LEASE AGREEMENT
THIS LEASE, made this 2nd day of August, 1993 between THE ARRILLAGA
FOUNDATION AND XXXXXXX X. XXXXX, Trustee, or his Successor Trustee UTA dated
7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST), as amended, and XXXXX
MARRIOTT, hereinafter called Landlord, and FAROUDJA LABORATORIES, INC., a
California Corporation, hereinafter called Tenant.
W I T N E S S E T H:
Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit "A,"
attached hereto and incorporated herein by this reference thereto more
particularly described as follows:
All of that certain 20,000+ square foot building located at
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx. Said Premises is
more particularly shown within the area outlined in Red on
EXHIBIT A attached hereto. The entire parcel, of which the
Premises is a part, and exclusive parking appurtenant
thereto, is shown within the area outlined in Green on
EXHIBIT A attached hereto. The Premises shall be improved
as shown on EXHIBIT B attached hereto, and is leased in its
present condition, and in the configuration as shown in Red
on EXHIBIT B.
The word "Premises" as used throughout this lease is hereby defined to
include the nonexclusive use of sidewalks and driveways in front of or adjacent
to the Premises, and the nonexclusive use of the area directly underneath or
over such sidewalks and driveways. The leased area of the Premises shall be
measured from outside of exterior walls to outside of exterior walls, and shall
include any atriums, covered entrances or egresses and covered loading areas.
Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.
1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of general
office, light manufacturing, research and development, and storage and other
uses necessary for Tenant to conduct Tenant's business in accordance with all
applicable government laws and ordinances and for no other purpose. Tenant
shall not do or permit to be done in or about the Premises anything which is
prohibited by or will in any way increase the existing rate of (or otherwise
affect) fire or any insurance covering the Premises or any part thereof, or any
of its contents, or will cause a cancellation of any insurance covering the
Premises or any part thereof, or any of its contents. Tenant shall not do or
permit to be done anything in, on or about the Premises which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Premises or neighboring premises or injure or annoy them, or use or allow the
Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. No sale by auction shall be permitted on the Premises. Tenant
shall not place any loads upon the floors, walls, or ceiling which endanger the
structure, or place any harmful fluids or other materials in the drainage system
of the building, or overload existing electrical or other mechanical systems.
No waste materials or refuse shall be dumped upon or permitted to remain upon
any part of the Premises or outside the building in which the Premises are a
part, except in trash containers placed inside exterior enclosures designated by
Landlord for that purpose or inside the building proper where designated by
Landlord. 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 outside the Premises. Tenant shall not place anything or
allow anything to be placed near the glass of any window, door partition or wall
which may appear unsightly from outside the Premises. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be
used in or at the Premises without the prior written consent of Landlord.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises. Tenant shall indemnify, defend and hold Landlord harmless against any
loss, expense, damage, reasonable attorneys' fees, or liability arising out of
failure of Tenant to comply with any applicable law. Tenant shall comply with
any covenant, condition, or restriction ("CC&R's") affecting the Premises. The
provisions of this paragraph are for the benefit of Landlord only and shall not
be construed to be for the benefit of any tenant or occupant of the Premises.
2. TERM
A. The term on this Lease shall be for a period of TEN (10) years (unless
sooner terminated as hereinafter provided) and, subject to Paragraphs 2B and 3,
shall commence on the 1st day of October, 1993 and end on the 30th day of
September, 2003.
B. Possession of the Premises shall be deemed tendered and the term of
the Lease shall commence when the first of the following occurs:
(a) One day after a Certificate of Occupancy is granted by the proper
governmental agency, or, if the governmental agency having jurisdiction over the
area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Landlord's
architect or contractor that Landlord's construction work has been completed; or
(b) Upon the occupancy of the Premises by any of Tenant's operating
personnel; or
(c) When the Tenant Improvements have been substantially completed
for Tenant's use and occupancy, in accordance and compliance with EXHIBIT B of
this Lease Agreement; or
(d) As otherwise agreed in writing.
3. POSSESSION If landlord, for any reason whatsoever, cannot deliver
possession of said premises to Tenant at the commencement of the said term, as
hereinbefore specified, this Lease shall not be void or voidable; no obligation
of Tenant shall be affected thereby; nor shall Landlord or Landlord's agents be
liable to Tenant for any loss of damage resulting therefrom; but in that event
the commencement and termination dates of the Lease, and all other dates
affected thereby shall be revised to conform to the date of Landlord's delivery
of possession, as specified in Paragraph 2B, above. The above, is however,
subject to the provision that the period of delay of delivery of the Premises
shall not exceed 60 days from the commencement date herein (except those delays
caused by Acts of God, strikes, war, utilities, governmental bodies, weather,
unavailable materials, and delays beyond Landlord's control shall be excluded in
calculating such period) in which instance Tenant, at its option, may, by
written notice to Landlord, terminate this lease.
4. RENT (subject to the provisions of Paragraph 40 "Basic Rent Adjustment")
A. BASIC RENT. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice, or demand, and
Landlord agrees to accept as Basic Rent for the lease Premises the total sum of
ONE MILLION SIX HUNDRED EIGHTY THOUSAND AND NO/100 DOLLARS ($1,680,000.00) in
lawful money of the United States of America, payable as follows:
SEE PARAGRAPH 39 FOR BASIC RENT SCHEDULE
It is agreed that, as the Basic Rent provided for herein is adjusted according
to Paragraph 35, the total Basic Rent and schedule of payments described above
shall be adjusted accordingly.
B. TIME FOR PAYMENT. Full monthly rent is due in advance on the first
day of each calendar month. In the event that the term of this Lease commences
on a date other than the first day of calendar month, on the date of
commencement of the term hereof Tenant shall pay to Landlord as rent for the
period
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* It is agreed in the event said Lease commenced on a date other than the
first day of the month the term of the Lease will be extended to account for
the number of days in the partial month. The Basic Rent during the resulting
partial month will be pro-rated (for the number of days in the partial month)
at the Basic Rent rate scheduled for the projected commencement date as shown
in Paragrah 39.
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from such date of commencement to the first day of the next succeeding calendar
month that proportion of the monthly rent hereunder which the number of days
between such date of commencement and the first day of the next succeeding
calendar month bears to thirty (30). In the event that the term of this Lease
for any reason ends on a date other than the last day of a calendar month, on
the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month
to and including the last day of the term hereof that proportion of the monthly
rent hereunder which the number of days between said first day of said last
calendar month and the last day of the term hereof bears to thirty (30).
C. LATE CHARGE. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rental as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal ten percent (10%) of each rental payment so
in default.
D. ADDITIONAL RENT. Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord or to Landlord's designated agent in
addition to the Basic Rent and as Additional Rent the following:
(a) All Taxes relating to the Premises as set forth in Paragraph 9,
and
(b) All insurance premiums relating to the Premises, as set forth in
Paragraph 12, and
(c) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue thereto
in the event of Tenant's failure to pay such amounts, and all damages,
reasonable costs and expenses which Landlord may incur by reason of default of
Tenant or failure on Tenant's part to comply with the terms of this Lease. In
the event of nonpayment by Tenant of Additional Rent, Landlord shall have all
the rights and remedies with respect thereto as Landlord has for nonpayment of
rent.
The Additional Rent due hereunder shall be paid to Landlord or Landlord's
agent (i) within five days after presentation of invoice from Landlord of
Landlord's agent setting forth such Additional Rent and/or (ii) at the option of
Landlord, Tenant shall pay to Landlord monthly, in advance, Tenant's prorata
share of any amount estimated by Landlord to be Landlord's approximate average
monthly expenditure for such Additional Rent items, which estimated amount shall
be reconciled at the end of each calendar year as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expending by Landlord in excess of said
estimated amount, or Landlord refunding to Tenant (providing Tenant is not in
default in the performance of any of the terms, covenants and conditions of this
Lease) any amount of estimated payments made by Tenant in excess of Landlord's
actual expenditures for said Additional Rent items.
The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the term of this Lease, and
if the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.
E. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at THE ARRILLAGA FOUNDATION AND
XXXXX/MARRIOTT, c/o XXXXX XXXXXXXXX, 0000 XXXXXXX XXXXXXX XXXX., XXXXX 000,
XXXXX XXXXX, XX 00000 or to such other person or to such other place as Landlord
may from time to time designate in writing.
F. SECURITY DEPOSIT. Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord the sum of TWENTY EIGHT THOUSAND
AND NO/100 DOLLARS ($28,000.00). Said sum shall be held by Landlord as a
Security Deposit for the faithful performance by Tenant of all of the terms,
covenants, and conditions of the Lease to be kept and performed by Tenant
during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including, but not limited to, the provisions relating to the
payment of rent and any of the monetary sums due herewith, Landlord may (but
shall not be required to) use, apply or retain all or any part of this
Security Deposit for the payment of any other amount which Landlord may spend
by reason of Tenant's default or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any
portion of said Deposit is so used or applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in the amount
sufficient to restore the Security Deposit to its original amount. Tenant's
failure to do so shall be a material breach of this Lease. Landlord shall
not be required to keep this Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on such Deposit. If
Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit or any balance thereof shall be
returned to Tenant (or at Landlord's option, to the last assignee of Tenant's
interest hereunder) at the expiration of the Lease term and after Tenant has
vacated the Premises. In the event of termination of Landlord's interest in
this Lease, Landlord shall transfer said Deposit to Landlord's successor in
interest whereupon Tenant agrees to release Landlord from liability for the
return of such Deposit or the accounting therefor.
5. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts
the Premises as being in good and sanitary order, condition and repair and
accepts the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. An
exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner
termination of this Lease, to surrender the Premises promptly and peaceably to
Landlord in good condition and repair (damage by Acts of God, fire, normal wear
and tear excepted), with all interior walls painted, or cleaned so that they
appear freshly painted, and repaired and replace, if damaged; all floors cleaned
and waxed; all carpets cleaned and shampooed; all broken, marred or
nonconforming acoustical ceiling tiles replaced; all windows washed; the
airconditioning and heating systems serviced by a reputable and licensed service
firm and in good operating condition and repair; the plumbing and electrical
systems and lighting in good order and repair, including replacement of any
burned out or broken light bulbs or ballasts; the lawn and shrubs in good
condition including the replacement of any dead or damaged plantings; the
sidewalk, driveways and parking areas in good order, condition and repair;
together with all alterations, additions, and improvements which may have been
made in, to, or on the Premises (except moveable trade fixtures installed at the
expense of Tenant) except that Tenant shall ascertain from Landlord with thirty
(30) days before the end of the term of this Lease whether Landlord desires to
have the Premises or any part or parts thereof restored to their condition and
configuration as when the Premises were delivered to Tenant and if Landlord
shall so desire, then Tenant shall restore said Premises or such part or parts
thereof before the end of this Lease at Tenant's sole cost and expense. Tenant,
on or before the end of the term or sooner termination of this Lease shall
remove all of Tenant's personal property and trade fixtures from the Premises,
and all property not so removed on or before the end of the term or sooner
termination of this Lease shall be deemed abandoned by Tenant and title to same
shall thereupon pass to Landlord without compensation to Tenant. Landlord may,
upon termination of this Lease, remove all moveable furniture and equipment so
abandoned by Tenant, at Tenant's sole cost, and repair any damage caused by such
removal at Tenant's sole cost. If the Premises be not surrendered at the end of
the term or sooner termination of this Lease, Tenant shall indemnify Landlord
against loss or liability resulting from the delay by Tenant in so surrendering
the Premises including, without limitation, any claims made by any succeeding
tenant founded on such delay. Nothing contained herein shall be construed as an
extension of the term hereof or as a consent of Landlord to any holding over by
Tenant. The voluntary or other surrender of this Lease or the Premise by Tenant
or a mutual cancellation of this Lease shall not work as a merger and, at the
option of Landlord, shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.
6. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made,
any alteration or addition to the Premises, or any part thereof, without the
written consent of Landlord first had and obtained by Tenant (such consent not
to be unreasonably withheld), but at the cost of Tenant, and any addition to, or
alteration of, the Premises, except moveable furniture and trade fixtures, shall
at once become a part of the Premises and belong to Landlord. Landlord reserves
the right to approve all contractors and mechanics proposed by Tenant to make
such alterations and additions. Tenant shall retain title to all moveable
furniture and trade fixtures placed in the Premises. All heating, lighting,
electrical, airconditioning, partitioning, drapery, carpeting, and floor
installations made by Tenant, together with all property that has become an
integral part of the Premises, shall not be deemed trade fixtures. Tenant
agrees that it will not proceed to make such alteration or additions, without
having obtained consent from Landlord to do so, and until five (5) days from the
receipt of such consent, in order that Landlord may post appropriate notices to
avoid any liability to contractors or material suppliers for payment for
Tenant's improvements. Tenant will at all times permit such notices to be
posted and to remain posted until the completion of work. Tenant shall, if
required by Landlord, secure at Tenant's own cost and expense, a completion and
lien indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises for
work claimed to have been done for, or materials claimed to have been furnished
to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after the filing thereof, at the cost and expense of Tenant. Any exception
to the foregoing must be made in writing and executed by both Landlord and
Tenant.
7. TENANT MAINTENANCE Tenant shall, at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a high
standard of maintenance and repair, or replacement, and in good and sanitary
condition. Tenant's maintenance and repair responsibilities herein referred to
include, but are not limited to, janitorization, all windows (interior and
exterior), window frames, plate glass and glazing (destroyed by accident or act
of third
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parties), truck doors, plumbing systems (such as water and drain lines, sinks,
toilets, faucets, drains, showers and water fountains), electrical systems (such
as panels, conduits, outlets, lighting fixtures, lamps, bulbs, tubes and
ballasts), heating and airconditioning systems (such as compressors, fans, air
handlers, ducts, mixing boxes, thermostats, time clocks, boilers, heaters,
supply and return grills), structural elements and exterior surfaces of the
building, store fronts, roofs, downspouts, all interior improvements within the
Premises including but not limited to wall coverings, window coverings, carpet,
floor coverings, partitioning, ceilings, doors (both interior and exterior),
including closing mechanisms, latches, locks, skylights (if any), automatic fire
extinguishing systems, and elevators and all other interior improvements of any
nature whatsoever, and all exterior improvements including but not limited to
landscaping, sidewalks, driveways, parking lots including striping and sealing,
sprinkler systems, lighting, ponds, fountains, waterways, and drains. Tenant
agrees to provide carpet xxxxxxx under all rolling chairs or to otherwise be
responsible for wear and tear of the carpet caused by such rolling chairs if
such wear and tear exceeds that caused by normal foot traffic in surrounding
areas. Areas of excessive wear shall be replaced at Tenant's sole expense upon
Lease termination. Tenant hereby waives all rights under, and benefits of,
Subsection 1 of Section 1932 and Section 1941 of the California Civil Code and
under any similar law, statute or ordinance now or hereafter in effect. In the
event any of the above maintenance responsibilities apply to any other tenant(s)
of Landlord where there is common usage with other tenant(s), such maintenance
responsibilities and charges shall be allocated to the leased Premises by square
footage or other equitable basis as calculated and determined by Landlord.
8. UTILITIES Tenant shall pay promptly, as the same become due, all charges
for water, gas, electricity, telephone, telex and other electronic communication
service, sewer service, waste pick-up and any other utilities, materials or
services furnished directly or used by Tenant on or about the Premises during
the term of this Lease, including, without limitation, any temporary or
permanent utility surcharge or other exaction whether or not hereinafter
imposed. In the even the above charges apply to any other tenant(s) of Landlord
where there is common usage with other tenant(s), such charges shall be
allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by Landlord.
Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.
9. TAXES
A. As Additional Rent and in accordance with Paragraph 4D of this Lease,
Tenant shall pay to Landlord, or if Landlord so directs, directly to the Tax
Collector, all Real Property taxes relating to the Premises. In the even the
Premises leased hereunder consist of only a portion of the entire tax parcel,
Tenant shall pay to Landlord Tenant's proportionate share of such real estate
taxes allocated to the leased Premises by square footage or other reasonable
basis as calculated and determined by Landlord. If the tax billing pertains
100% to the lease Premises, and Landlord chooses to have Tenant pay said real
estate taxes directly to the Tax Collector, then in such event it shall be the
responsibility of Tenant to obtain the tax and assessment bills and pay, prior
to delinquency, the applicable real property taxes and assessments pertaining to
the leased Premises, and failure to receive a xxxx for taxes and/or assessment
shall not provide a basis for cancellation of or nonresponsibility for payment
of penalties for nonpayment or late payment by Tenant. The term "Real Property
Taxes", as used herein, shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from assessments caused by any change in ownership of the Premises)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against, or with respect to the value, occupancy or
use of, all or any portion of the Premises (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord's
interest therein; any improvements located within the Premises (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Premises; or parking
areas, public utilities, or energy with the Premises; (ii) all charges, levies
or fees imposed by reason of environmental regulation or other governmental
control of the Premises; and (iii) all costs and fees (including reasonable
attorneys' fees) incurred by Landlord in reasonably contesting any Real Property
Tax and in negotiating with public authorities as to any Real Property Tax. If
at any time during the term of this Lease the taxation or assessment of the
Premises prevailing as of the commencement date of this Lease shall be allotted
so that in lieu of or in addition to any Real Property Tax described above there
shall be levied, assessed or imposed (whether by reason of a change in the
method of taxation or assessment, creation of a new tax or charge, or any other
cause) an alternate or additional tax or charge (i) on the value, use or
occupancy of the Premises or Landlord's interest therein or (ii) on or measured
by the gross receipts, income or rentals from the Premises, on Landlord's
business of leasing the Premises, or computed in any manner with respect to the
operation of the Premises, then any such tax or charge, however designated,
shall be included within the meaning of the term "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is based upon property or
rents unrelated to the Premises, then only that part of such Real Property Taxes
that is fairly allocable to the Premises shall be included within the meaning of
the term "Real Property Taxes". Notwithstanding the foregoing, the term "Real
Property Taxes" shall not include estate, inheritance, gift or franchise taxes
of Landlord of the federal or state net income tax imposed on Landlord's income
from all sources.
B. TAXES ON TENANT'S PROPERTY. Tenant shall be liable for and shall pay
ten days before delinquency, taxes levied against any personal property or trade
fixtures placed by Tenant in or about the Premises. If any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord or
Landlord's property or if the assessed value of the Premises is increased by the
inclusion therein of a value placed upon such personal property or trade
fixtures of Tenant and if Landlord, after written notice to Tenant, pays the
taxes based on such increased assessment, which Landlord shall have the right to
do regardless of the validity thereof, but only under proper protest if
requested by Tenant. Tenant shall upon demand, as the case may be, repay to
Landlord the taxes so levied against Landlord, or the proportion of such taxes
resulting from such increase in the assessment; provided that in any such event
Tenant shall have the right, in the name of Landlord and with Landlord's full
cooperation, to bring suit in any court of competent jurisdiction to recover the
amount of such taxes so paid under protest, and any amount so recovered shall
belong to Tenant.
10. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of comprehensive general liability
insurance for bodily injury and property damage occurring in, on or about the
Premises, including parking and landscaped areas, in the amount of $2,000,000
combined single limit. Such insurance shall be primary and noncontributory as
respects any insurance carried by Landlord. The policy or policies effecting
such insurance shall name Landlord as additional insureds, and shall insure any
liability of Landlord, contingent or otherwise, as respects acts or omissions of
Tenant, its agents, employees or invitees or otherwise by any conduct or
transactions of any of said persons in or about or concerning the Premises,
including any failure of Tenant to observe or perform any of its obligations
hereunder, shall be issued by an insurance company admitted to transact business
in the State of California; and shall provide that the insurance effected
thereby shall not be canceled, except upon thirty (30) days' prior written
notice to Landlord. A copy of said policy shall be delivered to Landlord. If,
during the term of this Lease, in the considered opinion of Landlord's Lender,
insurance advisor, or counsel, the amount of insurance described in this
Paragraph 10 is not adequate, Tenant agrees to increase to such reasonable
amount as Landlord's Lender, insurance advisor, or counsel shall deem adequate.
11. TENANT'S PERSONAL PROPERTY INSURANCE AND XXXXXXX'X COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage
insurance in "all risk" form with a sprinkler leakage endorsement insuring the
personal property, inventory, trade fixtures, and leasehold improvements within
the leased Premises for the full replacement value thereof. The proceeds from
any of such policies shall be used for the repair or replacement of such items
so insured.
Tenant shall also maintain a policy or policies of xxxxxxx'x compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.
12. PROPERTY INSURANCE Landlord shall purchase and keep in force, and as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord Tenant's proportionate share (allocated to the leased Premises
by square footage or other equitable basis as calculated and determined by
Landlord) of the cost of, policy or policies of insurance covering loss or
damage to the Premises (excluding routine maintenance and repairs and incidental
damage or destruction caused by accidents or vandalism for which Tenant is
responsible under Paragraph 7) in the amount of the full replacement value
thereof, providing protection against those perils included within the
classification of "all risks" insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one
hundred (100%) percent of twelve (12) months Basic Rent, plus sums paid as
Additional Rent. If such insurance cost is increased due to Tenant's use of the
Premises, Tenant agrees to pay to Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.
Landlord and Tenant do each hereby respectively release the other, to the
extent of insurance coverage of the releasing party, from any liability for loss
or damage caused by fire or any of the extended coverage casualties included in
the releasing party's insurance policies, irrespective of the cause of such fire
or casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver, then this waiver shall not take effect until
consent to such waiver is obtained. If such waiver is so prohibited, the
insured party affected shall promptly notify the other party thereof.
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13. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant
hereby waives all claims against Landlord for any injury to or death of any
person or damage to or destruction of property in or about the Premises by or
from any cause whatsoever, including, without limitation, gas, fire, oil,
electricity or leakage of any character from the roof, walls, basement or other
portion of the Premises but excluding, however, the negligence of Landlord, its
agents, servants, employees, invitees, or contractors of which negligence
Landlord has knowledge and reasonable time to correct. Except as to injury to
persons or damage to property the principal cause of which is the negligence of
Landlord, Tenant shall hold Landlord harmless from and defend Landlord against
any and all expenses, including reasonable attorneys' fees, in connections
therewith, arising out of any injury to or death of any person or damage to or
destruction of property occurring in, on or about the Premises, or any part
thereof, from any cause whatsoever.
14. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply
with all laws, statutes, ordinances and governmental rules, regulations of
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public
officer; provided, however, that not such failure shall be deemed a breach of
the provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdiction of
the admission of Tenant in any action against Tenant, whether Landlord be a part
thereto or not, that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its
sole cost and expense, comply with any and all requirements pertaining to said
Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance covering
requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises.
15. LIENS Tenant shall keep the Premises free from any liens arising out of
any work performed, materials furnished or obligation incurred by Tenant. In
the event that Tenant shall not, within ten (10) days following the imposition
of such lien, cause the same to be released of record, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All sums paid
by Landlord for such purpose, and all expenses incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at the
prime rate of interest as quoted by the Bank of America.
16. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest therein, and
shall not sublet the Premises, or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person or entity to occupy or use the
Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord which consent will not be unreasonably withheld. As a
condition for granting this consent to any assignment, transfer, or subletting,
Landlord may require that Tenant agrees to pay to Landlord, as additional rent,
all rents or additional consideration received by Tenant from its assignees,
transferees, or subtenants in excess of the rent payable by Tenant to Landlord
hereunder. Tenant shall, by one hundred twenty (120) days written notice,
advise Landlord of its intent to assign or transfer Tenant's interest in the
Lease or sublet the Premises or any portion thereof for any part of the term
hereof. Within thirty (30) days after receipt of said written notice, Landlord
may, in its sole discretion, elect to terminate this Lease as to the portion of
the Premises described in Tenant's notice on the date specified in Tenant's
notice by giving written notice of such election to terminate. If no such
notice to terminate is given to Tenant within said thirty (30) day period,
Tenant may proceed to locate an acceptable sublessee, assignee, or other
transferee for presentment to Landlord for Landlord's approval, all in
accordance with the terms, covenants, and conditions of this paragraph 16. If
Tenant intends to sublet the entire Premises and Landlord elects to terminate
this Lease, this Lease shall be terminated on the date specified in Tenant's
notice. If, however, this Lease shall terminate pursuant to the foregoing with
respect to less than all the Premises, the rent, as defined and reserved
hereinabove shall be adjusted on a pro rata basis to the number of square feet
retained by Tenant, and this lease as so amended shall continue in full force
and effect. In the event Tenant is allowed to assign, transfer or sublet the
whole or any part of the Premises, with the prior written consent of Landlord,
so assignee, transferee or subtenant shall assign or transfer this Lease, either
in whole or in part, or sublet the whole or part of the Premises, without also
having obtained the prior written consent of Landlord. A consent of Landlord to
one assignment, transfer, hypothecation, subletting, occupation or use by any
other person shall not release Tenant from any of Tenant's obligations hereunder
or be deemed to be a consent to any subsequent similar or dissimilar assignment,
transfer, hypothecation, subletting, occupation or use of any other person. Any
such assignment, transfer, hypothecation, subletting, occupation or use without
such consent shall be void and shall constitute a breach of this Lease by Tenant
and shall, at the option of Landlord exercised by written notice of Tenant,
terminate this Lease. Leasehold estate under this Lease shall not, nor shall
any interest therein, be assignable for any purpose by operation of law without
the written consent of Landlord. As a condition of its consent, Landlord may
require Tenant to pay all expenses in connection with the assignment, and
Landlord may require Tenant's assignee or transferee (or other assignees or
transferees) to assume in writing all the obligations under this Lease to remain
liable to Landlord under the Lease.
17. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Tenant hereby irrevocably appoints Landlord the attorney in fact of
Tenant to execute, deliver and record any such instrument or instruments for and
in the name and on the behalf of Tenant. Notwithstanding any such
subordination, Tenant's possession under this Lease shall not be disturbed if
Tenant is not in default and so long as Tenant shall pay all rent and observe
and perform all of the provisions set forth in this Lease.
18. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times
have, the right to enter the premises to inspect them; to perform any services
to be provided by Landlord hereunder; to make repairs or provide any services to
a contiguous tenant(s); to submit the Premises to prospective purchasers,
mortgagees or tenants; to post notices of nonresponsibility; and to alter,
improve or repair the Premises or other parts of the building, all without
abatement of rent, and may erect scaffolding and other necessary structures in
or through the Premises where reasonably required by the character of the work
to be performed; provided, however that the business of Tenant shall be
interfered with to the least extent that is reasonably practical. Any entry to
the Premises by Landlord for the purposes provided for herein shall not under
any circumstances be construed or deemed to be a forcible or unlawful entry into
or a detainer of the Premises or an eviction, actual or constructive, of Tenant
from the Premises or any portion thereof.
19. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action of
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during the bankruptcy, liquidation, reorganization,
insolvency or similar action elects to reject Tenant's unexpired Lease, the
trustee or receiver shall notify Landlord in writing of its election within
thirty (30) days after an order for relief in a liquidation action or within
thirty (30) days after the commencement of any action.
Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord
adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of rent, and other
consideration due under this lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius location, use, or exclusivity provision, in any agreement relating to the
above described Premises.
Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in connection
with a bankruptcy, liquidation, reorganization or insolvency action or an
assignment of Tenant for the benefit of creditor or other similar act. Nothing
contained in this Lease shall be construed as giving or granting or creating an
equity in the demised Premises to Tenant. In no event shall the leasehold
estate under the Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of Landlord.
In no event shall this Lease or any right or privileges hereunder be an asset of
Tenant under any bankruptcy, insolvency or reorganization proceedings.
The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of five (5) days from the date of written notice from Landlord
within which to cure any default in the payment of rental or adjustment thereto.
Tenant shall have a period of ten (10) days from the date of written notice from
Landlord within which to cure any other default under this Lease. Upon an
uncured default of this Lease by Tenant, Landlord shall have the following right
and remedies in addition to any other rights or remedies available to Landlord
at law or in equity:
(a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of the worth at the time
of award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of rental loss for the same period
4
the Tenant provides could be reasonably avoided, as computed pursuant to
subsection (b) of said Section 1951.2. Any proof by Tenant under
subparagraph (2) and (3) of Section 1951.2 of the California Civil Code of the
amount of rental loss that could be reasonably avoided shall be made in the
following manner. Landlord and Tenant shall each select a licensed real estate
broker in the business of renting property of the same type and use as the
Premises and in the same geographic vicinity. Such two real estate brokers
shall select a third licensed real estate broker, and the three licensed real
estate brokers so selected shall determine the amount of the rental loss that
could be reasonably avoided from the balance of the term of this Lease after the
time of award. The decision of the majority of said licensed real estate
brokers shall be final and binding upon the parties hereto.
(b) The rights and remedies provided by California Civil Code Section
which allows Landlord to continue the Lease in effect and to enforce all of its
rights and remedies under this Lease, including the right to recover rent as it
becomes due, for so long as Landlord does not terminate Tenant's right to
possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord's initiative to protect its
interests under this Lease shall not constitute a termination of Tenant's right
to possession.
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.
(d) The right and power, as attorney-in-fact for Tenant, to enter the
Premises and remove therefrom all persons and property, to store such property
in a public warehouse or elsewhere at the cost of and for the account of Tenant,
and to sell such property and apply such proceeds therefrom pursuant to
applicable California law. Landlord, as attorney-in-fact for Tenant, may from
time to time sublet the Premises or any part thereof for such term or terms
(which may extend beyond the term of this Lease) and at such rent and such terms
as Landlord in its reasonable sole discretion xxx xxxx advisable, with its right
to make alterations and repairs to the Premises. Upon each subletting,
(i) Tenant shall be immediately liable to pay Landlord, in addition to
indebtedness other than rent due hereunder, the reasonable cost of such
subletting, including, but not limited to, reasonable attorneys' fees, and any
real estate commission actually paid, and the cost of such reasonable
alternation s and repairs incurred by Landlord and the amount, if any, by which
the rent hereunder for the period of such subletting (to the extent such period
does not exceed the term hereof) exceeds the amount to be paid as rent for the
Premises for such period or (ii) the option of Landlord, rents received from
such subletting shall be applied first to payment of indebtedness other than
rent due hereunder from Tenant, Landlord; second, to the payment of any costs of
such subletting and of such alterations and repairs; third to payment of rent
due and unpaid hereunder; all the residue, if any, shall be held by Landlord and
applied in payment of future rent as the same becomes due hereunder. If Tenant
has been credited with all rent to be received by such subletting under
option (i) and such rent shall not be promptly paid to Landlord by the
subtenant(s), or if such rentals received from such subletting under option (ii)
during any month be less than that to be paid during that month by Tenant
hereunder, Tenant shall pay and any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. For all purposes set forth in
this subparagraph (d), Landlord is hereby irrevocably appointed attorney-in-fact
for Tenant, with power of substitution. No taking possession of the Premises by
Landlord, as attorney-in-fact for Tenant, shall be construed as an election on
its part to terminate this Lease unless a written notice of such intention be
given to Tenant. Notwithstanding any such subletting without termination,
Landlord may at any time hereafter elect to terminate this Lease for such
previous breach.
(e) The right to have a receiver appointed for Tenant upon
application by Landlord, to take possession of the Premises and to apply any
rents collected from the premises and to exercise all other rights and remedies
granted to Landlord as attorney-in-fact for Tenant pursuant to subparagraph
above.
20. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease; and if Tenant shall abandon, vacate surrender
said Premises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Tenant and left on the Premises shall be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.
21. DESTRUCTION In the event the Premises are destroyed in whole or in part
from any cause, except for routine maintenance and repairs and incidental damage
and destruction caused from vandalism and accidents for which Tenant is
responsible under Xxxxxxxxx 0, Xxxxxxxx may, at its option:
(a) Rebuild or restore the Premises to their condition prior to the
damage or destruction, or
(b) Terminate this Lease.
If Landlord does not give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent
while such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises.
If Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargos, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord's obligation to rebuild or restore shall be
limited to the building and interior improvements constructed by Landlord as
they existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and expense
provided this Lease is not cancelled according to the provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect. Tenant hereby expressly waives the
provisions of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of the
California Civil Code.
In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. In the event the destruction of the Premises is caused by
Tenant, Tenant shall pay the deductible portion of Landlord's insurance
proceeds.
22. EMINENT DOMAIN. If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award, or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.
If any action or proceeding is commenced for such taking of the Premises or
any part thereof, or if Landlord is advised in writing by any entity or body
having the right or power of condemnation of its intention to condemn the
premises or any portion thereof, then Landlord shall have the right to terminate
this Lease by giving Tenant written notice thereof within sixty (60) days of the
date of receipt of said written advice, or commencement of said action or
proceeding, or taking conveyance, which termination shall take place as of the
first to occur of the last day of the calendar month next following the month in
which such notice is given or the date on which title to the Premises shall vest
in the condemnor.
In the event of such a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant can
no longer reasonably conduct its business, Tenant shall have the privilege of
terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to Landlord of its intention so to do, and upon
giving of such notice this Lease shall terminate on the last day of the calendar
month next following the month in which such notice is given, upon payment by
Tenant of the rent from the date of such taking or conveyance to the date of
termination.
If a portion of the Premises be taken by condemnation or conveyance in lieu
thereof and neither Landlord nor Tenant shall terminate this Lease as provided
herein, this Lease shall continue in full force and effect as to the part of the
Premises not so taken or conveyed, and the rent herein shall be apportioned as
of the date of such taking or conveyance so that thereafter the rent to be paid
by Tenant shall be in the ratio that the area of the portion of the Premises not
so taken or conveyed bears to the total area of the Premises prior to such
taking.
23. SALE OR CONVEYANCE BY LANDLORD. In the event of a sale or conveyance of
the Premises or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any further
liability upon any of the terms, covenants or conditions (express or implied)
herein contained in favor of Tenant, and in such event, insofar as such transfer
is concerned, Tenant agrees to look solely to the responsibility of the
successor in interest of such transferor in and to the Premises and this Lease.
This Lease shall not be affected by any such sale or conveyance, and Tenant
agrees to attorn to the successor in interest of such transferor, provided that
the transferee assumes all of Landlord's obligations in writing under the Lease.
24. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest of Landlord
in the land and buildings in which the leased Premises are located (whether such
interest of Landlord is a fee title interest or a leasehold interest) is
encumbered by deed of trust, and such interest is acquired by the lender or any
third party through judicial foreclosure or by exercise of a power of sale at
private trustee's foreclosure sale, Tenant hereby agrees to attorn to the
purchaser at
5
any such foreclosure sale and to recognize such purchaser as the Landlord under
this Lease. In the event the lien of the deed of trust securing the loan from a
Lender to Landlord is prior and paramount to the Lease, this Lease shall
nonetheless continue in full force and effect for the remainder of the unexpired
term hereof, at the same rental herein reserved and upon all the other terms,
conditions and covenants herein contained.
25. HOLDING OVER. Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of
the term of this Lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred twenty-five (125%) percent of the month Basic
Rent required during the last month of the Lease term.
26. CERTIFICATE OF ESTOPPEL. Tenant shall at any time upon not less than ten
(10) days prior written notice to Landlord execute, acknowledge and deliver to
Landlord a statement in writing (i) certifying that this Lease is unmodified and
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease is in full force and effect, without modification
except as may be represented by Landlord; that there are no uncured defaults in
Landlord's performance, and that not more than one month's rent has been paid in
advance.
27. CONSTRUCTION CHANGES. It is understood that the description of the
Premises and the location of ductwork, plumbing and other facilities therein are
subject to such minor changes as Landlord or Landlord's architect determines to
be desirable in the course of construction of the Premises, and no such changes
shall affect this Lease or entitle Tenant to any reduction of rent hereunder or
result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of
such drawings rests with Tenant.
28. RIGHT OF LANDLORD TO PERFORM. All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder or shall fail to perform any other term or covenant hereunder on
its part to be performed, and such failure shall continue for five (5) days
after written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obliged
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Landlord and all necessary costs of
such performance by Landlord together with interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment on performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of nonpayment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.
29. ATTORNEYS' FEES.
A. In the event that Landlord should bring suit for the possession of the
Premises, for the recovery of any sum due under this Lease, or because of the
breach of any provision of this Lease, or for any other relief against Tenant
hereunder, then all costs and expenses, including reasonable attorneys' fees,
incurred by the prevailing party therein shall be paid by the other party, which
obligation on the part of the other party shall be deemed to have accrued on the
date of the commencement of such action and shall be enforceable whether or not
the action is prosecuted to judgment.
B. Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.
30. WAIVER. The waiver by either party of the other party's failure to perform
or observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.
31. NOTICES. All notices, demands, requests, advices or designations which may
be or are required to be given by either party to the other hereunder shall be
in writing. All notices, demands, requests, advices or designations by Landlord
to Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises of if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at The Arrillaga Foundation and
Xxxxx/Marriott, c/o Peery/Arrillaga, 0000 Xxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxx Xxxxx, XX 00000. Each notice, request, demand, advice or designation
referred to in this paragraph shall be deemed received on the date of the
personal service or mailing thereof in the manner herein provided, as the case
may be.
32. EXAMINATION OF LEASE. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant.
33. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event earlier than (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such that
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
34. CORPORATE AUTHORITY. If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership)
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation (or partnership) in accordance with the
by-laws of said corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or partnership)
in accordance with its terms. If Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.
35. BASIC RENT ADJUSTMENT. See Paragraph 40.
36. LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by Landlord:
(a) the sole and exclusive remedy shall be against Landlord and
Landlord's assets;
(b) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of the
partnership);
(c) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the partnership);
(d) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(e) no judgment will be taken against any partner of Landlord;
(f) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(g) no writ of execution will ever by levied against the assets of
any partner of Landlord;
(h) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
6
Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.
37. SIGNS. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the written consent
of Landlord first had and obtained and Landlord shall have the right to remove
any such sign, placard, picture, advertisement, name or notice without notice to
and at the expense of Tenant. If Tenant is allowed to print or affix or in any
way place a sign in, on, or about the Premises, upon expiration or other sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign.
All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved of by
Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may appear unsightly from
outside the Premises.
38. MISCELLANEOUS AND GENERAL PROVISIONS.
A. USE OF BUILDING NAME. Tenant shall not, without the written consent
of Landlord, use the name of the building for any purpose other than as the
address of the business conducted by Tenant in the Premises.
B. CHOICE OF LAW; SEVERABILITY. This Lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.
C. DEFINITION OF TERMS. The term "Premises" includes the space leased
hereby and any improvements now or hereafter installed therein or attached
thereto. The term "Landlord" or any pronoun used in place thereof includes the
plural as well as the singular and the successors and assigns of Landlord. The
term "Tenant" or any pronoun used in place thereof includes the plural as well
as the singular and individuals, firms, associations, partnerships and
corporations, and their and each of their respective heirs, executors,
administrators, successors and permitted assigns, according to the context
hereof, and the provisions of this Lease shall inure to the benefit of and bind
such heirs, executors, administrators, successors and permitted assigns.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used in
any gender include other genders. If there be more than one Tenant the
obligations of Tenant hereunder are joint and several. The paragraph headings
of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.
D. TIME OF ESSENCE. Time is of the essence of this Lease and of each and
all of its provisions.
E. QUITCLAIM. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within ten (10) days
after written demand from Landlord to Tenant, any quitclaim deed or other
document required by any reputable title company, licensed to operate in the
State of California, to remove the cloud or encumbrance created by this Lease
from the real property of which Tenant's Premises are a part.
F. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This instrument along
with any exhibits and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
agree hereby that all prior or contemporaneous oral agreements between and among
themselves and their agents or representatives relative to the leasing of the
Premises are merged in or revoked by this agreement.
G. RECORDING. Neither Landlord nor Tenant shall record this Lease or a
short form memorandum hereof without the consent of the other.
H. AMENDMENTS FOR FINANCING. Tenant further agrees to execute any
amendments required by a lender to enable Landlord to obtain financing, so long
as Tenant's rights hereunder are not substantially affected.
I. ADDITIONAL PARAGRAPHS. Paragraphs ____ through ____ are added hereto
and are included as a part of this lease.
J. CLAUSES, PLATS AND RIDERS. Clauses, plats and riders, if any, signed
by Landlord and Tenant and endorsed on or affixed to this Lease are a part
hereof.
K. DIMINUTION OF LIGHT, AIR OR VIEW. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect his
Lease, entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year first above written.
LANDLORD: TENANT:
THE ARRILLAGA FOUNDATION FAROUDJA LABORATORIES, INC.
a California corporation
By: /s/ Xxxx Xxxxxxxx
-------------------------------------- By: /s/ Yves Faroudja
Xxxx Xxxxxxxxx -------------------------------------
XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST Title: President
-------------------------------------
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Xxxxxxx X. Xxxxx, Trustee
XXXXX MARRIOTT
By: /s/ Xxxxx Marriott by Xxxxxxx X. Xxxxx, her attorney-in-fact
---------------------------------------------------------------
Xxxxx Marriott
7
Paragraph 39 through 48 to Lease Agreement Dated August 2, 1993, By and Between
THE ARRILLAGA FOUNDATION AND THE XXXXXXX X. PROPERTY TRUST AND XXXXX MARRIOTT,
as Landlord, and Faroudja Laboratories, Inc., a California corporation, as
Tenant for 20,000 Square Feet of Space Located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx
Xxxxxxxxxx.
39. BASIC RENT: In accordance with Paragraph 4(A) herein, the total aggregate
sum of ONE MILLION SIX HUNDRED EIGHTY THOUSAND AND NO/100 DOLLARS
($1,680,000.00), shall be payable as follows:
On October 1, 1993, the sum of FOURTEEN THOUSAND AND NO/100 DOLLARS
($14,000.00) shall be due, and a like sum due on the first day of each month
thereafter, through and including September 1, 1995.
On October 1, 1995, the sum of FOURTEEN THOUSAND AND NO/100 DOLLARS
($14,000.00) shall be due, and a like sum due on the first day of each month
thereafter, through the remaining term of this Lease; provided, however, that
the monthly rental has not been increased as provided for in Paragraphs 4(A) and
40 hereof, in which event the monthly and aggregate rentals shall be adjusted
accordingly.
40. BASIC RENT ADJUSTMENT: It is hereby agreed that commencing October 1,
1995, and on each successive one (1) year period thereafter, the Basic Rent (as
provided for in Paragraphs 4 and 35) for each succeeding one (1) year period of
the Lease Term, shall be increased over the monthly rental in effect at the
expiration of the one (1) year period of the Lease Term immediately preceding by
an amount equivalent to the percentage increase in the Consumer Price Index from
the commencement of the one (1) year period of the Lease Term immediately
preceding to the expiration of the one (1) year period of the Lease Term
immediately preceding; that is, from 10/94 to 10/95 to 10/96, 10/96 to 10/97,
10/97 to 10/98, 10/98 to 10/99, 10/99 to 10/00, 10/00 to 10/01, 10/01 to 10/02;
provided, however, that in no event shall the monthly Basic Rental increase for
any one (1) year period of the Lease Term, after adjustment, be more than five
percent (5%) per month each year. The Basic Rent shall be subject to a CPI
adjustment on the first day of the following months: 10/95, 10/96, 10/97, 10/98,
10/99, 10/00, 10/01, 10/02.
The Lease Basic Rent shall be adjusted in accordance with the following
formula based on the Consumer Price Index ("CPI") for all urban Consumers,
subgroup "All Items", San Francisco-Oakland, California Xxxxxxxxxxxx Xxxx
(0000-00 = 100) published by the Bureau of Labor Statistics, U.S. Department of
Labor (the "Index") published nearest October 1, 1994 (the "Beginning Index")
and the Index which is published nearest but prior to each and every anniversary
of the October 1, 1994 date (the "Adjustment Index"). The initial "CPI"
adjusted Basic Rent shall be calculated by multiplying the monthly Basic Rent of
$14,000.00 provided for in Paragraphs 4A and 39 of the Lease by the percent
increase in the Consumer Price Index, subject to a maximum increase of five
percent (5%) per month. The Basic Rent for each succeeding one year period will
be determined by using the same formula applied to the prior year's adjusted
monthly Basic Rent.
Landlord will notify Tenant in writing of each CPI increase and the
adjusted Basic Rent, and Tenant will make payment on the adjusted amount. If
the Index is changed so that the Base Year of the Index differs from that used
as of the month immediately preceding the month in which the term commences, the
Index shall be converted in accordance with the conversion factor published by
the United States Department of Labor, Bureau of Labor Statistics. If the Index
is discontinued or revised during the term, such other government index or other
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised. Each annual increase in the Basic Rent will be
calculated as shown below in the example displayed:
CPI CALCULATION EXAMPLE
-----------------------
CPI ANNUAL
EXAMPLE CPI CHANGE INCREASE %
------- ---------- ----------
CPI increase 145.7* 10/95 8%
------------
(as max. incr. 134.9* 10/94
is limited to 5%/mo
the 8% increase would be
reduced to 5%)
example is calculated at the max, incr. of 5%/mo
(increase based on CPI for this example:
$14,000.00 x 8% = $1,120.00)
Current Basic Rent $14,000.00
Max. Increase Adj.
to 5% 700.00
-----------
New Adjusted Basic Rent $14,700.00
commencing 10/1/95
CPI increase is less 145.7* 10/95 2.6%
------------
than 5% 141.9* 10/94
Current Basic Rent $14,000.00
Increase of 2.6% 364.00
------------
New Adjusted Basic Rent $14,364.00
commencing 10/1/95
(* factors used for example only)
41. "AS-IS" BASIS: Except as provided for in Paragraph 48 of this Lease, it is
hereby agreed that the Premises leased hereunder is leased strictly on an
"as-is" basis and in its present condition, and in the configuration as shown on
EXHIBIT B to be attached hereto, and by reference made a part hereof. Except
for those interior improvements as shown on EXHIBIT B, Landlord shall not be
required to make, nor be responsible for any cost, in connection with any other
repair, restoration, and/or improvement to the Premises in order for this Lease
to commence. Landlord makes no warranty or representation of any kind or nature
whatsoever as to the condition or repair of the Premises, nor as to the use or
occupancy which may be made thereof.
42. TENANTS FIRST OPTION TO TERMINATE LEASE: Providing Tenant is not in
default in any of the terms, covenants and conditions of this Lease Agreement
and any Amendments thereto, Landlord hereby grants Tenant the right to terminate
this Lease Agreement without penalty by giving Landlord sixty (60) days written
notice of its election to so terminate, in the event: (i) a civil, criminal or
administrative complaint is filed against Tenant by any governmental agency,
relating to Hazardous Materials contamination of the Property not caused by
Tenant, its employees, contractors, invitees, agents or future subtenants and/or
assignees (if any); and (ii) provided that Tenant is not dismissed from such
civil or criminal action or administrative proceeding within sixty (60) days
after Landlord receives (a) a copy of the governmental notice to Tenant stating
that such civil or criminal action or administrative proceeding has been filed
against Tenant and (b) Tenant's notice to terminate. Tenant shall not have the
right to terminate this Lease Agreement if: (i) Tenant fails to exercise its
right to terminate within 30 days following the date such civil, criminal or
administrative complaint is filed against Tenant by any governmental agency; and
(ii) Tenant is dismissed from said civil, criminal action or administrative
complaint within the aforementioned 60 day period. Tenant agrees to cooperate
with Landlord and the governing agency by providing whatever information is
necessary to obtain a dismissal from the civil, criminal or administrative
governmental complaint.
43. TENANT'S SECOND OPTION TO TERMINATE LEASE: Providing Tenant is not in
default in any of the terms, covenants and conditions of this Lease Agreement
and any Amendments thereto, Tenant shall, twenty four (24) months after
occupancy of the Leased Premises, have the option to terminate this Lease
Agreement, subject to the following terms and conditions:
8
A. Tenant shall execute this Option by giving Landlord four (4) months
written notice of Tenant's intent to terminate. Tenant WILL NOT have the right
to exercise its Option to Terminate prior to completing twenty-four months of
the Lease Term; therefore, the minimum Lease Term shall be no less than two (2)
years and four (4) months.
B. In the event Tenant timely exercises Tenant's Option to Terminate as
set forth herein, this Lease shall terminate and be of no further force and
effect four (4) months from the date of said written notice and Tenant will be
responsible for the full performance of all terms, covenants, and conditions
herein contained through the effective date of termination as set forth above.
C. In the event Tenant exercises Tenant's Option to Terminate as set
forth herein, Tenant agrees to surrender the Leased Premises to Landlord, free
and clear of Tenant's occupancy or the occupancy of any subtenants, as of the
effective date of termination, and shall comply with all clean-up requirements
as outlined in Paragraph 5 "Acceptance and Surrender of Premises" of this Lease.
D. The Option rights of Tenant under this Paragraph 43 are granted for
Tenant's personal benefit and may not be assigned or transferred by Tenant,
either voluntarily or by operation of law, in any manner whatsoever. In the
event that Landlord consents to a sublease or assignment under Paragraph 16, the
Option granted herein shall be void and of no force and effect as related to
said subtenant whether or not Tenant shall have purported to exercise such
Option prior to such assignment or sublease.
44. CONSENT: Whenever the consent of one party to the other is required
hereunder, such consents shall not be unreasonably withheld.
45. LANDLORD'S CORPORATE AUTHORITY: If Landlord is a corporation (or
partnership or trust), each individual executing this Lease on behalf of said
corporation (or partnership or trust) represents and warrants that he is duly
authorized to execute this Lease on behalf of said corporation (or partnership
or trust) in accordance with the bylaws of said corporation (or partnership in
accordance with the partnership agreement, or trust in accordance with the trust
indenture) and that this Lease is binding upon said corporation (or partnership
or trust) in accordance with its terms. If Landlord is a corporation, Landlord
shall in thirty (30) days after execution of this Lease deliver to Tenant a
certified copy of the resolution of the Board of Directors of said corporation
authorizing or ratifying the execution of this Lease.
46. ASSIGNMENT AND SUBLETTING CONTINUED: Notwithstanding anything stated in
Paragraph 16 of this Lease, Tenant shall be entitled to assign or sublet without
Landlord's consent (but shall still give Landlord notice thereof) to any parent
or subsidiary corporation, or related corporation which Yves and/or Isabelle
Faroudja (or their heirs) have more than a fifty-one percent (51%) interest in,
provided however, Tenant shall remain liable for 100% of the terms and
conditions and obligations of Tenant under this Lease.
47. LANDLORD'S REPRESENTATIONS: Landlord represents to the best of Landlord's
knowledge that, as of the commencement date of the Lease, all HVAC, plumbing and
plumbing fixtures, electrical and electrical fixtures, loading and man doors
serving the Premises are in good working order. Landlord assigns (during the
term of the Lease) to Tenant all of Landlord's Contractors' and equipment
warranties and shall cooperate with Tenant in enforcing any of such warranties
except that Landlord shall not be required to pay any legal fees or incur any
expenses in this regard.
48. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to
the existence or use of "Hazardous Materials" (as defined herein) on, in, under
or about the Premises and real property located beneath said Premises
(hereinafter collectively referred to as the "Property"):
As used herein, the term "Hazardous Materials" shall mean any hazardous or
toxic substance, material or waste which is or becomes subject to or regulated
by any local governmental authority, the State of California, or the United
States Government. The term "Hazardous Materials" includes, without limitation
any material or hazardous substance which is (i) listed under Article 9 or
defined as "hazardous" or "extremely hazardous" pursuant to Article 11 of
Title 22 of the California Administrative Code, Division 4, Chapter 30,
(ii) listed or defined as a "hazardous waste" pursuant to the Federal Resource
Conservation and Recovery Act, Section 42 U.S.C. Section 6901 et. seq.,
(iii) listed or defined as a "hazardous substance" pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et. seq. (42 U.S.C. Section 9601), (iv) petroleum or any derivative of
petroleum, or (v) asbestos.
Tenant shall have no obligation to "clean up", reimburse, release,
indemnify, or defend Landlord with respect to any Hazardous Materials or wastes
which Tenant, (prior to and during the term of the Lease) its employees,
contractors, invitees, or other parties (excluding Landlord, its employees,
agents and/or contractors) on the Property did not store, dispose, or transport
in, use, or cause to be on the Property in violation of applicable law.
Subject to the entire provisions of Paragraph 45 ("Hazardous Materials")
Landlord agrees to be 100 percent liable and responsible for, and shall
indemnify, defend, protect and hold Tenant harmless from and against all
liabilities, damages, costs, and expenses, excepting the costs identified above
(including, without limitation, attorney's fees) arising from any hazardous
contamination or toxic waste cleanup not related to Tenant (and not caused by
Tenant's activities prior to Tenant's occupancy of said Property), on or about
the Premises or the real property on which the Premises is located, and Landlord
agrees to be 100 percent liable and responsible for and indemnify Tenant for any
Hazardous Materials contamination or toxic waste cleanup or cost of testing
related thereto, and any claims by third parties (excluding claims, if any, from
Tenant's employees) resulting from such Hazardous Materials contamination,
caused by Landlord or third parties not related to Tenant, and not caused by
Tenant's activities, prior to and during the term of Tenant's Lease, provided
however, Landlord will not be responsible for any disruption to Tenant's
business as a result of any such cleanup.
Tenant will be 100 percent liable and responsible for: (i) any and all
"cleanup" of said toxic waste and/or Hazardous Materials contamination which
Tenant, its agents, employees, contractors, invitees, or future subtenants
and/or assignees (if any), or other parties (excluding Landlord, its employees,
agents, and/or contractors) on the Property, does store, dispose, or transport
in, use or cause to be on the Property and (ii) any claims by third parties
resulting from such Hazardous Materials contamination. Tenant shall indemnify
Landlord and hold Landlord harmless from any liabilities, demands, costs,
expenses and damages, including, without limitation, attorney fees incurred as a
result of any claims resulting from such Hazardous Materials contamination.
Tenant also agrees not to use or dispose of any toxic waste or Hazardous
Materials on the Property without first obtaining Landlord's written consent.
In the event consent is granted by Landlord, Tenant agrees to complete
compliance with governmental regulations, and prior to the termination of said
Lease Tenant agrees to follow the property closure procedures and will obtain a
clearance from the local fire department and/or the appropriate city agency. If
Tenant uses Hazardous Materials, Tenant also agrees to install at Tenant's
expense such toxic waste and/or Hazardous Materials monitoring devices as
Landlord deems necessary. It is mutually agreed that Tenant's and Landlord's
responsibilities related to toxic waste and Hazardous Materials will survive the
termination date of the Lease and that either party may obtain specific
performance of the other party's responsibilities under this Paragraph 48.
9
