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Exhibit 10-15
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COMPOSITE COPY
LEASE
THIS LEASE, dated August 8, 1990, is made between Bourns, Inc., a
California corporation ("Landlord"), and Precision Monolithics, Inc., a
California corporation ("Tenant").
Recitals:
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WHEREAS, pursuant to the terms of the Stock Purchase Agreement dated August
8, 1990 (the "SPA") by and between Landlord and Analog Devices, Inc. ("Analog"),
Analog is acquiring all of the stock of Tenant; and
WHEREAS, the Premises have been conveyed to Landlord with the intention of
leasing such Premises back to Tenant, upon the terms and conditions of this
Lease; and
WHEREAS, Landlord has agreed in the SPA to retain all responsibilities and
obligations to continue and complete a "VOC Remediation Program" (as defined in
the SPA); and
WHEREAS, pursuant to the SPA, Landlord has retained responsibility and
liability for certain "Excluded Liabilities" (as defined in the SPA) with
respect to obligations for all of the costs, charges, obligations, penalties and
liabilities arising out of or in connection with "Environmental Liabilities" (as
defined in the SPA); and
WHEREAS, the parties are entering into this Lease Agreement, as
contemplated by the SPA.
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements set forth herein and in the SPA and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
Article 1. PREMISES
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord,
subject to all terms and conditions of this Lease, those certain premises
commonly known as 0000 Xxxxx Xxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxxxx consisting of
approximately 5 acres and including two buildings containing approximately
72,800 square feet of
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rentable area, all building improvements and fixtures attached thereto and all
easements appurtenant thereto (the "Premises").
A legal description of the Premises is attached hereto as Schedule A.
Article 1A. ENVIRONMENTAL MATTERS
1A.1 Landlord acknowledges its continuing obligations under the SPA for the
Excluded Liabilities with respect to the Environmental Liabilities and the VOC
Remediation Program (all as defined in the SPA and incorporated herein by
reference). To the extent that an obligation of Tenant under this Lease is in
conflict with or is inconsistent with an obligation of Landlord under the SPA
with respect to the Excluded Liabilities, with respect to the Environmental
Liabilities and the VOC Remediation Program, the provisions of the SPA shall
prevail over the provisions of the Lease, and Landlord's obligation shall
supersede and be substituted for the conflicting or inconsistent obligation of
the Tenant.
1A.2 Landlord has disclosed to Tenant the presence of asbestos and
asbestos-containing materials ("Asbestos") on and in the Premises. Landlord
represents and warrants to Tenant that the condition of the Asbestos on the
Premises is not in violation of any applicable law, rule or regulation as of the
date of this Lease. To the extent that Tenant's use of the Premises causes the
condition of the Asbestos to be in violation of any applicable legal
requirement, Tenant shall be responsible for all costs, expenses and liabilities
associated with the encapsulation or removal of the affected Asbestos. Except to
the limited extent set forth in the immediately preceding sentence, Landlord
shall be responsible for the costs and expenses incurred by Tenant at any time
during the Term of the Lease, or thereafter, in connection with the removal or
encapsulation of the Asbestos. Landlord acknowledges that Tenant may incur such
costs and expenses as a result of any of the following:
(a) any action by any governmental authority requiring the encapsulation or
removal of any Asbestos from the Premises;
(b) any action by any governmental authority in lieu of removal or
encapsulation, requiring cessation or curtailment of Tenant's business activity
in all or any portion of the Premises as a result of the presence of Asbestos.
1A.3 Tenant shall have the right to terminate this Lease by notice to
Landlord upon the occurrence of any of the following:
(a) any action by any governmental authority requiring cessation or
curtailment of Tenant's business activity in all or any portion of the
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Premises as a result of any Environmental Liabilities or the presence
of Asbestos on or in the Premises; or
(b) any breach by Landlord of any of its obligations under this Article 1A.
Tenant shall give Landlord notice of the occurrence of an event giving
Tenant the right to terminate. If Landlord fails to cure such condition within
thirty (30) days after such written notice, then Tenant may terminate this Lease
by notice to Landlord; provided, however, that if the nature of such default is
such that the same cannot reasonably be cured within such thirty (30) day
period, Tenant shall not have the right to terminate if Landlord shall within
such period commence such cure and thereafter diligently prosecute the same to
completion.
1A.4 Landlord shall reimburse Tenant for any and all capital costs and
expenses incurred by Tenant, in excess of $407,500.00, in connection with the
improvements to the holding tank, vault and pipeline for the wastewater fluoride
treatment system serving the Premises ("the Facility") as may be necessary to
bring the Facility into full compliance with any applicable laws and regulations
in effect as of the date of this Lease; provided, that all such improvements are
made within twelve (12) months after the date of this Lease. In the event Tenant
is required to obtain any permits for the Facility, Landlord shall cooperate
with Tenant in obtaining all such permits.
1A.5 Landlord represents and warrants to Tenant that, as of the date of
this Lease, the ventilation ducts on or in the Premises are in compliance with
applicable laws and regulations. In the event of any breach of the foregoing
representation, Landlord shall pay for all costs and expenses incurred by Tenant
in bringing such ducts into compliance with all such laws and regulations.
1A.6 Landlord and its agents and employees shall have the right to enter
the Premises for purposes of complying with its obligations under the SPA and
this Article 1A; provided, however, that Landlord shall at all times use its
reasonable efforts to avoid or minimize any interference or disruption to
Tenant's business as a result of such entry. Tenant agrees to Cooperate with and
aid and assist Landlord as reasonably necessary in fulfilling Landlord's
obligations under the SPA, as referenced in Section 1A.1, at no out-of-pocket
cost or expense, or liability to Tenant.
Article 2. TERM
2.1 The Initial Term of this Lease, unless sooner terminated as provided
herein, shall be five (5) years, commencing on August 8, 1990 (the "Commencement
Date").
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2.2 Provided there exists no uncured default by Tenant under this Lease,
Tenant shall have the option to extend this Lease for three (3) successive terms
of five (5) years each (the "Option Terms"). Tenant shall exercise its option
for each Option Term, if at all, by written notice to be given to Landlord no
later than nine months prior to expiration of the Initial Term or, if Tenant at
the time of such extension occupies the Premises pursuant to the earlier
exercise of an Option Term, the then-existing Option Term. All references in
this Lease to the Term of this Lease shall mean, where appropriate, the Initial
Term as extended by the exercise of the Option Terms. All of the terms and
provisions of this Lease shall be applicable equally during any Option Term,
except that effective on the commencement date of the second Option Term (the
first day of the eleventh year of the Lease), the provisions of Article 1A and
Section 28A shall be of no further force and effect. Tenant agrees, upon the
request of Landlord, to reexecute the Lease without such provisions.
Article 3. RENT
3.1 Base Rent for the Initial Term shall be Nine Hundred and Twenty
Thousand Dollars ($920,000.00) per annum. Base Rent shall be payable in twelve
(12) equal installments on the first day of each month in advance, except that
the portion of Base Rent payable for the fraction of the month starting with the
Commencement Date shall be paid on the Commencement Date, prorated on the basis
of the actual number of days in said month. If the Initial or any Option Term
hereof ends on a day other than the last day of a month, then the portion of the
Base Rent for the month during which said expiration occurs shall be prorated on
the basis of the actual number of days in said month.
3.2 Base Rent for each Option Term shall be the fair rental value of the
Premises at the inception of such Option Term based on the terms and conditions
of this Lease. The fair rental value for each Option Term shall be determined by
the following process: At least six (6) months prior to the commencement of an
Option Term, Tenant and Landlord shall each notify the other of the Base Rent it
believes represents the fair rental value of the Premises. If at least four (4)
months prior to the commencement of an Option Term, the parties have not agreed
in writing on a Base Rent amount, Landlord and Tenant shall determine the fair
rental value of the Premises by MAI appraisal conducted by Coldwell Banker, or
mutually agreeable equivalent, based on the terms and conditions of this Lease
without, however, taking into account any improvements or alterations to the
Premises constructed at the expense, exclusive of insurance proceeds, of Tenant.
The Base Rent for such Option Term shall be the amount previously proposed by
either party that is closer in amount to the appraised rental value. In the
event that neither Landlord's nor Tenant's estimate of the fair rental value is
closer to the appraised rental value, the Base Rent shall be equal to the
appraised rental value. Neither party shall disclose to the appraiser its
estimate of the fair rental value. The fees and reimbursable expenses
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of such appraiser shall be paid by the party whose estimate prevails. If for any
reason the Base Rent has not been ascertained by the commencement of the Option
Term, Tenant shall pay on account of Base Rent an amount equal to the average of
the two proposed Base Rents until such time as the actual Base Rent shall have
been established.
3.3 Throughout the term of this Lease, Tenant shall pay, as additional
rent, all other amounts of money and charges required to be paid by Tenant under
this Lease, whether or not such amounts of money or charges are designated
"additional rent." As used in this Lease, "rent" shall mean and include all Base
Rent and additional rent payable by Tenant in accordance with this Lease.
3.4 Tenant shall pay all Base Rent under Section 3.1 or Section 3.2 hereof
to Landlord, monthly, in advance, on or before the first day of each and every
calendar month during the term of this Lease and shall pay all additional rent
promptly when due to the person entitled to receive the same. All rent payable
to Landlord shall be paid without deduction or offset, except as otherwise
provided herein, in lawful money of the United States of America at the address
for Landlord set forth on the signature page hereof, or to such other person or
at such other place as Landlord may from time to time designate in writing.
Article 4. NET LEASE
It is the intention of Landlord and Tenant that, except as otherwise
provided herein, the Base Rent payable by Tenant to Landlord during the entire
Term of this Lease shall be absolutely net of all costs and expenses incurred in
connection with the management, operation, maintenance and repair of the
Premises and every part thereof in accordance with this Lease. Subject to
Landlord's obligations under Articles 1A, 11 and 14 hereof, Tenant shall manage,
operate, maintain and repair the Premises and keep the Premises in compliance
with all applicable laws and regulations in accordance with this Lease and shall
pay all costs and expenses incurred in connection therewith before such costs or
expenses become delinquent.
Article 5. TAXES
5.1 Tenant shall pay, prior to delinquency, as additional rent, all
"Property Taxes" (as hereinafter defined) that accrue during or are allocable to
the term of this Lease. Landlord shall promptly deliver to Tenant any statements
or bills received by Landlord with respect to Property Taxes. Tenant shall
receive the benefit of any discount for early payment of such Property Taxes,
even if such taxes are not paid early, if Tenant is prevented from paying the
taxes early due to Landlord's failure to deliver the xxxx to Tenant in a timely
fashion. No later than ten (10) days after
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Landlord delivers to Tenant a request for evidence of payment of any such
amount, Tenant shall deliver to Landlord a receipt or other evidence
satisfactory to Landlord that such xxxx or statement has been paid.
5.2 "Property Taxes" shall mean all taxes, assessments, excises, levies,
fees and charges (and any tax, assessment, excise, levy, fee or charge levied
wholly or partly in lieu thereof or as a substitute therefor or as an addition
thereto) of every kind and description, general or special, ordinary or
extraordinary, foreseen or unforeseen, secured or unsecured, whether or not now
customary or within the contemplation of Landlord or Tenant, that are levied,
assessed, charged, confirmed or imposed by any public or government authority on
or against, or otherwise with respect to, (i) the Premises or any part thereof
or any personal property used in connection with the Premises; (ii) any rent
payable under this Lease, including, without limitation, any gross income tax or
excise tax, levied by any public or government authority with respect to the
receipt of any rent with respect to the Premises, but only to the extent no
exemption, exclusion or abatement is available to Landlord, at no cost or
expense to Landlord, with respect to such tax, or (ii) the possession, leasing,
operation, management, maintenance, alternation, repair, use or occupancy by
Tenant of the Premises, together with all interest, fines and other charges
assessed for the late payment of any thereof. Property Taxes shall not include
net income (measured by the income of Landlord from all sources or from sources
other than solely rent under this Lease), franchise, documentary transfer,
inheritance or capital stock taxes of Landlord, unless levied or assessed after
the Commencement Date against Landlord in whole or in part expressly in lieu of
or as a substitute for any Property Taxes.
5.3 Tenant shall have the right to contest any Property Taxes imposed
against the Premises or any part thereof, provided (i) the same is done at
Tenant's sole cost and expense, (ii) non-payment of such Property Tax will not
subject the Premises or any part thereof to sale or other liability by reason of
such non-payment, (iii) such contest shall not subject Landlord to the risk of
any criminal or civil liability, (iv) Tenant shall provide a bond in form and
substance as required by applicable law, and (v) Tenant pays the amount
determined to be due promptly after the conclusion of such contest. Landlord
agrees to execute and deliver to Tenant any and all documents reasonably
required, and to cooperate with Tenant in every respect, in any such contest,
but without any cost or expense to Landlord. Landlord agrees not to intervene,
compromise or prejudice Tenant's tax abatement or contest case, provided that
Tenant remains at all times in full compliance with this Article 5.
Article 6. SERVICES
Tenant shall, at Tenant's sole cost and expense, arrange and pay for all
utilities required for the conduct of its business. Landlord shall not be in
default hereunder or be liable for any damage or loss directly or indirectly
resulting from, nor shall the
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rent be abated or a constructive or other eviction be deemed to have occurred by
reason of, the installation, use or interruption of use of any equipment in
connection with the furnishing of any of the foregoing services, any failure to
furnish or delay in furnishing any such services, whether such failure or delay
is caused by accident or any condition beyond the control of Landlord or Tenant
or by the making of repairs or improvements to the Premises, or any limitation,
curtailment, rationing or restriction on use of any utility, whether such
results from mandatory governmental restriction or voluntary compliance with
governmental guidelines, unless, with respect to each of the foregoing
conditions, it is due solely to the act or omission of Landlord or its agents or
employees.
Article 7. USE OF PREMISES
Tenant shall use and occupy the Premises for the manufacturing of
semiconductors and activities reasonably related or ancillary thereto and shall
not use or occupy the Premises for any other purpose without the prior written
consent of the Landlord, which approval shall not be unreasonably withheld or
delayed. Tenant's use shall at all times be in compliance with the provisions of
Article 15 hereof. Tenant shall not commit, or suffer to be committed, any act
which (a) is in violation of any insurance requirement which is a condition to
the validity of any insurance policy with respect to the Premises, (b) is in
violation of the terms of any insurance policy, or (C) may cause a cancellation
of any such insurance for the Premises.
Article 8. ACCEPTANCE OF PREMISES
Subject to the obligations of Landlord under Article 1A, the Premises shall
be let in their present condition, i.e. "as is," and subject to any facts which
would be revealed by a survey or physical inspection thereof, the state of title
as it presently exists and all laws, ordinances and restrictions applicable
thereto. Tenant acknowledges that neither Landlord nor any agent of Landlord has
made any representation or warranty with respect to the Premises or with respect
to the suitability or fitness of the Premises or the conduct of Tenant's
business or for any other purpose. Notwithstanding the foregoing sentence,
Landlord does represent that the use of the Premises by Landlord's immediate
predecessor in title was in material conformance with all laws, ordinances and
regulations relating to zoning and land use applicable to the Premises. The
taking of possession or use of the Premises by Tenant for any purpose shall
conclusively establish that the Premises were at such time in satisfactory
condition and in conformity with the provisions of this Lease in all respects.
Nothing contained in this Article 8 shall affect the commencement of the Term of
this Lease or the obligation of Tenant to pay rent hereunder as provided in
Article 3 hereof.
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Article 9. ALTERATIONS
9.1 Tenant shall not make any alterations, additions or improvements in or
to the Premises or any part thereof, or attach any fixtures or equipment
thereto, without Landlord's prior written consent. Landlord's approval shall not
be unreasonably withheld or delayed but may be subject to such conditions as
Landlord may reasonably require. Tenant shall not be required to restore any
alterations, additions or improvements made by Tenant during the Term, unless
such restoration is required by Landlord at the time of such alteration,
addition or improvement. In addition, Tenant may make such alterations,
additions or improvements without Landlord's consent, but with notice to
Landlord, if the total per-project cost of such alterations, additions or
improvements is $200,000.00 or less, and such alterations, additions or
improvements will not affect the structural elements of the Premises, detract
from the fair rental or market value of the Premises or increase the costs of
the remediation contemplated in Article 1A hereof. Tenant will comply with all
applicable codes, laws, ordinances, rules or regulations in connection with any
alterations, additions or improvements. All alterations, additions or
improvements in or to the Premises shall be made by Tenant at Tenant's sole cost
and expense, shall be made expeditiously once work is begun and shall be
completed in a good and workmanlike manner using first class materials. No part
of the Premises shall be demolished unless Landlord has received an acceptable
surety bond assuring reconstruction. Tenant shall, at its expense, provide
builder's risk insurance naming Landlord as an insured during the period of any
construction work.
9.2 All alterations, additions or improvements requiring Landlord's consent
shall be as follows:
(a) Tenant shall submit to Landlord, for Landlord's written approval,
complete plan and specifications for all work to be done by Tenant. Such plans
and specifications shall be prepared by licensed architect(s) and engineer(s)
approved by Landlord, such approval not to be unreasonably withheld or delayed,
shall comply with all applicable codes, ordinances, rules and regulations, shall
be in a form sufficient to secure the approval of all government authorities
with jurisdiction over the Premises, and shall be otherwise satisfactory to
Landlord in Landlord's reasonable discretion. Landlord's failure to respond to a
request for plan approval within thirty (30) days shall be deemed approval of
such plans.
(b) Tenant shall, through Tenant's licensed contractor, perform the work
substantially in accordance with the plans and specifications approved in
writing by Landlord. All material changes in the plans and specifications
approved by Landlord shall be subject to Landlord's prior written approval. Any
such change shall be based upon revised plans and specifications prepared by the
licensed architect(s) and
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engineer(s) approved by Landlord, such approval not to be unreasonably withheld
or delayed.
(c) Tenant shall pay the entire cost of all work (including the cost of all
utilities, permits, fees, taxes, and property and liability insurance premiums
in connection therewith) required to make the alterations, additions or
improvements. Under no circumstances shall Landlord be liable to Tenant for any
damage, loss, cost or expense incurred by Tenant on account of any plans and
specifications, contractors or subcontractors, design of any work, construction
of any work, or delay in completion of any work.
9.3 All improvements, alterations, additions and fixtures (other than trade
fixtures), whether temporary or permanent in character, made in or to the
Premises by Tenant, shall remain the property of Tenant until the expiration or
earlier termination of this Lease, whereupon they shall become part of the
Premises and Landlord's property. All movable furniture, equipment, trade
fixtures, computers, office machines and other personal property of Tenant shall
remain the property of Tenant. Upon the expiration or earlier termination of
this Lease, Tenant shall, at Tenant's expense, remove all such movable
furniture, equipment, trade fixtures, computers, office machines and other
personal property from the Premises and repair all damage caused by such
removal; provided, however, that Tenant shall not be obligated to make any
repairs to wall or floor coverings or otherwise make repairs if Landlord intends
to otherwise demolish or renovate the Premises so that for all practical
purposes, the repairs would be in vain. This Section 9.3 shall survive the
expiration or earlier termination of this Lease.
Article 10. LIENS
Tenant shall promptly discharge or bond off any liens and encumbrances
whatsoever, including mechanics' liens, arising out of any work performed,
materials furnished or obligations incurred by or on behalf of Tenant. Tenant
shall indemnify and hold harmless Landlord from and against any such lien or
claim or action thereon, and reimburse Landlord promptly upon demand therefor by
Landlord for costs of suit and reasonable attorneys' fees incurred by Landlord
in connection with any such claim or actions.
Article 11. MAINTENANCE AND REPAIR
11.1 Landlord shall, throughout the Term, at Landlord's sole cost and
expense (a) make all structural repairs to the Premises including, without
limitation, repairs to the roof, the exterior and load bearing walls, the
structural columns and the foundation, and (b) to the extent required within six
(6) months from the date of this
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Lease, make all capital replacements (not including overhauls or upgrades) to
the plumbing, mechanical, electrical and HVAC systems and equipment
(specifically excluding filters and scrubbers) existing in the Premises as of
the date of this Lease, but only to the extent the cost of each such capital
replacement exceeds $10,000. Landlord shall not be responsible for the matters
listed in (a) or (b) above to the extent any such structural repair or capital
replacement is made necessary by any act or omission of Tenant, its agents or
employees.
11.2 Except as provided in Section 11.1, Tenant shall, at Tenant's sole
cost and expense, and at all times, keep and maintain the Premises and every
part thereof, in good working order and condition and shall make all normal and
ordinary repairs and replacements which may be necessary to keep the Premises in
good working order and condition, subject to ordinary wear and tear. Tenant, in
keeping the Premises in good order, condition and repair, shall exercise and
perform good maintenance practices. Tenant shall at all times maintain the
current slope, grade and drainage of the land included in the Premises. Landlord
and Tenant expressly waive the benefit of Section 1942 of the California Civil
Code, as the same may be amended in the future, or any statutory provision
enacted in lieu thereof.
Article 12. ENTRY BY LANDLORD
Landlord shall have the right to enter the Premises at any time during an
emergency and at reasonable times upon prior notice to (i) inspect the Premises,
(ii) exhibit the Premises to prospective purchasers or lenders, or, within 6
months prior to the expiration of the Term, prospective tenants, (iii) determine
whether Tenant is performing all of Tenant's obligations under any portion of
this Lease, (iv) post notices of nonresponsibility, (v) perform any inspection
or action requested or ordered by any governmental authority and (vi) make any
repairs to the Premises which, following requisite notice hereunder, Tenant has
failed to perform. Except to the extent caused by the gross negligence or wilful
misconduct of Landlord or Landlord's agents or employees, Tenant waives all
claims for damages for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises or
any other loss occasioned by such entry; provided that Landlord shall have used
reasonable efforts to avoid or minimize any disturbance or disruption to
Tenant's business.
Article 13. LIMITATIONS ON LANDLORD'S LIABILITY; INDEMNITY;
INSURANCE
13.1 Landlord shall not be liable to Tenant under this Lease, nor shall
Tenant be entitled to terminate this Lease or to any abatement of rent, for any
damage to or loss or theft of any property or for any bodily or personal injury,
illness or death of
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any person in, on or about the Premises or for any loss to Tenant's business
arising at any time and from any cause whatsoever (except to the extent caused
by the gross negligence or wilful misconduct of Landlord or its agents or
employees). Tenant waives all claims against Landlord arising from any liability
described in this Section 13.1 (except to the extent caused by the gross
negligence or wilful misconduct of Landlord or its agents or employees). This
Section 13.1 shall not affect Landlord's obligations under Article 1A.
13.2 Subject to Article 1A and Section 11.1 hereof, Tenant shall indemnify,
hold harmless and defend Landlord, its officers, directors, stockholders,
partners, employees, agents and representatives and any other party acting on
behalf of Landlord against all claims, demands, causes of action, liabilities,
damages, losses, costs and expenses, including reasonable attorneys' fees and
disbursements, arising from or related to any use or occupancy of the Premises,
or any condition of the Premises, or any default in the performance of Tenant's
obligations, or any damage to any property (including property of employees and
invitees of Tenant) or any bodily or personal injury, illness or death of any
person (including employees and invitees of Tenant) occurring in, on or about
the Premises or any part thereof arising at any time and from any cause
whatsoever (except to the extent caused by the negligence or misconduct of
Landlord or its agents or employees) or occurring outside the Premises when such
damage, bodily or personal injury, illness or death is caused by any act or
omission of Tenant or its agents, officers, employees, contractors, invitees or
licensees. This Section 13.2 shall survive the expiration or earlier termination
of this Lease with respect to any damage, bodily or personal injury, illness or
death occurring prior to such termination.
13.3 Tenant shall at all times, at its sole cost and expense, obtain, or
cause Analog to obtain, pay for and maintain in full force and effect such
insurance policy or policies as Landlord may from time to time reasonably
request, including the following:
(a) "All-Risk" property (including boiler and machinery) insurance, on a
replacement cost basis covering the Premises in an amount no less than the full
replacement cost thereof, excluding insurance coverage for the peril of
earthquake, including the costs of demolition and increased cost of construction
and contingent liability arising out of the need to comply with any building
code, law or regulation, to the extent the loss is due to direct physical loss
to the Premises from an insured peril. Loss covered by such insurance shall be
adjusted by Tenant subject to approval of Landlord, such approval not to be
unreasonably withheld or delayed, and the proceeds of such insurance shall be
payable solely to Landlord and Tenant or any Lender designated as mortgagee or
loss payee. Landlord shall be designated as named insured in such policies and
any Lender designated by Landlord shall be included as mortgagee or loss payee
relative to all real property. All risk property policies may provide for
reasonable deductibles (which at the inception of this Lease
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is $100,000). To the extent Landlord maintains insurance coverage against the
peril of earthquake with respect to the Premises, Tenant agrees to reimburse
Landlord for the annual premium, up to a maximum of $13,000.00 per year.
(b) Commercial general liability in respect to occurrences arising out of
or relating to the operation, maintenance and use of the Premises, and umbrella
liability insurance covering Tenant and Landlord as named insureds against
claims arising out of liability for bodily injury and death and personal injury
and advertising injury and property damage occurring in and about the Premises
and otherwise resulting from any acts and operations of Tenant and Landlord with
limits not less than the existing or future limits of such insurance generally
purchased by Tenant with respect to any other premises or operations of Tenant
but in no event less than a total combined single limit of $10,000,000 per
occurrence and $50,000,000 annual general aggregate. Such insurance may provide
for a reasonable deductible (which at the inception of this Lease is $100,000).
If commercially and reasonably available to Tenant, such policies shall be in
occurrence form and cross liability and severability of interests shall apply
(with the exception of limits of liability)
(c) Workers' compensation and employer's liability insurance in the state
in which the Premises are located. The total limits of the employer's liability
coverage shall not be less than the amounts required by applicable law.
(d) Such other appropriate endorsements or extensions of coverage as would
be deemed reasonable for a prudent landlord to require with respect to other
similar properties, provided they are available at a commercially reasonable
cost.
(e) In the event that any deductible or otherwise self-insured retention
amounts are applicable with respect to any loss or claim under any of the
insurance described in this Article 13 or otherwise, all such amounts shall be
entirely paid by Tenant.
13.4 All insurance required under this Article 13 and all renewals thereof
shall be issued by good and responsible companies rated not less than "A; 25
million policy holder surplus" by Best's Insurance Guide and qualified to do and
doing business in California. Each policy shall expressly provide that the
policy shall not be cancelled or altered without thirty (30) days' prior written
notice to Landlord and any designated Lender; provided that Tenant shall use its
reasonable efforts to have each policy expressly provide that it shall not be
cancelled or altered without sixty (60) days' prior written notice to Landlord
and any designated Lender. All insurance under Articles 13.3(a) and 13.3(b)
shall be primary and noncontributing with any insurance which may be carried by
Landlord. The term "Lender" means any institutional holder of a first or second
mortgage lien encumbering the Premises or any part thereof.
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13.5 The insurance required by this Lease, at the option of Tenant, may be
effected by blanket policies, umbrella policies or both issued to Tenant
covering the Premises and other properties owned or leased by Tenant, provided
that the policies otherwise comply with the provisions of this Lease and
allocate to the Premises the specified coverage. Tenant shall furnish to
Landlord or any Lender of Landlord certificates of insurers, evidencing the
existence of such policies and Tenant shall also provide copies certified by
Tenant of such policies in which Landlord has an insurable interest as soon as
such policies are received from the insurance companies upon Landlord's request
with schedules thereto attached showing the amount of insurance afforded by such
policies applicable to the Premises. If Tenant fails to insure or fails to
furnish to Landlord upon notice to do so any such certificate thereof as
required, Landlord shall have the right to effect such insurance for the benefit
of Tenant or Landlord or any Lender or any or all of them, and all premiums paid
by Landlord shall be payable by Tenant as additional rent on demand.
13.6 Landlord covenants that any person entering the Premises to perform
physical work or activity on the Premises on behalf of Landlord shall be covered
by comprehensive general liability insurance with a combined single limit of not
less than $1,000,000, and by workmen's compensation insurance, if and to the
extent required by law. Landlord shall use reasonable efforts to assure that all
other persons entering on the Premises on behalf of Landlord are similarly
insured.
Article 14. HAZARDOUS SUBSTANCES
14.1 Tenant shall not engage in any activity in, on or about the Premises
involving the generation, transportation, use, storage, spill, release or
disposal of Hazardous Substances without the express prior written consent of
Landlord and compliance in a timely manner (at Tenant's sole cost and expense)
with all Applicable Law (as defined in Article 15). "Hazardous Substances" as
used in this Lease shall mean any substance or material, or mixture or waste
containing such substance or material, regardless of quantity or concentration,
which is or may be (i) subject to regulation under state, federal or local law,
(ii) a basis for liability of Landlord to any governmental agency or third party
under any applicable statute, regulation or common-law theory. Notwithstanding
the foregoing, Tenant may, without Landlord's prior consent, but in compliance
with all Applicable Law, generate, transport, use, store or dispose of Hazardous
Substances on the Premises as is necessary to conduct business, as permitted by
Article 7, on the Premises.
14.2 [Intentionally omitted.]
14.3 As soon as practicable after the date hereof, Landlord shall prepare
and deliver to Tenant a list of certain Hazardous Substances, which shall be
attached to this Lease as SCHEDULE B. Tenant shall, following receipt of such
SCHEDULE B, during
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the Term of this Lease, notify Landlord of (a) any Hazardous Substances not
identified on SCHEDULE B which are located, stored or used by Tenant on the
Premises, and (b) any material increases in the quantity of any Hazardous
Substance listed on SCHEDULE B. Tenant shall use reasonable efforts to notify
Landlord prior to ordering or purchasing any Hazardous Substance not listed on
SCHEDULE B. In addition, Tenant shall notify Landlord of any release of a
Hazardous Substance at the Premises, if and when Tenant determines that such
release is required to be reported to any local, state or federal governmental
authority.
14.4 Subject to Article 1A hereof, Tenant shall indemnify, protect, defend
and hold Landlord, its agents, employees, lenders and ground lessor, if any, and
the Premises, harmless from and against any and all loss of rents and/or
damages, liabilities, judgments, costs, claims, liens, expenses, penalties,
permits and attorney's and consultant's fees arising out of or involving any
Hazardous Substance or storage tank brought onto the Premises by or for Tenant
or under Tenant's control. Tenant's obligations under this Article 14 shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Tenant, and the cost
of investigation (including consultant's and attorney's fees and testing),
removal, remediation, restoration, and/or abatement thereof, or of any
contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Landlord and Tenant shall release Tenant from its obligations
under this Lease with respect to Hazardous Substances or storage tanks, unless
specifically so agreed by Landlord in writing at the time of such agreement.
14.5 Subject to Article 1A, if a release of a Hazardous Substance occurs
for which Tenant is responsible ("Hazardous Substance Condition"), Tenant shall
make the investigation and remediation thereof required by Applicable Law, and
this Lease shall continue in full force and effect, but subject to Landlord's
rights under Articles 21 and 22 hereof. If after sixty (60) days written notice
to Tenant from Landlord of Tenant's obligations under this Section Tenant has
failed to begin investigation and remediation of such Hazardous Substance
Condition, Landlord may, upon thirty (30) days' written notice to Tenant,
terminate this Lease unless Tenant, in such thirty (30) days notice period,
begins investigation and remediation of such Hazardous Substance Condition and
agrees in writing to pay for the investigation and remediation of such Hazardous
Substance Condition at Tenant's sole expense and without reimbursement from
Landlord.
Article 15. TENANT'S COMPLIANCE WITH LAW
15.1 Except as otherwise provided in this Lease, Tenant shall, at Tenant's
sole cost and expense, fully, diligently and in a timely manner, comply in all
respects with all "Applicable Law," which term is used in this Lease to include
all laws, rules,
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regulations, ordinances, and directives or any state, federal or local
governmental authority relating in any manner to the Premises. Tenant shall,
within five (5) days after receipt of Landlord's written request, provide
Landlord with copies of all documents and information, including, but not
limited to, permits, registrations, manifests, applications, reports and
certificates, evidencing Tenant's compliance with any Applicable Law specified
by Landlord, and shall immediately upon receipt, notify Landlord in writing
(with copies of any documents involved) of any threatened or actual claim,
notice, citation, warning, complaint or report pertaining to or involving
failure by Tenant or the Premises to comply with any Applicable Law.
15.2 Notwithstanding Section 15.1, Tenant shall have the right to contest
the validity or applicability to Tenant or to the Premises of any Applicable
Law, provided (i) the same is done at Tenant's sole cost and expense, (ii)
non-compliance with such Applicable Law will not subject the Premises or any
part thereof to sale or other liability by reason of such non-compliance, (iii)
such contest shall not subject Landlord to the risk of any criminal or civil
liability, (iv) Tenant shall provide security in form and amount reasonably
requested by Landlord, taking into account the factors listed in subclauses (i),
(ii) and (iii) above, and (v) Tenant complies with such Applicable Law promptly
after the conclusion of such contest, if determined adversely to Tenant.
Article 16. WAIVER OF SUBROGATION
Any insurance carried by either party with respect to the Premises or
property therein or occurrences thereon shall, if it can be so written without
additional premium or with an additional premium which the other party agrees to
pay, include a clause or endorsement denying to the insurer rights of
subrogation against the other party to the extent rights have been waived by the
insured prior to occurrence of injury or loss. Each party, notwithstanding any
provisions of this Lease to the contrary, hereby waives any rights of recovery
against the other for injury or loss due to hazards covered by such insurance to
the extent of the indemnification received thereunder.
Article 17. ASSIGNMENT AND SUBLETTING
17.1 Except to an entity controlling, controlled by or under common control
with Tenant (an "Affiliate"), or to a successor to Tenant by way of merger,
consolidation or the sale of all or substantially all of Tenant's assets, Tenant
shall not either voluntarily or by operation of law assign, encumber, pledge or
otherwise transfer or hypothecate all or any part of Tenant's leasehold estate
hereunder, or permit the Premises to be occupied by anyone other than Tenant or
an Affiliate, or Tenant's or such Affiliate's employees, or sublet the Premises
or any portion thereof,
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without Landlord's prior written consent, which shall not be unreasonably
withheld or delayed; provided, however, that no one but Tenant, an Affiliate, or
a successor to Tenant by way of merger, consolidation or the sale of all or
substantially all of Tenant's assets, may exercise any Option to extend the Term
of this Lease, so that the occupancy of any sublessee shall be limited to the
balance remaining in the term during which such sublessee's occupancy begins. No
collection or acceptance of rent by Landlord from any person shall be deemed a
waiver of any provision of this Article 17, the acceptance of any assignee or
subtenant as the tenant hereunder or a release of Tenant from any obligation
under this Lease, whether theretofore or thereafter accruing.
17.2 If Tenant desires at any time to assign this Lease or to sublet the
Premises or any portion thereof, it shall first notify Landlord of its desire to
do so and shall submit in writing to Landlord (a) the name of the proposed
subtenant or assignee; (b) the nature of the proposed subtenant's or assignee's
business to be carried on in the Premises; (c) the terms and provisions of the
proposed sublease or assignment, and (d) such financial information as Landlord
may reasonably request concerning the proposed subtenant or assignee.
17.3 At any time within fifteen (15) days after Landlord's receipt of the
information specified in Section 17.2 hereof, Landlord may by written notice to
Tenant elect to (a) consent to the proposed subletting or assignment, in which
event Tenant may within ninety (90) days thereafter, enter into a valid
assignment or sublease of the Premises or portion thereof with such proposed
assignee or sublessee, upon the terms and conditions set forth in the
information furnished by Tenant to Landlord pursuant to Section 17.2 hereof, or
(b) refuse to give its consent, specifying in reasonable detail the reason(s)
therefor.
17.4 No consent by Landlord to any assignment or subletting by Tenant shall
relieve Tenant of any obligation to be performed by Tenant under this Lease,
whether accruing before or after such consent, assignment or subletting. The
consent by Landlord to any assignment or subletting shall not relieve Tenant or
any successor, assignee or subtenant of Tenant, from the obligation to obtain
Landlord's express written consent to any other assignment or subletting. Any
assignment or subletting which is not in compliance with this Article 17 shall
be void and, at the option of Landlord, constitute a default by Tenant
hereunder.
17.5 Each assignee, other than Landlord, shall assume all obligations of
Tenant under this Lease and shall be and remain liable jointly and severally
with Tenant for the payment of the rent, and for the due performance of all the
terms, covenants, conditions and agreements herein contained on Tenant's part to
be performed for the term of this Lease; provided, however, that the assignee
shall be liable to Landlord for rent only in the amount set forth in the
assignment or transfer. No assignment shall be binding on Landlord unless such
assignee or Tenant shall deliver to
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Landlord a counterpart of such assignment and an instrument in recordable form
which contains a covenant of assumption by the assignee satisfactory in
substance and form to Landlord, consistent with the requirements of this Section
17.5, but the failure or refusal of the assignee to execute such instrument of
assumption shall not release or discharge the assignee from its liability as set
forth above.
17.6 The voluntary or other surrender of this Lease by Tenant or a mutual
cancellation hereof shall not work a merger, and shall at the option of
Landlord, terminate all or any existing subleases or subtenancies or operate as
an assignment to Landlord of such subleases or subtenancies.
17.7 Tenant shall reimburse Landlord for Landlord's reasonable costs,
including, without limitation, its attorneys' fees, incurred in conjunction with
the processing and documentation of any assignment, subletting, transfer, change
of ownership or hypothecation of this Lease or Tenant's interest in and to the
Premises, or Tenant's request for Landlord's consent to any thereof.
Article 18. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer or transfers of Landlord's interest in the
Premises, other than a transfer for security purposes only, the transferor shall
be automatically relieved of any and all obligations and liabilities on the part
of Landlord accruing solely under this Lease from and after the date of such
transfer.
Article 19. DAMAGE OR DESTRUCTION
19.1 If the whole of the Premises or so much thereof as to render the
balance unusable by Tenant shall be destroyed by casualty during the term of
this Lease, either party may terminate this Lease upon fifteen (15) days'
written notice to the other party; provided, however, that all proceeds from
insurance and any deductible or self-insured retention amounts are paid over to
Landlord, or the Lender, if so required. If either party shall give such notice,
then this Lease shall terminate as of the date of such notice with the same
force and effect as if such date were the date originally established as the
expiration date hereof.
19.2 If the Lease is not terminated pursuant to Section 19.1, and if the
proceeds of insurance are made available to Tenant, Tenant shall proceed to
restore the Premises to substantially the condition existing prior to such
casualty, and this Lease shall continue in full force and effect. Tenant shall
not be entitled to any reduction in or abatement of rent by reason of any such
damage.
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19.3 No damage, compensation or claim shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Premises.
19.4 With respect to any damage which Landlord is obligated to repair or
elects to repair, Tenant, as a material inducement to Landlord entering into
this Lease, irrevocably waives and releases its rights under the provisions of
Sections 1932(2) and 1933(4) of the California Civil Code.
Article 20. EMINENT DOMAIN
20.1 If the whole of the Premises or so much thereof as to render the
balance unusable by Tenant shall be taken under power of eminent domain, this
Lease shall automatically terminate as of the date of such condemnation, or as
of the date possession is taken by the condemning authority, whichever is
earlier. No award for any such partial or entire taking shall be apportioned,
and Tenant hereby assigns to Landlord any award which may be made in such taking
or condemnation, together with any and all rights of Tenant now or hereafter
arising in or to the same or any part thereof; provided, however, that nothing
contained herein shall be deemed to give Landlord any interest in or to require
Tenant to assign to Landlord any award made to Tenant for its relocation
expenses, the taking of personal property and fixtures belonging to Tenant, the
interruption of or damage to Tenant's business and/or for Tenant's unamortized
cost of leasehold improvements.
20.2 In the event of a partial taking which does not result in a
termination of this Lease, rent shall be abated in proportion to that part of
the Premises made unusable by such partial taking.
20.3 No temporary taking (which shall mean a taking for a period of six (6)
months or less), of the Premises and/or of Tenant's rights therein or under this
Lease shall terminate this Lease or give Tenant any right to any abatement of
rent hereunder. Any award made to Tenant by reason of any such temporary taking
shall belong entirely to Tenant and Landlord shall not be entitled to share
therein.
Article 21. DEFAULTS
The occurrence of any one or more of the following shall constitute a
default by Tenant:
(i) The failure by Tenant to pay the Base Rent when due where such
failure continues for more than five (5) days after written notice to Tenant;
provided,
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that such notice shall be in lieu of and not in addition to any notice required
under Section 1161 of the California Code of Civil Procedure;
(ii) The abandonment, as a matter of law, of the Premises by Tenant;
(iii) The failure by Tenant to observe or perform any other provision
of this Lease to be observed or performed by Tenant, where such failure
continues for thirty (30) days after written notice thereof by Landlord to
Tenant; provided, however, that if the nature of such default is such that the
same cannot reasonably be cured within such thirty (30) day period, Tenant shall
not be deemed to be in default if Tenant shall within such period commence such
cure and thereafter diligently prosecute the same to completion; and provided
further, that such notice shall be in lieu of and not in addition to any notice
required under Section 1161 of the California Code of Civil Procedure;
(iv) If Tenant becomes insolvent as defined in the Federal Bankruptcy
Code, admits in writing its insolvency or its present or prospective inability
to pay its debts as they become due, is unable to or does not pay all or any
material portion (in number or dollar amount) of its debts as they become due,
permits or suffers a judgment to exist against it which affects Tenant's ability
to conduct its business in the ordinary course (unless enforcement thereof is
stayed pending appeal), makes an assignment for the benefit of creditors, or any
class thereof, for purposes of effecting a moratorium upon or extension or
composition of its debts, or commences any bankruptcy, reorganization or
insolvency proceeding, or other proceeding under any federal, state or other law
for the relief of debtors;
(v) If Tenant fails to obtain the dismissal, within sixty (60) days
after the commencement thereof, of any bankruptcy, reorganization or insolvency
proceeding, or other proceeding under any federal, state or other law for the
relief of debtors, instituted against it by one or more third parties, or fails
actively to oppose any such proceeding, or, in any such proceeding, defaults or
files an answer admitting the material allegations upon which the proceeding was
based or alleges its willingness to have an order for relief entered or its
desire to seek liquidation, reorganization or adjustment of any of its debts; or
(vi) If any receiver, trustee or custodian is appointed to take
possession of all or any substantial portion of the assets of Tenant, or any
committee of Tenant's creditors, or any class thereof, is formed for the purpose
of monitoring or investigating the financial affairs of Tenant or enforcing such
creditors' rights.
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Article 22. REMEDIES
In the event of any such default, then, in addition to any other remedies
available to Landlord at law or in equity:
22.1 Landlord shall have the right to terminate this Lease and all rights
of Tenant hereunder by giving Tenant written notice of such election to
terminate, in which event Landlord may recover from Tenant:
(i) the worth at the time of award of any unpaid rent which has been
earned at the time of such termination; plus
(ii) the worth at the time of award of any 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 which 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 the award exceeds the amount
of such rental loss which Tenant proves could be reasonably avoided; plus
(iv) any other amount, including attorney's fees and administrative
expenses, necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result therefrom; and
(v) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
For purposes of this Section 22.1, rent, other than the Base Rent, shall be
computed on the basis of the average monthly amount thereof accruing during the
24-month period immediately prior to default, except that if it becomes
necessary to compute such rental before such 24-month period has occurred, then
on the basis of the average monthly amount during such shorter period. As used
in subparagraphs (i) and (ii) above, the "worth at the time of award" shall be
computed by allowing interest at the rate specified in Section 22.5 hereof. For
purposes of subsection (iii) above, the "worth at the time of award" shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).
22.2 Landlord shall have the right, with or without terminating this Lease,
to re-enter the Premises, remove all persons and property from the Premises
pursuant to legal proceedings or any notice provided by law, and without
terminating this Lease, either recover all rent as it becomes due or relet the
Premises or any part
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thereof. Landlord shall use reasonable efforts to relet the Premises. The
rentals actually received by Landlord from such reletting shall be applied
first, to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the costs of such reletting; third, to the costs
of any alterations and repairs to the Premises; fourth, to the payment of rent
due and unpaid hereunder, together with interest thereon and late charges
attributable thereto; and the balance, if any, shall be held by Landlord and
applied in payment of future rent as the same may become due and payable
hereunder. Should any reletting result in the actual payment of rentals at less
than the rent payable during that month by Tenant hereunder, Tenant shall pay
such deficiency to Landlord immediately upon demand therefor by Landlord.
22.3 No re-entry or taking possession of the Premises by Landlord pursuant
to this Article 22 shall be construed as an election to terminate this Lease
unless a written notice of such intention be given to Tenant or unless the
termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord, Landlord may at
any time after such reletting elect to terminate this Lease.
22.4 Notwithstanding anything to the contrary contained elsewhere herein,
if Tenant shall fail to make payment of any obligation under this Lease within
five (5) days after the same becomes due and payable, Tenant acknowledges that
Landlord will incur extra administrative expenses (i.e., in addition to expenses
incident to receipt of timely payment) in connection with the delinquency in
payment. Because the actual damages suffered by Landlord in incurring such extra
administrative expenses would be impracticable or extremely difficult to
ascertain, it is agreed that three percent (3%) of the amount of the delinquent
payment shall be the amount of damages to which Landlord is entitled, upon such
default, in compensation for such extra administrative expenses. Therefore,
Tenant shall, in such event, without further notice, pay to Landlord as
Landlord's sole monetary recovery to cover such extra administrative expenses,
liquidated damages in the amount of three percent (3%) of the amount of such
delinquent payments. In addition to the foregoing, Tenant acknowledges that
Landlord may incur actual damages, in the event of delinquency in payment, in
the amount of the actual cost of funds borrowed by Landlord to replace the
amount of the delinquent payment hereunder. Tenant agrees to pay such actual
damages, to the extent actually incurred by Landlord, to Landlord upon demand.
Nothing contained in this Section 22.4 shall be construed as an express or
implied agreement by Landlord to forbear the collection of any delinquent
payment or be construed as in any way giving Tenant the right, express or
implied, to fail to make timely payment hereunder. The right of Landlord to
receive payment of such liquidated and actual damages, and receipt thereof, are
without prejudice to the right of Landlord to collect such delinquent payments
and any other amounts provided to be paid hereunder, or to declare a default
hereunder.
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22.5 Any amount due from Tenant to Landlord which is not paid when due
shall bear interest at the lesser of twelve (12%) per annum or the maximum rate
or rates from time to time permitted by applicable federal or state law from the
date such payment is due until paid, but the payment of such interest shall not
excuse or cure the failure to make such payment when due.
22.6 If Tenant or Landlord shall bring any action for any relief against
the other, declaratory or otherwise, arising out of or under this Lease,
including any suit by Landlord for the recovery of rent or possession of the
Premises, the losing party shall pay the successful party a reasonable sum for
attorneys' fees in such suit. Such attorneys' fees shall be deemed to have
accrued as of the commencement of such action and shall be paid whether or not
such action is prosecuted to judgment.
Article 23. SURRENDER OF PREMISES; REMOVAL OF PROPERTY
23.1 The voluntary or other surrender of this Lease by Tenant, or a mutual
termination thereof, shall not work a merger, and shall at the option of
Landlord, operate as an assignment to it of any or all subleases or subtenancies
affecting the Premises.
23.2 Upon the expiration of the term of this Lease, or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in as good order and condition as the same are now or
hereafter may be improved by Landlord or Tenant, ordinary wear and tear and
repairs which are Landlord's obligation excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, all furniture, equipment, business and trade fixtures, free-standing
cabinet work, movable partitions and other articles of personal property owned
by Tenant and all similar articles of any other persons claiming under Tenant
unless Landlord exercises its option to have any subleases or subtenancies
assigned to it, and Tenant shall repair all damage to the Premises resulting
from such removal.
23.3 Whenever Landlord shall re-enter the Premises pursuant to Article 22
hereof or as otherwise provided in this Lease, any property of Tenant not
removed by Tenant upon the expiration of the term of this Lease (or within
forty-eight (48) hours after a termination by reason of Tenant's default) shall
be considered abandoned and Landlord may remove any or all of such items and
dispose of the same in any manner or store the same in a public warehouse or
elsewhere for the account and at the expense and risk of Tenant, and if Tenant
shall fail to pay the cost of storing any such property after it has been stored
for a period of thirty (30) days or more, Landlord may sell any or all of such
property at public or private sale, in such manner and at such times and places
as Landlord, in its sole discretion, may deem proper, without notice to or
demand upon Tenant for the payment of all or any
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part of such charges or the removal of any such property. Landlord shall apply
the proceeds of such sale first, to the cost and expense of such sale,
including, without limitation, attorneys' fees incurred in connection therewith;
second, to the payment of the cost of or charges for storing any such property;
third, to the payment of any other sums of money which may then or thereafter be
due to Landlord from Tenant under any of the terms hereof; and fourth, the
balance, if any, to Tenant.
23.4 All fixtures, alterations, additions, improvements and/or
appurtenances attached or built into the Premises prior to or during the Term
hereof, whether by Landlord at its expense or at the expense of Tenant or both,
shall be and remain part of the Premises and shall not be removed by Tenant at
the end of the Term hereof unless otherwise expressly provided for in this
Lease. Any items installed by Tenant without Landlord's consent, as permitted
under Section 9.1, shall be removed by Tenant at the end of the Term, if so
required by Landlord, unless Landlord has given a contrary indication in writing
to Tenant at the time of the installation of such items. Such fixtures,
equipment, alterations, additions, improvements and/or appurtenances shall
include, without limitation, floor coverings, drapes, paneling, molding, doors,
plumbing systems, electrical systems, lighting systems, silencing equipment,
communication systems, all fixtures and outlets for the systems mentioned above
and for all telephone, radio, telegraph and television purposes, and any special
flooring or ceiling installations.
Article 24. WAIVER OF DAMAGES FOR REENTRY
Tenant hereby waives all claims for damages that may be caused by
Landlord's re-entering and taking possession of the Premises or removing and
storing the property of Tenant as herein provided, and Tenant shall indemnify
and hold harmless Landlord therefrom. No such re-entry shall be considered or
construed to be a forcible entry.
Article 25. HOLDING OVER
25.1 If Tenant holds over after the term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from month to
month only, and not a renewal hereof or an extension for any further term, and
in such case base rent shall be payable at the rate of one hundred fifty percent
(150%) of the rent then payable pursuant to Article 3 hereof, and such month to
month tenancy shall be subject to every other term, covenant and agreement
contained herein. Nothing contained in this Article 25 shall be construed as a
consent by Landlord to any holding over by Tenant and Landlord expressly
reserves the right to require Tenant to surrender possession of the Premises to
Landlord as provided in Article 23 hereof upon the expiration of the term of
this Lease or other termination of this Lease.
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25.2 Tenant acknowledges that Landlord will use reasonable efforts to
re-let the Premises on reasonable terms and conditions as soon as practicable
following the expiration or sooner termination of the term of this Lease. In
that context, Landlord may well enter into agreements with third parties
providing for the occupancy of the Premises, or a portion thereof, upon such
expiration or sooner termination or as soon thereafter as Landlord has estimated
that it will be able to refurbish the Premises, and that the failure by Tenant
to surrender possession of the Premises upon such expiration or sooner
termination may render Landlord unable to fulfill its obligations to such third
party. Accordingly, if Tenant fails to surrender possession of the Premises upon
such expiration or sooner termination, Tenant shall indemnify and hold Landlord
harmless from and against any and all costs, losses, claims or liabilities,
including, without limitation, attorneys' fees, arising under any claim made by
any such third party based, in whole or in part, on Landlord's failure to
deliver possession of the Premises, or any part thereof, to such third party.
Article 26. SUBORDINATION
26.1 This Lease is and at all times shall be subject and subordinate to any
ground or underlying leases, mortgages, trust deeds or like encumbrances, which
may now or hereafter affect the real property of which the Premises are a part,
and to all renewals, modifications, consolidations, replacements and extensions
of any such lease, mortgage, trust deed or like encumbrance. This clause shall
be self-operative and no further instrument of subordination shall be required
by any ground or underlying lessor or by any mortgagee or beneficiary, affecting
any lease or the real property of which the Premises are a part. In confirmation
of such subordination, Tenant shall execute promptly any certificate that
Landlord may request. The subordination of this Lease to any such lease,
mortgage, trust deed or like encumbrance shall, however, be subject to the
following:
(i) In the event of the sale of the Premises upon foreclosure or upon
the exercise of a power of sale, or by transfer in lieu of foreclosure or such
exercise, Tenant will upon written request attorn to the purchaser and recognize
the purchaser, or transferee, as the Landlord under this Lease.
(ii) Notwithstanding such subordination, Tenant's right to quiet
possession of the Premises and all other Tenant's rights under this Lease, shall
not be disturbed so long as Tenant shall pay the rent and observe and perform
all of the provisions of this Lease to be observed and performed by Tenant
unless this Lease is terminated pursuant to specific provisions relating thereto
contained herein.
26.2 Notwithstanding anything to the contrary herein, Landlord agrees, at
the request of Tenant, to use its reasonable efforts to obtain from Security
Pacific National Bank a recognition and non-disturbance agreement in form and
substance
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reasonably satisfactory to Tenant, and Landlord shall cooperate with Tenant as
may be necessary to secure such agreement.
Article 27. ESTOPPEL CERTIFICATES
Tenant shall at any time and from time to time upon not less than twenty
(20) days' prior notice by Landlord, execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), stating the
dates to which the basic rent, additional rent and other charges have been paid
in advance, if any, stating whether or not to the best knowledge of Tenant,
Landlord is in default in the performance of any covenant, agreement or
condition contained in this Lease and, if so, specifying each such default of
which Tenant may have knowledge, and responding to such other questions or
statements of fact as Landlord or any ground or underlying lessor or any
mortgagee or beneficiary shall reasonably request. Tenant's failure to deliver
such statement within such time shall constitute an acknowledgment by Tenant
that this Lease is unmodified and in full force and effect except as may be
represented to the contrary by Landlord, no more than one monthly installment of
Base Rent has been paid in advance, Landlord is not in default in the
performance of any covenant, agreement or condition contained in this Lease and
the other matters set forth in such request, if any, are true and correct. Any
such statement delivered pursuant to this Article 27 may be relied upon by any
prospective purchaser of the fee of the Premises or any mortgagee or other like
encumbrancer thereof or any assignee of any such encumbrancer upon the Premises.
Landlord shall reimburse Tenant for Tenant's reasonable costs, including,
without limitation, its attorneys' fees, incurred in conjunction with the
processing and documentation of any estoppel certificate.
Article 28. RIGHT OF LANDLORD TO PERFORM
If Tenant shall fail to pay any sum of money, other than rent, required to
be paid by it hereunder or shall fail to perform any other act on its part to be
performed hereunder, and such failure shall continue beyond any applicable grace
period set forth in Article 21 or 22 hereof, Landlord may, but shall not be
obligated so to do, and without waiving or releasing Tenant from any obligation
of Tenant, make any such payment or perform any such other act. Tenant shall,
promptly and upon demand therefor by Landlord, reimburse Landlord for all sums
so paid by Landlord and all necessary incidental costs, together with interest
thereon at the rate of twelve (12%) percent from the date of such payment by
Landlord, and Landlord shall have the same rights and remedies in the event of
the failure by Tenant to pay such amounts as Landlord would have in the event of
a default by Tenant in the payment of rent.
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Article 28A TENANT'S RIGHT TO PERFORM
If Landlord shall at any time default in the performance of any obligation
of Landlord (a) under this Lease with respect to any matter under Article 1A
hereof, or (b) under the SPA, with respect to the Excluded Liabilities with
respect to the Environmental Liabilities and the VOC Remediation Program, as
they apply to the adjoining premises at 0000 Xxxxxxxx Xxxx, leased by Landlord
to Tenant under the Lease of even date herewith, then Tenant shall have the
right (after Landlord's failure to cure such default within 60 days after
written notice from Tenant to Landlord) to perform such obligation,
notwithstanding the fact that no specific provision for such substituted
performance by Tenant is made in this Lease with respect to such default
("Tenant's Self-Help Remedy"). Any sums paid by Tenant (together with interest
at the rate of twelve (12%) percent from the date of payment, and all necessary
incidental costs and expenses in connection with the performance of any such
obligation by Tenant, shall be payable to Tenant immediately on demand, and if
not so paid may be offset by Tenant from the next succeeding installment(s) of
Base Rent due under this Lease, until Tenant shall have recouped such amount in
full, with interest as provided herein; provided, that in no event shall Tenant
set off against the Base Rent hereunder an amount in excess of $2,000,000.00, in
the aggregate, during the Term of this Lease. Tenant may exercise the foregoing
rights without waiving any other of its rights or releasing Landlord from any of
its obligations under this Lease. In addition to the other remedies provided in
this Lease, Tenant shall to the full extent provided by law, be entitled to the
restraint by injunction of the violation or attempted or threatened violation of
any of the covenants, conditions or provisions of this Lease by Landlord, or to
a decree compelling specific performance by Landlord of any such covenants
conditions or provisions. Nothing herein shall be construed to permit Tenant to
obtain a recovery with respect to any matter as to which Tenant has previously
obtained a recovery by other means. The continuance of possession by Tenant
following any such default by Landlord shall not be deemed a waiver by Tenant of
any rights under this Lease; specifically, Tenant reserves the right to
terminate this Lease by notice to Landlord delivered at any time when Tenant is
exercising Tenant's Self-Help Remedy hereunder.
Article 29. NOTICES
All notices and consents which Landlord or Tenant may be required, or may
desire, to serve or confer on the other must be in writing and may be served, as
an alternative to personal service, by mailing the same by either (a) registered
or certified mail, postage prepaid, return receipt requested, or (b) Federal
Express or similar overnight courier delivery service, addressed as follows:
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If to Landlord: Bourns, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxx,
Executive Vice President
With a copy to: Bourns, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx, Esq.,
Chief Legal Counsel
Submission of this Lease by either party shall not bind either party in any
manner and no lease or other obligation on the part of either party shall arise,
until this Lease is executed and delivered by both parties.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
Landlord: Tenant:
Bourns, Inc. Precision Monolithics, Inc.
By: Xxxxx X. Xxxxx By: Xxxx Xxxx
--------------------------- -----------------------------
Title: Exec. Vice President Title: President
By: By:
--------------------------- -----------------------------
Title Title
Address: Address:
------------------------------ --------------------------------
------------------------------ --------------------------------
------------------------------ --------------------------------
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SCHEDULE A
Description of Premises
All that certain real property in the City of Santa Xxxxx, County of Santa
Xxxxx, State of California, described as follows:
All of Parcel "A" as shown on that certain map entitled, "Parcel Map Lands
of Precision Monolithics," which map was filed for record in the office of the
recorder of the County of Santa Xxxxx, State of California on June 10, 1975 in
Book 357 of Maps, Page 4.
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