1
EXHIBIT 10.24
INDUSTRIAL SPACE
(Net)
THIS LEASE, dated April 1, 1995 for reference purposes only, is made by and
between PNB Investors ("Landlord"), and Tessera Corporation ("Tenant"), to be
effective and binding upon the parties as of the date the last of the designated
signatories to this Lease shall have executed this Lease (the "Effective Date of
this Lease").
REFERENCES
1.1. REFERENCES: All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:
A. Tenant's Address for Notices: Tessera Corporation
0000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
B. Tenant's Representative: Mr. Xxxx Xxxxx, President
Phone Number: (000) 000-0000
C. Landlord's Address for Notices: PNB Investors
c/x Xxxxxxxx Investment Company
P. O. Xxx 0000
Xxx Xxxxxxx, XX 00000
D. Landlord's Representative Xxxxxx Xxxxx
Phone Number (000) 000-0000, Extension 306
E. Intended Commencement Date: April 1, 1995
F. Term: 5 years
G. Lease expiration Date: March 31, 2000
H. Tenant's Punchlist Period:
I. First Month's Rent: $28,500.00
J. Last Month's Rent: $37,670.00
K. Tenant's Security Deposit: $28,500.00
L. Late Charge Amount: $500.00
M. Tenant's Required Liability Coverage: $1,000,000.00 single occurrence limit
N. Tenant's Number of Parking Spaces: First 24 months of term:
Non-exclusive use of 100 parking spaces
Last 36 Months of Term:
100% of building parking
O. Brokers: None
P. Building The building in which the Premises are
located, consisting of 51,105 square
feet, the address of which is 0000
Xxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx
00000.
Q. Tenant's Share of Taxes, Insurance, First 24 months of Term: 74.35%
Common Area Maintenance Last 36 months of Term: 100%
R. "Premises" or "Building" First 24 months of Term: (plus or
minus) 38,000 sq. ft.
Last 36 months of Term: (plus or
minus) 51,105 sq. ft.
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LEASE AGREEMENT
1. PARTIES. The parties to this Lease Agreement (the "Lease") dated
February 20, 1995, are PNB, (hereinafter referred to as "Landlord") and Tessera
(hereinafter referred to as "Tenant").
2. PROPERTY LEASED.
A. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord upon the terms and conditions as set forth herein the
following property (hereinafter referred to as the "Premises").
1. SPACE. Approximately 51,105 square feet of space to be
contained within that concrete tilt-up building shown as out-lined in red in
Exhibit A of this lease, together with exclusive rights over the parking areas
shown as marked, on Exhibit B and non-exclusive rights of ingress and egress
over the common areas of the land described in Exhibit B of this lease. It is
specifically understood that any references to the "Land" are for convenience
only, and that such reference is in no way intended to create a separate parcel
of property relative to the space hereby leased and that Tenant's right to the
land shall be for purposes of parking, non-exclusive ingress and egress only,
such right being necessary for the proper utilization of the improvements as
herein described.
2. BUILDING SYSTEMS; COMPLIANCE WITH LAWS: Notwithstanding
anything to the contrary contained in this Lease, as of the Commencement Date,
the Building Systems pertaining to the 19,000 sq. ft. not occupied currently by
Tessera (as defined in Paragraph 15.B. of this Lease) shall be in good order
and repair and in good operating condition. If, within sixty (60) days after the
Commencement Date, any Building System within the 19,000 square feet is not in
good working order and repair, Tenant shall so notify Landlord, and Landlord
shall repair the Building System, at no cost to Tenant, as soon as is reasonably
practicable. Also notwithstanding anything to the contrary contained in this
Lease, as of the Commencement Date, the Premises, the Building and the Land
shall conform to all requirements of covenants, conditions, restrictions and
encumbrances ("CC&R's"), all underwriters' requirements, and all rules,
regulations, statutes, ordinances, laws and building codes (including, without
limitation, the Americans with Disabilities Act of 1990) (collectively, "Laws")
applicable thereto. Tenant shall not be required to construct or to pay the cost
of complying with any CC&R's, underwriters' requirements or Laws requiring
construction of improvements in the Premises which are properly capitalized
under generally accepted accounting principles, unless such compliance is
necessitated solely because of Tenant's particular use of the Premises.
3. PHASED OCCUPANCY. Notwithstanding anything to the
contrary contained in this Lease, the parties acknowledge that, during the first
twenty-four (24) months of the Term, Tenant shall occupy approximately
thirty-eight thousand (38,000) square feet of the Building, and that, commencing
on the first day of the twenty-fifth (25th) month of the Term and continuing
through the Lease Expiration Date, Tenant shall occupy the remaining thirteen
thousand one hundred five (13,105) square feet of the Building ("Additional
Space"), for a total of fifty-one
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thousand one hundred five (51,105) square feet. Rent during both periods shall
be as set forth in Paragraph 5.13. hereof. During the first twenty-four months
of the Term, Landlord shall have the right to sublease the Additional Space to a
third party so long as the term of the sublease does not extend beyond the last
day of the twenty-fourth (24th) month of the Term. If Landlord has not delivered
the Additional Space to Tenant forty-five (45) days after the last day of the
twenty-fourth (24th) month of the Term, Tenant shall have the option to
terminate its obligation to lease the Additional Space. On the date that
Landlord delivers the Additional Space to Tenant, the Additional Space shall be
in the condition required by Paragraph 2.A.2. hereof. Notwithstanding the
foregoing, Tenant's obligation to pay rent for the Additional Space shall not
arise until the date that Landlord delivers the Additional Space to Tenant.
3. TERM. The term of this Lease shall be for a period of five (5) lease
years. The term "Lease Years" as used herein shall be a period of twelve (12)
successive calendar months, except that if the term commences on a day other
than the first day of a calendar month, then the initial fractional month
together with the next succeeding twelve (12) calendar months shall constitute
the first Lease Year.
The term of this Lease shall commence upon ("Commencement Date"):
____________, 1995.
4. USE OF PREMISES: Tenant shall use the Premises only in conformance with
applicable laws for any lawful activity including the manufacturing, wet
processing, research and development, marketing, processing, storage and
distribution of electronic equipment and components, and requisite office use
therewith, excluding manufacturing or storage activities outside of an enclosed
structure.
5. RENT.
A. BASIC. Tenant shall pay Landlord as rental the sums set forth in
subparagraph B below (the "Monthly Installment") each month in advance on the
first day of each month, commencing on the Commencement Date and continuing
through the term of this Lease, together with such additional rents as are
hereinafter specified. In the event that the Commencement Date is not on the
first day of a calendar month, the monthly rent payable on the Commencement Date
shall be equal to the product obtained by multiplying the Monthly Installment by
the quotient obtained by dividing thirty (30) into the number of days remaining
in such calendar month.
Said rental shall be paid by Tenant without deduction or offset, prior
notice or demand (except as otherwise provided herein) at such place or places
as may be noticed from time to time by Landlord, and Landlord agrees to accept
as rental for the use and occupancy of the Premises said amount.
B. MONTHLY INSTALLMENT. The Monthly Installment of rent payable for
the first two (2) Lease Years (24 months), shall be the sum of Twenty Eight
Thousand Five Hundred and no/100 ($28,500.00) dollars per month and for the next
three (3) years (25 to 60 months) shall be the sum of Thirty Seven Thousand
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Six Hundred Seventy and no/100 ($37,670.00) dollars per month. Such Monthly
Installment is based upon a leased premise of 38,000 square feet at a rental
rate of $0.75 per square foot for the first twenty four (24) months of the lease
term and a 51,105 sq. ft. lease rate of $0.74 per square foot for the final
thirty-six (36) months of the lease term. The first Monthly Installment shall be
due upon the signing of this Lease by all parties hereto.
C. LATE CHARGES. In the event Tenant fails to pay the basic rent or
Additional Rent within ten (10) business days of having been notified by
Landlord in writing of it's being due, Tenant agrees to pay a late charge of
Five Hundred and no/100 ($500.00) dollars which is not a penalty, but Landlord
and Tenant agree that in the event of a late installment it would be impractical
or extremely difficult to determine the extra expenses caused Landlord by such
late installment and therefore the parties agree that said late charge of Five
Hundred and no/100 ($500.00) represents a reasonable compensation to Landlord
for such late installment. In no event shall a late charge be assessed before
the 10th business day following the date at which written notification by
Landlord is given.
D. ADDITIONAL RENT. All taxes, charges, costs and expenses which
Tenant is required to pay hereunder, together with all interest and penalties
that may accrue thereon, in the event of Tenant's failure to pay such amounts,
and all damages, reasonable costs, and expenses which Landlord may incur by
reason of any default of Tenant or failure on Tenant's part to comply with the
terms of this Lease, shall be deemed to be additional rent ("Additional Rent")
and, in the event of non-payment by Tenant, Landlord shall have all the rights
and remedies with respect thereto as Landlord has for the non-payment of the
rent.
Any payment due from Tenant to Landlord, specifically including but not
limited to the Monthly Installment and Additional Rent (excluding late charges),
shall bear simple interest at the lesser of the rate of ten percent (10%) per
annum or the maximum rate permitted by law ("interest rate") from date of
receipt of Landlord's written notice thereof to the date of payment.
6. NO ABATEMENT OR TERMINATION OF RENT. It is the intention of the parties
that, except as specifically set forth in Article 17 entitled "Condemnation,"
Article 16 entitled "Damage and Destruction," and Article 14 entitled
"Utilities," Tenant shall, in all months of the Lease Term, pay to Landlord the
rent, Additional Rent and all other sums required herein. Tenant's obligations
and covenants, specifically including, without limitation, Tenant's obligation
to pay the rent, Additional Rent and all other sums required herein, shall be
absolute and shall not be subject to any abatement, refund, termination,
diminution or reduction for any cause or reason whatsoever, save and except as
set forth in Articles 14, 16, 17. Tenant's obligation and covenants shall not be
affected or discharged by virtue of or because of any present or future
governmental laws or ordinances, except to the extent such laws or ordinances
are found to be unenforceable.
7. SECURITY DEPOSIT. Upon the execution of this Lease by Tenant, Tenant
shall deposit with Landlord the sum of Twenty Eight Thousand Five Hundred and
no/100 ($28,500.00) dollars ("security deposit") to secure the faithful
performance by Tenant of each term, covenant and condition to be performed or
kept by
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Tenant under this Lease. If Tenant shall at any time fail to keep, and perform
any term, covenant and condition on its part to be made or performed or kept
under this Lease, Landlord may, but shall not be obligated to and without
waiving or releasing Tenant from any obligation under this Lease, use, apply, or
retain the whole or any part of the security deposit (1) to the extent of any
sum due to Landlord, or (2) make any required payment on Tenant's behalf, or (3)
to compensate Landlord for any loss, damage, attorney's fees, or expense
sustained by Landlord due to Tenant's default. In such event, Tenant shall,
within three (3) business days of written demand by Landlord, remit to Landlord
sufficient funds to restore said security deposit to its original sum. No
interest shall accrue on the security deposit. Should Tenant comply with all of
said terms, covenants and conditions and promptly pay all of the rental herein
provided as it falls due, and at the end of the term of this Lease leave the
Premises in the conditions required by the terms of this Lease, then said
security deposit shall be returned to Tenant within fourteen (14) days following
the termination of this Lease and vacancy of the Premises by Tenant.
8. POSSESSION. Tenant agrees that in the event of the inability of Landlord
to deliver to Tenant possession of the Premises at the Commencement Date,
Landlord shall not be liable for any damages caused thereby, nor shall this
Lease be void or voidable, but Tenant shall not be liable for rents until such
time as Landlord offers to deliver possession of said Premises to Tenant.
9. INSPECTION AND ACCESS. Tenant shall permit Landlord and Landlord's
agents to enter the Premises at all reasonable times and with twenty-four (24)
hours' prior notice (except in the case of emergency, in which case no notice
shall be required) for the purposes of inspecting the same, or for the purpose
of making repairs that Tenant has neglected or refused to make in accordance
with this Lease; and also for the purpose of showing the same to persons wishing
to lease at any time within one hundred eighty (180) days prior to the
expiration of this Lease, or at any reasonable time for the purpose of showing
the Premises to a prospective purchaser or lender. Notwithstanding the
foregoing, any entry by Landlord or Landlord's agents shall not impair Tenant's
operations more than reasonably necessary, and Tenant shall have the right to
have an employee accompany Landlord or its agents at all times that Landlord or
its agents are present on the Premises.
10. TAXES AND OTHER CHARGES.
A. Tenant shall pay and discharge, punctually and when same shall
become due and payable without penalty, Tenant's Share of 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 income taxes), environmental surcharges, privilege taxes, excise
taxes, business and occupation taxes, gross sales and/or use taxes, excise
taxes, business and occupation taxes, gross sales and/or use taxes,
occupational license taxes, water and sewer charges, assessments (including, but
not limited to, assessments for public improvements or benefit; and all other
governmental
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impositions and charges of every kind and nature whatsoever, whether or not now
customary or within the contemplation of the parties hereto and regardless of
whether the same shall be extraordinary or ordinary, general or special,
unforeseen or foreseen, or similar or dissimilar to any of the foregoing (all of
the foregoing being hereinafter collectively called "Tax" or "Taxes") which, at
any time during the Lease Term, shall be applicable to the Premises or assessed,
levied or imposed upon the Premise, or any part thereof, under or by virtue of
any present or future laws, statutes, ordinances, regulations or other
requirements of any governmental authority whatsoever. The term "Environmental
Surcharges" shall include any and all expenses, taxes, charge or penalties
imposed by the Federal Environmental Protection Agency, the Federal Clean Air
Act or any regulations promulgated thereunder, or any other local, state or
federal governmental agency or entity now or hereafter vested with the power to
impose taxes, assessments or other types of surcharges as a means of controlling
or abating environmental pollution in regard to Tenant's particular use,
operation or occupancy of the Premises. It is the intention of the parties that
Landlord shall be free from all such expenses and all such taxes and all other
governmental impositions and charges of every kind and nature whatsoever.
Nothing in this Lease contained shall require Tenant to pay any franchise,
estate, inheritance, gift, transfer, excess profits tax imposed upon Landlord;
provided, however, that if at any time during the Lease Term there should be
levied, assessed and imposed (i) a tax, assessment, levy, imposition or charge,
wholly or partially as a capital levy or otherwise, based or measured in whole
or in part on the rent payable by Tenant under this Lease, or (ii) a license fee
measured by the rent payable by Tenant under this Lease, or (iii) any other levy
in lieu of or equivalent to any Tax set forth in this Article 10, then all such
taxes, assessments, levies, fees, impositions, or charges shall be paid by
Tenant and shall be deemed to be included within the term "Tax" for the purposes
hereof.
B. If by law Tenant's share of any Tax is payable or may, at the
option of the taxpayer, be paid in installments, Tenant may whether or not
interest shall accrue on the unpaid balance thereof, pay the same, and any
accrued interest on any unpaid balance thereof, in installments as each
installment becomes due and payable, but in any event, before any fine, penalty,
interest or cost may be added thereto for non-payment of any installment or
interest.
C. Tenant's share of any Tax relating to a fiscal period of a
taxing authority, a part of which is within the Lease Term and a part of which
is subsequent to the Lease Term, shall be apportioned and adjusted between
Landlord and Tenant based upon a 365-day year. Such apportionment shall be made
whether or not Tenant's share of such Tax shall be assessed, levied, imposed, or
shall become a lien upon the Premises or shall become payable during the Lease
Term. With respect to any Tax for public improvements or benefits which by law
is payable or, at the option of the Landlord, may be paid in installments,
Landlord shall pay the installments thereof which become due and payable
subsequent to the expiration of the Lease Term; and Tenant shall pay Tenant's
share of all such installments which become due and payable at any time during
the Lease Term even though actual payment is postponed beyond the end of the
Lease Term by Tenant.
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D. Tenant shall furnish to Landlord five (5) business days prior to
the last date when any Tax will become delinquent, official receipts or other
proof satisfactory to Landlord evidencing payment of Tenant's share thereof,
subject to Paragraph E below.
E. Tenant shall have the right to contest or review the amount or
validity of any such Tax by appropriate legal proceedings (but which is not to
be deemed or construed in any way as relieving, modifying or extending Tenant's
covenant to pay Tenant's share of any such Tax at the time and in the manner as
provided in this Article), on condition, however, that if Tenant's share of such
contested Tax is not paid beforehand and if such legal proceedings shall not
operate to prevent or stay the collection of Tenant's share of the Tax so
contested, then before instituting any such proceeding, Tenant shall furnish to
Landlord a cash deposit or bond as security for the payment of Tenant's share of
such Tax in an amount sufficient to pay such Tax, together with all interest and
penalties in connection therewith, and all charges that may or might be assessed
against or be charged on the Premises in said proceedings.
F. Any contest as to the validity or amount of Tenant's share of
any Tax or assessed valuation upon which Tenant's share of such Tax was computed
or based, whether before or after payment, shall be made by Tenant in Tenant's
own name, or, if required by law, in the name of the Landlord or both Landlord
and Tenant. Landlord shall cooperate in any such contest, and Tenant shall
indemnify and save harmless Landlord from any and all costs or expenses,
including attorney fees, in connection with any such proceedings brought by
Tenant. Tenant shall be entitled to any refund of Tenant's share of any such Tax
and penalties or interest thereon which have been paid by Tenant.
G. The certificate, advice or xxxx of the appropriate official
(designated by law to make or issue the same or to receive payment of Tenant's
share of any such Tax) of the non-payment of Tenant's Share of any such Tax,
shall be conclusive of the fact that Tenant's share of such Tax was due and
unpaid at the time of the making or issuance of such certificate, advice or
xxxx.
H. In the event that Tenant shall fail to pay Tenant's share of any
such Tax or other expense which might create a lien against the real property,
required to be paid after the same shall become due and payable, and Tenant has
not provided Landlord with a cash deposit or bond as required in Paragraph 10(E)
above, Landlord shall have the right, at its option, to pay the same with all
interest and penalties thereon, and the amount so paid, with interest thereon
from the date of such payment by Landlord at the Interest Rate, shall be deemed
to be Additional Rent hereunder and shall be due and payable by Tenant on the
first day of the month following the month in which payment by Landlord was
made. Landlord's right to make payment under this Paragraph H is a cumulative
right and shall not be construed to be a waiver of any other rights of Landlord
under law or under this Lease Agreement.
11. INSURANCE.
A. Landlord shall, during the Lease Term, at Tenant's sole expense,
procure and keep in force the following insurance coverage for the Building,
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subject to the ordinary and reasonable deductible amount for such insurance,
Tenant's share of $2,000.00, which amount shall be Tenant's expense.
1. "All Risk" coverage, including flood insurance but not
including earthquake insurance on the Premises and all improvements, building
equipment and fixtures and personal property affixed or attached to the
Premises, including any improvements or fixtures hereinafter constructed or
installed thereon, in the full amount of the replacement cost thereof. Such full
replacement cost shall be determined by mutual agreement as of the Commencement
Date and if applicable, at the commencement of the Extension Term, based on
actual changes in replacement cost. If the parties are unable to agree on the
full replacement cost, the matter shall be resolved by arbitration administered
by and in accordance with the rules of the American Arbitration Association in
San Jose, California, using one arbitrator acceptable to Landlord and Tenant,
provided that the arbitrator selected shall have at least 10 years experience in
the real estate appraisal business.
2. Business interruption insurance insuring that one
hundred percent (100%) of the rent and other sums required to be paid by Tenant
hereunder will be paid to Landlord for a period of twelve (12) months if the
Premises are destroyed or damaged by a risk insured against by the "all risk"
insurance described above.
B. Tenant shall, during the Lease Term, at Tenant's sole expense,
procure and keep in force the following insurance coverage:
1. Plate glass insurance.
2. Comprehensive public liability insurance protecting
against any and all liabilities related to the condition, use or occupancy of
the Premises with limits of One Million Dollars ($1,000,000) for bodily injury
or death as a result of any one occurrence, and Five Hundred Thousand and no/100
($500,000.00) for property damage as a result of any one occurrence.
C. All insurance policies required under the provisions of this
Article 11 which are to be acquired by Tenant, shall name the Landlord, and the
beneficiary of any mortgage or deed of trust secured by the Premises as
additional insureds and all payments shall be made as their interest appear.
D. All policies provided for in this Article 11 which are to be
acquired by Tenant, shall be in such form and with such companies authorized to
write insurance in the state in which the Premises are located as reasonably may
be approved by Landlord, which approval Landlord agrees not to unreasonably
withhold. Originals of the policies provided for herein or, in the case of
comprehensive public liability insurance, certificates of insurance evidencing
the policy provided for herein, shall be delivered to landlord and shall certify
that the policy may not be canceled or altered without ten (10) days prior
written notice to Landlord. The certificate required herein shall also certify
that (i) the coverage provided insures performance of the indemnity set forth in
Article 12, and (ii) the coverage provided is primary and any coverage by
Landlord is in excess thereto.
E. In those situations whereby Landlord shall obtain and maintain
such insurance coverage and pay premiums therefor, Tenant's share of all
premiums so paid by Landlord, together with interest thereon at the Interest
Rate from the
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30th day following the billing of Tenant for such costs, shall be deemed
Additional Rent hereunder, and shall be paid by Tenant to Landlord upon demand.
F. In the event that Tenant fails to obtain and maintain any
insurance required herein, Landlord may, but shall not be obligated to, obtain
and maintain such insurance coverage and pay premiums therefor. All premiums so
paid by Landlord, together with interest thereon at the Interest Rate from the
date of such payment, shall be deemed Additional Rent hereunder, and shall be
paid by Tenant to Landlord upon demand. In addition, Landlord may recover from
Tenant, and Tenant agrees to pay as Additional Rent to Landlord, any and all
reasonable expenses (including reasonable Attorney's fees) and damages such
Landlord may have sustained by reason of the failure of Tenant to obtain and
maintain such insurance, it being expressly declared that the expenses and
damages of Landlord shall not be limited to the amount of premiums thereon. Any
such expenses and damages shall bear interest at the Interest Rate from the date
that the loss or damage occurs until paid by Tenant.
12. INDEMNITY AND EXCULPATION. Except to the extent caused by the negligence
or willful misconduct of Landlord, its agents, employees, contractors or
invitees, Tenant agrees to indemnify Landlord and hold Landlord harmless from
any and all liability, loss, cost, expenses, reasonable attorney's fees, or
obligations on account of, or arising out of the use, condition or occupancy of
the Premises by Tenant, Tenant agrees to defend Landlord against any litigation
or threatened litigation relating to any such incident to which the Landlord is
named as a defendant. It is understood that, except as otherwise provided in
this Paragraph, Landlord shall in no event be responsible or liable for any
injury or damage to any property of Tenant or any other person, or for damage or
injury to any other 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, except as
otherwise provided in this Paragraph, Landlord 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 therein or thereon, including without limitation,
any liability for injury to the person or property of Tenant, Tenant's agents,
officers, employees, invitees, or any other person, except to the extent caused
by the negligence or willful misconduct of Landlord, its agents, employees,
contractors or invitees. The provisions of this Lease permitting Landlord to
enter and inspect the Premises are for the purposes of enabling Landlord to
become informed as to whether Tenant is complying with the terms of this Lease,
and Landlord shall be under no duty to enter and inspect or to perform any of
Tenant's covenants set forth is this Lease Agreement. Notwithstanding anything
in this Paragraph 12 to the contrary, however, the Landlord shall be responsible
for the negligence or willful misconduct of Landlord, its agents, employees,
contractors or invitees relating to any of the circumstances set forth herein.
Notwithstanding anything to the contrary contained in this Lease, Landlord shall
not be released from, and shall indemnify, defend, protect and hold harmless
Tenant from, all damages, liabilities, judgments, actions, claims, attorneys'
fees, consultants' fees,
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payments, costs and expenses arising from the negligence or willful misconduct
of Landlord or its agents, employees, contractors or invitees; Landlord's
violation of Law; or a breach of Landlord's obligations or representations under
this Lease.
13. COMPLIANCE WITH LAWS AND REGULATIONS.
A. Tenant shall, at Tenant's sole cost, comply with all laws,
regulations, rules, orders, ordinances and requirements of all governmental
authorities (including, but not limited to, federal, state, county and city
governments and any department or agency thereof) now in force or which may
hereafter be in force, whether or not the same are now contemplated by the
parties pertaining to Tenant's particular use, occupancy or occupational safety
of the Premises. The judgment of any court of competent jurisdiction after final
appeal or the admission of Tenant in any action or proceeding against Tenant,
whether Landlord be a party thereto or not, that Tenant has violated any such
law, requirement, rule, order, ordinance or regulation in the use, or occupancy
of the Premises shall be conclusive of the fact of such violation by Tenant.
Except to the extent caused by the negligence or willful misconduct of Landlord,
its agents, employees, contractors or invitees, Tenant shall indemnify and hold
Landlord harmless from any and all liability, penalty, loss, cost, expense,
attorney's fee, or obligation arising out of Tenant's failure to comply with any
requirement, law, rule, order, ordinance and regulation of any governmental
agency now or hereafter in force pertaining to Tenant's particular use,
occupancy or occupational safety of the Premises. Tenant shall not be required
to construct or to pay the cost of complying with any requirement, law, rule,
order, ordinance or regulation requiring construction of improvements in the
Premises which are properly capitalized under generally accepted accounting
principles, unless such compliance is necessitated solely because of Tenant's
particular use of the Premises.
14. UTILITIES. Tenant shall pay all utility charges and connection fees,
including, but not limited to, water, gas, light, heat, power, electricity,
telephone or other communication service, scavenger, trash pickup, sewer, air
conditioning or any other service or utility supplied to or consumed on the
Premises, or any tax, fee, levy or surcharge therefor. If any such service or
utility is not separately metered to the Premises, and the charges incurred
during the first twenty-four months of the Term relate to the entire Building,
Tenant shall pay to Landlord Tenant's Share of the cost of such service or
utility, together with interest thereon at the Interest Rate from the thirtieth
(30th) day following Tenant's receipt of the documentation therefor.
Notwithstanding anything to the contrary contained in this Lease, if the
Premises should become not reasonably suitable for Tenant's use as a consequence
of fire, casualty, exercise of eminent domain, cessation of utilities or other
services, interference with access to the Premises, legal restrictions or the
presence of any Hazardous Material not stored, used, transported, handled or
disposed of by Tenant or its agents in or about the Premises in violation of
Hazardous Materials Laws, and in any of the foregoing cases the interference
with Tenant's use of the Premises persists for seven (7) consecutive calendar
days, then Tenant shall be entitled to an equitable batement
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of rent and Additional Rent to the extent of the interference with Tenant's use
of the Premises occasioned thereby.
15. ALTERATIONS, REPAIRS AND MAINTENANCE.
A. Subject to the provisions of Article 16 relating to destruction
of or damage to the Premises, during the period that Tenant leases the entire
building, Tenant shall, at Tenant's own expense, keep and maintain the entire
Premises including, without limited the generality of the foregoing, the roof,
exterior, interior, electrical wiring and connections, plumbing, sewer system,
heating and air-conditioning installation, truck doors, storefront, and Tenant's
Share of the common area, sidewalks, landscaping and paving of the Premises
(collectively "Building Systems") in good condition and repair, excepting
ordinary wear and tear, acts of God, casualty, condemnation, alterations with
respect to which Landlord has not reserved the right to require removal and
Hazardous Materials not used, stored, transported, disposed of or handled by
Tenant or its agents, employees, contractors and invitees in violation of
Hazardous Materials Laws excepted. Notwithstanding anything to the contrary
contained in this Paragraph, until such time as Tenant occupies the entire
Building, (i) Landlord shall be responsible for all such maintenance and other
obligations which are structural in nature, affect the Building Systems or
affect the exterior of the Building and any common area maintenance (such as the
roof, landscaping or repaving of the parking areas) and Tenant shall pay as
Additional Rent Tenant's Share of such costs within twenty (20) days after
receipt of Landlord's invoice therefor (except that any maintenance which is
necessitated by Tenant's violation of this Lease [after passage of the
applicable cure period] or by Tenant's negligence or willful misconduct shall be
performed at the sole cost and expense of Tenant); and (ii) Tenant shall be
responsible for all obligations not covered under (i) above, including without
limitation, all non-structural interior repairs to the Premises. The term
"repair" shall include replacements, restorations, and/or renewals when
necessary, as well as painting and decorating. Notwithstanding anything to the
contrary contained in this Lease, Landlord shall be responsible for all
replacements of Building Systems, and Tenant shall pay to Landlord in any one
Lease Year, as Additional Rent, only Tenant's Share of the annual amortized cost
of the replacement based on its useful life determined in accordance with
generally accepted accounting principles. Except as otherwise provided, and
subject to the provision of Paragraph 2.A.2. hereof, Tenant's obligation shall
extend to all alterations, additions and improvements to the Premises, all
fixtures and appurtenances therein and thereto, all equipment thereof,
including, but not limited to, all engines, boilers, elevators, machinery,
pipes, plumbing, wiring, gas, steam and electrical fittings, sidewalks, paving,
water, sewer and gas connections, heating equipment, air conditioning equipment
and machinery, and all other fixtures, machinery and equipment belonging to or
connected with the Premises. Except to the extent caused by the negligence or
willful misconduct of Landlord, its agents, employees, contractors or invitees,
Tenant shall indemnify and save Landlord harmless against and from all costs,
Expenses, liabilities, losses, injuries, damages, suits, fines, penalties,
claims, and demands, including reasonable attorneys' fees, resulting from
Tenant's failure to comply with the
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foregoing; and Tenant hereby expressly releases and discharges Landlord of and
from any liability therefor.
B. Landlord shall, at the request of Tenant, assign to Tenant any
guarantees and warranties received from contractors or equipment suppliers
relating to the construction of the Building.
C. Tenant waives the provisions of any law requiring that Landlord
make repairs, and further waives the provisions of any law allowing Tenant to
make repairs at the expense of Landlord.
D. At the expiration of the term of this Lease, or upon sooner
termination as provided herein, Tenant shall surrender the Premises to the
Landlord and in as good order and condition as at the commencement of the Lease
Term, normal wear and tear, casualty, condemnation, alterations with respect to
which Landlord has not reserved the right to require removal and Hazardous
Materials not used, stored, transported, disposed of or handled by Tenant or its
agents, employees, contractors and invitees in violation of Hazardous Materials
Laws excepted, and all carpeting shampooed and vinyl floors cleaned and waxed.
Nothing provided in this subparagraph shall diminish or reduce Tenant's
obligations under subparagraph A through D above. Tenant shall be entitled to
remove its trade fixtures at the termination of this lease, but agrees to repair
any damage caused thereby and to restore the area to its original condition
insofar as is possible.
16. DAMAGE AND DESTRUCTION
A. If the Premises are damaged or destroyed in whole or in part
from any cause (except condemnation), then within one (1) week of the damage or
destruction, the Landlord and the Tenant shall mutually agree upon and shall
hire an independent consultant to review the damage to the building and to
render an unbiased opinion in a written report on the length of time and the
cost of rebuilding the Premises. Whereon, Landlord may, at its option:
1. Rebuild the Premises to the condition existing
immediately prior to the damage or destruction, in which event Tenant agrees
that the proceeds of any and all insurance policies required hereinabove shall
be applied to the cost of rebuilding. In the event the insurance proceeds exceed
the cost of rebuilding, Landlord and Tenant shall be entitled to receive the
excess, as their interests may appear.
2. Terminate the Lease provided that the rebuilding cannot
be accomplished within one hundred eighty (180) days after the date of damage or
terminate the Lease should there be no insurance proceeds available for
reconstruction. Provided, however, that in the event that insurance proceeds are
insufficient to rebuild the Premises, Tenant may, at Tenant's option, pay to
Landlord in cash no later than the date of commencement of construction the
difference between the insurance proceeds and the contracted cost of rebuilding,
in which case Landlord agrees to rebuild the Premises.
3. Notwithstanding the provisions of paragraph (1) and (2)
above, Tenant may, by giving Landlord sixty (60) days prior written notice,
terminate the Lease if the Premises cannot be replaced or restored (based on the
consultant's report) within one hundred eighty (180) days after the date of
damage or is not
Page 12 of 33
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replaced or restored within one hundred eighty (180) days after the date of
damage. If the damage or destruction occurs during the last twelve (12) months
of the term, then either Tenant or Landlord may terminate this lease.
B. If Landlord does not give Tenant notice in writing within
forty-five (45) days from the damage or destruction of the Premises of
Landlord's election to rebuild them, Landlord shall be deemed to have elected to
rebuild the Premises and continue the Lease. Tenant hereby expressly waives the
provisions of any law requiring Landlord to make such repairs, or of any law
allowing the Tenant to make such repairs at Landlord's expense and, without
limiting the foregoing, Tenant specifically waives any statutes which permit
Tenant to terminate this Lease upon destruction or to make repairs at the
expense of Landlord.
C. In the event of damage or destruction, whether from an insured
or uninsured casualty, the rent and Additional Rent otherwise payable hereunder
shall be abated for the period commencing with the date of damage or destruction
and ending with (1) the date of completion of the repair or restoration, if the
lease is not terminated or (2) the date of termination of the Lease. The amount
of the abatement shall be calculated by dividing the rentable area of the
portion of the Premises affected by the damage or destruction by the Premises
rentable area.
17. CONDEMNATION.
A. DEFINITION OF TERMS. For the purpose of this Lease the term:
1. "Taking" means a taking of the Premises or damage
thereto related to the exercise of the power of eminent domain and includes a
voluntary conveyance under threat of condemnation, in lieu of court proceedings,
to any agency, authority, public utility, persons or corporate entity empowered
to condemn property.
2. "Total Taking" means the taking of the entire Premises
or so much of the Premises as to prevent or substantially impair the use thereof
by Tenant for the uses herein specified, but in no event shall Total Taking be
less then twenty percent (20%) of the Premises.
3. "Partial Taking" means the taking of only a portion of
the Premises which does not constitute a Total Taking.
4. "Date of Taking" means the date upon which title to the
Premises, or a portion thereof, passes to and vests in the condemnor or the
effective date of any order for possession if issued prior to the date title
vests in the condemnor.
5. "Award" means the amount of any award made,
consideration paid, or damages ordered as a result of a Taking.
B. RIGHTS. The parties agree that in the event of a Taking all
rights between them or in and to an Award shall be as set forth herein and
Tenant shall have no right to any Award except as set forth herein. Except as
otherwise provided herein and unless and until the Lease is terminated pursuant
to the provisions of this Lease, Tenant shall continue to pay to Landlord all
rent required in this Lease, and Tenant shall faithfully keep and observe all
other terms, conditions, and covenants of this Lease, all without any claim for
any abatement, refund, diminution or reduction or other expense whatsoever, and
there shall be
Page 13 of 33
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no abatement of rent whatsoever due to the commencement or threat of
commencement of condemnation proceedings or due to any other cause whatsoever
(except as provided in Paragraphs C and D below).
C. TOTAL TAKING. In the event of a Total Taking during the term
hereof (i) the rights of Tenant in and to the Premises shall cease and terminate
as of the Date of Taking, (ii) Landlord shall refund to Tenant any prepaid rent,
(iii) Tenant shall pay to Landlord any rent or charges due Landlord under the
Lease each prorated as of the Date of Taking, (iv) Tenant shall be entitled to
moving expenses, relocation allowances, good will and amounts for any award made
specifically for interior improvements installed and paid for by Tenant, and
trade fixtures which have not become affixed to and become part of the real
property, if separately awarded, (v) the remainder of the Award shall be paid to
and be the property of Landlord.
D. PARTIAL TAKING. In the event of a Partial Taking during the term
hereof, (i) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the portion of the Premises taken shall cease and terminate as
of the Date of Taking, (ii) Tenant shall be allowed any award made specifically
for interior improvements installed and paid for by Tenant which improvements
did not replace improvements made and paid for by Landlord, (iii) Tenant shall
be entitled to amounts for moving expenses, relocation costs, good will, any
award made specifically for interior improvements installed and paid for by
Tenant and amounts for trade fixtures which have not become affixed to and
become a part of the real property, if separately awarded, (iv) Tenant shall,
comply with the provisions of subparagraph E hereof, (v) the remainder of the
award shall be paid to and be the property of Landlord, and (vi) from and after
the Date of Taking, the rent and Additional Rent shall be reduced in the
proportion that the building area of the portion of the Premises taken bears to
the total building area of the Premises prior to the Taking.
E. In the event of a Partial Taking, Landlord shall have the option
to either (a) terminate the Lease, or (b) within forty-five (45) days after
receipt of the Award proceed to rebuild, repair and restore the remainder of the
Building or the Premises affected thereby to a complete independent and
self-contained architectural unit. Notwithstanding the foregoing sentence, in
the event the Partial Taking causes the Premises to be reduced in such a manner
that the Tenant is unable to utilize said Premises for the use intended, then
Tenant may terminate this Lease within forty-five (45) days after receipt of the
Award upon written notice to Landlord as more specifically set forth under
Article 25.
18. SUBORDINATION.
A. This Lease and all rights of Tenant under this Lease are and
shall, at the option of Landlord, be subject and subordinate to any mortgage
(including a consolidated mortgage) or deed of trust, which may now or hereafter
effect the Premises, or any part thereof, and to any and all renewals,
modifications, consolidations, replacements and extensions of any such mortgage
or deed of trust. Not withstanding the above, however, Landlord and Tenant agree
that Tenant shall:
1. not be a party to any foreclosure action;
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2. not be disturbed as to possession unless Tenant shall be
in material, uncured default of the lease; and
3. be indemnified by Landlord as to damages incurred by
Tenant by such subordination
B. Subject to Paragraph A above, Tenant shall, upon Landlord's
request, execute within ten (10) business days following such request (1) any
reasonable instrument of subordination presented by Landlord to Tenant necessary
to subordinate this Lease to any such mortgage or deed of trust to be placed on
the Premises, or any part thereof by Landlord and (2) any reasonable amendment
to this Lease requested by any lender providing financing for the Building
provided that any such amendment does not materially affect the rights of Tenant
or materially increase the obligations of Tenant or materially decrease the
rights of Tenant under this Lease.
19. BREACH BY TENANT
A. Upon the breach of this Lease by Tenant or upon any Event of
Default (as defined in this Lease), Landlord shall have the following remedies,
in addition to all other rights and remedies provided by law, to which Landlord
may resort cumulatively, or in the alternative:
1. Landlord may at Landlord's election reenter the
Premises, and without terminating this Lease, and at any time from time to time,
relet the Premises or any part or parts of them for the account and in the name
of Tenant or otherwise. Landlord may at Landlord's election eject Tenant or any
of Tenant's subtenants, except subtenants approved in writing by Landlord,
assignees, or other persons claming any right under or through this Lease.
Tenant shall nevertheless pay to Landlord on the due dates specified in this
Lease all the sums required of Tenant under this Lease, plus Landlord's
expenses, less the proceeds of any Sublease or reletting. The expenses allowed
Landlord shall include without limitation: costs paid to retake possession
(including reasonable attorneys' fees), costs to secure new tenants (including
broker's commissions and reasonable attorneys' fees), and costs to fulfill all
of Tenant's covenants and conditions to the end of the term. No act by or on
behalf of Landlord under this subparagraph (1) shall constitute a termination of
this Lease unless Landlord gives Tenant written notice of termination.
2. Landlord shall be entitled, at Landlord's election, to
keep the lease in full force and effect and to enforce all of its rights and
remedies under the Lease; including the right to recover the rent and other sums
as they become due, plus interest at the interest Rate from the due date of each
installment of rent or other sum until paid.
3. Landlord may, upon default or breach by Tenant, at
Landlord's election, terminate this Lease by giving Tenant written notice of
termination. On the giving of the notice, all of Tenant's rights in the Premises
and in the leasehold estate shall terminate. Promptly after notice of
termination, Tenant shall surrender and vacate the Premises in broom-clean
condition, and Landlord may reenter and take possession of the Premises and
eject Tenant or any of Tenant's subtenants and/or Assignees, except subtenants
and/or assignees approved in writing by Landlord, or other person or persons
claiming any right under or
Page 15 of 33
16
through Tenant or eject some and not others or eject none. This Lease may also
be terminated by a judgment specifically providing for termination. Any
termination under this paragraph shall not relieve Tenant from the payment of
any sum then due to Landlord or from any claim for breach, damages or rent
previously accrued. In no event shall any one or more of the following actions
by Landlord constitute a termination of this Lease:
(i) Maintenance, or restoration, or preservation of
the Premises.
(ii) Efforts to relet the Premises;
(iii) Appointment of a receiver in order to protect
Landlord's interest hereunder.
(iv) Consent to any subletting of the Premises by
Tenant, whether pursuant to the provisions hereof with concern to subletting or
otherwise;
(v) Any other action by Landlord or Landlord's agent
intended to mitigate the adverse effects of any breach of this Lease by Tenant.
4. In the event of termination pursuant to subparagraph
(3), Landlord shall be entitled at Landlord's election to damages in the
following sums:
(i) The worth at the time of the award of the unpaid
rent which has been earned at the time of termination; plus
(ii) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided; plus
(iii) The worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental that Tenant proves could be reasonably
avoided; and
(iv) Any other amount necessary to compensate
Landlord for all detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease, or which in the ordinary course of things
would be likely to result therefrom including without limitation the following:
(1) Expenses for cleaning, repairing and restoring the Premises; (2) Expenses
for repairing and repainting and otherwise restoring the Premises for the
purpose or reletting, (whether such be funded by a reduction of rent, direct
payment or allowance to tenant, or otherwise),(3) Reasonable Broker's fees,
attorneys' fees, advertising costs and other expenses of reletting the Premises;
(4) Costs of carrying the Premises such as repairs, restoration, maintenance,
taxes and insurance premiums, utilities and security precautions; (5) Expenses
in retaking possession of the Premises; and (6) Reasonable Attorneys' fees and
court costs.
(v) The "worth at the time of Award" of the amounts
referred to in subparagraphs (i) and (ii), above, is computed by allowing
interest at the rate of ten percent (10%) per annum, unless previously
calculated herein. The "worth at the time of Award" of the amount referred to in
subparagraph (iii) above, is computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of Award plus one
percent (1%).
Page 16 of 33
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B. A breach of this Lease shall exist if any of the following
events (severally "Event of Default" and collectively "Events of Default") shall
occur.
1. Default shall have occurred in the payment of rent or
other payment not made upon the date due; only if written notice has been given
and the number of days specified in paragraph 5C. has expired.
2. Tenant shall have assigned its assets for the benefit of
its creditors; or
3. The sequestration or attachment of, or execution on, any
substantial part of the property of Tenant or on any property essential to the
conduct of Tenant's business shall have occurred and Tenant shall have failed to
obtain a return or release of such property within sixty (60) days thereafter,
or prior to sale pursuant to such sequestration, attachment or levy, whichever
is earlier, or
4. Tenant shall have abandoned or vacated the Premises and
failed to pay rent and Additional Rent hereunder; or
5. Tenant shall have failed to perform any term, covenant
or condition contained in this Lease other than nonpayment of monies due
Landlord, where such failure shall not have been cured within thirty (30)
business days after written notice of such failure; provided that if the failure
cannot be reasonably cured within said thirty (30) day period, Tenant shall not
be in default if it commences the cure within said thirty (30) day period and
diligently prosecutes the cure to completion; or
6. A court having jurisdiction shall have made or entered
any decree or order; (a) adjudging Tenant to be bankrupt or insolvent; (b)
approving as properly filed a petition seeking reorganization of Tenant or an
arrangement under the bankruptcy laws or any other applicable debtor's relief
law or statute of the United States or any State thereof; (c) appointing a
receiver, trustee or assignee of Tenant in Bankruptcy or insolvency or for its
property; or (d) directing the winding up or liquidation of Tenant; and such
decree or order shall have continued for a period of sixty (60) days; or Tenant
shall have voluntarily submitted to or filed a petition seeking any such decree
or order.
20. HAZARDOUS MATERIALS. Landlord and Tenant agree as follows with respect
to the existence or use of Hazardous Materials on the Property:
A. Any handling, transportation, storage, treatment, disposal or
use of Hazardous Materials by Tenant, its agents, employees, contractors or
invitees after the Effective Date of this Lease in or about the Premises,
Building or Land shall strictly comply with all applicable Hazardous Materials
Laws. Tenant shall indemnify, defend upon demand with counsel reasonably
acceptable to Landlord, and hold harmless landlord from and against any and all
liabilities, losses, claims, damages, lost profits, consequential damages,
interest, penalties, fines, court costs, remediation costs, investigation costs,
and other expenses which result from or arise in any manner whatsoever out of
the use, storage, treatment, transportation, release, or disposal of Hazardous
Materials on or about the Premises, Building or Land by Tenant, Tenant's agents,
employees, contractors or Invitees in violation of Hazardous Materials Laws
after the Effective Date.
Page 17 of 33
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B. If the presence of Hazardous Materials on the Premises, Building
or Land caused or permitted by Tenant, Tenant's agents, employees, contractors,
or Invitees in violation of Hazardous Materials Laws after the Effective Date of
this Lease results in contamination or deterioration of water or soil or any
other part of the Premises, Building or Land then Tenant shall promptly take any
and all action necessary to investigate and remediate such contamination. Tenant
shall further be solely responsible for, and shall defend, indemnify and hold
Landlord and its agents harmless from and against all claims, costs and
liabilities, including reasonable attorney's fees and costs, arising out of or
in connection with any investigation and remediation (including investigative
analysis, removal, cleanup, and/or restoration work) required hereunder to
return the Premises, Building or Land to their condition existing prior to the
appearance of such Hazardous Materials.
C. Landlord and Tenant shall each give written notice to the other
as soon as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials which relates to the
Premises, Building or Land, and (ii) any contamination of the Premises, Building
or Land by Hazardous Materials which constitutes a violation of any Hazardous
Materials Law. Tenant acknowledges that Landlord, as the owner of the Premises,
Building and Land, at Landlord's election, shall have the sole right at Tenant's
expense to negotiate, defend, approve, and/or appeal any action taken or order
issued with regard to Hazardous Materials by any applicable governmental
authority. Tenant may use small quantities of household and office chemicals
such as adhesive, lubricants, and cleaning fluids in order to conduct its
business at the Premises and such other Hazardous Materials as are necessary to
the operation of Tenant's business of which Landlord receives notice prior to
such Hazardous Materials being brought onto the Premises, Building or Land (or
any portion thereof) and which Landlord consents in writing may be brought onto
the Premises, Building or Land. In granting Landlord's consent, Landlord may
specify the location and manner or use, storage, or handling of any Hazardous
Material. Landlord's consent shall in no way relieve Tenant from any of its
obligations as contained herein. Tenant shall notify Landlord in writing at
least ten (10) days prior to Tenant's first bringing any Hazardous Material on
the Premises, Building or Land. Tenant shall provide Landlord with a list of all
Hazardous Materials and the quantities of each Hazardous Material to be stored,
or used, on any portion of the Property, and upon Landlord's request Tenant
shall provide Landlord with copies of any and all Hazardous Materials Management
Plans, Material Safety Data Sheets, Hazardous Waste Manifests, and other
documentation required by Hazardous Materials Laws to be maintained or received
by Tenant pertaining to the Hazardous Materials used, stored, or transported or
to be used, stored, or transported on any portion of the Premises, Building or
Land. At any time during the Lease Term, Tenant shall, within five days after
written request therefor received from Landlord, disclose in writing all
Hazardous Materials that are being used by Tenant on the Premises, Building or
Land (or have been used by Tenant on the Premises, Building or Land), the nature
of such use, and the manner of storage and disposal.
Page 18 of 33
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D. Landlord may cause testing xxxxx to be installed on the Land and
may cause the ground water to be tested to detect the presence of Hazardous
Material by the use of such tests as are then customarily used for such
purposes. If Tenant so requests, Landlord shall supply Tenant with copies of
such test results. The cost of such tests and of the installation, maintenance,
repair and replacement of such xxxxx shall be paid by Tenant if such tests
disclose the existence of facts which give rise to liability of Tenant pursuant
to its indemnity given in A and/or B above. Landlord at its sole cost may retain
consultants to inspect the Property, conduct periodic environmental audits, and
review any information provided by Tenant. Tenant shall pay the reasonable cost
of fees charged by Landlord and/or Landlord's consultants if such inspections or
audits disclose the existence of facts which give rise to liability of Tenant
pursuant to its indemnity given in Paragraphs 20.A. and B. above.
E. Upon the expiration or earlier termination of the Lease, Tenant,
at its sole cost, shall remove all Hazardous Materials from the Premises that it
brought onto the Premises pursuant to Subparagraph C. hereof and shall, if
required by Hazardous Materials Laws, provide a certificate to Landlord from a
registered consultant reasonably satisfactory to Landlord, certifying that
Tenant has caused no contamination of building(s), soil or ground water in or
about the Premises, Building and or Land. If Tenant fails to so surrender the
Premises, Building or Land, Tenant shall indemnify and hold Landlord harmless
from all damages resulting from Tenant's failure to surrender the Premises,
Building or Land as required by this Subsection, including, without limitation,
any claims or actual, but not consequential, damages in connection with the
condition of the Premises, Building or Land, excluding, damages occasioned by
the inability to lease the Premises, Building or Land (or any portion thereof)
or a reduction in the fair market and/or rental value of the Premises, Building
or Land. If any action is required to be taken by a governmental authority to
test, monitor, and/or clean up Hazardous Materials used, stored, handled,
transported or disposed of by Tenant or its agents, employees, contractors or
invitees in violation of Hazardous Materials Laws from the Premises, Building
or Land, and such action is not completed prior to the expiration or earlier
termination of the Lease, Tenant shall be deemed to have held over until such
time as such required action is completed, and Tenant shall pay rent and
Additional Rent in accordance with the terms of Paragraph 24 (Holding Over). In
addition, Landlord shall be entitled to all damages directly incurred in
connection with such holding over, excluding, without limitation, damages
occasioned by the inability to Lease the Premises, Building or Land or a
reduction of the fair market value and/or rental of the Premises, Building or
Land.
F. As used herein, the term "Hazardous Materials(s)" means any
hazardous or toxic substance, material, or waste, which is or becomes regulated
by any federal, state, regional or local governmental authority because it is
in any way hazardous, toxic, carcinogenic, mutagenic or otherwise adversely
affects any part of the environment or creates risks of any such hazards or
effects, including, but not limited to, petroleum; asbestos, and polychlorinated
bipheyls and any material, substance, or waste (a) defined as a "hazardous
waste," "extremely hazardous waste" or "restricted hazardous waste" under
Sections 25115, 25117
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or 25122.7, or listed pursuant to Section 25140 of the California Health and
Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law); (b) defined
as a "hazardous substance" under Section 25316 of the California Health and
Safety Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx Xxxxxx Hazardous
Substance Account Act); (c) 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); (d) defined as a "hazardous substance" under Section 25281
of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground
Storage of Hazardous Substance); (e) defined as a "hazardous substance" pursuant
to Section 311 of the Clean Xxxxx Xxx, 00 Xxxxxx Xxxxxx Code Sections 1251 et
sq. (33 U.S.C. 1321) or listed pursuant to Section 307 of the Clean Water Act
(33 U.S.C. 1317); (f) defined as "hazardous waste" pursuant to Section 1004 of
the Resource Conservation and Recovery Act, 42 United States Code Section 6901
et. seq. (42 U.S.C. 6903); or (g) defined as "hazardous substance pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 United States Code Section 9601 et seg. (42 U.S.C. 9601) or
(h) defined as a "hazardous substance" pursuant to Section 311 of the Federal
Water Pollution Control Act, 33 U.S.C. 1251 et. sea. or (i) listed pursuant to
Section 307 of the Federal Water Pollution Control Act (33 U.S.C. 1317) or (j)
regulated under the Toxic Substances Control Act (15 U.S.C. 2601) et. seg.) or
(k) defined as a "hazardous material" under-Section 66680 or 66084 of Title 22
of the California Code of Regulations (Administrative Code (1) listed in the
United States Department of Transportation Hazardous Materials Table (49 C.F.R.
172.101) or (m) listed by the Environmental Protection Agency as "hazardous
materials"(40 C.F.R. Part 302) and amendments thereto. The term "Hazardous
Material Laws" shall mean (i) all of the foregoing laws as amended from time to
time and (ii) any other federal, state, or local law, ordinance, regulation, or
order regulating Hazardous Materials.
G. Notwithstanding anything to the contrary contained in this
Lease, Landlord hereby represents to Tenant that, to the best of Landlord's
knowledge: (i) the Premises, the Building and the Land and all operations
conducted thereon prior to the Commencement Date by any person other than Tenant
have been and are in compliance with all Hazardous Materials Laws; and (ii) any
handling, transportation, storage, treatment, disposal, release or use of
Hazardous Materials that has occurred on or about the Premises, the Building and
the Land prior to the Commencement Date by any person other than Tenant has been
in compliance with all Hazardous Materials Laws. Landlord further represents
that, to the best of Landlord's knowledge, no litigation has been brought or
threatened, nor any settlements reached with any governmental or private party,
concerning the actual or alleged presence of Hazardous Materials on or about the
Premises, Building or Land, nor has Landlord received any notice of any
violation, or any alleged violation, of any Hazardous Materials Laws, pending
claims or pending investigations with respect to the presence of Hazardous
Materials on or about the Premises, Building or Land. Except to the extent that
the Hazardous Material in question was released, emitted, used, stored,
manufactured, transported or
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discharged by Tenant, or its agents, employees or contractors, in violation of
Hazardous Materials Laws, Tenant shall not be responsible for and Landlord shall
defend with counsel reasonably acceptable to Tenant and hold harmless Tenant
from (i) any claim, remediation obligation, investigation obligation, liability,
cause of action, penalty, attorneys' fee, cost, expense or damage owing or
alleged to be owing to any third party with respect to any Hazardous Material
present on or about the Premises, the Building or the Land, or the soil,
groundwater or surface water thereof; or (ii) the removal, investigation,
monitoring or remediation of any Hazardous Material present on or about the
Premises, the Building or the Land, or the soil, ground water or surface water
thereof, and in any of the foregoing cases without regard to whether the
Hazardous Materials were present on the Premises, the Building or the Land as of
the Commencement Date or whether the presence of the Hazardous Materials was
caused by any person other than Landlord. Landlord's representations under this
Paragraph shall survive the termination of this Lease.
H. Tenant's failure to comply with any of the requirements of this
Paragraph regarding the storage, use, disposal, or transportation of Hazardous
Materials, or Tenant's bringing any Hazardous Materials on the Premises,
Building or Land, without Landlord's consent shall be an Event of Default as
defined in this Lease. The obligations of Landlord and Tenant under this
Paragraph shall survive the expiration or earlier termination of the Lease Term.
The rights and obligations of Landlord and Tenant within respect to issues
relating to Hazardous Materials are exclusively established by this Paragraph.
In the event of any inconsistency between any other part of this Lease and this
Paragraph, the terms of this Paragraph shall control.
21. ALTERATIONS AND IMPROVEMENTS.
A. BY TENANT. Except for non-structural alterations not exceeding
the sum of Twenty Five Thousand Dollars ($25,000.00) per work of alteration,
Tenant shall not make any alterations to or modifications of the Leased Premises
or construct any improvements to or within the Leased Premises without
Landlord's prior written approval, and then not until Landlord shall have first
approved in writing, the plans and specifications therefore, which approval
shall not be unreasonably withheld or delayed. All such modifications,
alterations or improvements, once so approved, shall be made, constructed or
installed by Tenant at Tenant's expense, using a licensed contractor first
reasonably approved by Landlord, in substantial compliance with the
Landlord-approved plans and specifications therefore. All work under taken by
Tenant shall be done in accordance with all Laws and in a good and workmanlike
manner using new materials of good quality. Tenant shall not commence the making
of any such modifications or alterations or the construction of any such
improvements until (i) all required governmental approvals and permits have been
obtained, (ii) all requirements regarding insurance imposed by this Lease have
been satisfied, (iii) Tenant shall have given Landlord at least five business
days prior written notice of its intention to commence such work so that
Landlord may post and file notices of non-responsibility, and (iv) if requested
by Landlord, Tenant shall have obtained contingency liability and broad form
builder's risk insurance in an
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amount reasonably satisfactory to Landlord to cover any perils relating to the
proposed work not covered by insurance carried by Tenant pursuant to Paragraph
11 hereof.
As used in this Paragraph, the term "modifications, alterations and/or
improvements" shall include, without limitation, the installation of additional
electrical outlets, overhead lighting, fixtures, drains, sinks, partition
doorways, or the like.
B. Ownership of Improvements: All modifications, alterations or
improvements made or added to the Premises by Tenant (other than Tenant's
inventory, equipment, movable furniture, wall decorations and trade fixtures)
shall be deemed real property and a part of the Premises, but shall remain the
property of Tenant during the Lease Term, and Tenant shall be entitled to all
tax benefits therefor. Any such modifications, alterations or improvements, once
completed, shall not be altered or removed from the Premises during the Lease
Term without Landlord's written approval first obtained in accordance with the
provisions of Article 21A. above. At the expiration or sooner termination of
this Lease, all such modifications, alterations and improvements (other than
Tenant's inventory, equipment, movable furniture, wall decorations and trade
fixtures) shall automatically become the property of Landlord and shall be
surrendered to Landlord as a part of the Premises unless Landlord shall have
notified Tenant in writing at the time that Landlord consents to the alteration
that Landlord will require Tenant to remove any of such modifications,
alterations or improvements, in which case Tenant shall so remove same.
Notwithstanding the foregoing, Tenant shall construct certain improvements to
the Premises at its cost, and at the time that Tenant submits plans and
specifications for the improvements in compliance with the provisions of
Paragraph 21.A. hereof, Tenant shall notify Landlord what improvements, if any,
that Tenant will remove from the Premises upon the expiration or earlier
termination of this Lease. If Tenant does remove alterations, Tenant shall
repair any damage caused by the removal. Landlord shall have no obligation to
reimburse Tenant all or any portion of the cost or value of any such
modifications, alterations or improvements so surrendered to Landlord. All
modifications, alterations or improvements which are installed or constructed on
or attached to the Premises by Landlord at Landlord's expense shall be deemed
real property, and a part of the Premises and shall be the property of Landlord.
All lighting, plumbing, electrical, partitioning, window coverings, wall
coverings and floor coverings installed by Tenant shall be deemed improvements
to the Premises and not trade fixtures of Tenant.
C. ALTERATIONS. At its sole cost, Tenant shall make all
modifications, alterations, and improvements to the Premises that are required
by any Law because of (i) Tenant's particular use or occupancy of the Premises
or the Building, (ii) Tenant's application for any permit or governmental
approval, or (iii) Tenant's making of any modifications, alterations or
improvements to or within the Premises. If Landlord shall, at any time during
the Lease Term, (i) be required by any governmental authority to make any
modifications, alterations or improvements to the Building or the Project, (ii)
modify the existing (or construct or replace additional) capital improvements or
provide Building service equipment for the purpose of reducing the consumption
of utility services or
Page 22 of 33
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project maintenance costs for the Building, Tenant's Share of the cost incurred
by Landlord in making such modifications, alterations, or improvements,
including a ten percent (10%) per annum cost of money factor, shall be amortized
by Landlord over the useful life of such modifications, alterations, or
improvements, as determined in accordance with generally accepted accounting
standards, and the monthly amortized cost of such modifications, alterations and
improvements as so amortized during the term shall be considered Additional
Rent.
D. LIENS. Tenant shall keep the Premises, the Building and the Land
free from any liens and shall pay when due all bills arising out of any work
performed, materials furnished, or obligations incurred by Tenant, its agents,
employees or contractors relating to the Premises. If any such claim of lien is
recorded against Tenant's interest in this Lease, the Leased Premises, the
Building or the Project, Tenant shall bond against, discharge or otherwise cause
such lien to be entirely released within twenty (20) days after the same has
been so recorded.
22. ASSIGNMENT AND SUBLETTING BY TENANT
A. BY TENANT. Tenant shall not sublet the Leased Premises (or any
portion thereof) or assign or encumber its interest in this Lease, whether
voluntarily or by operation of Law, without Landlord's prior written consent
first obtained in accordance with the provisions of this Article 22, which shall
not be unreasonably withheld or delayed. Any attempted subletting, assignment or
encumbrance without Landlord's prior written consent, at Landlord's election,
shall constitute a default by Tenant under the terms of this Lease. The
acceptance of rent by Landlord from any person or entity other than Tenant, or
the acceptance of rent by Landlord from Tenant with knowledge of a violation of
the provisions of this Article shall be deemed to be a waiver by landlord of any
provision of this Article or this Lease or to be a consent to any subletting by
Tenant or any assignment or encumbrance of Tenant's interest in this Lease.
B. SALE OF STOCK. Subject to the provisions of Paragraph 22. F.
hereof, if Tenant is a corporation, the sale during the Term of a controlling
percentage of the capital stock of Tenant, shall be deemed a voluntary
assignment of Tenant's interest in this Lease. The phase "controlling
percentage" means the ownership of and the right to vote stock possessing more
than fifty percent of the total combined voting power of all classes of Tenant's
capital stock issued, outstanding and entitled to vote for the election of
directors. If Tenant is a partnership, a withdrawal or change, whether
voluntary, involuntary or by operation of Law, of any general partner, or the
dissolution of the partnership, shall be deemed a voluntary assignment of
Tenant's interest in this Lease.
C. LANDLORD'S ELECTION. If Tenant shall desire to assign its
interest under this Lease or to sublet the Leased Premises, Tenant must first
notify Landlord, in writing, of its intent to so assign or sublet, not less than
thirty (30) days in advance of the date it intends to so assign its interest in
this Lease or sublet the Premises, specifying in detail the terms of such
proposed assignment or subletting, including the name of the proposed assignee
or sublessee, the proposed assignee's or sublessee's intended use of the
Premises, a current financial statement of such proposed assignee or sublessee
and the form of
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documents to be used in effectuating such assignment or subletting. Landlord
shall have a period of fifteen (15) days following receipt of such notice within
which to do one of the following: (a) terminate this Lease or, in the case of a
sublease of less than all of the Premises, terminate this Lease as to that part
of the Premises proposed to be so sublet, either (i) on the condition that the
proposed Transferee immediately enter into a direct lease of the Premises with
Landlord (or, in the case of a partial sublease, a lease for the portion
proposed to be so sublet) on the same terms and conditions contained in Tenant's
notice, or (ii) so that Landlord is thereafter free to lease the Premises (or,
in the case of a partial sublease, the portion proposed to be so sublet) to
whomever it pleases on whatever terms are acceptable to Landlord.
Notwithstanding the foregoing, Tenant shall have the right to rescind its
request for consent within five (5) business days after receipt of Landlord's
notice to terminate, in which case this Lease shall continue in full force and
effect. In the event Landlord elects to so terminate this Lease and Tenant does
not rescind its request for consent to sublease or assign, then (i) if such
termination is conditioned upon the execution of a lease between Landlord and
the proposed Transferee, Tenant's obligations under this Lease shall not be
terminated until such Transferee executes a new lease with Landlord, enters into
possession, and commences the payment of rent, and (ii) if Landlord elects
simply to terminate this Lease (or, in the case of a partial sublease, terminate
this Lease as to the portion to be so sublet), the Lease shall so terminate in
its entirety (or as to the space to be so sublet) fifteen (15) days after
Landlord has notified Tenant in writing of such election. In the case of a
partial termination of the Lease, the rent, Tenant's Share and Additional Rent
shall be reduced to an amount which bears the same relationship to the original
amount thereof as the area of that part of the Premises which remains subject to
the Lease bears to the original area of the Premises. Landlord and Tenant shall
execute a cancellation agreement with respect to this Lease to effect such
termination or partial termination, or (b) if Landlord shall not have elected to
cancel and terminate this Lease, to either (i) consent to such requested
assignment or subletting subject to Tenant's compliance with the conditions set
forth in Subparagraph D below or (ii) refuse to so consent to such requested
assignment or subletting, provided that such consent shall not be unreasonably
refused. It shall not be unreasonable for Landlord to withhold its consent to
any proposed assignment or subletting if; (i) the proposed assignee or subtenant
has been required by any prior landlord, lender or governmental authority to
clean up Hazardous Materials unlawfully discharged by the proposed assignee or
subtenant; or (ii) if the proposed assignee or subtenant is subject to
investigation or enforcement order or proceeding by any governmental authority
in connection with the use, disposal or storage of a Hazardous Material in
violation of Hazardous Materials Laws. During said fifteen day period, Tenant
covenants and agrees to supply to Landlord, upon request, all necessary or
relevant information which Landlord may reasonably request respecting such
proposed assignment or subletting and/or the proposed assignee or sublessee.
D. CONDITIONS TO LANDLORD'S CONSENT. If Landlord elects to consent,
or shall have been ordered to so consent by a court of competent jurisdiction,
to such requested assignment, subletting or encumbrance, such consent shall be
Page 24 of 33
25
expressly conditioned upon the occurrence of each of the conditions below set
forth, and any purported assignment, subletting or encumbrance made or ordered
prior to the full and complete satisfaction of each of the following conditions
shall be void and, at the election of Landlord, which election may be exercised
at any time following such a purported assignment, subletting or encumbrance but
prior to the satisfaction of each of the stated conditions, shall constitute a
material default by Tenant under this Lease giving Landlord the absolute right
to terminate this Lease unless such default is promptly cured by satisfying in
full each such condition by the assignee, sublessee or encumbrancer. The
conditions are as follows:
1. Landlord having approved in form and substance the
assignment or sublease agreement (or the encumbrance agreement), which approval
shall not be unreasonably withheld or delayed by Landlord if the requirements of
this Article 22 are otherwise complied with.
2. Each such sublessee or assignee having agreed, in
writing to Landlord and its counsel and for the benefit of Landlord, to assume,
to be bound by, and to perform the obligations of this Lease to be performed by
Tenant (or, in the case of an encumbrance, each such encumbrancer having
similarly agreed to assume, be bound by and to perform Tenant's obligation upon
a foreclosure or transfer in lieu thereof).
3. Tenant having fully and completely performed all of its
obligations under the terms of this Lease through and including the date of such
assignment or subletting.
4. Tenant having reimbursed to Landlord all reasonable
costs and attorneys fees incurred by Landlord in conjunction with the processing
and documentation of any such requested subletting, assignment or encumbrance,
not to exceed Seven Hundred Fifty Dollars ($750.00) per request.
5. Tenant having delivered to Landlord a complete and fully
executed duplicate original of such sublease agreement, assignment or
encumbrance (as applicable) and all related agreements.
E. EFFECT OF LANDLORD'S CONSENT. No subletting, assignment or
encumbrance, even with the consent of Landlord, shall relive Tenant of its
personal and primary obligation to pay rent and to perform all of the
obligations to be performed by Tenant hereunder. Consent by Landlord to one or
more assignments or encumbrances of Tenant's interest in this Lease or to one or
more subletting of the Premises shall not be deemed to be a consent to any
subsequent assignment, encumbrance or subletting. If Landlord shall have been
ordered by a court of competent jurisdiction to consent to a requested
assignment or subletting, or such an assignment or subletting shall have been
ordered over the objection of Landlord, such assignment or subletting shall not
be binding between the assignee (or sublessee) and Landlord until such time as
all conditions set forth in Subparagraph D above have been fully satisfied
(to the extent not then satisfied) by the assignee or sublessee.
F. Tenant shall be entitled to retain all excess rents received in
connection with any assignment or sublet approved by Landlord, or otherwise
permitted without Landlord's consent pursuant to this Paragraph. Also,
notwithstanding anything to the contrary contained in this Lease, Tenant,
without
Page 25 of 33
26
Landlord's prior written consent, may sublet the Premises or assign this Lease
to: (i) a subsidiary, affiliate, franchisee, division or corporation
controlling, controlled by or under common control with Tenant; (ii) a successor
corporation related to Tenant by merger, consolidation, non-bankruptcy
reorganization or government action; or (iii) a purchaser of substantially all
of Tenant's assets.
23. LIMITATION ON LANDLORD'S LIABILITY AND RELEASE.
A. LIMITATION ON LANDLORD'S LIABILITY AND RELEASE. Landlord shall
not be liable to Tenant for, and Tenant hereby releases Landlord and its
partners and officers from, any and all liability, whether in contract, tort or
on any other basis, for any injury to or any damage sustained by Tenant, its
agents, employees, contractors or invitees, any damage to Tenant's property: or
any loss to Tenant's business, loss of Tenant's profits or other financial loss
of Tenant resulting from or attributable to the condition of, the management of,
the maintenance of, or the protection of the Premises, the Building or the Land,
including, without limitation, any such injury, damage or loss resulting from
(i) the failure, interruption, rationing or other curtailment or cessation in
the supply of electricity, water, gas or other utility service to Building or
the Premises; (ii) the vandalism or forcible entry into the Building or the
Premises; (iii) the penetration of water into or onto any portion of the
Premises through roof leaks or otherwise; (iv) the failure to provide security
and/or adequate lighting in or about the Building or the Premises; (v) subject
to the provision of Paragraph 2.A.2. the failure of any mechanical systems to
function properly (such as the HVAC systems); or (vi) the blockage of access to
any portion of the Building or the Premises, except to the extent such damage
was caused by (A) Landlord's negligence or willful misconduct, or that of
Landlord's agents, employees, contractors or invitees, or (B) Landlord's failure
to perform an obligation expressly undertaken pursuant to this Lease but only if
Tenant shall have given Landlord prior written notice to perform such obligation
and Landlord shall have failed to perform such obligation within thirty (30)
days (or, if the obligation is not capable of being cured within thirty (30)
days, Landlord fails to commence to cure within the thirty (30) day period or
thereafter fails to diligently pursue the cure to completion) following receipt
of written notice from Tenant to so perform such obligation.
24. HOLDING OVER. This Lease shall terminate without further notice at the
expiration of the Lease Term, subject to the provisions of Paragraph 36 hereof.
Any holding over by Tenant after expiration shall not constitute a renewal or
extension or give Tenant any rights in or to the Premises except as expressly
provided in this Lease. Any holding over after the expiration with the consent
of Landlord shall be construed to be a tenancy from month to month, at one
hundred fifty percent (150%) of the existing Rent, and shall otherwise be on the
terms and conditions herein specified insofar as applicable.
25. NOTICES. Any notice required or desired to be given under this Lease
shall be in writing with copies directed as indicated below and shall be
personally served or given by mail. Any notice given by mail shall be deemed to
have been
Page 26 of 33
27
given when the return receipt is signed by way of certified or registered U.S.
mail. At the date of execution of this Lease, the address of Landlord is:
PNB Investors
0000 Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
and the address of Tenant is:
Tessera Corporation
0000 Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention:
------------------------------
26. ATTORNEY'S FEES. In the event either party shall bring any action or
legal proceeding for damages for an alleged breach of any provision of this
Lease, to recover rent, to terminate the tenancy of the Premises, or to enforce,
protect or establish any term or covenant of this Lease or right or remedy of
either party, the prevailing party shall be entitled to recover as a part of
such action or proceedings, reasonable attorneys' fees and court costs, for
appeal, as may be fixed by the court or jury.
27. NONASSIGNMENT. Landlord's waiver or consent to any subletting hereunder
shall not relieve Tenant from any obligation under this Lease unless the consent
shall so provide.
28. SUCCESSORS. The covenants and agreements contained in this Lease shall
be binding on the parties hereto and on their respective successors in interest.
29. MORTGAGEE PROTECTION. In the event of any default on the part of
Landlord, of which Tenant is made aware, Tenant will use its reasonable efforts
to give notice by registered or certified mail to any beneficiary of a deed of
trust or mortgagee of a mortgage, encumbering the Premises whose address shall
have been furnished it, and shall offer such beneficiary or mortgagee a
reasonable opportunity to cure the default, including time to obtain possession
of the Premises by power of sale or judicial foreclosure, if such should prove
necessary to effect a cure.
30. LANDLORD LOAN OR SALE. Tenant agrees promptly but no later than thirty
(30) days following request by Landlord to (A) execute and deliver to Landlord
any documents, including estoppel certificates presented to Tenant by Landlord,
(i) certifying that this Lease is unmodified and in full force and effect, 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 if
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28
there are uncured defaults, stating the nature and status of such defaults, and
(iii) evidencing the status of the Lease as may be required either by a lender
making a loan to Landlord to be secured by deed of trust or mortgage covering
the Premises or a purchaser of the Premises from Landlord and (B) to deliver to
Landlord the current financial statements of Tenants certified by Tenant to be
true and correct, including a balance sheet for the most recent prior fiscal
year all prepared in accordance with generally accepted accounting principles
consistently applied. The only financial statement that Tenant shall be required
to deliver to Landlord pursuant to this clause shall be a current balance sheet
with the opinion of a certified public accountant, if available, and Tenant
shall only be required to deliver such financial statement when Landlord is
engaged in negotiations for a bona fide sale or refinancing of the Premises.
Landlord shall keep confidential all such financial information received from
Tenant except as such information is required to be disclosed in connection with
the proposed sale or refinancing. Tenant's failure to deliver an estoppel
certificate within thirty (30) days following such request shall be conclusive
upon Tenant (a) that this Lease is in full force and effect, without
modification except as may be represented by Landlord (b) that there are now no
uncured defaults in Landlord's performance and (c) that no rent has been paid in
advance except those that are set forth in this Lease. Landlord agrees to secure
from Lender, a non-disturbance agreement to the effect that so long as Tenant is
not in material, uncured default of this lease, Tenant shall be allowed
undisturbed possession of the Premises according to the terms, covenants and
conditions contained herein.
31. SURRENDER OF LEASE NOT MERGER. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not work a merger and
shall, at the option of Landlord, terminate all or any existing subleases or
subtenants, or operate as an assignment to Landlord of any or all such subleases
of subtenants.
32. WAIVER. The waiver of Landlord or Tenant of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition or any subsequent breach of the same or any
other term, covenant or condition herein contained.
33. WASTE. QUIET CONDUCT AND ENJOYMENT. Tenant shall not commit, or suffer
to be committed, any waste upon the Premises, or any nuisance, or other acts or
things which may disturb, the quiet enjoyment of any occupants of neighboring
properties. Landlord shall not unlawfully disturb the quiet enjoyment of
Tenant.
34. SIGNS. Tenant shall not place or permit to be placed any sign or
decoration on the land or the exterior of the Building, including the roof,
without the prior written consent of Landlord, which shall not be unreasonably
withheld or delayed. Tenant, upon notification by Landlord shall immediately
remove any sign or decoration that Tenant has placed or permitted to be placed
on the Premises without the prior written consent of Landlord, which shall not
be
Page 28 of 33
29
unreasonably withheld or delayed and if Tenant fails to so remove such sign or
decoration within five (5) days after Landlord's request, Landlord may enter
upon the Premises and remove said sign or decoration and Tenant agrees to pay to
Landlord, as additional rent, the cost of such removal. Tenant shall be allowed
to have an identification sign in the common area landscaping area, of at least
32 square feet, such sign to be placed on a sign platform already in place on
the Land. Such sign shall conform to all municipal codes and' be approved by
Landlord prior to installation.
35. WAIVER OF SUBROGATION. Landlord hereby releases Tenant and Tenant hereby
releases Landlord and their respective officers, agents, employees and servants,
from any and all claims and demands for damage, loss, expense or injury to the
Premises, or to the furnishings and fixtures and equipment or inventory or other
property of either Landlord or Tenant in, about, or upon the Premises, as the
case may be, which is caused by or results from perils, events or happenings
which are the subject of insurance carried by the Landlord or Tenant and in
force at the time of any such loss; provided, however, that such waiver shall be
effective only to the extent permitted by the insurance covering such loss and
to the extent such insurance is not prejudiced thereby or the expense of such
insurance is not thereby increased.
36. OPTION TO RENEW.
A. Provided that Tenant has not been in material default under the
terms of this Lease beyond applicable cure periods, Tenant shall have one (1)
option to renew the term of this Lease, the option being for the term of five
(5) additional years. The option shall be exercised only by written notice
delivered to Landlord at least one hundred twenty (120) days prior to the
expiration date of Lease Term. In all respects, the terms, covenants and
conditions of this Lease shall remain unchanged during the option period, except
that the rental amount shall be adjusted at the commencement of the option term
in accordance with paragraph B below.
B. For purposes of adjusting the rental amount during the option
term, the following shall apply:
1. "Index" shall mean the consumer price index for all
urban consumers for the San Francisco/Oakland metropolitan areas as published by
the United States Department of Labor, Bureau of Labor Statistics (1982-84).
2. "Initial Index" shall mean the index existing at the
commencement date of the Lease term hereof.
3. "First Option Index" shall mean the index existing at
the commencement of the first option period.
4. Commencing with the first day of the option period of
this lease, the monthly installment shall be increased to the sum equal to the
product obtained by multiplying the monthly installment paid during the first
five year period of the lease term hereof (1st through 60th month) by the
quotient obtained by dividing the Index at the commencement of the 1st month of
the lease term hereof into the first option Index, provided, however, that in no
event shall the monthly installment paid during the first option period be more
than 150% of the
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30
monthly installment paid during the 1st through 60th month of the lease term
hereof, or less than, the monthly installment paid during the 60th through the
120th month of the lease term hereof.
If at the commencement of the Option Period, the Department of
Labor is not maintaining such Consumer Price Index tables, then the percentage
of base so indicated by the United States government tables then most nearly
corresponding thereto, shall be used for computing the increase in the Monthly
Installment. If the parties are unable to agree as to the tables which shall be
used for such calculation, the matter shall be resolved by arbitration
administered by and in accordance with the rules of the American Arbitration
Association in San Jose, California, using one arbitrator acceptable to Landlord
and Tenant, provided that the arbitrator selected have at least ten (10) years
experience in real estate development or real estate appraisal business.
37. GENERAL.
A. The paragraph headings used in this Lease are for the purposes
of convenience only. They shall not be construed to limit or extend the meaning
of any part of this Lease.
B. The term Landlord as used in this Lease, so far as the covenants
or obligations on the part of Landlord are concerned, shall be limited to mean
and include only the owner at the time in question of the fee title of the
Premises, and in the event of any transfers or transfers of the title of such
fee the Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall after the date of such transfer or
conveyance be automatically freed and relieved of all liability with respect to
performance of any covenants or obligations on the part of Landlord contained in
this Lease, thereafter to be performed; provided, that any funds in the hands of
Landlord or the then grantor at the time of such transfer, in which Tenant has
an interest, shall be turned over to the grantee and further provided that a
subsequent Landlord is capable and able to perform according to the terms and
obligations contained in this Lease. It being intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject as
aforesaid, be binding upon each Landlord, its heirs, personal representatives,
successors and assigns only during its respective period of ownership.
C. Any executed copy of this Lease shall be deemed an original for
all purposes. Notwithstanding the foregoing, this Lease may be executed in
counterparts, each of which, when taken together, shall constitute one
fully-executed document.
D. Time is of the essence of the performance of each term, covenant
and condition of this Lease.
E. In case any one or more of the provisions contained herein,
shall for any reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not effect any
provision of this Lease, but this Lease shall be construed as if such invalid,
illegal or unenforceable provision had not been contained herein. This Lease
shall be construed and enforced in accordance with the laws of the State of
California.
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F. Whenever the Lessor's prior consent, approval or permission is
referred to herein as a condition or requirement, same shall not be unreasonably
withheld.
G. All references to attorney's fees, costs and expenses herein
shall be deemed to be reasonable attorney's fees, costs and expenses.
H. Landlord's liability under the terms of this Lease insofar as
such liability relates to the obligation of Landlord to perform under the terms
and conditions herein contained shall be limited to the net worth of the
partnership so long as such net worth is equal to or better than that which
exists at the present time, and shall not extend to the personal assets of the
individuals hereunder.
38. CORPORATE AUTHORITY BROKERS ENTIRE AGREEMENT.
A. Corporate Authority. If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
Tenant is validly formed and duly authorized and existing, that Tenant is
qualified to do business in the State in which the leased Premises are located,
that Tenant has the full right and legal authority to enter into this Lease,
that he or she is duly authorized to execute and deliver this Lease on behalf of
Tenant in accordance with the bylaws and/or a board of directors' resolution of
Tenant, and that this Lease is binding upon Tenant in accordance with its terms.
If Landlord so requests, Tenant shall, within thirty days after execution of
this Lease, deliver to Landlord a certified copy of the resolution of its board
of directors authorizing or ratifying the execution of this Lease.
B. BROKERAGE COMMISSIONS Landlord and Tenant warrant to the other
that neither has had any dealings with any real estate broker(s), leasing
agent(s), finder(s), or salesmen, with respect to the lease by Tenant of the
Premises pursuant to this Lease, and that each will indemnify, defend with
competent counsel, and hold the other harmless from any liabilities for the
payment of any real estate brokerage commissions, leasing commissions or
finder's fees claimed by any real estate broker(s), leasing agent(s), finder(s)
or salesmen to be earned or due and payable by reason of the indemnifying
party's agreement or promise (implied or otherwise) to pay (or have Landlord
pay) a commission or finder's fee by reason of Tenant's leasing the Premises.
C. ENTIRE AGREEMENT. This Lease, the Exhibits and the Addenda,
which Exhibits and Addenda are by this reference incorporated herein, constitute
the entire agreement between the parties, and there are no other agreements,
understandings or representations between the parties relating to the lease by
Landlord of the Leased Premises to Tenant, except as expressed herein. No
subsequent changes, modifications or additions to this Lease shall be binding
upon the parties unless in writing and signed by both Landlord and Tenant.
D. LANDLORD'S REPRESENTATIONS. Tenant acknowledges that neither
Landlord nor any of its agents made any representations or warranties respecting
the Project, the Building or the Leased Premises, upon which Tenant relied in
entering into this Lease, which are not expressly set forth in this Lease.
Tenant further acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for Tenant's
intended use under existing Law or (ii) the suitability of the Leased Premises
for
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the conduct of Tenant's business or (iii) the exact square footage of the Leased
Premises, and that Tenant relied solely upon its own investigations respecting
said matters.
39. WAIVER OF SUBROGATION. Notwithstanding anything to the contrary
contained in this Lease, the parties hereto release each other and their
respective agents, employees, successors, assigns and subtenants from all
liability for injury to any person or damage to any property that is caused by
or results from a risk which is actually insured against, which is required to
be insured against under this Lease or which would normally be covered by the
standard form of full replacement value "all risk, extended coverage" casualty
insurance, without regard to the negligence or willful misconduct of the entity
so released. Each party shall use its best efforts to cause each insurance
policy it obtains to provide that the insurer thereunder waives all right of
recovery by way of subrogation as required herein in connection with any injury
or damage covered by the policy. If the insurance policy cannot be obtained with
the waiver of subrogation, or if the waiver of subrogation is available only at
additional cost and the party for whose benefit the waiver is not obtained does
not pay the additional cost, then the party containing the insurance immediately
shall notify the other party of that fact.
40. LIGHTING - SEISMIC SUPPORTS. Not later than sixty (60) days after the
Commencement Date, Landlord, at its sole cost and expense, shall ensure that any
fluorescent lighting in the Premises that is attached to false ceilings shall be
in compliance with all applicable state and local building and seismic codes and
regulations.
41. PARKING LOTS. Landlord and Tenant acknowledge that draining in the
parking lots surrounding the Building is poor, and that during the rainy season
the parking lots are flooded, making them inaccessible. Landlord shall use
reasonable, good faith efforts, at no cost to Tenant, to work with the local or
regional governmental authorities to facilitate satisfactory draining of the
parking lots.
42. DAMAGED LAB AREA(S). Landlord and Tenant acknowledge that Raychem
Corporation, the previous tenant in the Additional Space, is responsible,
pursuant to its lease with Landlord's predecessor-in-interest, for the
restoration of the damaged laboratory and adjacent areas located in the
Additional Space. Not later than forty five (45) days after the Commencement
Date, Landlord shall have obtained from Raychem Corporation restoration of the
damaged area(s) to the reasonable satisfaction of Tenant, or, in the
alternative, Landlord shall provide to Tenant the monetary equivalent necessary
to restore the damaged areas to Tenant's reasonable satisfaction.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
respective dates below set forth with the intent to be legally bound thereby as
of the Effective Date of this Lease.
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AS LANDLORD: AS TENANT:
PNB INVESTORS, A Limited TESSERA CORPORATION
Partnership
By: /s/ G. XXXXXX XXXXXXXX By: /s/ [SIGNATURE ILLEGIBLE]
---------------------------- ----------------------------
Title: General Partner Title: President & CEO
By: By:
---------------------------- ----------------------------
Title: Title:
---------------------------- ----------------------------
Dated: 5-24-95 Dated: 5-16-95
If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. This Lease must
be executed by the chairman of the board, president or vice president, and the
secretary, assistant secretary, the chief financial officer or assistant
treasurer, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event a certified copy of the bylaws or a certified
copy of the resolution, as the case may be, must be attached to this Lease.
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EXHIBIT B
SITE PLAN
35
Tessera Additional Space Plan
