Tenant's conduct of the Business within the Premises.
2.3 Compliance With Covenants, Restrictions And Applicable Law.
Landlord shall cause any alterations that are required to cause the
Premises to comply with all laws, rules, regulations, ordinances,
statutes, codes, directives, covenants, easements and restrictions of
record, permits and the reasonable requirements of any applicable fire
insurance underwriter or rating bureau (collectively, "Applicable
Law") to be constructed at Landlord's sole cost and expense. Landlord
shall further comply with all Applicable Law pertaining to the
Building and the Land other than the specific compliance obligations
of Tenant with respect to the conduct of the Business. In addition,
Landlord shall perform its maintenance obligations under the
provisions of Section 6 of this Lease in such manner so as to comply
with Applicable Law. Tenant shall, at its cost and expense, comply
with Applicable Law, whether or not any such Applicable Law may
involve a change of policy on the part of the body enacting the same,
to the extent related to Tenant's operation of the Business.
2.4 Termination Option. Tenant shall have the right, exercisable
at any time during the Lease Term, to terminate this Lease in its
entirety, provided that Tenant delivers a written notice of
termination to Landlord ("Termination Notice") at least six (6) months
prior to the date on which Tenant intends to terminate this Lease (the
"Termination Date"). If Tenant delivers a Termination Notice pursuant
to this Section 2.4, this Lease shall terminate effective as of the
Termination Date.
3. [INTENTIONALLY OMITTED]
4. RENT.
4.1 Base Rent. Subject to the terms of this Lease, Base Rent and
other rent or charges payable hereunder shall be paid to Landlord in
lawful money of the United States, without offset or deduction, except
as expressly otherwise provided in Section 12.3 hereof, when due under
the terms of this Lease, at Landlord's address stated herein or to
such other persons or at such
5
other addresses as Landlord may from time to time designate in writing
to Tenant. Except as expressly otherwise provided in Section 10.2,
Tenant shall not be responsible for paying or reimbursing Landlord for
any of the costs incurred by or on behalf of Landlord in maintaining,
operating, repairing or improving the Premises, the Building or the
Land, regardless of whether such costs are incurred by or on behalf of
Landlord in performing its maintenance, operation, repair and
improvement obligations under this Lease.
5. HAZARDOUS SUBSTANCES.
5.1 Definition. "Hazardous Substance" means (but shall not be
limited to) substances that are defined or listed in, or otherwise
classified pursuant to, any Applicable Law as "hazardous substances,"
"hazardous materials," "hazardous wastes" or "toxic substances," or
any other formulation intended to define, list or classify substances
by reason of deleterious properties such as ignitibility, corrosivity,
reactivity, radioactivity, carcinogenicity, reproductive toxicity or
"EP toxicity," and petroleum and drilling fluids, produced waters and
other wastes associated with the exploration, development, or
production of crude oil, natural gas or geothermal energy.
5.2 Landlord Representations. Except as otherwise disclosed in
the Purchase Agreement, Landlord has not generated, used, transported,
treated, stored, released or disposed of, or suffered or permitted
anyone else to generate, use, transport, treat, store, release or
dispose of any Hazardous Substance in violation of any Applicable Law
or at any location upon the Land or the Building which could require
investigation or remediation; (b) there has not been any generation,
use, transportation, treatment, storage, release or disposal of any
Hazardous Substance in connection with the conduct of the Business or
the use of any property or facility of Landlord (whether owned,
generated or used by Landlord) or to the knowledge of Landlord any
nearby or adjacent properties or facilities, which has created or
might reasonably be expected to create any liability under any
Applicable Law or which would require reporting to or notification of
any governmental agency or which could have an adverse impact on the
operation of the Land or the Building; (c) no asbestos or
polychlorinated biphenyl or underground storage tank is contained in,
on, under or about the Building or the Land, and no Hazardous
Substance is present on, under or about the Land or the Building which
could require investigation or remediation by any governmental agency;
(d) any Hazardous Substance handled or dealt with in any way in
connection with the Business, whether before or during Landlord's
ownership, has been and is being handled or dealt with in all respects
in compliance with Applicable Law; and (e) no condition exists in, on,
under or about the Land or the Building which is in violation of any
Applicable Law or for which any Applicable Law could require that
corrective action be taken. As used herein, the term "knowledge" with
respect to Landlord shall be limited as provided with respect to
"Seller" in Section 9.15 of the Purchase Agreement.
6
5.3 Landlord Indemnification. Subject to the limitations set
forth in Section 8.5 of the Purchase Agreement, Landlord agrees to
indemnify, defend and hold harmless Tenant and its directors,
officers, employees, affiliates and assigns from and against any and
all Losses (as such term is defined in the Purchase Agreement),
whether incurred directly or indirectly, as a result of, or based upon
or arising from the generation, use, transportation, treatment,
storage, release or disposal, before the date of this Lease, of
Hazardous Substances by, or at any property or facility of Landlord.
From and after the date of this Lease, Landlord shall indemnify,
defend and hold Tenant harmless from and against any and all losses,
costs, claims, causes of action, fines and penalties, whether incurred
directly or indirectly, as a result of, or based upon or arising from
the generation, use, transportation, treatment, storage, release or
disposal of Hazardous Substances in, on, under or about the Building
or the Land, which were not caused primarily by Tenant's operation.
5.4 Tenant's Use. Tenant shall have the right to store, use and
handle Hazardous Substances on the Premises, provided that (i) such
Hazardous Substances are used in the operation of the Business or are
brought onto the Premises in the ordinary course of the Business and
used in compliance with Applicable Law and Landlord's reasonable
procedures for the acquisition, use, storage, handling and disposal of
Hazardous Substances, (ii) Tenant shall not cause to be brought upon
the Premises any Hazardous Substances that have not been previously
stored or used at the Premises without Landlord's prior written
consent, which consent shall not be unreasonably withheld or delayed,
and (iii) Landlord shall instruct Tenant on compliance procedures
necessary to ensure that such Hazardous Substances are stored, used,
handled and disposed of in compliance with Applicable Law. In
connection with its oversight and coordination of the compliance
procedures, Landlord shall (x) have access to all of Tenant's
operations within the Premises at all times, following reasonable
notice (or in the case of emergency, without notice), for the purpose
of monitoring Tenant's compliance with Landlord's compliance
procedures with respect to Hazardous Substances, (y) have Tenant's
reasonable cooperation in complying with such procedures, and (z)
promptly notify Tenant of any release or discovery of Hazardous
Substances at the Premises not in compliance with Applicable Law and
Landlord's procedures. Tenant shall indemnify, defend and hold
Landlord harmless from any and all losses, costs, claims, causes of
action, fines and penalties, whether incurred directly or indirectly,
which relate to events occurring during the Lease Term and which arise
solely as a result of Tenant's use of Hazardous Substances at the
Premises during the Lease Term. Further, notwithstanding anything to
the contrary in this Lease, but without limiting Tenant's monetary
obligations under the foregoing indemnity, Tenant is not permitted to
maintain, repair, remediate or otherwise conduct work with respect to
the following portions of the Premises: (i) structural elements of the
Premises, the building systems and portions of the Building containing
insulation or fireproofing material on or in exterior walls, columns,
beams, ceilings, pipes,
7
ducts and other similar elements of the Building; (ii) any portion of
the Premises more than six (6) feet below ground surface; or (iii) any
portions of the Premises, the Building or the Land that are
contaminated with Hazardous Substances, as of the Commencement Date,
including, without limitation, any and all portions of the Premises,
the Building or the Land that are subject to Regional Remedial Action
Order HSA88/89016 and the Environmental Cleanup Agreement dated
January 11, 1992.
5.5 Environmental Communications. Landlord and Tenant shall
promptly after receipt or transmittal thereof, deliver to the other
copies of all material written communications given to or received
from any governmental agency, environmental consultant, or other
person or entity relating to Hazardous Substances in or removed from
the Premises, including, without limitation, copies of all claims,
reports, complaints, notices, warnings or asserted violations,
relating in any way to Hazardous Substances in, on, under or about the
Premises.
5.6 Survival. The representations, warranties and agreements of
the Parties set forth in this Article 5 shall survive the expiration
of the Lease Term or the termination of this Lease for any other
reason.
5.7 Inspection; Compliance. Landlord shall have the right to
enter the Premises at any time in the case of an emergency, and
otherwise at reasonable times upon reasonable prior notice for the
purpose of inspecting the condition of the Premises and for verifying
compliance by Tenant with this Lease, the Ground Lease, the Master
Lease and all Applicable Law. Any such inspection shall not disrupt or
disturb the ongoing operation of the Business. Landlord may employ
experts or consultants in connection therewith to advise Landlord with
respect to Tenant's activities, including but not limited to the
installation, operation, use, monitoring, maintenance or removal of
any Hazardous Substance or storage tank on or from the Premises. The
cost and expense of any such inspections shall be paid by Landlord,
unless a Breach (as defined in Section 12.1) of this Lease, a material
violation of an Applicable Law with respect to which Tenant is
obligated to pay for the costs or compliance under the terms of this
Lease, or Landlord's reasonable rules and regulations (provided that
Tenant has received written notice of such rules and regulations), or
a material contamination caused by Tenant is found to exist.
6. MAINTENANCE; REPAIRS; UTILITY INSTALLATIONS; TRADE FIXTURES AND ALTERATIONS.
6.1 Tenant's Obligations. Tenant, at Tenant's sole cost and
expense, shall maintain, operate and repair any and all Trade Fixtures
and Tenant owned Alterations and/or Utility Installations (as such
terms are defined in Section 6.3(a)). Although Landlord will be
providing normal janitorial services as provided below, Tenant shall
properly dispose of its own trash and waste
8
materials in waste receptacles designated by Landlord, and clean up
any extraordinary janitorial problems that it may cause in its conduct
of the Business. In addition, to the extent that Tenant or its
employees or agents damages any portion of the Premises or the
Building by any negligent or wrongful act or omission of such party,
Tenant shall repair any such damage at its sole cost and expense.
6.2 Landlord's Obligations. Except as otherwise provided in
Section 6.1 above, Landlord shall, at its sole cost and expense,
maintain, in good repair and condition, and service all portions of
the Building and the Premises including, but not limited to, the
foundation, roof, ceilings, floor coverings, downspouts, gutters,
plumbing fixtures, utility lines, windows, doors, plate glass,
exterior, interior, and demising walls, and all systems in the
Building, including, but not limited to, heating, ventilating, air
conditioning, and electrical systems, elevators, lighting facilities,
boilers, fired or unfired pressure vessels, fire alarm and/or smoke
detection systems and equipment and any other Utility Installations
that are not owned by Tenant. In addition, Landlord shall perform or
cause to be performed all maintenance, repair and other services to
the Common Areas and the Land, as and when the same are reasonably
necessary to maintain such areas in good condition and repair,
including, but not limited to, landscape maintenance, driveway and
parking area maintenance for the parking areas, any private streets
and roadways serving or providing access to the Building and the Land,
exterior lighting maintenance, waste removal, repair and maintenance
of walkways, cleaning supplies, miscellaneous building supplies,
external painting for the Building, exterior and interior Common Area
maintenance, insect and pest extermination, security guards or
security system for the Building, signs for the Building and other
miscellaneous maintenance. In addition, Landlord shall accept from
Tenant for disposal (by Tenant's depositing such items for storage as
specified by Landlord in writing) Tenant's spent Hazardous Substances
(in quantities generally comparable with those generated by the
Business as of the date of this Lease) ("Spent Materials") for
disposal in accordance with Applicable Law. To the extent that the
third-parties who haul away such Spent materials require that the
owner of such Spent Materials sign the manifest or other
documentation, Tenant shall sign such manifest or other documentation
as the owner thereof. Tenant shall reimburse Landlord for Landlord's
actual, documented, third-party costs incurred in having such Spent
Materials hauled away from the Land and Building in accordance with
Applicable Law. Tenant shall pay any amounts owing to Landlord under
the preceding sentence within thirty (30) days following Landlord's
delivery of a written invoice, together with supporting documentation,
for any such amounts.
6.3 Utility Installations; Trade Fixtures; Alterations.
(a) Definitions; Consent Required. The term "Utility
Installations" is used in this Lease to refer to all floor coverings,
window coverings, air lines, power panels, electrical distribution,
security, fire protection
9
systems, lighting fixtures, heating, ventilating, and air conditioning
equipment, plumbing and non-demising walls in, on, under or about the
Premises. The term "Trade Fixtures" shall mean Tenant's machinery and
equipment, including, but not limited to computer systems, computer
equipment, storage facilities, fences, partitions and other similar
items, that can be removed without doing irreparable damage to the
structural portions of the Premises. The term "Alterations" shall mean
any modification of the improvements on the Premises from that which
are provided by Landlord under the terms of this Lease, other than
Utility Installations or Trade Fixtures. Except as provided elsewhere
in this Lease, Tenant shall not make any Alterations or Utility
Installations in, on, under or about the Premises without (i)
Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed and (ii) the prior written consent of
the Ground Lessor and the Master Lessor, to the extent required under
the provisions of the Ground Lease and the Master Lease, as
applicable. As stated above, Landlord shall use commercially
reasonable efforts to obtain the consent of the Ground Lessor and the
Master Lessor, when required. Tenant shall not directly communicate
with the Ground Lessor or the Master Lessor.
(b) Consent. Any Alterations or Utility Installations that Tenant
shall desire to make, including, without limitation, any initial
tenant improvements that Tenant may desire, shall be presented to
Landlord in written form with proposed plans. All consents given by
Landlord shall be deemed conditioned upon: (i) Tenant's acquiring all
applicable permits required by governmental authorities; (ii) the
furnishing to Landlord of copies of such permits together with a copy
of the plans and specifications for the Alteration or Utility
Installation prior to commencement of the work thereof; and (iii)
compliance by Tenant with all conditions of said permits in a prompt
and expeditious manner. Any Alterations or Utility Installations made
by Tenant during the Lease Term shall be done in a good and
workmanlike manner, with good and sufficient materials, and in
compliance with all Applicable Law. Tenant shall promptly upon
completion thereof furnish Landlord with as-built plans and
specifications therefor. Landlord may (but without obligation to do
so) condition its consent to any requested Alteration or Utility
Installation (x) that costs Fifty Thousand Dollars ($50,000) or more
upon Tenant's providing Landlord with a lien and completion bond in an
amount equal to the estimated cost of such Alteration or Utility
Installation and (z) upon Tenant's written undertaking to remove such
Alteration or Utility Installation at the end of the Lease Term.
(c) Indemnification. Tenant will not permit to remain, and will
promptly discharge at its cost and expense, all liens, encumbrances
and charges upon the Premises, or Building or Land, or part thereof,
arising out of the use or occupancy of the Premises by Tenant or by
reason of labor or materials furnished or claimed to have been
furnished or any construction, alteration, addition, repair or
demolition of any part of the Premises, or Building or Land, for or at
the request of Tenant. Landlord is hereby authorized to enter upon the
Premises at
10
any time to post any notices which in its opinion shall be necessary
to hold Landlord harmless from any claim or liability arising out of
any work done on the Premises.
6.4 Ownership; Surrender.
(a) Ownership. All Alterations and Utility Installations made to
the Premises by Tenant shall be the property of and owned by Tenant,
but considered a part of the Premises. At the expiration of the Lease
Term, all such Alterations and Utility Installations shall remain a
part of the Premises and be surrendered to Landlord with the Premises
as provided below, except with respect to any Alterations or Utility
Installations which Tenant is obligated to remove from the Premises
under the provisions of Section 6.3(b)(z). In removing any such
Alterations and Utility Installations that Tenant is obligated to
remove hereunder, Tenant shall repair any material damage to the
Premises caused by such removal. Tenant's Trade Fixtures shall remain
the property of Tenant at all times and may be removed by Tenant at
any time, and shall be removed by Tenant at the expiration of the
Lease Term, and Tenant shall repair any material damage resulting from
such removal.
(b) Surrender. Tenant shall surrender the Premises by the end of
the last day of the Lease Term or any earlier termination of this
Lease, in the condition existing as of the Commencement Date,
reasonable wear and tear and damage by casualty excepted, with all of
the improvements and parts and surfaces thereof clean and free of
debris.
7. INSURANCE; INDEMNITY.
7.1 Landlord Insurance. Landlord shall maintain or cause to be
maintained at all times during the Lease Term all insurance required
to be maintained under the provisions of the Master Lease and Ground
Lease. Landlord shall cause Tenant to be named as an additional
insured under its policy of commercial general liability insurance.
7.2 Tenant Insurance. Tenant shall obtain and keep in force
during the Lease Term fire and extended coverage insurance on its
Alterations, Utility Installation and Trade Fixtures, and commercial
general liability insurance issued by insurers, with endorsements and
in amounts customary in the industry, naming the Ground Lessor, the
Master Lessor and Landlord as additional insureds thereunder.
7.3 Insurance Policies. Landlord and Tenant shall each cause to
be delivered to the other certificates evidencing the existence and
amounts of such insurance as required by this Lease. The certificates
shall contain a provision that the insurer will endeavor to provide
the other with thirty (30) days' prior written notice of cancellation.
Landlord and Tenant shall each endeavor to
11
provide the other at least fifteen (15) days prior to the expiration
of such policies, with evidence of renewals or "insurance binders"
evidencing renewal thereof.
7.4 Waiver Of Subrogation. Without affecting any other rights or
remedies, Tenant and Landlord ("Waiving Party") each hereby releases
and relieves the other, the Ground Lessor and the Master Lessor (but
Tenant only does so with respect to the Ground Lessor and the Master
Lessor to the extent that each such party does so with respect to
Tenant) and waives its entire right to recover damages in tort against
such parties, for loss of or damage to the Waiving Party's property
arising out of or incident to the perils required to be insured
against under this Article 7. The effect of such releases and waivers
of the right to recover damages shall not be limited to the amount of
insurance required to be carried hereunder nor by any customary
deductibles applicable thereto. The provisions of this Section 7.4
shall not apply if a Party breaches a duty to insure hereunder.
7.5 Indemnity. Tenant agrees to pay, and to protect, indemnify
and save harmless Landlord, from and against, any and all liabilities,
losses, damages, costs, expenses (including reasonable attorneys' fees
and expenses of Tenant and Landlord), causes of action, suits, claims
(including, without limitation, any claim of the Master Lessor or the
Ground Lessor), demands or judgments of any nature arising from (i)
Tenant's use of the Premises or the Land or operation of the Business
or (ii) Tenant's failure to perform its obligations under this Lease,
except to the extent caused by Landlord's gross negligence or wrongful
acts or omissions. Landlord agrees to pay, and to protect, indemnify
and save harmless Tenant, from and against any and all liabilities,
losses, damages, costs, expenses (including reasonable attorneys' fees
and expenses of Landlord and Tenant), causes of action, suits, claims,
demands or judgments of any nature arising from (i) Landlord's use of
the portion of the Building that is for Landlord's exclusive use or
performance of its business operation within the Building and upon the
Land or (ii) Landlord's failure to perform its obligations under this
Lease, except to the extent caused by Tenant's gross negligence or
wrongful acts or omissions. The agreements of Tenant and Landlord
under this Section 7.5 shall survive the termination of this Lease and
each party shall continue to be liable hereunder notwithstanding such
termination.
8. DAMAGE OR DESTRUCTION.
8.1 Termination; Restoration. In the event of any damage or
destruction of the Premises or the Building that results in the Ground
Lessor or the Master Lessor having any right to terminate the Ground
Lease or the Master Lease, as applicable, which termination right is
in fact exercised by the Ground Lessor or the Master Lessor, this
Lease shall terminate as of the date of such termination of the Ground
Lease or the Master Lease, as applicable, with no liability therefor
on the part of Landlord. To the extent that neither the Ground Lessor
nor the Master Lessor is entitled to terminate or chooses to terminate
the
12
Ground Lease or the Master Lease following any such damage or
destruction, Landlord shall not exercise any separate termination
right that it may have under the Ground Lease or the Master Lease
without first obtaining the prior written consent of Tenant, which
Tenant may withhold in its sole discretion. In the event that this
Lease is not terminated following any damage or destruction, Landlord
shall proceed to satisfy its obligations to repair and restore under
the Master Lease and the Ground Lease, to a condition suitable for
Tenant's conduct of the Business, as diligently as possible, and this
Lease shall remain in full force and effect. Notwithstanding the
foregoing, if as a result of such damage or destruction, Tenant is
unable to operate the Business at the Premises and the necessary
repair and restoration to permit business operations cannot be
completed within ninety (90) days after occurrence of such damage or
destruction, as reasonably determined by Tenant, Tenant shall have the
right to terminate this Lease by written notice delivered to Landlord
within thirty (30) days following the date of such damage or
destruction. During any period of time that Tenant is unable
reasonably to conduct the Business in the Premises as a result of any
damage or destruction, Base Rent shall be abated.
8.2 Waive Statutes. Landlord and Tenant agree that the terms of
this Lease shall govern the effect of any damage to or destruction of
the Premises with respect to the termination of this Lease and hereby
waive the provisions of any present or future Applicable Law to the
extent inconsistent herewith.
9. REAL PROPERTY TAXES.
9.1 Payment Of Taxes. Landlord shall pay all real property taxes,
and special or general assessments that may be imposed upon the lessee
under the Master Lease during the Lease Term. Tenant shall not be
responsible for the payment of any real property taxes or special or
general assessments applicable to the Premises, the Building, or the
Land. Tenant shall, however, be responsible for and shall pay prior to
delinquency all taxes imposed upon Tenant's Alterations, Utility
Installations and Trade Fixtures.
10. UTILITIES.
10.1 Utilities. Landlord shall pay for and, to the extent
commercially reasonably available, shall obtain and provide to Tenant,
all water, gas, heat, light, power, trash disposal and other utilities
and services reasonably necessary for the conduct of the Business,
together with any taxes thereon (collectively, the "Utility Charges").
Tenant shall not be responsible for the payment of any Utility Charges
applicable to the Premises, the Building, or the Land. If,
notwithstanding Landlord's commercially reasonable efforts, water,
gas, heat, light, power, trash disposal or any other utilities or
services previously supplied to the Premises become unavailable from
the public utility that provides them as of the date of this Lease,
then Landlord shall make available to Tenant, at Landlord's sole cost,
any substitute utilities or services that Landlord is able to procure
for the conduct of
13
its own operations within the Building, on the same terms and
conditions that apply to Landlord's use thereof. Notwithstanding the
foregoing, if such utilities and services are unavailable to Tenant to
a degree that, in Tenant's reasonable discretion, prevents Tenant from
conducting the Business for ten (10) or more consecutive days, then
Tenant may, by delivery of written notice to Landlord, terminate this
Lease. Such notice may be given at any time following such tenth
consecutive day and prior to the date that such utilities or services
are restored.
10.2 Telephone Services. Landlord shall make telephone service
available for Tenant's use within the Premises on the same basis as
the other utilities and services provided above (except with respect
to reimbursement, as provided below), and on the terms and subject to
the conditions set forth in Exhibit B hereto. Tenant shall reimburse
Landlord for the cost of such service as provided on Exhibit B, within
thirty (30) days following Tenant's receipt of Landlord's invoice
therefor, together with supporting documentation.
11. ASSIGNMENT AND SUBLETTING.
11.1 Tenant's Right To Assign Or Sublet. Tenant shall have no
right to assign its interest in this Lease or to sublet all or any
portion of its interest in the Premises, whether voluntarily,
involuntarily or by operation of law, without Landlord's prior written
consent, which consent may be given or withheld in Landlord's sole
discretion. Notwithstanding the foregoing, Tenant may assign its
interest in this Lease for financing purposes as set forth in Section
11.2 below and may assigns its interest in this Lease or sublet all or
any portion of the Premises to any Affiliate, as defined below.
"Affiliate" means a person or entity that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or
is under common control with Tenant.
11.2 Tenant's Right To Assign for Financing Purposes.
Notwithstanding the provisions of Section 11.1, Tenant may, without
Landlord's consent, assign or encumber by mortgage or deed of trust,
or other proper instrument ("Leasehold Encumbrance"), its leasehold
interest in the Premises and Tenant's right, title and interest in
this Lease, as security for any indebtedness of Tenant or its
Affiliates. The execution of any such mortgage, or deed of trust, or
other instrument, or the foreclosure thereof, or any sale thereunder,
either by judicial proceedings or by virtue of any power reserved in
such mortgage or deed of trust, or conveyance by Tenant to the holder
of such indebtedness, or the exercise of any right, power or privilege
reserved in any mortgage or deed of trust, shall not be held as a
violation of any of the terms or conditions hereof, or as an
assumption by the holder of such indebtedness personally of the
obligations hereof. Any such Leasehold Encumbrance shall expressly
provide that any foreclosure thereof (or deed in lieu thereof) may be
undertaken only for the purpose of continuing the Business upon the
Premises. No such encumbrance, foreclosure, conveyance or exercise of
right shall relieve Tenant of its liability hereunder. The holder of
any such mortgage, deed of trust
14
or other security instrument is herein referred to as a "Leasehold
Lender". If a Leasehold Lender shall have given Landlord written
notice of the creation of a Leasehold Encumbrance, Landlord shall give
to such Leasehold Lender a copy of each notice of any claimed default
by Tenant prior to exercising any remedies against Tenant, addressed
to such Leasehold Lender at the address last furnished to Landlord.
Such Leasehold Lender shall thereupon have a period of thirty (30)
days, after service of such notice upon it, to remedy the default or
cause the same to be remedied. Such Leasehold Lender, in case Tenant
shall be in default hereunder, shall, within such period and otherwise
as herein provided, have the right to remedy such default, or cause
the same to be remedied. Landlord will accept performance by the
Leasehold Lender of any covenant, condition or agreement on Tenant's
part to be performed hereunder with the same force and effect as
though performed by Tenant. No event of default of Tenant with respect
to the performance of work required to be performed, or acts to be
done, or conditions to be remedied, shall be deemed to exist, so long
as Leasehold Lender shall, in good faith, have commenced promptly to
rectify and to prosecute the same to completion with diligence and
continuity. If Leasehold Lender cannot reasonably take the action
required to cure the default without being in possession of the
Premises, the time of Leasehold Lender to cure the default shall be
deemed extended to include the period of time reasonably required by
such Leasehold Lender to obtain such possession through a trustee's
sale with due diligence; provided, however, that during such period
all other obligations of Tenant under this Lease, including the
payment of rent and other sums required to be paid by Tenant, are
being duly performed. No Leasehold Lender shall become liable under
the provisions of this Lease, unless and until such time as it
becomes, and then only for as long as it remains, the owner of the
leasehold interest created by this Lease ("Leasehold Estate").
11.3 Consent of the Ground Lessor and the Master Lessor.
Notwithstanding any other provision set forth in Sections 11.1 or 11.2
above, no Leasehold Encumbrance or other assignment of Tenant's
interest in this Lease or subletting of all or any portion of the
Premises shall be of any force or effect unless and until any required
consent of the Ground Lessor under the Ground Lease or the Master
Lessor under the Master Lease has been obtained. Landlord will use
reasonable efforts to obtain any required consent from the Ground
Lessor or the Master Lessor for any assignment or subletting that is
otherwise permitted under the provisions of Sections 11.1 or 11.2
above.
12. BREACH; REMEDIES.
12.1 Breach. As used in this Lease, a "Breach" is defined as a
failure by Tenant to observe, comply with or perform any of the terms,
covenants, conditions or rules applicable to Tenant under this Lease
following written notice and opportunity to cure as set forth below.
Where a grace period for cure after notice is specified herein, the
failure by Tenant to cure such Breach prior to the
15
expiration of the applicable grace period shall entitle Landlord to
pursue the remedies set forth in Section 12.2:
(a) The failure by Tenant to make any payment of Base Rent or any
other monetary payment required to be made by Tenant hereunder as and
when due, where any such failure continues for a period of five (5)
days following written notice thereof by or on behalf of Landlord to
Tenant.
(b) The failure by Tenant to comply with the terms, covenants,
conditions or provisions of this Lease that are to be observed,
complied with or performed by Tenant, other than those described in
Subsection 12.1 (a) above or (c) below, where such Breach continues
for a period of thirty (30) days after written notice thereof by or on
behalf of Landlord to Tenant; provided, however, that if the nature of
Tenant's Breach is such that more than thirty (30) days are reasonably
required for its cure, then it shall not be deemed to be a Breach of
this Lease by Tenant if Tenant commences such cure within said thirty
(30) day period and thereafter diligently prosecutes such cure to
completion.
(c) The occurrence of any of the following events: (i) the making
by Tenant of any general arrangement or assignment for the benefit of
creditors; (ii) Tenant's becoming a "debtor" as defined in 11 U.S.C.
ss. 101 or any successor statute thereto (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60)
days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where possession is
not restored to Tenant within sixty (60) days; or (iv) the attachment,
execution or other judicial seizure of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged within sixty (60) days.
12.2 Remedies. In the event of a Breach of this Lease by Tenant,
as defined in Section 12.1, with or without further notice or demand,
and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such Breach, Landlord may:
(a) Terminate Tenant's right to possession of the Premises by any
lawful means, in which case this Lease shall terminate and Tenant
shall immediately surrender possession of the Premises to Landlord. In
such event, Landlord shall be entitled to recover from Tenant: (i) the
worth at the time of the award of the unpaid Base Rent which had been
earned at the time of termination; (ii) the worth at the time of award
of the amount by which the unpaid Base Rent which would have been
earned after termination until the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably
avoided; (iii) the worth at the time of the award of the amount by
which the unpaid Base Rent for the balance of the originally scheduled
Lease Term after the time of award exceeds the amount of such rental
loss that Tenant proves could be
16
reasonably avoided; and (iv) 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 of things would be likely to result therefrom, including the
cost of recovering possession of the Premises, expenses of reletting
and reasonable attorneys' fees. The worth at the time of award of the
amount referred to in provision (iii) of the prior sentence shall be
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%). The worth at the time of award of the amount referred to
in provisions (i) and (ii) of the second prior sentence shall be
computed by allowing interest at a rate equal to 10 percent per annum.
Efforts by Landlord to mitigate damages caused by Tenant's Breach of
this Lease shall not waive Landlord's right to recover damages under
this Section. If termination of this Lease is obtained through the
provisional remedy of unlawful detainer, Landlord shall have the right
to recover in such proceeding the unpaid rent and damages as are
recoverable therein, or Lanlord may reserve therein the right to
recover all or any part thereof in a separate suit for such rent
and/or damages. Notwithstanding the foregoing, in no event shall
Landlord be entitled to recover an amount greater than six (6) months
of Base Rent.
(b) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State in which
the Premises are located. However, Landlord shall have a duty to
mitigate its damages in connection with the pursuit of any such other
remedy or the remedies herein provided.
(c) The expiration or termination of this Lease and/or the
termination of Tenant's right to possession shall not relieve either
Party from liability under any indemnity provisions of this Lease as
to matters occurring or accruing during the Lease Term.
12.3 Breach By Landlord. In addition to any other rights and
remedies Tenant may have under this Lease, under Applicable Laws or at
equity, if Landlord shall fail to perform any obligation on Landlord's
part to be performed hereunder for a period of thirty (30) days
following the date of Tenant's delivery of written notice to Landlord
of such failure, or, if such failure by its nature cannot be cured
within a thirty-day period, than within such longer period of time as
may be reasonably required so long as Landlord commences such cure of
such failure within such thirty-day period and thereafter diligently
prosecutes such cure to completion, Tenant may, but shall have no
obligation to, after reasonable notice or without notice if in
Tenant's judgment an emergency shall exist, perform such obligation at
Landlord's expense and offset the cost thereof against the payment of
rent hereunder, or, on written notice to Landlord, Tenant may demand
reimbursement therefor or part thereof from Landlord, and Landlord
shall
18
promptly reimburse Tenant after receipt of written notice, demand and
documentation.
13. CONDEMNATION.
13.1 Termination; Restoration. If the Premises or the Building,
or any portion thereof are taken under power of eminent domain or sold
under the threat of the exercise of said power (all of which are
herein called ("Condemnation") that results in the Ground Lessor or
the Master Lessor having any right to terminate the Ground Lease or
the Master Lease, as applicable, which termination right is in fact
exercised by the Ground Lessor or the Master Lessor, this Lease shall
terminate as of the date of such termination of the Ground Lease or
the Master Lease, as applicable, with no liability therefor on the
part of Landlord. To the extent that neither the Ground Lessor nor the
Master Lessor is entitled to terminate or chooses to terminate the
Ground Lease or the Master Lease following any such Condemnation,
Landlord shall not exercise any separate termination right that it may
have under the Ground Lease or the Master Lease without first
obtaining the prior written consent of Tenant, which Tenant may
withhold in its sole discretion. In the event that this Lease is not
terminated following any Condemnation, Landlord shall proceed to
satisfy its obligations to repair and restore under the Master Lease
and the Ground Lease, to a condition suitable for Tenant's conduct of
the Business, as diligently as possible, and this Lease shall remain
in full force and effect. Notwithstanding the foregoing, if as a
result of such Condemnation, Tenant is unable to operate the Business
at the Premises and the necessary repair and restoration to permit
business operations cannot be completed within ninety (90) days after
occurrence of such Condemnation, as reasonably determined by Tenant,
Tenant shall have the right to terminate this Lease by written notice
delivered to Landlord within thirty (30) days following the date of
such Condemnation. During any period of time that Tenant is unable
reasonably to conduct the Business in the Premises, or any portion
thereof, as a result of any Condemnation, Base Rent shall be abated in
proportion to the degree to which Tenant's use of the Premises is
impaired for the entire period Tenant is unable to conduct its
business at the Premises in the ordinary course as a result of such
Condemnation.
13.2 Award. The Award for any Condemnation action shall be
applied as provided in the Ground Lease and the Master Lease.
Notwithstanding the foregoing, Tenant may make its own separate claim
for any award for its Trade Fixtures (as well as any Alterations and
Utility Installations that Tenant owns and is required to remove from
the Premises at the expiration of the Lease under the provisions of
Section 6.3(b)(z)) that may be taken and for its costs of relocation.
13.3 Waive Statutes. Landlord and Tenant agree that the terms of
this Lease shall govern the effect of any Condemnation of the Premises
with
18
respect to the termination of this Lease and hereby waive the
provisions of any present or future Applicable Law to the extent
inconsistent herewith.
14. BROKERS.
Tenant and Landlord each represents and warrants to the other that it
has had no dealings with any person, firm, broker or finder in
connection with the negotiation of this Lease and/or the consummation
of the transaction contemplated hereby, and that no broker or other
person, firm or entity is entitled to any commission or finder's fee
in connection with said transaction. Tenant and Landlord do each
hereby agree to indemnify, protect, defend and hold the other harmless
from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the indemnifying Party, including
any costs, expenses and attorneys' fees reasonably incurred with
respect thereto.
15. TENANCY STATEMENT.
Each Party (as "Responding Party") shall within twenty-one (21)
days after written notice from the other Party (the "Requesting
Party") execute, acknowledge and deliver to the Requesting Party a
statement in writing specifying the term of this Lease, listing all of
the documents constituting this Lease (including any amendments
hereto), confirming whether this Lease is in full force and effect and
confirming whether any breaches have occurred hereunder and specifying
any defenses or offsets available to Tenant. Such statement shall also
specify the period through which rent and other charges have been paid
and shall confirm whether any security deposit is held by Landlord
hereunder.
16. LANDLORD'S LIABILITY.
The term "Landlord" as used herein shall mean the owner or owners
at the time in question of tenant's interest in the Master Lease. In
the event of a transfer of Landlord's title or interest in the
Premises or in this Lease, Landlord shall deliver to the transferee or
assignee (in cash or by credit) any unused or unearned funds of
Tenant, if any, held by Landlord at the time of such transfer or
assignment, and the transferee or assignee shall be deemed to have
assumed the obligations of Landlord hereunder effective as of the date
of the transfer. The transferor shall remain obligated under this
Lease only for the period during which such entity owned the tenant's
interest in the Master Lease and not thereafter.
17. SEVERABILITY.
The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof.
19
18. INTEREST ON PAST-DUE OBLIGATIONS.
Any monetary payment due to one Party from the other hereunder,
other than late charges, not received within thirty (30) days
following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of ten percent
(10%) per annum, but not exceeding the maximum rate allowed by law.
19. TIME OF ESSENCE.
Time is of the essence with respect to the performance of all
obligations to be performed or observed by the Parties under this
Lease.
20. RENT DEFINED.
All monetary obligations of Tenant to Landlord under the terms of
this Lease are deemed to be rent.
21. NO PRIOR OR OTHER AGREEMENTS.
This Lease and the Purchase Agreement contain all agreements
between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be
effective; provided that, to the extent any conflicts exist between
the Purchase Agreement, including all exhibits thereto, and this
Lease, this Lease shall control.
22. NOTICES.
22.1 All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand or by messenger or
courier service) or may be sent by certified or registered mail or by
overnight courier or mail service that guarantees next-day delivery
and provides a receipt, with postage prepaid, or by facsimile
transmission, and shall be deemed sufficiently given if served in a
manner specified in this Article 22. The following are the address(es)
of the Parties for delivery or mailing of notice purposes:
If to Tenant: If to Landlord:
TSMD Acquisition Corp. XXXXXXX-XXXXXXX COMPANY
c/o Mentmore Holdings, Inc. 0000 Xxxxxxxx Xxxxxx
0000 Xxxxxxxx, 00xx Xxxxx Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Xxx Xxxx, XX 00000-0000 Attention: Treasurer
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Either Party may, by written notice to the other, specify a
different address for notice purposes. A copy of all notices required
or permitted to be given to Landlord hereunder shall be concurrently
transmitted to such party or parties at
20
such addresses as Landlord may from time to time hereafter designate
by written notice to Tenant.
22.2 Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the date of delivery shown
on the receipt card or if no delivery date is shown, the postmark
thereon. Notice delivered by overnight courier that guarantees next
day delivery and provides a receipt shall be deemed given twenty-four
(24) hours after delivery of the same to the service or courier. If
any notice is transmitted by facsimile transmission or similar means,
the same shall be deemed served or delivered upon telephone
confirmation of receipt of the transmission thereof, provided a copy
is also delivered via delivery or mail. If notice is received on a
Saturday, Sunday or legal holiday, or after normal business hours, it
shall be deemed received on the next business day.
23. WAIVERS.
No waiver by Landlord of the Breach of any term, covenant or
condition hereof by Tenant shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Breach by Tenant of
the same or of any other term, covenant or condition hereof.
24. RECORDING.
Neither Landlord nor Tenant shall record either this Lease or any
memorandum hereof in the Official Records of Santa Xxxxx County,
California.
25. CUMULATIVE REMEDIES.
No remedy or election hereunder shall be deemed exclusive but
shall, wherever possible, be cumulative with all other remedies at law
or in equity.
26. BINDING EFFECT; CHOICE OF LAW.
This Lease shall be binding upon the Parties, their personal
representatives, successors and assigns and be governed by the laws of
the State in which the Premises are located. Any litigation between
the Parties hereto concerning this Lease shall be initiated in the
County in which the Premises are located.
27. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
27.1 Subordination. Subject to the provisions of Section 27.3
below, this Lease shall be subject and subordinate to the Ground
Lease, the Master Lease, and any mortgage, deed of trust, or other
hypothecation or security device (collectively, "Senior Lien"), now or
hereafter placed by Landlord upon the real property of which the
Premises are a part, to any and all advances made on the security
thereof, and to all renewals, modifications, consolidations,
replacements and extensions thereof. If any Lender shall elect to have
this Lease superior to
21
the lien of its Senior Lien and shall give written notice thereof to
Tenant, this Lease shall be deemed prior to such Senior Lien,
notwithstanding the relative dates of the documentation or recordation
thereof.
27.2 Attornment. Subject to the provisions of Section 27.3 below,
Tenant agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Senior Lien.
27.3 Self-Executing. The agreements contained in this Article 27
shall be effective without the execution of any further documents.
However, upon written request from Landlord or a Lender in connection
with a sale, financing or refinancing of the Premises, Tenant and
Landlord shall execute such further writings as may be reasonably
required to separately document any such subordination or non-
subordination, or attornment agreement as is provided for herein.
Notwithstanding the foregoing, Tenant's subordination of this Lease
shall be subject to receiving customary non-disturbance protection
from the applicable holder of any Senior Lien to the effect that
Tenant's possession and this Lease will not be disturbed so long as
Tenant is not in Breach hereof and attorns to the record owner of the
Premises, subject to any right of Tenant of to cure such Breach.
27.4 No Merger. There shall be no merger of this Lease or the
Ground Lease or the Master Lease or of any leasehold or subleasehold
estate hereby or thereby created with the fee estate or the title to
the Land or any portion thereof or interest therein by reason of the
fact that the same person may acquire or hold, directly or indirectly,
this Lease, the Ground Lease or the Master Lease or any leasehold or
subleasehold estate hereby or thereby created or any interest in this
Lease or in the Ground Lease or the Master Lease or in any such
leasehold or subleasehold estate as well as the fee estate in or title
to the Land or any portion thereof or interest therein.
28. ATTORNEYS' FEES.
If any Party brings an action or proceeding to enforce or
interpret the terms hereof or declare rights hereunder, the Prevailing
Party (as hereafter defined) in any such proceeding, action or appeal
thereon, shall be entitled to reasonable attorneys' fees, court costs
and fees of experts. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding
is pursued to decision or judgment. The term "Prevailing Party" shall
include, without limitation, a Party who substantially obtains or
defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment or the abandonment by the other Party of its
claim or defense. The attorneys' fees awarded shall not be computed in
accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys' fees reasonably incurred.
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29. LANDLORD'S ACCESS.
Landlord shall have the right to enter the Premises at any time
in the case of an emergency, and otherwise at reasonable times upon
reasonable notice, for the purpose of performing its obligations
hereunder.
30. SIGNS.
Tenant may install such signs as are reasonably required to
advertise Tenant's business and which are consistent with the existing
signage at the Premises that relates to the Business. Any such signage
shall be subject to Landlord's reasonable approval (as well as any
required approval from the Ground Lessor or the Master Lessor),
subject to Applicable Law. The installation of any sign on the
Premises by or for Tenant shall be subject to the provisions of
Article 6 (Maintenance; Repairs; Utility Installations; Trade Fixtures
And Alterations).
31. HOLDING OVER.
If Tenant holds over after the expiration of the Lease Term,
Tenant shall pay Base Rent for each month that such hold over
continues at a rate equal to 100 percent of the Base Rent in effect
immediately prior to the expiration of the Lease Term. Additionally,
Tenant shall save, protect, defend, indemnify and hold Landlord
harmless from and against any and all Losses (as such term is defined
in the Purchase Agreement) suffered by Landlord as result of such hold
over, including, without limitation, lost revenue due to Landlord's
inability to relet the Premises.
32. QUIET POSSESSION.
Upon payment by Tenant of the rent for the Premises and the
observance and performance of all of the covenants, conditions and
provisions on Tenant's part to be observed and performed under this
Lease, Tenant shall have quiet possession of the Premises for the
entire Lease Term.
33. CONSENTS.
Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party,
such consent shall not be unreasonably withheld or delayed. Landlord's
consent to any act, assignment of this Lease or subletting of the
Premises by Tenant shall not constitute an acknowledgment that no
Breach by Tenant of this Lease exists, nor shall such consent be
deemed a waiver of any then existing Breach, except as may be
otherwise specifically stated in writing by Landlord at the time of
such consent.
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34. PERFORMANCE UNDER PROTEST.
If at any time a dispute shall arise as to any amount or sum of
money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is
asserted shall have the right to make payment "under protest" and such
payment shall not be regarded as a voluntary payment and there shall
survive the right on the part of said Party to institute suit for
recovery of such sum. If it shall be adjudged that there was no legal
obligation on the part of said Party to pay such sum or any part
thereof, said Party shall be entitled to recover such sum (with
interest from the date paid until the date repaid at the rate provided
in Article 18) or so much thereof as it was not legally required to
pay under the provisions of this Lease.
35. AUTHORITY.
If either Party hereto is a corporation, trust or general or
limited partnership, each individual executing this Lease on behalf of
such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. If either Party is a
corporation, trust or partnership, such Party shall, within thirty
(30) days after request by the other Party, deliver to such Party
evidence of such authority.
36. CONFLICT.
Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the
typewritten or handwritten provisions.
37. OFFER.
Preparation of this Lease by either Party and submission of same
to the other Party shall not be deemed an offer to lease. This Lease
is not intended to be binding until executed by all Parties hereto.
38. AMENDMENTS.
This Lease may be modified only in writing, signed by the Parties
in interest at the time of the modification.
39. WAIVER OF STATUTORY LIEN.
Landlord shall not be entitled to any statutory lien or security
interest in any personal property or Tenant Owned Alterations, Utility
Installations or Trade Fixtures located on the Premises.
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40. MULTIPLE PARTIES.
Except as otherwise expressly provided herein, if more than one
person or entity is named herein as either Landlord or Tenant, the
obligations of such multiple Parties shall be the joint and several
responsibility of all persons or entities named herein as such
Landlord or Tenant.
The parties hereto have executed this Lease at the place and on
the dates specified above their respective signatures.
Executed at Executed at
on on
by LANDLORD: by TENANT:
XXXXXXX-XXXXXXX COMPANY, X-X TSMD INC.
a California corporation a California corporation
By: By:
------------------------------ -------------------
Name: Name:
------------------------------ -------------------
Title: Title:
------------------------------ -------------------
25
EXHIBIT A
THE LAND
All of that certain real property situate in the City of Palo Alto, County
of Santa Xxxxx, State of California, described as follows:
BEGINNING at a concrete highway monument situate on the Southwesterly line
of El Camino Real (State Highway) opposite Engineer's Station 144+27.00 as
surveyed by the California Division of Highways, as said Southwesterly line
was established by that certain Decree in Condemnation, a certified copy of
which Decree was filed for record in the Office of the Recorder of the
County of Santa Xxxxx, State of California, on July 7, 1930 in Book 520 of
Official Records, at page 571, said monument also marks the point of
intersection of said Southwesterly line with the Southeasterly line of that
certain 1289 acre tract of land described in the Deed from Xxxxxx X.
Xxxxxx, et al, to Xxxxxx Xxxxxxxx dated September 8, 1885, recorded
September 8, 1885 in Book 80 of Deeds, at page 382, Santa Xxxxx County
Records;
running thence along said line of said 1289 acre tract and its
Southwesterly prolongation, South 33(degree) 14' 44" West 4494.10 feet to
the most Westerly corner of that certain 3.268 acre parcel leased by The
Board of Trustees of The Xxxxxx Xxxxxxxx Junior University to The
Prudential Insurance Company of America by that certain Agreement adding
additional lands to lease dated as of December 12, 1958, a memorandum of
which said Agreement was recorded December 31, 1958 in the office of the
Recorder of the County of Santa Xxxxx, State of California, in Book 4276 of
Official Records, at page 70 and to the true point of beginning of the
parcel to be described;
thence from said true point of beginning along the Southwesterly line
of said parcel so leased to said The Prudential Insurance Company of
America, South 56(degree) 45' 20" East 274.47 feet to a point on the
Northwesterly boundary of that certain 16.242 acre parcel leased by The
Board of Trustees of The Xxxxxx Xxxxxxxx Junior University to Xxxx County
Land Company by Lease dated as of November 1, 1959, a memorandum of said
Lease was recorded in the office of the Recorder of the County of Santa
Xxxxx, State of California, on December 8, 1959 in Book 4630 of Official
Records, at page 286;
thence along said Northwesterly line of said parcel so leased to said
Xxxx County Land Company, South 43(degree) 39' 32" West 628.80 feet to a
point on the Northeasterly line of Hillview Avenue, at which point a radial
line bears North 69(degree) 27' 05" East;
thence along said Northeasterly line of Hillview Avenue, Northwesterly
along the arc of a curve to the left, having a radius of 430.00 feet
through a central angle of 36(degree) 12' 25", a distance of 271.73 feet;
thence continuing along the Northeasterly line of Hillview Avenue,
56(degree) 45' 20" West 383.34 feet; thence along the arc of a tangent
curve to the right, having a radius of 40.00 feet, through a central angle
of 90(degree), a distance of 62.83 feet to a point on the Southeasterly
line of Hanover Street;
thence Northeasterly along said Southeasterly line, North 33(degree)
14' 40" East 329.54 feet to the most Westerly corner of that certain 22.669
acre parcel leased by The Board of Trustees of The Xxxxxx Xxxxxxxx Junior
University to Lockheed Aircraft Corporation by Lease dated as of March 14,
1956 and recorded in the office of the Recorder of the County of Santa
Xxxxx, State of California, on January 17, 1957 in Book 3709 of Official
Records, at page 453;
thence Southeasterly along the Southwesterly line of said 22.669 acre
parcel South 71(degree) 50' 13" East 590.33 feet to the true point of
beginning.
EXHIBIT A-1
SITE PLAN
[GRAPHICS-- Building layouts of upper and lower Building 6 marked to
indicate areas of Stellex occupancy]
EXHIBIT B
Telephone Services
Promptly following the date of this Lease, the Parties shall negotiate
in good faith to produce a replacement for this Exhibit B, setting forth
the precise telephone services that will be made available to Tenant and a
reasonable methodology for determining how Tenant will pay Landlord for
such telephone services. The methodology shall be based on the number of
telephone lines, the number of people using the telephone services or such
other reasonable methodology as may be agreed to by the Parties.
