SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (the "Sublease") is dated for reference purposes only
as of December 1, 1997 by and between GLOBAL VILLAGE COMMUNICATION, INC., a
Delaware corporation ("Sublandlord"), and OAK TECHNOLOGY, INC., a Delaware
corporation (the "Subtenant").
RECITALS
A. Sublandlord, as Tenant, entered into that certain Lease Agreement dated
July 14, 1994, as modified by a First Amendment to Lease dated June 22, 1995
(collectively referred to as the "Prime Lease") as depicted on Exhibit "B"
attached hereto and incorporated by reference herein, with Xxxxxx Xxxxxxxxxxx,
Xx. and Xxxxxxx X. Xxxxxxxxxxx, as Landlords (collectively the "Prime
Landlord"), for the leasing of that certain demised premises described on
Exhibit "A" to the Prime Lease.
B. The parties to this Sublease have agreed that Sublandlord shall sublet the
Premises (as hereinafter defined), which comprises a portion of the demised
Premises leased to Sublandlord under the Prime Lease, for the term specified
herein, subject to the consent of the Prime Landlord, and otherwise in
accordance with the following terms and conditions:
NOW, THEREFORE, in consideration of the covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. SUBLEASING OF PREMISES. Sublandlord subleases to Subtenant, and Subtenant
subleases from Sublandlord, all of the property consisting of approximately
33,425 square feet as depicted on EXHIBIT "A" attached hereto, and incorporated
by referenced herein, and located at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx (the "Premises"), together with all improvements located thereon and
with all rights, privileges and appurtenances thereto or therein, including,
but not limited to a nonexclusive right to use the areas reserved for use by
all tenants of the building in which the Premises are located and all Outside
Area (as defined in Paragraph 44(a) of the Prime Lease). For as long as
Subtenant complies with the terms of this Sublease, then Subtenant shall
peaceably and quietly have, hold and enjoy the right and privilege to use and
occupy the Premises and appurtenances thereto in accordance with the terms of
this Sublease.
2. TERM. The term of this Sublease (the "Term") shall commence upon the
later of (i) the date that is two (2) weeks after execution of this Sublease by
Sublandlord and Subtenant and delivery of the Premises to Subtenant; or (ii)
the date upon which the current sublessee of the
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Premises surrenders the Premises to Sublandlord ("Commencement Date"), and
continuing through 11:59 p.m. on February 28, 2000 ("Expiration Date").
Notwithstanding the foregoing, upon execution of this Sublease, Subtenant
shall have a license for no additional consideration to enter the Premises
for the purpose of installing its furniture, fixtures, voice and data
communications systems, and any other improvements or equipment necessary for
the conduct of Subtenant's business. Notwithstanding anything to the contrary
contained in this Sublease, if Sublandlord has not delivered the Premises to
Subtenant by January 1, 1998, Subtenant shall have the right to terminate
this Sublease, and Sublandlord promptly shall refund to Subtenant all sums
paid by Subtenant to Sublandlord in connection with its execution of this
Sublease.
3. RENT. During the Term, Subtenant shall pay to Sublandlord as rent for the
Premises the sum of seventy thousand one hundred ninety-two and 50/100 dollars
($70,192.50) per month, without prior notice or demand, offset or deduction
therefor. The parties hereto agree that the above-referenced rent paid by
Subtenant includes Subtenant's share of all operating expenses for the
Premises, including but not limited to the following: real property taxes and
assessments, building insurance, Outside Area Expenses, Parking Charges (as
permitted to be charged pursuant to the Prime Lease), management and
administration (as permitted to be charged pursuant to the Prime Lease), trash
removal (not including construction, moving or furniture installation related
trash), all interior and exterior repair and maintenance costs (including
janitorial), all normal and reasonable utility costs (all as more particularly
defined in Paragraph 4.b. of the Prime Lease), and any other reasonable costs
necessary for the operation and/or maintenance of the Premises. Rent shall be
payable monthly by Subtenant to Sublandlord on or before the first day of each
calendar month during the Term. If the Term commences on a date on or before
the first day of the calendar month or the Term terminates on a date other than
the last day of a calendar month, then the rent for such partial calendar month
shall be prorated proportionate to the number of days in such calendar month,
and the prorated rent for such calendar month shall be payable on the
Commencement Date of the Term or the first day of the calendar month in which
the Sublease terminates, as appropriate.
4. SECURITY DEPOSIT. On or prior to the Commencement Date of the Term,
Subtenant shall pay to Sublandlord the sum of seventy thousand one hundred
ninety-two and 50/100 dollars ($70,192.50) to be held by Sublandlord as a
security deposit in an interest bearing account in a bank or savings and loan
institution reasonable acceptable to Subtenant, separate and apart from the
funds of Sublandlord, which sum Sublandlord shall retain as security for the
performance by Subtenant of its obligations under this Sublease. Subtenant
shall be entitled to all interest thereon at the rate paid by the bank or
savings and loan association. At Subtenant's request at any time during the
Term, Sublandlord shall provide Subtenant with reasonable evidence that the
deposit remains in a separate interest-bearing account reasonable acceptable to
Subtenant. If Subtenant fails at any time to perform its obligations under
this Sublease, Sublandlord may at its option apply so much of the deposit as is
required to cure Subtenant's default hereunder after applicable notice and
opportunity to cure periods. Upon the expiration or termination of the Term,
Sublandlord shall return the balance of the security deposit so held by
Sublandlord to Subtenant within thirty (30) days after the expiration or
termination of the Term less any sums due and owing to Sublandlord.
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5. INCORPORATION OF PRIME LEASE. The terms and conditions of this Sublease
shall include various Paragraphs of the Prime Lease, which, except to the
extent such terms are in conflict with any of the other terms of this Sublease
(in which event the other terms of this Sublease shall control), are
incorporated into this Sublease as if fully set forth, except that: (i) each
reference in such incorporated Paragraphs to "Lease" shall be deemed a
reference to "Sublease"; (ii) each reference to the "Premises" shall be deemed
a referenced to the subleased "Premises"; and (iii) each reference to
"Landlord" and "Tenant" shall be deemed a reference to "Sublandlord" and
"Subtenant", respectively (except as otherwise expressly set forth below).
Except as may be expressly inconsistent with the terms of this Sublease, which
nevertheless is expressly subject and subordinate to the Prime Lease, the
following terms, covenants and conditions of the Prime Lease are by this
reference incorporated herein and shall be applicable to this Sublease with the
same force and effect as if the Sublandlord was the Landlord under the Prime
Lease and the Subtenant was the Tenant thereunder:
Paragraphs 5; 8; 10; 11; 12(a); 12(b); 12(c); 12(d); 13 (with
references to "Landlord" meaning only Prime Landlord); 14(a); 14(b);
15(a); 15(b); 16; 18; 19; 21; 22; 23; 24(a) (except that the last
sentence thereof is deleted); 25 (except for Paragraphs 25(a) and
(b), which are deleted; Paragraph 25(f); and Paragraph 25(g) which is
modified by deleting the reference to Paragraph 24 and replacing it
with "under this Sublease"); 26-37 and 39-40 inclusive; 42; 43; 44;
and 45 (except to the extent that "280" shall be "127" wherever it
appears).
Sublandlord hereby covenants and agrees to cause the Prime Landlord to
perform all of the obligations of Landlord thereunder to the extent such
obligations apply to the Premises, this Sublease and/or Subtenant's use
thereof. Except to the extent waived or consented to in writing by the
Subtenant, Sublandlord will not, by re-negotiation of the Prime Lease,
assignment, subletting, voluntary termination, default or any other voluntary
action, avoid or seek to avoid the observance or performance of the terms to be
observed or performed by Sublandlord under the Prime Lease, but will, at all
time using best efforts and good faith, assist in carrying out the terms of
this Sublease and in taking all such action as may be necessary or appropriate
to protect the rights of the Subtenant which are affected thereby against
impairment. Notwithstanding anything to the contrary contained in this
Sublease, if this Sublease terminates as a result of a default by Sublandlord
under the Prime Lease or this Sublease, Sublandlord shall indemnify, defend,
protect and hold harmless Subtenant from and against any and all actual out-of-
pocket claims, judgments, causes of action, damages, penalties, fines, taxes,
costs, liabilities, losses and expenses arising out of such termination. The
foregoing indemnity shall exclude consequential damages (including, without
limitation, lost profits and lost business opportunity) and any rent
differential to be paid by Subtenant in leasing replacement premises, and
Subtenant shall have an obligation to mitigate its actual out-of-pocket
damages.
6. REPRESENTATIONS AND WARRANTIES OF SUBLANDLORD. As a materials inducement
for Subtenant to enter into this Sublease, (i) Sublandlord hereby represents
and warrants that as of the date first above written, neither Prime Landlord
nor Sublandlord are in default (or with the mere passage
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of time of the giving of notice would ripen into a default) under the terms
of the Prime Lease and that Prime Lease has not been amended, modified or
altered in any respect whatsoever, except as herein noted; (ii) that a true,
correct and complete copy of the Prime Lease is attached hereto as Exhibit
"B" and incorporated by reference herein; (iii) Sublandlord hereby covenants
and warrants that it will not make any modification, amendment or change in
and to the Prime Lease that affects, impairs or otherwise prejudices the
Sublease or Subtenant's rights thereunder without the express written consent
of Subtenant, which shall not be unreasonably withheld or delayed; (iv)
Sublandlord covenants that it will not do anything or permit anything to be
done that would cause the Sublease or the Term to be terminated or forfeited;
and (v) Sublandlord represents that the Premises comply with the provisions
of the Americans with Disabilities Act (ADA) in effect on the Commencement
Date of this Sublease.
7. RIGHT TO CURE. Notwithstanding anything in Paragraph 25 of the Prime
Lease (to the extent the same is incorporated herein by reference), if
Subtenant shall fail to pay rent or to otherwise satisfy a monetary obligation
due under the Sublease, then such shall not give rise to Sublandlord's right to
exercise its remedies under Paragraph 26 of the Prime Lease as incorporated
herein by reference except until the passage of a period of ten (10) days after
receipt of written notice of such failure and such failure has not been cured
within such ten (10) day period.
8. ASSIGNMENT AND SUBLEASING. Except as provided in Paragraph 24(a) of the
Prime Lease and in this Paragraph 8, Subtenant may not assign or encumber this
Sublease, and may not sublet any part or all of the Premises, without the
written consent of Prime Landlord and Sublandlord first had and obtained, which
consent Sublandlord shall not unreasonably withhold, condition or delay.
Notwithstanding anything in Paragraph 24 of the Prime Lease or this Sublease to
the contrary, Subtenant may assign this Sublease in its entirety or sublease
all or any portion of the Premises without the consent or approval of
Sublandlord to (i) any partnership, corporation or other business entity which
controls, or is controlled by or is under common control with Subtenant; (ii)
any partnership, corporation or other business entity into or with which
Subtenant shall be merged, converted, or consolidated or to which substantially
all of Subtenant's assets or stock may be transferred, or to a related
partnership, corporation or other business entity of Subtenant herein named;
and (iii) a partnership, corporation or other business entity which is a direct
successor of Subtenant owning substantially all of Subtenant's business and
assets. Sublandlord shall be entitled to all "Excess Rent" received by
Subtenant in connection with an assignment or sublet. As used herein, the term
"Excess Rents" shall mean all rents and other consideration payable by a
subtenant or assignee to Subtenant in connection with the sublease or
assignment in excess of the Rent payable by Subtenant hereunder, less the costs
incurred by Subtenant to effect the sublease or assignment, including, without
limitation, brokerage commissions, legal fees, refurbishment and redecorating
costs, and the cost of all unamortized improvements installed by Subtenant.
Nothing herein shall be deemed to permit Subtenant to pay to Sublandlord less
than the Rent due under this Sublease in the event of an assignment or sublet.
9. NOTICES. All notices, demands, consents and approvals which may or are to
be given by
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either party to the other hereunder shall be given in the manner
provided in the Prime Lease, at the addresses as shown on the signature page
hereof. Sublandlord agrees and covenants to notify Subtenant of any Default
under the Prime Lease or of any other event of which Sublandlord has actual
knowledge which will impair or prejudice Subtenant's ability to conduct its
activities at the Premises as soon as reasonably practicable following
Sublandlord's receipt of notice from the Prime Landlord of a default under the
Prime Lease or an act or actual knowledge of such impairment.
10. COMPLIANCE WITH NONDISCRIMINATION REGULATIONS. It is understood that it
is illegal for Sublandlord to refuse to display or sublease the Premises, or to
assign, surrender or sell the Prime Lease, to any person because of race,
color, religion, national origin, sex, sexual orientation, marital status or
disability.
11. TOXICS COMMUNICATION DISCLOSURE. Sublandlord and Subtenant each
acknowledge that they have been advised that numerous federal, state, and/or
local laws, ordinances and regulations ("Laws") affect the existence and
removal, storage, disposal, leakage of any contamination by materials
designated as hazardous or toxic ("Toxics"). Many materials, some utilized in
everyday business activities and property maintenance, are designated as
hazardous or toxic.
Some of the Laws require that Toxics be removed or cleaned up by
landowners, future landowners or former landowners without regard to whether
the party required to pay for "clean-up" caused the contamination, owned the
Property at the time the contamination occurred or even knew about the
contamination. Some items, such as asbestos or PCBs, which were legal when
installed, now are classified as Toxics, and are subject to removal
requirements. Civil lawsuits for damages resulting from Toxics may be filed by
third parties in certain circumstances.
Sublandlord and Subtenant each acknowledge that Broker has no specific
expertise with respect to environmental assessment or physical condition of the
Premises, including, but not limited to, matters relating to (i) problems which
may be posed by the presence or disposal of hazardous or Toxics substances on
or from the Premises, (ii) problems which may be posed by the Premises being
within the Special Studies Zone as designated under the Xxxxxxx-Xxxxxx Special
Studies Zone Act (Earthquake Zones), Section 2621-2630, inclusive of California
Public Resources Code, and (iii) problems which may be posed by the Premises
being within a HUD Flood Zone as set forth in the U.S. Department of Housing
and Urban Development "Special Flood Zone Area Maps," as applicable.
Sublandlord and Subtenant each acknowledge that Broker has not made an
independent investigation or determination of the physical or environmental
condition of the Premises, including, but not limited to, the existence or
nonexistence of any underground tanks, sumps, piping, toxic or hazardous
substances on the Premises. Subtenant agrees that it will rely solely upon its
own investigation and/or the investigation of professionals retained by it or
Sublandlord, and neither Sublandlord nor Subtenant shall rely upon Broker to
determine the physical and environmental condition of the Premises, including,
but not limited to, the existence or
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nonexistence of any underground tanks, sumps, piping, toxic or hazardous
substances on the Premises. Subtenant agrees that it will rely solely upon
its own investigation and/or the investigation of professionals retained by
it or Sublandlord, and neither Sublandlord nor Subtenant shall rely upon
Broker to determine the physical and environmental condition of the Premises
or to determine whether, to what extent or in what manner, such condition
must be disclosed to potential sublessees, assignees, purchasers or other
interested parties.
12. TENANT IMPROVEMENTS. Sublandlord shall permit Subtenant at Subtenant's
expense to make certain minor alterations and additions to the Premises prior
to commencement date of the Term. Within ten (10) days from and after
Sublandlord's execution of this Sublease, Subtenant shall provide Sublandlord
with a set of plans and a description of its intended tenant improvements for
Sublandlord's approval and Prime Landlord's approval, such tenant improvements
being subject to all applicable conditions and approvals as set forth in the
Prime Lease. All tenant improvements shall be installed by a licensed
contractor in compliance with all applicable building codes, and otherwise in
compliance with Paragraph 11 of the Prime Lease. Sublandlord's and Prime
Landlord's approval of the plans for such tenant improvements shall not be
unreasonably withheld, conditioned or delayed.
13. SURRENDER OF PREMISES. Subtenant shall surrender the Premises at the end
of the Term in the same condition as received, ordinary wear and tear, acts of
God, casualties, condemnation, Toxics (other than those stored, used or
disposed of by Subtenant in or about the Premises), alterations with respect to
which Subtenant has obtained specific written consent from Sublandlord and
Prime Landlord to allow to remain at surrender of the premises, and
alterations, improvements or additions installed by Sublandlord or others prior
to the Commencement Date excepted, unless Sublandlord otherwise agrees in
writing that such tenant improvements may remain within the Premises upon the
expiration of the Term.
14. HAZARDOUS MATERIALS. Sublandlord shall disclose to Subtenant any known
hazardous or toxic conditions or Toxics existing on, under or about the
property demised and described in the Prime Lease. Notwithstanding anything to
the contrary contained in this Lease, except to the extent that the Toxic in
question was released, emitted, used, stored, manufactured, transported or
discharged by Subtenant, or its agents, employees or contractors, Subtenant
shall not be responsible for, hereby is released from and Sublandlord shall
indemnify, defend with counsel reasonably acceptable to Subtenant, protect and
hold Subtenant harmless with respect to, losses, costs (including reasonable
attorneys' fees), damages, claims, suits, actions and causes of action with
respect to any Toxic present on or about the Premises, the Building or the
surrounding property, or the soil, groundwater or surface water thereof, that
was released, emitted, used, stored, manufactured, transported or discharged by
Sublandlord, its agents, employees or contractors. In addition, to the extent
that, pursuant to Section 32(c) of the Prime Lease, Prime Landlord indemnifies
Sublandlord for the cost of remediation or cleanup work required by any
governmental agency to be performed on the Premises as a result of any Toxics
existing on the Premises on the date of the Prime Lease, Subtenant shall be so
indemnified by Sublandlord.
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15. REPRESENTING BROKER. The parties acknowledge that the representing broker
for the Subtenant is Xxxxxx International Commercial Real Estate Services, and
the representing broker for Sublandlord is CB/Madison Advisory Group
(collectively, "Brokers"). Subtenant shall pay the real estate commission to
Brokers for this transaction in the amount of $101,077.20 fifty percent (50%)
of which sum shall be paid by Subtenant to each Broker upon the execution of
this Sublease by both Subtenant and Sublandlord and the receipt of Prime
Landlord's consent. Sublandlord and Subtenant shall indemnify and hold the
other harmless from any losses, damages, costs, and expenses arising out of a
claim for any other brokerage commission, finders' fee or the like in
connection with this Sublease.
16. ENTIRE AGREEMENT; AMENDMENTS. All prior understandings and agreements
between the parties hereto are merged within this Sublease, which sets forth
the entire understanding of the parties. This Sublease may not be changed,
modified or amended other than by agreement in writing by the parties hereto.
17. SUCCESSORS AND ASSIGNS. The covenants and agreements herein contained
shall bind and inure to the benefit of the Sublandlord, Subtenant, and their
respective successors and assigns.
18. CONTINGENCY; PRIME LANDLORD'S CONSENT. The Sublease is contingent upon
obtaining the written approval of the Prime Landlord. If for any reason the
Prime Landlord will not permit Sublandlord to Sublease the Premises to
Subtenant under the terms and conditions of this Sublease, this Sublease shall
be null and void. Notwithstanding anything to the contrary contained in this
Sublease, if Sublandlord has not obtained Prime Landlord's consent to this
Sublease within fifteen (15) days after execution hereof by Subtenant,
Subtenant shall have the right to terminate the Sublease, and Sublandlord
promptly shall return to Subtenant all sums paid by Subtenant TO SUBLANDLORD in
connection with its execution of this Sublease.
19. USE. Notwithstanding anything to the contrary contained in this Sublease
or the Prime Lease, so long as Prime Landlord has so consented, Sublandlord
shall have no objection to Subtenant's using the Premises for administrative
offices and the design and electronic testing of semiconductors and related
software, and all related legal uses.
20. DELIVERY OF PREMISES. Notwithstanding anything to the contrary contained
in this Sublease, Sublandlord shall deliver the Premises to Subtenant in its
"as-is" condition, free of debris, with all operating systems, including,
without limitation, the heating, ventilating and air conditioning ("HVAC")
system, and the electrical, plumbing, sewer, life safety and, if applicable,
security systems (collectively, "Building Systems") serving the Premises in
good working order and reasonable repair. The Premises also shall be delivered
to Subtenant in good condition and repair, including, without limitation, with
all broken ceiling tiles repaired or replaced, all wall damage repaired and all
touch up paint completed.
21. SIGNAGE. Subtenant shall be entitled to use one-third (1/3) of the
monument sign to be erected outside the Premises, and if used by Subtenant,
Subtenant shall bear one-third (1/3) of the cost to erect the monument sign.
Subtenant also shall have the right, at its cost, to use the two
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existing pedestal signs located outside the Premises, and to the use of the
sign(s) located on the door(s) of the Premises. Subtenant's signage rights
shall be exercised in accordance with applicable governmental rules,
regulations and ordinances.
22. SUBLANDLORD'S OBLIGATIONS. Notwithstanding anything to the contrary
contained herein, if Sublandlord shall fail to perform its obligations in
accordance with the terms of the Prime Lease, Sublandlord, upon receipt of
written notice from Subtenant, shall diligently attempt to enforce all
obligations of Prime Landlord under the Prime Lease. If, after receipt of
written request from Subtenant, Sublandlord shall fail or refuse to take action
for the enforcement of Sublandlord's rights against Prime Landlord with respect
to the Premises ("Action"), Subtenant shall have the right to take such Action
in its own name, and for that purpose and only to such extent, all of the
rights of Sublandlord as Tenant under the Prime Lease hereby are conferred upon
and assigned to Subtenant, and Subtenant hereby is subrogated to such rights to
the extent that the same shall apply to the Premises. If any such Action
against Prime Landlord shall be barred by reason of lack of privity,
nonassignability or otherwise, Subtenant may take such Action in Sublandlord's
name; provided that Subtenant has obtained the prior written consent of
Sublandlord, which consent shall not be unreasonably withheld or delayed, and,
provided further, that Subtenant shall indemnify, protect, defend by counsel
reasonably satisfactory to Sublandlord and hold Sublandlord harmless from and
against any and all liability, loss, claims, demands, suits, penalties or
damage (including, without limitation, reasonable attorneys' fees and expenses)
which Sublandlord may incur or suffer by reason of such Action, except for any
such liability, loss, claim, demand, suit, penalty or damage which Sublandlord
may incur or suffer by reason of Sublandlord's negligent acts or omissions.
23. ACCESS BY SUBLANDLORD. Notwithstanding anything to the contrary in this
Sublease or the Prime Lease, in entering upon the Premises pursuant to
Paragraph 25 of the Prime Lease, Sublandlord shall minimize interference with
Subtenant's use of the Premises to the extent possible.
24. ADDITIONAL REPRESENTATIONS AND WARRANTIES. As an inducement to Subtenant
to enter this Sublease, to the best of Sublandlord's actual knowledge, and in
addition to the representations and warranties set forth in Paragraph 6 above,
Sublandlord represents and warrants with respect to the Premises that:
a. There are no pending or threatened actions, suits or proceedings
before any court or administrative agency against Sublandlord or Prime
Landlord which could, in the aggregate, adversely affect the Premises
or any part thereof or the ability of Prime Landlord to perform its
obligations under the Prime Lease or of Sublandlord to perform its
obligations under this Sublease, and Sublandlord is not aware of any
facts which might result in any such actions, suits or proceedings
except as specifically disclosed by Sublandlord to Subtenant.
b. There is no pending or threatened condemnation or similar proceeding
affecting
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the Premises or any portion thereof, and Sublandlord has no knowledge
that any such action currently is contemplated.
The foregoing representations and warranties and the representations and
warranties set forth in Paragraph 6 above shall survive the expiration or
earlier termination of this Sublease.
25. AUTHORIZATION TO DIRECT SUBLEASE PAYMENTS. Sublandlord hereby
acknowledges that Sublandlord's failure to pay the Base Rent and other sums
owing by Sublandlord to Prime Landlord under the Prime Lease will cause
Subtenant to incur damages, costs and expenses not contemplated by this
Sublease, especially in those cases where Subtenant has paid sums to
Sublandlord hereunder which correspond in whole or in part to the amounts
owing by Sublandlord or Prime Landlord under the Prime Lease. Accordingly,
Subtenant shall have the right to pay all rent and other sums owing by
Subtenant to Sublandlord hereunder for those items which also are owed by
Sublandlord to Prime Landlord under the Prime Lease to Prime Landlord on
the following terms and conditions:
a. Subtenant has knowledge that Sublandlord has failed to make any
payment required to be made by Sublandlord to Prime Landlord under the
Prime Lease, and Sublandlord fails to provide adequate proof of
payment within five (5) business days after Subtenant's written demand
requesting such proof.
b. Subtenant shall not prepay any amounts owing by Subtenant without the
consent of Sublandlord.
c. Subtenant shall provide to Sublandlord concurrently with any payment
to Prime Landlord reasonable evidence of such payment.
d. If Sublandlord notifies Subtenant that it disputes any amount demanded
by Prime Landlord, Subtenant shall not make any such payment to Prime
Landlord unless Prime Landlord has provided a three-day notice to pay
such amount or forfeit the Prime Lease.
Any sums paid directly by Subtenant to Prime Landlord in accordance with this
Paragraph shall be credited toward the amounts payable by Subtenant to
Sublandlord under this Sublease.
26. RIGHT TO CURE. In the event that Sublandlord defaults in the performance
or observance of any of Sublandlord's remaining obligations under the Prime
Lease, or fails to perform Sublandlord's stated obligations under this Sublease
to enforce, for Subtenant's benefit, Prime Landlord's obligations under the
Prime Lease, then Subtenant shall give Sublandlord notice specifying in what
manner Sublandlord has defaulted, and if such default shall not be cured by
Sublandlord within five (5) business days with respect to payment of Base Rent
or Additional
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Rent due under the Prime Lease, and within thirty (30) days with respect to
non-monetary defaults (except that if such non-monetary default cannot be
cured with said thirty (30) day period, this period shall be extended for an
additional reasonable time, provided that Sublandlord commences to cure such
default within such thirty (30)-day period and proceeds diligently thereafter
to effect such cure as quickly as possible), then, in addition, Subtenant
shall be entitled, at Subtenant's option, to cure such default and promptly
collect from Sublandlord Subtenant's reasonable expenses in so doing
(including, without limitation, reasonable attorneys' fees and court costs).
Subtenant shall not be required, however, to wait the entire cure period
described herein if earlier action is required to comply with the Prime Lease
or with any applicable governmental law, regulation or order. Sublandlord
shall not be deemed hereunder to guarantee that Prime Landlord shall accept
Subtenant's cure. If Prime Landlord fails to accept Subtenant's cure,
Sublandlord shall be obligated to reimburse Subtenant under this Paragraph
only for the actual out-of-pocket costs incurred by Subtenant in attempting
to effect the cure. By way of example only and not by way of limitation, if
Prime Landlord fails to accept Subtenant's payment of monetary sum owing by
Sublandlord to Prime Landlord under the Prime Lease, and Subtenant incurs no
actual, out-of-pocket costs (i.e., legal fees) in connection with its attempt
to cure, Sublandlord shall have no reimbursement obligation hereunder with
respect thereto. Nothing herein shall be deemed to prevent Subtenant from
exercising its rights under Paragraphs 5 or 27.b. in the event of an uncurred
default by Sublandlord.
27. Indemnification.
a. Notwithstanding anything to the contrary contained in this Sublease or
the Prime Lease, except to the extent caused by the negligence or
willful misconduct of Sublandlord, its agents, employees, contractors
or invitees, Subtenant shall indemnify, defend by counsel reasonably
satisfactory to Sublandlord and hold Sublandlord harmless from and
against any and all claims, liabilities, judgments, causes of actions,
damages, costs and expenses (including, without limitation, reasonable
attorneys' and experts' fees) caused by or arising in connection
with: (i) the use or occupancy of the Premises by Subtenant; (ii) a
breach of Subtenant's obligations under this Sublease; (iii) the
negligence or willful misconduct of Subtenant or its agents,
employees, contractors or invitees; or (iv) a breach of Subtenant's
obligations under the Prime Lease to the extent those obligations
are Subtenant's as incorporated in this Sublease.
b. Notwithstanding anything to the contrary contained in this Sublease
or the Prime Lease, except to the extent caused by the negligence
or willful misconduct of Subtenant, its agents, employees, contractors
or invitees, Sublandlord shall indemnify, defend with counsel
reasonably acceptable to Subtenant and hold Subtenant harmless from
and against any and all claims, liabilities, judgments, causes of
action, damages, costs and expenses (including, without limitation,
reasonable attorneys' and expert fees) caused by or arising in
connection with: (i) a breach of Sublandlord's obligations under this
Sublease; (ii) a breach of Sublandlord's obligations under the Prime
Lease to the extent those obligations
Page 10
are not Subtenant's as incorporated in this Sublease; or (iii) the
negligence or willful misconduct of Sublandlord, its employees,
contractors, agents or invitees.
28. SUBLANDLORD'S DEFAULT. If Sublandlord voluntarily terminates the Prime
Lease for reasons other than due to destruction and damage of the Premises
(Section 22(b) of the Prime Lease) or to condemnation (Section 23 of the
Prime Lease), and Prime Landlord does not consent to a direct lease with
Subtenant upon all of the terms and conditions of this Sublease, such
voluntary termination shall be deemed a default under this Sublease, and
Subtenant shall be entitled to indemnification (expressly excluding
injunctive relief) from Sublandlord with respect thereto pursuant to the
provisions of Paragraph 5 of this Sublease.
IN WITNESS WHEREOF, the parties hereto have executed the sublease as of
the date and year first written above.
Sublandlord: GLOBAL VILLAGE COMMUNICATION, INC.
By: /s/ Xxxx X. Xxxxxx
--------------------------------------------
Xxxx X. Xxxxxx
Senior VP Finance, Business Development
Chief Financial Officer
Date: 12/4/97
---------------
Notice Address: 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Subtenant: OAK TECHNOLOGY, INC.
A Delaware Corporation
By: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name
Its VP/CFO
Date: 12/4/97
-----------------
Notice Address: 000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Page 11
EXHIBIT A
[MAP]
EXHIBIT B
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx
FIRST AMENDMENT TO LEASE
BETWEEN XXXXXX XXXXXXXXXXX, XX. AND XXXXXXX X. XXXXXXXXXXX
LANDLORD
AND GLOBAL VILLAGE COMMUNICATION, INC., TENANT
DATED JULY 14, 1994
It is hereby agreed that the subject lease is amended as follows:
1. The premises at 0000 Xxxx Xxxxxx, Xxxxxxxxx, being 54,505
square feet of space in "as is" condition (erroneously indicated as
54,585 square feet in the lease) as shown on attached
Exhibit A together with outside areas set forth in paragraph
44 of the lease and parking set forth in paragraph 45 of the
lease and in paragraph 4 below, are hereby added to the premises
under this lease effective November 1, 1995. Tenant may for
the purpose of installing tenant improvements occupy the new
premises commencing September 1, 1995, subject to all terms
and conditions of the lease except that no base rental or
allocation for operating expenses shall be payable for the months of
September and October, 1995.
2. Paragraph 4(a) of this lease, "Base Rent", is amended to read that
the monthly installments of rent shall be as specified below:
PERIOD BASE RENTAL/MONTH/NNN
------ ---------------------
October 15, 1994-August 14, 1995 $
August 15, 1995-October 31, 1995 $
November 1, 1995-August 14, 1996 $
August 15, 1996-August 14, 1997 $
August 15, 1997-August 14, 1998 $
August 15, 1998-July 14, 1999 $
July 15, 1999-April 14, 2000 $
Base Rent shall be payable in advance on the first of the month and shall
be payable in the amounts shown in Exhibit C.
3. Paragraph 4(c)(2) of this lease is amended as follows:
a) Effective November 1, 1995, Tenant's share of the
specified expenses shall be % instead of %.
b) Tenant's share of the specified expenses shall not exceed
the amounts shown below for the following periods
instead of those amounts shown in paragraph 4(c)(2):
October 15, 1994-December 31, 1995 $
January 1, 1996-December 31, 1996 $
January 1, 1997-December 31, 1997 $
January 1, 1998-December 31, 1998 $
January 1, 1999-December 31, 1999 $
January 1, 2000-April 14, 2000 $
4. Paragraph 45 is amended to substitute the number 484 in the second
and third sentences for 280 effective November 1, 1995. The parking
spaces are shown in Exhibit B attached to this addendum.
5. In connection with the addition of the 54,505 square feet covered by
this amendment, Landlord shall provide an allowance for the planning
and construction of tenant improvements of $______ in the subject
54,505 square feet. In addition, Landlord shall provide an additional
$_____ for this area to correct non conformities with current codes as
required by governmental authorities and to apply moisture sealant
under floor tiles. The total amount (a maximum of $_____) shall be
known as the Tenant Improvement Allowance and shall be the maximum
contribution by Landlord for Tenant Improvement Costs including
correcting non conformities to codes or any other deficiencies. Should
the actual cost of planning and constructing those Tenant Improvements
depicted on the Final Plans and Specifications be less than the Tenant
Improvements Allowance, the Allowance shall be reduced to an amount
equal to the actual costs. In addition, Landlord shall, if requested
to do so by Tenant at the time of determining the final cost of Tenant
Improvements, provide an additional allowance of up to _____ per
square foot or $_____ ($_____ x 54,505 square ft.) for the sole
purpose of constructing tenant improvements in the 54,505 square foot
area. Tenant shall reimburse Landlord for the additional Tenant
Improvement funds ($_____) as specified in paragraph 47 except that
amortization shall be over 53.4667 months at _____ percent per annum.
All other applicable procedures specified in paragraph 47 shall be
followed in the planning and construction of the tenant improvements
in the 54,505 square foot area.
6. If the Landlord cannot deliver possession of the new premises on
September 1, 1995, this amendment to lease shall not be void or
voidable, nor shall Landlord or Landlord's agent be liable to Tenant
for any loss or damage resulting therefrom. Tenant shall not be liable
for Rent until two months after Landlord delivers possession of the
new Premises to Tenant. The expiration date of the Term of the Lease
(April 14, 2000) shall be extended by the same number of days that
Tenant's possession of the Premises is delayed.
7. The premises at 0000 Xxxx Xxxxxx, Xxxxxxxxx have been inspected and
are accepted by Tenant in "As Is" condition with the following
exceptions:
a) These premises shall be received in "broom clean" condition
with the carpets vacuumed,
b) All holes in walls to remain as part of Tenant's
improvements shall be repaired,
c) The roof shall be inspected by a reputable roofing
contractor selected by Tenant and approved by Landlord,
which approval shall not be unreasonably withheld. If
Landlord disagrees with the findings of said inspection,
Landlord may also have a reputable roofing contractor
inspect the premises and if the findings and repairs
recommended by the second contractor differ from the first,
the two contractors shall meet and agree upon recommended
repairs. Repairs recommended and agreed upon by these
inspections to place the roof in good condition prior to
November 1, 1995 shall be accomplished with the cost to be
borne by the Landlord. Landlord shall pay for all repairs
to the roof and roof membrane covering the premises at 1154
East Arques not caused by the actions of Tenant, for the
period starting September 1, 1995 and ending April 30, 1996.
d) The HVAC equipment on the roof serving 0000 Xxxx Xxxxxx
shall be inspected by a reputable HVAC contractor selected
by Tenant and approved by Landlord, which approval shall not
be unreasonably withheld. If Landlord disagrees with the
findings of said inspection, Landlord may also have a
reputable HVAC contractor inspect the premises, and if the
findings and repairs recommended by the second contractor or
differ from the first, the two contractors shall meet and
agree upon recommended repairs. The repairs recommended and
agreed upon by these inspections to place this HVAC
equipment in good condition shall be accomplished prior to
November 1, 1995 with the cost to be borne by Landlord.
e) All repairs to the parking area added to the premises under
lease by this amendment and serving the premises at 1154
East Arques not caused by the actions of Tenant shall be
paid for by Landlord for the period starting September 1,
1995 and ending October 31, 1996.
All other terms and conditions of the original lease shall remain in
full force and effect.
LANDLORD TENANT
Xxxxxx Xxxxxxxxxxx, Xx. and Global Village Communication, Inc.
Xxxxxxx X. Xxxxxxxxxxx
/s/ Xxxxxx Xxxxxxxxxxx, Xx. By /s/ Xxxxx X. Xxxxxx
------------------------------- -------------------------------
Xxxxxx Xxxxxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxxxxxx V.P. Finance
-------------------------------- -------------------------------
Xxxxxxx X. Xxxxxxxxxxx Title
000 Xxxxxxxx Xx.
Xxx Xxxxxx, XX 00000
6/22/95
-----------------------------
Date
EXHIBIT A
[MAP]
EXHIBIT B
[MAP]
EXHIBIT B
[MAP]
EXHIBIT C
BASE RENT PAYMENT SCHEDULE
PERIOD BASE MONTHLY RENT # OF MONTHS
-------------------------------------------------------------------------------------
10/15/94 - 10/31/94 paid on execution $
11/01/94 - 07/31/95
08/01/95 - 08/31/95
8/01 - 8/14/95(14/31 of
8/15 - 8/31/95(17/31 of
09/01/95 - 10/31/95
11/01/95 - 07/31/96
08/01/96 - 08/31/96
8/01 - 8/14/96(14/31 of
8/15 - 8/31/96(17/31 of
09/01/96 - 7/31/97
08/01/97 - 08/31/97
8/01 - 8/14/97(14/31 of
8/15 - 8/31/97(17/31 of
09/01/97 - 07/31/98
08/01/98 - 08/31/98
8/01 - 8/14/98(14/31 of
8/15 - 8/31/98(17/31 of
09/01/98 - 06/30/99
07/01/99 - 07/31/99
7/01 - 7/14/99(14/31 of
7/15 - 7/31/99(17/31 of
08/01/99 - 03/31/2000
4/01/2000 - 4/14/2000(14/30 of _____
Months 66
LEASE AGREEMENT
This Lease Agreement is made and entered into by and between XXXXXX
XXXXXXXXXXX, XX. and XXXXXXX X. XXXXXXXXXXX, jointly, the Landlord, and GLOBAL
VILLAGE COMMUNICATION, INC., a Delaware Corporation, Tenant, as of this 14th day
of July, 1994.
1. DEMISE: In consideration of the rents and all other charges and
payments payable by Tenant, and for the agreements, terms and conditions to be
performed by Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND
TENANT DOES HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below
(the "Premises"), upon the agreements, terms and conditions of this Lease for
the Term hereinafter stated.
2. PREMISES: The Premises demised by this Lease are approximately
73,648.6 square feet of space in the building at 0000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx, as shown on attached EXHIBIT A being in "as is" condition
together with the outside areas to the extent set forth in paragraph 44 below
and parking set forth in paragraph 45 below. No easement for light or air is
incorporated in the Premises.
The Premises demised by this Lease shall also include the Tenant
Improvements on the terms and conditions set forth.
3. TERM: The term of this Lease (the "Term") shall be for the period of
66 months commencing on October 15, 1994.
Early possession of the Premises for the purpose of constructing
tenant improvements shall be on July 15, 1994, and subject to Addendum Two.
4. RENT:
(a) BASE RENT. Tenant shall pay to Landlord, in advance on the first
day of each calendar month, without further notice or demand and without offset
or deduction, the monthly installments of rent specified below:
Full Calendar Months Base Rental/Month/NNN
1-10
11-22
23-34
35-46
47-57
58-66
However, in order to have rent payable on the first day of each calendar
month, upon execution of this Lease, Tenant shall pay to Landlord base rental
and additional rent for the period October 15 through October 31, 1994 and the
Security Deposit hereafter set forth.
(b) ADDITIONAL RENT. In addition to the Base Rent, Tenant shall pay
to Landlord, in accordance with this Paragraph 4, Tenant's proportionate share
of the following items related to the Building, the Property, and/or the Outside
Area (as defined in Paragraph 4(b)(3)) (the "Additional Rent").
(1) TAXES AND ASSESSMENTS. All real estate taxes and
assessments applicable to the Term. Real estate taxes and assessment shall
include any form of assessment, license, fee, tax, levy, penalty (if a result of
Tenant's delinquency), or tax (other than net income, estate, succession,
1
inheritance, transfer or franchise taxes), imposed by any authority having the
direct or indirect power to tax or by any city, county, state or federal
government or any improvement or other district or division thereof, whether
such tax is (i) determined by the area of the Premises, the Building or the
Property, or any part thereof or the Rent and other sums payable hereunder by
Tenant, including, but not limited to, any gross income or excise tax levied by
any of the foregoing authorities with respect to receipt of Rent or other sums
due under this Lease; (ii) upon any legal or equitable interest of Landlord in
the Premises, the Building or the Property, or any part thereof; (iii) upon this
transaction or any document to which Tenant is a party creating or transferring
any interest in the Premises, the Building or the Property; (iv) levied or
assessed in lieu of, in substitution for, or in addition to, existing or
additional taxes against the Premises, the Building or the Property, whether or
not now customary or within the contemplation of the parties; or (v) surcharge
against the parking area. Tenant and Landlord acknowledge that Proposition 13
was adopted by the voters of the State of California in June, 1978 election and
that assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such purposes as fire protection, street, sidewalk, road, utility
construction and maintenance, refuse removal and for other governmental services
which may formerly have been provided without charge to property owners or
occupants. It is the intention of the parties that all new and increased
assessments, taxes, fees, levies and charges due to Proposition 13 or any other
cause are to be included within the definition of real property taxes for
purposes of this Lease.
(2) INSURANCE. All insurance premiums, including premiums for
"all risk", fire and extended coverage (including earthquake endorsements)
insurance for the Building, public liability insurance, other insurance as
Landlord deems necessary, and any deductibles paid under policies of any such
insurance.
(3) OUTSIDE AREAS EXPENSES. All costs to operate, manage,
maintain, repair, supervise, insure (including provision of public liability
insurance) and administer the areas outside of the Building ("Outside Areas"),
including but not limited to, watering, fertilizing, landscaping, tree work,
spraying, window washing of exterior window surfaces, plant and tree
replacement, lighting, building alarm system, repair of paving and sidewalks,
striping, clean-up and sweeping.
(4) PARKING CHARGES. Any parking charges or other costs levied,
assessed or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by any governmental
authority or insurer in connection with the use or occupancy of the Building,
the Outside Areas and/or the Property.
(5) MAINTENANCE AND REPAIR OF BUILDING. All costs to maintain,
repair, and replace the building, including structural portions of the roof, the
roof coverings, the foundations, the floor slab, the load bearing walls, and the
exterior walls (including the painting thereof) of the Building, and all costs
to maintain, repair and replace all utility and plumbing systems, fixtures and
equipment located outside the Building. Notwithstanding said provisions, the
cost of any improvement or replacement to the building under this sub-paragraph,
which exceeds $25,000.00 in cost and which has a useful life of more than 5
years, shall be amortized on a straight-line basis together with interest
thereon at the rate of 8-1/2% per annum, and only the amortized portion of such
cost and interest shall be included in costs recoverable by Landlord. Also
notwithstanding anything to the contrary, Landlord shall not recover any costs
in excess of $5,000.00 per repair or replacement incurred in maintaining,
repairing or replacing the exterior load bearing walls, foundation, and
structural components of the roof. The
2
portion of any such costs up to $5,000.00 per repair or replacement, shall be
passed through to Tenant.
(6) MANAGEMENT AND ADMINISTRATION. All costs for management and
administration of the Building and the Property, including a property management
fee, accounting, auditing, billing, postage, employee benefits, payroll taxes,
etc. All such expenses shall be reasonable and in accordance with good
management practices and shall not exceed 1% of annual Base Rent.
(c) ALLOCATION OF COSTS.
(1) If said real estate taxes and assessments are assessed
against the entire building and building site, each of greater extent than the
"Premises", the taxes and assessments allocated to the leased premises shall be
pro-rated on a square footage or other equitable basis, as calculated by
Landlord, such as the tax assessor's relative valuations. If the assessed value
of the Landlords premises is increased by the inclusion therein of a value
placed upon the personal property or improvements of the Tenant, and if the
Landlord pays the taxes based on such increased assessment, the Tenant shall,
upon demand, repay to the Landlord the portion of such taxes resulting from such
increase in assessment. In the event the Premises and any improvements installed
therein by Tenant or Landlord are valued by the assessor disproportionately
higher or lower than those of other Tenants in the building or parcel, Tenant's
share of the property taxes shall be readjusted upwards or downwards
accordingly, and Tenant agrees to such readjusted share. Such determination
shall be made by Landlord from the respective valuations assigned in the
assessor's work sheet or such other information as may be reasonably available.
Landlord's reasonable determination thereof, in good faith, shall be conclusive.
Increase in real estate taxes due to reappraisal because of transfer of
Landlord's interest to a third party, shall not be charged to Tenant under this
sub-paragraph (c)(1).
(2) Insurance, Outside Areas Expenses, Parking Charges,
Maintenance and repair of building, and management and administration expense
shall be charged to Tenant in proportion to that portion of the total rentable
building area on the site rented by Tenant hereunder. Until further buildings on
the site are completed, Tenant's share shall be calculated as 73,648.6 square
feet/163,706 square feet or 44.99%. Tenants share of expenses for insurance,
outside area and management and administration shall not exceed the amounts
shown below for the following periods:
October 15, 1994-December 31, 1995 -
January 1, 1996-December 31, 1996 -
January 1, 1997-December 31, 1997 -
January 1, 1998-December 31, 1998 -
January 1, 1999-December 31, 1999 -
January 1, 2000-April 14, 2000 -
Any excess of Tenant's share of expenses over said amounts, shall be carried
forward to the next succeeding year.
(d) PAYMENT OF ADDITIONAL RENT.
(1) Upon execution of this Lease, Landlord shall submit to
Tenant an estimate of monthly Additional Rent for the period between October 15,
1994 and the following December 31 and Tenant shall pay such estimated
Additional Rent in advance on a monthly basis concurrently with the payment of
the Base Rent. Tenant shall continue to make said monthly payments until
notified by Landlord of a change therein. By March
3
1 of each calendar year, Landlord shall endeavor to provide to Tenant a
statement showing the actual Additional Rent due to Landlord for the prior
calendar year, prorated from the Commencement Date during the first year. If the
total of the monthly payments of Additional Rent that Tenant has made for the
prior calendar year (or portion thereof during which this Lease was in effect)
is less than the actual Additional Rent chargeable to Tenant for such prior
calendar year, then Tenant shall pay the difference in a lump sum within thirty
(30) days after receipt of such statement from Landlord. Any overpayment by
Tenant of Additional Rent for the prior calendar year shall be promptly refunded
to Tenant no later than April 15.
(2) The actual Additional Rent for the prior calendar year shall
be used for purposes of calculating Tenant's monthly payment of estimated
Additional Rent for the current year, subject to adjustment as provided above,
except that in any year in which resurfacing of the parking area or material
roof repairs are planned, Landlord may include the estimated cost of such work
in the estimated monthly Additional Rent. Landlord shall make final
determination of Additional Rent for the year in which this Lease terminates as
soon as possible after termination. Tenant shall remain liable for payment of
any amount due to Landlord in excess of the estimated Additional Rent previously
paid by Tenant, and conversely, Landlord shall promptly return to Tenant any
overpayment, even though the Term has expired and Tenant has vacated the
Premises. Failure of Landlord to submit statements as called for herein shall
not be deemed a waiver of Tenant's obligation to pay Additional Rent as herein
provided. Tenant shall have the right to review and audit Landlord's records
relating to Additional Rent at Tenant's expense, at Landlord's business office,
provided Tenant has given Landlord reasonable prior notice.
(e) GENERAL PAYMENT TERMS. The Base Rent, Additional Rent and all
other sums payable by Tenant to Landlord hereunder are referred to as the
"Rent". All Rent shall be paid without deduction, offset or abatement in lawful
money of the United States of America. Rent for any partial month during the
Term shall be prorated for the portion thereof falling due within the Term.
5. LATE CHARGE: Notwithstanding any other provision of this Lease,
Tenant hereby acknowledges that late payment to Landlord of Rent, or other
amounts due hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
If any Rent or other sums due from Tenant are not received by Landlord or by
Landlord's designated agent within ten (10) days after their due date, then
Tenant shall pay to Landlord a late charge equal to six percent (6%) of such
overdue amount, plus any attorneys' fees incurred by Landlord by reason of
Tenant's failure to pay Rent and/or other charges when due hereunder. Landlord
and Tenant hereby agree that such late charges represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of Tenant's late
payment. Landlord's acceptance of such late charges shall not constitute a
waiver of Tenant's default with respect to such overdue amount or estop Landlord
from exercising any of the other rights and remedies granted under this Lease.
Initials: Landlord /s/ HC Tenant /s/ JW
/s/ RC
---------- --------
6. SECURITY DEPOSIT: Concurrently with Tenant's execution of the Lease,
Tenant shall deposit with Landlord the Security Deposit in the amount of
$57,300. as security for the full and faithful performance of each and every
term, covenant and condition of this Lease. Landlord may use, apply or retain
the whole or any part of the Security Deposit as may be reasonably necessary (a)
to remedy Tenant's default in the payment of any Rent, (b) to repair damage to
the Premises caused by Tenant, (c) to clean the
4
Premises upon termination of this Lease, (d) to reimburse Landlord for the
payment of any amount which Landlord may reasonably spend or be required to
spend by reason of Tenant's default, or (e) to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. Should
Tenant faithfully and fully comply with all of the terms, covenants and
conditions of this Lease, within thirty (30) days following the expiration of
the Term, the Security Deposit or any balance thereof shall be returned to
Tenant or, at the option of Landlord, to the last assignee of Tenant's interest
in this Lease. Landlord shall deposit said Security Deposit in a savings account
in a bank or savings and loan institution, and Tenant will be entitled to
interest thereon at the rate paid by the savings institution, payable to Tenant
at the termination of the lease. If Landlord so uses or applies all or any
portion of said deposit, within ten (10) days after written demand therefor
Tenant shall deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the full extent of the above amount, and Tenant's failure to
do so shall be a default under this Lease. In the event Landlord transfers its
interest in this Lease, Landlord shall transfer the then remaining amount of the
Security Deposit to Landlord's successor in interest, and thereafter Landlord
shall have no further liability to Tenant with respect to such Security Deposit.
7. POSSESSION:
(a) TENANT'S RIGHT OF POSSESSION. Tenant shall be entitled to
occupancy of the Premises for fixturation commencing at the Early Occupancy
Period (See Addendum Two).
(b) DELAY IN DELIVERING POSSESSION. If Landlord cannot deliver
possession of the Premises to Tenant at the commencement of the Term, i.e., on
October 15, 1994, this Lease shall not be void or voidable, nor shall Landlord,
or Landlord's agents be liable to Tenant for any loss or damage resulting
therefrom. Tenant shall not be liable for Rent until Landlord delivers
possession of the Premises to Tenant. The expiration date of the Term shall be
extended by the same number of days that Tenant's possession of the Premises is
delayed.
8. USE OF PREMISES:
(a) PERMITTED USES. The Premises shall be used only for R & D,
general office, sales, administration, shipping/receiving, storage and light
manufacturing, to the extent permitted by governmental regulations. No printed
circuit board manufacture or wafer fabrication shall be permitted, or any
activities involving toxic substances, except that Tenant shall be permitted to
use customary office products and cleansers and minor quantities of cleaners and
solvents in connection with its business, but subject as to such cleaners and
solvents, the prior written consent of Landlord, which shall not be unreasonably
withheld.
(b) COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at
Tenant's expense, faithfully observe and comply with all Municipal, State and
Federal statutes, rules, regulations, ordinances, requirements, and orders, now
in force or which may hereafter be in force pertaining to the Premises or
Tenant's use thereof, including without limitation, any statutes, rules,
regulations, ordinances, requirements, or orders requiring installation of fire
sprinkler systems and removal of asbestos placed on the Premises by Tenant,
whether substantial in cost or otherwise, and all recorded covenants, conditions
and restrictions affecting the Property ("Private Restrictions") now in force or
which may hereafter be in force; provided that no such future Private
Restrictions shall materially affect Tenant's use and enjoyment of the Premises
or Property and provided, however, that Tenant shall not be required to make
structural changes to the Premises or Building not related to
5
Tenant's specific use of the Premises unless the requirement for such changes
is imposed as a result of any improvements or additions made or proposed to be
made at Tenant's request. The judgment of any court of competent jurisdiction,
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 rule,
regulation, ordinance, statute or Private Restrictions, shall be conclusive of
that fact as between Landlord and Tenant.
9. ACCEPTANCE OF PREMISES. By execution hereof, Tenant accepts the
Premises as suitable for Tenant's intended use and as being in good and sanitary
operating order, condition and repair; AS IS, and without representation or
warranty by Landlord as to the condition, or use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed
by Landlord and Tenant, and specifically set forth in Addendum One.
10. SURRENDER: Tenant agrees that on the termination of this Lease,
Tenant shall surrender the premises in the same condition as herein agreed
they have been received, damage caused by war, earthquake and ordinary wear
and tear excepted but with carpets vacuumed and other floors "broom clean".
At the time of termination of this lease, Landlord may require any or all of
the alterations or additions installed by Tenant or by Landlord for the
benefit of Tenant at Tenant's request to be removed and the premises restored
to their original condition, whether or not said alterations or additions
have become part of the premises under paragraph 11 hereof. Notwithstanding
the foregoing, Tenant shall not be required to remove the Tenant Improvements
made at the commencement of the Term, and subsequent alterations and
improvements unless (I) Tenant has not requested Landlord's consent to them
(whether or not such consent is required) or, (II) Tenant has requested such
consent and Landlord has notified Tenant, at the time of Tenant's request for
consent that such removal will be required. Upon surrender of the premises,
either at the expiration of the term or otherwise, Lessee agrees to remove
all personal property and rubbish from the premises; but if not so removed by
Tenant, Landlord may have the same removed at Tenant's expense. All property
of Tenant not so removed, unless such non-removal is consented to by
Landlord, shall be deemed abandoned by Tenant, provided that in such event
Tenant shall remain liable to Landlord for all costs incurred in storing and
disposing of such abandoned property of Tenant. If the Premises are not
surrendered at the end of the term or sooner termination of this lease,
Tenant hereby indemnifies Landlord against loss or liability resulting from
delay by Tenant in so surrendering the Premises including, without
limitation, any claims made by any succeeding tenant founded on such delay.
In the event of surrender of this lease, Landlord shall have the option of
terminating all existing sub-leases or of assigning said subleases to
Landlord.
11. ALTERATIONS AND ADDITIONS:
(a) Except for non-structural interior alterations and additions
costing less than $15,000.00 per alteration or addition, Tenant shall not make,
or permit to be made, any alteration or addition to the Premises, or any part
thereof, without the prior written consent of Landlord, such consent not to be
unreasonably withheld. Landlord's failure to disapprove proposed alterations or
additions within 10 working days after Landlord's receipt of the request for
approval, shall be deemed approval. Normal repair and maintenance work shall not
be deemed to be an alteration or addition to the Premises.
(b) Any alteration or addition to the Premises (including those in
subparagraph (a)) shall be at Tenant's sole cost and expense, in compliance with
all applicable laws and requirements requested by Landlord,
6
and in accordance with plans and specifications submitted in writing to Landlord
and approved as to alterations and additions costing over $15,000.00.
(c) All additions, alterations or improvements, including, but not
limited to, heating, lighting, electrical, air conditioning, fire extinguishers,
lighting fixtures, ballasts, light globes, and tubes, hot water heaters, fixed
partitioning, drapery, wall covering and paneling, built-in cabinet work and
carpeting installations made by Tenant, together with all property that has
become an integral part of the Building, shall at once be and become the
property of Landlord, and shall not be deemed trade fixtures, but any or all are
subject to removal pursuant to paragraph 10 hereof. Notwithstanding the
foregoing, the following Tenant improvements, if paid for by Tenant and not
included in the Tenant Improvement Allowance, namely telecommunication and
computer-related equipment, including specialized flooring, cabling, air
conditioning equipment (for the sole purpose of cooling said computers), may be
removed by Tenant so long as Tenant repairs any damage caused by such removal.
(d) Tenant agrees not to proceed to make such alterations or
additions, notwithstanding consent from Landlord to do so, until five (5) days
after Tenant's receipt of such consent.
12. MAINTENANCE OF PREMISES:
(a) MAINTENANCE BY TENANT. Throughout the Term, Tenant shall, at its
sole expense, (1) keep and maintain in good order, condition, and repair, and to
repair and to replace the Premise, and every part thereof, including glass,
windows, window frames, skylights, door closers, locks, storefronts, interior
and exterior doors and door frames, and the interior of the Premises, (excepting
only those portions of the Building to be maintained by Landlord, as provided in
Paragraph 12(c) below), (2) keep and maintain in good order and condition,
repair, and replace all utility and plumbing systems, fixtures and equipment,
including without limitation, electricity, gas, HVAC, water, and sewer, located
in or on the Premises, and furnish all expendables, including fluorescent tubes,
ballasts, light bulbs, paper goods and soaps, used in the Premises, (3) repair
all damage to the Building or the Outside Areas caused by the negligence or
willful misconduct of Tenant or its agents, employees, contractors or invitees
or other persons, including vandals. Tenant shall not do anything to cause any
damage, deterioration or unsightliness to the Building and the Outside Areas.
Tenant also agrees to maintain and pay for a service contract which meets the
manufacturer's recommendations of the air conditioning and heating systems
installed in the leased premises. Landlord reserves the right to hire a licensed
HVAC contractor to inspect annually the heating and air conditioning system. If
this contractor finds deficiencies in the condition of this system, Tenant
agrees to make all repairs and corrections within a reasonable period of time at
Tenant's expense, and after 30 days notice pay the cost of the inspections by
Landlord's contractor. If no deficiencies are found, Landlord shall pay for the
cost of the inspections.
(b) LANDLORD'S RIGHT TO MAINTAIN AND REPAIR AT TENANT'S EXPENSE.
Notwithstanding the foregoing, Landlord shall have the right, but not the
obligation, at Tenant's expense, to enter the Premises and perform Tenant's
maintenance, repair and replacement work. Within thirty (30) days after invoice
therefor from Landlord, Tenant shall pay all reasonable costs and expenses
incurred by Landlord in connection with such maintenance, repair and replacement
work. Landlord shall have the right to perform Tenant's maintenance, repair and
replacement work only if Tenant fails to take appropriate remedial action within
ten (10) days after receiving written notice from Landlord specifying the nature
of Tenant's failure to comply with
7
Paragraph 12(a) of the Lease. Notwithstanding the foregoing, if Tenant's failure
to maintain, repair or replace as required by Paragraph 12(a) of the Lease
creates an immediate danger of material further damage to the Premises, Landlord
shall not be required to give the notice to Tenant set forth in the previous
sentence.
(c) MAINTENANCE BY LANDLORD. Subject to the provisions of Paragraphs
12(a), 22 and 23, and further subject to Tenant's obligation under Paragraph 4
to reimburse Landlord, in the form of Additional Rent, for Tenant's
Proportionate Share of the cost and expense of the following items, Landlord
agrees to repair and maintain the following items: the structural portions of
the roof and the roof coverings (provided that Tenant installs no additional air
conditioning or other equipment on the roof that damages structural portions of
the roof or the roof coverings), the foundation, the floor slab, the load
bearing walls, and the exterior walls (excluding any glass therein but including
the painting thereof) of the Building; the utility and plumbing systems,
(including fountain and sewer lines), fixtures and equipment located outside the
Building; and the parking areas, landscaping, sprinkler systems, alarm system,
sidewalks, driveways, curbs, and lighting systems in the Outside Areas. Landlord
shall not be required to repair or maintain conditions due to any act,
negligence or omission of Tenant or its agents, contractors, employees or
invitees. Landlord's obligation hereunder to repair and maintain is subject to
the condition precedent that Landlord shall have received written notice of the
need for such repairs and maintenance. Tenant shall promptly report in writing
to Landlord any defective condition known to it which Landlord is required to
repair.
(d) TENANT'S WAIVER OF RIGHTS. Tenant hereby expressly waives all
rights to make repairs at the expense of Landlord or to terminate this Lease, as
provided for in California Civil Code Sections 1941 and 1942, and 1932 (l),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.
(e) INITIAL 12 MONTH MAINTENANCE BY LANDLORD. Landlord shall pay at
its expense for all repairs to the five Trane gas heaters and the five Trane air
conditioning units on the roof, less a $250.00 deductible for each call for
repairs, for the first twelve months after October 15, 1994, provided Tenant
gives Landlord 24 hours advance written notice of said need for repairs.
Landlord shall have the right to contract for said repairs, within a reasonable
period. Landlord shall also pay at its expense for all repairs to the roof, roof
membrane, and parking lot for the first twelve months after October 15, 1994.
This obligation of Landlord shall also extend to replacement of any
material, if repairs are not feasible.
Excluded from this obligation are any repairs or replacement directly
caused by Tenant, and its construction or misuse of the Premises.
The cost to Landlord under this Paragraph 12(e) shall not be passed
through to Tenant under Paragraphs 4(b)(5) and 12(a).
13. LANDLORD'S INSURANCE: Landlord shall purchase and keep in force fire,
extended coverage and "all risk" insurance covering the Building, and earthquake
coverage at the option of the Landlord. Tenant shall, at its sole cost and
expense, comply with any and all reasonable requirements pertaining to the
Premises of any insurer necessary for the maintenance of reasonable fire and
public liability insurance, covering Building and appurtenances. Landlord, at
Tenant's cost, may maintain "Loss of Rents" insurance, insuring that the Rent
will be paid in a timely manner to Landlord for a period of at least twelve (12)
months if the Premises are destroyed or rendered unusable or inaccessible by any
cause insured against
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under this Lease. The premium for such Loss of Rents insurance shall be
Additional Rent as set forth in Paragraph 4(b)(2).
14. TENANT'S INSURANCE:
(a) PUBLIC LIABILITY INSURANCE. Tenant shall, at Tenant's expense
secure and keep in force a "broad form" public liability insurance and
property damage policy covering the Premises and the Outside Areas, insuring
Tenant, and naming Landlord and its lenders as additional insureds, against
any liability arising out of the ownership, use, occupancy or maintenance of
the Premises and all Outside Areas. The minimum limit of coverage of such
policy shall be in the amount of not less than One Million Dollars
($1,000,000.) for injury or death of one person in any one accident or
occurrence and in the amount of not less than One Million Dollars
($1,000,000.) for injury or death of more than one person in any one accident
or occurrence, shall include an extended liability endorsement providing
contractual liability coverage (which shall include coverage for Tenant's
indemnification obligations in this Lease), and shall contain a severability
of interest clause or a cross liability endorsement. Such insurance shall
further insure Landlord and Tenant against liability for property damage of
at least One Million Dollars ($1,000,000.). The limit of any insurance shall
not limit the liability of Tenant hereunder. No policy shall be cancelable or
subject to reduction of coverage, without at least thirty (30) days prior
written notice to Landlord, and loss payable clauses shall be subject to
Landlord's approval. Such policies of insurance shall be issued as primary
policies and not contributing with or in excess of coverage that Landlord may
carry, by an insurance company authorized to do business in the State of
California for the issuance of such type of insurance coverage and rated
A:XIII or better in BEST'S KEY RATING GUIDE. A copy of said policy or a
certificate evidencing to Landlord's reasonable satisfaction that such
insurance is in effect shall be delivered to Landlord upon commencement of
the Term, and thereafter whenever said policies are renewed or modified, and
also whenever Landlord shall reasonable request.
(b) PERSONAL PROPERTY INSURANCE. Tenant shall maintain in full force
and effect on all of its fixtures and equipment on the Premises, a policy or
policies of fire and extended coverage insurance with standard coverage
endorsement to the extent of the full replacement cost thereof. During the term
of this Lease the proceeds from any such policy or policies of insurance shall
be used for the repair or replacement of the fixtures and equipment so insured.
Landlord shall have no interest in the insurance upon Tenant's equipment and
fixtures and will sign all documents reasonably necessary in connection with the
settlement of any claim or loss by Tenant. Landlord will not carry insurance on
Tenant's possessions. Tenant shall furnish Landlord with a certificate
evidencing to Landlord's reasonable satisfaction that such insurance is
currently in effect, and whenever required, shall satisfy Landlord that such
policy is in full force and effect.
15. INDEMNIFICATION:
(a) OF LANDLORD. Tenant shall indemnify and hold harmless Landlord
and agents, employees, partners, shareholders, directors, invitees, and
independent contractors (collectively "Agents") of Landlord against and from any
and all claims, liabilities, judgments, costs, demands, causes of action and
expenses (including, without limitation, reasonable attorneys' fees) arising
from (1) Tenant's use of the Premises or from any activity done, permitted or
suffered by Tenant, its agents, employees or independent contractors in and
about the Premises, the Building or the Property, and (2) any act, neglect,
fault, willful misconduct or omission of Tenant, or Tenant's Agents and invitees
or from any breach or default in the terms of this Lease by Tenant, and (3) any
action or proceeding brought on account of any matter
9
in items (1) or (2). If any action or proceeding is brought against Landlord by
reason of any such claim, upon notice from Landlord, Tenant shall defend the
same at Tenant's expense by counsel reasonably satisfactory to Landlord. As a
material part of the consideration to Landlord, Tenant hereby assumes all risk
of damage to property or injury to persons in or about the Premises from any
cause whatsoever (except that which is caused by the sole active negligence or
willful misconduct by Landlord or its Agents or by the failure of Landlord to
observe any of the terms and conditions of this Lease), if such failure has
persisted for an unreasonable period of time after written notice of such
failure), and Tenant hereby waives all claims in respect thereof against
Landlord. The obligations of Tenant under this Paragraph 15 shall survive
any termination of this Lease.
(b) NO IMPAIRMENT OF INSURANCE. The foregoing indemnity shall not
relieve any insurance carrier of its obligations under any policies required to
be carried by either party pursuant to this Lease, to the extent that such
policies cover the peril or occurrence that results in the claim that is subject
to the foregoing indemnity.
16. SUBROGATION: Landlord and Tenant hereby mutually waive any claim
against the other during the Term for any injury to person or loss or damage to
any of their property located on or about the Premises, the Building or the
Property that is caused by or results from perils covered by insurance carried
by the respective parties, to the extent of the proceeds of such insurance
actually received with respect to such injury, loss or damage, whether or not
due to the negligence of the other party or its agents. Because the foregoing
waivers will preclude the assignment of any claim by way of subrogation to an
insurance company or any other person, each party now agrees to immediately give
to its insurer written notice of the terms of these mutual waivers. Nothing in
this Paragraph 16 shall relieve a party of liability to the other for failure to
carry insurance required by this Lease.
17. ABANDONMENT: Tenant shall not abandon the Premises at any time during
the Term. In the event of abandonment, the rights and remedies of Tenant and
Landlord shall be determined in accordance with the applicable California
statutes in effect at the time of abandonment.
18. FREE FROM LIENS: Tenant shall keep the Premises and the Property free
from any liens arising out of any work performed, materials furnished, or
obligations incurred by or for Tenant.
19. ADVERTISEMENTS AND SIGNS: Tenant shall not place or permit to be
placed in, upon, or about the Premises or the Property any signs, advertisements
or notices without obtaining Landlord's prior written consent or without
complying with applicable law, and will not conduct, or permit to be conducted,
any sale by auction on the Premises or otherwise on the Property. Tenant shall
remove any sign, advertisement or notice placed on the Premises by Tenant upon
the expiration of the Term or sooner termination of this Lease, and Tenant shall
repair any damage or injury to the Premises or the Property caused thereby, all
at Tenant's expense. If any signs are not removed, or necessary repairs not
made, Landlord shall have the right to remove the signs and repair any damage or
injury to the Premises at Tenant's sole cost and expense. Landlord hereby
consents to Tenant's installing, at its expense, such signs located either on
the Building, in front of the Building (on Arques Avenue), or on both, provided
that such signs shall be in keeping both in number and size as those currently
identifying Signetics. The special designs for the signs shall be submitted to
and must receive prior written approval of Landlord.
20. UTILITIES. Tenant shall pay for all water, sewer, gas, heat, light,
power, telephone service and all other materials and services supplied to the
10
Premises. If Tenant fails to pay for any of the foregoing when due, Landlord may
pay the same and add such amount to the Rent.
It is understood that certain utility lines and controls, serving
premises other than the leased Premise, have been installed within the leased
Premise. It is agreed that such lines and controls may remain therein, and
access shall be provided by Tenant for the maintenance of said lines and
controls. Landlord shall give Tenant prior notice of such access and shall use
reasonable efforts to minimize any inconvenience to Tenant.
It is further understood that certain utility services, including
water, power, gas, sewer and HVAC are not separately metered to the Premises,
but also serve other adjoining premises. Landlord and Tenant agree that Landlord
shall submit at regular billing intervals, when utility bills are received, an
allocation of the monthly charges applicable to each user by area occupied by
each. Said allocated charges shall constitute additional rent. Landlord and
Tenant agree that such allocation shall cease as to any service for which
Landlord shall arrange for a separate meter for the Premises. The allocated
costs shall also include the expense of maintenance, repair and replacement of
equipment providing distribution of said utility services, which shall be
charged on the same area basis.
21. ENTRY BY LANDLORD. Tenant shall permit Landlord and its Agents to
enter into and upon the Premises at all reasonable times, upon reasonable notice
of no less than twenty four (24) hours, (except in the case of an emergency, for
which no notice shall be required), and subject to Tenant's reasonable security
arrangements, for the purpose of inspecting the same or showing the Premises to
prospective purchasers, lenders or tenants or to alter, improve, maintain and
repair the Premises as required or permitted of Landlord under the terms hereof,
without any liability to Tenant for any loss of occupation or quiet enjoyment of
the Premises thereby occasioned (except for actual damages resulting from the
negligence or willful misconduct of Landlord or its agents); and Tenant shall
permit Landlord to post notices of non-responsibility and ordinary "for sale" or
"for lease" signs, provided that Landlord may post such "for lease" signs and
exhibit the Premises to prospective tenants only during the six (6) months prior
to termination of this Lease. No such entry shall be construed to be a forcible
or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises.
22. DESTRUCTION AND DAMAGE:
(a) If the Building is damaged by fire or other perils covered by
extended coverage insurance, Landlord shall, at Landlord's option:
(1) Subject to the provisions of Paragraph 4 of Addendum One
hereof, in the event of total destruction (which shall mean destruction or
damage in excess of twenty-five percent (25%) of the full insurable value
thereof) of the Building, elect either to commence promptly to repair and
restore the Building and prosecute the same diligently to completion, in which
event this lease shall remain in full force and effect; or not to repair or
restore the Building, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
occurrence of such destruction. If Landlord elects not to restore the Building,
this Lease shall be deemed to have terminated as of the date of such total
destruction.
(2) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Building for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and
11
restore such partial destruction and, if the damage thereto is such that the
Building may be substantially repaired or restored to its condition existing
immediately prior to such damage or destruction within one hundred eighty (180)
days from the date of such destruction, Landlord shall commence and proceed
diligently with the work of repair and restoration, in which event the Lease
shall continue in full force and effect. If such repair and restoration requires
longer than one hundred eighty (180) days or if the insurance proceeds therefor
(plus any amounts Tenant may elect or is obligated to contribute) are not
sufficient to cover the cost of such repair and restoration, Landlord may elect
either to so repair and restore, in which event the Lease shall continue in full
force and effect, or not to repair or restore, in which event the Lease shall
terminate. In either case, Landlord shall give written notice to Tenant of its
intention within sixty (60) days after the destruction occurs. If Landlord
elects not to restore the Building, this Lease shall be deemed to have
terminated as of the date of such partial destruction.
(3) Notwithstanding anything to the contrary contained in this
Paragraph 22, in the event of damage to the Building or the Premises occurring
during the last twelve (12) months of the Term, Landlord may elect to terminate
this Lease by written notice of such election given to Tenant within thirty (30)
days after the damage occurs.
(b) Subject to the provisions of Paragraph 4 of Addendum One hereon,
if the Building is damaged by any peril not covered by extended coverage
insurance, and the cost to repair such damage exceeds any amount Tenant may
agree to contribute, Landlord may elect either to commence promptly to repair
and restore the Building and prosecute the same diligently to completion, in
which event this Lease shall remain in full force and effect; or not to repair
or restore the Building, in which event this Lease shall terminate. Landlord
shall given Tenant written notice of its intention within sixty (60) days after
the occurrence of such damage. If Landlord elects not to restore the Building,
this Lease shall be deemed to have terminated as of the date on which Tenant
surrenders possession of the Premises to Landlord, except that if the damage to
the Premises materially impairs Tenant's ability to continue its business
operations in the Premises, then this Lease shall be deemed to have terminated
as of the date such damage occurred.
(c) In the event of repair and restoration as herein provided, the
monthly installments of Base Rent shall be abated proportionately in the ratio
which Tenant's use of the Premises is impaired during the period of such repair
or restoration, unless the damage was caused by the negligent or willful acts of
omissions of Tenant, in which event there shall be abatement of Base Rent only
to the extent of rental abatement insurance proceeds received by Landlord.
Tenant shall not be entitled to any compensation or damages for loss of use of
the whole or any part of the Premises and/or any inconvenience or annoyance
occasioned by such damage, repair or restoration.
(d) If Landlord is obligated to or elects to repair or restore as
herein provided, Landlord shall repair or restore only those portions of the
Building and Premises which were originally provided at Landlord's expense,
substantially to their condition existing immediately prior to the occurrence of
the damage or destruction; and Tenant shall promptly repair and restore, at
Tenant's expense, Tenant's fixtures, improvements, alterations and additions
in and to the Premises or Building which were not provided at Landlord's
expense.
(e) Tenant hereby waives the provisions of California Civil Code
Section 1932(2) and Section 1933(4) which permit termination of a lease upon
destruction of the leased premises, and the provisions of any similar
12
law now or hereinafter in effect, and the provisions of this Paragraph 22 shall
govern exclusively in case of such destruction.
23. CONDEMNATION: If twenty-five percent (25%) or more of the Building or
the parking area for the Premises is taken for any public or quasi-public
purpose by any lawful governmental power or authority, by exercise of the right
of appropriation, inverse condemnation, condemnation or eminent domain, or sold
to prevent such taking (each such event being referred to as a "Condemnation"),
Landlord or Tenant may, at its option, terminate this Lease as of the date title
vests in the condemning party. If the Building after any Condemnation and any
repairs by Landlord would be untenantable for the conduct of Tenant's business
operations, Tenant shall have the right to terminate this Lease as of the date
title vests in the condemning party. If either party elects to terminate this
Lease as provided herein, such election shall be made by written notice to the
other party given within thirty (30) days after the nature and extent of such
Condemnation have been finally determined. Tenant shall not because of such
taking assert any claim against Landlord. Landlord shall be entitled to receive
the proceeds of all Condemnation awards, (except separate awards for trade
fixtures and relocation expense), and Tenant hereby assigns to Landlord all of
its interest in such awards. If less than twenty-five percent (25) of the
Building or the parking area is taken, Landlord at its option may terminate this
Lease. If neither Landlord nor Tenant elects to terminate this Lease to the
extent permitted above, Landlord shall promptly proceed to restore the Premises,
to the extent of any Condemnation award received by Landlord, to substantially
their same condition as existed prior to such Condemnation, allowing for the
reasonable effects of such Condemnation, and a proportionate abatement shall
be made to the Base Rent corresponding to the time during which, and to the
portion of the floor area of the Building (adjusted for any increase thereto
resulting from any reconstruction) of which, Tenant is deprived on account of
such Condemnation and restoration. The provisions of California Code of Civil
Procedure Section 1265.130, which allows either party to petition the
Superior Court to terminate the Lease in the event of a partial taking of the
Premises, and any other applicable law now or hereafter enacted, are hereby
waived by Landlord and Tenant.
24. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not voluntarily or by operation of law, (1)
mortgage, pledge, hypothecate or encumber this Lease or any interest herein,
(2) assign or transfer this Lease or any interest herein, sublet the Premises
or any part thereof, or any right or privilege appurtenant thereto, or allow
any other person (the employees, agents and invitees of Tenant excepted) to
occupy or use the Premises, or any portion thereof, without first obtaining
the written consent of Landlord, which consent shall not be withheld
unreasonably. When Tenant requests Landlord's consent to such assignment or
subletting, it shall notify Landlord in writing of the name and address of
the proposed assignee or subtenant and the nature and character of the
business of the proposed assignee or subtenant and shall provide current
financial statements for the proposed assignee or subtenant prepared in
accordance with generally accepted accounting principles. Tenant shall also
provide Landlord with a copy of the proposed sublet or assignment agreement,
including all material terms and conditions thereof. Landlord shall have the
option, to be exercised within thirty (30) days of receipt of the foregoing,
to (1) cancel this Lease [handwritten rider illegible] as of the commencement
date stated in the proposed sublease or assignment, (2) acquire from Tenant
the interest, or any portion thereof, in this Lease and/or the Premises that
Tenant proposes to assign or sublease, on the same terms and conditions as
stated in the proposed sublet or assignment agreement, (3) consent to the
proposed assignment or sublease, or (4) refuse its consent to the proposed
assignment or sublease, providing that such consent shall not be unreasonably
withheld.
13
(b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord may take into account the reputation and credit
worthiness of the proposed assignee or subtenant, the character of the business
proposed to be conducted in the Premises or portion thereof sought to be
subleased, and the potential impact of the proposed assignment or sublease on
the economic value of the Premises. In any event, Landlord may withhold its
consent to any assignment or sublease, if (1) the actual use proposed to be
conducted in the Premises or portion thereof conflicts with the provisions of
Paragraph 8(a) or (b) above or with any other lease which restricts the use to
which any space in the Building may be put, or (2) the proposed assignment or
sublease requires unreasonable alterations, improvements or additions to the
Premises or portions thereof.
(c) If Landlord approves an assignment or subletting as herein
provided, Tenant shall pay to Landlord, as Additional Rent, 50% of the
difference, if any, between (1) the Base Rent plus Additional Rent allocable to
that part of the Premises affected by such assignment or sublease pursuant to
the provisions of this Lease, and (2) the rent and any additional rent paid by
the assignee or sublessee to Tenant, after deducting the costs incurred by
Tenant in connection with any such assignment or sublease. The assignment or
sublease agreement, as the case may be, after approval by Landlord, shall not be
amended without Landlord's prior written consent, and shall contain a provision
directing the assignee or subtenant to pay the rent and other sums due
thereunder directly to Landlord upon receiving written notice from Landlord that
Tenant is in default under this Lease with respect to the payment of Rent.
Landlord's collection of such rent and other sums shall not constitute an
acceptance by Landlord of attornment by such assignee or subtenant. A consent to
one assignment subletting, occupation or use, and consent to any assignment or
subletting shall in no way relieve Tenant of any liability under this Lease. Any
assignment or subletting without Landlord's consent shall be void, and shall, at
the option of Landlord, constitute a Default under this Lease.
(d) Tenant shall pay Landlord's reasonable fees, not to exceed Five
Hundred Dollars ($500.00) per transaction, incurred in connection with
Landlord's review and processing of documents regarding any proposed assignment
or sublease.
(e) Tenant acknowledges and agrees that the restrictions, conditions
and limitations imposed by this Paragraph 24 on Tenant's ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or, use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that the Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof, to transfer or assign any right or
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof.
(f) Notwithstanding anything to the contrary herein, Landlord's
consent shall not be required for any transfer, assignment or subletting of the
Premises (or any portion thereof) to any entity which controls, is controlled
by, or is under common control with Tenant; to any entity which results from a
merger of or consolidation with Tenant; to any entity which acquires
substantially all of the assets of the Tenant, as a going concern, with respect
to the business that is being conducted in the Premises; or to entity engaged in
a bona fide joint venture with Tenant.
14
25. TENANT'S DEFAULT: The occurrence of any one of the following events
shall constitute an event of default on the part of Tenant ("Default"):
(a) The abandonment of the Premises by Tenant;
(b) Failure to pay any installment of Rent or any other monies due
and payable hereunder, said failure continuing for a period of 10 calendar days
after the same is due;
(c) A general assignment by Tenant for the benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant, the
filing of a voluntary petition for an arrangement, the filing of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by Tenant's creditors, said involuntary petition remaining undischarged
for a period of sixty (60) days;
(e) Receivership, attachment, or other judicial seizure of
substantially all of Tenant's assets on the Premises, such attachment or other
seizure remaining undismissed or undischarged for a period of sixty (60) days
after the levy thereof;
(f) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraph 30 or 31 or 40.
(g) An assignment or sublease, or attempted assignment or sublease,
of this Lease or the Premises by Tenant contrary to the provision of Paragraph
24, unless such assignment or sublease is expressly conditioned upon Tenant
having received Landlord's consent thereto;
(h) Failure of Tenant to restore the Security Deposit to the amount
and within the time period provided in Paragraph 6 above;
(i) Failure in the performance of any of Tenant's covenants,
agreements or obligations hereunder (except those failures specified as events
of Default in other Paragraphs or this Paragraph 25, which shall be governed by
such other Paragraphs), which failure continues for ten (10) calendar days after
written notice thereof from Landlord to Tenant PROVIDED THAT, if Tenant has
exercised reasonable diligence to cure such failure and such failure cannot be
cured within such ten (10) day period despite reasonable diligence, Tenant shall
not be in default under this subparagraph unless Tenant fails thereafter
diligently and continuously to prosecute the cure to completion; and
(j) Chronic delinquency by Tenant in the payment of Rent, or any
other periodic payments required to be paid by Tenant under this Lease. "Chronic
delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within (5) calendar days
after written notice thereof for any three (3) months (consecutive or
non-consecutive) during any twelve (12) month period. In the event of a
Chronic Delinquency, in addition to Landlord's other remedies for Default
provided in this Lease, at Landlord's option, Landlord shall have the right
to require that Rent be paid by Tenant quarterly, in advance.
Tenant agrees that any notice given by Landlord pursuant to Paragraph
25(b), (i) or (j) above shall satisfy the requirements for notice under
California Code of Civil Procedure Section 1161, and Landlord shall not be
required to give any additional notice in order to be entitled to commence an
unlawful detainer proceeding.
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26. LANDLORD'S REMEDIES:
(a) TERMINATION. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of such
intention to terminate. In the event that Landlord shall elect to so terminate
this Lease then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and any
other sums due and payable which have been earned at the time of such
termination; plus
(2) the worth at the time of award of the amount by which the
unpaid Rent and any other sums due and payable which would have been earned
after termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which the
unpaid Rent and any other sums due and payable for the balance of the term of
this Lease after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, including, without limitation, any costs or expenses reasonably and
necessarily incurred by Landlord (i) in retaking possession of the Premises;
(ii) in maintaining, repairing, preserving, restoring, replacing, cleaning,
altering or rehabilitating the Premises or any portion thereof, including such
acts for reletting to a new tenant or tenants; (iii) for leasing commissions; or
(iv) for any other costs necessary or appropriate to relet the Premises; plus
(5) such reasonable attorneys' fees incurred by Landlord as a
result of a Default, and costs in the event suit is filed by Landlord to enforce
such remedy; and plus
(6) 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.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above, the "worth at the time of award" 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%). Tenant waives redemption
of relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any Default or
Tenant hereunder.
(b) CONTINUATION OF LEASE. In the event of any Default by Tenant,
then in addition to any other remedies available to Landlord at law or in equity
and under this Lease, Landlord shall have the remedy described in California
Civil Code Section 1951.4 (Landlord may continue this Lease in effect after
Tenant's Default and abandonment and recover Rent as it becomes due, provided
Tenant has the right to sublet or assign, subject only to reasonable
limitations).
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(c) RE-ENTRY. In the event of any Default by Tenant, Landlord shall
also have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.
(d) RELETTING. In the event of the abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided in
Paragraph 26(b) or shall take possession of the Premises pursuant to legal
proceeding or pursuant to any notice provided by law, then if Landlord does not
elect to terminate this Lease as provided in Xxxxxxxxx 00(x), Xxxxxxxx may from
time to time, without terminating this Lease, relet the Premises or any part
thereof for such term or terms and at such rental or rentals and upon such other
terms and conditions as Landlord in its sole discretion may deem advisable with
the right to make alterations and repairs to the Premises. In the event that
Landlord shall elect to so relet, then rentals received by Landlord for such
reletting shall be applied in the following order: (1) to reasonable attorneys'
fees incurred by Landlord as a result of a Default and costs in the event suit
is filed by Landlord to enforce such remedies; (2) to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord; (3) to the
payment of any reasonable costs of such reletting; (4) to the payment of the
costs of any reasonable alterations and repairs to the Premises; (5) to the
payment of Rent due and unpaid hereunder; and (6) the residue, if any, shall be
held by Landlord and applied in payment of future Rent and other sums payable by
Tenant hereunder as the same may become due and payable hereunder. Should that
portion of such rentals received from such reletting during any month, which is
applied to the payment of Rent hereunder, be less than the Rent payable during
the month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall
also pay to Landlord, as soon as ascertained, any costs and expenses reasonably
and necessarily incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such reletting.
(e) TERMINATION. No re-entry or taking of possession of the Premises
by Landlord pursuant to this Paragraph 26 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.
(f) CUMULATIVE REMEDIES. The remedies herein provided are not
exclusive and Landlord shall have any and all other remedies provided herein or
by law or in equity.
(g) NO SURRENDER. No act or conduct of Landlord, whether consisting
of the acceptance of the keys to the Premises, or otherwise, shall be deemed to
be or constitute an acceptance of the surrender of the Premises by Tenant prior
to the expiration of the Term, and such acceptance by Landlord of surrender by
Tenant shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger takes place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant's estate
under this Lease, and
17
thereupon Landlord may terminate any or all such subleases by notifying the
sublessee of its election so to do within (5) days after such surrender.
27. ATTORNEY'S FEES: In the event any legal action or proceeding,
including arbitration or declaratory relief, is commenced for the purpose of
enforcing any rights or remedies pursuant to this Lease, the prevailing party
shall be entitled to recover from the non-prevailing party reasonable
attorneys' fees, as well as costs or suit, in said action or proceeding,
whether or not such action is prosecuted to judgment.
28. TAXES: Tenant shall be liable for and shall pay, prior to
delinquency, all taxes levied against personal property and trade or business
fixtures of Tenant. If any alteration, addition or improvement installed by
Tenant pursuant to Paragraph 11, or any personal property, trade fixture or
other property of Tenant, is assessed and taxed with the Property, Tenant shall
pay such taxes to Landlord within fifteen (15) days after delivery to Tenant of
a statement therefor.
29. EFFECT OF CONVEYANCE: The term "Landlord" as used in this Lease,
means only the owner for the time being of the Property containing the Building,
so that, in the event of any sale of the Property or the Building, Landlord
shall be and hereby is entirely freed and relieved of all covenants and
obligations of Landlord hereunder accruing from and after the transfer, and it
shall be deemed and construed, without further agreement between the parties and
the purchaser at any such sale, that the purchaser of the Property or the
Building has assumed and agreed to carry out any and all covenants and
obligations of Landlord hereunder.
30. TENANT'S ESTOPPEL CERTIFICATE: From time to time, upon written
request of Landlord, Tenant shall execute, acknowledge and deliver to Landlord
or its designee, a written certificate stating (a) the date this Lease was
executed, the Commencement Date of the Term and the date the Term expires; (b)
the date Tenant entered into occupancy of the Premises; (c) the amount of Rent
and the date to which such Rent has been paid; (d) that this Lease is in full
force and effect and has not been assigned, modified, supplemented or amended in
any way (or, if assigned, modified, supplemented or amended, specifying the date
and terms of any agreement so affecting this Lease); (e) that this Lease
represents the entire agreement between the parties with respect to Tenant's
right to use and occupy the Premises (or specifying such other agreements, if
any); (f) that all obligations under this Lease to be performed by Landlord as
of the date of such certificate have been satisfied (or specifying those as to
which Tenant claims that Landlord has yet to perform); (g) that all required
contributions by Landlord to Tenant on account of Tenant's improvements have
been received (or stating exceptions thereto); (h) to the best of Tenant's
knowledge that on such date there exist no defenses or offsets that Tenant has
against the enforcement of this Lease by Landlord (or stating exceptions
thereto; (i) that no Rent or other sum payable by Tenant hereunder has been paid
more than one (1) month in advance (or stating exceptions thereto); (j) that
security has been deposited with Landlord, stating the amount thereof; and (k)
any other matters evidencing the status of this Lease that may be required
either by a lender making a loan to Landlord to be secured by a deed of trust
covering the Premises or by a purchaser of the Premises. Any such certificate
delivered pursuant to this Paragraph 30 may be relied upon by a prospective
purchaser of Landlord's interest or a mortgagee of Landlord's interest or
assignee of any mortgage upon Landlord's interest in the Premises. If Tenant
shall fail to provide such certificate within ten (10) days of receipt by Tenant
of a written request by Landlord as herein provided, such failure shall, at
Landlord's election, constitute a Default under this Lease, and Tenant shall be
deemed to have given such certificate as above provided without modification and
shall be deemed to have given such certificate as above provided without
18
modification and shall be deemed to have admitted the accuracy of any
information supplied by Landlord to a prospective purchaser or mortgagee.
31. SUBORDINATION: Landlord shall have the right to cause this Lease
to be and remain subject and subordinate to any and all mortgages, deeds of
trust ("Encumbrances") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; PROVIDED ONLY, that in the event of the foreclosure of any such
mortgage or deed of trust, so long as Tenant is not in default, the holder
thereof ("Holder") shall agree to recognize Tenant's rights under this Lease
as long as Tenant shall pay the Rent and observe and perform all the
provisions of this Lease to be observed and performed by Tenant. Within ten
(10) days after Landlord's written request, Tenant shall execute, acknowledge
and deliver any and all reasonable documents required by Landlord or the
Holder to effectuate such subordination. If Tenant fails to do so, such
failure shall constitute a Default by Tenant under this Lease.
Notwithstanding anything to the contrary set forth in this Paragraph 31,
Tenant hereby attorns and agrees to attorn to any person or entity
purchasing or otherwise acquiring the Premises at any sale or other
proceeding or pursuant to the exercise of any other rights, powers or
remedies under such Encumbrance.
32. ENVIRONMENTAL COVENANTS:
(a) As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property, including all of those materials and substances designated
as hazardous or toxic by the city in which the Premises are located, the U.S.
Environmental Protection Agency, the Consumer Product Safety Commissions, the
Food and Drug Administration, the California Water Resources Control Board, the
Regional Water Quality Control Board, San Francisco Bay Region, the California
Air Resources Board, CAL/OSHA Standards Board, Division of Occupational Safety
and Health, the California Department of Food and Agriculture, the California
Department of Health Services, and any federal agencies that have overlapping
jurisdiction with such California agencies, or any other governmental agency now
or hereafter authorized to regulate materials and substances in the environment.
Without limiting the generality of the foregoing, the term "Hazardous Material"
shall include all of those materials and substances defined as "hazardous
materials" or "hazardous waste" in Sections 66680 through 66685 of Title 22 of
the California Administrative Code, Division 4, Chapter 30, as the same
products, fractions, constituents and sub-constituents of petroleum or
petroleum-related substances, asbestos, and any other materials requiring
remediation now or in the future under federal, state or local statutes,
ordinances, regulations or policies.
(b) Tenant represents, warrants and covenants (i) that it will use
and store in, on or about the Premises, only those Hazardous Materials that are
necessary for Tenant to conduct its business activities on the Premises, (ii)
that, with respect to any such Hazardous Materials, Tenant shall comply with all
applicable federal, state and local laws, rules, regulations, policies and
authorities relating to the storage, use, disposal or cleanup of Hazardous
Materials, including, but not limited to, the obtaining of proper permits, and
(iii) that it will not dispose of any Hazardous Materials in, on or about the
Premises under any circumstances except as permitted by applicable law.
19
(c) Tenant shall immediately notify Landlord of any inquiry, test,
investigation or enforcement proceeding by or against Tenant, Landlord or the
Premises concerning a Hazardous Material. Tenant acknowledges that Landlord, as
the owner of the Premises, shall have the right to negotiate, defend, approve
and appeal, any action taken or order issued with regard to a Hazardous Material
by an applicable governmental authority. Landlord shall immediately notify
Tenant of any inquiry, test, investigation or enforcement proceeding against the
Premises concerning a Hazardous Material on the Premises. Tenant shall pay
Landlord's cost of negotiating, defending or appealing any action or order
issued with regard to Hazardous Material by an applicable governmental authority
if Tenant caused, permitted or suffered such Hazardous Material to come onto the
Premises. Landlord agrees to indemnify, defend and hold Tenant harmless from and
against the cost and expense of any remediation or cleanup work required by any
governmental agency to be performed on the Premises as a result of any Hazardous
Materials existing on the Premises on the date of this Lease.
(d) If Tenant's storage, use or disposal of any Hazardous Material
in, on or adjacent to the Premises results in any contamination of the Premises,
the soil or surface of groundwater (1) requiring remediation under federal,
state or local statutes, ordinances, regulations, or policies, or (2) at levels
which are unacceptable to Landlord, in Landlord's reasonable judgment, Tenant
agrees to clean up said contamination. Tenant further agrees to indemnify,
defend and hold Landlord harmless from and against any claims, liabilities,
suits, causes of action, costs, expenses or fees, including reasonable
attorneys' fees and costs, arising out of or in connection with any remediation,
cleanup work, inquiry or enforcement proceeding in connection therewith, and any
Hazardous Materials currently or hereafter used, stored or disposed of by Tenant
or its agents, employees, contractors or invitees in, on or adjacent to the
Premises.
(e) Notwithstanding any other right of entry granted to Landlord
under this Lease, Landlord shall have the right upon reasonable prior written
notice (except in an emergency or in a situation where there is a danger of
immediate further contamination, in which case no prior notice will be required)
to enter the Premises or to have consultants enter the Premises throughout the
term of this Lease for the purpose of (1) determining whether the Premises are
in conformity with federal, state and local statutes, regulations, ordinances,
and policies including those pertaining to the environmental condition of the
Premises, (2) conducting an environmental audit or investigation of the Premises
for purposes of sale, transfer, conveyance or financing, (3) determining whether
Tenant has complied with this Paragraph 32, and (4) determining the corrective
measures, if any, required of Tenant to ensure the safe use, storage and
disposal of Hazardous Materials, or to remove Hazardous Materials (except to the
extent used, stored or disposed of by Tenant or its agents, employees,
contractors or invitees in compliance with applicable law). Tenant agrees to
provide access and reasonable assistance for such inspections. Such inspections
may include, but are not limited to, entering the Premises or adjacent property
with drill rigs or other machinery for the purpose of obtaining laboratory
samples. Landlord shall not be limited in the number of such inspections during
the term of this Lease. To the extent such inspections disclose the presence of
Hazardous Materials used, stored or disposed of other than in accordance with
subparagraph (b) (ii) above, Tenant shall reimburse Landlord for the reasonable
cost of such inspections within ten (10) days of receipt of a written statement
thereof. If such consultants determine that the Premises are contaminated with
Hazardous Materials used, stored or disposed of by Tenant or its agents,
employees, contractors or invitees, Tenant shall, in a timely manner, at its
expense, remove such Hazardous Materials or otherwise comply with the
recommendations of such consultants to the reasonable
20
satisfaction of Landlord and any applicable governmental agencies. The right
granted to Landlord herein to inspect the Premises shall not create a duty on
Landlord's part to inspect the Premises, or liability of Landlord for Tenant's
use, storage or disposal of Hazardous Materials, it being understood that Tenant
shall be solely responsible for all liability in connection therewith. Landlord
shall be liable for the gross negligence or willful misconduct of Landlord or
its agents, employees or consultants in conducting the aforementioned
inspections.
(f) Tenant shall surrender that Premises to Landlord upon the
expiration or earlier termination of this Lease free of debris, waste and
Hazardous Materials used, stored or disposed of by Tenant or its agents,
employees, contractors or invitees, and in a condition which complies with all
governmental statutes, ordinances, regulations and policies, recommendations of
consultants hired by Landlord, and such other reasonable requirements as may be
imposed by Landlord.
(g) Tenant's obligations under this Paragraph 32 shall survive
termination of this Lease, and Tenant waives the Statute of Limitations, as to
Landlord, applicable to any action brought hereunder.
(h) Landlord hereby disclose to Tenant that the Premises and the
Property are in an area in which contamination of soils or groundwater by
Hazardous Materials exist. If Tenant desires more definite information regarding
the existence or possible existence of contamination by Hazardous Materials of
soils or groundwater of or beneath the Premises, the Property, or other real
property in the general area of the Property, then Tenant shall investigate such
matters.
33. NOTICES: All notices and demands which may or are to be required or
permitted to be given to either party by the other hereunder shall be in writing
and shall be sent by United States mail, postage prepaid, certified, or by
personal delivery or overnight courier, addressed to the addressee at the
address for such addressee as specified herein, or to such other place as such
party may from time to time designate in a notice to the other party given as
provided herein. Notice shall be deemed given upon the earlier of actual receipt
or the date on which delivery was attempted if Tenant refuses to receive.
34. WAIVER: The waiver of any breach of any term, covenant or
condition of this Lease 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. The subsequent acceptance of Rent by
Landlord shall not be deemed to be a waiver of any preceding breach by
Tenant, other than the failure of Tenant to pay the particular rental so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such Rent. No delay or omission in the exercise of any
right or remedy of Landlord on any Default by Tenant shall impair such a
right or remedy or be construed as a waiver. Any waiver by landlord of any
Default must be in writing and shall not be a waiver of any other Default
concerning the same or any other provisions of this Lease.
35. HOLDING OVER: Any holding over after the expiration of the Term,
without the express written consent of Landlord, shall constitute a Default and,
without limiting Landlord's remedies provided in this Lease, such holding over
shall be construed to be a tenancy at sufferance, at a rental rate of one
hundred twenty percent (120%) of the Base Rent last due in this Lease, plus
Additional Rent, and shall otherwise be on the terms and conditions herein
specified, so far as applicable.
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36. SUCCESSORS AND ASSIGNS: The terms, covenants and conditions of this
Lease shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of all of the parties
hereto. If Tenant shall consist of more than one entity or person, the
obligations of Tenant under this Lease shall be joint and several.
37. TIME: Time is of the essence of this Lease and each and every term,
condition, and provision herein.
38. BROKERS: Landlord represents and warrants to Tenant that neither it
nor its officers or agents not anyone acting on its behalf has dealt with any
real estate broker except Xxxxxxx Realty and Tenant represents to Landlord that
Cornish & Xxxxx is its sole real estate broker in such negotiations, and each
party agrees to indemnify and hold harmless the other from any claim or claims,
and costs and expenses, including attorney's fees, incurred by the indemnified
party in conjunction with any such claim or claims of any other broker or
brokers to a commission in connection with this Lease as a result of the actions
of the indemnifying party.
39. RULES AND REGULATIONS: Tenant agrees to comply with such reasonable
rules and regulations as Landlord may adopt from time to time for the orderly
and proper operating of the Building and parking and other common areas. Such
rules may include but shall not be limited to the following: (a) restriction of
employee parking to a limited, designated area or areas; and (b) regulation of
the removal, storage and disposal of Tenant's refuse and other rubbish at the
sole cost and expense of Tenant. The rules and regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
responsible to Tenant for the failure of any other person to observe and abide
by any of said rules and regulations.
40. MORTGAGEE PROTECTION:
(a) MODIFICATIONS FOR LENDER. If, in connection with obtaining
financing for the Premises or any portion thereof, Landlord's lender shall
request reasonable modifications to this Lease as a condition to such financing,
Tenant shall not unreasonably withhold, delay or defer its consent to such
modifications, provided such modifications do not materially adversely affect
Tenant's rights or increase Tenant's obligations under this Lease.
(b) RIGHTS TO CURE. Tenant agrees to give to any trust deed or
mortgage holder ("Holder"), by registered mail, at the same time as it is given
to Landlord, a copy of any notice of default given to Landlord, PROVIDED THAT
prior to such notice Tenant has been notified, in writing, (by way of notice of
assignment of rents and leases, or otherwise) of the address of such Holder.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, then the Holder shall have an
additional twenty (20) days after expiration of such period, or after receipt of
such notice from Tenant (if such notice to the Holder is required by this
Paragraph 42(b), whichever shall last occur, within which to cure such default
or if such default cannot be cured within that time, then such additional time
as may be necessary if within such twenty (20) days, any Holder has commenced
and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings, if
necessary to effect such cure), in which event this Lease shall not be
terminated.
41. ENTIRE AGREEMENT: This Lease, including the Exhibits and any Addenda
attached hereto, which are hereby incorporated herein by this reference,
contains the entire agreement of the parties hereto, and no representations,
inducements, promises or agreements, oral or otherwise,
22
between the parties, not embodied herein or therein, shall be of any force and
effect.
42. CONSTRUCTION: This Lease shall be construed and interpreted in
accordance with the laws of the State of California. The parties acknowledge and
agree that no rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall be employed in the interpretation of
this Lease, including the Exhibits and any Addenda attached hereto. All captions
in this Lease are for reference only and shall not be used in the interpretation
of this Lease. Whenever required by the context of this Lease, the singular
shall include the plural, the masculine shall include the feminine, and vice
versa. If any provision of this Lease shall be determined to be illegal or
unenforceable, such determination shall not affect any other provision of this
Lease and all such other provisions shall remain in full force and effect.
43. REPRESENTATIONS AND WARRANTIES OF TENANT: Tenant hereby makes the
following representations and warranties, each of which is material and being
relied upon by Landlord, is true in all respects as of the date of this Lease,
and shall survive the expiration or termination of the Lease.
(a) If Tenant is an entity, Tenant is duly organized, validly
existing and in good standing under the laws of the state of its organization
and the persons executing this Lease on behalf of Tenant have the full right
and authority to execute this Lease on behalf of Tenant and to bind Tenant
without the consent or approval of any other person or entity. Tenant has
full power, capacity, authority and legal right to execute and deliver this
Lease and to perform all of its obligations hereunder. This Lease is a legal,
valid and binding obligation of Tenant, enforceable in accordance with its
terms.
(b) Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by any creditors, (3) suffered the appointment of a
receiver to take possession of all or substantially all of its assets, (4)
suffered the attachment or other judicial seizure of all or substantially all of
its assets, (5) admitted in writing its inability to pay its debts as they come
due, or (6) made an offer of settlement, extension or composition to its
creditors generally.
Landlord and Tenant have executed and delivered this Lease as of the date
first hereinabove set forth.
44. OUTSIDE AREAS.
(a) Subject to the terms and conditions of this lease and such
rules and regulations as Landlord may from time to time prescribe, Tenant and
Tenant's employees, invitees, guests and customers shall have the
nonexclusive right to use the access roads, parking areas, and facilities
provided and designated by Landlord for the general use and convenience of
the occupants of the building in which the premises are located, which areas
and facilities are referred to herein at "Outside Area". This right shall
terminate upon the termination of this lease. Landlord reserves the right
from time to time to make changes in the shape, size, location, amount and
extent of "Outside Area", and in painting of exterior walls. Landlord further
reserves the right to promulgate such reasonable rules and regulations
relating to the use of the "Outside Area", and any part or parts thereof, as
Landlord may deem appropriate for the best interests of the occupants of the
building. The rules and regulations shall be binding upon Tenant upon
delivery of a copy of them to Tenant and Tenant shall abide by them and
cooperate in their observance. Such rules and regulations may be
23
amended by Landlord from time to time, with or without advance notice, and
all amendments shall be effective upon delivery of a copy to Tenant. Tenant
agrees to require its employees, executives, invitees, guests and customers
to abide by such rules and regulations including parking regulations.
(b) Landlord shall operate, manage and maintain the "Outside Area",
and landscaping and the surface of the exterior walls. The manner in which the
"Outside Area" shall be maintained and the expenditures for such maintenance
shall be at the discretion of Lessor.
(c) No materials, supplies, equipment, finished products or
semi-finished products, raw materials or articles of any nature shall be
stored upon or permitted to remain on any portion of the leased premises
outside of the building constructed thereon, except with the prior written
consent of the Landlord. No waste materials or refuse shall be dumped upon or
permitted to remain unreasonable upon any part of the leased premises outside
of building proper, unless approved by Landlord.
(d) Tenant shall not use solid hard tires on any fork lifts or
dollies on paved parking, truck loading or driveway areas, and in the event
Tenant violates this provision, Tenant shall be responsible for the cost of
resurfacing the entire area.
45. PARKING: Motor vehicle parking shall be non-exclusive, subject to
reallocation by Landlord from time to time. Landlord reserves the right to
designate from time to time the parking spaces for vehicles of Tenant and its
guests and invitees. Said spaces shall total 280 less the number eliminated by
revisions to existing handicap parking and the installation of a dock. The
current designation of 280 spaces is shown on attached Exhibit B (2 pages).
Tenant agrees that Landlord shall have no responsibility for policing these
parking spaces or seeing that they are used exclusively by Tenant's employees,
guests, or invitees. Tenant shall not at any time park or permit the parking of
Tenant's trucks or other vehicles, or the trucks or other vehicles of others in
driveways or adjacent to loading areas as to interfere in any way with the use
of such areas, nor shall Tenant at any time park or permit the parking of Tenant
vehicles or trucks, or the vehicles or trucks of Tenant's suppliers or invitees
in any portion of the "Parking Area" not designated by Landlord for such use by
Tenant. Tenant shall not park or permit to be parked inoperative vehicles or
equipment on any portion of the "Outside Area" and agrees that no vehicle will
be parked on the "Outside Area" for longer than eighteen (18) hours in any
twenty-four (24) hour period.
46. CALCULATION OF AREA:
The square footage of the leased premises (approximately 73,648.6
square feet as set forth in Paragraph 2) has been calculated in this manner: the
area of the leased building, measured from the outer extent (drip line) of
metal and built-up roofed areas, or the outer walls, and to the center of
interior party walls. The Premises shall be deemed for all purposes and agreed
to consist of 73,648.6 square feet.
47. TENANT IMPROVEMENTS:
Tenant shall select and retain an architect or facilities planner who
shall prepare "tenant improvement" drawings and specifications for revisions to
the premises which are accepted by Tenant in "AS IS" condition, subject to the
provisions of Addendum 1, Paragraph 1.
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"Tenant Improvements" as stated in the Lease shall include only those
improvements within the Premises which are depicted on the Final Plans and
Specifications or described herein below.
The Tenant Improvements may include, but are not limited to:
(a) Partitioning, doors, floor coverings, finishes, ceilings,
wall coverings and painting, millwork and similar items.
(b) Electrical wiring, lighting fixtures, outlets and switches,
and other electrical work.
(c) Duct work, terminal boxes, defusers and accessories required
for the completion of the heating, ventilation and air conditioning systems
serving the Premises, including the cost of meter and key control for after-hour
air conditioning.
(d) Any additional Tenant requirements including, but not
limited to odor control, special heating, ventilation and air conditioning,
noise or vibration control or other special system.
(e) All fire and life safety control systems such as fire walls,
sprinklers, halon, fire alarms, including piping, wiring and accessories serving
the Premises.
(f) All plumbing, fixtures, pipes, and accessories serving the
Premises.
(g) Changes to handicapped parking or ramps.
Landlord shall provide in writing, not later than five (5) business
days after request therefor, approval or disapproval of preliminary and Final
Plans and Specifications. Landlord and Tenant shall indicate their approval of
the Final Plans and Specifications by initialing them. Upon completion of the
Final Plans and Specifications and approval thereof by Landlord and Tenant,
Tenant will obtain general contractor bids and furnish a cost breakdown to
Landlord. In the event the estimated Tenant Improvements Cost, based on such
bids and the reasonably anticipated costs of other items constituting the Tenant
Improvement Cost, exceeds the sum of the Tenant Improvements Allowance plus any
amounts which Tenant desires to pay as an Excess Tenant Improvements Costs, the
Final Plans and Specifications may be revised, at Tenant's cost and expense. Any
such revisions shall be subject to Landlord's approval, and the amended Final
Plans and Specifications, as approved by Landlord and Tenant, shall thereafter
be deemed to be the Final Plans and Specifications for the Tenant Improvements.
The amended Final Plans and Specifications shall be approved by Landlord in
writing, not later than five (5) business days after Tenant's request therefor.
Tenant shall thereafter submit such amended Final Plans and Specifications to
general contractors selected by Tenant and approved by Landlord for re-bidding,
and shall furnish a cost breakdown to Tenant. If the estimated Tenant
Improvements Cost, as determined by the bids based on the amended Final Plans
and Specifications and the reasonably anticipated costs or other items
constituting the Tenant Improvements Cost, result in an Excess Tenant
Improvements Cost, then Tenant may make further revisions as required to
delete such items from the Final Plans and Specifications in order to
eliminate any Excess Tenant Improvements Cost or, if Tenant does not elect to
make further revisions, Tenant shall pay such Excess Tenant Improvements Cost
as and when required below.
When the Final Plans and Specifications (as amended, if required above)
have been approved by Landlord and Tenant, Tenant shall submit
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such Final Plans and Specifications to all governmental authorities having
rights of approval over the Tenant Improvement work and shall apply for all
governmental approvals and building permits. Subject to its obligations, Tenant
shall thereafter commence and proceed to have completed construction of the
Tenant Improvements in a good and workmanlike manner by a general contractor
approved by Landlord.
Landlord shall provide an allowance for the planning and construction of
Tenant Improvements in the amount of Ten Dollars per square foot ($736,486.00).
In addition, Landlord shall provide $10,000. plus an amount of up to $15,000.
the $15,000. to be matched by equal amount from the above Ten Dollar per square
foot tenant improvement allowance to correct non-conformities with current codes
as required by governmental authorities and to apply moisture sealant under
floor tiles. The total amount (a maximum of $761,486.) shall be known as the
Tenant Improvement Allowance and shall be the maximum contribution by Landlord
for Tenant Improvement Costs including correcting any non-conformities to codes
or any other deficiencies. Should the actual cost of planning and constructing
those Tenant Improvements depicted on the Final Plans and Specifications be
less than the Tenant Improvements Allowance shall be reduced to an amount
equal to said actual cost.
The Tenant Improvements Cost ("Tenant Improvements Cost") shall include all
costs and expenses associated with the design, preparation, approval and
construction of the Tenant Improvements, including, but not limited, to the
following:
(a) All costs of preliminary and final architectural and engineering
plans and specifications for the Tenant Improvements, and engineering costs
associated with completion of the State of California energy utilization
calculations under Title 24 legislation;
(b) All costs of obtaining building permits and other necessary
authorizations from local governmental authorities;
(c) All costs of interior design and finish schedule plans and
specifications including as-build drawings;
(d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises;
(e) Utility connection fees.
In no event shall the Tenant Improvements Cost include any costs of procuring,
constructing or installing in the Premises any of Tenant's personal property or
trade fixtures.
In addition, Landlord shall, if requested to do so by Tenant at the time of
determining the final cost of the Tenant Improvements provide an additional
allowance of up to Five Dollars per square foot ("Additional Tenant Improvement
Funds"). The Additional Tenant Improvement Funds shall be used to construct and
install the Tenant Improvements and for no other purpose. Tenant shall reimburse
Landlord for the Additional Tenant Improvement Funds as provided for in this
Paragraph. The full amount of the Additional Tenant Improvement Funds, together
with interest thereon at the rate of eight and one-half percent (8-1/2%) per
annum, shall be amortized on a straight line basis over the number of months of
the Initial Term. The monthly amount resulting from such amortization
("Additional Tenant Improvement Funds Reimbursement") shall be added to the
monthly Base Rent amount set forth in Paragraph 4 of the Lease due by Tenant to
Landlord when Base Rent is due, as increased Base Rent. Any increase to Base
Rent
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shall for purposes of this Lease constitute "Base Rent". Landlord shall
calculate the amount of the monthly Additional Tenant Improvement Funds
Reimbursement, and such amount shall be the Additional Tenant Improvement Funds
Reimbursement. Thereafter, Landlord and Tenant shall execute a memorandum to
this Lease setting forth the amount by which Base Rent has been increased.
Landlord shall reimburse Tenant for Tenant Improvement Costs (up to the sum
of the Tenant Improvement Allowance, and if applicable, the Additional Tenant
Improvement Funds) within 10 days after presentation of invoices therefor and
proof that such invoices have been paid by Tenant. Tenant shall be entitled to
submit paid invoices to Landlord from time to time (but not more frequently than
once every 30 days) during construction.
48. CONTINUING OPTION. Landlord grants Tenant an option to lease the
remaining space in the South wing of the building (approximately 54,585 square
feet currently occupied by Kalpana Inc. under sublease from Philips
Semiconductors). This option to lease shall be for a lease with terms and
conditions identical to this lease with the following exception:
1) Base monthly rent shall be $.7765/square foot/month to be paid
monthly;
2) The $10.00/square foot tenant improvement allowance and Landlord's
maximum contribution to rectification of Code non-conformities ($.3394/square
foot) specified in Paragraph 47 shall be decreased to amounts which are
proportionate to the number of months of the term for the additional space
compared to sixty-six months. Example: if the term for the additional space is
fifty months, the amount for tenant improvements shall be $7.576/square foot
($10.00 x 50/66) and Landlord's maximum contribution to rectification of Code
non-conformities shall be $.2571/square foot ($.3394 x 50/66):
3) The additional $5.00 per square foot specified in Paragraph 47 for
tenant improvements shall be available to Tenant for the same purpose under the
same terms and conditions;
4) If the optioned space is vacant at the time of the exercise of the
option, early occupancy shall commence immediately and rental and occupancy
shall commence 90 days after option exercise. If the space is occupied at the
time of exercise of the option, early occupancy shall commence immediately on
surrender of the premises by the existing tenant, and rental and occupancy shall
commence 60 days thereafter. No rental shall be charged by Landlord during early
occupancy periods.
5) The space subject to the option shall be solidly contiguous to the
premises under this lease and shall not be less than 18,415 square feet at each
option exercise with a natural break with the remaining space considering HVAC,
electrical, other utilities, and layout. The remaining space also must be
reasonably leasable by Lessor. This continuing option is subject to any right of
Diamond Computer Systems, Inc. under its lease with Landlord. This continuing
option shall be for the period ending December 31, 1996, and shall not be
exercisable if the space is under lease or subject to a fully executed letter of
intent between Landlord and a third party. It is exercisable by Tenant by
written notice to Landlord to be received by Landlord only during the first
seven days of each month of the period ending December 31, 1996. To exercise
this continuing option, Tenant must have performed all the covenants and
obligations of Tenant and Tenant's financial condition must be at least equal
to that at the time of execution of this lease. If Tenant has not exercised
said option by April 7, 1995, Kalpana (lessee of adjoining space) may exercise
its option to extend its option to extend its lease
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of the adjoining 54,585 square feet for a lease term expiring February 29, 1996.
In such event, the period in which Tenant's option may be exercised is extended
to June 30, 1997.
The term of the expanded lease, which the exercise of the option shall
implement, shall commence as set forth in sub-paragraph 4 above, and end on the
termination date of the base lease. However, the said term shall be extended if
the option to extend under the base lease has been exercised, to coincide with
the extended termination date of the base lease. The rental and other provisions
applicable to the extended option period of the base lease, including
arbitration, shall be applicable to the premises added under the continuing
option and in effect such added premises shall be part of the base lease.
49. RIGHT OF FIRST OFFER: In the event that any space becomes available
to Landlord in the north wing of the building (approximately 35,552 square feet
currently under lease to Diamond Computer Systems, Inc.), Landlord shall notify
Tenant in writing of its availability at rent at 100% of "Fair Market Value"
with a term to end on the same date as the ending date of this lease. Tenant
shall have five working days after receipt of said notice to express its
interest. However, after the aforesaid five working days, Landlord shall have
the right to lease said space to any tenant as Landlord determines.
In the event that Landlord and Tenant cannot agree on a determination of
"Fair Market Rent", "Fair Market Rent" shall be determined in the same manner as
in Paragraph 50 - option to extend this lease.
50. OPTION TO EXTEND: Landlord grants to Tenant an option to extend the
term of this lease for one period of five years subject to all terms and
conditions herein contained except this paragraph, the maximum on "outside area"
expense set forth in paragraph 4(c)(2), paragraph 47 - Tenant Improvements, and
monthly rental including escalation which shall be determined as set forth
below. In order to exercise this option, Tenant must have performed all the
covenants and obligations of Tenant herein and at least six months before the
ending date of the initial term of this lease must have delivered to Landlord
written notice of the exercise of this option.
As of the date of exercise by Tenant of its option to extend, the monthly
base rental a maximum for "outside area" expenses and escalation of base rent,
all for the Extended Term shall be subject to negotiation between the Landlord
and Tenant. Not later than five (5) full calendar months prior to the expiration
date of the Initial Term, Landlord and Tenant shall meet and endeavor to agree
between themselves as to the fair market base monthly rental of the premises,
escalation thereof, and maximum for "outside area" expenses, all as of the
commencement of the Extended Term. If the parties are able to agree on such fair
market base monthly rental, escalation and maximum, said base monthly,
escalation and maximum rental shall be the rental escalation and maximum for the
premises during the Extended Term, the escalation agreed upon, and the maximum
"outside area" expenses. In the event the parties fail to agree upon said
amounts for the Extended Term, at least four (4) full calendar months prior to
commencement thereof, the base monthly rental for the Extended Term, including
escalation thereof, but not including maximum "outside area" expense, shall be
determined by appraisal in the manner hereafter set forth. Notwithstanding the
foregoing, Landlord and Tenant agree that the Outside Area Expense Maximum shall
in no event exceed, (a) for the first 12 months of the Extended Term, an amount
per square foot equal to 72 cents multiplied by a fraction, the numerator of
which is the CPI Index (hereinafter defined) for the month immediately prior to
the month in which the Extended Term commences and the denominator of which is
the CPI Index for the month immediately prior to the first full
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calendar month of the Term hereof, and (b) for each subsequent 12 month period,
the Outside Area Expense maximum established for the previous 12 month period,
increased by 5%. As used herein "CPI Index" means the United States Department
of Labor's Bureau of Labor Statistics Consumer Price Index, All Urban Consumers,
All Items, for the San Francisco-Oakland-San Xxxx area (1982-84=100) or any
comparable successor index.
In the event it becomes necessary under this subparagraph to determine the
fair market base monthly rental of the premises by appraisal, Landlord and
Tenant, no later than three (3) full calendar months prior to commencement of
the Extended Term, each shall appoint an experienced real estate appraiser with
at least five (5) years experience in the leasing of industrial office property
in the general vicinity of the premises. The two appraisers so selected shall
each determine the fair market base monthly rental for the premises taking into
account the value of the property and comparable prevailing rentals including
escalations for a five (5) year term in that area. Such appraisers shall, within
twenty (20) business days after their appointment, complete their appraisals and
submit their appraisal reports to Landlord and Tenant. If the fair market
monthly base rental of the premises established in the two (2) appraisals varies
by ten percent (10%) or less of the higher rental, the average of the two shall
be controlling. If said fair market monthly base rental varies by more than ten
percent (10%) of the higher rental, said appraisers, within ten (10) days after
the submission of the last appraisal, shall appoint a third appraiser who shall
also meet the qualifications set forth above. Such third appraiser shall, within
twenty (20) business days after his appointment, determine by appraisal the fair
market monthly base rental of the premises, taking into account the same factors
referred to above, and submit his appraisal report to Landlord and Tenant. The
fair market monthly base rental determined by the third appraiser for the
premises shall be controlling, unless it is less than that set forth in the
lower appraisal previously obtained, in which case the value set forth in said
lower appraisal shall be controlling, or unless it is greater than that set
forth in the higher appraisal previously obtained, in which case the base rental
set forth in said higher appraisal shall be controlling. If either Landlord or
Tenant fails to appoint an appraiser or if an appraiser appointed by either of
them fails, after his appointment, to submit his appraisal within the required
period in accordance with the foregoing, the appraisal submitted by the other
appraiser shall be controlling. The term "fair market monthly base rental" used
for all purposes of this paragraph, shall include escalation over the five year
term. The cost of all appraisals under this subparagraph shall be borne equally
by Landlord and Tenant. Upon determination of the fair market base monthly
rental by appraisal and an agreement between Landlord and Tenant on a maximum
for "outside area" expenses the parties hereto shall immediately execute an
addendum to this Lease stating the fair market base monthly rental so
determined, the escalation applicable thereto, and the "outside area" expense
maximum, the latter item being subject to agreement between Landlord and Tenant,
but not arbitration.
In the event of exercise of the option to extend, the security deposit
shall continue to be held under the provisions of the lease, to be returned to
Tenant to the extent therein set forth, within 30 days after the termination of
the extension period and vacation of the premises by Tenant.
It is agreed that this Option to Extend is personal to Tenant and to
successor tenant as defined by Paragraph 24([illegible]) and has been granted
because of specific use of the premises by Tenant and agreements in the lease
concerning Tenant's improvements. In the event this lease is assigned or
sublet to any third party or entity, this Option to Extend shall be null and
void.
Landlord and Tenant have executed and delivered this Lease as of the date
first hereinabove set forth.
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LANDLORD TENANT
Xxxxxx Xxxxxxxxxxx, Xx. and Global Village Communication, Inc.
Xxxxxxx X. Xxxxxxxxxxx
/s/ Xxxxxx Xxxxxxxxxxx, Xx. By /s/ Xxxxx X. Xxxxxx
------------------------------- -----------------------------
Xxxxxx Xxxxxxxxxxx, Xx. Printed
Name: Xxxxx X. Xxxxxx
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/s/ Xxxxxxx X. Xxxxxxxxxxx Title: V. P. Finance
-------------------------------- --------------------------
Xxxxxxx X. Xxxxxxxxxxx
By:
------------------------------
000 Xxxxxxxx Xx.
Xxx Xxxxxx, XX 00000 Printed
Name:
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