EXHIBIT 10.25
LEASE AGREEMENT
This Lease Agreement is made by and between Xxxxxxxxx X. Xxxxx and Xxxxxxxx X.
Xxxxx, hereinafter, "Landlord", and Integrated Packaging Assembly Corporation
(IPAC), a California corporation, and its assigns, hereinafter, "Tenant", to and
for the property commonly known as 000 Xxxxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx,
consisting of an approximately 7,150 square feet in a Manufacturing/Warehouse
building, hereinafter, "Premises".
1. PREMISES
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Landlord leases to Tenant, who leases from Landlord, those Premises (the
"Premises") outlined in EXHIBIT A, and described in the Basic Lease Data.
2. POSSESSION & LEASE COMMENCEMENT
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The Lease shall commence on NOVEMBER 1, 1997. Tenant may take possession of
some or all of the Premises at that time provided Tenant has pre-paid the
November 1997 rent, acquired the necessary insurance, and tendered the
security deposit. It is agreed Tenant assumes full responsibility for
acquiring all necessary government approvals and legal permits for tenant
improvements and occupancy of the Premises.
3. TERM
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The term of this Lease shall commence on the Lease Commencement Date and
continue in full force and effect for the number of months specified as the
Length of Term in the Basic Lease Data or until this lease is terminated as
provided herein. If the Commencement Date is a date other than the first day
of a calendar month, the Term shall be the number of months of the Length of
Term in addition to the remainder of the calendar month following the Term
Commencement Date.
A. LEASE EXTENSION OPTION. Tenant shall have one 5-year option to extend the
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lease at market rates provided Tenant is not in default under the terms of
this Agreement. If the option is exercised, the monthly rent shall be the
current fair market rent for the Premises at the commencement of the extended
term, as agreed by the parties. If the parties do not agree within thirty
(30) days prior to commencement of the option, the fair market rent shall be
determined by three mutually acceptable appraisers selected and governed by
the Rules of the American Arbitration Association. All other terms and
conditions in this Lease shall continue to apply during the option term.
B. SECURITY DEPOSIT. A Security Deposit shall be tendered to Landlord upon
execution of the lease in an amount equivalent to the last month's rent
($6,835.00). Upon execution of the lease, Tenant shall provide Landlord with
its most current financial statements. Additional security may be required if
Landlord determines Tenant's financial condition is inadequate to commit to a
lease of the Premises.
4. USE OF THE PREMISES
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A. GENERAL. Tenant shall use the Premises for the permitted use specified in
the Basic Lease Data ("Permitted Use") and for no other use or purpose.
Tenant shall control Tenant's employees, agents, customers, visitors,
invitees, licensees, contractors, assignees and subtenants (collectively,
"Tenant's Parties") in such a manner that Tenant and Tenant's Parties
cumulatively do not exceed the parking density specified in the Basic Lease
Data at any time. Tenant and Tenant's Parties shall have the non-exclusive
right to use, in common with other parties occupying the Building, the
parking areas, driveways and other common areas of the Building, subject to
reasonable rules from Landlord. Tenant shall have the right to use, on an
assigned basis, the number of parking spaces described in the Basic Lease
Data. Landlord shall not oversubscribe parking.
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B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises or any portion
of the common areas as a result of Tenant's or any Tenant's Party's use
thereof, nor take any action which would constitute a nuisance or would
disturb, obstruct or endanger any other occupants of the Building or
interfere with their use of their respective premises or common areas.
Storage outside the Premises of materials, vehicles or any other items is
prohibited. Tenant shall not use or allow the Premises to be used for any
immoral, improper or unlawful purpose, nor shall Tenant cause or maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer the commission of any waste in, on or about the Premises. Tenant shall
not allow any sale by auction upon the Premises, or place any loads upon the
floors, walls or ceilings which endanger the structure, or place any harmful
substances in the drainage system of the Building. No waste, materials or
refuse shall be dumped upon or permitted to remain outside the Premises
except in trash containers placed inside exterior enclosures designated for
that purpose by Landlord. Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building with any of
the above-referenced rules, or any other terms or provisions of such tenant's
or occupant's lease or other contract.
C. COMPLIANCE WITH REGULATIONS. By entering the Premises, Tenant accepts
the Premises in the condition existing as of the date of such entry. Tenant
shall at its sole cost and expense strictly comply with all existing or
future applicable municipal, state and federal and other governmental
statutes, rules, requirements, regulations, laws and ordinances, including
zoning ordinances and regulations, and covenants, easements and restrictions
of record governing and relating to Tenant's use, occupancy or possession of
the Premises, to Tenant's use of the common areas, or to its use storage,
generation or disposal or Hazardous Materials. Tenant shall at its sole cost
and expense obtain any and all licenses or permits necessary for Tenant's use
of the Premises. Tenant shall not do or permit anything to be done in, on or
about the Premises or bring or keep anything which will in any way increase
the rate of any insurance upon the Premises, Building or upon any contents
therein or cause a cancellation of said insurance or otherwise affect said
insurance in any manner. Tenant shall indemnify and hold Landlord harmless
from and against any loss, cost, damage, legal fees or liability arising out
of the failure of Tenant to comply with any regulation. Tenant's obligations
pursuant to the foregoing indemnity shall survive the expiration or earlier
termination of this Lease.
D. HAZARDOUS MATERIALS. "Hazardous Materials" shall include, but not be
limited to, hazardous, toxic and those substances defined as "hazardous
substances", "hazardous materials", "hazardous waste", "toxic substances", or
other similar designations in any regulation. Tenant shall not cause, or
allow any of Tenant's parties to cause, any hazardous materials to be used,
generated, stored or disposed of on or about the Premises, the Building or
surrounding land or environment in violation of any regulations. Tenant must
obtain Landlord's written consent prior to the introductions of any hazardous
materials onto the Premises. Landlord consents to Tenant's use of the
hazardous materials described in EXHIBIT B, provided Tenant obtains all
necessary government approvals or permits to use or store said materials on
the Premises. Tenant agrees that any future additions to this list, also
require Landlord's written consent as well as the abovementioned approvals
or permits prior to use or storage. Tenant may handle, store, use and dispose
of any such hazardous materials in a safe and lawful manner and never allow
such hazardous materials to contaminate the Premises, Building or surrounding
land or environment. Tenant shall immediately notify Landlord of any
hazardous materials' contamination of any portion of the Premises of which
Tenant becomes aware, whether or not caused by Tenant. Landlord shall have
the right at all reasonable times to inspect the Premises and to conduct
tests and investigations to determine whether Tenant is in compliance with
the foregoing provisions, the costs of all such inspections, tests and
investigations to be borne by Tenant. Tenant shall indemnify, and hold
Landlord harmless from all liabilities, losses, costs, legal fees, demands,
causes of action, claims or judgments directly or indirectly arising out of
the use, generation, storage, release, or disposal of hazardous materials by
Tenant or any of Tenant's parties in, on or about the Premises, the Building
or
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surrounding land or environment, which indemnity shall include, without
limitation, damages for personal or bodily injury, property damage, damage to
the environment, or natural resources occurring on or off the Premises,
losses attributable to diminution in value or adverse effects on
marketability, the reasonable costs of any investigation, monitoring,
government oversight, repair, removal, remediation, restoration, abatement,
and disposal, and the preparation of any closure or other required plans,
whether such action is required or necessary prior to or following the
expiration or earlier termination of this Lease. Notwithstanding the
foregoing, Tenant shall only be liable for detrimental consequences directly
or indirectly caused by its own acts or omissions. Neither Landlord's consent
to the use, generation, storage, release or disposal of hazardous materials
nor the strict compliance by Tenant with all laws pertaining to hazardous
materials shall excuse that Tenant from Tenant's obligation of
indemnification pursuant to this Section 4D. Tenant's obligations pursuant to
the foregoing indemnity shall survive the expiration or earlier termination
of this Lease. Landlord and its agents make no representations about the
current condition of the premises with respect to hazardous materials. Tenant
accepts the Premises "as is" and assumes full responsibility for obtaining
all necessary government approvals or permits prior to commencing operations
as well as any clean-up or clearance approvals upon the termination of its
activities on the Premises.
5. RULES & REGULATIONS
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Tenant shall faithfully observe and comply with any rules and regulations and
any additions thereto which Landlord may from time to time prescribe in
writing, for the purpose of maintaining the proper care, cleanliness, safety,
traffic flow and general order of the Premises or Building. Tenant shall
cause Tenant's parties to comply with such rules and regulations. Landlord
shall not be responsible to Tenant for the non-compliance by any other tenant
or occupant of the Building with any such rules and regulations, any other
tenant's or occupant's lease or any regulations. Landlord agrees to apply the
same rules and regulations non-discriminately to all of Landlord's tenants in
the building, and that said rules shall not unreasonably interfere with
Tenant's use of the Premises or Tenant's parking rights and does not
materially increase the obligations or decrease the rights of Tenant under
the Lease.
6. RENT
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A. BASE RENT. Tenant shall pay to Landlord Base Rent as specified in the
Basic Lease Data, payable in monthly installments in advance, on or before
the first day of each calendar month, without deductions or offset
whatsoever, at the remittance address specified in the Basic Lease Data or to
such other place as Landlord may from time to time designate in writing. Base
Rent for the first full month of the Term shall be paid by Tenant upon
Tenant's execution of this Lease. If the obligation for payment of Base Rent
commences on other than the first day of a month, then Base Rent shall be
prorated and the prorated installment shall be paid on the first day of the
calendar month next succeeding the Term Commencement Date. The Base Rent
payable by Tenant is subject to adjustments as provided in ADDENDUM 1
appended to this Lease. As used herein, the term "Base Rent" shall contain
the Base Rent specified in the Basic Lease Data as it may be so adjusted from
time to time.
B. ADDITIONAL RENT. All moneys other than Base Rent to be paid by Tenant,
including, but not limited to, Tenant's Proportionate Share of Operating
Expenses, as specified in Section 7 of this Lease, the interest and late
charge described in Sections 26 and 27, and any money spent by Landlord
pursuant to Section 30, shall be considered additional rent ("Additional
Rent"). "Rent" shall mean Base Rent and Additional Rent.
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B. PAYMENT OF OPERATING EXPENSES. Landlord shall have the right from time
to time to revise its fiscal year and accounting periods so long as the
periods as so revised are reconciled with prior periods in a reasonable
manner. During the last month of each fiscal year during the Term, or as soon
thereafter as practicable, Landlord shall give Tenant written notice of the
Estimated Operating Expenses for the ensuing fiscal year. Tenant shall pay
Tenant's proportionate share of the estimated operating expenses with
installments of base rent for the fiscal year to which the estimate operating
expenses applies in monthly installments on the first day of each calendar
month during such year, in advance. If at any time during the course of the
fiscal year, Landlord determines that Operating Expenses are projected to
vary from the then Estimate Operating Expenses by more than Ten percent
(10%), Landlord may, by written notice to Tenant, revise the Estimated
Operating Expenses for the balance of such fiscal year, and Tenant's monthly
installments for the remainder of such year shall be adjusted so that by the
end of such fiscal year Tenant has paid to Landlord Tenant's proportionate
share of the revised Estimated Operating Expenses for such year.
C. COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "Operating Expense
Adjustment" shall mean the difference between Estimate Operating Expenses and
actual Operating Expenses for any fiscal year determined as hereinafter
provided. Within one hundred twenty (120) days after the end of each fiscal
year, as determined by Landlord, or as soon thereafter as practicable,
Landlord shall deliver to Tenant a statement of actual Operating Expenses for
the fiscal year just ended, accompanied by a computation of Operating Expense
Adjustment. If such statement shows that Tenant's payment based upon
Estimated Operating Expenses is less than Tenant's Proportionate Share of
Operating Expenses, then Tenant shall pay to Landlord the difference within
20 days after receipt of such statement. If such statement shows that
Tenant's payment of Estimate Operating Expenses exceed Tenant's proportionate
share of Operating Expenses, (provided Tenant is not in default under this
Lease), Landlord shall pay to Tenant the difference within 20 days after
delivery of such statement to Tenant. If this Lease has been terminated or
the Term hereof has expired prior to the date of such statement, then the
Operating Expense Adjustment shall be paid by the appropriate party within 20
days after the date of delivery of the statement. Should this Lease commence
or terminate at any time other than the first day of the fiscal year,
Tenant's Proportionate share of the Operating Expense Adjustment shall be
prorated by reference to the exact number of calendar days during such fiscal
year that this Lease is in effect.
8. INSURANCE & INDEMNIFICATION
A. LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for
the sole benefit of Landlord and under Landlord's sole control.
(1) PROPERTY INSURANCE. Landlord agrees to maintain property insurance
insuring the Building against damage or destruction due to risks including
fire, vandalism, and malicious mischief in an amount not less than the
replacement cost thereof, in the form and with deductibles and endorsements
selected by Landlord. Landlord may elect to obtain "All Risk" coverage as an
option.
(2) OPTIONAL INSURANCE. Landlord may choose to obtain "All Risk" coverage,
and other types of insurance in amounts selected by Landlord, including but
not limited to earthquake, flood, pollution, loss of rent and so on. Landlord
shall not be obligated to insure any furniture, equipment, inventory,
supplies or other personal property which Tenant may have on the Premises.
B. TENANT'S INSURANCE.
(1) PROPERTY INSURANCE. Tenant shall procure at Tenant's sole expense and
keep in effect from the date of this Lease at all times until the end of the
Term, insurance on all personal property and fixtures of Tenant and all
improvements, additions or alterations made by or for Tenant to the Premises
on an "All Risk" basis, insuring such property for the full replacement value
of such property.
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(2) LIABILITY INSURANCE. Tenant shall procure at Tenant's sole expense and
keep in effect from the date of this Lease at all times until the end of the
Term, Commercial General Liability insurance applying to the use and
occupancy of the Premises, and any part of it, and any areas adjacent
thereto, and the business operated by Tenant or by any other occupant of the
Premises. Such insurance shall include Broad Form Contractual Liability
insurance coverage insuring all of Tenant's indemnity obligations under this
Lease. Such coverage shall have a minimum combined single limit of liability
of at least Two Million Dollars ($2,000,000), and a minimum general aggregate
limit of Three Million Dollars ($3,000,000), with an "Additional Insured -
Managers or Lessors of Premises Endorsement" and the "Amendment of the
Pollution Exclusion Endorsement". All such policies shall be written to apply
to all bodily injury, property damage or loss, personal injury and other
covered loss, however occasioned, occurring during the policy term, shall be
endorsed to add Landlord and any party holding an interest to which this
Lease may be subordinated as an additional insured, and shall provide that
such coverage shall be "primary" and non-contributing with any insurance
maintained by Landlord, which shall be excess insurance only. Such coverage
shall also contain endorsements: (i) deleting any employee exclusion on
personal injury coverage; (ii) including employees as additional insureds;
and (iii) providing for coverage of employer's automobile non-ownership
liability. All such insurance shall provide for the severability of interest
of insureds; and shall be written on an "occurrence" basis, which shall
afford coverage for all claims based on acts, omissions, injury and damage,
which occurred or arose in whole or in part during the policy period. Tenant
shall also procure at Tenant's sole cost and expense and keep in effect
during the Term of this Lease, Legal Liability Insurance covering direct
physical damage and loss of use of the Building of which Tenant is legally
obligated in an amount of the full replacement value of the Building.
(3) WORKER'S COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE. Tenant shall
carry Worker's Compensation Employer's Liability Insurance in amounts not
less than One Million Dollars ($1,000,000), each accident for bodily injury
by accident; One Million Dollars ($1,000,000) policy limit for bodily injury
by disease; and One Million Dollars ($1,000,000) each employee for bodily
injury by disease, throughout the Term at Tenant's sole expense.
(4) COMMERCIAL AUTO LIABILITY INSURANCE. Tenant shall procure at Tenant's
sole expense, and keep in effect through this Lease's duration, commercial
auto liability insurance with a combined limit of not less than One Million
Dollars ($1,000,000) for bodily injury and property damage for each accident.
Such insurance shall cover liability relating to any auto.
(5) GENERAL INSURANCE REQUIREMENTS. All coverages described in this Section
shall be endorsed to (i) provide Landlord with 30 days notice of cancellation
or change in terms, which includes a reduction in coverage; and (ii) waive
all rights of subrogation by the insurance carrier against Landlord.
9. WAIVER OF SUBROGATION
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To the extent allowed by law and without affecting the required insurance
coverage hereunder, or other rights or remedies, Landlord and Tenant waive
any right to recover against the other for: (a) damages for injury or death
of persons; (b) damages to any property; (c) damages to the Premises; and (d)
claims arising from the foregoing due to hazards covered by insurance to the
extent of proceeds recovered therefrom. This provision waives any rights
and/or claims arising by reason of the foregoing, but only to the extent that
any of the foregoing damages and/or claims referred to above are covered, and
only to the extent of such coverage by insurance actually carried by Landlord
or Tenant. This section also waives, for the benefit of each party, any
rights and/or claims which might give rise to a right of subrogation on any
insurance carrier. Subject to all qualifications of this Section 9, Landlord
waives its rights herein to any subtenant it has approved pursuant to Section
21 but only in exchange for the written waiver of such rights given by such
subtenant to Landlord. Each party shall cause each insurance policy it
obtained to provide that the insurance company waives all right of recovery
by way of subrogation against either party in connection with any damage
covered by any policy.
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10. LANDLORD'S REPAIRS AND MAINTENANCE
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At its own expense, Landlord shall maintain in good repair, reasonable wear
and tear excepted, the structural soundness of the roof, foundations, and
exterior walls of the Building. The term "exterior walls" as used herein
shall not include windows, glass or plate glass, doors, dock bumpers or dock
plates, special store fronts or office entries. Any damages caused by or
repairs necessitated by any act of Tenant or Tenant's Parties may be
repaired by Landlord at Landlord's option and Tenant's expense. Tenant shall
immediately give Landlord written notice of any defect or need of repairs in
such components of the Building after which Landlord shall have a reasonable
opportunity and the right to enter the Premises at all reasonable times to
repair same. Landlord's liability with respect to any defects, repairs, or
maintenance for which Landlord is responsible under any of the provisions of
this Lease shall be limited to the cost of such repairs or maintenance, and
there shall be no abatement of rent and no liability of Landlord by reason
of any injury to or interference with Tenant's business arising from the
making of repairs, alterations or improvements in or to any portion of the
Premises or Project or to fixtures, appurtenances or equipment in the
Building, except as provided in Section 24. By taking possession of the
Premises, Tenant accepts them as being in good order, condition and repair
and the condition in which Landlord is obligated to deliver them.
11. TENANT'S REPAIRS AND MAINTENANCE
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Tenant shall at all times during the Term at Tenant's expense maintain all
parts of the Premises a first-class, good, clean and secure condition and
promptly make all necessary repairs and replacements, as determined by
Landlord, including but not limited to all windows, glass, doors, walls,
including demising walls, and wall finishes, floors and floor covering,
heating, ventilating and air conditioning systems, ceiling insulation, truck
doors, hardware, dock bumpers, dock plates and levelers, plumbing work and
fixtures, downspouts, entries, skylights, smoke hatches, roof vents,
electrical and lighting systems, and fire sprinklers, with materials and
workmanship of the same character, kind and quality as the original. Tenant
shall at its own expense also perform regular removal of trash and debris.
If Tenant uses rail and if required by the railroad company, Tenant agrees
to sign a joint maintenance agreement governing the use of the rail spur, if
any. Tenant shall, at Tenant's own expense, enter into a regularly scheduled
preventative maintenance/service contract with a maintenance contractor for
servicing all hot water, heating and air conditioning systems and equipment
within or servicing the Premises. The maintenance contractor and the
contract must be approved by Landlord. The service contract must including
all services suggested by the equipment manufacturer within the
operation/maintenance manual and must become effective and a copy thereof
delivered to Landlord within thirty (30) days after the Term Commencement
Date. Landlord may, upon notice to Tenant, enter into such a service
contract on behalf of Tenant or perform the work and in either case charge
Tenant the cost thereof along with a reasonable amount for Landlord's
overhead. Notwithstanding anything to the contrary contained herein, Tenant
shall, at its expense, promptly repair any damage to the Premises or the
Building or Project resulting from or caused by any act of Tenant or
Tenant's Parties. Landlord shall perform or construct any repair,
maintenance or improvements (a) necessitated by acts or omissions of
Landlord or other occupants of the Building or their agents, employees or
contractors, (b) occasioned by casualty or by the exercise of eminent
domain, (c) which are outside the demising walls of the Premises. Tenant
shall pay for its share of the repairs to the extent such costs are included
in the Operating Expenses.
Paage 8 of 20
12. ALTERATIONS
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A. Tenant shall not make, or allow to be made, any alterations, physical
additions, improvements or partitions, including without limitation the
attachment of any fixtures or equipment, in, about or to the Premises
("ALTERATIONS") without obtaining the prior written consent of Landlord,
which consent shall not be unreasonably withheld with respect to proposed
Alterations which: (a) comply with all applicable Regulations; (b) are, in
Landlord's opinion, compatible with the Project and its mechanical,
plumbing, electrical, heating/ventilation/air conditioning systems; and (c)
will not interfere with the use and occupancy of any other portion of the
Building or Project by any other tenant or its invitees. Specifically, but
without limiting the generality of the foregoing, Landlord shall have the
right of written consent for all plans and specifications for the proposed
Alterations, construction means and methods, all appropriate permits and
licenses, any contractor or subcontractor to be employed on the work of
Alterations, and the time for performance of such work, and may impose rules
and regulations for contractors and subcontractors performing such work.
Tenant shall supply to Landlord any documents and information reasonably
requested by Landlord in connection with Landlord's consideration of a
request for approval hereunder. Tenant shall cause all Alterations to be
accomplished in a first-class, good and workmanlike manner, and to comply
with all applicable Regulations. Tenant shall at Tenant's sole expense,
perform any additional work required under applicable Regulations due to the
Alterations hereunder. No consent by Landlord to any proposed Alteration or
additional work shall constitute a waiver of Tenant's obligations under this
Paragraph 12. Tenant shall reimburse Landlord for all costs which Landlord
may incur in connection with granting approval to Tenant for any such
Alterations, including any costs or expenses which Landlord may incur in
electing to have outside architects and engineers review said plans and
specifications. All such Alterations shall remain the property of Tenant
until the expiration or earlier termination of this Lease, at which time
they shall be and become the property of Landlord if Landlord so elects;
provided, however, that Landlord may, at Landlord's option, require that
Tenant at Tenant's expense, remove any or all Alterations made by Tenant and
restore the Premises by the expiration or earlier termination of this Lease,
to their condition existing prior to the construction of any such
Alterations. All such removals and restoration shall be accomplished in a
good and workmanlike manner so as not to cause any damage to the Premises or
Project whatsoever. If Tenant fails to remove such Alterations or Tenant's
trade fixtures or furniture, Landlord may keep and use them or remove any of
them and cause them to be stored or sold in accordance with applicable law,
at Tenant's sole expense. In addition to and wholly apart from Tenant's
obligation to pay Tenant's Proportionate Share of Operating Expenses, Tenant
shall be responsible for and shall pay prior to delinquency any taxes or
governmental service fees, possessory interest taxes, fees or charges in
lieu of any such taxes, capital levies, or other charges imposed upon,
levied with respect to or assessed against its personal property, on the
value of Alterations within the Premises, and on Tenant's interest pursuant
to this Lease, or any increase in any of the foregoing based on such
Alterations.
Landlord approves of Tenant's construction of the alterations described in
EXHIBIT C to the Lease. All alterations shall be constructed at Tenant's
sole expense, with Tenant having responsibility for obtaining all government
approvals and permits. All trade fixtures, furniture, equipment and other
personal property installed in the Premises shall remain Tenant's property.
Except for alterations which cannot be removed without structural damage to
the Premises, Tenant may remove its property from the Premises at any time,
provided that Tenant repairs any damage caused by such removal.
B. In compliance with Section 27 thereof, at least ten (10) business days
before beginning construction of any Alteration, Tenant shall give Landlord
written notice of the expected commencement date of that construction to
permit Landlord to post and record a notice of non-responsibility. Upon
substantial completion of construction, Tenant shall cause a timely notice
of completion to be recorded in the office of the recorder of the county in
which the Building is located.
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13. SIGNS
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All signs, notices and graphics of every kind or character, visible in or
from public view or corridors, the common areas or the exterior of the
Premises, shall be subject to Landlord's prior written approval, which shall
not be unreasonably withheld. Tenant shall not place or maintain any banners
whatsoever or any window decor in or on any exterior window or window
fronting upon any common areas or service area or upon any truck doors or
main doors without Landlord's prior written approval which Landlord shall
have the right to withhold in its absolute and sole discretion. Any
installation of signs or graphics on or about the Premises or Project shall
be subject to any Regulations and to any other requirements imposed by
Landlord. Tenant shall remove all such signs or graphics by the termination
of this Lease. Such installations and removals shall be made in such manner
as to avoid injury to or defacement of the Premises, Building or Project and
any other improvements contained therein, and Tenant shall repair any injury
or defacement including without limitation discoloration caused by such
installation or removal.
14. INSPECTIONS/POSTING NOTICES
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After reasonable notice, except in emergencies where no such notice shall be
required, Landlord and Landlord's agents and representatives, shall have the
right to enter the premises to inspect the same, to clean, to perform such
work as may be permitted or required hereunder, to make repairs or
alterations to the Premises or Project or to other tenant spaces therein, to
deal with emergencies, to post such notices as may be permitted or required
by law to prevent the perfection of liens against Landlord's interest in the
project or to exhibit the premises to prospective tenants, purchasers,
encumbrances or to others, or for any other purpose as Landlord may deem
necessary or desirable; provided, however, that Landlord shall use
reasonable efforts not to unreasonably interfere with Tenant's business
operations or security measures without reasonable notice. Tenant shall not
be entitled to any abatement of Rent by reason of the exercise of any such
right of entry. At any time within six (6) months prior to the expiration of
the Term or following any earlier termination of this Lease or agreement to
terminate this Lease, landlord shall have the right to erect on the Premises
and/or Project a suitable sign indicating that the Premises are available
for lease.
15. UTILITIES
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Tenant shall pay directly for all water, gas, heating, air conditioning,
light, power, telephone, sewer, sprinkler charges and other utilities and
services used on or from the Premises, together with any taxes, penalties,
surcharges or the like pertaining thereto, and maintenance charges for
utilities and shall furnish all electric light bulbs, ballasts and tubes.
Tenant is responsible, at its own expense, for installing separate meters on
all utilities for its exclusive use. If any such services are not separately
metered to Tenant, Tenant shall pay a proportion, as determined by Landlord,
of all charges jointly serving other premises. Landlord shall not be liable
for any damages directly or indirectly resulting from nor shall the Rent or
any monies owed landlord under this Lease herein reserved be abated by
reason of: (a) the installation, use or interruption of use of any equipment
used in connection with the furnishing of any such utilities or services;
(b) the failure to furnish or delay in furnishing any such utilities or
services when such failure or delay is caused by acts of God or the
elements, labor disturbances of any character, or any other accidents or
other conditions beyond the reasonable control of Landlord; or (c) the
limitation, curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises or Project. Landlord shall be entitled to
cooperate voluntarily and in a reasonable manner with the efforts of
national, state or local governmental agencies or utility suppliers in
reducing energy or other resource consumption. The obligation to make
services available hereunder shall be subject to the limitations of any such
voluntary, reasonable program.
Page 10 of 20
16. SUBORDINATION
-------------
Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, the Lease shall be subject and
subordinate at all times to: (a) all ground leases or underlying leases
which may now exist or hereafter be executed affecting the Premises and/or
the land upon which the Premises and Project are situated, or both; and (b)
any mortgage or deed of trust which may now exist or be placed upon the
Building, the Project and/or the land upon which the premises or the Project
are situated, or said ground leases or underlying leases, or landlord's
interest or estate in any of said items which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or
any such liens to this Lease. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or deed of trust
is foreclosed or a conveyance in lieu of foreclosure is made for any reason,
Tenant shall, notwithstanding any subordination, attorn to and become the
Tenant of the successor in interest to the Landlord and Tenant shall not be
disturbed in its possession under this Lease by such successor in interest
so long as Tenant is not in default under this Lease. Within ten (10) days
after request by Landlord, Tenant shall execute and deliver any additional
documents evidencing Tenant's attornment or the subordination of this Lease
with respect to any such ground leases or underlying leases or any such
mortgage or deed of trust, in the form requested by Landlord or by any
ground landlord, mortgage, or beneficiary under a deed of trust, subject to
such nondisturbance requirement.
Landlord shall obtain from any lenders of the Building, a written agreement
providing for recognition of Tenant's interests under the Lease in the event
of a foreclosure of the lender's security interest.
17. FINANCIAL STATEMENTS
--------------------
At the request of Landlord from time to time, Tenant shall provide to
Landlord Tenant's and any guarantor's current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with
the ownership, management, financing and disposition of the Project. Prior
to execution of this Lease, Tenant shall provide Landlord with copies of the
financial statements stated in this Section 17.
18. ESTOPPEL CERTIFICATE
--------------------
Tenant agrees from time to time, within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, that this
Lease has not been modified (or stating all modifications, written or oral,
to this Lease), the date to which Rent has been paid, the unexpired portion
of this Lease, that there are no current defaults by Landlord or Tenant
under this Lease (or specifying any such defaults), and such other matters
pertaining to this Lease as may be reasonably requested by Landlord. Failure
by Tenant to execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant that the statements
included are true and correct without exception. Tenant agrees that if
Tenant fails to execute and deliver such certificate within such ten (10)
day period, Landlord may execute and deliver such certificate on Tenant's
behalf and that such certificate shall be binding on Tenant. Landlord and
Tenant intend that any statements delivered pursuant to this Paragraph may
be relied upon by any mortgagee, beneficiary, purchaser or prospective
purchaser of the Project or any interest therein. The parties agree that
Tenant's obligation to furnish such estoppel certificates in a timely
fashion is a material inducement for Landlord's execution of the Lease, and
shall be an event of default if Tenant fails to fully comply or makes any
material misstatement in any such certificate.
Page 11 of 20
19. SECURITY DEPOSIT
----------------
Tenant agrees to deposit with Landlord upon execution of this Lease, a
Security Deposit as stated in the Basic Lease Data, which sum shall be held
by Landlord, without obligation to pay interest, as security for the
performance of Tenant's covenants and obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of damages
incurred by landlord in case of Tenant's default. Upon the occurrence of any
event of default by Tenant, Landlord may from time to time, without
prejudice to any other remedy provided herein or provided by law, use such
fund to the extent necessary to make good any Rent arrears or other payments
due to landlord hereunder, and any other damage, injury, expense or
liability caused by such event of default, and Tenant shall pay to Landlord,
on demand, the amount so applied in order to restore the security deposit to
its original amount. Although the Security Deposit shall be deemed the
property of Landlord, any remaining balance of such deposit shall be
returned by Landlord to Tenant at such time after termination of this Lease
that all of Tenant's obligations under this Lease have been fulfilled.
Landlord may use and commingle the Security Deposit with other funds of
Landlord.
20. TENANT'S REMEDIES
-----------------
The obligations and liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease are not personal obligations of
Landlord or of the individual or other partners of Landlord or its or their
partners, directors, officers, or shareholders, and Tenant agrees to look
solely to Landlord's interest in the Project for the recovery of any amount
from Landlord, and shall not look to other assets of Landlord nor seek
recourse against the assets of the individual or other partners of Landlord
or its or their partners, directors, officers or shareholders. Any lien
obtained to enforce any such judgment and any levy of execution thereon
shall be subject and subordinate to any lien, mortgage or deed of trust on
the Project.
21. ASSIGNMENT & SUBLETTING
-----------------------
A. GENERAL. Tenant shall not assign or pledge this Lease or sublet the
Premises or any part thereof, whether voluntarily or by operation of law, or
permit the use or occupancy of the Premises or any part thereof by anyone
other than Tenant, or suffer or permit any such assignment, pledge,
subleasing or occupancy, without landlord's prior written consent except as
provided herein. If Tenant desires to assign this Lease or sublet any or all
of the Premises, Tenant shall give Landlord written notice at least sixty
(60) days prior to the anticipated effective date of the proposed assignment
or sublease, which shall contain all of the information reasonably requested
by Landlord to address Landlord's decision criteria specified hereinafter.
Landlord shall then have a period of thirty (30) days following receipt of
the notice to notify Tenant in writing that Landlord elects either: (1) to
terminate this Lease as to the space so affected as of the date so requested
by Tenant; or (2) to consent to the proposed assignment or sublease,
subject, however, to Landlord's prior written consent of the proposed
assignee or subtenant and of any related documents or agreements associated
with the assignment or sublease. If Landlord should fail to notify Tenant in
writing of such election within said period, Landlord shall be deemed to
have waived option (1) above, but written consent by Landlord of the
proposed assignee or subtenant shall be required. If Landlord does not
exercise option (1) above, Landlord's consent to a proposed assignment or
sublet shall not be unreasonably withheld.
Page 12 of 20
B. CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other instances
in which it may be reasonable for Landlord to withhold Landlord's consent to
an assignment or subletting, Landlord and Tenant acknowledge that is shall
be reasonable for Landlord to withhold Landlord's consent in the following
instances: the use of the Premises by such proposed assignee or subtenant
would not be a Permitted use or would violate any exclusivity arrangement
which Landlord has with any other tenant or occupant or would increase the
Parking Density of the Building or Project; the proposed assignee or
subtenant is not of sound financial condition as determined by Landlord in
landlord's sole discretion; the proposed assignee or subtenant is a
governmental agency; the proposed assignee or subtenant does not have a good
reputation as a tenant of property; the proposed assignee or subtenant is a
person with whom Landlord is negotiating to lease space in the Project or is
a present tenant of the Project; the assignment or subletting would entail
any Alterations which would lessen the value of the leasehold improvements
in the Premises; or Tenant is in default of any obligation of Tenant under
this Lease, or Tenant has defaulted under this Lease on three (3) or more
occasions during any twelve (12) months preceding the date that Tenant shall
request consent. Failure by landlord to consent to a proposed assignee or
subtenant shall not cause a termination of this Lease. Upon a termination
under this Section 21, Landlord may lease the Premises to any party,
including parties with whom Tenant has negotiated an assignment or sublease,
without incurring any liability to Tenant. At the option of Landlord, a
surrender and termination of this Lease shall operate as an assignment to
Landlord of some or all subleases or subtenancies. Landlord shall exercise
this option by giving notice of that assignment to such subtenants on or
before the effective date of the surrender and termination.
C. BONUS RENT. Any Rent or other consideration realized by Tenant under
any sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission incurred by Tenant, shall
be divided and paid, ten percent (10%) to Tenant, ninety percent (90%) to
Landlord. In any subletting or assignment undertaken by Tenant, Tenant shall
diligently seek to obtain the maximum rental amount available in the
marketplace for comparable space available for primary leasing.
D. CORPORATION. If Tenant is a corporation, a transfer of corporate shares
by sale, assignment, bequest, inheritance, operation of law or other
disposition (including such a transfer to or by a receiver or trustee in
federal or state bankruptcy, insolvency or other proceedings) resulting in a
change in the present control of such corporation or any of its parent
corporations by the person or persons owning a majority of said corporate
shares, shall constitute an assignment for purpose of this Lease.
E. UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business
form, a transfer of the interest of persons, firms, or entities responsible
for managerial control of Tenant by sale, assignment, bequest, inheritance,
operation of law or other disposition, so as to result in a change in the
present control of said entity and/or a change in the identity of the
persons responsible for the general credit obligations of said entity shall
constitute an assignment for all purposes of this Lease.
G. LIABILITY. No assignment or subletting by Tenant, permitted or
otherwise, shall relieve Tenant of any obligations under this Lease or alter
the primary liability of the Tenant named herein for the payment of Rent or
for the performance of any other obligations to be performed by Tenant,
including obligations contained in Section 25 with respect to any assignee
or subtenant. Any assignment or subletting which conflicts with the
provisions hereof shall be void.
22. AUTHORITY
---------
Landlord represents and warrants that it has full right and authority to
enter into this Lease and to perform all of Landlord's obligations hereunder
and that all persons signing this Lease on its behalf are authorized to do
so. Tenant represents and warrants that it has full right and authority to
enter into this Lease and to perform all of Tenant's obligations hereunder
and that all persons signing this Lease on its behalf are authorized to do
so.
Page 13 of 20
23. CONDEMNATION
------------
A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial
part of this Project of which the Premises are a part should be taken or
condemned for any public use under governmental law, ordinance or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the
Permitted Use of the Premises, this Lease shall terminate and the Rent shall
be abated during the unexpired portion of this Lease, effective when the
physical taking of said Premises shall have occurred.
B. CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project
of which the Premises are a part should be taken or condemned for any public
use under governmental law, ordinance or regulation, or by right of eminent
domain, or by private purchase in lieu thereof; and the taking materially
interferes with the Permitted Use of the Premises, and this Lease is not
terminated as provided in Section 23.A. above, the Rent payable hereunder
during the unexpired portion of the Lease shall be reduced, beginning on the
date when the physical taking shall have occurred based upon the extent to
which Tenant's use of the Premises has been diminished, to such amount as
may be fair and reasonable under all of the circumstances.
C. AWARD. Landlord shall be entitled to any and all payment, income, rent,
award or any interest therein whatsoever which may be paid or made in
connection with such taking or conveyance and Tenant shall have no claim
against Landlord or otherwise for the value of any unexpired portion of this
Lease. Notwithstanding the foregoing, any compensation specifically and
separately awarded Tenant for Tenant's personal property, and moving costs,
shall be and remain the property of Tenant.
D. WAIVER OF CCP SECTION 1265.130. Each party waives the provisions of
California Code of Civil Procedure Section 1265.130 allowing either party to
petition the superior court to terminate this Lease as a result of a partial
taking.
24. CASUALTY DAMAGE
---------------
A. GENERAL. If the Premises should be damaged or destroyed by fire,
tornado, or other casualty, Tenant shall give immediate written notice
thereof to Landlord. Within thirty (30) days after Landlord's receipt of
such notice, Landlord shall notify Tenant whether in Landlord's estimation
material restoration of the premises can reasonably be made either; (1)
within ninety (90) days; (2) in more than ninety (90) days but within one
hundred eighty (180) days; or (3) in more than one hundred eighty (180) days
from the date of such notice and receipt of required permits for such
restoration. Landlord's determination shall be binding on Tenant.
B. WITHIN 90 DAYS. If the Premises should be damaged by Casualty to such
extent that material restoration can in Landlord's estimation be reasonably
completed within ninety (90) days after the date of such damage and receipt
of required permits for such restoration, this Lease shall not terminate.
Provided that insurance proceeds are received by Landlord to fully repair
the damage, Landlord shall proceed to rebuild and repair the premises in the
manner determined by Landlord, except that Landlord shall not be required to
rebuild, repair or replace any part of the Alterations which may have been
placed on or about the Premises by Tenant. If the Premises are untenantable
in whole or in part following such damage, the Rent payable hereunder during
the period in which they are untenantable shall be abated proportionately,
but only to the extent of rental abatement insurance proceeds received by
Landlord during the time and to the extent the Premises are unfit for
occupancy.
Page 14 of 20
C. GREATER THAN 90 DAYS. If the Premises should be damaged by Casualty to
such extent that rebuilding or repairs can in Landlord's estimation be
reasonably completed in more than ninety (90) days but within one hundred
eighty (180) days after the date of such damage and receipt of required
permits for such rebuilding or repair, then Landlord shall have the option
of either: (1) terminating this Lease effective upon the date of the
occurrence of such damage, in which event the Rent shall be abated during
the unexpired portion of this Lease; or (2) electing to rebuild or repair
the Premises in the manner determined by Landlord. Notwithstanding the
above, Landlord shall not be required to rebuild, repair or replace any part
of the Alterations which may have been placed, on or about the Premises by
Tenant. If the Premises are untenantable in whole or in part following such
damage, the Rent payable hereunder during the period in which they are
untenantable shall be abated proportionately, but only to the extent of
rental abatement insurance proceeds received by Landlord during the time and
to the extent the premises are unfit for occupancy. In the event that
landlord should fail to complete such repairs and rebuilding within one
hundred eighty (180) days after the date upon which Landlord is notified by
Tenant of such damage and receipt of required permits, such period of time
to be extended for delays caused by the fault or neglect of Tenant or
otherwise by Tenant or because of acts of God, acts of public agencies,
labor disputes, strikes, fires, freight embargoes, rainy or stormy weather,
inability to obtain materials, supplies or fuels, or delays of the
contractors or subcontractors or any other causes or contingencies beyond
the reasonable control of Landlord, Tenant may at Tenant's option within ten
(10) days after the expiration of such one hundred eighty (180) day period
(as such may be extended), terminate this Lease by delivering written notice
of termination to Landlord as tenant's exclusive remedy, whereupon all
rights hereunder shall cease and terminate thirty (30) days after Landlord's
receipt of such termination notice.
D. GREATER THAN 180 DAYS. If the Premises should be so damaged by Casualty
that rebuilding or repairs cannot in Landlord's estimation be completed one
hundred eighty (180) days after such damage and receipt of required permits
for such rebuilding or repair, this Lease shall terminate and the Rent shall
be abated during the unexpired portion of this Lease, effective upon the
date of the occurrence of such damage.
E. TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty
resulting from the fault, negligence, or breach of this Lease by Tenant or
any of Tenant's Parties, Base Rent and Additional Rent shall not be
diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of the
Building caused thereby to the extent such cost and expense is not covered
by insurance proceeds.
F. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, in
the event that the Premises are damaged or destroyed and are not fully
covered by the insurance proceeds received by Landlord or in the event that
the holder of any indebtedness secured by a mortgage or deed of trust
covering the Premises requires that the insurance proceeds be applied to
such indebtedness, then in either case, Landlord shall have the right to
terminate this Lease by delivering written notice of termination to Tenant
within thirty (30) days after the date of notice to Landlord that said
damage or destruction is not fully covered by insurance or such requirement
is made by any such holder, as the case may be, whereupon all rights and
obligations hereunder shall cease and terminate.
G. WAIVER. This Section 24 shall be Tenant's sole and exclusive remedy in
the event of damage or destruction to the Premises or the Building. As a
material inducement to Landlord entering into this Lease, Tenant hereby
waives any rights it may have under Sections 1932, 1933(4), 1941 or 1942 of
the Civil Code of California with respect to any destruction of the
Premises, Landlord's obligation for tenantability of the Premises and
Tenant's right to make repairs and deduct the expenses of such repairs, or
under any similar law, statue or ordinance now or hereafter in effect.
Page 15 of 20
H. TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of
the Premises or the Building, under no circumstances shall Landlord be
required to repair any injury or damage to, or make any repairs to or
replacements of, Tenant's personal property.
I. CASUALTY DAMAGE. Landlord shall not have the right to terminate the
Lease if damage to the Premises is due to a casualty ordinarily covered by
insurance required to be carried by Landlord under the Lease or is
relatively minor (ie: repair or restoration would cost less than ten percent
(10%) of the replacement cost of the Premises).
25. HOLDING OVER
------------
Unless Landlord expressly consents in writing to Tenant's holding over,
Tenant shall be only a Tenant at sufferance, whether or not Landlord accepts
any Rent from Tenant or any other person while Tenant is holding over
without Landlord's written consent. If Tenant retains possession of the
Premises or any portion thereof without Landlord's consent following the
Lease expiration or sooner termination for any reason, then Tenant shall pay
to Landlord for each day of such retention double the amount of daily rental
as of the last month prior to the date of expiration or earlier termination.
Tenant shall also indemnify, defend, protect and hold Landlord harmless from
any loss, liability or cost, including reasonable attorney's fees, resulting
from delay by Tenant in surrendering the Premises, including, without
limitation, any claims made by the succeeding tenant founded on such delay.
Acceptance of Rent by Landlord following expiration or earlier termination
shall not constitute a renewal of this Lease, and nothing in this Section 25
shall waive Landlord's right of reentry or any other right. Additionally, in
the event that upon expiration or earlier termination of this Lease, Tenant
has not fulfilled its obligation with respect to repairs and cleanup of the
Premises or any other Tenant obligations as set forth in this Lease, then
Landlord shall have the right to perform any such obligations as it deems
necessary at Tenant's sole cost and expense, and any time required by
Landlord to complete such obligations shall be considered a period of
holding over and the terms of this section shall apply. The provisions of
this Section 25 shall survive any expiration or earlier termination of this
Lease.
26. DEFAULT
-------
A. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute a default by Tenant:
(1) ABANDONMENT. Abandonment or vacation of the Premises for a continuous
period in excess of thirty (30) days. Tenant waives any right to notice
Tenant may have under Section 1951.3 of the Civil Code of the State of
California, the terms of this Section 26 being deemed such notice to Tenant
as required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any other
amount due and payable hereunder upon the date when said payment is due.
There will be a maximum five (5) day grace period with respect to the rent
payment only, after which, no notice shall be required to consider the Lease
in default.
(3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
covenant under this lease other than those matters specified in
subparagraphs (1) and (2) of this Section 26, such failure continuing for
fifteen (15) days after written notice of such failure, or such additional
time as is reasonably required to cure such failure, provided Tenant is
diligently pursuing a cure.
(4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit of
creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant's creditors,
which involuntary petition remains undischarged for a period of thirty (30)
days. In the event that under applicable law, the trustee in bankruptcy or
Tenant has the right to affirm this Lease and continue to perform the
obligations of Tenant hereunder, such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure
all defaults of Tenant hereunder outstanding as of the date of the
affirmance of this Lease and provide to Landlord such adequate assurances as
may be necessary to ensure Landlord of the continued performance of Tenant's
obligations under this Lease.
Page 16 of 20
(6) RECEIVERSHIP. The employment of a receiver to take possession of
substantially all of Tenant's assets or the Premises, if such appointment
remains undismissed or undischarged for a period of ten (10) days after the
order therefor.
(7) ATTACHMENT. The attachment, execution, or other judicial seizure of all
or substantially all of Tenant's assets on the Premises, if such attachment
or other seizure remains undismissed or undischarged or a period of fifteen
(15) days after the levy thereof.
B. REMEDIES UPON DEFAULT.
(1) TERMINATION. In the event of the occurrence of any event of default,
Landlord shall have the right to give a written termination notice to
Tenant, and on the date specified in such notice, Tenant's right to
possession shall terminate, and this Lease shall terminate unless on or
before such date all Rent in arrears and all costs and expenses incurred by
or on behalf of Landlord hereunder shall have been paid by Tenant and all
other events of default of this Lease by Tenant at the time existing shall
have been fully remedied to the satisfaction of Landlord. At any time after
such termination, Landlord may recover possession of the Premises or any
part thereof and expel and remove therefrom Tenant and any other person
occupying the same, by any lawful means, and again repossess and enjoy the
Premises without prejudice to any of the remedies that landlord may have
under this Lease, or at law or equity by any reason of Tenant's default or
of such termination. Landlord hereby reserves the right to recognize the
continued possession of any subtenant.
(2) CONTINUATION AFTER DEFAULT. Even though an event of default may have
occurred, this Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession under Section 26.B(l) hereof, and
Landlord may enforce all of landlord's rights and remedies under this lease
and at law or in equity, including without limitation, the right to recover
Rent as it becomes due, and Landlord, without terminating this Lease, may
exercise all of the rights and remedies of a landlord under Section 1951.4
of the Civil Code of the State of California or any successor code section.
Acts of maintenance, preservation or efforts to lease the Premises or the
appointment of a receiver under application of Landlord to protect
Landlord's interest under this Lease or other entry by Landlord upon the
Premises shall not constitute an election to terminate Tenant's right to
possession.
C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to
the provisions of Section 26.B(1) hereof; Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the
State of California or any successor code sections. Upon such termination,
in addition to any other rights and remedies to which Landlord may be
entitled under applicable law or at equity, Landlord shall be entitled to
recover from Tenant: (1) the worth at the time of award of the unpaid Rent
and other amounts which had been earned at the time of termination, (2) the
worth at the time of award of the amount by which the unpaid Rent that would
have been earned after the date of termination until the time of award
exceeds the amount of such Rent loss that Tenant proves could have been
reasonably avoided: (3) the worth at the time of the amount by which the
unpaid Rent for the balance of the Term after the time of the award exceeds
the amount of such Rent loss that the Tenant proves could be reasonably
avoided; and (4) any other amount and court costs necessary to compensate
Landlord for all detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease or which, in the ordinary course of
things, would be likely to result therefrom. The "worth" at the time of
"award" as used in (1) and (2) above shall be computed at the lesser of the
"prime rate", as announced from time to time by Xxxxx Fargo Bank, N.A., (San
Francisco) or its successor, plus five (5) percentage points, or the maximum
interest rate allowed by law (Applicable Interest Rate). The "worth at the
time of award" as used in (3) above shall be computed by discounting such
amount at the Federal Discount Rate of the Federal Reserve Bank of San
Francisco at the time of the award plus one percent (1%). If this Lease
provides for any periods during the Term during which Tenant is not required
to pay Base Rent or if Tenant otherwise receives a Rent concession, then
upon the occurrence of an event of default, Tenant shall owe to Landlord the
full amount of such Base Rent or value of such Rent concession, plus
interest at the Applicable Interest Rate, calculated from the date that such
Base Rent or Rent concession would have been payable.
Page 17 of 20
D. LATE CHARGE. In addition to its other remedies, Landlord shall have the
right without notice or demand to add to the amount of any payment required
to be made by Tenant hereunder, and which is not paid and received by
Landlord on or before the fifth (5th) day of each calendar month, an amount
equal to ten percent (10%) of the delinquency for each month or portion
thereof that the delinquency remains outstanding to compensate Landlord for
The loss of the use of the amount not paid and the administrative costs
caused by the delinquency, the parties agreeing that Landlord's damage by
virtue of such delinquencies would be extremely difficult and impracticable
to compute and the amount state herein represents a reasonable estimate
thereof. Any waiver by Landlord of any late charge shall not constitute a
waiver of other late charges or any other remedies available to Landlord.
E. REMEDIES CUMULATIVE. All rights, privileges and elections or remedies
of the parties are cumulative and not alternative, to the extent permitted
by law and except as otherwise provided herein.
27. LIENS
-----
Tenant shall at all times keep the premises and the Project free from liens
arising out of or related to work or services performed, materials or
supplies furnished or obligations incurred by Tenant or in connection with
work made, suffered or done by or on behalf of Tenant in or on the Premises
or Project. In the event that Tenant shall not, within ten (10) days
following the imposition of any such lien, cause the same to be released of
record by payment or posting of a proper bond, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but
not the obligation, to cause the same to be released by such means as the
Landlord shall deem proper, including payment of the claim giving rise to
such lien. All sums paid by Landlord on behalf of Tenant and all expenses
incurred by Landlord in connection therefor shall be payable to Landlord by
Tenant on demand with interest at the Applicable Interest Rate. Landlord
shall have the right at all times to post and keep posted on the Premises
any notices permitted or required by law, or which Landlord shall deem
proper, for the protection of Landlord, the Premises, the project and any
other party having an interest therein, from mechanics' and materialmen's
liens, and Tenant shall give Landlord not less than ten (10) business days
prior written notice of the commencement of any work in the premises or
Project which could lawfully give rise to a claim for mechanics' or
materialmen's liens to permit Landlord to post and record a timely notice of
non-responsibility.
28. TRANSFERS BY LANDLORD
---------------------
In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
landlord from any liability upon any of the covenants or conditions, express
or implied, herein contained in favor of Tenant, to the extent required to
be performed after the passing of title to Landlord's successor-in-interest.
In such event Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of "Landlord" to be performed after
the passing of title to Landlord's successor-in-interest. This Lease shall
not be affected by any such sale and Tenant agrees to attorn to the
purchaser or assignee. Landlord's successor(s)-in-interest shall not have
liability to Tenant with respect to the failure to perform any of the
obligations of "Landlord," to the extent required to be performed prior to
the date such successor(s)-in-interest became the owner of the Building.
Page 18 of 20
29. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
-----------------------------------------------
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any
sum of money, other than Base Rent, required to be paid by Tenant hereunder
or shall fail to perform any other act on Tenant's part to be performed
hereunder, including Tenant's obligations under Paragraph 11 hereof and such
failure shall continue for fifteen (15) days after notice thereof by
Landlord, in addition to the other rights and remedies of Landlord, Landlord
may make any such payment and perform any such act on Tenant's part. In the
case of an emergency, no prior notification by Landlord shall be required.
Landlord may take such actions without any obligation and without releasing
Tenant from any of Tenant's obligations. All sums so paid by Landlord may
take such actions without any obligation and without releasing Tenant from
any of Tenant's obligations. All sums so paid by Landlord and all
incidental costs incurred by Landlord and interest thereon at the Applicable
Interest Rate, from the date of payment by Landlord, shall be paid to
Landlord on demand as Additional Rent.
30. WAIVER
------
If either Landlord or Tenant waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein. The acceptance of Rent by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant
or condition of this Lease, regardless of Landlord's knowledge of such
preceding breach at the time Landlord accepted such Rent. Failure by
Landlord to enforce any of the terms, covenants or conditions of this Lease
for any length of time shall not be deemed to waive or decrease the right of
landlord to insist thereafter upon strict performance by Tenant. Waiver by
Landlord of any term, covenant, or condition contained in this lease may
only be made by a written document signed by the landlord.
31. NOTICES
-------
Each provision of this Lease or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to sending,
mailing, or delivery of any notice or the making of any payment by Landlord
or Tenant to the other shall be deemed to be complied with when and if the
following steps are taken:
A. RENT. All Rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at Landlord's Remittance
Address set forth in the Basic Lease Information, or at such other address
as landlord may specify from time to time by written notice delivered in
accordance herewith. Tenant's obligation to pay Rent and any other amounts
to Landlord under the terms of this Lease shall not be deemed satisfied
until such Rent and other amounts have been actually received by Landlord.
B. OTHER. All notices, demands, consents and approvals which may or are
required to be given by either party to the other hereunder shall be in
writing and either personally delivered, sent by commercial overnight
courier, or mailed, certified or registered, postage prepaid, and addressed
to the party to be notified at the Notice Address for such party as
specified in the Basic Lease Information or to such other place as the party
to be notified may from time to time designate by at lease fifteen (15) days
notice to the notifying party. Notices shall be deemed served upon receipt
or refusal to accept delivery. Tenant appoints as its agent to receive the
service of all default notices and notice of commencement of unlawful
detainer proceedings the person in charge of or apparently in charge of
occupying the Premises at the time, and, if there is no such person, then
such service may be made by attaching the same on the main entrance of the
Premises.
Page 19 of 20
32. ATTORNEYS' FEES
---------------
In the event that Landlord places the enforcement of this Lease, or any part
thereof, or the collection of any Rent due, or to become due hereunder, or
recovery of possession of the Premises in the hands of an attorney, Tenant
shall pay to Landlord, upon demand, Landlord's reasonable attorneys' fees
and court costs, whether incurred at trial, appeal or review. In any action
which Landlord or Tenant brings to enforce its respective rights hereunder,
the unsuccessful party shall pay all costs incurred by the prevailing party
including reasonable attorney's fees, to be fixed by the court, and said
costs and attorneys' fees shall be a part of the judgment in said action.
33. SUCCESSORS & ASSIGNS
--------------------
This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit
of Tenant, it's successors, and to the extent assignment is approved by
Landlord as provided hereunder, Tenant's assigns.
34. FORCE MAJEURE
-------------
If performance by a party of any portion of this Lease is made impossible by
any prevention, delay, or stoppage caused by strikes, lockouts, labor
disputes, acts of God, inability to obtain services, labor, or materials or
reasonable substitutes for those items, government actions, civil commotion,
fire or other casualty, or other causes beyond the reasonable control of the
party obligated to perform, performance by that party for a period equal to
the period of that prevention, delay, or stoppage is excused. Tenant's
obligation to pay Rent, however, is not excused by this Paragraph.
35. SURRENDER OF PREMISES
---------------------
Tenant shall, upon expiration or sooner termination of this Lease, surrender
the Premises to Landlord in the same condition as existed on the date Tenant
originally took possession thereof, including, but not limited to, all
interior walls cleaned, all interior painted surfaces repainted in the
original color, all holes in walls repaired, all carpets shampooed and
cleaned, all HVAC equipment in operating order and in good repair and all
floors cleaned, waxed, and free of any Tenant-introduced marking or
painting, all to the reasonable satisfaction of Landlord. Tenant's
obligations with respect to the surrender of the Premises, shall be
fulfilled if Tenant surrenders possession of the Premises in the condition
existing at the Commencement Date, ordinary wear and tear, and alterations
or other interior improvements which Tenant is permitted to surrender at
Lease termination, excepted. Tenant shall remove all of its debris from the
Project. At or before the time of surrender, Tenant shall comply with the
terms of Section 12.A hereof with respect to Alterations to the Premises and
all other matters addressed in such Section. If the Premises are not so
surrendered at the expiration or sooner termination of this Lease, the
provisions of Section 25 hereof shall apply. All keys to the Premises or any
part thereof shall be surrendered to Landlord upon expiration or sooner
termination of the Term.
36. MISCELLANEOUS
-------------
A. GENERAL. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural
number, individuals, firms or corporations, and their respective successors,
executors, administrators and permitted assigns, according to the context
hereof.
B. TIME. Time is of the essence regarding this Lease and all of its
provisions.
C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws
of the State of California.
D. ENTIRE AGREEMENT. This Lease, together with its Exhibits, contains all
the agreements of the parties hereto and supersedes any previous
negotiations. There have been no representations made by the Landlord or its
agents or understandings made between the parties other than those set forth
in this Lease and its Exhibits.
Page 20 of 20
E. MODIFICATION. This Lease may not be modified except by a written
instrument signed by the parties hereto.
F. SEVERABILITY. If for any reason any of the provisions of this agreement
shall be deemed unenforceable or ineffective, all of the other provisions
shall be and remain in full force and effect.
G. RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof.
H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not
constitute an option or offer to lease and this Lease is not effective
otherwise until execution and delivery by both Landlord and Tenant.
I. ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than
the total Rent due nor any endorsement on any check or letter accompanying
any check or payment of Rent shall be deemed an accord and satisfaction of
full payment of Rent, and Landlord may accept such payment without prejudice
to Landlord's right to recover the balance of such Rent or to pursue other
remedies.
J. EXHIBITS. Exhibits "A, B, C," are attached, hereto and are incorporated
--------
herein by this reference.
K. COUNTERPARTS. This Lease may be executed in my number of counterparts,
each of which shall be deemed an original.
L. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.
M. APPROVALS. Whenever the Lease requires an approval, consent,
determination, selection or judgment by either Landlord or Tenant, such
approval, consent, determination, selection or judgment and any conditions
imposed thereby shall be reasonable and shall not be unreasonably withheld
or delayed and, in exercising any right or remedy hereunder, each party
shall at times act reasonably and in good faith.
N. REASONABLE EXPECTATIONS. Any expenditure by a party permitted or
required under the Lease, for which such party is entitled to demand
reimbursement from the other party, shall be limited to the fair market
value of the goods and services involved, shall be reasonably incurred, and
shall be substantiated by documentary evidence available for inspection and
review by the other party or its representative during normal business
hours.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
indicated below.
LANDLORD
Xxxxxxxxx X. Xxxxx and/or Xxxxxxxx X. Xxxxx
By: /s/ Xxxxxxxxx X. Xxxxx By:
------------------------------------ -----------------------------------
Its: Its:
----------------------------------- ----------------------------------
Date: 10/23/97 Date:
---------------------------------- ---------------------------------
TENANT
Integrated Packaging Assembly Corporation
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------ -----------------------------------
Its: VP OPERATIONS Its: VP & CFO
----------------------------------- ----------------------------------
Date: 10/17/97 Date: 10/18/97
---------------------------------- ---------------------------------
================================================================================
BASIC LEASE DATA
================================================================================
(10/16/97)
1. LEASE DATE: November 1, 1997
2. LANDLORD: Xxxxxxxxx X. Xxxxx and Xxxxxxxx X. Xxxxx
3. LANDLORD'S ADDRESS: 000 Xxxxxxxx Xxxx., Xxxxxxxx, XX 00000
4. TENANT: IPAC (Integrated Packaging Assembly Corporation)
5. TENANT'S NOTICE ADDRESS: 0000 Xxxxxxx Xxxx, Xxx Xxxx, XX 00000
6. BUILDING DESCRIPTION: A single-story, detached building totaling
approximately 45,000 square feet situated on approximately five (5) acres of
land, commonly known as 000 Xxxxxxxx Xxxx., Xxxxxxxx, XX 00000.
7. PREMISES DESCRIPTION: A section of the above described building, in the
Northwest quadrant, totaling approximately 7,150 square feet. The total size
is broken down into two parts: First, the enclosed portion of the Premises
is approximately 6,100 square feet; second, the semi-enclosed portion is
approximately 1,050sf.
8. INTENDED USE: The Premises shall be used for semiconductor device
manufacturing, including, but not limited to, lead finishing (lead-tin
solder alloy electroplating), inspection, rework and other end-of-line
operations.
9. PARKING FOR PREMISES: 12 assigned parking spaces.
10. LENGTH OF TERM: Five(5) years, (60 months).
11. COMMENCEMENT OF LEASE: November 1, 1997
12. OPTIONS: One (1) 5-year option (rent at market rate).
13. RENT:
Base Rent (1st year) $5,405/month, NNN.
Security Deposit: $6,835.00
Est 1st Year Basic Oper. Costs: $22,213.14 ($1,851.09/mo.)
14. TENANT'S PROPORTIONAL SHARE OF BLDG: Sixteen percent (16%)
The foregoing Basic Lease Data is incorporated into and made a part of this
lease. Each reference in this lease to any Basic Lease Data shall mean the
respective information above and shall be construed to incorporate all of the
terms provided under the particular Lease paragraph concerning such information.
If there is any conflict between the Basic Lease Data and the lease, the latter
shall control.
ADDENDUM 1: BASE RENT
BASE RENT. Base Rent for the Premises, Net of Basic Operating Costs per Section
7 of this Lease shall be as follows:
6,100 S.F. 1,050 S.F.
PERIOD (MO.) MAIN SPACE EQUIP.PAD TOTAL MO. RENT
------------ ---------- --------- --------------
1 - 12 $4,880.00 $525.00 $5,405.00
13 - 24 $5,185.00 $577.50 $5,762.50
25 - 36 $5,490.00 $630.00 $6,120.00
37 - 48 $5,795.00 $682.50 $6,477.50
49 - 60 $6,100.00 $735.00 $6,835.00
EXHIBIT B
HAZARDOUS ARTICLES ON SITE
The following manufacturing chemicals shall be used by IPAC and stored in
approximate quantities as shown below.
QUANTITY DESCRIPTION CONCENTRATION
1750 Liters Proprietary Deflating Solution 100 g/l alkali (NaOH)
1000 Liters Methyl Sulfonic Acid (MSA) Solution 200 g/l MSA
2000 Liters Methyl Sulfonic Acid (MSA) Solution 100 g/l MSA
2000 Liters Proprietary Sn/Pb Plating Solution Approx 280 g/l MSA;
65 g/l Sn and 5 g/l Pb
480Kg Sn - Pb Anode Bars 85% Sn - 15% Pb
1000 Liters Proprietary Activation Solution Approx 25% Sulfuric Acid
with 1 g/l Thiourea
1750 Liters Proprietary Stripping Solution 300 g/l MSA + 30% Nitric Acid
50 Gallons Sulfuric Acid Solution 30% Concentration Sulfuric Acid
50 Gallons Hydrochloric Acid Solution 25% Concentration HCl
50 Pounds Sodium Hydroxide NaOH Pellets
1-5 lb. Bottles Various Analytical Reagents for Lab Varies
Analysis
The above materials constitute the bulk of the manufacturing and control
process. As we move into production and future activities, other hazardous
articles may be required. These will be identified as they become known to IPAC.
EXHIBIT C - BUILDING MODIFICATIONS
IPAC will require the following modifications be made to the existing
building site:
Demolition (removal) of certain nonload-bearing internal sheetrock walls
Closure of certain doorways to provide security and fire safety
Separation of incoming electrical power, providing a minimum 1000 amps at 480
volts AC to IPAC
Separate metering of utilities (i.e., electrical, water and gas)
Separation of fire sprinkler alarm system
Separation of security alarm system
Separation of HVAC systems
Separate entry way, including ADA upgrades where required
Installation of ADA compliant restroom facilities
Removal of certain equipment from the facilities pad, including but not limited
to, air compressor, refrigerated dryer, DI water storage tank, etc. to
provide operating space for IPAC required equipment
Construction of internal berms and other hazardous material control features to
certain room(s)
Upgrades to trench covers in certain internal room(s) to permit washing and
maintenance of flooring and equipment
Installation of improved fume ducting to permit proper exhausting of chemical
vapor discharges
Modifications to the existing compressed air lines and sources of supply
Modifications of the equipment pad, including but not limited to, addition of
concrete berms, sumps, walkways, walls, etc. to facilitate placement of
equipment and handling/storage of hazardous materials
Extension of the equipment pad roofline to provide protection from the elements
to tanks, pumps and other equipment located thereunder
Installation of manufacturing equipment and supporting plumbing, electrical and
mechanical interfaces within the building and upon the equipment pad
Construction of future expansion areas within the building, such as but not
limited to, office areas, storage areas. manufacturing and inspection
areas, shipping and receiving areas, etc.
