EXHIBIT 10.14
COMMERCIAL LEASE
This Lease made this 29th day of February, 1996 at Santa Clara,
California, by and between XXXXXX CORPORATION. A Delaware corporation
("Lessor), and Synergy Semiconductor Corporation, a California
corporation("Lessee").
1. PREMISES - Lessor hereby leases to Lessee and Lessee hires from
Lessor for the term, at the rental, and upon all of the conditions set forth
herein that certain real property situated in the City of Santa Xxxxx,
County of Santa Xxxxx, State Of California, located at 0000 Xxxxx Xxxx.,
consisting of approximately 70,046 sq. ft. of an office, R&D, fabrication
and manufacturing building, which includes a total site of approximately 5.8
acres, as shown on the site plan which is attached hereto marked Exhibit "A"
and incorporated herein by reference.
2.TERM - The term of this Lease shall be for one hundred twenty(120)
months commencing November 1, 1996 or on the date of issuance by the City of
Santa Xxxxx of a Certificate of Occupancy relating to the Tenant Improvement
construction, whichever is sooner ("Commencement Date"). Upon execution of
this Lease, and prior to the Commencement Date, Lessor shall deliver
possession of the premises to Lease, and prior to the Commencement Date,
construction of the Tenant Improvements. Upon Lessee taking possession of
the Premises (the "Possession Date"), Lessee agrees to pay the following
operating costs associated with the Premises: any and all utilities,
security services, landscaping services, liability and property insurance,
and costs for any contractors retained by lessee or Lessee's agent (except
for costs for Tenant Improvements), and shall comply with all terms and
conditions hereunder, except for payment of rent and property taxes, which
shall commence as set forth above.
In the event that the, Commencement Date is later than August 1, 1996,
Lessee agree to pay to Seller an amount equal to thirty (30) days' interest
for the month of August, September and October on August 1, 1996, September
1, 1996 and October 1. 1996, as the case may be, on the amount of the Tenant
Improvement Allowance which has been expended as of August 1, 1996,
September 1, 1996, and October 1, 1996, respectively, at an interest rate
equal to the prime lending rate in effect on those dates at the Chase
Manhattan Bank, N.A. in New York City. If such payments are not received
within ten(10) days of August 1,1996, September 1, 1996, and October 1,
1996, respectively, there shall be added to the payment a late fee of five
percent (5%) of said payment.
BASE RENT - Rent shall be payable in advance on the 1st day of each month
commencing on the Commencement Date, plus any additional state sales tax
thereon that the United States or the State Of California may impose. The
monthly rate is set forth below:
Base Rent:
Months 1 - 24 $0.75 Triple net/sq.ft./month Nov'96 -> Oct'98
25 - 48 $0.81 Triple net/sq.ft./month Nov'98 -> Oct'00
49 - 72 $0.88 Triple net/sq.ft./month Nov'00 -> Oct'02
73 - 96 $0.94 Triple net/sq.ft./month Nov'02 -> Oct'04
97 -120 $1.00 Triple net/sq.ft./month Nov'04 -> Oct'06
For any Commencement Date other than the first of the month, the month's
rent shall be prorated.
Upon execution of this Lease, Lessee shall pay to the Lessor the first
month's rent(at the rate
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applicable to months 1-24). Thirty (30) days prior to the Commencement Date,
Lessee shall pay to Lessor an amount equal to the last month's rent (at the
rate applicable to months 97-120) as a security deposit for Lessee's
faithful performance of its obligations under the Lease. Should Lessee
comply with all of the term of this Lease and promptly pay all Rent and all
other sums payable by Lessee when due to Lessor, the security deposit shall
be returned in full to lessee within ten (10) business days after the
termination of the Lease.
If rent payments are not received within ten (10) days of the date rent
is first due for a given month, there shall be added to the rent a late fee
of five percent(5%) of said rental payment.
4. ADDITIONAL RENT: Lessee shall pay an additional monthly rent to
repay the Tenant Improvement Allowance described in Section 10 below. The
additional monthly rent shall be payable in advance of the first day of each
month, commencing on the commencement Date, plus any additional state sales
tax thereon that the United States or the State of California may impose.
The rate is at forth below:
Additional Rent:
Months 1 - 24 $0.95/sq.ft.month
25 - 48 $0.96
49 - 72 $0.97
73 - 96 $0.98
97 -120 $1.00
For any Commencement Date other than the first of the month, the month's
additional rent shall be prorated.
If additional rent payments are not received within ten (10) days of
the date rent is first due for a given month, there shall be added to the
additional rent a late fee of five percent(5%) of said additional rent
payment.
5.USE - The Premises shall be used and occupied by Lessee for its
business consistent with the planning and zoning codes for the location.
Lessee shall notify Lessor and obtain lessor's written approval, which shall
not be unreasonably withheld, before using the Premises for any purpose
permitted under then existing zoning other than office, light, and assembly,
or semiconductor manufacture and activities associated therewith, if such
use would involve the use of Hazardous Materials(as defined hereafter in
Section 24(a)) other than those used by Lessee for its semiconductor
manufacture operations. Lessee is responsible to obtain any and all
licenses and/or permits required for the lawful operation of Lessee's
business.
6. TAXES
(a) Lessee to Pay taxes: In addition to the rents required to be paid
under this Lease, Lessee shall pay, and Lessee hereby agree to
pay, any and all real property taxes(including general and
special assessments and other charges) of any description levied
or assessed during the term of this Lease by any governmental
agency or entity on or against said Premises, any portion of said
Premises, any interest in said Premises, or any improvement or
other property in or on said Premises. Such payment shall be
made by Lessee on or before the due date of said taxes. Lessee's
liability for taxes for the first and last partial tax years of
the Lease shall be prorated on an annual basis with the tax year
commencing on the Commencement Date.
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Lease shall not be required to pay any income or franchise taxes
of Lessor. Lessee shall not be liable for increase in real property taxes
that result from changes in ownership (as defined in the California Revenue
and Taxation Code) of the Premises, but Lessee shall be liable for any and
all increases in real property taxes (including general and special
assessments and other charges) for any other cause.
(b) Tax Hold-Harmless Clause: Lessee shall indemnify and hold Lessor
and the property of Lessor, including said Premises and any improvements now
or hereafter on said Premises, free and harmless from any liability, loss,
or damage resulting through no fault of Lessor from any taxes, assessments,
or other charges required by this article to be paid by Lessee and from all
interest, penalties, and other sums imposed thereon and from any sales or
other proceedings to enforce collection of any such taxes, assessments, or
other charges.
(c) Lessee shall have the right, at Lessee's sole cost and expense, to
protest or contest any tax or assessment or any increases in any tax or
assessment levied or assessed against the Premises, but Lessee shall have no
right to direct Lessor pending final determination of the protest or contest
not to pay any tax or assessment before it become delinquent, unless Lessee
will be imposed on the Premises for failure to timely pay the tax or
assessment and one year's interest at the rate charged by the government
entity imposing the tax or assessment on the amount of the tax or
assessment.
(d) Payment by Lessor: Should Lessee fail to pay within the time
specified in this Article any taxes, assessments, or other charges required
by this Article to be paid by Lessee, Lessor may, without notice to or
demand on Lessee, pay, discharge, or adjust such tax, written demand of
Lessor reimburse Lessor for the full amount paid by Lessor in paying,
discharging, or adjusting such tax, assessment, or other charge together
with interest thereon at the rate of ten percent (10%) per annum from the
date of payment by Lessor until the date of repayment by Lessee. Where no
time within which any charge required by this Article to be paid by Lessee
is specified in this Article, such charge must be paid by Lessee before it
becomes delinquent.
7. COMPLIANCE W1TH LAW - Lessee shall, at Lessee's expense, comply
Promptly with all applicable statutes, ordinances, rules, regulations,
orders, covenants and restrictions of records, and requirements in effect
during the term or any part of the term hereof, regulating the use by Lessee
of the Premises. Lessee shall not use or permit the use of the Premises in
any manner that will tend to create a waste or a nuisance or tend to disturb
use of the adjacent Premises. Lessor agrees to make any structural changes
which may be required by law after the Commencement Date, except that Lessee
agrees to make all alterations during the term hereof required because of
Lessee's particular use of the Premises and Lessee agrees to make all
alterations required as a result of grandfathering exemptions from certain
requirements being removed because of the installation of Tenant
Improvements or other alterations made by Lessee.
8.CONDITION OF PREMISES - Except as otherwise provided in this Lease,
Lessee hereby accepts the Premises in their condition existing as of the
date of this Lease agreement subject to a11 applicable zoning, municipal,
county and state laws, ordinances and regulations governing and regulating
the use of the Premises, and any covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and
by any exhibits attached hereto. Lessee acknowledges that neither Lessor nor
Lessor's agent has made any representation or warranty as to the present or
future suitability of the Premises for the conduct of Lessee's business.
Lessee acknowledges that Lessor has notified Lessee of the presence of
asbestos-containing material("ACM") in the building. Lessee hereby
covenants and agrees that it will not permit any drilling, moving, boring or
other disturbance of the ACM by anyone other than qualified and
appropriately trained individuals.
9. MAINTENANCE, REPAIRS & ALTERATIONS - Lessee agrees that Lessee shall
maintain the Premises
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in good condition and repair (including but not limited to parking and
landscape areas, plumbing, HVAC systems, electrical, fixtures, interior
walls, ceilings, windows, doors, plate glass and skylights on the Premises
and tenant signs located on the Premises). Lessor agrees to take
responsibility for structural repairs to the building's foundations and
walls and Lessee agrees to take responsibility for maintenance (e.g.,
painting, minor repairs) thereof. With respect to the roof, Lessee agrees
to take responsibility for maintenance and repair of the roof membrane and
Lessor agrees to take responsibility for the structural members of the roof,
except where Tenant Improvements or other activities by Lessee result in
damage thereto, in which case Lessee agrees to repair the damage.
Except for Tenant Improvements, which are discussed below in Section
10, and except for any individual nonstructural alterations costing Fifty
Thousand Dollars($50,000.00) or less(an "Alteration"), the Premises shall
not be altered, repaired or changed without the written consent of Lessor,
which consent shall not be unreasonably withheld. Detailed descriptions or
drawings of proposed improvements which are not Alterations are to be
supplied to Lessor ten(10) business days prior to the start of work. The
Lessor will respond in writing within seven(7) business days and lessor may
post and record a Notice of Non-responsibility prior to commencement of
work.
10. TENANT IMPROVEMENT ALLOWANCE
(a) Lessor agrees to provide an allowance in the amount of $6,100,000
(the "Tenant Improvement Allowance") toward the total cost of constructing
improvements to the Premises including, without limitation, architectural
design, engineering, consulting, demolition, construction, labor, materials,
survey and testing expenses, construction management, city and other
governmental fees, charges and permits and also including the maintenance,
repair or replacement of the HVAC and processing equipment currently on the
Premises (the "Tenant Improvements"). The Tenant Improvement Allowance also
includes repair, maintenance and replacement of exterior and interior
building materials, including but not limited to roofing materials, ceiling
tiles, floor tile, carpet, partitions and the like and other portions of the
Premises required to bring the facility to operating use by Lessee. The
architect, disciplines, contractor, and all subcontractors working on the
premises must be licensed to do business in California.
The Tenant Improvement Allowance is to be used solely for improvements
to the Premises (including floor-to ceiling partitions similar to Durasan
Wall Panels, the parking lot and landscaping). All improvements, equipment,
partitions, etc. associated with same are for the beneficial upgrading of
the building and shall remain the property of Lessor although used by
Lessee. Lessee hereby covenants that Lessee will attach Xxxxxx
Identification tags to all potentially removable fixtures purchased with the
Tenant Improvement allowance(e.g., the floor-to-ceiling partitions reference
above) and that Lessee will not use funds provided for Tenant Improvements
for personal property that can be removed from the Premises.
Lessor and its agent shall review and approve for funding the contract
drawings and specifications. If the cost of the Tenant Improvements exceeds
$6,100,000, such an additional cost shall be borne directly by Lessee.
Lessee hereby acknowledges that such Tenant Improvement Allowance is
available to Lessee only the extent of the accrual cost of constructing the
Tenant Improvements and that Lessee shall not be entitled to any portion of
the Tenant Improvement Allowance which exceeds the actual cost of
constructing the Tenant Improvements. After execution of this Lease by
Lessor and Lessee, Lessee shall proceed to have final construction drawings
and specification prepared for the Tenant
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Improvements(the "Final Plans") and shall submit such Final Plans to Lessor
for Lessor's approval of such Final Plans or of the reasons for Lessor's
reasonable disapproval of such Final Plans within ten(10) business days
after Lessee's delivery of such Final Plans to Lessor. If further revisions
are necessitated to accommodate Lessor's concerns, Lessee and Lessor shall
work together to achieve mutual agreement and the Final Plans shall be
revised accordingly. In all cases, Lessor shall notify Lessee of Lessor's
approval or reasons for disapproval of any revisions to the Final plans
within ten(10) business days after Lessor's receipt of such revisions from
Lessee. Lessee and Lessor hereby acknowledge that Lessor is making the
Tenant Improvement Allowance available to Lessee for the purpose of
constructing improvements that will remain a part of the Premises upon the
expiration or earlier termination of this Lease.
During the construction phase, Lessor's agent shall have unrestricted
access to the Premises for the purpose of observing the quality and progress
of construction and ensuring that construction complies with the
construction plans and other documents.
(b) Lessor shall pay the Tenant Improvement Allowance to the general
contractor ("Contractor") as follows:
(i) On or about the 30th day of each month, Contractor shall submit
an application for payment to Lessor, which application shall have been pre-
approved by Lessee and supported by invoices and requests for payments from
Contractor, together with lien releases from any and all subcontractors,
material men and suppliers whose invoices or requests for payments are
included in the application. The payment amount so requested is hereinafter
referred to as the "Application Amount." At the same time, contractor shall
submit a full copy of each such submission to Lessor's agent. Within 15
business days of receipt by Lessor and its agent of Contractor's submission,
Lessor and its agent shall review and, if appropriate, approve the
application for payment. Upon such approval, Lessor shall pay directly to
Contractor an amount equal to 90% of the Application Amount. An amount
equal to 10% of the Application Amount shall be set aside by Lessor and is
referred to hereinafter as the "Retention Amount." Notwithstanding the
foregoing, if a dispute exists among Lessor, Lessee and Contractor regarding
any progress payment or the work performed, Lessor may withhold from payment
an amount not exceeding 150% of the disputed amount(which withheld amount is
referred to hereinafter as the "Disputed Amount"). In no event shall the
total amount paid under this section exceed the Application Amount.
(ii) Within 15 business days of receipt of written notice by Lessor
and Lessee from Contractor that any work in dispute has been completed in
accordance with the terms of the contract. Lessor and Lessee must advise
Contractor of the acceptance or rejection of the disputed work. Within 15
business days of acceptance of the disputed work, Lessor must release the
applicable portion of the Disputed Amount.
(iii) The Retention amount shall be paid within 45 days after the
date of completion of the Tenant Improvements or within fifteen(15) business
days after completion of the "punch list", whichever occurs last. For these
purposes, "date of completion" means any of the following:
(A) The date of completion indicated by a valid notice of
completion recorded pursuant to California Civil Code Sec. 3093;
(B) The "date of completion" as that term is defined in
California Civil Code Sec. 3086; or
(C) The date of issuance of a certificate of occupancy covering
the Tenant Improvements.
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Notwithstanding the foregoing, if a dispute continues to exist among Lessor,
Lessee and Contractor, Lessor may withhold from final payment the Disputed
Amount, pending resolution of such dispute.
(c) Lessor shall, within fifteen(15) business days after receipt by
Lessor of Lessee's application for payment, reimburse Lessee out of the
Tenant Improvement Allowance for other Tenant Improvement costs incurred by
Lessee directly (and not through Contractor), such as any permit fees,
survey costs, architectural fees, and fees of contractors other than
Contractor.
(d) Any additions, deletions or modifications to the work that are to
be paid out of the Tenant Improvement Allowance may be made only by written
change order signed by lessor, Lessee and Contractor.
(e) Lessee shall obtain from Contractor a full written indemnity and
hold harmless contract holding Lessor, its agents and employees harmless
from and against claims, damages, losses, and expenses, including but not
limited to attorneys' fee, arising out of or resulting from the performance
of the work, provided that such claim, damage, loss or expense is
attributable to bodily injury, sickness, disease or death, or to injury to
or destruction of tangible property(other than the work itself) including
the loss of use resulting therefrom, but only to the extent caused in whole
or in part by negligent acts or admissions of Contractor, a subcontractor,
anyone directly or indirectly employed by them or anyone for whose acts they
may be liable regardless of whether or not such claim, damage, loss, or
expense is caused in part by a party indemnified hereunder. Such obligation
shall not be construed to negate, abridge or reduce other rights or
obligations of indemnity which would otherwise exist as a party or person
described in this paragraph.
In Claims against any person or entity indemnified under this paragraph by
an employee of Contractor, a subcontractor, anyone directly or indirectly
employed by them or anyone for whose acts they may be liable, this
indemnification obligation shall not be limited by a limitation on amount or
type of damages, compensation or benefits payable by or for Contractor or a
subcontractor under workers or xxxxxxx'x compensation acts, disability
benefits acts or other employee benefit acts.
(f) Lessee will procure or cause Contractor to procure before
commencement of any work, a broad form of builders risk insurance with
course of construction, vandalism and malicious mischief clauses attached.
The insurance shall be in a sum equal to the greater of the contract price
or One Million Dollars($1,000,000), with loss payable to Lessor. The
insurance will name Lessee, Contractor and subcontractors as additional
insureds, and shall be written to protect Lessor, Lessee, Contractor and
subcontractor as additional insureds, and shall be written to protect
lessor, Lessee, Contractor and subcontractors as their interests may appear.
(g) In the event Lessee is able to complete construction of the Tenant
Improvements for less than $6,100,000, the additional rent contained in
Section 4 of this Lease shall be reduced to the amounts shown in the table
attached as Exhibit "X".
(h) As part of the Tenant Improvements, Lessee agrees to upgrade the
Premises to conform with UBC91 and the Americans with Disabilities Act of
1990.
(i) Title to all Tenant Improvements shall be with Lessor without
need for further documentation. All such alterations, improvements, and
changes shall remain upon and be surrendered with the premises. All damage
or injury done to the Premises by lessee, or by any person who may be in or
upon the Premises with the consent of Lessee, shall be paid for by Lessee.
At Lessor's option, within sixty (60) days of Lessee's surrender of the
Premises, Lessee, at its cost and expense, shall remove any Alterations and
non-Lessor-approved improvements to the Premises and restore the Premises to
their former state, provided, however, that Lessee shall not be required to
so remove the Tenant Improvements or any other Lessor-approved
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improvements. Lessee shall keep the Premises free and clear of all liens
arising our of any work performed, materials furnished or obligations
incurred by Lessee. In the event any such lien attaches to the Premises and
Lessee does not cause the same to be released within ten(10) days after the
attachment thereof, whether by payment, bonding or otherwise, Lessor shall
have the right, but not the obligation, to cause the same to be released by
such means as it deems proper and any sums expended by Lessor in connection
therewith shall be payable by Lessee on demand.
Subject to the provisions of this section, lessee may install and
maintain furnishings, equipment, movable partitions, business machines and
other trade fixtures in the Premises, provided that the trade fixtures do
not become an integral part of the Premises or the building. Lessee may
alter or remove any of its trade fixtures at any time during the term of
this Lease or upon its expiration or termination.
11. SURRENDER-On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same
condition as when received, ordinary wear and tear excepted, clean and free
of debris, except that Lessee shall not be required to remove the Tenant
Improvements or any Lessor-approved improvements. Lessee shall repair any
damage to the Premises occasioned by the installation or removal of Lessee'
Alterations, trade fixtures, furnishings and equipment.
12. WARRANT-Lessee shall, simultaneous with the signing of this Lease,
execute and deliver to Lessor a Warrant in the form attached hereto as
Exhibit "B". The parties have agreed that any shares of Lessee's Common
Stock issued pursuant to the Warrant shall have certain registration rights,
as set for the in the Second Restated Investor Rights Agreement attached
hereto as Exhibit C (the "IR Agreement"). In the event that the IR
Agreement is not executed and void and Lessee shall reimburse Lessor for any
part of the Tenant Improvement Allowance which Lessor may have expended or
would otherwise be obligated to pay, together with any funds Lessor may have
expended or would otherwise be obligated to pay in connection with lessee's
Phase I and Phase II due diligence assessments.
13. LIABILITY INSURANCE-Lessee shall provide sufficient bodily injury and
property damage liability insurance consistent with the following
paragraphs.
(a) Insuring Party: From and after the Possession Date, Lessee shall at
Lessee's expense obtain and keep in force during the term of this Lease a
commercial general liability insurance policy of combined single limit
bodily injury and property damage insurance insuring Lessor and Lessee
against liability arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be a combined single limit policy in an amount not less than
$2,000,000.00 per occurrence. The policy shall name Xxxxxx Corporation as
an additional insured. The policy shall insure performance by Lessee of the
indemnity provisions of this paragraph. The limits of said insurance shall
not however limit the insurance policies within fifteen (15) days of the
Possession Date and upon breach or renewal of the policies thereafter.
(b) Waiver of Subrogation Rights: Lessee and Lessor each hereby release
and relieve the other and waive their entire right of recovery against the
other for loss or damage arising out of or incident to all perils insured
against, which perils occur in, on or about the premises whether due to the
negligence of Lessor or Lessee or their agents, employees, contractors or
invitees. Lessee and Lessor shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carriers of the foregoing
mutual waiver of subrogation.
(b) Indemnity: Lessee shall indemnify and hold Lessor harmless from
and against any claims arising from Lessee's use of the Premises
or from the conduct of Lessee's business or from any activity,
work or things done, permitted or suffered by Lessee in or about
the Premises or elsewhere and shall further indemnify and hold
harmless Lessor from and against any claims arising from any
breach or default in the performance of any obligation on
lessee's part to be performed under the terms of this Lease, and
Lessee hereby waives all claims in respect thereof against
Lessor. Lessor shall indemnify and hold Lessee harmless from and
against any claims arising from any willful misconduct or sole
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negligence of Lessor or from any breach or default in the performance of any
obligation of Lessor" part to be performed under the terms of this Lease,
and Lessor hereby waives all claims in respect thereof against Lessee.
(d) Exemption of Lessor from Liability: Lessee hereby agrees that
Lessor shall not be Liable for injury to Lessee's business or any loss of
income therefrom or for damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers or any person
there or about the Premises nor shall lessor be liable for injury to the
person of Lessee, Lessee's employees, agents or contractors whether such
damage or injury caused by or results from fire, steam, electricity, gas,
water or rain or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air condition or lighting
fixtures or from any other cause whether the same damage or injury results
from conditions arising upon the Premises or upon other portions of the
building of which the Premises are a part or from other sources or places
and regardless of whether the cause of such damage or injury results from
the sole negligence or willful acts of Lessor, Lessor's employees, agents or
contractors.
Not withstanding the above, Lessee shall be under no duty to indemnify and
hod Lessor harmless from any liability, claims, or damages arising because
of the sole negligence or any intentional or willful acts of Lessor or any
person who is an agent or employee of Lessor acting in the course and scope
of their agency or employment.
14. PROPERTY INSURANCE-
(a) Lessor, at Lessee's sole cost and expense(which cost shall not
exceed $100,000 per year), shall provide property damage insurance on the
building itself. From and after the Possession Date, Lessor agrees at
lessee's sole expense to maintain in full force during the full term of this
Lease and any extended term thereof, and Lessee agrees to reimburse Lessor
for the cost of, a policy of "all risk" extended coverage property damage
insurance coverage for the building, any and all improvements thereto, and
any personal property of Lessor contained therein, in the amount of its full
replacement value, insuring against loss or damage resulting from fire,
vandalism, malicious mischief, earthquake, flood, and such other perils
ordinarily included in extended coverage casualty insurance policies.
Lessor shall provide lessee with a copy of relevant portions of Lessor's
insurance policy, including coverage and exclusions from coverage. Lessee
will maintain the fire alarm system, sprinkler system and provide a fire
alarm monitoring system to respond to fire emergencies on the Premises to
the extent required by Santa Xxxxx. In the event that Xxxxxx' 'property
insurers are not willing to provide insurance for the Santa Xxxxx facility
or require upgrades and/or improvements for loss prevention purposes which
Lessor is unable or unwilling to make, Lessee hereby agrees to independently
obtain adequate property insurance company and include coverage for a
building value of $10,000,000 with a maximum deductible of $100,000. Lessee
hereby agrees that such insurance coverage will be on an "all-risk" property
policy form and will include earthquake coverage.
"Full replacement cost: as used in this Section 14 shall mean the actual
cost of replacement for the building, personal property and other
improvements on the Premises as determined from time to time.
(b) Lessee, at Lessee's sole cost and expense, shall provide
appropriate property damage insurance on its personal property. From and
after the Possession Date, Lessee agrees at Lessee's sole expense to
maintain in full force during the full term of this Lease and any extended
term thereof a policy of "all risk" extended coverage property damage
insurance coverage for any and all personal property contained on the
Premises, in the amount of its full replacement value, insuring against loss
or
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damage resulting from fire, vandalism, malicious mischief, and such other
perils ordinarily included in extended coverage casualty insurance policies.
(c) Waiver of Subrogation Rights: Lessee and Lessor each hereby release
and relieve the other and waive their entire right of recovery against the
other for loss or damage arising out of or incident to all perils insured
against, which perils occur in, on or about the Premise whether due to the
negligence of Lessor or Lessee or their agents, employees, contractors or
invitees. Lessee and Lessor shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers of the
foregoing mutual waiver of subrogation.
15. ENTRY AND INSPECTION-Lessee shall permit and shall cooperate with Lessor
or Lessor's agents to enter upon the Premises at other reasonable times and
upon reasonable notice, for the purpose of inspecting the same, and will
permit Lessor, at any time within one hundred eighty(180) days prior to the
expiration of this Lease, to place upon the Premises any usual "To Let",
"For Lease" or "For Sale" signs, and permit persons desiring to purchase or
lease the same to inspect the Premises thereafter upon reasonable notice to
Lessee, so long as they do not disrupt Lessee's business activities. This
section shall become null and void in the event of a default by lessee under
this Lease.
16. DESTRUCTION OF PREMISES-
(a) Duty to Repair or Restore: If any improvements, including buildings
and other structures, located on the Premises are damaged or destroyed
during the term of this Lease or any renewal or extension thereof, the
damage shall be repaired as follows:
(i)If the damage or destruction is caused by a peril against which
fire and extended coverage insurance is required to be carried by Section 14
of this Lease, except as provided in the following sentence, Lessee shall
repair that damage as soon as reasonably possible and restore the Premises
and improvements to substantially the same condition as existed just before
the damage or destruction, regardless of whether the insurance proceeds are
sufficient to cover the actual cost of repair and restoration. Lessor shall
promptly pay to Lessee any and all the Premises following damage or
destruction. If it will cost more than $250,000.00 in excess of the
insurance proceeds from the fire and extended coverage insurance required to
be carried by Section 14 of this Lease in order to restore the Premises,
Lessee may terminate this Lease by giving Lessor written notice of the
termination within thirty(30) days after occurrence of the damage or
destruction.
(ii) If the damage or destruction is caused by a peril against
which insurance is not required to be carried by this Lease, subject to
their rights to terminate this Lease described in Section 16(b), Lessor
shall repair that damage to the building and Lessee shall repair that damage
to its personal property and any improvements to the Premises as soon as
reasonably possible and restore the Premises to substantially the same
condition as existed just before the damage or destruction.
(b) Termination of Lease for Certain Loses:
(i)Notwithstanding any other provision of this Lease, if any
improvements located on the Premises are damaged or destroyed to such an
extent it will cost more than $250,000.00 to repair or replace them, and the
damage or destruction is caused by a peril against which insurance is not
required to be carried by this Lease, Lessor may terminate this Lease by
within thirty (30) days after occurrence of the damage or destruction.
However, after receipt of Lessor's notice, Lessee may elect to undertake the
repair and restoration of the Premises at Lessee's cost, by giving Lessor
written notice of such election within thirty(30) days of Lessee's receipt
of Lessor's notice of intention to terminate. If Lessee does so elect to
repair and restore at Lessee's cost, the Lease shall not be terminated and
shall remain in full force and effect. Otherwise, the Lease shall be deemed
terminated as provided in subsection (iii) below.
9
(ii) Lessee or Lessor shall have the right to terminate this Lease
under either of the following circumstances:
(A) If the Premises are damaged or destroyed from any cause
whatsoever, insured or uninsured, and the laws then in existence do not
permit the repair or restoration of the Premises provided for in this
article; or
(B) If the Premises are destroyed from any cause whatsoever,
insured or uninsured, during the last twelve(12) months of the term of this
Lease, or during the last twelve(12) months of the extended term, if any, of
this Lease.
(iii)Either party may terminate this Lease by giving written notice
of termination to the other not later than thirty(30) days after occurrence
of the event giving rise to the termination under subsection (ii), and
termination shall be effective as of the date of the notice of termination.
In the event of a termination under subsection (ii), Lessee shall not be
entitled to collect any insurance proceeds attributable to insurance
policies covering the Premises or improvements, except those proceeds
attributable to Lessee's personal property and trade fixtures.
(iv)If this Lease is terminated pursuant to either subsection (i) or
(ii) above, rent, taxes, assessments, and other sums payable by Lessee to
Lessor under this Lease shall be prorated as of the termination date. If
any taxes, assessments, or rent has been paid in advance by Lessee, Lessor
shall refund it to Lessee for the unexpired period for which the payment has
been made.
(c) Time for Construction of Repairs: Any and all repairs and
restoration of improvements required by this section shall be commenced by
Lessor or Lessee, as the case may be, within a reasonable time after
occurrence of the damage or destruction requiring the repairs or
restoration; shall be diligently pursued after being commenced; and shall be
completed within a reasonable time after the loss. If Lessor is required
under this Lease to perform the repairs and restoration, Lessor shall cause
the repairs and restoration to be completed not later than one hundred
eighty (180) days after occurrence of the event causing destruction or
Lessee shall have the right to terminate this Lease.
(d)Abatement of Rent: If Lessor elects to rebuild or restore the
Premises from any cause, Lessee's obligation to pay all base rent and
additional rent hereunder shall be abated to the extent of the damage in the
event that the damage or destruction renders the Premises either partially
or completely uninhabitable for the uses authorized by this Lease.
17. CONDEMNATION-
(a) Total Condemnation Defined: The term "total condemnation" as used
in this section shall mean the taking by eminent domain ("condemnation") by
a public or quasi-public agency or entity having the power of eminent
domain("condemn or") of either:
(i)More than thirty-three percent(33%) of the square footage of the
building; or
(ii) Less than thirty-three percent(33%) of the square footage of
the building at a time when the remaining buildings or improvements on the
Premises cannot reasonably be restored to a condition suitable for Lessee's
occupancy for the uses permitted by this Lease within thirty(30) normal
eight-hour business days under all laws and regulations then applicable; or
(iii) Less than thirty-three percent(33%) of the square footage of
the building at a time when the remaining in such a manner that Lessee is
substantially prevented from carrying on operations of a
10
permitted use under this Lease on the remaining portion of the Premises; or
(iv) More than thirty-three percent(33%) of the production are in
the building is rendered partially or totally unusable.
(b)Partial Condemnation Defined: The term "partial condemnation" as
used in this section shall mean any condemnation of a portion of the
Premises that is not a total condemnation under Section 17(a) of this Lease.
(c)Termination for Total Condemnation: In the event of a total
condemnation of the Premises during the term of this Lease, this Lease shall
terminate without further notice as of 12:01 A.M. on the date actual
physical possession of the condemned property is taken by the condemnor.
All rent payable under this Lease shall be prorated as of 12:01 A.M. on the
date and a prompt refund or payment of rent for the unexpired period of this
Lease shall be made by Lessor to Lessee. On the making of that rent
adjustment, both Lessor and Lessee will be released and discharged from any
and all further obligations under this Lease.
(d) Effect of Partial Condemnation: In the event of a partial
condemnation of the Premises, this Lease shall terminate as to the portion
of the Premises taken on the date actual physical possession of that
portions taken by the condemnor but shall remain in full force and effect as
to the remainder of the Premises; provided, however, that promptly after the
taking of actual physical possession by the condemnor of the portion taken
by condemnation, Lessor shall, on the remainder of the Premises to a
condition making the Premises tenantable by Lessee for the used permitted by
this Lease. Any rent payable under this Lease after the date actual
physical possession is taken by the condemnor of the portion of the Premises
condemned shall be reduced by the percentage the square footage of the
portion taken by eminent domain bears to the total square footage of the
building area of the Premises on the date of this Lease. In addition, the
rent payable under this Lease shall be further abated during the time and to
the extent Lessee is prevented from occupying all of the remainder of the
Premises by the work of restoration required by this section to be performed
by Lessor.
(e) Lessor's Power to Sell in Liew of Condemnation: Lessor may, without
any obligation or liability to Lessee and without affecting the validity or
continuation of this Lease other than as expressly provided in this section,
agree to sell or convey to the condemnor, without first requiring that an
action or proceeding for condemnation be instituted or tried, the portion of
the Premises sought by the condemnor free from this Lease and the rights of
Lessee in the Premises other than as provided in this Section 17.
(f) Condemnation Award: All compensation and damages awarded or paid
for the condemnation of the Premises or any portion of the Premises, or for
any sale in lieu of condemnation as authorized by Section 17(e) above,
shall, except as otherwise expressly provided in this section, belong to and
be the sole property of Lessor. Lessee hereby assigns to Lessor any claim
Lessee might have except for this provision against Lessor, the leased
Premises, or condemnor for diminution in value of the leasehold estate
created by this Lease or the value of the unexpired term of this Lease;
provided, however, that Lessee is entitled to seek to recover from the
condemnor, but not from Lessor:
(i) The cost of removing any trade fixtures, furniture, or
equipment from the portion of the Premises taken by condemnation;
(ii)Value of any improvements installed by Lessor on the portion of
the Premises
11
taken by condemnation that Lessee has a right to remove under this Lease but
that Lessee elects not to remove.
(iii) The then amortized value of all improvements made by Lessee
on the portion of the Premises taken by condemnation that could not be
removed by Lessee on expiration of this Lease either because of provisions
of this Lease or because the value on removal from the Premises; and
(iv) Moving expenses, and the value of the leasehold estate.
18. UTILITIES-From and after the Possession Date, Lessee shall pay or cause
to be paid, and hold Lessor and the property of Lessor including said
Premises free and harmless from, all charges for the furnishings
of gas, electricity, and other public utilities to said Premises during the
term of this Lease and for the removal of garbage and rubbish from said
Premises during the term of this Lease.
19. ASSIGNMENT AND SUBLETTING-Lessee shall not assign 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 (the
agents and servants of Lessee excepted) to occupy or use the Premises, or
any portion thereof, without the written consent of Lessor first had and
obtained which consent shall not be unreasonably withheld; and a consent to
one assignment, subletting, occupation or use by any other person, shall not
be deemed to be a consent to any subsequent assignment, subletting,
occupation or use by another person. Any such assignment or subletting
without such consent shall be void, and shall at the option of Lessor,
terminate this Lease. This Lease shall not, nor shall any interest therein,
be assignable, as to the interest of Lessee, by operation of law, without
the written consent of Lessor.
Lessor's prior consent shall not be required for any assignment, sublease or
other transfer of Lessee's interest in the Premises or the Lease to any
corporation with which Lessee may merge or consolidate or become affiliated
as a parent, subsidiary, holding company or otherwise, or to an entity in
which Lessee has a controlling interest.
20. ESTOPPEL CERTIFICATE-Either party shall upon the other party's written
request, promptly execute and deliver to the requesting party, without
charge, a statement certifying that this Lease is in full force and effect
in its original form or is in full force and effect as modified, and if
applicable, the date to which the rent has been prepaid and any other
information as may be reasonably required by the requesting party.
21. SUBORDINATION-Lessee agrees promptly to execute and deliver to Lessor,
upon written request, without charge, in such form as may be reasonably
required by any prospective lenders to Lessor, an instrument or instruments
whereby Lessee will agree to subordinate this lease to the lien of said
lender's mortgage or deed of trust or other encumbrance and in the case of
foreclosure will attorn to such mortgage or holder acquiring title by
foreclosure; provided that the mortgage or holder shall have delivered to
Lessee a written non disturbance agreement for the benefit of Lessee to the
effect that the Lease shall not be terminated in the event of any default
under any ground lease, mortgage or deed of trust, so long as lessee is not
in default (after the expiration of all applicable cure periods) under the
terms of the Lease. As used herein, the term "foreclosure" shall include
both judicial proceedings and the exercise of a power of sale under any
mortgage or deed of trust without recourse to judicial proceedings. Lessor
shall deliver to Lessee, prior to the execution of this Lease, a non-
disturbance agreement in form and substance reasonably satisfactory to
Lessee, executed by any lender which currently holds a deed of trust
encumbering any portion of the Premises.
22. INSOLVENCY OR BANKRUPTCY-Either (a) the appointment of a receiver to
take possession of all or substantially all of the assets of Lessee, or (b)
a general assignment by Lessee for the benefit of creditors,
12
or (c) any action taken or suffered by Lessee under any insolvency or
bankruptcy act shall constitute a breach of this Lease by Lessee.
23. REMEDIES OF OWNER ON DEFAULT-
(a) Events of Default: The occurrence of any of the following shall
constitute an "Event of Default" by Lessee:
(i) Lessee fails to make any payment of rent when due and such
failure are not cured within five (5) days after notice to Lessee thereof.
(ii) Lessee fails to timely make payments of rent when due under
this Lease three(3) or more times during any twelve(12) month period during
the term of this Lease.
(iii) Lessee fails to perform any other provision of this Lease and
such failure is not cured within thirty(30) days after written notice to
Lessee or, if such failure cannot be cured within such thirty(30) day
period, Lessee fails within such thirty (30) day period to commence, and
thereafter diligently proceed with, any actions necessary to cure such
failure as soon as reasonably possible.
(iv) Lessee fails to deliver any estoppel certificate require by
Section 20 within twenty (20) days after receipt of a written request from
Lessor.
(v) Lessee ceases doing business as a going concern, makes an
assignment for the benefit of creditors, is adjudicated an insolvent, files
a petition (or files an answer admitting the material allegations of such
position) seeking for lessee any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar arrangement under any
state or federal bankruptcy or other statute, law or regulation, or Lessee
consents to or acquiesces in the appointment, pursuant to any state or
federal bankruptcy or other statute, law or regulation, of a trustee,
receiver or liquidator for the Premises, for Lessee or for all or any
substantial part of Lessee's assets.
(vi) Lessee fails within ninety(90) days after the commencement of
any proceedings against Lessee seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under
any state or federal bankruptcy or other statute, law or regulation, to have
such proceeding dismissed, or Lessee fails, within ninety (90) days after an
appointment pursuant to any state or federal bankruptcy or other statue, law
or regulation, without Lessee's consent or acquiescence, of any trustee,
receiver or liquidator for the Premises, for Lessee or for all or any
substantial part of Lessee's assets, to have such appointment vacated.
(b) Remedies: Upon the occurrence of an event of default Lessor shall
have the following remedies, which shall not be exclusive but shall be
cumulative and shall be in addition to any other remedies now or hereafter
allowed by law:
(i) Lessor may terminate Lessee's right to possession of the
Premises at any time by written notice to Lessee. Lessee expressly
acknowledges that in the absence of such written notice from Lessor, no
other act of Lessor, including, but not limited to, its re-entry into the
Premises, its efforts to rent the Premises, its releasing of the Premises
for Lessee's account, its storage of Lessee's personal property and trade
fixtures, its acceptance of keys to the Premises from Lessee or its exercise
of any other rights and remedies under this Section, shall constitute an
acceptance of Lessee's surrender of the Premises or constitute a termination
of this Lease or of Lessee's right to possession of the Premises.
13
Upon such termination in writing of Lessee's right to possession of the
Premises, as herein provided, this Lease shall terminate and Lessor shall be
entitled to recover damages from Lessee for such breach, including but not
limited to the following;
(A) The reasonable cost of recovering the Premises; plus
(B) The reasonable cost of removing Lessee's Alterations, trade
fixtures and non-Lessor-approved improvements; plus
(C) All unpaid rent due or earned hereunder prior to the date of
termination less the proceeds of any reletting or any rental received from
subtenants prior to the date of termination applied as provided in
subsection (ii) below, together with interest at the rate of ten
percent(10%) per annum, on such sums from the date such rent is due and
payable until the date of the reward of damages; plus
(D) The amount by which the rent which would be payable by
Lessee hereunder, including Lessee" share of increases in operating costs
and taxes, as reasonably estimated by lessor, form the date of termination
until the date of the award of damages exceeds the amount of such rental
loss as Lessee proves could have been reasonably avoided together with
interest at the rate of ten percent(10%) per annum on such sums from the
date such rent is due and payable until the date of the award of damages;
plus
(E) The amount by which the rent which would be payable by Lessee
hereunder, including Lessee" share of increases in operating costs and
taxes, as reasonably estimated by Lessor, for the remainder of the term,
including any extensions thereof, after the date of the award of damages
exceeds the amount of such rental loss as lessee proves could have been
reasonably avoided, discounted at the discount rate published by the Federal
Reserve Bank of Atlanta for member banks at the time of the award plus one
percent(1%); plus
(F) Such other amounts in addition to or in lieu of the foregoing
as may be permitted from time to time by applicable law.
(ii) Lessor may continue this Lease in full force and effect
and may enforce all its rights and remedies under this lease, including, but
not limited to, the right to recover rent as it becomes due. During the
continuance of an event of default, Lessor may enter the Premises without
terminating this Lease and sublet all or any part of the Premises for
Lessee's account any person, for such term (which may be a period beyond the
remaining term of this Lease), at such rents and on such other term(which
may be a period beyond the remaining term of this Lease), at such rents and
on such other terms and conditions as Lessor deems advisable. In the event
of any such subletting, rents received by Lessor from such subletting shall
be applied (A)first, to the payment of the costs of maintaining, preserving,
altering and preparing the Premises for subletting and other costs of
subletting, including but not limited to brokers' commissions, attorneys'
fees and expenses of removal of Lessee's personal property, Alterations,
trade fixtures and non-Lessor-approved improvements; (B)second, to the
payment of rent then due and payable; (C)third, to the payment of future
rent as the same may become due and payable hereunder, and (D) fourth, the
balance, if any, shall be paid to Lessee upon(but not before) expiration of
the term of this Lease. If the rents received by Lessor from such
subletting, after application as provided above, are insufficient in any
month to pay the rent due and payable hereunder for such month, Lessee
shall pay such deficiency to
40
Lessor monthly upon demand. Notwithstanding any such subletting for
lessee's account without termination, Lessor may at any time thereafter, by
written notice to Lessee, elect to terminate this Lease by virtue of a
previous event of default.
Upon any event of default, for so long as Lessor does not terminate Lessee's
right to possession of the Premises and subject to Section 19 "Assignment
and Subletting" above, Lessor shall not unreasonably withhold its consent to
an assignment or sublease of Lessee's interest in the Premises or in this
Lease.
(iii) During the continuance of an event of default, Lessor
may enter the Premises without terminating this Lease and remove all
Lessee's personal property, Alterations, trade fixtures and non-Lessor
approved improvements from the Premises. If Lessor removes such property
from the Premises and stores it at Lessee's risk and expense, and if Lessee
fails to pay the cost of such removal and storage after written demand
therefor and/or to pay any rent then due, after the property has been stored
for a period of thirty (30) days or more, Lessor may sell such property at
public or private sale, in the manner and at such times and places as Lessor
in its sole discretion deems commercially reasonable following reasonable
notice to Lessee of the time and place of such sale. The proceeds of any
such sale shall be applied first to the payment of the expenses for removal
and storage of the property, preparation for and conducting such sale, and
attorneys' fees and other legal expenses incurred by Lessor in connection
therewith, and the balance shall be applied as provided in subsection (ii)
above.
Lessee hereby waives all claims for damages that may be caused by Lessor's
reentering and taking possession of the Premises or removing and storing
Lessee's personal property pursuant to this section, and Lessee shall hold
Lessor harmless from and against any loss, cost or damage resulting from any
such act. No reentry by Lessor shall constitute or be construed as a
forcible entry by Lessor.
(iv) Lessor may require Lessee to remove any and all
Alterations and non-Lessor-approved improvements from the Premises or, if
Lessee fails to do so within ten(10) days after Lessor's request, Lessor may
do so at Lessee's expense.
(v) Lessor may cure the event of default at Lessor's expense.
If Lessor pays any sum or incurs any expenses in curing the event of
default, Lessee shall reimburse Lessor upon demand for the amount of such
payment or expense with interest at the rate of ten(10%) percent per annum
from the date the sum is paid or the expense is incurred until Lessor is
reimbursed by Lessee. Any amount due Lessor under this subsection shall
constitute additional rent.
24. HAZARDOUS MATERIALS
(a) Lessee's Representations. Lessee shall not use, generate,
manufacture, produce, store, release, discharge, or dispose of, on, under or
about the Premises, or transport to or from the Premises, any hazardous
Materials or allow its employees, agents, contractors, invitees or any other
person or entity to do so except in full compliance with all Federal, state
and local laws, regulations and ordinances. Lessee covenants and agrees to
provide Lessor with a list of all Hazardous materials or allow its
employees, agents, contractors, invitees or any other person or entity to do
so except in full compliance with all Federal, state and local laws,
regulations and ordinances. Lessee covenants and agrees to provide Lessor
with a list of all Hazardous Materials and the quantities there of which
Lessee uses, generates, stores or otherwise has present at the Premises
during the term of this Lease, updated throughout the term of this lease at
such times as Lessee is required to update such list to the fire department,
but in no case less frequently than annually. The term "Hazardous
Materials" shall include without limitation:
(i) Those substances included within the definitions of
"hazardous substances", "hazardous materials", "toxic
substances", or "solid waste" under XXXXXX, XXXX,
00
and the Hazardous Materials transportation Act, 49 U.S.C. section 1801, et
seq., and in the regulations promulgated pursuant to said laws;
(ii) Those substances defined as "hazardous wastes" in section
25117 of the California Health & Safety Code, or as :hazardous substances"
in Section 25316 of the California Health & Safety Code, and in the
regulations promulgated pursuant to said laws;
(iii) Those substances listed in the United States Department
of Transportation Table(49 CFR 172.101 and amendments thereto) or designated
by the Environmental Protection Agency Or any successor agency) as hazardous
substances (see, e.g., 40 CFR Part 302 and amendments thereto);
(iv) Such other substances, materials and wastes which are or become
regulated under applicable local, state or federal law, or the United States
government, or which are or become classified as hazardous or toxic under
federal, state, or local laws or regulations; and
(v) Any material, waste or substance which is (a) petroleum (b)asbestos,
(c)polychlorinated biphenyl's, (d) designated as a "hazardous substance"
pursuant to or listed pursuant to Section 307 of the Clean Water Act of 1977
(33 U.S.C. '1317),(e) flammable explosives, or (f) radioactive materials.
In addition to the foregoing, Lessee further agrees that without Lessor's
prior written consent Which may be given or withheld in Lessor's sole
discretion, only items approved by the appropriate governmental agencies is
permitted to be put into the drains of the Premises. UNDER NO CIRCUMSTANCES
SHALL LESSEE EVER DEPOSIT ANY ESTERS OR KETONES (USUALLY FOUND IN SOLVENTS
USED TO CLEAN UP PETROLEUM PRODUCTS) IN THE DRAINS AT THE PREMISES.
Regardless of whether Lessor approves of Lessee's use, storage or disposal
of Hazardous Materials, Lessee shall be liable to Lessor for and indemnify
and hold Lessor harmless against all damages (including attorney's fees,
investigation and remedial costs), liabilities and claims arising out of
Lessee's activities associated with Hazardous Materials, including all costs
and expenses incurred by Lessor in repairing or replacing, but not limited
to , the piping so damaged, to the extent such damages, liabilities and
claims arise out of Lessee's activities associated with Hazardous
Substances. In the event Lessee's activities with Hazardous Materials
create a contamination problem on or adjacent to the Premises, Lessee shall
promptly commence investigation and remedial activities to fully cleanup the
problem. If appropriate or required by law, these activities shall be
conducted in conjunction with Federal, state and local oversight and
approvals.
Upon reasonable prior notice to Lessee, Lessor may survey the Premises on a
periodic basis for agency compliance, including a review of current permits.
(b) Lessor has provided Lessee with copies of the following
documents(all of which are hereinafter referred to as the "Environmental
Studies"):
* Dames & Xxxxx Interim Report-Environmental Baseline Survey-
GE/Xxxxxx-Santa Clara, California, dated November 2, 1988.
* Dames & Xxxxx Environmental Baseline Investigation-Results of
Task V-GE/Xxxxxx-Santa Clara, California, dated January 31, 1989.
* Dames & xxxxx XX/Xxxxxx-Environmental Baseline Survey-Task VII-
Final Summary Report- Santa Clara, California, dated October 12, 1990.
16
* Sampling Report for Characterization Sampling of the Xxxxxx
Semiconductor Building, 0000 Xxxxx Xxxx., Xxxxx Xxxxx, Xxxxxxxxxx, prepared
by Peregren Environmental Group, dated December 19, 1991.
* Closure Report for Xxxxxx Semiconductor, Santa Clara,
California, prepared by Peregren Environmental Group, dated July 17, 1995.
* Letter to Xxxxxx Semiconductor from the City of Santa Clara,
California, confirming partial closure of the 0000 Xxxxx Xxxx., Xxxxx Xxxxx,
Xxxxxxxxxx facility dated December 16, 1993.
Lessor shall indemnify and hold Lessee harmless against all
damages(including attorney's fees, investigation and remedial costs),
liabilities and claims arising out of the presence of Hazardous Materials on
the Premises which are disclosed in the Environmental Studies or otherwise
existing on the Premises as of the execution of this Lease, or which become
located on the Premises(through the migration of plumes or otherwise)
through no fault or act of Lessee during the term of the lease.
Lessee has contracted for Phase I and Phase II due diligence assessments of
the Premises. In the event that the results of such assessments are not
reasonably satisfactory to Lessee, Lessee shall have the right to terminate
this Agreement within fifteen(15) days of receipt thereof. In the event
that Lessee so terminates this Agreement, Lessor's liability to pay the
Tenant Improvement Allowance is limited to no more than $250,000.
25. ATTORNEY'S FEES-In case suit should be brought for recovery of the
Premise, or for any sum due hereunder, for the enforcement or interpretation
of any of the terms or conditions of this Lease, or because of any act which
may arise out of the possession of the Premises, by either party, the
prevailing party shall be entitled to all costs incurred in connection with
such action, including a reasonable attorney's fee.
26. WAIVER-No failure of Lessor to enforce any terms hereof shall be deemed
to be a waiver.
27. HOLDING OVER-Any holding over after the expiration of this Lease, with
the consent of Lessor, shall be construed as a month-to month tenancy for no
more than three (3) months at a monthly rent of $2.00 per square foot.
Lessee shall have no right to hold over beyond such three months and Lessor
shall have the right to bring an action for immediate eviction in the event
that Lessee attempts to hold over beyond that period.
28. SUCCESSORS AND ASSIGNS-The covenants and conditions herein contained
shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of all of the
parties hereto; and all of the administrators and assigns of all of the
parties hereto; and all of the parties hereto shall be jointly and severally
liable hereunder.
29. TIME-Time is of the essence of this Lease.
30. CAPTION-The captions of the sections of this Lease are for convenience
only and are not a part of this Lease and do not in any way limit or amplify
the terms and provisions of this Lease.
31. GOVERNING LAW-This Lease shall be governed by and construed in
accordance with the laws of the State of California.
32. ENTIRE AGREEMENT-This Lease contains all of the terms, covenants and
conditions agreed to by Lessor and Lessee and it may not be modified orally
or in any manner other than by an agreement in writing signed by all of the
parties to this Lease or their respective successors in interest.
17
33. PARTIAL INVALIDITY-The unenforceablility, invalidity or illegality of
any provision(s) of this Lease shall not render the other provisions
unenforceable, invalid or illegal.
34. SIGNS-Lessee may install suitable signage on the Premises provided such
signage meets all appropriate signage codes. At end of this Lease and any
extensions hereof, Lessee shall remove all site and exterior building signs,
as Lessor may request.
35. BROKERAGE COMMISSION-Lessor shall pay commission in the amount of
$234,514.00 to its broker, Xxxxx Xxxxxx Associates, pursuant to the terms
and conditions of its Exclusive Listing Agreement. Lessee's broker, BT
Commercial Real Estate, shall look to Xxxxxx Xxxxxx Associates for its
commission payment.
36. BUILDING SECURITY-No building security will be supplied by Lessor.
37. ABANDONMENT OF PREMISES-Lessee shall not abandon the Premises at any
time during the term hereof, and if Lessee shall abandon the Premises, or be
dispossessed by process of law, or otherwise, any personal property
belonging to Lessee left upon the Premises shall be deemed to be abandoned,
at the option of Lessor.
38. LESSOR'S LIABILITY-The term "Lessor," as used in this section, shall
mean only the owner of the real property or a Lessee's interest in a ground
lease of the Premises. In the event of any transfer of such title or
interest, Lessor named herein (or the grantor in case of any subsequent
transfers) shall be relieved of all liability related to Lessor's
obligations to be performed after such transfer, provided, however, that any
of Lessee's funds in the hands of Lessor or Grantor at the time of such
transfer shall be delivered to Grantee and that Grantee shall have assumed
in writing all of Lessor's obligations under the Lease. Lessor's aforesaid
obligations shall be binding upon Lessor's successors and assigns only
during their respective periods of ownership.
39. NOTICES-Any notice, demand, request, consent, approval or communication
that either party desires or is required to give to the other party under
this Lease shall be in writing and shall be served personally, delivered by
independent messenger or nationally recognized overnight courier service, or
sent by U.S. certified mail, return receipt requested, postage prepaid,
addressed to the other party at the address set forth below;
Prior to Commencement Date
To Lessee: Synergy Semiconductor Corporation
Point of Contact: 0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx
After Commencement Date
To Lessee: Synergy Semiconductor Corporation
Point of Contact: 0000 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attn: Xx. Xxxx Xxxxxxx
To Lessor: Director of Facilities Management
Xxxxxx Corporation
0000 X. XXXX Xxxx.
Xxxxxxxxx, XX 00000
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Notice shall be deemed given on the date of personal delivery, the next day
after being sent via nationally recognized overnight courier, and three(3)
days after being sent via certified mail, return receipt requested.
40. OPTION TO EXTEND
(a) Extended Terms. In consideration of Lessee entering into the
Lease, and provided that Lessee is not then in default, Lessor hereby grants
to Lessee the option to extend the term of the Lease for one(1) additional
term of (5)years(the "Extended Term"). Lessee shall give written notice to
Lessor of Lessee's intent to exercise such option to extend at least one
hundred eighty(180) days prior to the expiration of the term of this Lease.
The Extended Term shall be upon the same covenants, agreements, terms,
provisions and conditions as are contained in the Lease, except the rent
payable shall be as provided in Section 40(b) below. If Lessee has
exercised this option to extend, the phrase "Lease Term" as used in the
Lease shall mean the original term of the Lease and the Extended term.
(b) Rent for Extended Term. The Base Rent for each year of the
Extended Term shall be at 95% of the then prevailing market rental rate, but
in no case shall the Base Rent be Less than the base rent for the rental
period just prior. Base Rent during the Extended Term shall increase
annually at each anniversary date of this Lease by two and one-half
percentage points(2 1/2%). There shall be no additional rent for the
Extended Term. The prevailing market rental value shall be determined as
follows;
(i) Lessor shall deliver to Lessee written notice of Lessor's
determination of prevailing market rental value within fifteen(15) business
days after Lessor receives notice from Lessee that Lessee has exercised its
option to extend.
(ii) If Lessee disputed Lessor's determination of the prevailing
market rental value as contained in Lessor's notice, Lessee shall notify
Lessor in writing within fifteen(15) business days of its receipt of Lessor'
determination, which notice shall set forth Lessee's determination of the
prevailing market rental value. Should Lessee timely notify Lessor as
aforesaid, Lessor and Lessee shall attempt to resolve their differences
within fifteen(15) business days following Lessor's receipt of Lessee's
notice.
(iii) If Lessor and Lessee cannot agree on the prevailing market
rental value during such fifteen(15) business day period, Lessor and Lessee
shall each appoint as county in which the Premises are located and give
notice of such appointment to the other within fifteen(15) business days
after the foregoing fifteen(15) business day period. If either Lessor or
Lessee shall fail timely to appoint an appraise, then the single appraiser
appointed by one party within fifteen(15) business days after the
appointment of the last of them to be appointed, complete their written
determinations of prevailing market rental value and furnish the same to
Lessor and Lessee. Each party shall pay the fees and costs of the appraiser
appointed by it. The prevailing market rental value shall be the average of
the two valuations.
(iv) For purposes of this Section 40, the prevailing market rental
value of the Premises shall mean the rental rate that an unrelated party
negotiating at arm's length would pay for leasing the Premises for the
period of the Extended Term, taking into account all then current market
factors, including without limitation rent for like properties over the past
six(6) months, the availability of like space on the then-current market,
the quality, design, and location of the Building and the Premises within
the Building, the terms and conditions of the Lease(including the permitted
use provided in the Lease) and the value of the existing tenant improvements
to such party(but excluding the value of any improvements installed at
Lessee's expense) and also excluding any premium based on the size of the
Premises.
(v) Upon determination of the prevailing market rental value of the
Premises (and the calculation of Base Rent pursuant to subsection (I) above)
for the Extended Term, Lessee shall have the
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right to withdraw its exercise of its option to extend by giving Lessor
notice of withdrawal within five(5) days of Lessee's receipt of notice of
the determination. In the event Lessee does withdraw its option exercise,
Lessee shall pay all appraisal fees incurred by Lessor and Lessee in
determining the prevailing market rental value. In the event Lessee does
not withdraw its option exercise, then upon determination of the Base Rent
for the extension period as described above, the parties shall execute a
certificate specifying the Base Rent for such extension period.
41. COVENANT OF QUIET ENJOYMENT-So long as Lessee pays all rentals required
hereunder and observes and performs all of the covenants, conditions and
provisions on Lessee's part to be observed and performed hereunder, Lessee
shall have quiet possession of the Premises for the entire Lease Term,
subject to all the provisions of the Lease. Nonetheless, Lessor shall not
be barred from bringing any valid action under this Lease. Any lawsuit
brought by Lessor to enforce the terms of this Lease or seeking a
declaration of Lessor's rights pursuant to this Lease shall not be deemed a
violation of this section.
42. MEMORANDUM OF LEASE-Lessee may record a short form memorandum of the
Lease, subject to the prior written consent of Lessor as to form and
content, which consent shall not be unreasonably withheld.
43. SURVIVAL OF CERTAIN OBLIGATIONS-Sections 13, 14 and 24 of this Lease
shall survive the termination or expiration of this Lease.
44. AUTHORITY-Lessee and Lessor warrant and represent that their respective
representatives executing this Lease each have the full power and authority
to execute this Lease on be half of Lessee and Lessor, respectively, and
that this Lease, once executed by the signatory of Lessee or Lessor, as the
case may be, shall constitute a legal and binding obligation of that party
and is fully enforceable in accordance with its terms.
45. MODIFICATION-This Lease may not be modified or amended except by a
written instrument executed by both parties.
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