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Exhibit 10.8
STANDARD FORM LEASE
1. BASIC PROVISIONS
1.1 PARTIES: This Lease, executed in duplicate at Cupertino, California,
on September 29 , 2000, by and between T.B.I./Mission West Properties, LLC, , a
California Limited Liability Corporation, and Condor Systems, Inc., a Delaware
Corporation, hereinafter called respectively Lessor and Lessee, without regard
to number or gender.
1.2 LETTING: Lessor hereby leases to Lessee, and Lessee hires from Lessor,
the Premises, for the term, at the rental and upon all the terms and conditions
set forth herein.
1.3 USE: Lessee may use the Premises for the purpose of conducting therein
office, research and development, light manufacturing, and warehouse activities,
and any other legal activity.
1.4 PREMISES: The real property with appurtenances as shown on Exhibit A
(the "Premises") situated in the City of Xxxxxx Xxxx, County of Santa Xxxxx,
State of California, and more particularly described as follows:
The Premises includes a total of 160,000 square feet, consisting of one two
story 120,000 sq. ft. building and one single story 40,000 sq. ft.
building, including all improvements thereto as shown on Exhibit A.1
including the right to use 600 unreserved parking spaces in the locations
designated on Exhibit A.1. The address for the Premises is _______ Xxxxxxx
Xxxxxxx, Xxxxxx Xxxx, Xxxxxxxxxx, 00000. Lessee's pro-rata share of the
Premises is 100%.
1.5 TERM: The term shall be for one hundred twenty (120) months unless
extended pursuant to Section 35 of this Lease (the "Lease Term"), commencing on
the Commencement Date as defined in Section 1.11 and ending one hundred twenty
(120) months thereafter.
1.6 RENT: Base rent shall be payable in monthly installments as follows:
Base rent Estimated CAC* Total
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Months 1 through 12 $241,500 $43,520 $285,020
Months 13 through 24 $269,100 $43,520 $312,620
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Months 25 through 36 $298,522 $43,520 $342,042
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Months 37 through 48 $310,463 $43,520 $353,983
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Monthly base rent to increase by 4% on the annual anniversary of the
Commencement Date each year during the Lease Term over the prior year's Base
rent rounded to the nearest dollar.
* CAC charges to be adjusted per Common Area Charges Section 1.8 below.
Base rent and CAC as scheduled above shall be payable in advance on or before
the first day of each calendar month during the Lease Term. The term "Rent," as
used herein, shall be deemed to be and to mean the monthly Base rent and all
other sums required to be paid by Lessee pursuant to the terms of this Lease.
Rent shall be paid in lawful money of the United States of America, without
offset or deduction, and shall be paid to Lessor at such place or places as may
be designated from time to time by Lessor. Rent for any period less than a
calendar month shall be a pro rata portion of the monthly installment. Upon
execution of this Lease, Lessee shall deposit with Lessor the first month's
rent, including estimated CAC.
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1.7 SECURITY DEPOSIT: On the Commencement Date, Lessee shall deposit with
Lessor a security deposit in the sum of Three Hundred Forty Two Thousand Forty
Two Dollars ($342,042) (the "Security Deposit") in the form of a letter of
credit in favor of Lessor in form and substance reasonable acceptable to Lessor
and drawn upon a financial institution reasonably acceptable to Lessor (the
"Letter of Credit"). The Security Deposit shall be held by Lessor as security
for the faithful performance by Lessee of all of the terms, covenants, and
conditions of this Lease applicable to Lessee. If Lessee commits a default as
provided for herein, including but not limited to a default with respect to the
provisions contained herein relating to the condition of the Premises, Lessor
may (but shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any amount which Lessor may spend by reason
of the default by Lessee. If any portion of the Security Deposit is so used or
applied, Lessee shall, within ten days after written demand therefor, increase
the amount of the Letter of Credit with Lessor in an amount sufficient to
restore the Security Deposit to its original amount. Lessee's failure to do so
shall be a default by Lessee. Any attempt by Lessee to transfer or encumber its
interest in the Security Deposit shall be null and void.
1.8 COMMON AREA CHARGES: Lessee shall pay to Lessor, as additional Rent,
an amount equal to Lessee's pro-rate share of the total common area charges of
the Premises as defined below (the common area charges for the Premises is
referred to herein as ("CAC")). Lessee shall pay to Lessor as Rent, on or before
the first day of each calendar month during the Lease Term, subject to
adjustment and reconciliation as provided hereinbelow, the sum of Forty Three
Thousand Five Hundred Twenty Dollars ($43,520), said sum representing Lessee's
estimated monthly payment of Lessee's percentage share of CAC and includes a
fixed monthly sum of Six_Thousand Dollars ($6,000) which represents the long
term capital reserve for replacement of HVAC units, parking lot, roof and
painting of building exterior ("Capital Reserves") for the Premises. It is
understood and agreed that Lessee's obligation under this paragraph shall be
prorated to reflect the Commencement Date and the end of the Lease Term.
Lessee's estimated monthly payment of CAC payable by Lessee during the calendar
year in which the Lease commences is set forth above. At or prior to the
commencement of each succeeding calendar year term (or as soon as practical
thereafter), Lessor shall provide Lessee with Lessee's estimated monthly payment
for CAC which Lessee shall pay to Lessor as Rent. Within 120 days of the end of
the calendar year and the end of the Lease Term, Lessor shall provide Lessee a
statement of actual CAC incurred including capital reserves being held for the
Premises for the preceding year or other applicable period in the case of a
termination year. If such statement shows that Lessee has paid less than its
actual percentage, then Lessee shall within 30 days after receipt of such
statement pay to Lessor the amount of such deficiency. If such Statement shows
that Lessee has paid more than its actual percentage, then Lessor shall, at its
option, promptly refund such excess to Lessee or credit the amount thereof to
the Rent next becoming due from Lessee. Lessor reserves the right to revise any
estimate of CAC if the actual or projected CAC show an increase or decrease in
excess of 10% from an earlier estimate for the same period. In such event,
Lessor shall provide a revised estimate to Lessee, together with an explanation
of the reasons therefor, and Lessee shall revise its monthly payments
accordingly. Lessor's and Lessee's obligation with respect to adjustments in CAC
at the end of the Lease Term or earlier expiration of this Lease shall survive
the Lease Term or earlier expiration by one year.
As used in this Lease, CAC shall include but is not limited to: (i) items as
specified in Sections 5(b), 6, 16 and 31; (ii) all costs and expenses including
but not limited to supplies, materials, equipment and tools used or required in
connection with the operation and maintenance of the Premises; (iii) licenses,
permits and inspection fees; (iv) all other costs incurred by Lessor in
maintaining and operating the Premises; (v) Capital Reserves replacements and
improvements due to government regulations imposed on the Premises not related
to Lessee's use and occupancy of the Premises; and (vi) an amount equal to two
percent (2%) of the base rent and CAC, as compensation for Lessor's accounting
and management services. Lessee shall have the right to review and photocopy the
basis and computation analysis used to derive the CAC applicable to this Lease
annually. In the event of any dispute related to any items charged, allocation
computation or capital reserves being held for the Premises, the Lessor and
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Lessee shall negotiate in good faith to resolve the dispute within thirty days.
If the Lessor and Lessee are unable to resolve their differences, then
PricewaterhouseCoopers LLP, or other nationally recognized accounting firm
acceptable to both parties, will be asked to determine the reasonableness of the
item under dispute.
1.9 LATE CHARGES: Lessee hereby acknowledges that a late payment made by
Lessee to Lessor of Rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges, which may be imposed on
Lessor according to the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Rent or any other sum due from
Lessee is not received by Lessor or Lessor's designee within five (5) days after
such amount is due, Lessee shall pay to Lessor a late charge equal to five (5%)
percent of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of late payments made by Lessee. Acceptance of such late charges by
Lessor shall in no event constitute a waiver of Lessee's default with respect to
such overdue amount, nor shall it prevent Lessor from exercising any of the
other rights and remedies granted hereunder.
1.10 QUIET ENJOYMENT: Lessor covenants and agrees with Lessee that upon
Lessee paying Rent and performing its covenants and conditions under this Lease,
Lessee shall and may peaceably and quietly have, hold and enjoy the Premises for
the Lease Term, subject, however, to the rights reserved by Lessor hereunder.
1.11 POSSESSION: Possession shall be deemed tendered and the term shall
commence upon the first to occur of the following (the "Commencement Date"): (i)
the date Lessor delivers to Lessee written notice stating the Premises are
Substantially Complete or (ii) Lessee commences business operations from the
Premises or (ii) the date Lessor delivers to Lessee written notice stating the
date the Premises would have been Substantially Complete were it not for Lessee
Delays (as defined in Section 2.1.8). The Commencement Date shall be extended by
one day for each day of delay in the design of, or Lessee's move into, the
Premises that is caused by any Force Majeure Delay (as defined in Section 2.1.8)
or Lessor Delay. It is the intention of Lessee and Lessor that July 1, 2001
shall be the Commencement Date. Upon Lessee taking possession of the Premises,
Lessee will vacate existing Premises on Samaritan Drive Building ("Existing
Lease Premises") within 30 days, except for up to 5,000 sq. ft portion of the
office building, as more specifically addressed in a side letter between the
parties of even date herewith. Lessee's obligation to pay Rent or any other
charges on the Existing Lease Premises shall terminate on the Commencement Date
of this Lease unless the Lessee does not vacate the Existing Lease Premises
within 15 days after the Commencement Date of this Lease. The Lessee shall be
responsible to pay Rent or any other charges for any hold over period of
occupancy of the Existing Lease Premises beyond the 15 days.
"Substantially Complete" shall mean that: (i) Lessor has tendered possession of
Premises to Lessee, (ii) Lessor has met all requirements for occupancy, (iii)
The Lessee Interior Improvements are materially complete per the approved plans,
exclusive of telephone or other communication systems, punchlist items and there
remains no incomplete or defective items of work which would materially
adversely affect Lessee's intended use of the Premises, and (iv) said interior
of the building is in a "broom clean" condition.
1.12 COMMENCEMENT DATE MEMORANDUM: When the actual Commencement Date is
determined, the parties shall execute a Commencement Date Memorandum setting
forth the Commencement Date, the expiration date of the Lease Term and any
required adjustments to base rent and CAC, but failure to do so shall not affect
the continuing validity and enforceability of this Lease, which shall remain in
full force and effect.
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2. LESSEE'S IMPROVEMENTS
2.1 BUILDING SHELL: The "Building Shell", as defined in the attached
Exhibit B shall be constructed at Lessor's sole cost and expense by independent
contractors to be employed by and under the supervision of Lessor in accordance
with the site plan, elevations, plans, specifications, and working drawings to
be prepared by Lessor, which have been approved by Lessee, and thereafter
attached hereto as Exhibit C (collectively the "Shell Plans "). Lessor shall be
responsible for ensuring that the Building Shell conforms to the approved plans
and all applicable statutes, rules, regulations, ordinances, and City of Xxxxxx
Xxxx Building Department interpretations necessary for occupancy
2.1.1 LESSEE INTERIOR IMPROVEMENTS: The "Lessee Interior Improvements"
shall be defined as all items not part of the Building Shell and shall be
constructed by independent contractors to be employed by and under the
supervision of Lessor, in accordance with complete plans and specifications
prepared by Lessor for submission to the City of Xxxxxx Hill ("Lessee
Improvement Plans"), complete with all mechanical and electrical design,
approved by Lessee, and then to be attached hereto as Exhibit D. Lessee and its
designated representatives, shall at all times during the construction of the
Lessee Interior Improvements have access to the Premises to monitor the progress
of construction and Lessor's compliance with its obligation hereunder; provided
however, that such access shall not unreasonably interfere with the activities
of Lessor or its contractors.
2.1.2 BUDGET: Before entering into any contract with a contractor
furnishing labor or materials in connection with the construction of the Lessee
Interior Improvements where the payment due under such contract is estimated by
Lessor to be in excess of One Hundred Thousand Dollars ($100,000), Lessor shall
request bids from at least three (3) qualified contractors selected by Lessor
and approved by Lessee (which approval shall not be unreasonably withheld) for
bidding. Lessor will accept the lowest bid. Lessee shall have the opportunity to
review and approve the bidders list prepared by Lessor, which approval shall not
be unreasonable withheld, and may select a bidder of their choice for the bid,
provided the bidder, meets the Lessor's reasonable requirements.
2.1.3 LESSOR'S ALLOWANCE: Lessor shall contribute up to Six Million Dollars
($6,000,000) or Thirty Seven Dollars and Fifty Cents ($37.50) per square foot
towards construction of the Lessee Interior Improvements (the "TI Allowance"),
which is included in base rent.
2.1.4 COST STATEMENT & LESSEE'S CONTRIBUTION: Lessor and Lessee have
approved the interior cost statement which shall be attached as Exhibit E (the
"Cost Statement"), showing the expected construction cost of the Lessee Interior
Improvements. Lessor may include in the Cost Statement, a construction
management fee, covering its overhead and profit equal to six percent (6%) of
all costs shown on the Cost Statement plus any additional costs approved by
Lessee. Based on the quantities, allowances and items listed on the Cost
Statement, Lessor will guarantee the total costs of Lessee Interior Improvements
not to exceed $40.00 per sq. ft. as an average over the entire project. Lessor
and Lessee shall work together in good faith to reduce the costs for
construction of the Lessee Interior Improvements by modifying the plans or
taking other appropriate actions if the cost exceeds $40.00 per sq. ft. Lessee
shall pay its approved share of the cost, ($2.50 per sq. ft.) for construction
of the Lessee Interior Improvements within fifteen (15) days after the Lessor
has provided Lessee with evidence that the approved work being billed has been
installed. All costs payable by Lessee for construction of the Lessee Interior
Improvements shall be reasonably documented and subject to verification by
Lessee. Notwithstanding the above Lessee agrees that if $40.00 per sq. ft.
budget does not cover the 25 private offices required by Lessee, Lessor will
build those 25 offices upon payment by Lessee to Lessor of an additional amount
not to exceed $100,000.
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2.1.5 CHANGE ORDERS: Change to the plans for the Lessee Interior
Improvements for or the Cost Statement after the final approval by the parties
must be approved in writing by Lessor and Lessee, which approval shall not be
unreasonably withheld. In this regard, Lessor shall not be required to approve
any change which will: (i) increase its cost contribution above the Cost
Statement, unless mutually agreed or Lessee agrees to pay the difference,
(ii)_structurally impair the Premises, (iii) materially and adversely effect the
outside appearance of the subject building, or (iv) interfere with the conduct
of Lessee's business, or (v) materially detracts from the inside appearance of
the Premises. Change orders shall be written and shall describe the nature of
the change and the reasonably determined increase or decrease in each item of
the Cost Statement (including the Lessor's management fee) occasioned by the
change. If Lessee requests a change which will delay the Substantial Completion
of the Lessee Interior Improvements beyond the Scheduled Completion Date
(defined below), the actual amount of Lessee Delay, as defined in Section 2.1.8
that can be attributed to the change shall also be specified in the change
order.
2.1.6 INABILITY TO OBTAIN MATERIALS: If Lessor notifies Lessee that any
fittings, finished or other materials specified by Lessee for the Lessee
Interior Improvements are not: (i) regularly used, (ii) cannot be obtained
within sixty (60) days after placing an order therefore, and (iii) Lessor
reasonably determines that such extended delivery time will prohibit Lessor from
Substantially Completing the Lessee Interior Improvements by the Scheduled
Completion Date, then Lessee shall within five days either (i) execute a change
order selecting an alternative reasonably approved by Lessor, or (ii) agree that
any delay in the Substantial Completion of the Lessee Interior Improvements as a
consequence of the inability to obtain the item will be a Lessee Delay.
2.1.7 TIME PERIODS FOR APPROVAL: Lessee shall approve or disapprove any
preliminary plans on or before the fifth (5th) business day following submission
to Lessee of the plan. Lessee shall approve or disapprove on or before the tenth
(10th) business day following submission to Lessee of any final plans. All
change orders shall be approved or disapproved within three (3) business days
during construction. If plans or change orders are disapproved, Lessee shall
state the reason for disapproval and Lessor and Lessee shall act in good faith
to resolve any issues.
2.1.8 COMPLETION OF THE WORK & DELAY: Lessor shall use its best efforts to
cause the Commencement Date of the initial term to occur not later than July 1,
2001. If the Commencement Date has not occurred by August 31, 2001, Lessee may
at its sole option, by written notice to Lessor, have the right to terminate
this Lease at any time after July 31, 2001 until the Commencement Date. In the
event Lessee shall elect to terminate this Lease after August 31, 2001, Lessee
must deliver to Lessor such notice prior to the date the Premises and Lessee
Interior Improvements are delivered to Lessee Substantially Complete and upon
receipt of such notice neither party shall have any further obligation to the
other under this Lease. Notwithstanding anything to the contrary herein, all
dates stated herein shall be extended for the number of days Lessor is unable to
Substantially Complete the Premises as a result of: (i) Force Majeure Delays (as
defined below), and (ii) due to Lessee Delays. "Lessee Delays" means a delay in
Substantial Completion resulting from (a) Lessee's failure to meet Lessee's
deadlines for approval as shown on Exhibit F, (b) delays due to change orders
requested by Lessee, (c) delays due to Lessee's failure to meet the deadlines
for approving any plans or change orders, and (d) delays because of the
inability to obtain any product, materials, design, color, fitting, or finish
pursuant to this Section 2.1.6. The term "Force Majeure Delay" as used in the
Lease shall mean any delay incurred in the design of Lessee Interior
Improvements or its move-in into the Premises attributable to any: (1) actual
delay or failure to perform attributable to any strike, lockout or other labor
or industrial disturbance (whether or not on the part of the employee of either
party hereto), civil disturbance, further order claiming jurisdiction, act of
public enemy, war, riot, sabotage, blockade, embargo; (2) delay due to changes
in any Applicable Laws (including, without limitation, the ADA) or the
interpretation thereof (3) delay attributable to lightning, earthquake, fire,
storm, hurricane, tornado, flood, washout, explosion, or any other similar
industrywide or Premises-wide cause beyond the reasonable control of the party
from whom performance is required, or any of its contractors or other
representatives or (4) delay due to governmental actions or the City of Xxxxxx
Xxxx'x
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failure to issue building permits within 30 days after submission of plans that
comply with governmental regulations.
2.1.9 STANDARD OF PERFORMANCE: Lessor shall be responsible for ensuring
that the Building Shell and the Lessee Interior Improvements conform to all
applicable Laws and the approved plans for the Lessee Interior Improvements and
are performed in a good and workmanlike manner. Neither Lessee's approval of the
plans for the Lessee Interior Improvements, the Cost Estimate, nor Lessee's
recommendation of any contractor for the work, shall relieve Lessor of its
obligations under this Lease nor make Lessee liable to Lessor or any contractor,
or their subcontractors with respect to the work. Lessor shall timely complete
punchlist after Commencement Date.
2.1.10 INSTALLATION OF LESSEE'S IMPROVEMENTS: Lessee shall be permitted
during the installation of Lessee Improvements by Lessor to inspect Lessor's
work and to install Lessee items such as telephone, security and network cabling
and other Lessee related work provided it does not materially interfere with or
delay Lessor's work or final approvals ("Lessee's Work"). Such Lessee's Work
shall not advance the Commencement Date, provided Lessee does not commence
business operations from any part of the Premises.
2.1.11 ACCEPTANCE OF PREMISES AND COVENANTS TO SURRENDER: Lessee accepts
the Premises in an "AS IS" condition and "AS IS" state of repair, subject to
Lessor's representation that the Premises are in good order and repair, and
comply with all requirements for occupancy as of the Commencement Date. Lessee
agrees on the last day of the Lease Term, or on the sooner termination of this
Lease, to surrender the Premises to Lessor in Good Condition and Repair. "Good
Condition and Repair" shall generally mean that the Premises are in the
condition that one would expect the Premises to be in, if throughout the Lease
Term Lessee (i) uses and maintains the Premises in a commercially reasonable
manner and in an accordance with the requirements of this Lease and (ii) makes
all Required Replacements. "Required Replacements" are the replacements to
worn-out equipment, fixtures, and improvements that a commercially reasonable
owner-user would make. All of the following shall be in Good Condition and
Repair: (i) the interior walls and floors of all offices and other interior
areas, (ii) all suspended ceilings and any carpeting shall be clean and in good
condition, (iii) all glazing, windows, doors and door closures, plate glass, and
(iv) all electrical systems including light fixtures and ballasts, plumbing, and
temperature control systems. Lessee, on or before the end of the Lease Term or
sooner termination of this Lease, shall remove all its personal property and
trade fixtures from the Premises, and all such property not so removed shall be
deemed to be abandoned by Lessee. Lessee shall reimburse Lessor for all
disposition costs incurred by Lessor relative to Lessee's abandoned property. If
the Premises are not surrendered at the end of the Lease Term or earlier
termination of this Lease, Lessee shall indemnify Lessor against loss or
liability resulting from any delay caused by Lessee in surrendering the Premises
including, without limitation, any claims made by any succeeding Lessee founded
on such delay.
3. USES PROHIBITED: Lessee shall not commit, or suffer to be committed, any
waste upon the Premises, or any nuisance, or other act or thing which may
unreasonably disturb the quiet enjoyment of any other tenant in or around the
buildings in which the subject Premises are located or allow any sale by auction
upon the Premises, or allow the Premises to be used for anyunlawful purpose, or
place any loads upon the floor, walls, or ceiling which endanger the structure,
or use any machinery or apparatus which vibrate or shake the Premises or the
building of which it is a part in a manner to adversely affect the structure, or
place any harmful liquids in the drainage system of the building. No waste
materials or refuse shall be dumped upon or permitted to remain upon any part of
the Premises outside of the building proper. No materials, supplies, equipment,
finished products or semi-finished products, raw materials or articles of any
nature shall be stored upon or permitted to remain on any portion of the
Premises outside of the building structure, unless approved by the local, state
federal or other applicable governing authority. Lessor consents to Lessee's use
of materials which are incidental to the normal, day-to-day operations of any
office user, such as copier fluids, cleaning materials, etc., but this does not
relieve Lessee of any of its obligations not to contaminate the Premises and
related real property or violate any Hazardous Materials Laws.
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4. ALTERATIONS AND ADDITIONS: Lessee shall not make, or suffer to be made, any
structural alteration or addition to said Premises or any non-structural
alteration or addition to the premises that has an aggregate cost in excess of
twenty-five thousand dollars ($25,000), or any part thereof, without the
express, advance written consent of Lessor, which consent shall not be
unreasonably withheld, conditioned or delayed. The Lessee shall have the right
to make interior, non-structural alterations and improvements to the Premises
without Lessor's prior consent thereto for alterations and improvements that
cost less than twenty-five thousand dollars ($25,000). Any addition or
alteration to said Premises, except movable furniture and trade fixtures, shall
become at once a part of the realty and belong to Lessor at the end of the Lease
Term or earlier termination of this Lease. Alterations and additions which are
not deemed as trade fixtures shall include HVAC systems, lighting systems,
electrical systems, hardwall partitioning, carpeting, or any other installation
which has become an integral part of the Premises. Lessee agrees that it will
not proceed to make such alterations or additions until all required government
permits have been obtained and after having obtained consent from Lessor to do
so, until five (5) days from the receipt of such consent, so that Lessor may
post appropriate notices to avoid any liability to contractors or material
suppliers for payment for Lessee's improvements. Lessee shall at all times
permit such notices to be posted and to remain posted until the completion of
work. At the end of the Lease Term or earlier termination of this Lease, all
tenant improvements, all related equipment, and any additions or alterations
installed by Lessee after Commencement Date shall be removed from the Premises
unless Lessor informs Lessee in writing at the time the alterations and/or
improvements that such improvements may remain on Premises. Notwithstanding the
above, Lessor agrees to allow any reasonable alterations and improvements and
will notify Lessee at the time of approval if such improvements or alterations
are to be removed at the end of the Lease Term or earlier termination of this
Lease.
5. MAINTENANCE OF PREMISES:
(a) Lessee shall at its sole cost and expense keep, repair, and maintain
the interior of the Premises in good condition and repair, including, but not
limited to, the interior walls and floors of all offices and other interior
areas, doors and door closures, all lighting systems, temperature control
systems. Lessee shall provide interior window washing as needed.
(b) Lessor shall, at Lessee's expense, keep, repair, and maintain in good
condition and repair including replacements (based on a pro-rata share of (i)
costs based on square footage or (ii) costs directly related to Lessee's use of
the Premises) the following, which shall be included in the monthly CAC:
1. The exterior of the building (including exterior window
washing)twice per year, any appurtenances and every part thereof, including but
not limited to, glazing, sidewalks, parking areas, electrical systems, and
painting of exterior walls. The parking lot to receive a finish coat every five
to seven years.
2. The HVAC by a service contract with a licensed air conditioning
and heating contractor which contract shall provide for a minimum of quarterly
maintenance of all air conditioning and heating equipment at the Premises
including HVAC repairs or replacements which are either excluded from such
service contract or any existing equipment warranties.
3. The landscaping by a landscape contractor to water, maintain,
trim and replace, when necessary, any shrubbery, irrigation parts, and
landscaping at the Premises.
4. The roof membrane by a service contract with a licensed reputable
roofing contractor which contract shall provide for a minimum of semi-annual
maintenance, cleaning of storm gutters, drains, removing of debris, and trimming
overhanging trees, repair of the roof and application of a finish coat every
five years to the building at the Premises.
5. Exterior pest control.
6. Fire monitoring services.
7. Parking lot sweeping.
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8. Elevator
(c) Lessee hereby waives any and all rights to make repairs at the expense
of Lessor as provided in Section 1942 of the Civil Code of the State of
California, and all rights provided for by Section 1941 of said Civil Code.
(d) Lessor shall be responsible for the repair of any structural defects
in the Premises including the roof structure (not membrane), exterior walls and
foundation during the Lease Term.
6. INSURANCE:
A) HAZARD INSURANCE: Lessee shall not use, or permit said Premises, or
any part thereof, to be used, for any purpose other than that for which the
Premises are hereby leased; and no use shall be made or permitted to be made of
the Premises, nor acts done, which cause a cancellation of any insurance policy
covering the Premises, or any part thereof, nor shall Lessee sell or permit to
be kept, used or sold, in or about said Premises, any article which may be
prohibited by a fire and extended coverage insurance policy. Lessee shall comply
with any and all requirements, pertaining to said Premises, of any insurance
organization or company, necessary for the maintenance of reasonable fire and
extended coverage insurance, covering the Premises. Lessor shall, at Lessee's
sole cost and expense, purchase and keep in force fire and extended coverage
insurance, covering loss or damage to the Premises in an amount equal to the
full replacement cost of the Premises, as determined by Lessor, with proceeds
payable to Lessor. In the event of a loss per the insurance provisions of this
paragraph, Lessee shall be responsible for deductibles up to a maximum of
$25,000 per occurrence. Lessee acknowledges that the insurance referenced in
this paragraph does not include coverage for Lessee's personal property.
B) LOSS OF RENTS INSURANCE: Lessor shall, at Lessee's sole cost and
expense, purchase and maintain in full force and effect, a policy of rental loss
insurance, in an amount equal to the amount of Rent payable by Lessee commencing
within sixty (60) days of the date of the loss or on the date of loss if
reasonably available for the next ensuing one (1) year, as reasonably determined
by Lessor with proceeds payable to Lessor ("Loss of Rents Insurance").
C) LIABILITY AND PROPERTY DAMAGE INSURANCE: Lessee, as a material part of
the consideration to be rendered to Lessor, hereby waives all claims against
Lessor and Lessor's Agents for damages to goods, wares and merchandise, and all
other personal property in, upon, or about the Premises, and for injuries to
persons in, upon, or about the Premises, from any cause arising at any time, and
Lessee will hold Lessor and Lessor's Agents exempt and harmless from any damage
or injury to any person, or to the goods, wares, and merchandise and all other
personal property of any person, arising from the use or occupancy of the
Premises by Lessee, or from the failure of Lessee to keep the Premises in Good
Condition and Repair, as herein provided. Lessee shall, at Lessee's sole cost
and expense, purchase and keep in force a standard policy of commercial general
liability insurance and property damage policy covering the Premises and all
related areas insuring the Lessee having a combined single limit for both bodily
injury, death and property damage in an amount not less than one million dollars
($1,000,000.00) per occurrence with a two million dollars ($2,000,000) aggregate
limit and excess/umbrella insurance in the amount of four million dollars
($4,000,000) and Lessee's insurance shall be primary. The limits of said
insurance shall not, however, limit the liability of Lessee hereunder. Lessee
shall, at its sole cost and expense, comply with all of the insurance
requirements of all local, municipal, state and federal authorities now in
force, or which may hereafter be in force, pertaining to Lessee's use and
occupancy of the said Premises.
D) PERSONAL PROPERTY INSURANCE: Lessee shall obtain, at Lessee's sole
cost and expense, a policy of fire and extended coverage insurance including
coverage for direct physical loss special form, and a sprinkler leakage
endorsement insuring the personal property of Lessee. The proceeds from any
personal property damage policy shall be payable to Lessee.
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All insurance policies required in 6 C) and 6 D) above shall: (i) provide for a
certificate of insurance evidencing the insurance required herein, being
deposited with Lessor ten (10) days prior to the Commencement Date, and upon
each renewal, such certificates shall be provided 30 days prior to the
expiration date of such coverage, (ii) be in a form reasonably satisfactory to
Lessor and shall provide the coverage required by Lessee in this Lease, (iii) be
carried with companies with a Best Rating of A:X minimum, (iv) specifically
provide that such policies shall not be subject to cancellation, reduction of
coverage, or other change except after 30 days prior written notice to Lessor
(except for cancellation for nonpayment of premium, in which event cancellation
shall not take effect until at least ten (10) days' notice has been given to
Lessor), (v) name Lessor, Lessor's lender, and any other party with an insurable
interest in the Premises as additional insureds by endorsement to policy, and
(vi) shall be primary.
Lessee agrees to pay to Lessor, as additional Rent, the full cost of the
insurance polices referenced in 6 A) and 6 B) above as evidenced by insurance
xxxxxxxx to Lessor which shall be included in the CAC. If Lessee does not occupy
the entire Premises, the insurance premiums shall be allocated to the portion of
the Premises occupied by Lessee on a pro-rata square footage or other equitable
basis, as determined by Lessor. It is agreed that Lessee's obligation under this
paragraph shall be prorated to the reflect the Commencement Date and the end of
the Lease Term.
Lessor and Lessee hereby waive any rights each may have against the other
related to any loss or damage caused to Lessor or Lessee as the case may be, or
to the Premises or its contents, and which may arise from any risk covered by
fire and extended coverage insurance and those risks required to be covered
under Lessee's personal property insurance. The parties shall provide that their
respective insurance policies insuring the property or the personal property
include a waiver of any right of subrogation which said insurance company may
have against Lessor or Lessee, as the case may be.
7. ABANDONMENT: Lessee shall not vacate or abandon the Premises at any time
during the Lease Term; and if Lessee shall abandon, vacate or surrender said
Premises, or be dispossessed by process of law, or otherwise, any personal
property belonging to Lessee and left on the Premises shall be deemed to be
abandoned, at the option of Lessor. Notwithstanding the above, the Premises
shall not be considered vacated or abandoned if Lessee maintains the Premises in
Good Condition and Repair, provides security and is not in default.
8. FREE FROM LIENS: Lessee shall keep the subject Premises and the property in
which the subject Premises are situated, free from any and all liens arising out
of any work performed, materials furnished, or obligations incurred by Lessee. .
However, the Lessor shall allow Lessee to contest a lien claim, so long as the
claim is discharged prior to any foreclosure proceeding being initiated against
the property and provided Lessee provides Lessor a bond if the lien exceeds
$5,000.
9. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Lessee shall, at its sole cost
and expense, comply with all of the requirements of all local, municipal, state
and federal authorities now in force, or which may hereafter be in force,
pertaining to the Premises, and shall faithfully observe in the use and
occupancy of the Premises all local and municipal ordinances and state and
federal statutes now in force or which may hereafter be in force.
10. INTENTIONALLY OMITTED
11. ADVERTISEMENTS AND SIGNS: Lessee shall not place or permit to be placed,
in, upon or about the Premises any unusual or extraordinary signs, or any signs
not approved by the city, local, state, federal or other applicable governing
authority. Lessee shall not place, or permit to be placed upon the Premises, any
signs, advertisements or notices without the written consent of the
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Lessor, and such consent shall not be unreasonably withheld. A sign so placed on
the Premises shall be so placed upon the understanding and agreement that Lessee
will remove same at the end of the Lease Term or earlier termination of this
Lease and repair any damage or injury to the Premises caused thereby, and if not
so removed by Lessee, then Lessor may have the same removed at Lessee's expense.
12. UTILITIES: Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities supplied to the Premises. Any charges for sewer
usage, PG&E and telephone site service or related fees shall be the obligation
of Lessee and paid for by Lessee. If any such services are not separately
metered to Lessee, Lessee shall pay a reasonable proportion of all charges which
are jointly metered, the determination to be made by Lessor acting reasonably
and on any equitable basis. Lessor and Lessee agree that Lessor shall not be
liable to Lessee for any disruption in any of the utility services to the
Premises.
13. ATTORNEY'S FEES: In case suit should be brought for the possession of the
Premises, for the recovery of any sum due hereunder, because of the breach of
any other covenant herein, or to enforce, protect, or establish any term,
conditions, or covenant of this Lease or the right of either party hereunder,
the losing party shall pay to the Prevailing Party reasonable attorney's fees
which shall be deemed to have accrued on the commencement of such action and
shall be enforceable whether or not such action is prosecuted to judgment. The
term "Prevailing Party" shall mean the party that received substantially the
relief requested, whether by settlement, dismissal, summary judgment, judgment,
or otherwise.
14. DEFAULT
14.1 LESSEE DEFAULT: The occurrence of any of the following shall
constitute a default and breach of this Lease by Lessee: a) Any failure by
Lessee to pay Rent or to make any other payment required to be made by Lessee
hereunder when due if not cured within ten (10) days after written notice
thereof by Lessor to Lessee; b) The abandonment or vacation of the Premises by
Lessee except as provided in Section 7; c) A failure by Lessee to observe and
perform any other provision of this Lease to be observed or performed by Lessee,
where such failure continues for thirty days after written notice thereof by
Lessor to Lessee; provided, however, that if the nature of such default is such
that the same cannot be reasonably cured within such thirty (30) day period,
Lessee shall not be deemed to be in default if Lessee shall, within such period,
commence such cure and thereafter diligently prosecute the same to completion;
d) The making by Lessee of any general assignment for the benefit of creditors;
the filing by or against Lessee of a petition to have Lessee adjudged a bankrupt
or of a petition for reorganization or arrangement under any law relating to
bankruptcy; or e) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets or Lessee's interest in this Lease, or the
attachment, execution or other judicial seizure of substantially all of Lessee's
assets located at the Premises or of Lessee's interest in this Lease.
14.2 SURRENDER OF LEASE: In the event of any such default by Lessee, then
in addition to any other remedies available to Lessor at law or in equity,
Lessor shall have the immediate option to terminate this Lease before the end of
the Lease Term and all rights of Lessee hereunder, by giving written notice of
such intention to terminate. In the event that Lessor terminates this Lease due
to a default of Lessee, then Lessor may recover from Lessee: a) the worth at the
time of award of any unpaid Rent which had been earned at the time of such
termination; plus b) the worth at the time of award of unpaid Rent which would
have been earned after termination until the time of award exceeding the amount
of such rental loss that the Lessee proves could have been reasonably avoided;
plus c) the worth at the time of award of the amount by which the unpaid Rent
for the balance of the Lease Term after the time of award exceeds the amount of
such rental loss that the Lessee proves could have been reasonably avoided; plus
d) any other amount necessary to compensate Lessor for all the detriment
proximately caused by Lessee's failure to perform his obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom; and e) at Lessor's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time
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to time by applicable California law. As used in (a),(b) and (c) above, the
"worth at the time of award" is computed by allowing interest at the rate of
Xxxxx Fargo's prime rate plus two percent (2%) per annum..
14.3 RIGHT OF ENTRY AND REMOVAL: In the event of any such default by
Lessee, Lessor shall also have the right, with or without terminating this
Lease, 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 Lessee.
14.4 ABANDONMENT: In the event of the vacation or abandonment, except as
provided in Section 7, of the Premises by Lessee or in the event that Lessor
shall elect to re-enter as provided in paragraph 14.3 above or shall take
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, and Lessor does not elect to terminate this Lease as
provided in Section 14.2 above, then Lessor may from time to time, without
terminating this Lease, either recover all Rent as it becomes due or relet the
Premises or any part thereof for such term or terms and at such rental rates and
upon such other terms and conditions as Lessor, in its sole discretion, may deem
advisable with the right to make alterations and repairs to the Premises. In the
event that Lessor elects to relet the Premises, then Rent received by Lessor
from such reletting shall be applied; first, to the payment of any indebtedness
other than Rent due hereunder from Lessee to Lessor; second, to the payment of
any cost of such reletting; third, to the payment of the cost of any alterations
and repairs to the Premises; fourth, to the payment of Rent due and unpaid
hereunder; and the residue, if any, shall be held by Lessor and applied to the
payment of future Rent as the same may become due and payable hereunder. Should
that portion of such Rent received from such reletting during any month, which
is applied by the payment of Rent hereunder according to the application
procedure outlined above, be less than the Rent payable during that month by
Lessee hereunder, then Lessee shall pay such deficiency to Lessor immediately
upon demand therefor by Lessor. Such deficiency shall be calculated and paid
monthly. Lessee shall also pay to Lessor, as soon as ascertained, any costs and
expenses incurred by Lessor in such reletting or in making such alterations and
repairs not covered by the rentals received from such reletting.
14.5 NO IMPLIED TERMINATION: No re-entry or taking possession of the
Premises by Lessor pursuant to Section 14.3 or Section 14.4 of this Lease shall
be construed as an election to terminate this Lease unless a written notice of
such intention is given to Lessee or unless the termination thereof is decreed
by a court of competent jurisdiction. Notwithstanding any reletting without
termination by Lessor because of any default by Lessee, Lessor may at any time
after such reletting elect to terminate this Lease for any such default.
15. SURRENDER OF LEASE: The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work a merger, and shall, at
the option of Lessor, terminate all or any existing subleases or sub tenancies,
or may, at the option of Lessor, operate as an assignment to him of any or all
such subleases or sub tenancies.
16. TAXES: Lessee shall pay and discharge prior to the time such charges become
delinquent all real estate taxes, personal property taxes, taxes based on
vehicles utilizing parking areas in the Premises, taxes computed or based on
rental income(other than federal, state and municipal net income taxes),
Environmental Surcharges (as defined below), privilege taxes, excise taxes,
business and occupation taxes, school fees or surcharges, gross receipts taxes,
sales and/or use taxes, employee taxes, occupational license taxes, water and
sewer taxes, assessments (including, but not limited to, assessments for public
improvements or benefit), assessments for local improvement and maintenance
districts, and all other governmental impositions and charges of every kind and
nature whatsoever, regardless of whether now customary or within the
contemplation of the parties hereto and regardless of whether resulting from
increased rate and/or valuation, or whether extraordinary or ordinary, general
or special, unforeseen or foreseen, or similar or dissimilar to any of the
foregoing (all of the foregoing being hereinafter collectively called "Tax" or
"Taxes") which, at any time during the Lease Term, shall be applicable or
against the Premises, or shall become
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due and payable and a lien or charge upon the Premises under or by virtue of any
present or future laws, statutes, ordinances, regulations, or other requirements
of any governmental authority whatsoever. The term "Environmental Surcharge"
shall include any and all expenses, taxes, charges or penalties imposed by the
Federal Department of Energy, Federal Environmental Protection Agency, the
Federal Clean Air Act, or any regulations promulgated thereunder, or any other
local, state or federal governmental agency or entity now or hereafter vested
with the power to impose taxes, assessments or other types of surcharges as a
means of controlling or abating environmental pollution or the use of energy in
regard to the use, operation or occupancy of the Premises. The term "Tax" shall
include, without limitation, all taxes, assessments, levies, fees, impositions
or charges levied, imposed, assessed, measured, or based in any manner
whatsoever (i) in whole or in part on the Rent payable by Lessee under this
Lease, (ii) upon or with respect to the use, possession, occupancy, leasing,
operation or management of the Premises, (iii) upon this transaction or any
document to which Lessee is a party creating or transferring an interest or an
estate in the Premises, (iv) upon Lessee's business operations conducted at the
Premises, (v) upon, measured by or reasonably attributable to the cost or value
of Lessee's equipment, furniture, fixtures and other personal property located
on the Premises or the cost or value of any leasehold improvements made in or to
the Premises by or for Lessee, regardless of whether title to such improvements
shall be in Lessor or Lessee, or (vi) in lieu of or equivalent to any Tax set
forth in this Section 16. In the event any such Taxes are payable by Lessor and
it shall not be lawful for Lessee to reimburse Lessor for such Taxes, then the
Rent payable thereunder shall be increased to net Lessor the same net rent after
imposition of any such Tax upon Lessor as would have been payable to Lessor
prior to the imposition of any such Tax. It is the intention of the parties that
Lessor shall be free from all such Taxes and all other governmental impositions
and charges of every kind and nature whatsoever. However, nothing contained in
this Section 16 shall require Lessee to pay any Federal or State income,
franchise, estate, inheritance, succession, transfer or excess profits tax
imposed upon Lessor. If any general or special assessment is levied and assessed
against the Premises, Lessor agrees to use its best reasonable efforts to cause
the assessment to become a lien on the Premises securing repayment of a bond
sold to finance the improvements to which the assessment relates which is
payable in installments of principal and interest over the maximum term allowed
by law. It is understood and agreed that Lessee's obligation under this
paragraph will be prorated to reflect the Commencement Date and the end of the
Lease Term. It is further understood that if Taxes cover the Premises and Lessee
does not occupy the entire Premises, the Taxes will be allocated to the portion
of the Premises occupied by Lessee based on a pro-rata square footage or other
equitable basis, as determined by Lessor. Taxes billed by Lessor to Lessee shall
be included in the monthly CAC.
Subject to any limitations or restrictions imposed by any deeds of trust or
mortgages now or hereafter covering or affecting the Premises, Lessee shall have
the right to contest or review the amount or validity of any Tax by appropriate
legal proceedings but which is not to be deemed or construed in any way as
relieving, modifying or extending Lessee's covenant to pay such Tax at the time
and in the manner as provided in this Section 16. However, as a condition of
Lessee's right to contest, if such contested Tax is not paid before such contest
and if the legal proceedings shall not operate to prevent or stay the collection
of the Tax so contested, Lessee shall, before instituting any such proceeding,
protect the Premises and the interest of Lessor and of the beneficiary of a deed
of trust or the mortgagee of a mortgage affecting the Premises against any lien
upon the Premises by a surety bond, issued by an insurance company acceptable to
Lessor and in an amount equal to one and one-half (1 1/2) times the amount
contested or, at Lessor's option, the amount of the contested Tax and the
interest and penalties in connection therewith. Any contest as to the validity
or amount of any Tax, whether before or after payment, shall be made by Lessee
in Lessee's own name, or if required by law, in the name of Lessor or both
Lessor and Lessee. Lessee shall defend, indemnify and hold harmless Lessor from
and against any and all costs or expenses, including attorneys' fees, in
connection with any such proceedings brought by Lessee, whether in its own name
or not. Lessee shall be entitled to retain any refund of any such contested Tax
and penalties or interest thereon which have been paid by Lessee. Nothing
contained herein shall be construed as affecting or limiting Lessor's right to
contest any Tax at Lessor's expense.
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17. NOTICES: Unless otherwise provided for in this Lease, any and all written
notices or other communication (the "Communication") to be given in connection
with this Lease shall be given in writing and shall be given by personal
delivery, facsimile transmission or by mailing by registered or certified mail
with postage thereon or recognized overnight courier, fully prepaid, in a sealed
envelope addressed to the intended recipient as follows:
(a) to the Lessor at: 00000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Fax No: (000) 000-0000
(b) to the Lessee at: 0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Fax No: (000) 000-0000
or such other addresses, facsimile number or individual as may be designated by
a Communication given by a party to the other parties as aforesaid. Any
Communication given by personal delivery shall be conclusively deemed to have
been given and received on a date it is so delivered at such address provided
that such date is a business day, otherwise on the first business day following
its receipt, and if given by registered or certified mail, on the day on which
delivery is made or refused or if given by recognized overnight courier, on the
first business day following deposit with such overnight courier and if given by
facsimile transmission, on the day on which it was transmitted provided such day
is a business day, failing which, on the next business day thereafter.
18. ENTRY BY LESSOR: Lessee shall permit Lessor and its agents to enter into
and upon said Premises at all reasonable times and after reasonable notice using
the minimum amount of interference and inconvenience to Lessee and Lessee's
business, subject to any security regulations of Lessee, for the purpose of
inspecting the same or for the purpose of maintaining the building in which said
Premises are situated, or for the purpose of making repairs, alterations or
additions to any other portion of said building, including the erection and
maintenance of such scaffolding, canopies, fences and props as may be required,
without any rebate of Rent (subject to Section 7 above) and without any
liability to Lessee for any loss of occupation or quiet enjoyment of the
Premises (subject to Section 43 below); and shall permit Lessor and his agents,
at any time within ninety (90) days prior to the end of the Lease Term, to place
upon said Premises any usual or ordinary "For Sale" or "For Lease" signs and
exhibit the Premises to prospective Lessees at reasonable hours.
19. DESTRUCTION OF PREMISES: In the event of a partial destruction of the said
Premises during the Lease Term from any cause which is covered by Lessor's
property insurance, Lessor shall forthwith repair the same, provided such
repairs can be made within one hundred eighty (180) days after the date of the
casualty, but such partial destruction shall in no way annul or void this Lease,
except that Lessee shall be entitled to a proportionate reduction of Rent. With
respect to any partial destruction which Lessor is obligated to repair or may
elect to repair under the terms of this paragraph, the provision of Section
1932, Subdivision 2, and of Section 1933, Subdivision 4, of the Civil Code of
the State of California are waived by Lessee. In the event that the building in
which the subject Premises may be situated is destroyed to an extent greater
than thirty-three and one-third percent (33 1/3%) of the replacement cost
thereof or which cannot be completed within 6 months after the casualty, Lessor
or Lessee may, at their sole option, elect to terminate this Lease. A total
destruction of the building in which the subject Premises are situated shall
terminate this Lease. Notwithstanding the above, Lessor is only obligated to
repair or rebuild to the extent of available insurance proceeds including any
deductible amount paid by Lessee. Should Lessor determine that insufficient or
no
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insurance proceeds are available for repair or reconstruction of Premises,
Lessor, at its sole option, may terminate the Lease. Lessee shall have the
option of continuing this Lease by agreeing to pay all repair costs to the
subject Premises.
20. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease, or any
interest therein, and shall not sublet the said Premises or any part thereof, or
any right or privilege appurtenant thereto, or cause any other person or entity,
to occupy or use the Premises, or any portion thereof, without the advance
written consent of Lessor, which shall not be unreasonably withheld.
Notwithstanding the above, Lessee may, without the consent of Lessor, assign
this Lease or sublet all or any part of the Premises to a bona fide subsidiary
or affiliate of Lessee, an entity in which or with which Lessee merges or an
entity which acquires all or substantially all of the assets of Lessee, an
entity which is controlled directly or indirectly by Lessee or which entity
controls, directly or indirectly, Lessee ("Excepted Party"). Notwithstanding
Lessor's obligation to provide reasonable approval, Lessor reserves the right to
withhold its consent for any proposed sublessee or assignee of lessee if the
proposed sublessee or assignee is a user or generator of Hazardous Materials.
Any such assignment or subletting requiring Lessor's consent made without
Lessor's consent shall be void, and shall, at the option of the Lessor,
terminate this Lease. This Lease shall not, or shall any interest therein, be
assignable, as to the interest of Lessee, by operation of law, without the
written consent of Lessor. If Lessee desires to assign its rights under this
Lease or to sublet all or any part of the Premises to a party other than an
Excepted Party, Lessee shall first notify Lessor of the proposed terms and
conditions of such assignment or subletting. Lessor at it's sole option, shall
have the right (I) to enter into a direct Lessor-lessee relationship with such
party under such proposed terms and conditions, in which event Lessee shall be
relieved of its obligations hereunder to the extent of the Lessor-lessee
relationship entered into between Lessor and such third party or (II) to
terminate the Lease and relieve the Lessee of all Lease obligations occurring
after Lease termination. Notwithstanding the foregoing, Lessee may assign this
Lease to an Excepted Party, provided there is no substantial reduction in the
net worth of the resulting guarantor. Whether or not Lessor's consent to a
sublease or assignment is required, in the event of any sublease or assignment,
Lessee shall be and shall remain primarily liable for the performance of all
conditions, covenants, and obligations of Lessee hereunder and, in the event of
a default by an assignee or sublessee, Lessor may proceed directly against the
original Lessee hereunder and/or any other predecessor of such assignee or
sublessee without the necessity of exhausting remedies against said assignee or
sublessee. If Lessee merges or sells substantially all of its assets and the net
worth of the resulting entity is substantially less than that of Lessee, such
sale shall be a default under this Lease unless approved by Lessor.
21. CONDEMNATION: If any part of the Premises shall be taken for any public or
quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof, and a part thereof remains is usable by Lessee as
determined by Lessee in its reasonable discretion, this Lease shall as to the
part so taken, terminate as of the date title vests in the condemnor or
purchaser, and the Rent payable hereunder shall be adjusted on a per square foot
basis so that the Lessee shall be required to pay for the remainder of the Lease
Term only that portion of Premises remaining.The rental adjustment resulting
will be computed at the same Rental rate for the remaining part not taken;
however, Lessor shall have the option to terminate this Lease as of the date
when title to the part so taken vests in the condemnor or purchaser. If all of
the Premises, or such part thereof be taken so that there does not remain a
portion susceptible for occupation hereunder, this Lease shall thereupon
terminate. If a part or all of the Premises be taken, all compensation awarded
upon such taking shall be payable to the Lessor. Lessee may file a separate
claim and be entitled to any award granted to Lessee.
22. EFFECTS OF CONVEYANCE: The term "Lessor" as used in this Lease, means only
the owner for the time being of the land and building constituting the Premises,
so that, in the event of any sale of said land or building, or in the event of a
Lease of said building, Lessor shall be and hereby is entirely freed and
relieved of all covenants and obligations of Lessor hereunder, and it shall be
deemed and construed, without further agreement between the parties and the
purchaser of any such sale, or the Lessor of the building, that the purchaser or
lessor of the building has assumed and agreed to carry out any and all covenants
and
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obligations of the Lessor hereunder. If any security is given by Lessee to
secure the faithful performance of all or any of the covenants of this Lease on
the part of Lessee, Lessor may transfer and deliver the security, as such, to
the purchaser at any such sale of the building, and thereupon the Lessor shall
be discharged from any further liability.
23. SUBORDINATION: This Lease, in the event Lessor notifies Lessee in writing,
shall be subordinate to any ground lease, deed of trust, or other hypothecation
for security now or hereafter placed upon the real property at which the
Premises are a part and to any and all advances made on the security thereof and
to renewals, modifications, replacements and extensions thereof. Lessee agrees
to promptly execute any documents required by lenders that contain commercially
reasonable terms which may be required to effectuate such subordination.
Notwithstanding such subordination, if Lessee is not in default and so long as
Lessee shall pay the Rent and observe and perform all of the provisions and
covenants required under this Lease, Lessee's right to quiet possession of the
Premises shall not be disturbed or effected by any subordination.
24. WAIVER: The waiver by Lessor or Lessee of any breach of any term, covenant
or condition, herein contained shall not be construed to be a waiver of such
term, covenant or condition or any subsequent breach of the same or any other
term, covenant or condition therein contained. The subsequent acceptance of Rent
hereunder by Lessor shall not be deemed to be a waiver of Lessee's breach of any
term, covenant, or condition of the Lease.
25. HOLDING OVER: Any holding over after the end of the Lease Term requires
Lessor's written approval prior to the end of the Lease Term, which,
notwithstanding any other provisions of this Lease, Lessor may withhold. Such
holding over shall be construed to be a tenancy at sufferance from month to
month. Lessee shall pay to Lessor monthly base rent equal to one and one-half
(1.5) times the monthly base rent installment due in the last month of the Lease
Term and all other additional rent and all other terms and conditions of the
Lease shall apply, so far as applicable. Holding over by Lessee without written
approval of Lessor shall subject Lessee to the liabilities and obligations
provided for in this Lease and by law, including, but not limited to those in
Section 2.1 of this Lease. Lessee shall indemnify and hold Lessor harmless
against any loss or liability resulting from any delay caused by Lessee in
surrendering the Premises, including without limitation, any claims made or
penalties incurred by any succeeding lessee or by Lessor. No holding over shall
be deemed or construed to exercise any option to extend or renew this Lease in
lieu of full and timely exercise of any such option as required hereunder.
26. LESSOR'S LIABILITY: If Lessee should recover a money judgment against
Lessor arising in connection with this Lease, the judgment shall be satisfied
only out of the Lessor's interest in the Premises (without regard to liens or
encumbrances thereon) and neither Lessor or any of its partners shall be liable
personally for any deficiency.
27. ESTOPPEL CERTIFICATES: Lessee and Lessor shall at any time during the Lease
Term, upon not less than ten (10) days prior written notice from the requesting
party, execute and deliver to the other party a statement in writing certifying
that, this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification) and the dates to which the Rent and
other charges have been paid in advance, if any, and acknowledging that there
are not, to the certifying party's knowledge knowledge, any uncured defaults on
the part of the other party hereunder or specifying such defaults if they are
claimed. Any such statement may be conclusively relied upon by the party in
whose favor the estoppel certificate is addressed. The certifying party's
failure to deliver such a statement within such time shall be conclusive upon
the certifying party that (a) this Lease is in full force and effect, without
modification except as may be represented by the other party; and (b) there are
no uncured defaults in the other party's performance.
28. TIME: Time is of the essence of the Lease.
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29. CAPTIONS: The headings on titles to the paragraphs of this Lease are not a
part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof. This instrument contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in writing signed by
all of the parties hereto or their respective successors in interest.
30. PARTY NAMES: Landlord and Tenant may be used in various places in this
Lease as a substitute for Lessor and Lessee respectively.
31. EARTHQUAKE INSURANCE: As a condition of Lessor agreeing to waive the
requirement for earthquake insurance, Lessee agrees that it will pay, as
additional Rent, which shall be included in the monthly CAC, an amount not to
exceed Sixty Four Thousand Dollars ($64,000) per year for earthquake insurance
if Lessor desires to obtain some form of earthquake insurance in the future, if
and when available, on terms acceptable to Lessor as determined in the sole and
absolute discretion of Lessor. In the event Lessor obtains insurance under of
this paragraph, Lessee shall not be responsible for any deductible in excess of
$25,000.
32. HABITUAL DEFAULT: Notwithstanding anything to the contrary contained in
Section 14 herein, Lessor and Lessee agree that if Lessee shall have defaulted
in the payment of Rent for two or more times during any twelve month period
during the Lease Term, then such conduct shall, at the option of the Lessor,
represent a separate default which cannot be cured by Lessee. Lessee
acknowledges that the purpose of this provision is to prevent repetitive
defaults by the Lessee under the Lease, which constitute a hardship to the
Lessor and deprive the Lessor of the timely performance by the Lessee hereunder.
33. HAZARDOUS MATERIALS
33.1 DEFINITIONS: As used in this Lease, the following terms shall have the
following meaning:
a. The term "Hazardous Materials" shall mean (i) polychlorinated
biphenyls; (ii) radioactive materials and (iii) any chemical, material or
substance now or hereafter defined as or included in the definitions of
"hazardous substance" "hazardous water", "hazardous material", "extremely
hazardous waste", "restricted hazardous waste" under Section 25115, 25117 or
15122.7, or listed pursuant to Section 25140 of the California Health and Safety
Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as
"hazardous substance" under Section 25316 of the California Health and Safety
Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substances
Account Act), (iii) defined as "hazardous material", "hazardous substance", or
"hazardous waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release, Response, Plans and
Inventory), (iv) defined as a "hazardous substance" under Section 25181 of the
California Health and Safety Code, Division 20l, Chapter 6.7 (Underground
Storage of Hazardous Substances), (v) petroleum, (vi) asbestos, (vii) listed
under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to
Article II of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (viii) defined as "hazardous substance" pursuant to Section 311 of
the Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq. or listed
pursuant to Section 1004 of the Federal Water Pollution Control Act (33 U.S.C.
1317), (ix) defined as a "hazardous waste", pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., (x)
defined as "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Responsibility Compensations, and Liability Act, 42 U.S.C. 9601 et
seq., or (xi) regulated under the Toxic Substances Control Act, 156 U.S.C. 2601
et seq.
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b. The term "Hazardous Materials Laws" shall mean any local, state
and federal laws, rules, regulations, or ordinances relating to the use,
generation, transportation, analysis, manufacture, installation, release,
discharge, storage or disposal of Hazardous Material.
c. The term "Lessor's Agents" shall mean Lessor's agents,
representatives, employees, contractors, subcontractors, directors, officers and
partners.
d. The term "Lessee's Agents" shall mean Lessee's agents,
representatives, employees, contractors, subcontractors, directors, officers,
partners, invitees or any other person in or about the Premises.
33.2 LESSEE'S RIGHT TO INVESTIGATE: Lessee shall be entitled to cause such
inspection, soils and ground water tests, and other evaluations to be made of
the Premises as Lessee deems necessary regarding (i) the presence and use of
Hazardous Materials in or about the Premises, and (ii) the potential for
exposure to Lessee's employees and other persons to any Hazardous Materials used
and stored by previous occupants in or about the Premises. Lessee shall provide
Lessor with copies of all inspections, tests and evaluations. Lessee shall
indemnify, defend and hold Lessor harmless from any cost, claim or expense
arising from such entry by Lessee or from the performance of any such
investigation by such Lessee.
33.3 LESSOR'S REPRESENTATIONS: Lessor hereby represents and warrants to the
best of Lessor's knowledge that the Premises are, as of the date of this Lease,
in compliance with all Hazardous Material Laws.
33.4 LESSEE'S OBLIGATION TO INDEMNIFY: Lessee, at its sole cost and
expense, shall indemnify, defend, protect and hold Lessor and Lessor's Agents
harmless from and against any and all cost or expenses, including those
described under subparagraphs i, ii and iii herein below set forth, arising from
or caused in whole or in part, directly or indirectly by:
a. Lessee's or Lessee's Agents' use, analysis, storage,
transportation, disposal, release, threatened release, discharge or generation
of Hazardous Material to, in, on, under, about or from the Premises; or
b. Lessee's or Lessee's Agents failure to comply with Hazardous
Material laws; or
c. Any release of Hazardous Material to, in, on, under, about, from
or onto the Premises caused by or occurring as a result of acts or omissions of
Lessee or Lessee's Agents or occurring during the Lease Term, except ground
water contamination from other parcels where the source is from off the Premises
not arising from or caused by Lessee or Lessee's Agents.
The cost and expenses indemnified against include, but are not limited to the
following:
i. Any and all claims, actions, suits, proceedings, losses, damages,
liabilities, deficiencies, forfeitures, penalties, fines, punitive damages, cost
or expenses;
ii. Any claim, action, suit or proceeding for personal injury
(including sickness, disease, or death), tangible or intangible property damage,
compensation for lost wages, business income, profits or other economic loss,
damage to the natural resources of the environment, nuisance, pollution,
contamination, leaks, spills, release or other adverse effects on the
environment;
33.5 LESSEE'S OBLIGATION TO REMEDIATE CONTAMINATION: Lessee shall, at its
sole cost and expense, promptly take any and all action necessary to remediate
contamination of the Premises by Hazardous Materials during the Lease Term
caused or occurring as a result of acts or omissions of Lessee or Lessee's
Agents.
33.6 OBLIGATION TO NOTIFY: Lessor and Lessee shall each give written notice
to the other as soon as reasonably practical of (i) any communication received
from any governmental authority concerning Hazardous Material which related to
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the Premises and (ii) any contamination of the Premises by Hazardous Materials
which constitutes a violation of any Hazardous Material Laws.
33.7 SURVIVAL: The obligations of Lessee under this Section 33 shall
survive the Lease Term or earlier termination of this Lease.
33.8 CERTIFICATION AND CLOSURE: On or before the end of the Lease Term or
earlier termination of this Lease, Lessee shall deliver to Lessor a
certification executed by Lessee stating that, to the best of Lessee's
knowledge, there exists no violation of Hazardous Material Laws resulting from
Lessee's obligation in Section 33. If pursuant to local ordinance, state or
federal law, Lessee is required, at the expiration of the Lease Term, to submit
a closure plan for the Premises to a local, state or federal agency, then Lessee
shall comply at its sole cost and expense with the requirements of the closure
plan and furnish to Lessor a copy of such plan.
33.9 PRIOR HAZARDOUS MATERIALS: Lessee shall have no obligation to clean up
or to hold Lessor harmless with respect to any Hazardous Material or wastes
discovered on the Premises, except as a result of Environmental Surcharges,
which were not introduced into, in, on, about, from or under the Premises during
the Lease Term or ground water contamination from other parcels where the source
is from off the Premises not arising from or caused by Lessee or Lessee's
Agents.
34. BROKERS: Lessor and Lessee represent that they have not utilized or
contacted a real estate broker or finder with respect to this Lease other than
PRESCO and Lessee agrees to indemnify and hold Lessor harmless against any
claim, cost, liability or cause of action asserted by any broker or finder
claiming through Lessee other than PRESCO. Lessor shall at its sole cost and
expense pay the brokerage commission previously agreed upon to PRESCO in
connection with this transaction. Lessor represents and warrants that it has not
utilized or contacted a real estate broker or finder with respect to this Lease
other than PRESCO and Lessor agrees to indemnify and hold Lessee harmless
against any claim, cost, liability or cause of action asserted by any broker or
finder claiming through Lessor.
35. OPTIONS TO EXTEND
A. OPTION: Lessor hereby grants to Lessee two (2) options to extend the
Lease Term, with each extended term to be for a period of five (5) years, on the
following terms and conditions:
(i) Lessee shall give Lessor written notice of its exercise of its
option to extend no earlier than twelve (12), nor later than six (6) calendar
months before the Lease Term would end but for said exercise. If Lessee and
Lessor have not agreed to rental terms in writing, Lessee may withdraw its
notice of exercise of an extension option prior to six (6) months before the
Lease Term would end but for said exercise. Lessor shall provide Lessee with
Lessor's proposed base monthly rent for the option period within twenty (20)
days of Lessee's written request. However, once Lessee delivers a notice of
exercise of an option to extend the Lease Term it may not be withdrawn except as
provided for herein and subject to the provisions of this Section 35, such
notice shall operate to extend the Lease Term. Upon any extension of the Lease
Term pursuant to this Section 35, the term "Lease Term" as used in this Lease
shall thereafter include the then extended term. Time is of the essence.
(ii) Lessee may not extend the Lease Term pursuant to any option
granted by this Section 35 if Lessee is in default as of the date of the
exercise of its option. If Lessee has committed a default by Lessee as defined
in Section 14 or 32 that has not been cured or waived by Lessor in writing by
the date that any extended term is to commence, then Lessor may
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elect not to allow the Lease Term to be extended, notwithstanding any notice
given by Lessee of an exercise of this option to extend.
(iii) All terms and conditions of this Lease shall apply during the
extended term, except that the base rent and rental increases for each extended
term shall be determined as provided in Section 35 (B) below
(iv) The option rights of Condor Systems, Inc. granted under this
Section 35 are personal and may not be assigned or transferred to any assignee
or sublessee except Excepted Parties and may not be exercised if Condor Systems
or Excepted Party is not occupying the Premises at time of exercise.
B. EXTENDED TERM RENT - OPTION PERIODS: The monthly Base Rent for the
Premises during each extended term shall equal the fair market monthly Rent for
the Premises as of the commencement date of the extended term but in no case,
less than the rent during the last month of the prior Lease term. Promptly upon
Lessee's exercise of the option to extend, Lessee and Lessor shall meet and
attempt to agree on the fair market monthly Rent for the Premises as of the
commencement date of the extended term. In the event the parties fail to agree
upon the amount of the monthly Rent for the extended term within 30 days of
Lessor's receipt of Lessee's notice of intent to extend the term of the Lease,
the monthly Rent for the extended term shall be determined by appraisal in the
manner hereafter set forth; provided, however that in no event shall the monthly
rent for the extended term be less than in the immediate preceding period.
Annual base rent increases during the extended term shall be four percent (4%)
per year. In the event it becomes necessary under this paragraph to determine
the fair market monthly Rent of the Premises by appraisal, Lessor and Lessee
each shall appoint a real estate appraiser who shall be a member of the American
Institute of Real Estate Appraiser ("AIREA") who shall have been active in AIREA
over the 5 year period ending on the date of such appointment in the appraisal
of comparable properties in the vicinity of the Premises and such appraisers
shall each determine the fair market monthly Rent for the Premises taking into
account the value of the Premises and the amenities provided by the outside
areas, the common areas, and the Building, and prevailing comparable Rentals in
the area. Such appraisers shall, within twenty (20) business days after their
appointment, complete their appraisals and submit their appraisal reports to
Lessor and Lessee. If the fair market monthly Rent of the Premises established
in the two (2) appraisals varies by five percent (5%) or less of the higher
Rent, the average of the two shall be controlling. If said fair market monthly
Rent varies by more than five percent (5%) of the higher Rental, said
appraisers, within ten (10) days after submission of the last appraisal, shall
appoint a third appraiser who shall be a member of the AIREA and who shall meet
the same criteria as the previous two appointed appraiser as set forth herein.
Such third appraiser shall, within twenty (20) business days after his
appointment, determine which of the previous two appraisals is closes to the
fair market monthly Rent of the Premises. If either Lessor or Lessee fails to
appoint an appraiser, or if an appraiser appointed by either of them fails,
after his appointment to submit his appraisal within the required period in
accordance with the foregoing, the appraisal submitted by the appraiser properly
appointed and timely submitting his appraisal shall be controlling. If the two
appraisers appointed by Lessor and Lessee are unable to agree upon a third
appraiser within the required period in accordance with the foregoing,
application shall be made within twenty (20) days thereafter by either Lessor or
Lessee to AIREA, which shall appoint a member of said institute willing to serve
as appraiser and meeting the criteria set forth in this Section 35. The cost of
all appraisals under this subparagraph shall be borne equally be Lessor and
Lessee.
36. APPROVALS: Whenever in this Lease the Lessor's or Lessee's consent is
required, such consent shall not be unreasonably or arbitrarily withheld or
delayed. In the event that the Lessor or Lessee does not respond to a request
for any consents which may be required of it in this Lease within ten business
days of the request of such consent in writing by the Lessee or Lessor, such
consent shall be deemed to have been given by the Lessor or Lessee.
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37. AUTHORITY: Each party executing this Lease represents and warrants that he
or she is duly authorized to execute and deliver the Lease. If executed on
behalf of a corporation, that the Lease is executed in accordance with the
by-laws of said corporation (or a partnership that the Lease is executed in
accordance with the partnership agreement of such partnership), that no other
party's approval or consent to such execution and delivery is required, and that
the Lease is binding upon said individual, corporation (or partnership) as the
case may be in accordance with its terms.
38. INDEMNIFICATION OF LESSOR: Except to the extent caused by the sole
negligence or willful misconduct of Lessor or Lessor's Agents, Lessee shall
defend, indemnify and hold Lessor harmless from and against any and all
obligations, losses, costs, expenses, claims, demands, attorney's fees,
investigation costs or liabilities on account of, or arising out of the use,
condition or occupancy of the Premises or any act or omission to act of Lessee
or Lessee's Agents or any occurrence in, upon, about or at the Premises,
including, without limitation, any of the foregoing provisions arising out of
the use, generation, manufacture, installation, release, discharge, storage, or
disposal of Hazardous Materials by Lessee or Lessee's Agents. It is understood
that Lessee is and shall be in control and possession of the Premises and that
Lessor shall in no event be responsible or liable for any injury or damage or
injury to any person whatsoever, happening on, in, about, or in connection with
the Premises, or for any injury or damage to the Premises or any part thereof.
This Lease is entered into on the express condition that Lessor shall not be
liable for, or suffer loss by reason of injury to person or property, from
whatever cause, which in any way may be connected with the use, condition or
occupancy of the Premises or personal property located herein. The provisions of
this Lease permitting Lessor to enter and inspect the Premises are for the
purpose of enabling Lessor to become informed as to whether Lessee is complying
with the terms of this Lease and Lessor shall be under no duty to enter, inspect
or to perform any of Lessee's covenants set forth in this Lease. Lessee shall
further indemnify, defend and hold harmless Lessor from and against any and all
claims arising from any breach or default in the performance of any obligation
to Lessee's part to be performed under the terms of this Lease. The provisions
of Section 38 shall survive the Lease Term or earlier termination of this Lease
with respect to any damage, injury or death occurring during the Lease Term.
39. SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained
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;
and all of the parties hereto shall be jointly and severally liable hereunder.
40. MISCELLANEOUS PROVISIONS: All rights and remedies hereunder are cumulative
and not alternative to the extent permitted by law and are in addition to all
other rights or remedies in law and in equity.
41. CHOICE OF LAW: This lease shall be construed and enforced in accordance
with the substantive laws of the State of California. The language of all parts
of this lease shall in all cases be construed as a whole according to its fair
meaning and not strictly for or against either Lessor or Lessee.
42. ENTIRE AGREEMENT: This Lease is the entire agreement between the parties,
and there are no agreements or representations between the parties except as
expressed herein. Except as otherwise provided for herein, no subsequent change
or addition to this Lease shall be binding unless in writing and signed by the
parties hereto.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease, the day and year
first above written.
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LESSOR LESSEE
T.B.I./MISSION WEST PROPERTIES, L.L.C. CONDOR SYSTEMS INC.
By: By:
----------------------------------- -----------------------------------
Signature of authorized representative signature of authorized representative
-------------------------------------- --------------------------------------
printed name printed name
-------------------------------------- --------------------------------------
Title title
-------------------------------------- --------------------------------------
Date date
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Exhibit A
Site plan to be attached.
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Exhibit B
BUILDING SHELL
Building Shell includes the following items in customary quantities and quality.
All items not listed are part of Lessee Interior Improvements.
Exterior walls
Foundations
Floors Slabs
Roof structures and membrane
Glazing
Exit doors
Truck doors
Landscaping
Parking and paving
Storm sewer line to building
Sanitary sewer line to building
Water line to building
Paint of exterior walls
Shell architect and engineering (Lessor's Agents)
All permits for the above items
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Exhibit C
Building Shell plans to be attached.
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Exhibit D
Lessee Interior Improvement Plans to be attached.
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Exhibit E
Lessee Approval Deadlines
Lease signed 09/20/00
Approval of site plan 09/30/00
Approval of building elevation 9/30/00
Approval of restroom, stairs and underground plumbing 10/31/00
Approval of preliminary floor plan, single line 10/31/00
Approval of interior plans and specifications 11/30/00
Final selection of all material and interior finishes
for construction such as Carpet, ceramic tile, paint,
and any other lessee selected materials and finishes 11/30/00
Lessee shall not unreasonably withhold approval of final shell or interior plans
if they conform in general to the preliminary site plan, preliminary elevation,
and floor plans.
The Commencement Date shall be extended one day for each day Lessee does not
meet each deadline set forth on this Exhibit E and Lessee shall pay Rent for any
delays that effect the Substantial Completion Date which shall be considered a
Lessee Delay.
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