EXHIBIT 10.25
INDUSTRIAL LEASE
(SINGLE TENANT: NET; STAND-ALONE)
BETWEEN
THE IRVINE COMPANY
AND
SILICON STORAGE TECHNOLOGY, INC.
TABLE OF CONTENTS
PAGE
ARTICLE 1 BASIC LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE 2 PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 2.1 LEASED PREMISES. . . . . . . . . . . . . . . . . . . . . . . . .2
Section 2.2 ACCEPTANCE OF PREMISES . . . . . . . . . . . . . . . . . . . . .2
Section 2.3 BUILDING NAME AND ADDRESS. . . . . . . . . . . . . . . . . . . .2
Section 2.4 LANDLORD'S RESPONSIBILITIES. . . . . . . . . . . . . . . . . . .2
ARTICLE 3 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Section 3.1 GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Section 3.2 RIGHT TO EXTEND THIS LEASE . . . . . . . . . . . . . . . . . . .3
ARTICLE 4 RENT AND OPERATING EXPENSES. . . . . . . . . . . . . . . . . . . . . . . .4
Section 4.1 BASIC RENT . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Section 4.2 OPERATING EXPENSES . . . . . . . . . . . . . . . . . . . . . . .4
Section 4.3 SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . .6
ARTICLE 5 USES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 5.1 USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Section 5.2 SIGNS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Section 5.3 HAZARDOUS MATERIALS. . . . . . . . . . . . . . . . . . . . . . .7
ARTICLE 6 SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Section 6.1 UTILITIES AND SERVICES . . . . . . . . . . . . . . . . . . . . .9
Section 6.2 PARKING. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE 7 MAINTAINING THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.1 TENANT'S MAINTENANCE AND REPAIR. . . . . . . . . . . . . . . . 10
Section 7.2 LANDLORD'S MAINTENANCE AND REPAIR. . . . . . . . . . . . . . . 10
Section 7.3 ALTERATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.4 MECHANIC'S LIENS . . . . . . . . . . . . . . . . . . . . . . . 11
Section 7.5 ENTRY AND INSPECTION . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 8 TAXES AND ASSESSMENTS ON TENANT'S PROPERTY . . . . . . . . . . . . . . . 12
ARTICLE 9 ASSIGNMENT AND SUBLETTING. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9.1 RIGHTS OF PARTIES. . . . . . . . . . . . . . . . . . . . . . . 12
Section 9.2 EFFECT OF TRANSFER . . . . . . . . . . . . . . . . . . . . . . 14
Section 9.3 SUBLEASE REQUIREMENTS. . . . . . . . . . . . . . . . . . . . . 14
Section 9.4 CERTAIN TRANSFERS. . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 10 INSURANCE AND INDEMNITY . . . . . . . . . . . . . . . . . . . . . . 15
Section 10.1 TENANT'S INSURANCE . . . . . . . . . . . . . . . . . . . . . . 15
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 10.2 LANDLORD'S INSURANCE . . . . . . . . . . . . . . . . . . . . . 15
Section 10.3 TENANT'S INDEMNITY . . . . . . . . . . . . . . . . . . . . . . 15
Section 10.4 LANDLORD'S NONLIABILITY. . . . . . . . . . . . . . . . . . . . 15
Section 10.5 WAIVER OF SUBROGATION. . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 11 DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.1 RESTORATION. . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.2 LEASE GOVERNS. . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 12 EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 12.1 TOTAL OR PARTIAL TAKING. . . . . . . . . . . . . . . . . . . . 17
Section 12.2 TEMPORARY TAKING . . . . . . . . . . . . . . . . . . . . . . . 17
Section 12.3 TAKING OF PARKING AREA . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 13 SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS . . . . . . . . . . 18
Section 13.1 SUBORDINATION. . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 13.2 ESTOPPEL CERTIFICATE . . . . . . . . . . . . . . . . . . . . . 18
Section 13.3 FINANCIALS.. . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 14 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 19
Section 14.1 TENANT'S DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . 19
Section 14.2 LANDLORD'S REMEDIES. . . . . . . . . . . . . . . . . . . . . . 19
Section 14.3 LATE PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 14.4 RIGHT OF LANDLORD TO PERFORM . . . . . . . . . . . . . . . . . 21
Section 14.5 DEFAULT BY LANDLORD. . . . . . . . . . . . . . . . . . . . . . 21
Section 14.6 EXPENSES AND LEGAL FEES. . . . . . . . . . . . . . . . . . . . 21
Section 14.7 WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . 22
Section 14.8 SATISFACTION OF JUDGMENT . . . . . . . . . . . . . . . . . . . 22
Section 14.9 LIMITATION OF ACTIONS AGAINST LANDLORD . . . . . . . . . . . . 22
ARTICLE 15 END OF TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 15.1 HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 15.2 MERGER ON TERMINATION. . . . . . . . . . . . . . . . . . . . . 22
Section 15.3 SURRENDER OF PREMISES; REMOVAL OF PROPERTY . . . . . . . . . . 23
ARTICLE 16 PAYMENTS AND NOTICES. . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 17 RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 18 BROKER'S COMMISSION . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 19 TRANSFER OF LANDLORD'S INTEREST . . . . . . . . . . . . . . . . . . 24
ARTICLE 20 INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 20.1 GENDER AND NUMBER. . . . . . . . . . . . . . . . . . . . . . . 24
Section 20.2 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 20.3 JOINT AND SEVERAL LIABILITY. . . . . . . . . . . . . . . . . . 24
Section 20.4 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 20.5 TIME OF ESSENCE. . . . . . . . . . . . . . . . . . . . . . . . 24
Section 20.6 CONTROLLING LAW. . . . . . . . . . . . . . . . . . . . . . . . 24
Section 20.7 SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 20.8 WAIVER AND CUMULATIVE REMEDIES . . . . . . . . . . . . . . . . 24
Section 20.9 INABILITY TO PERFORM . . . . . . . . . . . . . . . . . . . . . 25
Section 20.10 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 25
Section 20.11 QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . . . . . . . 25
Section 20.12 SURVIVAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 21 EXECUTION AND RECORDING . . . . . . . . . . . . . . . . . . . . . . 25
Section 21.1 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 21.2 CORPORATE AND PARTNERSHIP AUTHORITY. . . . . . . . . . . . . . 25
Section 21.3 EXECUTION OF LEASE; NO OPTION OR OFFER . . . . . . . . . . . . 25
Section 21.4 RECORDING. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 21.5 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 21.6 EXECUTED COPY. . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 21.7 ATTACHMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 22 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 22.1 NONDISCLOSURE OF LEASE TERMS . . . . . . . . . . . . . . . . . 26
Section 22.2 GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 22.3 CHANGES REQUESTED BY LENDER. . . . . . . . . . . . . . . . . . 26
Section 22.4 MORTGAGEE PROTECTION . . . . . . . . . . . . . . . . . . . . . 26
Section 22.5 COVENANTS AND CONDITIONS . . . . . . . . . . . . . . . . . . . 26
Section 22.6 SECURITY MEASURES. . . . . . . . . . . . . . . . . . . . . . . 26
Section 22.7 EXPIRATION OF EXISTING LEASE . . . . . . . . . . . . . . . . . 27
Section 22.8 JAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
iii.
INDUSTRIAL LEASE
(SINGLE TENANT; NET; STAND-ALONE)
THIS LEASE is made as of the 22nd day of November, 1999, by and between
The Irvine Company, hereafter called "Landlord," and SILICON STORAGE
TECHNOLOGY, INC., a California corporation hereinafter called "Tenant."
ARTICLE I
BASIC LEASE PROVISIONS
Each reference in this Lease to the "Basic Lease Provisions" shall mean
and refer to the following collective terms, the application of which shall
be governed by the provisions in the remaining Articles of this Lease.
1. Premises: The Premises are more particularly
described in Section 2.1.
2. Address of Building: 0000 Xxxxxx Xxxxx, Xxxxxxxxx,
XX 00000
3. Use of Premises: General office, research and
development, storage, distribution and testing of computer flash memory
products.
4. Estimated Commencement Date: April 6, 2000
5. Lease Term: The Term of this Lease shall expire at
midnight on April 5, 2005.
6. Basic Rent: Thirty Four Thousand Dollars
($34,000.00) per month, based on $1.70 per rentable square foot. Basic Rent
is subject to adjustment as follows:
Commencing April 1, 2001, the Basic Rent shall be Thirty Five
Thousand Dollars ($35,000.00) per month, based on $1.75 per
rentable square foot.
Commencing April 1, 2002, the Basic Rent shall be Thirty Six
Thousand Dollars ($36,000.00) per month, based on $1.80 per
rentable square foot.
Commencing April 1, 2003, the Basic Rent shall be Thirty Seven
Thousand Two Hundred Dollars ($37,200.00) per month, based on
$1.86 per rentable square foot.
Commencing April 1, 2004, the Basic Rent shall be Thirty Eight
Thousand Two Hundred Dollars ($38,200.00) per month, based on
$1.91 per rentable square foot.
7. Guarantor(s): None
8. Floor Area of Premises: approximately 20,000
rentable square feet
9. Security Deposit: $21,000.00
10. Broker(s): Colliers International
11. Additional Insureds: Insignia\ESG of California,
Inc.
12. Address for Payments and Notices:
1.
LANDLORD TENANT
INSIGNIA\ESG OF CALIFORNIA, INC. SILICON STORAGE TECHNOLOGY, INC.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 0000 Xxxxxx Xxxxx
Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
with a copy of notices to:
IRVINE INDUSTRIAL COMPANY
X.X. Xxx 0000
Xxxxxxx Xxxxx, XX 00000-0000
Attn: Vice President, Industrial
Operations
13. Tenant's Liability Insurance Requirement: $2,000,000.00
14. Vehicle Parking Spaces: See Section 6.2
ARTICLE II
PREMISES
SECTION 2.1 LEASED PREMISES. Landlord leases to Tenant and Tenant
leases from Landlord the premises shown in EXHIBIT A (the "Premises"),
including the building identified in Item 2 of the Basic Lease Provisions
(which together with the underlying real property, is called the "Building"),
and containing approximately the floor area set forth in Item 8 of the Basic
Lease Provisions. The Building is located on the site (the "Site") shown on
EXHIBIT A-1 attached hereto.
SECTION 2.2 ACCEPTANCE OF PREMISES. Tenant acknowledges that neither
Landlord nor any representative of Landlord has made any representation or
warranty with respect to the Premises or the Building or the suitability or
fitness of either for any purpose, including without limitation any
representations or warranties regarding zoning or other land use matters.
Tenant further acknowledges that neither Landlord nor any representative of
Landlord has agreed to undertake any alterations or additions or construct
any improvements to the Premises except as expressly provided in this Lease.
Tenant is currently in possession of the Premises pursuant to a separate
lease agreement with Landlord that will expire on the day before the
Commencement Date of this Lease (the "Existing Lease"). Tenant shall take
possession of the premises as of the Commencement Date of the Lease in an
"as-is" condition without further obligation on Landlord's part as to
improvements whatsoever, except that Landlord shall make repairs to the
mechanical system at a cost not to exceed Twenty Three Thousand Dollars
($23,000.00).
SECTION 2.3 BUILDING NAME AND ADDRESS. Tenant shall not utilize any
name selected by Landlord from time to time for the Building as any part of
Tenant's corporate or trade name. Landlord shall have the right to change
the name, address, number or designation of the Building without liability to
Tenant.
SECTION 2.4 LANDLORD'S RESPONSIBILITIES. Notwithstanding the
provisions of Section 7.2 of this Lease, during the Term of this Lease,
Landlord agrees to repair and/or replace, at its sole cost and expense and
not as a "Building Cost", the structural components of the roof, the
load-bearing walls and the foundations and footings of the Building.
Notwithstanding the foregoing, Landlord's obligation contained in this
Section 2.4 to bear such costs and expenses shall not apply: (i) to the costs
and expenses of periodic maintenance of the roof, walls, foundations and
footings of the Building, nor (ii) to the extent of the negligence or willful
misconduct by Tenant, its employees, agents, contractors, licensees or
invitees (in which case Tenant shall be responsible for the reasonable costs
of such repairs and/or replacements). The repairs or replacements required
of Landlord pursuant to this Section 2.4(a) shall be made promptly following
notice from Tenant of the need for such repairs or replacements.
2.
ARTICLE III
TERM
SECTION 3.1 GENERAL. The Term shall be for the period shown in Item 5
of the Basic Lease Provisions. The Term shall commence ("Commencement Date")
on the date set forth in Item 4 of the Basic Lease Provisions and shall
expire on the corresponding date (the "Expiration Date") of the expiration of
the Term.
SECTION 3.2 RIGHT TO EXTEND THIS LEASE. Provided that Tenant is not
in default under any provision of this Lease, either at the time of exercise
of the extension right granted herein or at the time of the commencement of
such extension, and provided further that Tenant is occupying the Premises
and has not assigned its interest in this Lease, Tenant may extend the Term
of this Lease for one (1) period of sixty (60) months. Tenant shall
exercise its right to extend the Term by and only by delivering to Landlord,
not less than nine (9) months or more than twelve (12) months prior to the
expiration date of the Term, Tenant's irrevocable written notice of its
commitment to extend (the "Commitment Notice"). The Basic Rent payable
under the Lease during any extension of the Term shall be determined as
provided in the following provisions.
If Landlord and Tenant have not by then been able to agree upon the
Basic Rent for the extension of the Term, then within one hundred twenty
(120) and ninety (90) days prior to the expiration date of the Term, Landlord
shall notify Tenant in writing of the Basic Rent that would reflect the
prevailing market rental rate for a 60-month renewal of comparable space in
the area of the Premises (together with any increases thereof during the
extension period) as of the commencement of the extension period ("Landlord's
Determination"). Should Tenant disagree with the Landlord's Determination,
then Tenant shall, not later than twenty (20) days thereafter, notify
Landlord in writing of Tenant's determination of those rental terms
("Tenant's Determination"). In no event, however, shall Landlord's
Determination or Tenant's Determination be less than the Basic Rent payable
by Tenant during the final month of the initial Term. Within ten (10) days
following delivery of the Tenant's Determination, the parties shall attempt
to agree on an appraiser to determine the fair market rental. If the parties
are unable to agree in that time, then each party shall designate an
appraiser within ten (10) days thereafter. Should either party fail to so
designate an appraiser within that time, then the appraiser designated by the
other party shall determine the fair market rental. Should each of the
parties timely designate an appraiser, then the two appraisers so designated
shall appoint a third appraiser who shall, acting alone, determine the fair
market rental for the Premises. Any appraiser designated hereunder shall
have an MAI certification with not less than five (5) years experience in the
valuation of commercial industrial buildings in Santa Xxxxx County,
California.
Within thirty (30) days following the selection of the appraiser and
such appraiser's receipt of the Landlord's Determination and the Tenant's
Determination, the appraiser shall determine whether the rental rate
determined by Landlord or by Tenant more accurately reflects the fair market
rental rate for the 60-month renewal of the Lease for the Premises, as
reasonably extrapolated to the commencement of the extension period.
Accordingly, either the Landlord's Determination or the Tenant's
Determination shall be selected by the appraiser as the fair market rental
rate for the extension period. In making such determination, the appraiser
shall consider rental comparables for similarly improved space in thc area of
the Premises with appropriate adjustment for location and quality of project,
but the appraiser shall not attribute any factor for market tenant
improvement allowances or brokerage commissions in making its determination
of the fair market rental rate. At any time before the decision of the
appraiser is rendered, either party may, by written notice to the other
party, accept the rental terms submitted by the other party, in which event
such terms shall be deemed adopted as the agreed fair market rental. The
fees of the appraiser(s) shall be borne entirely by the party, whose
determination of the fair market rental rate was not accepted by the
appraiser.
Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare an appropriate amendment to this Lease for the
extension period, and Tenant shall execute and return same to Landlord within
twenty (20) days. Should the fair market rental not be established by the
commencement of the extension period, then Tenant shall continue paying rent
at the rate in effect during the last month of the initial Term, and a lump
sum adjustment shall be made promptly upon the determination of such new
rental.
3.
If Tenant fails to timely comply with any of the provisions of this
paragraph, Tenant's right to extend the Term shall be extinguished and the
Lease shall automatically terminate as of the expiration date of the Term,
without any extension and without any liability to Landlord. Any attempt to
assign or transfer any right or interest created by this paragraph shall be
void from its inception. Tenant shall have no other right to extend the Term
beyond the single sixty (60) month extension period created by this
paragraph. Unless agreed to in a writing signed by Landlord and Tenant, any
extension of the Term, whether created by an amendment to this Lease or by a
holdover of the Premises by Tenant, or otherwise, shall be deemed a part of,
and not in addition to, any duly exercised extension period permitted by this
paragraph.
ARTICLE IV
RENT AND OPERATING EXPENSES
SECTION 4.1 BASIC RENT. From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset, Basic Rent for the
Premises in the total amount shown (including subsequent adjustments, if any)
in Item 6 of the Basic Lease Provisions. Any rental adjustment shown in Item
6 shall be deemed to occur on the specified monthly anniversary of the
Commencement Date. The rent shall be due and payable in advance commencing on
the Commencement Date (as prorated for any partial month) and continuing
thereafter on the first day of each successive calendar month of the Term.
No demand, notice or invoice shall be required for the payment of Basic Rent.
SECTION 4.2 OPERATING EXPENSES.
(a) Tenant shall pay to Landlord, as additional rent, "Building
Costs" and "Property Taxes," as those terms are defined below, incurred by
Landlord in the operation of the Building. For convenience of reference,
Property Taxes and Building Costs shall be referred to collectively as
"Operating Expenses".
(b) Commencing prior to the start of the first full "Expense
Recovery Period" (as defined below) of the Lease, and prior to the start of
each full or partial Expense Recovery Period thereafter, Landlord shall give
Tenant a written estimate of the amount of Operating Expenses for the Expense
Recovery Period. Tenant shall pay the estimated amounts to Landlord in equal
monthly installments, in advance, with Basic Rent. If Landlord has not
furnished its written estimate for any Expense Recovery Period by the time
set forth above, Tenant shall continue to pay cost reimbursements at the
rates established for the prior Expense Recovery Period, if any; provided
that when the new estimate is delivered to Tenant, Tenant shall, at the next
monthly payment date, pay any accrued cost reimbursements based upon the new
estimate. For purposes hereof, "Expense Recovery Period" shall mean every
twelve month period during the Term (or portion thereof for the first and
last lease years) commencing July 1 and ending June 30.
(c) Within one hundred twenty (120) days after the end of each
Expense Recovery Period, Landlord shall furnish to Tenant a statement showing
in reasonable detail the actual or prorated Operating Expenses incurred by
Landlord during the period, and the parties shall within thirty (30) days
thereafter make any payment or allowance necessary to adjust Tenant's
estimated payments, if any, to Tenant's actual owed amounts as shown by the
annual statement. Any delay or failure by Landlord in delivering any
statement hereunder shall not constitute a waiver of Landlord's right to
require Tenant to pay Operating Expenses pursuant hereto. Any amount due
Tenant shall be credited against installments next coming due under this
Section 4.2, and any deficiency shall be paid by Tenant together with the
next installment. If Tenant has not made estimated payments during the
Expense Recovery Period, any amount owing by Tenant pursuant to subsection
(a) above shall be paid to Landlord in accordance with Article XVI. Should
Tenant fail to object in writing to Landlord's determination of actual
Operating Expenses within sixty (60) days following delivery of Landlord's
expense statement, Landlord's determination of actual Operating Expenses for
the applicable Expense Recovery Period shall be conclusive and binding on the
parties and any future claims to the contrary shall be barred.
Provided Tenant is not then in default of any monetary covenant of this
Lease (including, without limitation, the obligation to pay Basic Rent and/or
Tenant's Share of Operating Expenses), or any material non-monetary covenant,
following written notice and the expiration of the applicable cure period,
then Tenant shall have
4.
the right to have Tenant's financial officer or a certified public accountant
audit Landlord's Operating Expenses, subject to the terms and conditions
hereof. In no event, however, shall such auditor be compensated by Tenant on
a "contingency" basis, or on any other basis tied to the results of said
audit. Tenant shall give written notice to Landlord of Tenant's intent to
audit, if at all, within sixty (60) days following delivery of Landlord's
expense statement for each of the Expense Recovery Periods. Following at
least ten (10) business days notice to Landlord, such audit shall be
conducted at a mutually agreeable time during normal business hours at the
office of Landlord or its management agent where the records are maintained.
Landlord agrees to make such personnel available to Tenant as is reasonably
necessary for Tenant's employees and agents, to conduct such audit. Landlord
shall make such records available to Tenant's employees and agents, for
inspection during normal business hours. Tenant's employees and agents shall
be entitled to make photostatic copies of such records, provided Tenant bears
the expense of such copying, and further provided that Tenant keeps such
copies in a confidential manner and does not discuss, display or distribute
such copies to any other third party. If Tenant's audit determines that
actual Operating Expenses have been overstated by more than five percent
(5%), then subject to Landlord's right to review and/or contest the audit
results, Landlord shall reimburse Tenant for the reasonable out-of-pocket
costs of such audit. Tenant's Basic Rent shall be appropriately adjusted to
reflect any overstatement in Operating Expenses. In the event or a dispute
between Landlord and Tenant regarding the results of such audit, such
dispute shall be submitted to and resolved by JAMS as provided in Section
22.7 of this Lease.
All of the information obtained by Tenant and/or its auditor in
connection with such audit. as well as any compromise, settlement, or
adjustment reached between Landlord and Tenant as a result thereof, shall be
held in strict confidence and, except as may be required pursuant to
litigation, shall not be disclosed to any third party, directly or
indirectly, by Tenant or its auditor or any of their officers, agents or
employees. Landlord may require Tenant and its auditor to execute a separate
confidentiality agreement as a condition precedent to any audit.
(d) Even though the Lease has terminated and the Tenant has
vacated the Premises, when the final determination is made of Operating
Expenses for the Expense Recovery Period in which the Lease terminates,
Tenant shall upon notice pay the entire increase due over the estimated
expenses paid. Conversely, any overpayment made in the event expenses
decrease shall be rebated by Landlord to Tenant.
(e) If, at any time during any Expense Recovery Period, any one or
more of the Operating Expenses are increased to a rate(s) or amount(s) in
excess of the rate(s) or amount(s) used in calculating the estimated expenses
for the year, then the estimate of Operating Expenses shall be increased for
the month in which such rate(s) or amount(s) becomes effective and for all
succeeding months by an amount equal to the increase. Landlord shall give
Tenant written notice of the amount or estimated amount of the increase, the
month in which the increase will become effective, and the month for which
the payments are due. Tenant shall pay the increase to Landlord as a part of
Tenant's monthly payments of estimated expenses as provided in paragraph (b)
above, commencing with the month in which effective.
(f) The term "Building Costs" shall include all expenses of
operation and maintenance of the Building and all landscaping, walkways,
parking areas and lighting of the Site to the extent such expenses are not
billed to and paid directly by Tenant, and shall include the following
charges by way of illustration but not limitation: water and sewer charges;
insurance premiums or reasonable premium equivalents should Landlord elect to
self-insure any risk that Landlord is authorized to insure hereunder;
license, permit, and inspection fees; heat; light; power; air conditioning;
supplies; materials; equipment; tools; the cost of any environmental,
insurance, tax or other consultant utilized by Landlord in connection with
the Building; costs incurred in connection with compliance of any laws or
changes in laws applicable to the Building; the cost of any capital
investments (other than tenant improvements for specific tenants) to the
extent of the amortized amount thereof over the useful life of such capital
investments calculated at a market cost of funds, all as determined by
Landlord, for each such year of useful life during the Term; labor;
reasonably allocated wages and salaries, fringe benefits, and payroll taxes
for administrative and other personnel directly applicable to the Building,
including both Landlord's personnel and outside personnel; any expense
incurred pursuant to Sections 6.1, 6.2, 7.2, and 10.2; and a reasonable
overhead/management fee for the professional operation of the Building.
Notwithstanding anything to the contrary contained herein, the amount of such
overhead/management fee to be charged to Tenant shall be determined by
multiplying the actual fee charged (which from time to time may be with
respect to the Building only or the Building together with other properties
owned by Landlord and/or its affiliates) by a fraction, the numerator of
which is the floor area of the Premises (as set forth in Item No. 8 of the
Basic Lease Provisions) and the denominator of which is the total square
footage of space
5.
charged with such fee actually leased to tenants (including Tenant). It is
understood that Building Costs shall include competitive charges for direct
services provided by any subsidiary or division of Landlord, and may include
the Building's or the Site's proportionate share of the cost of maintenance
or repair contracts which cover the Building and/or the Site and other
buildings and/or projects in Landlord's portfolio, as reasonably allocated by
Landlord.
(g) The term "Property Taxes" as used herein shall include the
following: (i) all real estate taxes or personal property taxes, as such
property taxes may be reassessed from time to time; and (ii) other taxes,
charges and assessments which are levied with respect to this Lease, to the
Building or to the Site, and any improvements, fixtures and equipment and
other property, of Landlord located in the Building or on the Site, except
that general net income and franchise taxes imposed against Landlord shall be
excluded; and (iii) all assessments and fees for public improvements,
services, and facilities and impacts thereon, including without limitation
arising out of any Community Facilities Districts, "Xxxxx Xxxx" districts,
similar assessment districts, and any traffic impact mitigation assessments
or fees; and (iv) any tax, surcharge or assessment which shall be levied in
addition to or in lieu of real estate or personal property taxes, other than
taxes covered by Article VIII; and (v) costs and expenses incurred in
contesting the amount or validity of any Property Tax by appropriate
proceedings.
SECTION 4.3 SECURITY DEPOSIT. Concurrently with Tenant's delivery of
this Lease, Tenant shall deposit with Landlord the sum, if any, stated in
Item 9 of the Basic Lease Provisions, to be held by Landlord as security for
the full and faithful performance of Tenant's obligations under this Lease
(the "Security Deposit"). Subject to the last sentence of this Section, the
Security Deposit shall be understood and agreed to be the property of
Landlord upon Landlord's receipt thereof, and may be utilized by Landlord in
its discretion towards the payment of all prepaid expenses by Landlord for
which Tenant would be required to reimburse Landlord under this Lease,
including without limitation brokerage commissions and Tenant Improvement
costs. Upon any default by Tenant, including specifically Tenant's failure
to pay rent or to abide by its obligations under Sections 7.1 and 15.3 below,
whether or not Landlord is informed of or has knowledge of the default, the
Security Deposit shall be deemed to be automatically and immediately applied,
without waiver of any rights Landlord may have under this Lease or at law or
in equity as a result of the default, as a setoff for full or partial
compensation for that default. If any portion of the Security Deposit is
applied after a default by Tenant, Tenant shall within five (5) days after
written demand by Landlord deposit cash with Landlord in an amount sufficient
to restore the Security Deposit to its original amount. Landlord shall not be
required to keep this Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on the Security Deposit. If Tenant
fully performs its obligations under this Lease, the Security Deposit or any
balance thereof shall be returned to Tenant (or, at Landlord's option, to the
last assignee of Tenant's interest in this Lease) after the expiration of the
Term, provided that Landlord may retain the Security Deposit to the extent
and until such time as all amounts due from Tenant in accordance with this
Lease have been determined and paid in full. Tenant hereby authorizes
Landlord to retain any remaining balance of the security deposit funded to
Landlord under the Existing Lease (as defined in Section 22.7), which balance
shall be applied by Landlord to offset the sums owing under this Section 4.3.
ARTICLE V
USES
SECTION 5.1 USE. Tenant shall use the Premises only for the purposes
stated in Item 3 of the Basic Lease Provisions, all in accordance with
applicable laws and restrictions and pursuant to approvals to be obtained by
Tenant from all relevant and required governmental agencies and authorities.
The parties agree that any contrary use shall be deemed to cause material and
irreparable harm to Landlord and shall entitle Landlord to injunctive relief
in addition to any other available remedy. Tenant, at its expense, shall
procure, maintain and make available for Landlord's inspection throughout the
Term, all governmental approvals, licenses and permits required for the
proper and lawful conduct of Tenant's permitted use of the Premises. Tenant
shall not use or allow the Premises to be used for any unlawful purpose, nor
shall Tenant permit any nuisance or commit any waste in the Premises. Tenant
shall not do or permit to be done anything which will invalidate or increase
the cost of any insurance policy(ies) covering the Building or its contents,
and shall comply with all applicable insurance underwriters rules and the
requirements of the Pacific Fire Rating Bureau or any other organization
performing a similar function. Tenant shall comply at its expense with all
present and future laws, ordinances, restrictions, regulations, orders, rules
and requirements of all governmental authorities that pertain to Tenant or
its use of the Premises, including without limitation all federal and
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state occupational health and safety requirements, whether or not Tenant's
compliance will necessitate expenditures or interfere with its use and
enjoyment of the Premises. Tenant shall comply at its expense with all
present and future covenants, conditions, easements or restrictions now or
hereafter affecting or encumbering the Building, and any amendments or
modifications thereto, including without limitation the payment by Tenant of
any periodic or special dues or assessments charged against the Premises or
Tenant which may be allocated to the Premises or Tenant in accordance with
the provisions thereof. Tenant shall promptly upon demand reimburse Landlord
for any additional insurance premium charged by reason of Tenant's failure to
comply with the provisions of this Section, and shall indemnify Landlord from
any liability and/or expense resulting from Tenant's noncompliance.
SECTION 5.2 SIGNS. Except for Tenant's existing signage on or about
the Premises or the Building (which existing signage is hereby approved by
Landlord), Tenant shall not have the right to install new signage on or about
the Premises or the Building visible from the exterior of the Building,
without Landlord's approval. The size, design, graphics, material, style,
color and other physical aspects of any such new signage shall be subject to
Landlord's written approval prior to installation (which approval may be
withheld in Landlord's discretion), any covenants, conditions or restrictions
encumbering the Premises, Landlord's signage program, if any, as in effect
from time to time ("Signage Criteria"), and any applicable municipal or other
governmental permits and approvals. Tenant acknowledges having received and
reviewed a copy of the current Signage Criteria, if applicable. Tenant shall
be responsible for the cost of any permitted sign, including the fabrication,
installation, maintenance and removal thereof. If Tenant fails to maintain
its sign, or if Tenant fails to remove same upon termination of this Lease
and repair any damage caused by such removal, Landlord may do so at Tenant's
expense.
SECTION 5.3 HAZARDOUS MATERIALS.
(a) For purposes of this Lease, the term "Hazardous Materials"
includes (i) any "hazardous materials" as defined in Section 25501(n) of the
California Health and Safety Code, (ii) any other substance or matter which
results in liability to any person or entity from exposure to such substance
or matter under any statutory or common law theory, and (iii) any substance
or matter which is in excess of permitted levels set forth in any federal,
California or local law or regulation pertaining to any hazardous or toxic
substance, material or waste.
(b) Tenant shall not cause or permit any Hazardous Materials to be
brought upon, stored, used, generated, released or disposed of on, under,
from or about the Premises or the Site (including without limitation the soil
and groundwater thereunder) without the prior written consent of Landlord.
Notwithstanding the foregoing, Tenant shall have the right, without obtaining
prior written consent of Landlord: (A) to utilize within the Premises
standard office products that may contain Hazardous Materials (such as
photocopy toner, "White Out," and the like), provided, however, that (i)
Tenant shall maintain such products in their original retail packaging, shall
follow all instructions on such packaging with respect to the storage, use
and disposal of such products, and shall otherwise comply with all applicable
laws with respect to such products, and (ii) all of the other terms and
provisions of this Section 5.3 shall apply with respect to Tenant's storage,
use and disposal of all such products, and (B) to utilize those Hazardous
Materials in kind and quantity as set forth on Tenant's Environmental
Questionnaire delivered to Landlord prior to the execution of this Lease,
provided that all of the terms and provisions of this Section 5.3 shall apply
with respect to Tenant's storage, use and disposal of such Hazardous
Materials. Landlord may, in its sole discretion, place such conditions as
Landlord deems appropriate with respect to any Hazardous Materials other than
those described in the preceding sentence, and may further require that
Tenant demonstrate that any such Hazardous Materials are necessary or useful
to Tenant's business and will be generated, stored, used and disposed of in a
manner that complies with all applicable laws and regulations pertaining
thereto and with good business practices. Tenant understands that Landlord
may utilize an environmental consultant to assist in determining conditions
of approval in connection with the storage, generation, release, disposal or
use of Hazardous Materials by Tenant on or about the Premises, and/or to
conduct periodic inspections of the storage, generation, use, release and/or
disposal of such Hazardous Materials by Tenant on and from the Premises, and
Tenant agrees that any reasonable costs incurred by Landlord in connection
therewith shall be reimbursed by Tenant to Landlord as additional rent
hereunder upon demand, provided Tenant has been the cause of the
contamination justifying the use of the environmental consultant.
(c) Prior to the execution of this Lease, Tenant shall complete,
execute and deliver to Landlord an Environmental Questionnaire and Disclosure
Statement (the "Environmental Questionnaire") in the form of Exhibit B
attached hereto. The completed Environmental Questionnaire shall be deemed
incorporated into
7.
this Lease for all purposes, and Landlord shall be entitled to rely fully on
the information contained therein. On each anniversary of the Commencement
until the termination of this Tenant shall disclose to Landlord in writing
the names and amounts of all Hazardous Materials which were stored,
generated, used, released and/or disposed of on, under or about the Premises
for the twelve-month period prior thereto, and which Tenant desires to store,
generate, use, release and/or dispose of on, under or about the Premises for
the succeeding twelve-month period. In addition, to the extent Tenant is
permitted to utilize Hazardous Materials upon the Premises, Tenant shall
promptly provide Landlord with complete and legible copies of all the
following environmental documents relating thereto: reports filed pursuant to
any self-reporting requirements; permit applications, permits, monitoring
reports, workplace exposure and community exposure warnings or notices and
all other reports, disclosures, plans or documents (even those which may be
characterized as confidential) relating to water discharges, air pollution,
waste generation or disposal, and underground storage tanks for Hazardous
Materials; orders, reports, notices, listings and correspondence (even those
which may be considered confidential) of or concerning the release,
investigation of, compliance, cleanup, remedial and corrective actions, and
abatement of Hazardous Materials; and all complaints, pleadings and other
legal documents filed by or against Tenant related to Tenant's use, handling,
storage, release and/or disposal of Hazardous Materials.
(d) Landlord and its agents shall have the right, but not the
obligation, to inspect, sample and/or monitor the Premises, the Site and/or
the soil or groundwater thereunder at any time to determine whether Tenant is
complying with the terms of this Section 5.3, and in connection therewith
Tenant shall provide Landlord with full access in all relevant facilities,
records and personnel. If Tenant is not in compliance with any of the
provisions of this Section 5.3, or in the event or a release of any
Hazardous Material on, under or about the Premises and/or the Site caused or
permitted by Tenant, its agents, employees, contractors, licensees or
invitees, Landlord and its agents shall have the right, but not the
obligation, without limitation upon any of Landlord's other rights and
remedies under this Lease, to immediately enter upon the Premises and/or the
Site without notice and to discharge Tenant's obligations under this Section
5.3 at Tenant's expense, including without limitation the taking of emergency
or long-term remedial action. Landlord and its agents shall endeavor to
minimize interference with Tenant's business in connection therewith, but
shall not be liable for any such interference. In addition, Landlord, at
Tenant's expense, shall have the right, but not the obligation, to join and
participate in any legal proceedings or actions initiated in connection with
any claims arising out of the storage, generation, use, release and/or
disposal by Tenant or its agents, employees, contractors, licensees or
invitees of Hazardous Materials on, under, from or about the Premises and/or
the Site.
(e) If the presence of any Hazardous Materials on, under, from or
about the Premises and/or the Site caused or permitted by Tenant or its
agents, employees, contractors, licensees or invitees results in (i) injury
to any person, (ii) injury to or any contamination of the Premises and/or the
Site, or (iii) injury to or contamination of any real or personal property
wherever situated, Tenant, at its expense, shall promptly take all actions
necessary to return the Premises, the Site and any other affected real or
personal property, owned by Landlord to the condition existing prior to the
introduction of such Hazardous Materials and to remedy or repair any such
injury or contamination, including without limitation, any cleanup,
remediation, removal, disposal, neutralization or other treatment of any such
Hazardous Materials. Notwithstanding the foregoing, Tenant shall not, without
Landlord's prior written consent, take any remedial action in response to the
presence of any Hazardous Materials on, under or about the Premises, the Site
or any other affected real or personal property owned by Landlord or enter
into any similar agreement, consent, decree or other compromise with any
governmental agency with respect to any Hazardous Materials claims; provided
however, Landlord's prior written consent shall not be necessary in the event
that the presence of Hazardous Materials on, under or about the Premises, the
Site or any other affected real or personal property owned by Landlord (i)
imposes an immediate threat to the health, safety or welfare of any
individual or (ii) is of such a nature that an immediate remedial response is
necessary and it is not possible to obtain Landlord's consent before taking
such action. To the fullest extent permitted by law, Tenant shall indemnify,
hold harmless, protect and defend (with attorneys acceptable to Landlord)
Landlord and any successors to all or any portion of Landlord's interest in
the Premises, the Site and any other real or personal property owned by
Landlord from and against any and all liabilities, losses, damages,
diminution in value, judgments, fines, demands, claims, recoveries,
deficiencies, costs and expenses (including without limitation attorneys'
fees, court costs and other professional expenses), whether foreseeable or
unforeseeable, arising directly or indirectly out of the use, generation,
storage, treatment, release, on or off-site disposal or transportation of
Hazardous Materials on, into, from, under or about the Premises, the Site and
any other real or personal property owned by Landlord caused or permitted by
Tenant, its agents, employees, contractors, licensees or invitees,
specifically including without
8.
limitation the cost of any required or necessary, repair, restoration,
cleanup or detoxification of the Premises, the Site and any other real or
personal property, owned by Landlord, and the preparation of any closure or
other required plans, whether or not such action is required or necessary
during the Term or after the expiration of this Lease. If Landlord at any
time discovers that Tenant or its agents, employees, contractors, licensees
or invitees may have caused or permitted the release of a Hazardous Material
on, under, from or about the Premises, the Site or any other real or personal
property owned by Landlord, Tenant shall, at Landlord's request, immediately
prepare and submit to Landlord a comprehensive plan, subject to Landlord's
approval, specifying the actions to be taken by Tenant to return the
Premises, the Site or any other real or personal property owned by Landlord
to the condition existing prior to the introduction of such Hazardous
Materials. Upon Landlord's approval of such cleanup plan, Tenant shall, at
its expense, and without limitation of any rights and remedies of Landlord
under this Lease or at law or in equity, immediately implement such plan and
proceed to cleanup such Hazardous Materials in accordance with all applicable
laws and as required by such plan and this Lease. The provisions of this
subsection (e) shall expressly survive the expiration or sooner termination
of this Lease.
(f) Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, certain facts relating to Hazardous Materials at the Project
known by Landlord to exist as of the date of this Lease, as more particularly
described in EXHIBIT C attached hereto. Tenant shall have no liability or
responsibility with respect to the Hazardous Materials facts described in
EXHIBIT C, nor with respect to any Hazardous Materials which were not caused
or permitted by Tenant, its agents, employees, contractors, licensees or
invitees. Landlord shall take responsibility, at its sole cost and expense,
for any governmentally-ordered clean-up, remediation, removal, disposal,
neutralization or other treatment of Hazardous Materials conditions described
in this Section 5.3(f). The foregoing obligation on the part of Landlord
shall include the reasonable costs (including, without limitation, reasonable
attorney's fees) of defending Tenant (with attorneys reasonably acceptable to
Tenant) from and against any legal action or proceeding instituted by any
governmental agency in connection with such clean-up, remediation, removal,
disposal, neutralization or other treatment of such conditions, provided that
Tenant promptly tenders such defense to Landlord. Tenant agrees to notify
its agents, employees, contractors, licensees, and invitees of any exposure
or potential exposure to Hazardous Materials at the Premises that Landlord
brings to Tenant's attention.
SECTION 5.4 In the event of any foreclosure of a mortgage or deed of
trust encumbering the Building and/or the Project, the obligations on the
part of Landlord contained in Section 5.3(f) above shall be personal to
Landlord and shall not be binding on nor inure against any lender acquiring
the Building and/or the Project by foreclosure of its mortgage or deed of
trust or deed in lieu of foreclosure, or any successor in interest to such
lender.
ARTICLE VI
SERVICES
SECTION 6.1 UTILITIES AND SERVICES. Tenant shall be responsible for
and shall pay promptly, directly to the appropriate supplier, all charges for
water, gas, electricity, sewer, heat, light, power, telephone, refuse pickup,
janitorial service, interior landscape maintenance and all other utilities,
materials and services furnished directly to Tenant or the Premises or used
by Tenant in, on or about the Premises during the Term, together with any
taxes thereon. Landlord shall not be liable for damages or otherwise for any
failure or interruption of any utility or other service furnished to the
Premises, and no such failure or interruption shall be deemed an eviction or
entitle Tenant to terminate this Lease or withhold or xxxxx any rent due
hereunder. Landlord shall at all reasonable times have free access to all
electrical and mechanical installations of Landlord.
SECTION 6.2 PARKING. Tenant shall be entitled to the vehicle parking
spaces on the Site which are designated by Landlord for parking. Tenant
shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant's employees, suppliers, shippers, Customers or invitees to
be loaded, unloaded or parked in areas other than those designated by
Landlord for such activities. If Tenant permits or allows any of the
prohibited activities described above, then Landlord shall have the right,
without notice, in addition to such other rights and remedies that Landlord
may have, to remove or tow away the vehicle involved and charge the costs to
Tenant. Parking shall be limited to striped parking stalls, and no parking
shall be permitted in any driveways, access ways or in any similar area.
Nothing contained in this Lease shall be deemed to create liability upon
Landlord for any damage to motor vehicles of visitors or employees, for any
loss of property from within those motor vehicles, or for
9.
any injury to Tenant, its visitors or employees, unless ultimately determined
to be caused by the sole active negligence or willful misconduct of Landlord,
its agents, servants and employees. Landlord shall have the right to
establish, and from time to time amend, and to enforce against all users all
reasonable rules and regulations (including the designation of areas for
employee parking) that Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of parking. Landlord shall
have the right to construct, maintain and operate lighting facilities within
the parking areas; to change the area, level, location and arrangement of the
parking areas and improvements therein; and to do and perform such other acts
in and to the parking areas and improvements therein as, in the use of good
business judgment, Landlord shall determine to be advisable. Parking areas
shall be used only for parking vehicles. Washing, waxing, cleaning or
servicing of vehicles, or the storage of vehicles for 24-hour periods, is
prohibited unless otherwise authorized by Landlord. Tenant shall be liable
for any damage to the parking areas caused by Tenant or Tenant's employees,
suppliers, shippers, customers or invitees, including without limitation
damage from excess oil leakage. Tenant shall have no right to install any
fixtures, equipment or personal property in the parking areas.
ARTICLE VII
MAINTAINING THE PREMISES
SECTION 7.1 TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole
expense shall comply with all applicable laws and governmental regulations
governing the Premises and make all repairs necessary to keep the Premises in
the condition as existed on the Commencement Date (or on any later date that
the improvements may have been installed), excepting ordinary wear and tear,
including without limitation the electrical and mechanical systems, any air
conditioning, ventilating or heating equipment which serves the Premises, all
walls, glass, windows, doors, door closures, hardware, fixtures, electrical,
plumbing, fire extinguisher equipment and other equipment. Any damage or
deterioration of the Premises shall not be deemed ordinary wear and tear if
the same could have been prevented by good maintenance practices by Tenant.
As part of its maintenance obligations hereunder, Tenant shall, at Landlord's
request, provide Landlord with copies of all maintenance schedules, reports
and notices prepared by, for or on behalf of Tenant. Tenant shall obtain
preventive maintenance contracts from a licensed heating and air conditioning
contractor to provide for regular inspection and maintenance of the heating,
ventilating and air conditioning systems servicing the Premises, all subject
to Landlord's approval. All repairs shall be at least equal in quality to
the original work, shall be made only by a licensed contractor approved in
writing in advance by Landlord and shall be made only at the time or times
approved by Landlord. Any contractor utilized by Tenant shall be subject to
Landlord's standard requirements for contractors, as modified from time to
time. Landlord shall have the right at all times to inspect Tenant's
maintenance of all equipment (including without limitation air conditioning,
ventilating and heating equipment), and may impose reasonable restrictions
and requirements with respect to repairs, as provided in Section 7.3, and the
provisions of Section 7.4 shall apply to all repairs. Alternatively, Landlord
may elect to make any repair or maintenance required hereunder on behalf of
Tenant and at Tenant's expense, and Tenant shall promptly reimburse Landlord
for all costs incurred upon submission of an invoice.
SECTION 7.2 LANDLORD'S MAINTENANCE AND REPAIR. Subject to Section 7.1
and Article XI, Landlord shall provide service, maintenance and repair with
respect to the roof, foundations, and footings of the Building, all
landscaping, walkways, parking areas, exterior lighting of the Site, and the
exterior surfaces of the exterior walls of the Building, except that Tenant
at its expense shall make all repairs which Landlord deems reasonably
necessary as a result of the act or negligence of Tenant, its agents,
employees, invitees, subtenants or contractors. Landlord shall have the
right to employ or designate any reputable person or firm, including any
employee or agent of Landlord or any of Landlord's affiliates or divisions,
to perform any service, repair or maintenance function. Landlord need not
make any other improvements or repairs except as specifically required under
this Lease, and nothing contained in this Section shall limit Landlord's
right to reimbursement from Tenant for maintenance, repair costs and
replacement costs as provided elsewhere in this Lease. Tenant understands
that it shall not make repairs at Landlord's expense or by rental offset.
Tenant further understands that Landlord shall not be required to make any
repairs to the roof, foundations or footings unless and until Tenant has
notified Landlord in writing of the need for such repair and Landlord shall
have a reasonable period of time thereafter to commence and complete said
repair, if warranted. Except for Landlord's repair and/or replacement
obligations contained in Sections 2.2 and 2.4 of this Lease, all costs of any
maintenance and repairs on the part of Landlord provided hereunder shall be
considered part of Building Costs.
10.
SECTION 7.3 ALTERATIONS. Tenant shall make no alterations, additions
or improvements to the Premises without the prior written consent of
Landlord, which consent may be given or withheld in Landlord's sole
discretion. Notwithstanding the foregoing, Landlord shall not unreasonably
withhold its consent to any alterations, additions or improvements to the
Premises which cost less than One Dollar ($1.00) per square foot of the
improved portions of the Premises (excluding warehouse square footage) and do
not (i) affect the exterior of the Building or outside areas (or be visible
from adjoining sites), or (ii) affect or penetrate any of the structural
portions of the Building, including but not limited to the roof, or (iii)
require any change to the basic floor plan of the Premises, any change to any
structural or mechanical systems of the Premises, or any governmental permit
as a prerequisite to the construction thereof, or (iv) interfere in any
manner with the proper functioning of or Landlord's access to any mechanical,
electrical, plumbing or HVAC systems, facilities or equipment located in or
serving the Building, or (v) diminish the value of the Premises. Landlord
may impose, as a condition to its consent, any requirements that Landlord in
its discretion may deem reasonable or desirable, including but not limited to
a requirement that all work be covered by a lien and completion bond
satisfactory to Landlord and requirements as to the manner, time, and
contractor for performance of the work. Tenant shall obtain all required
permits for the work and shall perform the work in compliance with all
applicable laws, regulations and ordinances, all covenants, conditions and
restrictions affecting the Premises, and the Rules and Regulations (hereafter
defined). If any governmental entity requires, as a condition to any
proposed alterations, additions or improvements to the Premises by Tenant,
that improvements be made to the outside areas, and if Landlord consents to
such improvements to the outside areas, then Tenant shall, at Tenant's sole
expense, make such required improvements to the outside areas in such manner,
utilizing such materials, and with such contractors (including, if required
by Landlord, Landlord's contractors) as Landlord may require in its sole
discretion. Under no circumstances shall Tenant make any improvement which
incorporates any Hazardous Materials, including without limitation
asbestos-containing construction materials into the Premises. Any request
for Landlord's consent shall be made in writing and shall contain
architectural plans describing the work in detail reasonably satisfactory to
Landlord. Unless Landlord otherwise agrees in writing, all alterations,
additions or improvements affixed to the Premises (excluding moveable trade
fixtures and furniture) shall become the property of Landlord and shall be
surrendered with the Premises at the end of the Term, except that Landlord
may, as provided in the next succeeding paragraph of this Section 7.3,
require Tenant to remove by the Expiration Date, or sooner termination date
of this Lease, all or any alterations, decorations, fixtures, additions,
improvements and the like installed either by Tenant or by Landlord at
Tenant's request and to repair any damage to the Premises arising from that
removal. Except as otherwise provided in this Lease or in any Exhibit to
this Lease, should Landlord make any alteration or improvement to the
Premises for Tenant, Landlord shall be entitled to prompt reimbursement from
Tenant for all costs incurred.
As of the Expiration Date or earlier termination of the Term, Landlord
shall have the right to require Tenant to remove any alterations, additions
or improvements made by Tenant to the Premises, whether or not Landlord's
consent was required therefor. Notwithstanding the foregoing, if at the time
of requesting Landlord's consent to any such alterations, improvements or
additions to the Premises, Tenant shall request in writing whether or not
Landlord shall require the removal thereof as of the Expiration Date or
earlier termination of this Lease, then Landlord's right to require Tenant to
so remove such alterations, improvements or additions shall be exercised, if
at all, at the time of Landlord's consent thereto. Any such removal by
Tenant shall be subject to the provisions of Section 15.3 of this Lease.
SECTION 7.4 MECHANIC'S LIENS. Tenant shall keep the Premises free
from any liens arising out of any work performed, materials furnished, or
obligations incurred by or for Tenant. Upon request by Landlord, Tenant
shall promptly cause any such lien to be released by posting a bond in
accordance with California Civil Code Section 3143 or any successor statute.
In the event that Tenant shall not, within thirty (30) days following the
imposition of any lien, cause the lien to be released of record by payment or
posting or a proper bond, Landlord shall have, in addition to all other
available remedies, the right to cause the lien to be released by any means
it deems proper, including payment of or defense against the claim giving
rise to the lien. All expenses so incurred by Landlord, including Landlord's
attorneys' fees, and any consequential or other damages incurred by Landlord
arising out of such lien, shall be reimbursed by Tenant promptly following
Landlord's demand, together with interest from the date of payment by
Landlord at the maximum rate permitted by law until paid. Tenant shall give
Landlord no less than twenty (20) days' prior notice in writing before
commencing construction of any kind on the Premises so that Landlord may post
and maintain notices of nonresponsibility on the Premises.
11.
SECTION 7.5 ENTRY AND INSPECTION. Landlord shall at all reasonable
times, upon written or oral notice (except in emergencies, when no notice
shall be required) have the right to enter the Premises to inspect them, to
supply services in accordance with this Lease, to protect the interests of
Landlord in the Premises, and to submit the Premises to prospective or actual
purchasers or encumbrance holders (or, during the last one hundred and eighty
(180) days of the Term or when an uncured Tenant default exists, to
prospective tenants), all without being deemed to have caused an eviction of
Tenant and without abatement of rent except as provided elsewhere in this
Lease. Except in cases of emergency, Landlord, at Tenant's election, shall
be accompanied by Tenant's representative in connection with any such entry.
Landlord shall have the right, if desired, to retain a key which unlocks all
of the doors in the Premises, excluding Tenant's vaults and safes, and
Landlord shall have the right to use any and all means which Landlord may
deem proper to open the doors in an emergency in order to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord shall not under
any circumstances be deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or any eviction of Tenant from the Premises.
ARTICLE VIII
TAXES AND ASSESSMENTS ON TENANT'S PROPERTY
Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes and assessments levied against all personal property
of Tenant located in the Premises, and against any alterations, additions or
like improvements made to the Premises by or on behalf of Tenant. When
possible Tenant shall cause its personal property and alterations to be
assessed and billed separately from the real property of which the Premises
form a part. If any taxes on Tenant's personal property and/or alterations
are levied against Landlord or Landlord's property and if Landlord pays the
same, or if the assessed value of Landlord's property is increased by the
inclusion of a value placed upon the personal property and/or alterations of
Tenant and if Landlord pays the taxes based upon the increased assessment,
Tenant shall pay to Landlord the taxes so levied against Landlord or the
proportion of the taxes resulting from the increase in the assessment. In
calculating what portion of any tax xxxx which is assessed against Landlord
separately, or Landlord and Tenant jointly, is attributable to Tenant's
alterations and personal property, Landlord's reasonable determination shall
be conclusive.
ARTICLE IX
ASSIGNMENT AND SUBLETTING
SECTION 9.1 RIGHTS OF PARTIES.
(a) Notwithstanding any provision of this Lease to the contrary,
Tenant will not, either voluntarily or by operation of law, assign, sublet,
encumber, or otherwise transfer all or any part of Tenant's interest in this
lease, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord's prior written consent, which consent shall not
unreasonably be withheld in accordance with the provisions of Section 9.1(b).
No assignment (whether voluntary, involuntary or by operation of law) and no
subletting shall be valid or effective without Landlord's prior written
consent and, at Landlord's election, any such assignment or subletting or
attempted assignment or subletting shall constitute a material default of
this Lease. Landlord shall not be deemed to have given its consent to any
assignment or subletting by any other course of action, including its
acceptance of any name for listing in the Building directory. To the extent
not prohibited by provisions of the Bankruptcy Code, 11 U.S.C. Section 101
et seq. (the "Bankruptcy Code"), including Section 365(f)(1), Tenant on
behalf of itself and its creditors, administrators and assigns waives the
applicability of Section 365(e) of the Bankruptcy Code unless the proposed
assignee of the Trustee for the estate of the bankrupt meets Landlord's
standard for consent as set forth in Section 9.1(b) of this Lease. If this
Lease is assigned to any person or entity pursuant to the provisions of the
Bankruptcy Code, any and all monies or other considerations to be delivered
in connection with the assignment shall be delivered to Landlord, shall be
and remain the exclusive property of Landlord and shall not constitute
property of Tenant or of the estate of Tenant within the meaning of the
Bankruptcy Code. Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code shall be deemed to have
assumed all of the obligations arising under this Lease on and after the date
of the assignment, and shall upon demand execute and deliver to Landlord an
instrument confirming that assumption.
12.
(b) If Tenant desires to transfer an interest in this Lease, it
shall first notify Landlord of its desire and shall submit in writing to
Landlord: (i) the name and address of the proposed transferee; (ii) the
nature of any proposed subtenant's or assignee's business to be carried on in
the Premises; (iii) the terms and provisions of any proposed sublease or
assignment, including a copy of the proposed assignment or sublease form;
(iv) evidence of insurance of the proposed assignee or subtenant complying
with the requirements of Exhibit D hereto; (v) a completed Environmental
Questionnaire from the proposed assignee or subtenant; and (vi) any other
information requested by Landlord and reasonably related to the transfer.
Except as provided in Subsection (e) of this Section, Landlord shall not
unreasonably withhold its consent, provided: (1) the use of the Premises will
be consistent with the provisions of this Lease; (2) the proposed assignee or
subtenant has not been required by any prior landlord, lender or governmental
authority to take remedial action in connection with Hazardous Materials
contaminating a property arising out of the proposed assignee's or
subtenant's actions or use of the property in question and is not subject to
any enforcement order issued by any governmental authority in connection with
the use, disposal or storage of a Hazardous Material; (3) at Landlord's
election, insurance requirements shall be brought into conformity with
Landlord's then current leasing practice; (4) any proposed subtenant or
assignee demonstrates that it is financially responsible by submission to
Landlord of all reasonable information as Landlord may request concerning the
proposed subtenant or assignee, including, but not limited to, a balance
sheet of the proposed subtenant or assignee as or a date within ninety (90)
days of the request for Landlord's consent and statements of income or profit
and loss of the proposed subtenant or assignee for the two-year period
preceding the request for Landlord's consent, and/or a certification signed
by the proposed subtenant or assignee that it has not been evicted or been in
arrears in rent at any other leased premises for the 3-year period preceding
the request for Landlord's consent; (5) any proposed subtenant or assignee
demonstrates to Landlord's reasonable satisfaction a record of successful
experience in business; and (6) the proposed transfer will not impose
additional burdens or adverse tax effects on Landlord. If Tenant has any
exterior sign rights under this Lease, such rights are personal to Tenant and
may not be assigned or transferred to any assignee of this Lease or subtenant
of the Premises without Landlord's prior written consent, which may be
withheld in Landlord's sole and absolute discretion.
If Landlord consents to the proposed transfer, Tenant may within ninety
(90) days after the date of the consent effect the transfer upon the terms
described in the information furnished to Landlord; provided that any
material change in the terms shall be subject to Landlord's consent as set
forth in this Section. Landlord shall approve or disapprove any requested
transfer within fifteen (15) business days following receipt of Tenant's
written request, the information set forth above, and the fee set forth below.
(c) Notwithstanding the provisions of Subsection (b) above, in
lieu of consenting to a proposed assignment of the Lease or to any proposed
subletting of the entire floor area of the Premises for more than fifty
percent (50%) of the then-remaining Term of this Lease, Landlord may elect to
(i) sublease the Premises or take an assignment of Tenant's interest in this
Lease, upon the same terms as offered to such proposed subtenant or assignee
(excluding terms relating to the purchase of personal property, the use of
Tenant's name or the continuation of Tenant's business), or (ii) terminate
this Lease effective on the date that such proposed sublease or assignment
would have become effective, Landlord may thereafter, at its option, assign
or re-let any space so recaptured to any third party, including without
limitation the proposed transferee of Tenant.
(d) Tenant agrees that fifty percent (50%) of any amounts paid by
the assignee or subtenant, however described, in excess of (i) the Basic Rent
payable by Tenant hereunder, or in the case or a sublease or a portion of the
Premises, in excess of the Basic Rent reasonably allocable to such portion,
plus (ii) Tenant's direct out-of-pocket costs which Tenant certifies to
Landlord have been paid to provide occupancy related services to such
assignee or subtenant of a nature commonly provided by landlords of similar
space, shall be the property of Landlord and such amounts shall be payable
directly to Landlord by the assignee or subtenant or, at Landlord's option,
by Tenant. At Landlord's request, a written agreement shall be entered into
by and among Tenant, Landlord and the proposed assignee or subtenant
confirming the requirements of this subsection.
(e) Tenant shall pay to Landlord a fee of Five Hundred Dollars
($500.00) if and when any transfer hereunder is requested by Tenant. Such
fee is hereby acknowledged as a reasonable amount to reimburse Landlord for
its costs of review and evaluation or a proposed assignee/sublessee, and
Landlord shall not be obligated to commence such review and evaluation unless
and until such fee is paid.
13.
SECTION 9.2 EFFECT OF TRANSFER. No subletting or assignment, even
with the consent of Landlord, shall relieve Tenant of its obligation to pay
rent and to perform all its other obligations under this Lease. Moreover,
Tenant shall indemnify and hold Landlord harmless, as provided in Section
10.3, for any act or omission by an assignee or subtenant. Each assignee,
other than Landlord, shall be deemed to assume all obligations of Tenant
under this Lease and shall be liable jointly and severally with Tenant for
the payment of all rent, and for the due performance of all of Tenant's
obligations, under this Lease. No transfer shall be binding on Landlord
unless any document memorializing the transfer is delivered to Landlord and
both the assignee/subtenant and Tenant deliver to Landlord an executed
consent to transfer instrument prepared by Landlord and consistent with the
requirements of this Article. The acceptance by Landlord of any payment due
under this Lease from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or to be a consent to any transfer.
Consent by Landlord to one or more transfers shall not operate as a waiver or
estoppel to the future enforcement by Landlord of its rights under this Lease.
SECTION 9.3 SUBLEASE REQUIREMENTS. The following terms and conditions
shall apply to any subletting by Tenant of all or any part of the Premises
and shall be deemed included in each sublease:
(a) Each and every provision contained in this Lease (other than
with respect to the payment of rent hereunder) is incorporated by reference
into and made a part of such sublease, with "Landlord" hereunder meaning the
sublandlord therein and "Tenant" hereunder meaning the subtenant therein.
(b) Tenant hereby irrevocably assigns to Landlord all of Tenant's
interest in all rentals and income arising from any sublease of the Premises,
and Landlord may collect such rent and income and apply same toward Tenant's
obligations under this Lease; provided, however, that until a default occurs
in the performance of Tenant's obligations under this Lease, Tenant shall
have the right to receive and collect the sublease rentals. Landlord shall
not, by reason of this assignment or the collection of sublease rentals, be
deemed liable to the subtenant for the performance of any of Tenant's
obligations under the sublease. Tenant hereby irrevocably authorizes and
directs any subtenant, upon receipt of a written notice from Landlord stating
that an uncured default exists in the performance of Tenant's obligations
under this Lease, to pay to Landlord all sums then and thereafter due under
the sublease. Tenant agrees that the subtenant may rely on that notice
without any duty of further inquiry and notwithstanding any notice or claim
by Tenant to the contrary. Tenant shall have no right or claim against the
subtenant or Landlord for any rentals so paid to Landlord.
(c) In the event of the termination of this Lease, Landlord may,
at its sole option, take over Tenant's entire interest in any sublease and,
upon notice from Landlord, the subtenant shall attorn to Landlord. In no
event, however, shall Landlord be liable for any previous act or omission by
Tenant under the sublease or for the return of any advance rental payments or
deposits under the sublease that have not been actually delivered to
Landlord, nor shall Landlord be bound by any sublease modification executed
without Landlord's consent or for any advance rental payment by the subtenant
in excess of one month's rent. The general provisions of this Lease,
including without limitation those pertaining to insurance and
indemnification, shall be deemed incorporated by reference into the sublease
despite the termination of this Lease.
SECTION 9.4 CERTAIN TRANSFERS. The sale of all or substantially all
of Tenant's assets (other than bulk sales in the ordinary course of business)
or, if Tenant is a corporation, an unincorporated association, or a
partnership, the transfer, assignment or hypothecation of any stock or
interest in such corporation, association, or partnership in the aggregate of
twenty-five percent (25%) (except for publicly traded shares of stock
constituting a transfer of twenty-five percent (25%) or more in the
aggregate, so long as no change in the controlling interest of Tenant occurs
as a result thereof) shall be deemed an assignment within the meaning and
provisions of this Article. Notwithstanding the foregoing, Landlord's
consent shall not be required for the assignment of this Lease as a result of
a merger by Tenant with or into another entity, so long as (i) the net worth
of the successor entity after such merger is at least equal to the greater of
the net worth of Tenant as of the execution of this Lease by Landlord or the
net worth of Tenant immediately prior to the date of such merger, evidence of
which, satisfactory to Landlord, shall be presented to Landlord prior to such
merger, (ii) Tenant shall provide to Landlord, prior to such merger, written
notice of such merger and such assignment documentation and other information
as Landlord may request in connection therewith, and (iii) all of the other
terms and requirements of this Article shall apply with respect to such
assignment.
14.
ARTICLE X
INSURANCE AND INDEMNITY
SECTION 10.1 TENANT'S INSURANCE. Tenant, at its sole cost and expense,
shall provide and maintain in effect tile insurance described in Exhibit D.
Evidence of that insurance must be delivered to Landlord prior to the
Commencement Date.
SECTION 10.2 LANDLORD'S INSURANCE. Landlord may, at its election,
provide any or all of the following types of insurance, with or without
deductible and in amounts and coverages as may be determined by Landlord in
its discretion: "all risk" property insurance, subject to standard
exclusions, covering the Building, and such other risks as Landlord or its
mortgagees may from time to time deem appropriate, including leasehold
improvements made by Landlord, and commercial general liability coverage.
Landlord shall not be required to carry insurance of any kind on Tenant's
property, including leasehold improvements, trade fixtures, furnishings,
equipment, plate glass, signs and all other items of personal property, and
shall not be obligated to repair or replace that property should damage
occur. All proceeds of insurance maintained by Landlord upon the Building
shall be the property of Landlord, whether or not Landlord is obligated to or
elects to make any repairs. At Landlord's option, Landlord may self-insure
all or any portion of the risks for which Landlord elects to provide
insurance hereunder.
SECTION 10.3 TENANT'S INDEMNITY. To the fullest extent permitted by
law, and except to the extent of the sole active negligence of Landlord, its
employees or authorized agents, Tenant shall defend, indemnify, protect, save
and hold harmless Landlord, its agents, and any and all affiliates of
Landlord, including, without limitation, any corporations or other entities
controlling, controlled by or under common control with Landlord, from and
against any and all claims, liabilities, costs or expenses arising either
before or after the Commencement Date from Tenant's use or occupancy of the
Premises or the Building, or from the conduct of its business, or from any
activity, work, or thing done, permitted or suffered by Tenant or its agents,
employees, invitees or licensees in or about the Premises or the Building, or
from any default in the performance of any obligation on Tenant's part to be
performed under this Lease, or from any act or negligence of Tenant or its
agents, employees, visitors, patrons, guests, invitees or licensees.
Landlord may, at its option, require Tenant to assume Landlord's defense in
any action covered by this Section through counsel satisfactory to Landlord.
The provisions of this Section shall expressly survive the expiration or
sooner termination of this Lease.
SECTION 10.4 LANDLORD'S NONLIABILITY. Except to the extent of the sole
active negligence of Landlord, its employees or authorized agents, Landlord
shall not be liable to Tenant, its employees, agents and invitees, and Tenant
hereby waives all claims against Landlord for loss of or damage to any
property or personal injury, or any other loss, cost, damage, injury or
liability whatsoever resulting from fire, explosion, falling plaster, steam,
gas, electricity, water or rain which may leak or flow from or into any part
of the Premises or from the breakage, leakage, obstruction or other defects
of the pipes, sprinklers, wires, appliances, plumbing, air conditioning,
electrical works or other fixtures in the Building, whether the damage or
injury results from conditions arising in the Premises or in other portions
of the Building. It is understood that any such condition may require the
temporary evacuation or closure of all or a portion of the Building.
Notwithstanding any provision of this Lease to the contrary, including,
without limitation, the negligence of Landlord, its employees and/or agents,
Landlord shall in no event be liable to Tenant, its employees, agents, and
invitees, and Tenant hereby waives all claims against Landlord, for loss or
interruption of Tenant's business or income (including, without limitation,
any consequential damages and lost profit or opportunity costs), or any other
loss, cost, damage, injury or liability resulting from, but not limited to,
Acts of God (except with respect to restoration obligations pursuant to
Article XI below), acts of civil disobedience or insurrection, acts or
omissions (criminal or otherwise) of any third parties (other than Landlord's
employees or authorized agents), including without limitation, any other
tenants within the Project or their agents, employees, contractors, guests or
invitees. Except as provided in Sections 11.1 and 12.1 below, there shall be
no abatement of rent and no liability of Landlord by reason of any injury to
or interference with Tenant's business (including without limitation
consequential damages and lost profit or opportunity costs) arising from the
making of any repairs, alterations or improvements to any portion of the
Building, including repairs to the Premises, nor shall any related activity
by Landlord constitute an actual or constructive eviction; provided, however,
that in making repairs, alterations or improvements, Landlord shall interfere
as little as reasonably practicable with the conduct of Tenant's business in
the Premises. Neither Landlord nor its agents shall be liable for
interference
15.
with light or other similar intangible interests. Tenant shall immediately
notify Landlord in case of fire or accident in the Premises or the Building
and of defects in any improvements or equipment.
SECTION 10.5 WAIVER OF SUBROGATION. Landlord and Tenant each hereby
waives all rights of recovery against the other and the other's agents on
account of loss and damage occasioned to the property of such waiving party
to the extent only that such loss or damage is required to be insured against
under any "all risk" property insurance policies required by this Article X;
provided however, that (i) the foregoing waiver shall not apply to the extent
of Tenant's obligations to pay deductibles under any such policies and this
Lease, and (ii) if any loss is due to the act, omission or negligence or
willful misconduct of Tenant or its agents, employees, contractors, guests or
invitees, Tenant's liability insurance shall be primary and shall cover all
losses and damages prior to any other insurance hereunder. By this waiver it
is the intent of the parties that neither Landlord nor Tenant shall be liable
to any insurance company (by way of subrogation or otherwise) insuring the
other party for any loss or damage insured against under any "all risk"
property insurance policies required by this Article, even though such loss
or damage might be occasioned by the negligence of such party, its agents,
employees, contractors, guests or invitees. The provisions of this Section
shall not limit the indemnification provisions elsewhere contained in this
Lease.
ARTICLE XI
DAMAGE OR DESTRUCTION
SECTION 11.1 RESTORATION.
(a) If the Building is damaged, Landlord shall repair that damage
as soon as reasonably possible, at its expense, unless: (i) Landlord
reasonably determines that the cost of repair is not covered by Landlord's
fire and extended coverage insurance plus such additional amounts Tenant
elects, at its option, to contribute, excluding however the deductible (for
which Tenant shall be responsible for Tenant's proportionate share); (ii)
Landlord reasonably determines that the Premises cannot, with reasonable
diligence, be fully repaired by Landlord (or cannot be safely repaired
because of the presence of hazardous factors, including without limitation
Hazardous Materials, earthquake faults, and other similar dangers) within two
hundred seventy (270) days after the date of the damage; (iii) an event of
default by Tenant has occurred and is continuing at the time of such damage;
or (iv) the damage occurs during the final twelve (12) months of the Term.
Should Landlord elect not to repair the damage for one of the preceding
reasons, Landlord shall so notify Tenant in writing within sixty (60) days
after the damage occurs and this Lease shall terminate as of the date of that
notice.
(b) Unless Landlord elects to terminate this Lease in accordance
with subsection (a) above, this Lease shall continue in effect for the
remainder of the Term; provided that so long as Tenant is not in default
under this Lease, if the damage is so extensive that Landlord reasonably
determines that the Premises cannot, with reasonable diligence, be repaired
by Landlord (or cannot be safely repaired because of the presence of
hazardous factors, earthquake faults, and other similar dangers) so as to
allow Tenant's substantial use and enjoyment of the Premises within two
hundred seventy (270) days after the date of damage, then Tenant may elect to
terminate this Lease by written notice to Landlord within the sixty (60) day
period stated in subsection (a).
(c) Commencing on the date of any damage to the Building, and
ending on the sooner of the date the damage is repaired or the date this
Lease is terminated, the rental to be paid under this Lease shall be abated
in the same proportion that the floor area of the Building that is rendered
unusable by the damage from time to time bears to the total floor area of the
Building, but only to the extent that any business interruption insurance
proceeds are received by Landlord therefor from Tenant's insurance described
in Exhibit D.
(d) Notwithstanding the provisions of subsections (a), (b) and (c)
of this Section, and subject to the provisions of Section 10.5 above, the
cost of any repairs shall be borne by Tenant, and Tenant shall not be
entitled to rental abatement or termination rights, if the damage is due to
the fault or neglect of Tenant or its employees, subtenants, invitees or
representatives. In addition, the provisions of this Section shall not be
deemed to require Landlord to repair any improvements or fixtures that Tenant
is obligated to repair or insure pursuant to any other provision of this
Lease.
16.
(e) Tenant shall fully cooperate with Landlord in removing
Tenant's personal property and any debris from the Premises to facilitate all
inspections of the Premises and the making of any repairs. Notwithstanding
anything to the contrary contained in this Lease, if Landlord in good faith
believes there is a risk of injury to persons or damage to property from
entry into the Building or Premises following any damage or destruction
thereto, Landlord may restrict entry into the Building or the Premises by
Tenant, its employees, agents and contractors in a non-discriminatory manner,
without being deemed to have violated Tenant's rights of quiet enjoyment to,
or made an unlawful detainer of, or evicted Tenant from, the Premises. Upon
request, Landlord shall consult with tenant to determine if there are safe
methods of entry into the Building or the Premises solely in order to allow
Tenant to retrieve files, data in computers, and necessary inventory, subject
however to all indemnities and waivers of liability from Tenant to Landlord
contained in this Lease and any additional indemnities and waivers of
liability which Landlord may require.
SECTION 11.2 LEASE GOVERNS. Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of
law.
ARTICLE XII
EMINENT DOMAIN
SECTION 12.1 TOTAL OR PARTIAL TAKING. If all or a material portion of
the Premises is taken by any lawful authority by exercise of the right of
eminent domain, or sold to prevent a taking, either Tenant or Landlord may
terminate this Lease effective as of the date possession is required to be
surrendered to the authority. In the event title to a portion of the
Premises is taken or sold in lieu of taking, and if Landlord elects to
restore the Premises in such a way as to alter the Premises materially,
either party may terminate this Lease, by written notice to the other party,
effective on the date of vesting of title. In the event neither party has
elected to terminate this Lease as provided above, then Landlord shall
promptly, after receipt of a sufficient condemnation award, proceed to
restore the Premises to substantially their condition prior to the taking,
and a proportionate allowance shall be made to Tenant for the rent
corresponding to the time during which, and to the pan of the Premises of
which, Tenant is deprived on account of the taking and restoration. In the
event of a taking, Landlord shall be entitled to the entire amount of the
condemnation award without deduction for any estate or interest of Tenant;
provided that nothing in this Section shall be deemed to give Landlord any
interest in, or prevent Tenant from seeking any award against the taking
authority for, the taking of personal property and fixtures belonging to
Tenant or for relocation or business interruption expenses recoverable from
the taking authority.
SECTION 12.2 TEMPORARY TAKING. No temporary taking of the Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Premises
shall belong entirely to Tenant. A temporary taking shall be deemed to be a
taking of the use or occupancy of the Premises for a period of not to exceed
one hundred eighty (180) days.
SECTION 12.3 TAKING OF PARKING AREA. In the event there shall be a
taking of the parking area such that Landlord can no longer provide
sufficient parking to comply with this Lease, Landlord may substitute
reasonably equivalent parking in a location reasonably close to the Building;
provided that if Landlord fails to make that substitution within ninety (90)
days following the taking and if the taking materially impairs Tenant's use
and enjoyment of the Premises, Tenant may, at its option, terminate this
Lease by written notice to Landlord. If this Lease is not so terminated by
Tenant, there shall be no abatement of rent and this Lease shall continue in
effect.
ARTICLE XIII
SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS
SECTION 13.1 SUBORDINATION. At the option of Landlord, this Lease
shall be either superior or subordinate to all ground or underlying leases,
mortgages and deeds of trust, if any, which may hereafter affect the
Premises, and to all renewals, modifications, consolidations, replacements
and extensions thereof; provided, that so long as Tenant is not in default
under this Lease, this Lease shall not be terminated or Tenant's quiet
enjoyment of
17.
the Premises is disturbed in the event of termination of any such ground or
underlying lease, or the foreclosure of any such mortgage or deed of trust,
to which Tenant has subordinated this Lease pursuant to this Section. In the
event of a termination or foreclosure, Tenant shall become a tenant of and
attorn to the successor-in-interest to Landlord upon the same terms and
conditions as are contained in this Lease, and shall execute any instrument
reasonably required by Landlord's successor for that purpose. Tenant shall
also, upon written request of Landlord, execute and deliver all instruments
as may be required from time to time to subordinate the rights of Tenant
under this Lease to any ground or underlying lease or to the lien of any
mortgage or deed of trust (provided that such instruments include the
nondisturbance and attornment provisions set forth above), or, if requested
by Landlord, to subordinate, in whole or in part, any ground or underlying
lease or the lien of any mortgage or deed of trust to this Lease.
SECTION 13.2 ESTOPPEL CERTIFICATE.
(a) Tenant shall, at any time upon not less than ten (10) days
prior written notice from Landlord, execute, acknowledge and deliver to
Landlord, in any form that Landlord may reasonably require, a statement in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of the modification and
certifying that this Lease, as modified, is in full force and effect) and the
dates to which the rental, additional rent and other charges have been paid
in advance, if any, and (ii) acknowledging that, to Tenant's knowledge, there
are no uncured defaults on the part of Landlord, or specifying each default
if any are claimed, and (iii) setting forth all further information that
Landlord may reasonably require. Tenant's statement may be relied upon by
any prospective purchaser or encumbrancer of the Premises.
(b) Notwithstanding any other rights and remedies of Landlord,
Tenant's failure to deliver any estoppel statement within the provided time
shall be conclusive upon Tenant that (i) this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii)
there are no uncured defaults in Landlord's performance, and (iii) not more
than one month's rental has been paid in advance.
SECTION 13.3 FINANCIALS.
(a) Tenant shall deliver to Landlord, prior to the execution of
this Lease and thereafter at any time upon Landlord's request, Tenant's
current tax returns and financial statements, certified true, accurate and
complete by the chief financial officer of Tenant, including a balance sheet
and profit and loss statement for the most recent prior year (collectively,
the "Statements"), which Statements shall accurately and completely reflect
the financial condition of Tenant. Landlord agrees that it will keep the
Statements confidential, except that Landlord shall have the right to deliver
the same to any proposed purchaser or encumbrancer of the Premises.
Notwithstanding the foregoing, so long as Tenant is a publicly-traded
corporation whose stock is traded on a nationally recognized exchange or on
NASDAQ, the "Statements" shall consist of Tenant's most recently publicly
disclosed financial statements.
(b) Tenant acknowledges that Landlord is relying on the Statements
in its determination to enter into this Lease, and Tenant represents to
Landlord, which representation shall be deemed made on the date of this Lease
and again on the Commencement Date, that no material change in the financial
condition of Tenant, as reflected in the Statements, has occurred since the
date Tenant delivered the Statements to Landlord. The Statements are
represented and warranted by Tenant to be correct and to accurately and fully
reflect Tenant's true financial condition as of the date of submission by any
Statements to Landlord.
ARTICLE XIV
DEFAULTS AND REMEDIES
SECTION 14.1 TENANT'S DEFAULTS. In addition to any other event of
default set forth in this Lease, the occurrence of any one or more of the
following events shall constitute a default by Tenant:
(a) The failure by Tenant to make any payment of rent or
additional rent required to be made by Tenant, as and when due, where the
failure continues for a period of three (3) days after written notice from
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Landlord to Tenant; provided, however, that any such notice shall be in lieu
of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 and 1161(a) as amended. For purposes of these
default and remedies provisions, the term "additional rent" shall be deemed
to include all amounts of any type whatsoever other than Basic Rent to be
paid by Tenant pursuant to the terms of this Lease.
(b) Assignment, sublease, encumbrance or other transfer of the
Lease by Tenant, either voluntarily or by operation of law, whether by
judgment, execution, transfer by intestacy or testacy, or other means,
without the prior written consent of Landlord.
(c) The discovery by Landlord that any financial statement
provided by Tenant, or by any affiliate, successor or guarantor of Tenant,
was materially false.
(d) The failure of Tenant to timely and fully provide any
subordination agreement, estoppel certificate or financial statements in
accordance with the requirements of Article XIII.
(e) The failure or inability by Tenant to observe or perform any
of the express or implied covenants or provisions of this Lease to be
observed or performed by Tenant, other than as specified in any other
subsection of this Section, where the failure continues for a period of
thirty (30) days after written notice from Landlord to Tenant or such shorter
period as is specified in any other provision of this Lease; provided,
however, that any such notice shall be in lieu of, and not in addition to,
any notice required under California Code of Civil Procedure Section 1161 and
1161(a) as amended. However, if the nature of the failure is such that more
than thirty (30) days are reasonably required for its cure, then Tenant shall
not be deemed to be in default if Tenant commences the cure within thirty
(30) days, and thereafter diligently pursues the cure to completion.
(f) (i) The making by Tenant of any general assignment for the
benefit of creditors; (ii) the filing by or against Tenant or a petition to
have Tenant adjudged a Chapter 7 debtor under the Bankruptcy Code or to have
debts discharged or a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case or a petition filed against
Tenant, the same is dismissed within thirty (30) days); (iii) the appointment
of a trustee or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease, if
possession is not restored to Tenant within thirty (30) days; (iv) the
attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where the seizure is not discharged within thirty (30) days; or (v)
Tenant's convening of a meeting of its creditors for the purpose of effecting
a moratorium upon or composition of its debts. Landlord shall not be deemed
to have knowledge of any event described in this subsection unless
notification in writing is received by Landlord, nor shall there be any
presumption attributable to Landlord of Tenant's insolvency. In the event
that any provision of this subsection is contrary to applicable law, the
provision shall be of no force or effect.
SECTION 14.2 LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, or in the event of the
abandonment of the Premises by Tenant, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:
(i) Landlord may terminate Tenant's right to possession of
the Premises by any lawful means, in which case this Lease shall terminate
and Tenant shall immediately surrender possession of the Premises to
Landlord. Such termination shall not affect any accrued obligations of Tenant
under this Lease. Upon termination, Landlord shall have the right to reenter
the Premises and remove all persons and property. Landlord shall also be
entitled to recover from Tenant:
1. The worth at the time of award of the unpaid rent
and additional rent 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 and additional rent which would have been earned after
termination until the time of award exceeds the amount of such loss that
Tenant proves could have been reasonably avoided;
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3. The worth at the time of award of the amount by
which the unpaid rent and additional rent for the balance of the Term after
the time of award exceeds the amount of such loss that Tenant proves could be
reasonably avoided;
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 of things would
be likely to result from Tenant's default, including, but not limited to, the
cost of recovering possession of the Premises, refurbishment of the Premises,
marketing costs, commissions and other expenses of reletting, including
necessary, repair, the unamortized portion of any tenant improvements and
brokerage commissions funded by Landlord in connection with this Lease,
reasonable attorneys' fees, and any other reasonable costs; and
5. At Landlord's election, all other amounts in
addition to or in lieu of the foregoing as may be permitted by law. The term
"rent" as used in this Lease shall be deemed to mean the Basic Rent and all
other sums required to be paid by Tenant to Landlord pursuant to the terms of
this Lease. Any sum, other than Basic Rent, shall be computed on the basis
of the average monthly amount accruing during the twenty-four (24) month
period immediately prior to default, except that if it becomes necessary to
compute such rental before the twenty-four (24) month period has occurred,
then the computation shall be on the basis of the average monthly amount
during the shorter period. As used in subparagraphs (1) and (2) above, the
"worth at the time of award" shall be computed by allowing interest at the
rate often percent (10%) per annum. As used in subparagraph (3) above, the
"worth at the time of award" shall be computed by discounting the amount at
the discount rate of the Federal Reserve Bank of San Francisco at the time of
award plus one percent (1%).
(ii) Landlord may elect not to terminate Tenant's right to
possession of the Premises, in which event Landlord may continue to enforce
all of its rights and remedies under this Lease, including the right to
collect all rent as it becomes due. Efforts by the Landlord to maintain,
preserve or relet the Premises, or the appointment or a receiver to protect
the Landlord's interests under this Lease, shall not constitute a termination
of the Tenant's right to possession of the Premises. In the event that
Landlord elects to avail itself of the remedy provided by this subsection
(ii), Landlord shall not unreasonably withhold its consent to an assignment
or subletting of the Premises subject to the reasonable standards for
Landlord's consent as are contained in this Lease.
(b) Landlord shall be under no obligation to observe or perform
any covenant of this Lease on its part to be observed or performed which
accrues after the date of any default by Tenant unless and until the default
is cured by Tenant, it being understood and agreed that the performance by
Landlord of its obligations under this Lease are expressly conditioned upon
Tenant's full and timely performance of its obligations under this Lease.
The various rights and remedies reserved to Landlord in this Lease or
otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same
time.
(c) No delay or omission of Landlord to exercise any right or
remedy shall be construed as a waiver of the right or remedy or of any
default by Tenant. The acceptance by Landlord of rent shall not be a (i)
waiver of any preceding breach or default by Tenant of any provision of this
Lease, other than the failure of Tenant to pay the particular rent accepted,
regardless of Landlord's knowledge of the preceding breach or default at the
time of acceptance of rent, or (ii) a waiver of Landlord's right to exercise
any remedy available to Landlord by virtue of the breach or default. The
acceptance of any payment from a debtor in possession, a trustee, a receiver
or any other person acting on behalf of Tenant or Tenant's estate shall not
waive or cure a default under Section 14.1. No payment by Tenant or receipt
by Landlord of a lesser amount than the rent required by this Lease shall be
deemed to be other than a partial payment on account of the earliest due
stipulated rent, nor shall any endorsement or statement on any check or
letter be deemed an accord and satisfaction and Landlord shall accept the
check or payment without prejudice to Landlord's right to recover the balance
of the rent or pursue any other remedy available to it. No act or thing done
by Landlord or Landlord's agents during the Term shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by Landlord. No
employee of Landlord or of Landlord's agents shall have any power to accept
the keys to the Premises prior to the termination of this Lease, and the
delivery of the keys to any employee shall not operate as a termination of
the Lease or a surrender of the Premises.
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SECTION 14.3 LATE PAYMENTS.
(a) Any rent due under this Lease that is not received by Landlord
within five (5) days of the date when due shall bear interest at the maximum
rate permitted by law from the date due until fully paid. The payment of
interest shall not cure any default by Tenant under this Lease. In addition,
Tenant acknowledges that the late payment by Tenant to Landlord of rent will
cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult and impracticable to ascertain.
Those costs may include, but are not limited to, administrative, processing
and accounting charges, and late charges which may be imposed on Landlord by
the terms of any ground lease, mortgage or trust deed covering the Premises.
Accordingly, if any rent due from Tenant shall not be received by Landlord or
Landlord's designee within five (5) days after the date due, then Tenant
shall pay to Landlord, in addition to the interest provided above, a late
charge in a sum equal to the greater of five percent (5%) of the amount
overdue or Two Hundred Fifty Dollars ($250.00) for each delinquent payment.
Acceptance of a late charge by Landlord shall not constitute a waiver of
Tenant's default with respect to the overdue amount, nor shall it prevent
Landlord from exercising any of its other rights and remedies.
(b) Following each second consecutive installment of rent that is
not paid within five (5) days following notice of nonpayment from Landlord.
Landlord shall have the option (i) to require that beginning with the first
payment of rent next due, rent shall no longer be paid in monthly
installments but shall be payable quarterly three (3) months in advance
and/or (ii) to require that Tenant increase the amount, if any, of the
Security Deposit by one hundred percent (100%). Should Tenant deliver to
Landlord, at any time during the Term, two (2) or more insufficient cheeks,
the Landlord may require that all monies then and thereafter due from Tenant
be paid to Landlord by cashier's check.
SECTION 14.4 RIGHT OF LANDLORD TO PERFORM. All covenants and
agreements to be performed by Tenant under this Lease shall be performed at
Tenant's sole cost and expense and without any abatement of rent or right of
set-off. If Tenant fails to pay any sum of money, other than rent, or fails
to perform any other act on its part to be performed under this Lease, and
the failure continues beyond any applicable grace period set forth in Section
14.1, then in addition to any other available remedies, Landlord may, at its
election make the payment or perform the other act on Tenant's part.
Landlord's election to make the payment or perform the act on Tenant's part
shall not give rise to any responsibility of Landlord to continue making the
same or similar payments or performing the same or similar acts. Tenant
shall, promptly upon demand by Landlord, reimburse Landlord for all sums paid
by Landlord and all necessary incidental costs, together with interest at the
maximum rate permitted by law from the date of the payment by Landlord.
Landlord shall have the same rights and remedies if Tenant fails to pay those
amounts as Landlord would have in the event of a default by Tenant in the
payment of rent.
SECTION 14.5 DEFAULT BY LANDLORD. Landlord shall not be deemed to be
in default in the performance of any obligation under this Lease unless and
until it has failed to perform the obligation within thirty (30) days after
written notice by Tenant to Landlord specifying in reasonable detail the
nature and extent of the failure; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days are required
for its performance, then Landlord shall not he deemed to be in default if it
commences performance within the thirty (30) day period and thereafter
diligently pursues the cure to completion.
SECTION 14.6 EXPENSES AND LEGAL FEES. All sums reasonably incurred by
Landlord in connection with any event of default by Tenant under this Lease
or holding over of possession by Tenant after the expiration or earlier
termination of this Lease, including without limitation all costs, expenses
and actual accountants, appraisers, attorneys and other professional fees,
and any collection agency or other collection charges, shall be due and
payable by Tenant to Landlord on demand, and shall bear interest at the rate
of ten percent (10%) per annum. Should either Landlord or Tenant bring any
action in connection with this Lease, the prevailing party shall be entitled
to recover as a part of the action its reasonable attorneys' fees, and all
other costs. The prevailing party for the purpose of this paragraph shall be
determined by the trier of the facts.
SECTION 14.7 WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH
ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS
CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES
HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO
AGAINST THE OTHER
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(AND/OR AGAINST ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR
AFFILIATED ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR
ANY CLAIM OF INJURY OR DAMAGE.
SECTION 14.8 SATISFACTION OF JUDGMENT. The obligations of Landlord do
not constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent partners.
Should Tenant recover a money judgment against Landlord, such judgment shall
be satisfied only out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and interest of Landlord
in the Building and out of the rent or other income from such property
receivable by Landlord or out of consideration received by Landlord from the
sale or other disposition of all or any part of Landlord's right, title or
interest in the Building, and no action for any deficiency may be sought or
obtained by Tenant.
SECTION 14.9 LIMITATION OF ACTIONS AGAINST LANDLORD. Any claim, demand
or right of any kind by Tenant which is based upon or arises in connection
with this Lease shall be barred unless Tenant commences an action thereon
within twelve (12) months after the date that the act, omission, event or
default upon which the claim, demand or right arises, has occurred.
ARTICLE XV
END OF TERM
SECTION 15.1 HOLDING OVER. This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after
the expiration shall not constitute a renewal or extension of this Lease, or
give Tenant any rights under this Lease, except when in writing signed by
both parties. If Tenant holds over for any period after the expiration (or
earlier termination) of the Term without the prior written consent of
Landlord, such possession shall constitute a tenancy at sufferance only; such
holding over with the prior written consent of Landlord shall constitute a
month-to-month tenancy commencing on the first (1st) day following the
termination of this Lease. In either of such events, possession shall be
subject to all of the terms of this Lease, except that the monthly Basic Rent
shall be the greater of(a) one hundred fifty, percent (150%) of the Basic
Rent for the month immediately preceding the date of termination or (b) the
then currently scheduled Basic Rent for comparable space in the Building. If
Tenant fails to surrender the Premises upon the expiration of this Lease
despite demand to do so by Landlord, Tenant shall indemnify and hold Landlord
harmless from all loss or liability, including without limitation, any claims
made by any succeeding tenant relating to such failure to surrender.
Acceptance by Landlord of rent after the termination shall not constitute a
consent to a holdover or result in a renewal of this Lease. The foregoing
provisions of this Section are in addition to and do not affect Landlord's
right of re-entry or any other rights of Landlord under this Lease or at law.
SECTION 15.2 MERGER ON TERMINATION. The voluntary or other surrender of
this Lease by Tenant, or a mutual termination of this Lease, shall terminate any
or all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.
SECTION 15.3 SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
Expiration Date or upon any earlier termination of this Lease, Tenant shall
quit and surrender possession of the Premises to Landlord in as good order,
condition and repair as when received or as hereafter may be improved by
Landlord or Tenant, reasonable wear and tear and repairs which are Landlord's
obligation excepted, and shall, without expense to Landlord, remove or cause
to be removed from the Premises all personal property and debris, except for
any items that Landlord may by written authorization allow to remain. Tenant
shall repair all damage to the Premises resulting from the removal, which
repair shall include the patching and filling of holes and repair of
structural damage, provided that Landlord may instead elect to repair any
structural damage at Tenant's expense. If Tenant shall fail to comply with
the provisions of this Section, Landlord may effect the removal and/or make
any repairs, and the cost to Landlord shall be additional rent payable by
Tenant upon demand. If Tenant fails to remove Tenant's personal property
from the Premises upon the expiration of the Term, Landlord may remove,
store, dispose of and/or retain
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such personal property, at Landlord's option, in accordance with then
applicable laws, all at the expense of Tenant. If requested by Landlord,
Tenant shall execute, acknowledge and deliver to Landlord an instrument in
writing releasing and quitclaiming to Landlord all right, title and interest
of Tenant in the Premises.
ARTICLE XVI
PAYMENTS AND NOTICES
All sums payable by Tenant to Landlord shall be paid, without deduction
or offset, in lawful money of the United States to Landlord at its address
set forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, as for example in the payment of rent pursuant to Section 4.1, all
payments shall be due and payable within ten (10) days after demand. All
payments requiring proration shall be prorated on the basis of a thirty (30)
day month and a three hundred sixty (360) day year. Any notice, election,
demand, consent, approval or other communication to be given or other
document to be delivered by either party to the other may be delivered in
person or by courier or overnight delivery service to the other party, or may
be deposited in the United States mail, duly registered or certified, postage
prepaid, return receipt requested, and addressed to the other party at the
address set forth in Item 12 of the Basic Lease Provisions, or if to Tenant,
at that address or, from and after the Commencement Date, at the Premises
(whether or not Tenant has departed from, abandoned or vacated the Premises),
or may be delivered by telegram, telex or telecopy, provided that receipt
thereof is telephonically confirmed. Either party may, by written notice to
the other, served in the manner provided in this Article, designate a
different address. If any notice or other document is sent by mail, it shall
be deemed served or delivered twenty-four (24) hours after mailing. If more
than one person or entity is named as Tenant under this Lease, service of any
notice upon any one of them shall be deemed as service upon all of them.
ARTICLE XVII
RULES AND REGULATIONS
Tenant agrees to observe faithfully and comply strictly with the Rules
and Regulations, attached as Exhibit E, and any reasonable and
nondiscriminatory amendments, modifications and/or additions as may be
adopted and published by written notice to tenants by Landlord for the
safety, care, security, good order, or cleanliness of the Premises. Landlord
shall not be liable to Tenant for any violation of the Rules and Regulations
or the breach of any covenant or condition in any lease by any other tenant
or such tenant's agents, employees, contractors, guests or invitees. One or
more waivers by Landlord of any breach of the Rules and Regulations by Tenant
or by any other tenant(s) shall not be a waiver of any subsequent breach of
that rule or any other. Tenant's failure to keep and observe the Rules and
Regulations shall constitute a default under this Lease. In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall
be controlling.
ARTICLE XVIII
BROKER'S COMMISSION
The parties recognize as the broker(s) who negotiated this Lease the
firm(s), if any, whose name(s) is (are) stated in item 10 of the Basic Lease
Provisions, and agree that Landlord shall be responsible for the payment of
brokerage commissions to those broker(s) unless otherwise provided in this
Lease. Tenant warrants that it has had no dealings with any other real
estate broker or agent in connection with the negotiation of this Lease, and
Tenant agrees to indemnify and hold Landlord harmless from any cost, expense
or liability (including reasonable attorneys' fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent
employed or claiming to represent or to have been employed by Tenant in
connection with the negotiation of this Lease. The foregoing agreement
shall survive the termination of this Lease.
ARTICLE XIX
TRANSFER OF LANDLORD'S INTEREST
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In the event of any transfer of Landlord's interest in the Premises, the
transferor shall be automatically relieved of all obligations on the part of
Landlord accruing under this Lease from and after the date of the transfer,
provided that any funds held by the transferor in which Tenant has an
interest shall be turned over, subject to that interest, to the transferee
and Tenant is notified of the transfer as required by law. No holder or a
mortgage and/or deed of trust to which this Lease is or may be subordinate,
and no landlord under a so-called sale-leaseback, shall be responsible in
connection with the Security Deposit, unless the mortgagee or holder of the
deed of trust or the landlord actually receives the Security Deposit. It is
intended that the covenants and obligations contained in this Lease on the
part of Landlord shall, subject to the foregoing, be binding on Landlord, its
successors and assigns, only during and in respect to their respective
successive periods of ownership.
ARTICLE XX
INTERPRETATION
SECTION 20.1 GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and "Tenant" shall include the plural as well
as the singular, and words used in neuter, masculine or feminine genders
shall include the others.
SECTION 20.2 HEADINGS. The captions and headings of the articles and
sections of this Lease are for convenience only, are not a part of this Lease
and shall have no effect upon its construction or interpretation.
SECTION 20.3 JOINT AND SEVERAL LIABILITY. If more than one person or
entity is named as Tenant, the obligations imposed upon each shall be joint
and several and the act of or notice from, or notice or refund to, or the
signature of, any one or more of them shall be binding on all of them with
respect to the tenancy of this Lease, including, but not limited to, any
renewal, extension, termination or modification of this Lease.
SECTION 20.4 SUCCESSORS. Subject to Articles IX and XIX, all rights
and liabilities given to or imposed upon Landlord and Tenant shall extend to
and bind their respective heirs, executors, administrators, successors and
assigns. Nothing contained in this Section is intended, or shall be
construed, to grant to any person other than Landlord and Tenant and their
successors and assigns any rights or remedies under this Lease.
SECTION 20.5 TIME OF ESSENCE. Time is of the essence with respect to
the performance of every provision of this Lease.
SECTION 20.6 CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 20.7 SEVERABILITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material
benefit by either party or the deletion of which is consented to by the party
adversely affected, shall be held invalid or unenforceable to any extent, the
remainder of this Lease shall not be affected and each term and provision of
this Lease shall be valid and enforceable to the fullest extent permitted by
law.
SECTION 20.8 WAIVER AND CUMULATIVE REMEDIES. One or more waivers by
Landlord or Tenant of any breach of any term, covenant or condition contained
in this Lease shall not be a waiver of any subsequent breach of the same or
any other term, covenant or condition. Consent to any act by one of the
parties shall not be deemed to render unnecessary, the obtaining of that
party's consent to any subsequent act. No breach by Tenant of this Lease
shall be deemed to have been waived by Landlord unless the waiver is in a
writing signed by Landlord. The rights and remedies of Landlord under this
Lease shall be cumulative and in addition to any and all other rights and
remedies which Landlord may have.
SECTION 20.9 INABILITY TO PERFORM. In the event that either party
shall be delayed or hindered in or prevented from the performance of any work
or in performing any act required under this Lease by reason of any cause
beyond the reasonable control of that party, then the performance of the work
or the doing of the act shall be excused for the period of the delay and the
time for performance shall be extended for a period equivalent to the
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period of the delay. The provisions of this Section shall not operate to
excuse Tenant from the prompt payment of rent or from the timely performance
of any other obligation under this Lease within Tenant's reasonable control.
SECTION 20.10 ENTIRE AGREEMENT. This Lease and its exhibits and other
attachments cover in full each and every agreement of every kind between the
parties concerning the Premises and the Building, and all preliminary
negotiations, oral agreements, understandings and/or practices, except those
contained in this Lease, are superseded and of no further effect. Tenant
waives its rights to rely on any representations or promises made by Landlord
or others which are not contained in this Lease. No verbal agreement or
implied covenant shall be held to modify the provisions of this Lease, any
statute, law, or custom to the contrary notwithstanding.
SECTION 20.11 QUIET ENJOYMENT. Upon the observance and performance of
all the covenants, terms and conditions on Tenant's part to be observed and
performed, and subject to the other provisions of this Lease. Tenant shall
peaceably and quietly hold and enjoy the Premises for the Term without
hindrance or interruption by Landlord or any other person claiming by or
through Landlord.
SECTION 20.12 SURVIVAL. All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination
of this Lease, including without limitation any warranty or indemnity
hereunder, shall so survive and continue to be binding upon and inure to the
benefit of the respective parties and their successors and assigns.
ARTICLE XXI
EXECUTION AND RECORDING
SECTION 21.1 COUNTERPARTS. This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which
shall be one and the same agreement.
SECTION 21.2 CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, each individual executing this Lease on behalf of
the corporation or partnership represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of the corporation or
partnership, and that this Lease is binding upon the corporation or
partnership in accordance with its terms. Tenant shall, at Landlord's
request, deliver a certified copy of its board of directors' resolution or
partnership agreement or certificate authorizing or evidencing the execution
of this Lease.
SECTION 21.3 EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of
this Lease to Tenant shall be for examination purposes only, and shall not
constitute an offer to or option for Tenant to lease the Premises. Execution
of this Lease by Tenant and its return to Landlord shall not be binding upon
Landlord, notwithstanding any time interval, until Landlord has in fact
executed and delivered this Lease to Tenant, it being intended that this
Lease shall only become effective upon execution by Landlord and delivery of
a fully executed counterpart to Tenant.
SECTION 21.4 RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord,
shall execute and acknowledge a "short form" memorandum of this Lease for
recording purposes.
SECTION 21.5 AMENDMENTS. No amendment or termination of this Lease
shall be effective unless in writing signed by authorized signatories of
Tenant and Landlord, or by their respective successors in interest. No
actions, policies, oral or informal arrangements, business dealings or other
course of conduct by or between the parties shall be deemed to modify, this
Lease in any respect.
SECTION 21.6 EXECUTED COPY. Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.
SECTION 21.7 ATTACHMENTS. All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.
25.
ARTICLE XXII
MISCELLANEOUS
SECTION 22.1 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute
proprietary information of Landlord. Disclosure of the terms could adversely
affect the ability of Landlord to negotiate other leases and impair
Landlord's relationship with other tenants. Accordingly, Tenant agrees that
it, and its partners, officers, directors, employees and attorneys, shall not
intentionally and voluntarily disclose the terms and conditions of this Lease
to any other tenant or apparent prospective tenant of the Landlord, either
directly or indirectly, without the prior written consent of Landlord.
provided, however, that Tenant may disclose the terms to prospective
subtenants or assignees under this Lease.
SECTION 22.2 GUARANTY. As a condition to the execution of this Lease
by Landlord, the obligations, covenants and performance of the Tenant as
herein provided shall be guaranteed in writing by the Guarantor(s) listed in
Item 7 of the Basic Lease Provisions, if any, on a form of guaranty provided
by Landlord.
SECTION 22.3 CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Building, the lender shall request reasonable
modifications in this Lease as a condition to the financing, Tenant will not
unreasonably withhold or delay its consent, provided that the modifications
do not materially increase the obligations of Tenant or materially and
adversely affect the leasehold interest created by this Lease.
SECTION 22.4 MORTGAGEE PROTECTION. No act or failure to act on the
part of Landlord which would otherwise entitle Tenant to be relieved of its
obligations hereunder or to terminate this Lease shall result in such a
release or termination unless (a) Tenant has given notice by registered or
certified mail to any beneficiary or a deed of trust or mortgage covering the
Premises whose address has been furnished to Tenant and (b) such beneficiary
is afforded a reasonable opportunity to cure the default by Landlord (which
in no event shall be less than sixty (60) days), including, if necessary to
effect the cure, time to obtain possession of the Premises by power of sale
or judicial foreclosure provided that such foreclosure remedy is diligently
pursued. Tenant agrees that each beneficiary or a deed of trust or mortgage
covering the Premises is an express third party beneficiary hereof, Tenant
shall have no right or claim for the collection of any deposit from such
beneficiary or from any purchaser at a foreclosure sale unless such
beneficiary or purchaser shall have actually received and not refunded the
deposit, and Tenant shall comply with any written directions by any
beneficiary to pay rent due hereunder directly to such beneficiary without
determining whether an event of default exists under such beneficiary's deed
of trust.
SECTION 22.5 COVENANTS AND CONDITIONS. All of the provisions of this
Lease shall be construed to be conditions as well as covenants as though the
words specifically expressing or imparting covenants and conditions were used
in each separate provision.
SECTION 22.6 SECURITY MEASURES. Tenant hereby acknowledges that
Landlord shall have no obligation whatsoever to provide guard service or
other security measures for the benefit of the Premises. Tenant assumes all
responsibility for the protection of Tenant, its agents, invitees and
property from acts of third parties, Nothing herein contained shall prevent
Landlord, at its sole option, from providing security protection for the
Premises or any part thereof, in which event the cost thereof shall be
included within the definition of Building Costs.
SECTION 22.7 EXPIRATION OF EXISTING LEASE. It is understood that
Tenant is presently leasing the Premises pursuant to a Lease Agreement dated
March 5, 1996 executed by Landlord's predecessor-in-interest, Aetna Life
Insurance Company, (the "Existing Lease"). The parties agree that the
Existing Lease shall expire in accordance with its terms as &the day
preceding the Commencement Date of this Lease, provided that such termination
shall not relieve Tenant of (a) any accrued obligation or liability under the
Existing Lease as of said termination date, or (b) any obligation under the
Existing Lease which was reasonably intended to survive the expiration or
termination thereof.
SECTION 22.8 JAMS.
26.
(a) All claims or disputes between Landlord and Tenant arising out
of, or relating to the Lease which either party is expressly authorized by a
provision hereof to submit to arbitration, shall be decided by the
JAMS/ENDISPUTE, or its successor, in San Jose, California ("JAMS"), unless
the parties mutually agree otherwise. Within ten (10) business days
following submission to JAMS, JAMS shall designate three arbitrators and each
party may, within five (5) business days thereafter, veto one of the three
persons so designated. If two different designated arbitrators have been
vetoed, the third arbitrator shall hear and decide the matter. Any
arbitration pursuant to this Section 22.8 shall be decided within thirty (30)
days of submission of JAMS. The decision of the arbitrator shall be final and
binding on the parties. All costs associated with arbitration shall be
awarded to the prevailing party as determined by the arbitrator.
(b) Notice of the demand for arbitration by either party to the
Lease shall be filed in writing with the other party to the Lease and with
JAMS and shall be made within a reasonable time after the dispute has arisen.
The award rendered by the arbitrators shall be final, and judgment may be
entered upon it in accordance with applicable law in any court having
jurisdiction thereof. Except by written consent of the person or entity
sought to be joined, no arbitration arising out of or relating to the Lease
shall include, by consolidation, joinder or in any other manner, any person
or entity not a party to the Lease under which such arbitration is filed
unless (1) such person or entity is substantially involved in a common
question of fact or law, (2) the presence of such person or entity is
required if complete relief is to be accorded in the arbitration, or (3) the
interest or responsibility of such person or entity, in the matter is not
insubstantial.
(c) The agreement herein among the parties to the Lease and any
other written agreement to arbitrate referred to herein shall be specifically
enforceable under prevailing law.
LANDLORD TENANT:
THE IRVINE COMPANY SILICON STORAGE TECHNOLOGY, INC.
a California corporation
By: /s/ Xxxxxx X. Xxxxxxxx, Xx. By: /s/ Bing Yeh
--------------------------------- -----------------------------------
Xxxxxx X. Xxxxxxxx, Xx., Name: Bing Yeh
President --------------------------
Irvine Industrial Company, Title: President and Chief
A division of The Irvine Executive Officer
Company -------------------------
By: Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------------- -----------------------------------
Xxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxx
Assistant Secretary --------------------------
Title: Vice President,
Chief Finance Officer
-------------------------
27.
