EXHIBIT 10.5
BLDG: Palomar 3
OWNER: 500
PROP: 273
UNIT: 2
TENANT: 27305
LEASE AGREEMENT
THIS LEASE, made this 27th day of August, 1997 between XXXX XXXXXXXXX,
Trustee, or his Successor Trustee, UTA dated 7/20/77 (XXXX XXXXXXXXX
SURVIVOR'S TRUST) as amended, and XXXXXXX X. XXXXX, Trustee, or his Successor
Trustee, UTA dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST) as
amended, hereinafter called Landlord, and FAROUDJA LABORATORIES, INC., a
California corporation, hereinafter called Tenant.
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit
"A", attached hereto and incorporated herein by this reference thereto more
particularly described as follows:
A portion of that certain 20,000 plus/minus square foot, one-story building
located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, consisting of
approximately 10,000 plus/minus square feet of space. Said Premises is more
particularly shown within the area outlined in Red on Exhibit A attached
hereto. The entire parcel, of which the Premises is a part, is shown within
the area outlined in green on Exhibit A attached. The Premises shall be
improved as shown on Exhibit B to be attached hereto, and is leased on an
"as-is" basis, in its present condition, and in the configuration as shown in
Red on Exhibit B to be attached hereto.
The word "Premises" as used throughout this lease is hereby defined to
include the nonexclusive use of landscaped areas, sidewalks and driveways in
front of or adjacent to the Premises, and the nonexclusive use of the area
directly underneath or over such sidewalks and driveways. The gross leasable
area of the building shall be measured from outside of exterior walls to
outside of exterior walls, and shall include any atriums, covered entrances
or egresses and covered loading areas.
Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of
the consideration for this Lease to perform and observe each and all of said
terms, covenants and conditions. This lease is made upon the conditions of
such performance and observance.
1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of
general office, light manufacturing, research and development, and storage
and other uses necessary for Tenant to conduct Tenant's business, provided
that such uses shall be in accordance with all applicable governmental laws
and ordinances, and for no other purpose. Tenant shall not do or permit to
be done in or about the Premises nor bring or keep or permit to be brought or
kept in or about the Premises anything which is prohibited by or will in any
way increase the existing rate of (or otherwise affect) fire or any insurance
covering the Premises or any part thereof, or any of its contents, or will
cause a cancellation of any insurance covering the Premises or any part
thereof, or any of its contents. Tenant shall not do or permit to be done
anything in, on or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Premises or
neighboring premises or injure or annoy them, or use or allow the Premises to
be used for any improper, immoral, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the
Premises. No sale by auction shall be permitted on the Premises. Tenant shall
not place any loads upon the floors, walls, or ceiling which endanger the
structure, or place any harmful fluids or other materials in the drainage
system of the building, or overload existing electrical or other mechanical
systems. No waste materials or refuse shall be dumped upon or permitted to
remain upon any part of the Premises or outside of the building in which the
Premises are a part, except in trash containers placed inside exterior
enclosures designated by Landlord for that purpose or inside of the building
proper where designated by Landlord. No materials, supplies, equipment,
finished products or semifinished products, raw materials or articles of any
nature shall be stored upon or permitted to remain outside the Premises.
Tenant shall not place anything or allow anything to be placed near the glass
of any window, door partition or wall which may appear unsightly from outside
the Premises. No loudspeaker or other device, system or apparatus which can
be heard outside the Premises shall be used in or at the Premises without the
prior written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend
and hold Landlord harmless against any loss, expense, damage, reasonable
attorneys' fees, or liability arising out of failure of Tenant to comply with
any applicable law. Tenant shall comply with any covenant, condition, or
restriction ("CC&R's") affecting the Premises. The provisions of
this paragraph are for the benefit of Landlord only and shall not be construed
to be for the benefit of any tenant or occupant of the Premises.
2. TERM*
A. The term of this Lease shall be for a period of FIVE (5) years
ELEVEN (11) months TWENTY SIX (26) days (unless sooner terminated as
hereinafter provided) and, subject to paragraphs 2B and 3, shall commence on
the 6th day of October, 1997 and end on the 30th day of September, 2003.
B. Possession of the Premises shall be deemed tendered and the term of
the Lease shall commence when the first of the following occurs:
(a) One day after a Certificate of Occupancy is granted by the
proper governmental agency, or, if the governmental agency having
jurisdiction over the area in which the Premises are situated does not issue
certificates of occupancy, then the same number of days after certification
by Landlord's architect or contractor that Landlord's construction work has
been completed; or
(b) Upon the occupancy of the Premises by any of Tenant's operating
personnel; or
(c) When the Tenant Improvements have been substantially completed
for Tenant's use and occupancy, in accordance and compliance with Exhibit B
of this Lease Agreement; or
(d) As other agreed in writing.
* It is agreed in the event said Lease commences on a date other than the
first day of the month the term of the Lease will be extended to account
for the number of days in the partial month. The Basic Rent during the
resulting partial month will be pro-rated (for the number of days in the
partial month) at the Basic Rent rate scheduled for the projected
commencement date as shown in Paragraph 39.
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3. POSSESSION If Landlord, for any reason whatsoever, cannot deliver
possession of said premises to Tenant at the commencement of the said term,
as hereinbefore specified, this Lease shall not be void or voidable; no
obligation of Tenant shall be affected thereby; nor shall Landlord or
Landlord's agents be liable to Tenant for any loss or damage resulting
therefrom; but in that event the commencement and termination dates of the
Lease, and all other dates affected thereby shall be revised to conform to
the date of Landlord's delivery of possession, as specified in Paragraph 2B,
above. The above is, however, subject to the provision that the period of
delay of delivery of the Premises shall not exceed 30 days from the
commencement date herein (except those delays caused by Acts of God,
strikes, war, utilities, governmental bodies, weather, unavailable materials,
and delays beyond Landlord's control shall be excluded in calculating such
period) in which instance Tenant, at its option, may, by written notice to
Landlord, terminate this Lease.
4. RENT
A. BASIC RENT. Tenant agrees to pay to Landlord at such place as
Landlord may designate without deduction, offset, prior notice, or demand,
and Landlord agrees to accept as Basic Rent for the leased Premises the total
sum of ONE MILLION FOUR HUNDRED NINETEEN THOUSAND SIXTEEN AND 13/100 Dollars
($1,419,016.13) in lawful money of the United States of America, payable as
follows:
See Paragraph 39 for Basic Rent Schedule
B. TIME FOR PAYMENT. Full monthly rent is due in advance on the first
day of each calendar month. In the event that the term of this Lease
commences on a date other than the first day of a calendar month, on the date
of commencement of the term hereof Tenant shall pay to Landlord as rent for
the period from such date of commencement to the first day of the next
succeeding calendar month that proportion of the monthly rent hereunder which
the number of days between such date of commencement and the first day of the
next succeeding calendar month bears to thirty (30). In the event that the
term of this Lease for any reason ends on a date other than the last day of a
calendar month, on the first day of the last calendar month of the term
hereof Tenant shall pay to Landlord as rent for the period from said first
day of said last calendar month to and including the last day of the term
hereof that proportion of the monthly rent hereunder which the number of days
between said first day of said last calendar month and the last day of the
term hereof bears to thirty (30).
C. LATE CHARGE. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rental as set forth in this Paragraph 4
when due, or any part thereof, Tenant agrees to pay Landlord, in addition to
the delinquent rental due, a late charge for each rental payment in default
ten (10) days. Said late charge shall equal ten percent (10%) of each rental
payment so in default.
D. ADDITIONAL RENT. Beginning with the commencement date of the term
of this Lease, Tenant shall pay to Landlord or to Landlord's designated agent
in addition to the Basic Rent and as Additional Rent the following:
(a) All Taxes relating to the Premises as set forth in paragraph 9,
and
(b) All insurance premiums relating to the Premises, as set forth
in Paragraph 12, and
(c) All charges, costs and expenses, which Tenant is required to
pay hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue
thereto in the event of Tenant's failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of
default of Tenant or failure on Tenant's part to comply with the terms of
this Lease. In the event of nonpayment by Tenant of Additional Rent,
Landlord shall have all the rights and remedies with respect thereto as
Landlord has for nonpayment of rent.
The Additional Rent due hereunder shall be paid to Landlord or
Landlord's agent (i) within five days for taxes and insurance and within
thirty days for all other Additional Rent items after presentation of invoice
from Landlord or Landlord's agent setting forth such Additional Rent and/or
(ii) at the option of Landlord, Tenant shall pay to Landlord monthly, in
advance, Tenant's prorata share of an amount estimated by Landlord to be
Landlord's approximate average monthly expenditure for such Additional Rent
items, which estimated amount shall be reconciled within 120 days of the end
of each calendar year or more frequently if Landlord elects to do so at
Landlord's sole and absolute discretion as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord,
upon demand, any amount of actual expenses expended by Landlord in excess of
said estimated amount, or Landlord crediting to Tenant (providing Tenant is
not in default in the performance of any of the terms, covenants and
conditions of this Lease) any amount of estimated payments made by Tenant in
excess of Landlord's actual expenditures for said Additional Rent items.
The respective obligations of Landlord and Tenant under this paragraph
shall survive the expiration or other termination of the term of this Lease,
and if the term hereof shall expire or shall otherwise terminate on a day
other than the last day of a calendar year, the actual Additional Rent
incurred for the calendar year in which the term hereof expires or otherwise
terminates shall be determined and settled on the basis of the statement of
actual Additional Rent for such calendar year and shall be prorated in the
proportion which the number of days in such calendar year preceding such
expiration or termination bears to 365.
E. FIXED MANAGEMENT FEE. Beginning with the Commencement Date of the
Term of this Lease, Tenant shall pay to Landlord, in addition to the Basic
Rent and Additional Rent, a fixed monthly management fee ("Management Fee")
equal to 2% of the Basic Rent due for each month during the Lease Term.
F. PLACE OF PAYMENT OF RENT AND ADDITIONAL RENT. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at Xxxxx/Xxxxxxxxx, File 0000, Xxx 00000,
Xxx Xxxxxxxxx, XX 00000 or to such other person or to such other place as
Landlord may from time to time designate in writing.
*G. SECURITY DEPOSIT. Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord the sum of FORTY TWO THOUSAND AND
NO/100 Dollars ($42,000.00). Said sum shall be held by Landlord as a Security
Deposit for the faithful performance by Tenant of all of the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the term hereof. If Tenant defaults with respect to any provision of
this Lease, including, but not limited to, the provisions relating to the
payment of rent and any of the monetary sums due herewith, Landlord may (but
shall not be required to) use, apply or retain all or any part of this
Security Deposit for the payment of any other amount which Landlord may spend
by reason of Tenant's default or to compensate Landlord for
* $21,000.00 Cash due upon Lease execution.
$21,000.00 Promissory Note due October 1, 1998.
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any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said Deposit is so used or applied, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with
Landlord in the amount sufficient to restore the Security Deposit to its
original amount. Tenant's failure to do so shall be a material breach of this
Lease. Landlord shall not be required to keep this Security Deposit separate
from its general funds, and Tenant shall not be entitled to interest on such
Deposit. If Tenant fully and faithfully performs every provision of this
Lease to be performed by it, 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 hereunder) at the expiration of the Lease term and after
Tenant has vacated the Premises. In the event of termination of Landlord's
interest in this Lease, Landlord shall transfer said Deposit to Landlord's
successor in interest whereupon Tenant agrees to release Landlord from
liability for the return of such Deposit or the accounting therefor.
5. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts
the Premises as being in good and sanitary order, condition and repair and
accepts the building and improvements included in the Premises in their
present condition and without representation or warranty by Landlord as to
the condition of such building or as to the use or occupancy which may be
made thereof. Any exceptions to the foregoing must be by written agreement
executed by Landlord and Tenant. Tenant agrees on the last day of the Lease
term, or on the sooner termination of this Lease, to surrender the Premises
promptly and peaceably to Landlord in good condition and repair (damage by
Acts of God, fire, normal wear and tear excepted), with all interior walls
painted, or cleaned so that they appear freshly painted, and repaired and
replaced, if damaged; all floors cleaned and waxed; all carpets cleaned and
shampooed; all broken, marred or nonconforming accoustical ceiling tiles
replaced; all windows washed; the airconditioning and heating systems
serviced by a reputable and licensed service firm and in good operating
condition and repair; the plumbing and electrical systems and lighting in
good order and repair, including replacement of any burned out or broken
light bulbs or ballasts; the lawn and shrubs in good condition including the
replacement of any dead or damaged plantings; the sidewalk, driveways and
parking areas in good order, condition and repair; together with all
alterations, additions, and improvements which may have been made in, to, or
on the Premises (except moveable trade fixtures installed at the expense of
Tenant) except that Tenant shall ascertain from Landlord within thirty (30)
days before the end of the term of this Lease whether Landlord desires to
have the Premises or any part or parts thereof restored to their condition
and configuration as when the Premises were delivered to Tenant and if
Landlord shall so desire, then Tenant shall restore said Premises or such
part or parts thereof before the end of this Lease at Tenant's sole cost and
expense. Tenant, on or before the end of the term or sooner termination of
this Lease, shall remove all of Tenant's personal property and trade fixtures
from the Premises, and all property not so removed on or before the end of
the term or sooner termination of this Lease shall be deemed abandoned by
Tenant and title to same shall thereupon pass to Landlord without
compensation to Tenant. Landlord may, upon termination of this Lease, remove
all moveable furniture and equipment so abandoned by Tenant, at Tenant's sole
cost, and repair any damage caused by such removal at Tenant's sole cost. If
the Premises be not surrendered at the end of the term or sooner termination
of this Lease, Tenant shall indemnify Landlord against loss or liability
resulting from the delay by Tenant in so surrendering the Premises including,
without limitation, any claims made by any succeeding tenant founded on such
delay. Nothing contained herein shall be construed as an extension of the
term hereof or as a consent of Landlord to any holding over by Tenant. The
voluntary or other surrender of this Lease or the Premises by Tenant or a
mutual cancellation of this Lease shall not work as a merger and, at the
option of Landlord, shall either terminate all or any existing subleases or
subtenancies or operate as an assignment to Landlord of all or any such
subleases or subtenancies.
6. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made,
any alteration or addition to the Premises, or any part thereof, without the
written consent of Landlord first had and obtained by Tenant (such consent
not to be unreasonably withheld), but at the cost of Tenant, and any addition
to, or alteration of, the Premises, except moveable furniture and trade
fixtures, shall at once become a part of the Premises and belong to Landlord.
Landlord reserves the right to approve all contractors and mechanics proposed
by Tenant to make such alterations and additions. Tenant shall retain title
to all moveable furniture and trade fixtures placed in the Premises. All
heating, lighting, electrical, airconditioning, floor to ceiling
partitioning, drapery, carpeting, and floor installations made by Tenant,
together with all property that has become an integral part of the Premises,
shall not be deemed trade fixtures. Tenant agrees that it will not proceed to
make such alteration or additions, without having obtained consent from
Landlord to do so, and until five (5) days from the receipt of such consent,
in order that Landlord may post appropriate notices to avoid any liability to
contractors or material suppliers for payment for Tenant's improvements.
Tenant will at all times permit such notices to be posted and to remain
posted until the completion of work. Tenant shall, if required by Landlord,
secure at Tenant's own cost and expense, a completion and lien indemnity
bond, satisfactory to Landlord, for such work. Tenant further covenants and
agrees that any mechanic's lien filed against the Premises for work claimed
to have been done for, or materials claimed to have been furnished to Tenant,
will be discharged by Tenant, by bond or otherwise, within ten (10) days
after the filing thereof, at the cost and expense of Tenant. Any exceptions
to the foregoing must be made in writing and executed by both Landlord and
Tenant.
7. TENANT AND MAINTENANCE Tenant shall, at its sole cost and expense, keep
and maintain the Premises (including appurtenances) and every part thereof in
a high standard of maintenance and repair, and in good and sanitary
condition. Tenant's maintenance and repair responsibilities herein referred
to include, but are not limited to, janitorization, plumbing systems within
the non-common areas of the Premises (such as water and drain lines, sinks),
electrical systems within the non-common areas of the Premises (such as
outlets, lighting fixtures, lamps, bulbs, tubes, ballasts), heating and
airconditioning controls within the non-common areas of the Premises (such as
mixing boxes, thermostats, time clocks, supply and return grills), all
interior improvements within the premises including but not limited to: wall
coverings, window coverings, accoustical ceilings, vinyl tile, carpeting,
partitioning, doors (both interior and exterior, including closing
mechanisms, latches, locks), and all other interior improvements of any
nature whatsoever. Tenant agrees to provide carpeted xxxxxxx under all
rolling chairs or to otherwise be responsible for wear and tear of the carpet
caused by such rolling chairs if such wear and tear exceeds that caused by
normal foot traffic in surrounding areas. Areas of excessive wear shall be
replaced at Tenant's sole expense upon Lease termination.
8. UTILITIES (This Space Intentionally Left Blank)
9. TAXES A. As Additional Rent in accordance with Paragraph 4D of this
Lease, Tenant shall pay to Landlord, or if Landlord so directs, directly to
the Tax Collector, all Real Property Taxes relating to the Premises. In the
event the Premises leased hereunder consist of only a portion of the entire
tax parcel, Tenant shall pay to Landlord Tenant's proportionate share of such
real estate taxes allocated to the leased Premises by square footage or other
reasonable basis as calculated and determined by Landlord. If the tax billing
pertains 100% to the leased Premises, and Landlord chooses to have Tenant pay
said real estate taxes directly to the Tax Collector, then in such event it
shall be the responsibility of Tenant to obtain the tax and assessment bills
and pay, prior to delinquency, the applicable real property taxes and
assessments pertaining to the leased Premises, and failure to receive a xxxx
for taxes and/or assessments shall not provide a basis for cancellation of or
nonresponsibility for payment of penalties for nonpayment or late payment by
Tenant. The term "Real Property Taxes", as used herein, shall mean (i) all
taxes, assessments, levies and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any general or special
assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership of the Premises) now or
hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy
assessments, which are levied or assessed against, or with respect to the
value, occupancy or use of, all or any portion of the Premises (as now
constructed or as may at any time hereafter be constructed, altered, or
otherwise changed) or Landlord's interest therein; any improvements located
within the Premises (regardless of ownership); the fixtures, equipment and
other property of Landlord, real or personal, that are an integral part of
and located in the Premises; or parking areas, public utilities, or energy
within the Premises; (ii) all charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the Premises; and
(iii) all costs and fees (including
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reasonable attorneys' fees) incurred by Landlord in reasonably contesting any
Real Property Tax and in negotiating with public authorities as to any Real
Property Tax. If at any time during the term of this Lease the taxation or
assessment of the Premises prevailing as of the commencement date of this
Lease shall be altered so that in lieu of or in addition to any Real Property
Tax described above there shall be levied, assessed or imposed (whether by
reason of a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate or additional tax or charge
(i) on the value, use or occupancy of the Premises or Landlord's interest
therein or (ii) on or measured by the gross receipts, income or rentals from
the Premises, on Landlord's business of leasing the Premises, or computed in
any manner with respect to the operation of the Premises, then any such tax
or charge, however designated, shall be included within the meaning of the
term "Real Property Taxes" for purposes of this Lease. If any Real Property
Tax is based upon property or rents unrelated to the Premises, then only that
part of such Real Property Tax that is fairly allocable to the Premises shall
be included within the meaning of the term "Real Property Taxes".
Notwithstanding the foregoing, the term "Real Property Taxes" shall not
include estate, inheritance, gift or franchise taxes of Landlord or the
federal or state net income tax imposed on Landlord's income from all such
sources.
B. TAXES ON TENANT'S PROPERTY Tenant shall be liable for and shall pay
ten days before delinquency, taxes levied against any personal property or
trade fixtures placed by Tenant in or about the Premises. If any such taxes
on Tenant's personal property or trade fixtures are levied against Landlord
or Landlord's property or if the assessed value of the Premises is increased
by the inclusion therein of a value placed upon such personal property or
trade fixtures of Tenant and if Landlord, after written notice to Tenant,
pays the taxes based on such increased assessment, which Landlord shall have
the right to do regardless of the validity thereof, but only under proper
protest if requested by Tenant, Tenant shall upon demand, as the case may be,
repay to Landlord the taxes so levied against Landlord, or the proportion of
such taxes resulting from such increase in the assessment; provided that in
any such event Tenant shall have the right, in the name of Landlord and with
Landlord's full cooperation, to bring suit in any court of competent
jurisdiction to recover the amount of such taxes so paid under protest, and
any amount so recovered shall belong to Tenant.
10. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in
force during the term of this Lease a policy of commercial general liability
insurance with combined single limit coverage of not less than Two Million
Dollars ($2,000,000) per occurrence for bodily injury and property damage
occurring in, on or about the Premises, including parking and landscaped
areas. Such insurance shall be primary and noncontributory as respects any
insurance carried by Landlord. The policy or policies effecting such
insurance shall name Landlord as additional insureds, and shall insure any
liability of Landlord, contingent or otherwise, as respects acts or omissions
of Tenant, its agents, employees or invitees or otherwise by any conduct or
transactions of any of said persons in or about or concerning the Premises,
including any failure of Tenant to observe or perform any of its obligations
hereunder; shall be used by an insurance company admitted to transact
business in the State of California; and shall provide that the insurance
effected thereby shall not be canceled, except upon thirty (30) days' prior
written notice to Landlord. A certificate of insurance of said policy shall
be delivered to Landlord. If, during the term of this Lease, in the
considered opinion of Landlord's Lender, insurance advisor, or counsel, the
amount of insurance described in this Paragraph 10 is not adequate, Tenant
agrees to increase said coverage to such reasonable amount as Landlord's
Lender, insurance advisor, or counsel shall deem adequate.
11. TENANT'S PERSONAL PROPERTY INSURANCE AND XXXXXXX'X COMPENSATION
INSURANCE Tenant shall maintain a policy or policies of fire and property
damage insurance in "all risk" form with a sprinkler leakage endorsement
insuring the personal property, inventory, trade fixtures, and leasehold
improvements within the leased Premises for the full replacement value
thereof. The proceeds from any of such policies shall be used for the repair
or replacement of such items so insured.
Tenant shall also maintain a policy or policies of xxxxxxx'x compensation
insurance and any other employee benefit insurance sufficient to comply with
all laws.
12. PROPERTY INSURANCE Landlord shall purchase and keep in force, and as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant
shall pay to Landlord (or Landlord's agent if so directed by Landlord)
Tenant's proportionate share (allocated to the leased Premises by square
footage or other equitable basis as calculated and determined by Landlord) of
the deductibles on insurance claims and the cost of, policy or policies of
insurance covering loss or damage to the Premises (excluding routine
maintenance and repairs and incidental damage or destruction caused by
accidents or vandalism for which Tenant is responsible under Paragraph 7) in
the amount of the full replacement value thereof, providing protection
against those perils included within the classification of "all risks"
insurance and flood and/or earthquake insurance, if available, plus a policy
of rental income insurance in the amount of one hundred (100%) percent of
twelve (12) months Basic Rent, plus sums paid as Additional Rent. If such
insurance cost is increased due to Tenant's use of the Premises, Tenant
agrees to pay to Landlord the full cost of such increase. Tenant shall have
no interest in nor any right to the proceeds of any insurance procured by
Landlord for the Premises.
Landlord and Tenant do each hereby respectively release the other, to the
extent of insurance coverage of the releasing party, from any liability for
loss or damage caused by fire or any of the extended coverage casualties
included in the releasing party's insurance policies, irrespective of the
cause of such fire or casualty; provided, however, that if the insurance
policy of either releasing party prohibits such waiver, then this waiver
shall not take effect until consent to such waiver is obtained. If such
waiver is so prohibited, the insured party affected shall promptly notify the
other party thereof.
13. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant
hereby waives all claims against Landlord for any injury to or death of any
person or damage to or destruction of property in or about the Premises by or
from any cause whatsoever, including, without limitation, gas, fire, oil,
electricity or leakage of any character from the roof, walls, basement or
other portion of the Premises but excluding, however, the willful misconduct
or negligence of Landlord, its agents, servants, employees, invitees, or
contractors of which negligence Landlord has knowledge and reasonable time to
correct. Except as to injury to persons or damage to property to the extent
arising from the willful misconduct or the negligence of Landlord, its
agents, servants, employees, invitees, or contractors Tenant shall hold
Landlord harmless from and defend Landlord against any and all expenses,
including reasonable attorneys' fees, in connection therewith, arising out of
any injury to or death of any person or damage to or destruction of property
occurring in, on or about the Premises, or any part thereof, from any cause
whatsoever (excluding, however, on-site Hazardous Materials clean up expenses
that are not related to Tenant's Hazardous Materials Activities as defined in
Paragraph 49B).
14. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply
with all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board
of fire underwriters or other similar body now or hereafter constituted; and
with any direction or occupancy certificate issued pursuant to law by any
public officer; provided, however, that no such failure shall be deemed a
breach of the provisions if Tenant, immediately upon notification, commences
to remedy or rectify said failure. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement, direction
or provision, shall be conclusive of that fact as between Landlord and
Tenant. Tenant shall, at its sole cost and expense, comply with any and all
requirements pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and public
liability insurance covering requirements pertaining to said Premises, of any
insurance organization or company necessary for the maintenance of reasonable
fire and public liability insurance covering the Premises.
15. LIENS Tenant shall keep the Premises free from any liens arising out of
any work performed, materials furnished or obligation incurred by Tenant. In
the event that Tenant shall not, within ten (10) days following the
imposition of such lien, cause the same to be released of record, Landlord
shall have, in addition to all other remedies provided herein and by law, the
right, but no obligation, to cause the same to be released by such means as
it shall deem proper, including payment of the claim giving rise to such
lien. All sums paid by Landlord for such purpose, and all expenses incurred
by it in connection therewith, shall be payable to Landlord by Tenant on
demand with interest at the prime rate of interest as quoted by the Bank of
America.
16. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest therein,
and shall not sublet the Premises, or any part thereof, or any right or
privilege appurtenant thereto, or suffer any other person or entity to occupy
or use the Premises, or any portion thereof, without, in each case, the prior
written consent of Landlord which consent will not be unreasonably withheld.
As a condition for granting this consent to any assignment, transfer, or
subletting, Landlord shall require Tenant to pay to Landlord, as Additional
Rent, all rents and/or additional consideration due Tenant from its
assignees, transferees, or subtenants in excess of the Rent payable by Tenant
to Landlord hereunder for the assigned, transferred and/or subleased space.
Tenant shall, by thirty (30) days written notice, advise Landlord of its
intent to assign or transfer Tenant's interest in the Lease or sublet the
Premises or any portion thereof for any part of the term hereof. Within
thirty (30) days after receipt of said written notice, Landlord may, in its
sole discretion, elect to terminate this Lease as to the portion of the
Premises described in Tenant's notice on the date specified in Tenant's
notice by giving written notice of such election to terminate. If no such
notice to terminate is given to Tenant within said thirty (30) day period,
Tenant may proceed to locate an acceptable sublessee, assignee, or other
transferee for presentment to Landlord for Landlord's approval, all in
accordance with the terms, covenants, and conditions of this paragraph 16. If
Tenant intends to sublet the entire Premises and Landlord elects to terminate
this Lease, this Lease shall be terminated on the date specified in Tenant's
notice. If, however, this Lease shall terminate pursuant to the foregoing
with respect to less than all the Premises, the rent, as defined and reserved
hereinabove shall be adjusted on a pro rata basis to the number of square
feet retained by Tenant, and this Lease as so amended shall continue in full
force and effect. In the event Tenant is allowed to assign, transfer or
sublet the whole or any part of the Premises, with the prior written
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consent of Landlord, no assignee, transferee or subtenant shall assign or
transfer this Lease, either in whole or in part, or sublet the whole or any
part of the Premises, without also having obtained the prior written consent
of Landlord. A consent of Landlord to one assignment, transfer,
hypothecation, subletting, occupation or use by any other person shall not
release Tenant from any of Tenant's obligations hereunder or be deemed to be
a consent to any subsequent similar or dissimilar assignment, transfer,
hypothecation, subletting, occupation or use by any other person. Any such
assignment, transfer, hypothecation, subletting, occupation or use without
such consent shall be void and shall constitute a breach of this Lease by
Tenant and shall, at the option of Landlord exercised by written notice to
Tenant, terminate this Lease. The leasehold estate under this Lease shall
not, nor shall any interest therein, be assignable for any purpose by
operation of law without the written consent of Landlord. As a condition to
its consent, Landlord shall require Tenant to pay all expenses in connection
with the assignment, and Landlord shall require Tenant's assignee or
transferee (or other assignees or transferees) to assume in writing all of
the obligations under this Lease and for Tenant to remain liable to Landlord
under the Lease. Notwithstanding the above, in no event will Landlord consent
to a sub-sublease. See Paragraph 46.
17. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust; upon the interest
of Landlord in the land and buildings in which the demised Premises are
located, to secure a loan from a lender (hereinafter referred to as "Lender")
to Landlord, Tenant shall, at the request of Landlord or Lender, execute in
writing an agreement subordinating its rights under this Lease to the lien of
such deed of trust, or, if so requested, agreeing that the lien of Lender's
deed of trust shall be or remain subject and subordinate to the rights of
Tenant under this Lease. Notwithstanding any such subordination, Tenant's
possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all rent and observe and perform all
of the provisions set forth in this Lease.
18. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times
after at least 24 hours notice (except in emergencies) have, the right to
enter the Premises to inspect them; to perform any services to be provided by
Landlord hereunder; to make repairs or provide any services to a contiguous
tenant(s); to submit the Premises to prospective purchasers, mortgagers or
tenants; to post notices of nonresponsibility; and to alter, improve or
repair the Premises or other parts of the building, all without abatement of
rent, and may erect scaffolding and other necessary structures in or through
the Premises where reasonably required by the character of the work to be
performed; provided, however that the business of Tenant shall be interfered
with to the least extent that is reasonably practical. Any entry to the
Premises by Landlord for the purposes provided for herein shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into
or a detainer of the Premises or an eviction, actual or constructive, of
Tenant from the Premises or any portion thereof.
19. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar
action undertaken by Tenant, or the insolvency of Tenant, shall, at
Landlord's option, constitute a breach of this Lease by Tenant. If the
trustee or receiver appointed to serve during a bankruptcy, liquidation,
reorganization, insolvency or similar action elects to reject Tenant's
unexpired Lease, the trustee or receiver shall notify Landlord in writing of
its election within thirty (30) days after an order for relief in a
liquidation action or within thirty (30) days after the commencement of any
action.
Within thirty (30) days after court approval of the assumption of this
Lease, the trustee or receiver shall cure (or provide adequate assurance to
the reasonable satisfaction of Landlord that the trustee or receiver shall
cure) any and all previous defaults under the unexpired Lease and shall
compensate Landlord for all actual pecuniary loss and shall provide adequate
assurance of future performance under said Lease to the reasonable
satisfaction of Landlord. Adequate assurance of future performance, as used
herein, includes, but shall not be limited to: (i) assurance of source and
payment of rent, and other consideration due under this Lease; (ii) assurance
that the assumption or assignment of this Lease will not breach substantially
any provision, such as radius, location, use, or exclusivity provision, in
any agreement relating to the above described Premises.
Nothing contained in this section shall affect the existing right of
Landlord to refuse to accept an assignment upon commencement of or in
connection with a bankruptcy, liquidation, reorganization or insolvency
action or an assignment of Tenant for the benefit of creditors or other
similar act. Nothing contained in this Lease shall be construed as giving or
granting or creating an equity in the demised Premises to Tenant. In no event
shall the leasehold estate under this Lease, or any interest therein, be
assigned by voluntary or involuntary bankruptcy proceeding without the prior
written consent of Landlord. In no event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency
or reorganization proceedings.
The failure to perform or honor any covenant, condition or
representation made under this Lease shall constitute a default hereunder by
Tenant upon expiration of the appropriate grace period hereinafter provided.
Tenant shall have a period of five (5) days from the date of written notice
from Landlord within which to cure any default in the payment of rental or
adjustment thereto. Tenant shall have a period of thirty (30) days from the
date of written notice from Landlord within which to cure any other default
under this Lease. Upon an uncured default of this Lease by Tenant, Landlord
shall have the following rights and remedies in addition to any other rights
or remedies available to Landlord at law or in equity:
(a) The rights and remedies provided for by California Civil Code
Section 1951.2, including but not limited to, recovery of the worth at the
time of award of the amount by which the unpaid rent for the balance of the
term after the time of award exceeds the amount of rental loss for the same
period that Tenant proves could be reasonably avoided, as computed pursuant
to subsection (b) of said Section 1951.2. Any proof by Tenant under
subparagraphs (2) and (3) of Section 1951.2 of the California Civil Code of
the amount of rental loss that could be reasonably avoided shall be made in
the following manner: Landlord and Tenant shall each select a licensed real
estate broker in the business of renting property of the same type and use as
the Premises and in the same geographic vicinity. Such two real estate
brokers shall select a third licensed real estate broker, and the three
licensed real estate brokers so selected shall determine the amount of the
rental loss that could be reasonably avoided from the balance of the term of
this Lease after the time of award. The decision of the majority of said
licensed real estate brokers shall be final and binding upon the parties
hereto.
(b) The rights and remedies provided by California Civil Code
Section which allows Landlord to continue the Lease in effect and to enforce
all of its rights and remedies under this Lease, including the right to
recover rent as it becomes due, for so long as Landlord does not terminate
Tenant's right to possession; acts of maintenance or preservation, efforts to
relet the Premises, or the appointment of a receiver upon Landlord's
initiative to protect its interest under this Lease shall not constitute a
termination of Tenant's right to possession.
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.
(d) To the extent permitted by law, the right and power, to enter
the Premises and remove therefrom all persons and property, to store such
property in a public warehouse or elsewhere at the cost of and for the
account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord, may from time to
time sublet the Premises or any part thereof for such term or terms (which
may extend beyond the term of this Lease) and at such rent and such other
terms as Landlord in its reasonable sole discretion may deem advisable, with
the right to make alterations and repairs to the Premises. Upon each
subletting, (i) Tenant shall be immediately liable to pay Landlord, in
addition to indebtedness other than rent due hereunder, the reasonable cost
of such subletting, including, but not limited to, reasonable attorneys'
fees, and any real estate commissions actually paid, and the cost of such
reasonable alterations and repairs incurred by Landlord and the amount, if
any, by which the rent hereunder for the period of such subletting (to the
extent such period does not exceed the term hereof) exceeds the amount to be
paid as rent for the Premises for such period or (ii) at the option of
Landlord, rents received from such subletting shall be applied first to
payment of indebtedness other than rent due hereunder from Tenant to
Landlord; second, to the payment of any costs of such subletting and of such
alterations and repairs; third to payment of rent due and unpaid hereunder;
and the residue, if any, shall be held by Landlord and applied in payment of
future rent as the same becomes due hereunder. If Tenant has been credited
with any rent to be received by such subletting under option (i) and such
rent shall not be promptly paid to Landlord by the subtenant(s), or if such
rentals received from such subletting under option (ii) during any month be
less than that to be paid during that month by Tenant hereunder, Tenant shall
pay any such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. No taking possession of the Premises by Landlord, shall be
construed as an election on its part to terminate this Lease unless a written
notice of such intention be given to Tenant. Notwithstanding any such
subletting without termination, Landlord may at any time hereafter elect to
terminate this Lease for such previous breach.
(e) The right to have a receiver appointed for Tenant upon
application by Landlord, to take possession of the Premises and to apply any
rental collected from the Premises and to exercise all other rights and
remedies granted to Landlord pursuant to subparagraph d. above. See Paragraph
47.
20. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease, and if Tenant shall abandon, vacate or
surrender said Premises, or be dispossessed by the process of law, or
otherwise, any personal property belonging to Tenant and left on the Premises
shall be deemed to be abandoned, at the option of Landlord, except such
property as may be mortgaged to Landlord. See Paragraph 48.
21. DESTRUCTION In the event the Premises are destroyed in whole or in part
from any cause, except for routine maintenance and repairs and incidental
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damage and destruction caused from vandalism and accidents for which Tenant
is responsible under Xxxxxxxxx 0, Xxxxxxxx may, at its option:
(a) Rebuild or restore Premises to their condition prior to the
damage or destruction, or
(b) Terminate this Lease, (providing that the Premises is damaged to
the extent of 33 1/3% of the replacement cost)
If Landlord does not give Tenant notice in writing within thirty (30)
days from the destruction of the Premises of its election to either rebuild
and restore them, or to terminate this Lease, Landlord shall be deemed to
have elected to rebuild or restore them, in which event Landlord agrees, at
its expense, except for any deductible, which is the responsibility of
Tenant, promptly to rebuild or restore the Premises to their condition prior
to the damage or destruction. Tenant shall be entitled to a reduction in rent
while such repair is being made in the proportion that the area of the
Premises rendered untenantable by such damage bears to the total area of the
Premises. If Landlord initially estimates that the rebuilding or restoration
will exceed 180 days or if Landlord does not complete the rebuilding or
restoration within one hundred eighty (180) days following the date of
destruction (such period of time to be extended for delays caused by the
fault or neglect of Tenant or because of Acts of God, acts of public
agencies, labor disputes, strikes, fires, freight embargos, rainy or stormy
weather, inability to obtain materials, supplies or fuels, acts of
contractors or subcontractors, or delay of the contractors or subcontractors
due to such causes or other contingencies beyond the control of Landlord),
then Tenant shall have the right to terminate this Lease by giving fifteen
(15) days prior written notice to Landlord. Notwithstanding anything herein
to the contrary, Landlord's obligation to rebuild or restore shall be limited
to the building and interior improvements constructed by Landlord as they
existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and
expense provided this Lease is not cancelled according to the provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly
waives the provisions of Section 1932, Subdivision 2, in Section 1933,
Subdivision 4 of the California Civil Code.
In the event that the building in which the Premises are situated is
damaged or destroyed to the extent of not less than 33 1/3% of the
replacement cost thereof, Landlord may elect to terminate this Lease, whether
the Premises be injured or not. Notwithstanding anything to the contrary
herein, Landlord may terminate this Lease in the event of an uninsured event
or if insurance proceeds are insufficient to cover one hundred percent of the
rebuilding costs net of the deductible.
22. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any portion of
the Premises so taken or conveyed on the date when title vests in the
condemnor, and Landlord shall be entitled to any and all payment, income,
rent, award, or any interest therein whatsoever which may be paid or made in
connection with such taking or conveyance, and Tenant shall have no claim
against Landlord or otherwise for the value of any unexpired term of this
Lease. Notwithstanding the foregoing paragraph, any compensation specifically
awarded Tenant for loss of business, Tenant's personal property, moving cost
or loss of goodwill, shall be and remain the property of Tenant.
If any action or proceeding is commenced for such taking of the Premises
or any part thereof, or if Landlord is advised in writing by any entity or
body having the right or power of condemnation of its intention to condemn
the premises or any portion thereof, then Landlord shall have the right to
terminate this Lease by giving Tenant written notice thereof within sixty
(60) days of the date of receipt of said written advice, or commencement of
said action or proceeding, or taking conveyance, which terminate shall take
place as of the first to occur of the last day of the calendar month next
following the month in which such notice is given or the date on which title
to the Premises shall vest in the condemnor.
In the event of such a partial taking or conveyance of the Premises, if
the portion of the Premises taken or conveyed is so substantial that the
Tenant can no longer reasonably conduct its business, Tenant shall have the
privilege of terminating this Lease within sixty (60) days from the date of
such taking or conveyance, upon written notice to Landlord of its intention
so to do, and upon giving of such notice this Lease shall terminate on the
last day of the calendar month next following the month in which such notice
is given, upon payment by Tenant of the rent from the date of such taking or
conveyance to the date of termination.
If a portion of the Premises be taken by condemnation or conveyance in
lieu thereof and neither Landlord nor Tenant shall terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter
the rent to be paid by Tenant shall be in the ratio that the area of the
portion of the Premises not so taken or conveyed bears to the total area of
the Premises prior to such taking.
23. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of
the Premises or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any
further liability upon any of the terms, covenants or conditions (express or
implied) herein contained in favor of Tenant, and in such event, insofar as
such transfer is concerned, Tenant agrees to look solely to the
responsibility of the successor in interest of such transferor in and to the
Premises and this Lease. This Lease shall not be affected by any such sale
or conveyance, and Tenant agrees to attorn to the successor in interest of
such transferor, provided that the transferee assumes all of Landlord's
obligations in writing under the Lease.
24. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of
Landlord in the land and buildings in which the leased Premises are located
(whether such interest of Landlord is a fee title interest or a leasehold
interest) is encumbered by deed of trust, and such interest is acquired by
the lender or any third party through judicial foreclosure or by exercise of
a power of sale at private trustee's foreclosure sale, Tenant hereby agrees
to attorn to the purchaser at any such foreclosure sale and to recognize such
purchaser as the Landlord under this Lease. In the event the lien of the deed
of trust securing the loan from a Lender to Landlord is prior and paramount
to the Lease, this Lease shall nonetheless continue in full force and effect
for the remainder of the unexpired term hereof, at the same rental herein
reserved and upon all the other terms, conditions and covenants herein
contained.
25. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease
or give Tenant any rights in or to the leased Premises except as expressly
provided in this Lease. Any holding over after the expiration or other
termination of the term of this Lease, with the consent of Landlord, shall be
construed to be a tenancy from month to month, on the same terms and
conditions herein specified insofar as applicable except that the monthly
Basic Rent shall be increased to an amount equal to one hundred twenty five
(125%) percent of the month Basic Rent required during the last month of the
Lease term.
26. CERTIFICATE OF ESTOPPEL Tenant shall at any time upon not less than ten
(10) days prior written notice from Landlord execute, acknowledge and deliver
to Landlord a statement in writing (i) certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in
full force and effect) and the date to which the rent and other charges are
paid in advance, if any, and (ii) acknowledging that there are not, to
Tenant's knowledge, any uncured defaults on the part of Landlord hereunder,
or specifying such defaults, if any, are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Tenant's failure to deliver such statement within such time shall
be conclusive upon Tenant that this Lease is in full force and effect,
without modification except as may be represented by Landlord; that there are
no uncured defaults in Landlord's performance, and that not more than one
month's rent has been paid in advance.
27. CONSTRUCTION CHANGES It is understood that the description of the
Premises and the location of ductwork, plumbing and other facilities therein
are subject to such minor changes as Landlord or Landlord's architect
determines to be desirable in the course of construction of the Premises, and
no such changes shall affect this Lease or entitle Tenant to any reduction of
rent hereunder or result in any liability of Landlord to Tenant Landlord does
not guarantee the accuracy of any drawings supplied to Tenant and
verification of the accuracy of such drawings rests with Tenant.
28. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of
this Lease to be performed or observed by Tenant shall be performed or
observed by Tenant at Tenant's sole cost and expense and without any
reduction of rent. If Tenant shall fail to pay any sum of money, or other
rent, required to be paid by it hereunder and such failure shall continue
for five (5) days after written notice by Landlord, or shall fail to perform
any other term or covenant hereunder on its part to be performed, and such
failure shall continue for thirty (30) days after written notice thereof by
Landlord, Landlord, without waiving or releasing Tenant from any obligation
of Tenant hereunder, may, but shall not be obliged to, make any such payment
or perform any such other term or covenant on Tenant's part to be performed.
All sums so paid by Landlord and all necessary costs of such performance by
Landlord together with interest thereon at the rate of the prime rate of
interest per annum as quoted by the Bank of America from the date of such
payment on performance by Landlord, shall be paid (and Tenant covenants to
make such payment) to Landlord on demand by Landlord, and Landlord shall
have (in addition to any other right or remedy of Landlord) the same rights
and remedies in the event of nonpayment by Tenant as in the case of failure by
Tenant in the payment of rent hereunder.
29 ATTORNEYS' FEES
A. In the event that either Landlord or Tenant should bring suit for the
possession of the Premises, for the recovery of any sum due under this Lease,
or because of the breach of any provision of this Lease, or for any other
relief against the other party hereunder, hen all costs and expenses,
including reasonable attorneys' fees,
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incurred by the prevailing party therein shall be paid by the other party,
which obligation on the part of the other party shall be deemed to have
accrued on the date of the commencement of such action and shall be
enforceable whether or not the action is prosecuted to judgment.
B. Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder,
Tenant shall pay to Landlord its costs and expenses incurred by such suit,
including a reasonable attorney's fee.
30. WAIVER The waiver by either party of the other party's failure to perform
or observe any term, covenant or condition herein contained to be performed
or observed by such waiving party shall not be deemed to be a waiver of such
term, covenant or condition or of any subsequent failure of the party failing
to perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any
way affect, the right of either party to insist upon performance and
observance by the other party in strict accordance with the terms hereof.
31. NOTICES All notices, demands, requests, advices or designations which
may be or are required to be given by either party to the other hereunder
shall be in writing. All notices, demands, requests, advices or designations
by Landlord to Tenant shall be sufficiently given, made or delivered if
personally served on Tenant by leaving the same at the Premises of if sent by
United States certified or registered mail, postage prepaid, addressed to
Tenant at the Premises. All notices, demands, requests, advices or
designations by Tenant to Landlord shall be sent by United States certified
or registered mail, postage prepaid, addressed to Landlord at its offices at
Xxxxx/Xxxxxxxxx, 0000 Xxxxxxx Xxxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxx, XX 00000
Each notice, request, demand, advice or designation referred to in this
paragraph shall be deemed received on the date of the personal service or
mailing thereof in the manner herein provided, as the case may be.
32. EXAMINATION OF LEASE Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a
lease, and this instrument is not effective as a lease or otherwise until its
execution and delivery by both Landlord and Tenant.
33. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time,
but in no event earlier than (30) days after written notice by Tenant to
Landlord and to the holder of any first mortgage or deed of trust covering
the Premises whose name and address shall have heretofore been furnished to
Tenant in writing, specifying wherein Landlord has failed to perform such
obligations; provided, however, that if the nature of Landlord's obligations
is such that more than thirty (30) days are required for performance, then
Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion.
34. CORPORATE AUTHORITY If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or
partnership) represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of said corporation (or partnership) in
accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement) and that this Lease is binding upon said
corporation (or partnership) in accordance with its terms. If Tenant is a
corporation, Tenant shall, within thirty (30) days after execution of this
Lease, deliver to Landlord a certified copy of the resolution of the Board of
Directors of said corporation authorizing or ratifying the execution of this
Lease. See Xxxxxxxxx 00
00. (This Space Intentionally Left Blank)
36. LIMITATION OF LIABILITY In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in
the event of any actual or alleged failure, breach or default hereunder by
Landlord:
(a) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;
(b) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of the
partnership);
(c) no service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership);
(d) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(e) no judgment will be taken against any partner of Landlord;
(f) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(g) no writ of execution will ever by levied against the assets of any
partner of Landlord;
(h) these covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this
Lease or imposed by statute or at common law.
37. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside
of the Premises or any exterior windows of the Premises without the written
consent of Landlord first had and obtained and Landlord shall have the right
to remove any such sign, placard, picture, advertisement, name or notice
without notice to and at the expense of Tenant. If Tenant is allowed to print
or affix or in any way place a sign in, on, or about the Premises, upon
expiration or other sooner termination of this Lease, Tenant at Tenant's sole
cost and expense shall both remove such sign and repair all damage in such a
manner as to restore all aspects of the appearance of the Premises to the
condition prior to the placement of said sign.
All approved signs or lettering on outside doors shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person approved
of by Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may appear unsightly from
outside the Premises.
38. MISCELLANEOUS AND GENERAL PROVISIONS
A. USE OF BUILDING NAME. Tenant shall not, without the written consent of
Landlord, use the name of the building for any purpose other than as the
address of the business conducted by Tenant in the Premises.
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Initials: JA, RP
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B. CHOICE OF LAW; SEVERABILITY. This Lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be
and remain in full force and effect.
C. DEFINITION OF TERMS. The term "Premises" includes the space leased
hereby and any improvements now or hereafter installed therein or attached
thereto. The term "Landlord" or any pronoun used in place thereof includes
the plural as well as the singular and the successors and assigns of
Landlord. The term "Tenant" or any pronoun used in place thereof includes the
plural as well as the singular and individuals, firms, associations,
partnerships and corporations, and their and each of their respective heirs,
executors, administrators, successors and permitted assigns, according to the
context hereof, and the provisions of this Lease shall inure to the benefit
of and bind such heirs, executors, administrators, successors and permitted
assigns.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used
in any gender include other genders. If there be more than one Tenant the
obligations of Tenant hereunder are joint and several. The paragraph headings
of this Lease are for convenience of reference only and shall have no effect
upon the construction or interpretation of any provision hereof.
D. TIME OF ESSENCE. Time is of the essence of this Lease and of each and
all of its provisions.
E. QUITCLAIM. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within ten (10)
days after written demand from Landlord to Tenant, any quitclaim deed or
other document required by any reputable title company, licensed to operate
in the State of California, to remove the cloud or encumbrance created by
this Lease from the real property of which Tenant's Premises are a part.
F. INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This instrument along
with any exhibits and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this agreement and
the exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
agree hereby that all prior or contemporaneous oral agreements between and
among themselves and their agents or representatives relative to the leasing
of the Premises are merged in or revoked by this agreement.
G. RECORDING. Neither Landlord nor Tenant shall record this Lease or a
short form memorandum hereof without the consent of the other.
H. AMENDMENTS FOR FINANCING. Tenant further agrees to execute any
amendments required by a lender to enable Landlord to obtain financing, so
long as Tenant's rights hereunder are not substantially affected.
I. ADDITIONAL PARAGRAPHS. Paragraphs 39 through 53 are added hereto and
are included as a part of this lease.
J. CLAUSES, PLATS AND RIDERS. Clauses, plats and riders, if any, signed
by Landlord and Tenant and endorsed on or affixed to this Lease are a part
hereof.
K. DIMINUTION OF LIGHT, AIR OR VIEW. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may
be hereafter erected (whether or not by Landlord) shall in any way affect his
Lease, entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year last written below.
LANDLORD: TENANT:
XXXX XXXXXXXXX SURVIVOR'S TRUST FAROUDJA LABORATORIES, INC.
A California corporation
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxxxxx Xxxxxx
---------------------------------- ---------------------------------
Xxxx Xxxxxxxxx, Trustee
Date: 10/10/97 Title VP FINANCE
---------------------------------- ------------------------------
XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST
Type or Print Name XXXXXXX XXXXXX
-----------------
By /s/ Xxxxxxx X. Xxxxx Date: 10/6/97
---------------------------------- -------------------------------
Xxxxxxx X. Xxxxx, Trustee
Date: 10/9/97
-------------------------------
Initials: MH
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Paragraph 39 through 53 to Lease Agreement dated August 27, 1997, By and
Between the Xxxx Xxxxxxxxx Survivor's Trust and the Xxxxxxx X. Xxxxx Separate
Property Trust, as Landlord, and FAROUDJA LABORATORIES, INC., a California
corporation, as Tenant for 10,000 plus/minus Square Feet of Space Located at
000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx.
39. BASIC RENT: In accordance with Paragraph 4A herein, the total aggregate
sum of ONE MILLION FOUR HUNDRED NINETEEN THOUSAND SIXTEEN AND 13/100 DOLLARS
($1,419,016.13), shall be payable as follows:
On October 6, 1997, the sum of FIFTEEN THOUSAND FIVE HUNDRED SIXTEEN AND
13/100 DOLLARS ($15,516.13) shall be due, representing the Rental for the
period October 6, 1997 through October 31, 1997.
On November 1, 1997, the sum of EIGHTEEN THOUSAND FIVE HUNDRED AND
NO/100 DOLLARS ($18,500.00) shall be due, and a like sum due on the first day
of each month thereafter, through and including September 1, 1998.
On October 1, 1998, the sum of NINETEEN THOUSAND AND NO/100 DOLLARS
($19,000.00) shall be due, and a like sum due on the first day of each month
thereafter, through and including September 1, 1999.
On October 1, 1999, the sum of NINETEEN THOUSAND FIVE HUNDRED AND NO/100
DOLLARS ($19,500.00) shall be due, and a like sum due on the first day of
each month thereafter, through and including September 1, 2000.
On October 1, 2000, the sum of TWENTY THOUSAND AND NO/100 DOLLARS
($20,000.00) shall be due, and a like sum due on the first day of each month
thereafter, through and including September 1, 2001.
On October 1, 2001, the sum of TWENTY ONE THOUSAND FIVE HUNDRED AND
NO/100 DOLLARS ($21,500.00) shall be due, and a like sum due on the first day
of each month thereafter, through and including September 1, 2002.
On October 1, 2002, the sum of TWENTY ONE THOUSAND AND NO/100 DOLLARS
($21,000.00) shall be due, and a like sum due on the first day of each month
thereafter, through and including September 1, 2003; or until the entire
aggregate sum of ONE MILLION FOUR HUNDRED NINETEEN THOUSAND SIXTEEN AND
13/100 DOLLARS ($1,419,016.13) has been paid.
40. "AS-IS" BASIS: Subject only to Paragraph 53 and to Landlord making the
improvements shown on EXHIBIT B to be attached hereto, it is hereby agreed
that the Premises leased hereunder is leased strictly on an "as-is" basis and
in its present condition, and in the configuration as shown on EXHIBIT B to
be attached hereto, and by reference made a part hereof. Except as noted
herein, it is specifically agreed between the parties that after Landlord
makes the interior improvements as shown on EXHIBIT B, Landlord shall not be
required to make, nor be responsible for any cost, in connection with any
repair, restoration, and/or improvement to the Premises in order for this
Lease to commence, or thereafter, throughout the Term of this Lease.
Notwithstanding anything to the contrary within this Lease, Landlord makes no
warranty or representation of any kind or nature whatsoever as to the
condition or repair of the Premises, nor as to the use or occupancy which may
be made thereof.
41. RULES AND REGULATIONS AND COMMON AREA: Subject to the terms and
conditions of this Lease and such Rules and Regulations as Landlord may from
time to time prescribe, Tenant and Tenant's employees, invitees and customers
shall, in common with other occupants of the Parcel/Building in which the
premises are located, and their respective employees, invitees and customers,
and other entitled to the use thereof, have the non-exclusive right to use
the access roads, parking areas, and facilities provided and designated by
Landlord for the general use and convenience of the occupants of the
Parcel/Building in which the Premises are located, which areas and
facilities are referred to herein as "Common Area". This right shall
terminate upon the
Initial: MH, JA, RP
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termination of this Lease. Landlord reserves the right from time to time to
make changes in the shape, size, location, amount and extent of Common Area.
Landlord further reserves the right to promulgate such reasonable rules and
regulations relating to the use of the Common Area, and any part or parts
thereof, as Landlord may deem appropriate for the best interests of the
occupants of the Parcel/Building. Such Rules and Regulations may be amended
by landlord from time to time, with or without advance notice, and all
amendments shall be effective upon delivery of a copy to Tenant. Landlord
shall not be responsible to Tenant for the non-performance by any other
tenant or occupant of the Parcel/Building of any of said Rules and
Regulations.
Landlord shall operate, manage and maintain the Common Area. The manner in
which the Common Area shall be maintained and the expenditures for such
maintenance shall be at the discretion of Landlord.
42. EXPENSES OF OPERATION, MANAGEMENT, AND MAINTENANCE OF THE COMMON AREAS
OF THE PARCEL AND BUILDING IN WHICH THE PREMISES ARE LOCATED: As Additional
Rent and in accordance with Paragraph 4D of this Lease, Tenant shall pay to
Landlord Tenant's proportionate share (calculated on a square footage or
other equitable basis as calculated by landlord) of all expenses of
operation, management, maintenance and repair of the Common Areas of the
Parcel including, but not limited to, license, permit, and inspection fees;
security; utility charges associated with exterior landscaping and lighting
(including water and sewer charges); all charges incurred in the maintenance
and replacement of landscaped areas, lakes, parking lots and paved areas
(including repairs, replacement, resealing and restriping), sidewalks,
driveways, maintenance, repair and replacement of all fixtures and
electrical, mechanical and plumbing systems; supplies, materials, equipment
and tools; the cost of capital expenditures which have the effect of reducing
operating expenses, provided, however, that in the event Landlord makes such
capital improvements, Landlord may amortize its investment in said
improvements (together with interest at the rate of fifteen (15%) percent per
annum on the unamortized balance) as an operating expense in accordance with
standard accounting practices, provided, that such amortization is not at a
rate greater than the anticipated savings in the operating expenses.
As Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant
shall pay its proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of the cost of operation
(including common utilities), management, maintenance, and repair of the
building (including structural and common areas such as lobbies, restrooms,
janitor's closets, hallways, elevators, mechanical and telephone rooms,
stairwells, entrances, spaces above the ceilings and janitorization of said
common areas) in which the Premises are located. The maintenance items herein
referred to include, but are not limited to, all windows, window frames,
plate glass, glazing, truck doors, main plumbing systems of the building (such
as water drain lines, sinks, toilets, faucets, drains, showers and water
fountains), main electrical systems (such as panels and conduits), heating
and airconditioning systems (such as compressors, fans, air handlers, ducts,
boilers, heaters), structural elements and exterior surfaces of the building;
store fronts, roof, downspouts, building common area interiors (such as wall
coverings, window coverings, floor coverings and partitioning), ceilings,
building exterior doors, skylights (if any), automatic fire extinguishing
systems, and elevators (if any); license, permit and inspection fees;
security, supplies, materials, equipment ant tools; the cost of capital
expenditures which have the effect of reducing operating expenses, provided,
however, that in the event Landlord makes such capital improvements, Landlord
may amortize its investment in said improvements (together with interest at
the rate of fifteen (15%) percent per annum on the unamortized balance) as an
operating expense in accordance with standard accounting practices, provided,
that such amortization is not at a rate greater than the anticipated savings
in the operating expenses. Tenant hereby waives all rights hereunder, and
benefits of, subsection 1 of Section 1932 and Sections 1941 and 1942 of the
California Civil Code and under any similar law, statute or ordinance now or
hereafter in effect.
"Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on charges, expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest; or executive salaries.
43. UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED: As
Additional Rent and in accordance with Paragraph 4D of this Lease Tenant
shall pay its proportionate share (calculated on a square footage or other
equitable basis as calculated by Landlord) of the cost of all utility charges
such as water, gas, electricity, (telephone, telex and
Initial: MH, JA, RP
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other electronic communications service, if applicable) sewer service, waste
pick-up and any other utilities, materials or services furnished directly to
the building in which the Premises are located, including, without
limitation, any temporary or permanent utility surcharge or other exactions
whether or not hereinafter imposed.
Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused
by accident, breakage, repair, strikes, lockouts, or other labor disturbances
or labor disputes of any nature, or by any other cause, similar or
dissimilar, beyond the reasonable control of Landlord.
Provided that Tenant is not in default in the performance or observance of
any of the terms, covenants or conditions of this Lease to be performed or
observed by it, Landlord shall furnish to the Premises between the hours of
8:00 am and 6:00 pm, Mondays through Fridays (holidays excepted) and subject
to the rules and regulations of the Common Area hereinbefore referred to,
reasonable quantities of water, gas and electricity suitable for the intended
use of the Premises and heat and airconditioning required in Landlord's
judgment for the comfortable use and occupation of the Premises for such
purposes. Tenant agrees that at all times it will cooperate fully with
Landlord and abide by all regulations and requirements that Landlord may
prescribe for the proper functioning and protection of the building heating,
ventilating and airconditioning systems. Whenever heat generating machines,
equipment, or any other devices (including exhaust fans) are used in the
Premises by Tenant which affect the temperature or otherwise maintained by
the airconditioning system, Landlord shall have the right to install
supplementary airconditioning units in the Premises and the cost thereof,
including the cost of installation and the cost of operation and maintenance
thereof, shall be paid by Tenant to Landlord upon demand by Landlord. Tenant
will not, without the written consent of Landlord, use any apparatus or
device in the Premises (including, without limitation), electronic data
processing machines or machines using current in excess of 110 Volts which
will in any way increase the amount of electricity, gas, water or
airconditioning usually furnished or supplied to premises being used as
general office space, or connect with electric current (except through
existing electrical outlets in the Premises), or with gas or water pipes any
apparatus or device for the purposes of using electric current, gas, or
water. If Tenant shall require water, gas, or electric current in excess of
that usually furnished or supplied to premises being used as general office
space, Tenant shall first obtain the written consent of Landlord, which
consent shall not be unreasonably withheld and Landlord may cause an electric
current, gas or water meter to be installed in the Premises in order to
measure the amount of electric current, gas or water consumed for any such
excess use. The cost of any such meter and of the installation, maintenance
and repair thereof, all charges for such excess water, gas and electric
current consumed (as shown by such meters and at the rates then charged by
the furnishing public utility); and any additional expense incurred by
Landlord in keeping account of electric current, gas, or water so consumed
shall be paid by Tenant, and Tenant agrees to pay Landlord therefor promptly
upon demand by Landlord.
44. PARKING: Tenant shall have the right to the nonexclusive use of thirty
eight (38) parking spaces in the common parking area of the building. Tenant
agrees that Tenant, Tenant's employees, agents, representatives, and/or
invitees shall not use parking spaces in excess of said 38 parking spaces
allocated to Tenant hereunder. Landlord shall have the right, at Landlord's
sole discretion, to specifically designate the location of Tenant's parking
spaces within the common parking area of the building in the event of a
dispute among the tenants occupying the building referred to herein, in which
event Tenant agrees that Tenant, Tenant's employees, agents, representatives
and/or invitees shall not use any parking spaces other than those parking
spaces specifically designated by Landlord for Tenant's use. Said parking
spaces, if specifically designated by Landlord to Tenant, may be relocated by
Landlord at any time, and from time to time. Landlord reserves the right, at
Landlord's sole discretion, to rescind any specific designation of parking
spaces, thereby returning Tenant's parking spaces to the common parking area.
Landlord shall give Tenant written notice of any change in Tenant's parking
spaces. Tenant shall not, at any time, park or permit to be parked, any
trucks or vehicles adjacent to the loading area so as to interfere in any way
with the use of such areas, nor shall Tenant, at any time, park or permit the
parking of Tenant's trucks and other vehicles or the trucks and vehicles of
Tenant's suppliers or others, in any portion of the common areas not
designated by Landlord for such use by Tenant. Tenant shall not park nor
permit to be parked, any inoperative vehicles or equipment on any portion of
the common parking area or other common areas of the building. Tenant agrees
to assume responsibility for compliance by its employees with the parking
provision contained herein. If Tenant or its employees park in other than
designated parking areas, then Landlord may charge Tenant, as an additional
charge, and Tenant agrees to pay Ten Dollars ($10.00) per day for
Initial: MH, JA, RP
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each day or partial day each such vehicle is parking in any area other than
that designated. Tenant hereby authorizes Landlord, at Tenant's sole expense,
to tow away from the building any vehicle belonging to Tenant or Tenant's
employees parked in violation of these provisions, or to attach violation
stickers or notices to such vehicles. Tenant shall use the parking area for
vehicle parking only and shall not use the parking areas for storage.
45. ASSESSMENT CREDITS: The demised property herein may be subject to a
special assessment levied by the City of Sunnyvale as part of an Improvement
District. As a part of said special assessment proceedings (if any),
additional bonds were or may be sold and assessments were or may be levied to
provide for construction contingencies and reserve funds. Interest shall be
earned on such funds created for contingencies and on reserve funds which
will be credited for the benefit of said assessment district. To the extent
surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the
property of Landlord. Notwithstanding that such surpluses may be credited on
assessments otherwise due against the Leased Premises, Tenant shall pay to
Landlord, as additional rent if, and at the time of any such credit of
surpluses, an amount equal to all such surpluses so credited. For example: if
(i) the property is subject to an annual assessment of $1,000.00, and (ii) a
surplus of $200.00 is credited towards the current year's assessment which
reduces the assessment amount shown on the property tax xxxx from $1,000.00
to $800.00, Tenant shall, upon receipt of notice from Landlord, pay to
Landlord said $200.00 credit as Additional Rent.
46. ASSIGNMENT AND SUBLETTING (CONTINUED):
A. Notwithstanding anything stated in Paragraph 16 of this Lease,
Landlord hereby agrees to consent to an assignment or sublease to any parent
or subsidiary corporation, or related corporation which Yves and/or Isabelle
Faroudja (or their heirs) have more than fifty-one percent (51%) interest in,
provided however, Tenant shall remain liable for 100% of the terms and
conditions and obligations of Tenant under this Lease. Notwithstanding the
above, Tenant shall be required to (a) give Landlord written notice prior to
such assignment or subletting to any party as described above, and (b)
execute Landlord's consent document prepared by Landlord reflecting the
assignment or subletting.
B. Any and all sublease agreement(s) between Tenant and any and all
subtenant(s) (which agreements must be consented to by Landlord, pursuant to
the requirements of this Lease) shall contain the following language:
"If Landlord and Tenant jointly and voluntarily elect, for any
reason whatsoever, to terminate the Master Lease prior to the scheduled
Master Lease termination date, then this Sublease (if then still in
effect) shall terminate concurrently with the termination of the Master
Lease. Subtenant expressly acknowledges and agrees that (1) the
voluntary termination of the Master Lease by Landlord and Tenant and the
resulting termination of this Sublease shall not give Subtenant any
right or power to make any legal or equitable claim against Landlord,
including without limitation any claim for interference with contract or
interference with prospective economic advantage, and (2) Subtenant
hereby waives any and all rights it may have under law or at equity
against Landlord to challenge such an early termination of the Sublease,
and unconditionally releases and relieves Landlord, and its officers,
directors, employees and agents, from any and all claims, demands,
and/or causes of action whatsoever (collectively, "Claims"), whether
such matters are known or unknown, latent or apparent, suspected or
unsuspected, foreseeable or unforeseeable, which Subtenant may have
arising out of or in connection with any such early termination of this
Sublease. Subtenant knowingly and intentionally waives any and all
protection which is or may be given by Section 1542 of the California
Civil Code which provides as follows: "A general release does not extend
to claims which the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if known by him must
have materially affected his settlement with debtor.
The term of this Sublease is therefore subject to early
termination. Subtenant's initials here below evidence (a) Subtenant's
consideration of and agreement to this early termination provision, (b)
Subtenant's acknowledgement that, in determining the
Initial: MH, JA, RP
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net benefits to be derived by Subtenant under the terms of this Sublease,
Subtenant has anticipated the potential for early termination, and (c)
Subtenant's agreement to the general waiver and release of Claims above.
Initials: Initials: "
----------- -----------
Subtenant Tenant
47. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with
respect to non-monetary defaults not involving Tenant's failure to pay Basic
Rent or Additional Rent, Tenant shall not be in default of any non-monetary
obligation if (i) more than thirty (30) days is required to cure such
non-monetary default, and (ii) Tenant commences cure of such default as soon
as reasonably practicable after receiving written notice of such default from
Landlord and thereafter continuously and with due diligence prosecutes such
cure to completion.
48. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not
be in default under the Lease if it leaves all or any part of Premises vacant
so long as (i) Tenant is performing all of its other obligations under the
Lease including the obligation to pay Basic Rent and Additional Rent (ii)
Tenant provides on-site security during normal business hours for those parts
of the Premises left vacant, (iii) such vacancy does not materially and
adversely affect the validity or coverage of any policy of insurance carried
by Landlord with respect to the Premises, and (iv) the utilities and heating
and ventilation system are operated and maintained to the extent necessary to
prevent damage to the Premises or its systems.
49. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect
to the existence or use of "Hazardous Materials" (as defined herein) on, in,
under or about the Premises and real property located beneath said Premises
and the common shares of the Parcel, which includes the entire parcel of land
on which the Premises are located as shown in Green on EXHIBIT A attached
hereto (hereinafter collectively referred to as the "Property"):
A. As used herein, the term "Hazardous Materials" shall mean any
material, waste, chemical, mixture or byproduct which is or hereafter is
defined, listed or designated under Environmental Laws (defined below) as a
pollutant, or as a contaminant, or as a toxic or hazardous substance, waste
or material, or any other unwholesome, hazardous, toxic, biohazardous, or
radioactive material, waste, chemical, mixture or byproduct, or which is
listed, regulated or restricted by any Environmental Law (including, without
limitation, petroleum hydrocarbons or any distillates or derivatives or
fractions thereof, polychlorinated biphenyls, or asbestos). As used herein,
the term "Environmental Laws" shall mean any applicable Federal, State of
California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement, agreement,
or approval, or any determination, judgment, directive, or order of any
executive or judicial authority at any level of Federal, State of California
or local government (whether now existing or subsequently adopted or
promulgated) relating to pollution or the protection of the environment,
ecology, natural resources, or public health and safety.
B. Tenant shall obtain Landlord's written consent, which may be
withheld in Landlord's discretion, prior to the occurrence of any Tenant's
Hazardous Materials Activities (defined below); provided, however, that
Landlord's consent shall not be required for normal use in compliance with
applicable Environmental Laws of customary household and office supplies
(Tenant shall first provide Landlord with a list of said materials use), such
as mild cleaners, lubricants and copier toner. As used herein, the term
"Tenant's Hazardous Materials Activities" shall mean any and all use,
handling, generation, storage, disposal, treatment, transportation, release,
discharge, or emission of any Hazardous Materials on, in, beneath, to, from,
at or about the Property, in connection with Tenant's use of the Property, or
by Tenant or by any of Tenant's agents, employees, contractors, vendors,
invitees, visitors or its future subtenants or assignees. Tenant agrees that
any and all Tenant's Hazardous Materials Activities shall be conducted in
strict, full compliance with applicable Environmental Laws at Tenant's
expense, and shall not result in any contamination of the Property or the
environment. Tenant agrees to provide Landlord with prompt written notice of
any spill or release of Hazardous Materials at the Property during the term
of the Lease of which Tenant becomes aware, and further agrees to provide
Landlord with prompt written notice of any violation of Environmental Laws in
connection with Tenant's Hazardous Materials Activities of which Tenant
becomes aware. If Tenant's Hazardous Materials
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Activities involve Hazardous Materials other than normal use of customary
household and office supplies, Tenant also agrees at Tenant's expense: (i)to
install such Hazardous Materials monitoring, storage and containment devices
as Landlord reasonably deems necessary (Landlord shall have no obligation
to evaluate the need for any such installation or to require any such
installation); (ii) provide Landlord with a written inventory of such
Hazardous Materials, including an update of same each year upon the
anniversary date of the Commencement Date of the Lease ("Anniversary Date");
and (iii) on each Anniversary Date, to retain a qualified environmental
consultant, acceptable to Landlord, to evaluate whether Tenant is in
compliance with all applicable Environmental laws with respect to Tenant's
Hazardous Materials Activities. Tenant, at its expense, shall submit to
Landlord a report from such environmental consultant which discusses the
environmental consultant's findings within two (2) months of each Anniversary
Date. Tenant, at its expense, shall promptly undertake and complete any and all
steps necessary, and in full compliance with applicable Environmental Laws,
to fully correct any and all problems or deficiencies identified by the
environmental consultant, and promptly provide Landlord with documentation of
all such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at its
expense, shall (i) properly remove from the Property all Hazardous Materials
which come to be located at the Property in connection with Tenant's
Hazardous Materials Activities, and (ii) fully comply with and complete all
facility closure requirements of applicable Environmental Laws regarding
Tenant's Hazardous Materials Activities, including but not limited to (x)
properly restoring and repairing the Property to be extent damaged by such
closure activities, and (y) obtaining from the local Fire Department or other
appropriate governmental authority with jurisdiction a written concurrence
that closure has been completed in compliance with applicable Environmental
Laws. Tenant shall promptly provide Landlord with copies of any claims,
notices, work plans, data and reports prepared, received or submitted in
connection with any such closure activities.
D. If Landlord, in its sole discretion, believes that the Property has
become contaminated as a result of Tenant's Hazardous Materials Activities,
Landlord in addition to any other rights it may have under this Lease or
under Environmental Laws or other laws, may enter upon the Property and
conduct inspection, sampling and analysis, including but not limited to
obtaining and analyzing samples of soil and groundwater, for the purpose of
determining the nature and extent of such contamination. Tenant shall
promptly reimburse Landlord for the costs of such an investigation, including
but not limited to reasonable attorneys' fees Landlord incurs with respect to
such investigation, that discloses Hazardous Materials contamination for
which Tenant is liable under this Lease. Except as may be required of Tenant
by applicable Environmental Laws, Tenant shall not perform any sampling,
testing, or drilling to identify the presence of any Hazardous Materials at
the Property, without Landlord's prior written consent which may be withheld
in Landlord's discretion. Tenant shall promptly provide Landlord with copies
of any claims, notices, work plans, data and reports prepared, received or
submitted in connection with any sampling, testing or drilling performed
pursuant to the preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel acceptable to
Landlord, whose consent shall not unreasonably be withheld) and hold harmless
Landlord, its employees, assigns, successors, successors-in-interest, agents
and representatives from and against any and all claims (including but not
limited to third party claims from a private party or a government
authority), liabilities, obligations, losses, causes of action, demands,
governmental proceedings or directives, fines, penalties, expenses, costs
(including but not limited to reasonable attorneys', consultants' and other
experts' fees and costs), and damages, which arise from or related to: (i)
Tenant's Hazardous Materials Activities; (ii) any Hazardous Materials
contamination caused by Tenant prior to the Commencement Date of the Lease;
or (iii) the breach of any obligation of Tenant under this Paragraph 49
(collectively, "Tenant's Environmental Indemnification"). Tenant's
Environmental Indemnification shall include but is not limited to the
obligation to promptly and fully reimburse Landlord for losses in or
reductions to rental income, and diminution in fair market value of the
Property. Tenant's Environmental Indemnification shall further include but is
not limited to the obligation to diligently and properly implement to
completion, at Tenant's expense, any and all environmental investigation,
removal, remediation, monitoring, reporting, closure activities, or other
environmental response action (collectively, "Response Actions"). Tenant
shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with
any Response Actions.
It is agreed that the Tenant's responsibilities related to Hazardous
Materials will survive the expiration or termination of this Lease and that
Landlord may obtain specific performance of Tenant's responsibilities under
this Paragraph 49.
Initial: MH, JA, RP
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50. CONSENT: Whenever the consent of one party to the other is required
hereunder, such consent shall not be unreasonably withheld.
51. AUTHORITY TO EXECUTE: The parties executing this Lease Agreement hereby
warrant and represent that they are properly authorized to execute this Lease
Agreement and bind the parties on behalf of whom they execute this Lease
Agreement and to all of the terms, covenants and conditions of this Lease
Agreement as they relate to the respective parties hereto.
52. LANDLORD'S CORPORATE AUTHORITY: If Landlord is a corporation (or
partnership or trust), each individual executing this Lease on behalf of said
corporation (or partnership or trust) represents and warrants that he is
duly authorized to execute this Lease on behalf of said corporation (or
partnership or trust) in accordance with the bylaws of said corporation (or
partnership in accordance with the partnership agreement, or trust in
accordance with the trust indenture) and that this Lease is binding upon said
corporation (or partnership or trust) in accordance with its terms. If
Landlord is a corporation, Landlord shall in thirty (30) days after execution
of this Lease deliver to Tenant a certified copy of the resolution of the
Board of Directors of said corporation authorizing or ratifying the execution
of this Lease.
53. PUNCH LIST: In addition to and notwithstanding anything to the contrary
in Paragraphs 5 and 40 of this Lease, Tenant shall have thirty (30) days
after the Commencement Date to provide Landlord with a written "punch list"
pertaining to defects in the Building and in the interior improvements
constructed by Landlord for Tenant. As soon as reasonably possible
thereafter, Landlord, or one of Landlord's representatives (if so approved by
Landlord), and Tenant shall conduct a joint walk-through of the Premises (if
Landlord so requires), and inspect such Tenant Improvements, using their best
efforts to agree on the incomplete or defective construction related to the
Tenant Improvements installed by Landlord. After such inspection has been
completed, Landlord shall prepare, and both parties shall sign, a list of all
"punch list" items which the parties reasonably agree are (i) to be corrected
by Landlord (but which shall exclude any damage or defects caused by Tenant,
its employees, agents or parties Tenant has contracted with to work on the
Premises) or (ii) if said defects and/or damaged item(s) are not material,
Landlord may elect, in its sole and absolute discretion, not to repair such
item(s), but to acknowledge in written form the defect and/or damaged
item(s); in which case, notwithstanding anything to the contrary in said
Lease Paragraph 5 ("Acceptance and Surrender"), Tenant shall not be
responsible upon Lease Termination to repair said item(s) so noted by
Landlord. Landlord shall have thirty (30) days thereafter (or longer if
necessary, provided Landlord is diligently pursuing the completion of the
same) to complete, at Landlord's expense, the "punch list" items without the
Commencement Date of the Lease and Tenant's obligation to pay Rental
thereunder being affected. Notwithstanding the foregoing, a crack in the
foundation, or exterior walls or any other defect in the structure or
Building that does not endanger the structural integrity of the building, or
which is not life-threatening, shall not be considered material, nor shall
Landlord be responsible for repair of same. This Paragraph shall be of no
force and effect if Tenant shall fail to give any such notice to Landlord
within thirty (30) days after the Commencement Date of this Lease.
(This Space Left Blank Intentionally)
Initial: MH, JA, RP
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