EXHIBIT 10.6
LEASE
THIS LEASE IS MADE ON THE TENTH DAY OF MAY, 1990, BY AND BETWEEN LOS GATOS
BUSINESS PARK, A CALIFORNIA LIMITED PARTNERSHIP (HEREINAFTER CALLED "LESSOR"),
AND TRANSCRIPTION ENTERPRISES, LIMITED, A CALIFORNIA CORPORATION (HEREINAFTER
CALLED "LESSEE").
IN CONSIDERATION OF THE MUTUAL PROMISES HEREIN CONTAINED, THE PARTIES AGREE AS
FOLLOWS:
1. Premises. Lessor leases to Lessee, and Lessee leases from Lessor, upon the
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terms and conditions herein set forth, those certain Premises ("Premises")
situated in the City of Los Gatos, County of Santa Clara, California, as
outlined in Exhibit "A" attached hereto and described as follows:
approximately 2,394 square feet of a larger 22,272 square foot building
located at 000 Xxxxxxxx Xxx, Xxx Xxxxx, Xxxxxxxxxx.
2. Term. The term of this Lease shall be for three (3) years, commencing on
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August 1, 1990, and ending on July 31, 1993, unless sooner terminated
pursuant to any provision hereof.
3. Rent. Lessee shall pay to Lessor rent for the Premises of Two Thousand,
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Eight Hundred Seventy-Three and 00/100 Dollars ($2,873.00) per month in
lawful money of the United States of America. Rent shall be paid without
deduction or offset, prior notice, or demand, at such place as may be
designated from time to time by Lessor as follows: $2,873.00 shall be paid
upon execution of the Lease, which sum represents the amount of the first
month's rent. If Lessee is not in default of any provision of this Lease,
this sum, without interest thereon, shall be applied toward the rent due
for the last month of the term of this Lease or the extended term, pursuant
to any extension of the initial term in accordance with the provisions of
this Lease. Pursuant to Paragraph 5 of this Lease Agreement, a deposit of
$2,490 shall be made by Lessee and held by Lessor. The deposit shall be
paid upon execution of the Lease. $2,873.00 shall be paid on August 1,
1990, and in advance on the first (1st) day of each succeeding calendar
month until July 31, 1993. Rent for any period during the term hereof which
is for less than one (1) full month shall be a pro-rata portion of the
monthly rent payment. Lessee acknowledges that late payment by Lessee to
Lessor of rent or any other payment due Lessor will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Lessor by the terms of any encumbrance and note secured by any
encumbrance covering the Premises. Therefore, if any installment of rent or
other payment due from Lessee is not received by Lessor within five (5)
days following the date it is due and payable, Lessee shall pay to Lessor
an additional sum of ten percent (10%) of the overdue amount as a late
charge. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Lessor will incur by reason of late
payment by Lessee. Acceptance of any late charge shall not constitute a
waiver of Lessee's default with respect to the overdue amount, nor prevent
Lessor from exercising any of the other rights and remedies available to
Lessor.
If, for any reason whatsoever, Lessor cannot deliver possession of the
Premises on the commencement date set forth in Paragraph 2 above, this
Lease shall not be void or voidable, nor shall Lessor be liable to Lessee
for any loss or damage resulting therefrom; but in such event,
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Lessee shall not be obligated to pay rent until possession of the Premises
is tendered to Lessee and the commencement and termination dates of this
Lease shall be revised to conform to the date of Lessor's delivery of
possession. In the event that Lessor shall permit Lessee to occupy the
Premises prior to the commencement date of the term, such occupancy shall
be subject to all of the provisions of this Lease, including the obligation
to pay rent at the same monthly rate as that prescribed for the first month
of the Lease term.
4. Option to Extend Term. In no event shall the monthly rent for any extended
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term be less than the monthly rent paid immediately prior to such extended
term.
5. Security Deposit. Lessor acknowledges that Lessee has deposited with
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Lessor a Security Deposit in the sum of Two Thousand, Eight Hundred
Seventy-Three and 00/100 Dollars ($2,490.00) to secure the full and
faithful performance by Lessee of each term, covenant, and condition of
this Lease. If Lessee shall at any time fail to make any payment or fail to
keep or perform any term, covenant, or condition on its part to be made or
performed or kept under this Lease, Lessor may, but shall not be obligated
to and without waiving or releasing Lessee from any obligation under this
Lease, use, apply, or retain the whole or any part of said Security Deposit
(a) to the extent of any sum due to Lessor; or (b) to compensate Lessor for
any loss, damage, attorneys' fees or expense sustained by Lessor due to
Lessee's default. In such event, Lessee shall, within five (5) days of
written demand by Lessor, remit to Lessor sufficient funds to restore the
Security Deposit to its original sum. No interest shall accrue on the
Security Deposit. Should Lessee comply with all the terms, covenants, and
conditions of this Lease and, at the end of the term of this Lease, leave
the Premises in the condition required by this Lease, then said Security
Deposit or any balance thereof, less any sums owing to Lessor, shall be
returned to Lessee within fifteen (15) days after the termination of this
Lease and vacancy of the Premises by Lessee. Lessor can maintain the
Security Deposit separate and apart from Lessor's general funds, or can
co-mingle the Security Deposit with the Lessor's general and other funds.
6. Use of the Premises. The Premises shall be used exclusively for the purpose
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of computer software marketing and engineering normal and customary to the
industry.
Lessee shall not use or permit the Premises, or any part thereof, to
be used for any purpose or purposes other than the purpose for which the
Premises are hereby leased; and no use shall be made or permitted to be
made of the Premises, nor acts done, which will increase the existing rate
of insurance upon the building in which the Premises are located, or cause
a cancellation of any insurance policy covering said building, or any part
thereof, nor shall Lessee sell or permit to be kept, used, or sold, in or
about the Premises, any article which may be prohibited by the standard
form of fire insurance policies. Lessee shall not commit or suffer to be
committed any waste upon the Premises or any public or private nuisance or
other act or thing which may disturb the quiet enjoyment of any other
tenant in the building in which the Premises are located; nor, without
limiting the generality of the foregoing, shall Lessee allow the Premises
to be used for any improper, immoral, unlawful, or objectionable purpose.
Lessee shall not place any harmful liquids in the drainage system of
the Premises or of the building of which the Premises form a part. No waste
materials or refuse shall be dumped upon or permitted to remain upon any
part of the Premises outside of the building proper except in trash
containers placed inside exterior enclosures designated for that purpose by
Lessor, or inside the building proper where designated by Lessor. No
materials, supplies, equipment, finished or semi-finished products, raw
materials, or articles of any nature shall be stored upon or permitted to
remain on any portion of the Premises outside of the building proper.
Lessee shall
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comply with all the covenants, conditions, and/or restrictions ("C.C. &
R.'s") affecting the Premises.
Lessee shall abide by all laws, ordinances, and statutes, as they now
exist or may hereafter be enacted by legislative bodies having jurisdiction
thereof, relating to its use and occupancy of the Premises.
7. Taxes and Assessments.
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A. Lessee shall pay before delinquency any and all taxes, assessments,
license fees, and public charges levied, assessed, or imposed upon or
against Lessee's fixtures, equipment, furnishings, furniture,
appliances, and personal property installed or located on or within
the Premises. Lessee shall cause said fixtures, equipment,
furnishings, furniture, appliances, and personal property to be
assessed and billed separately from the real property of Lessor. If
any of Lessee's said personal property shall be assessed with Lessor's
real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement from
Lessor setting forth the taxes applicable to Lessee's property.
B. All property taxes or assessments levied or assessed or hereafter
levied or assessed by any governmental authority against the Premises
or any portion of such taxes or assessments which becomes due or
accrued during the term of this Lease shall be paid by Lessor. Lessee
shall reimburse Lessor for Lessee's proportionate share of such taxes
or assessments within ten (10) days of receipt of Lessor's invoice
demanding such payment. Lessee's liability hereunder shall be prorated
to reflect the commencement and termination dates of this Lease.
8. Insurance.
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A. Indemnity. Lessee agrees to indemnify and defend Lessor against and
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hold Lessor harmless from any and all demands, claims, causes of
action, judgments, obligations, or liabilities, and all reasonable
expenses incurred in investigating or resisting the same (including
reasonable attorneys' fees) on account of, or arising out of, the
condition, use, or occupancy of the Premises. This Lease is made on
the express condition that Lessor shall not be liable for, or suffer
loss by reason of, injury to person or property, from whatever cause,
in any way connected with the condition, use, or occupancy of the
Premises, specifically including, without limitation, any liability
for injury to the person or property of Lessee, its agents, officers,
employees, licensees, and invitees.
B. Liability Insurance. Lessee shall, at its expense, obtain and keep in
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force during the term of this Lease a policy of comprehensive public
liability insurance insuring Lessor and Lessee, with cross-liability
endorsements, against any liability arising out of the condition, use,
or occupancy of the Premises and all areas appurtenant thereto,
including parking areas. Such insurance shall be in an amount
satisfactory to Lessor of not less than one million dollars
($1,000,000) for bodily injury or death as a result of one occurrence,
and five hundred thousand dollars ($500,000) for damage to property as
a result of any one occurrence. The insurance shall be with companies
approved by Lessor, which approval Lessor agrees not to withhold
unreasonably. Prior to possession, Lessee shall deliver to Lessor a
certificate of insurance evidencing the existence of the policy which
(1) names
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Lessor an additional insured, (2) shall not be canceled or altered
without thirty (30) days' prior written notice to Lessor, (3) insures
performance of the indemnity set forth in Section A of Paragraph 9,
and (4) coverage is primary and any coverage by Lessor is in excess
thereto.
C. Property Insurance. Lessor shall obtain and keep in force during the
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term of this Lease a policy or policies of insurance (including
earthquake and flood coverage) covering loss or damage to the
Premises, in the amount of the full replacement value thereof. Lessee
shall pay to Lessor its pro-rata share of the cost of said insurance
within ten (10) days of Lessee's receipt of Lessor's invoice demanding
such payment.
D. Lessee hereby releases Lessor, and its partners, officers, agents,
employees, and servants, from any and all claims, demands, loss,
expense, or injury to the Premises or to the furnishings, fixtures,
equipment, inventory, or other property of Lessee in, about, or upon
the Premises, which is caused by or results from perils, events, or
happenings which are the subject of insurance in force at the time of
such loss.
9. Utilities. Lessee shall pay for all water, gas, light, heat, power,
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electricity, telephone, trash removal, landscaping, sewer charges, and all
other services, including normal and customary property management fees,
supplied to or consumed on the Premises. In the event that any such
services are billed directly to Lessor, then Lessee shall reimburse Lessor
for such expenses within ten (10) days of Lessee's receipt of Lessor's
invoice demanding payment.
10. Repairs and Maintenance.
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A. Subject to provisions of Paragraph 15, Lessor shall keep and maintain
the roof, paving, structural elements, landscaping, irrigation, and
exterior walls of the building in which the Premises are located in
good order and repair. Lessee shall reimburse Lessor for its
proportionate share of said expenses within ten (10) days of Lessee's
receipt of Lessor's invoice demanding payment. If, however, any
repairs or maintenance is required because of an act or omission of
Lessee or its agents, employees, or invitees, Lessee shall pay to
Lessor upon demand one hundred percent (100%) of the costs of such
repair and maintenance.
B. Except as expressly provided in Subparagraph A above, Lessee shall, at
its sole cost, keep and maintain the entire Premises and every part
thereof, including, without limitation, the windows, window frames,
plate glass, glazing, truck doors, doors, all door hardware, interior
of the Premises, interior walls and partitions, and the electrical,
plumbing, lighting, heating, and air conditioning systems in good and
sanitary order, condition, and repair. Lessee shall, at its own
expense, for the duration of this Lease, retain a service company,
approved by Lessor, to provide routine maintenance and repairs of the
heating, ventilation, and air conditioning systems.
Should Lessee fail to maintain the Premises or make repairs
required of Lessee hereunder forthwith upon notice from Lessor,
Lessor, in addition to all other remedies available hereunder or by
law, and without waiving any alternative remedies, may make the same,
and in that event, Lessee shall reimburse Lessor as additional rent
for the cost of such maintenance or repairs on the next date upon
which rent becomes due. Lessee hereby expressly waives the provision
of Subsection 1 of Section 1932, and Sections 1941
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and 1942 of the Civil Code of California and all rights to make
repairs at the expense of Lessor, as provided in Section 1942 of said
Civil Code.
11. Alterations and Additions. Lessee shall not make, or suffer to be made, any
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alterations, improvements, or additions in, on, or about, or to the
Premises or any part thereof, without prior written consent of Lessor and
without a valid building permit issued by the appropriate governmental
authority. Lessor retains, at his sole option, the right to perform all
repairs, alterations, improvements, or additions in, on, about, or to said
Premises or any part thereof. As a condition to giving such consent, Lessor
may require that Lessee agree to remove any such alterations, improvements,
or additions at the termination of this Lease, and to restore the Premises
to their prior condition. Any alteration, addition, or improvement to the
Premises, shall become the property of Lessor upon installation, and shall
remain upon and be surrendered with the Premises at the termination of this
Lease. Lessor can elect, however, within thirty (30) days before expiration
of the term or within five (5) days after termination of the term, to
require Lessee to remove any alterations, additions, or improvements that
Lessee has made to the Premises. If Lessor so elects, Lessee shall restore
the Premises to the condition designated by Lessor in its election, before
the last day of the term, or within thirty (30) days after notice of
election is given, whichever is later. Alterations and additions which are
not to be deemed as trade fixtures including heating, lighting, electrical
systems, air conditioning, partitioning, electrical signs, carpeting, or
any other installation which has become an integral part of the Premises.
In the event that Lessor consents to Lessee's making any alterations,
improvements, or additions, Lessee shall be responsible for the timely
posting of notices of non-responsibility on Lessor's behalf, which shall
remain posted until completion of the alterations, additions, or
improvements. Lessee's failure to post notices of non-responsibility as
required hereunder shall be a breach of this Lease.
If, during the term hereof, any alteration, addition, or change of any
sort through all or any portion of the Premises or of the building of which
the Premises form a part, is required by law, regulation, ordinance, or
order of any public agency, Lessee, at its sole cost and expense, shall
promptly make the same.
12. Acceptance of the Premises and Covenant to Surrender. By entry and taking
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possession of the Premises pursuant to this Lease, Lessee accepts the
Premises as being in good and sanitary order, condition, and repair, and
accepts the Premises in their condition existing as of date of such entry,
and Lessee further accepts any tenant improvements to be constructed by
Lessor, if any, as being completed in accordance with the plans and
specifications for such improvements.
Lessee agrees on the last day of the term hereof, or on sooner
termination of this Lease, to surrender the Premises, together with all
alterations, additions, and improvements which may have been made in, to,
or on the Premises by Lessor or Lessee, unto Lessor in good and sanitary
order, condition, and repair, excepting for such wear and tear as would be
normal for the period of the Lessee's occupancy. Lessee, on or before the
end of the term or sooner termination of this Lease, shall remove all its
personal property and trade fixtures from the Premises, and all property
not so removed shall be deemed abandoned by Lessee. Lessee further agrees
that at the end of the term or sooner termination of this Lease, Lessee, at
its sole expense, shall have the carpets steam cleaned, the walls and
columns painted, the flooring waxed, any damaged ceiling tile replaced, the
windows cleaned, the drapes cleaned, and any damaged doors replaced.
If the Premises are not surrendered at the end of the term or sooner
termination of this Lease, Lessee shall indemnify Lessor against loss or
liability resulting from delay by Lessee in
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so surrendering the Premises, including, without limitation, any claims
made by any succeeding tenant founded on such delay.
13. Default. In the event of any breach of this Lease by the Lessee, or an
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abandonment of the Premises by the Lessee, the Lessor has the option of
(1.) removing all persons and property from the Premises and repossessing
the Premises, in which case any of the Lessee's property which the Lessor
removes from the Premises may be stored in a public warehouse or elsewhere
at the cost of, and for the account of, Lessee; or (2.) allowing the Lessee
to remain in full possession and control of the Premises. If the Lessor
chooses to repossess the Premises, the Lease will automatically terminate
in accordance with the provisions of the California Civil Code, Section
1951.2. In the event of such termination of the Lease, the Lessor may
recover from the Lessee: (1.) the worth at the time of award of the unpaid
rent which had been earned at the time of termination, including interest
at the maximum rate an individual is permitted by law to charge; (2.) the
worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds
the amount of such rental loss that the Lessee proves could have been
reasonably avoided, including interest at the maximum rate an individual is
permitted by law to charge; (3.) 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 such rental loss that the Lessee proves
could be reasonably avoided; and (4.) any other amount necessary to
compensate the Lessor for all the detriment proximately caused by the
Lessee's failure to perform his obligations under the Lease or which, in
the ordinary course of things, would be likely to result therefrom. "The
worth at the time of award," as used in (1.) and (2.) of this Paragraph, is
to be computed by allowing interest at the maximum rate an individual is
permitted by law to charge. "The worth at the time of award," as used in
(3.) of this Paragraph, is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of
award, plus one percent (1%).
If the Lessor chooses not to repossess the Premises, but allows the
Lessee to remain in full possession and control of the Premises, then, in
accordance with provisions of the California Civil Code, Section 1951.4,
the Lessor may treat the Lease as being in full force and effect, and may
collect from the Lessee all rents as they become due through the
termination date of the Lease, as specified in the Lease. For the purpose
of this paragraph, the following do not constitute a termination of
Lessee's right to possession: (1.) acts of maintenance or preservation, or
efforts to relet the property; (2.) the appointment of a receiver on the
initiative of the Lessor to protect his interest under this Lease.
Lessee shall be liable immediately to Lessor for all costs Lessor
incurs in reletting the Premises, including, without limitation, brokers'
commissions, expenses of remodeling the Premises required by the reletting,
and like costs. Reletting can be for a period shorter or longer than the
remaining term of this Lease. Lessee shall pay to Lessor the rent due under
this Lease on the dates the rent is due, less the rent Lessor receives from
any reletting. No act by Lessor allowed by this Section shall terminate
this Lease unless Lessor notifies Lessee that Lessor elects to terminate
this Lease. After Lessee's default and for as long as Lessor does not
terminate Lessee's right to possession of the Premises, if Lessee obtains
Lessor's consent, Lessee shall have the right to assign of sublet its
interest in this Lease, but Lessee shall not be released from liability.
Lessor's consent to a proposed assignment or subletting shall not be
unreasonably withheld.
If Lessor elects to relet the Premises as provided in this Paragraph,
rent that Lessor receives from reletting shall be applied to the payment
of: (1.) any indebtedness from Lessee to Lessor other than rent due from
Lessee; (2.) all costs, including for maintenance, incurred by
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Lessor in reletting; (3.) rent due and unpaid under this Lease. After
deducting the payments referred to in this Paragraph, any sum remaining
from the rent Lessor receives from reletting shall be held by Lessor and
applied in payment of future rent as rent becomes due under this Lease. In
no event shall Lessee by entitled to any excess rent received by Lessor.
If, on the date rent is due under this Lease, the rent received from
reletting is less than the rent due on that date, Lessee shall pay to
Lessor, in addition to the remaining rent due, all costs, including for
maintenance, Lessor incurred in reletting that remain after applying the
rent received from the reletting, as provided in this Paragraph.
Lessor, at any time after Lessee commits a default, can cure the
default at Lessee's cost. If Lessor at any time, by reason of Lessee's
default, pays any sum or does any act that requires the payment of any sum,
the sum paid by Lessor shall be due immediately from Lessee to Lessor at
the time the sum is paid, and if paid at a later date shall bear interest
at the maximum rate an individual is permitted by law to charge form the
date the sum is paid by Lessor until Lessor is reimbursed by Lessee. The
sum, together with interest on it, shall be additional rent.
Rent not paid when due shall bear interest at the maximum rate an
individual is permitted by law to charge from the date due until paid.
14. Destruction. In the event the Premises are destroyed in whole or in part
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from any cause, Lessor may, at its option, (1.) rebuild or restore the
Premises to their condition prior to the damage or destruction or (2.)
terminate the Lease.
If Lessor does not give Lessee notice in writing within thirty (30)
days from the destruction of the Premises of its election either to rebuild
and restore the Premises, or to terminate this Lease, Lessor shall be
deemed to have elected to rebuild or restore them, in which event Lessor
agrees, at its expense, promptly to rebuild or restore the Premises to its
condition prior to the damage or destruction. If Lessor 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 Lessee or because of acts of God,
acts of public agencies, labor disputes, strikes, fires, freight embargoes,
rainy or stormy weather, inability to obtain materials, supplies or fuels,
acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond control of
Lessor), then Lessee shall have the right to terminate this Lease by giving
fifteen (15) days prior written notice to Lessor. Lessor's obligation to
rebuild or restore shall not include restoration of Lessee's trade
fixtures, equipment, merchandise, or any improvements, alterations, or
additions made by Lessee to the Premises.
Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Lessee hereby expressly
waives the provisions of Section 1932, Subdivision 2, and 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 thirty-three and one-third percent (33 1/3%) of the
replacement cost thereof, Lessor may elect to terminate this Lease, whether
the Premises be injured or not.
15. Condemnation. If any part of the Premises shall be taken for any public or
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quasi-public use, under any statute of by right of eminent domain, or
private purchase in lieu thereof, and a part thereof remains, which is
susceptible of occupation hereunder, this Lease shall, as to the part so
taken, terminate as of the date title shall vest in the condemnor or
purchaser, and the rent payable hereunder shall be adjusted so that the
Lessee shall be required to pay for the remainder of the term only such
portion of such rent as the value of the part remaining after taking such
bears to the value of the entire Premises prior to such taking. Lessor
shall have the option to terminate
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this Lease in the event that such taking causes a reduction in rent payable
hereunder by fifty percent (50%) or more. If all of the Premises or such
part thereof be taken so that there does not remain a portion susceptible
for occupation hereunder, as reasonably necessary for Lessee's conduct of
its business as contemplated in this Lease, this Lease shall thereupon
terminate. If a part of all of the Premises be taken, all compensation
awarded upon such taking shall go to the Lessor, and the Lessee shall have
no claim thereto, and the Lessee hereby irrevocably assigns and transfers
to the Lessor any right to compensation or damages to which the Lessee may
become entitled during the term hereof by reason of the purchase or
condemnation of all or a part of the Premises. Each party waives the
provisions of the Code of Civil Procedure, Section 1265.130, allowing
either party to petition the Superior Court to terminate this Lease in the
event of a partial taking of the Premises.
16. Free from Liens: Lessee shall (1.) pay for all labor and services performed
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for materials used by or furnished to Lessee, or any contractor employed by
Lessee with respect to the Premises, and (2.) indemnify, defend, and hold
Lessor and the Premises harmless and free from any liens, claims, demands,
encumbrances, or judgments created or suffered by reason of any labor or
services performed for materials used by or furnished to Lessee or any
contractor employed by Lessee with respect to the Premises, and (3.) give
notice to Lessor in writing five (5) days prior to employing any laborer or
contractor to perform services related, or receiving materials for use upon
the Premises, and (4.) shall post, on behalf of Lessor, a notice of non-
responsibility in accordance with the statutory requirements of the
California Civil Code, Section 3904; or any amendment thereof. In the event
an improvement bond with a public agency in connection with the above is
required to be posted, Lessee agrees to include Lessor as an additional
obligee.
17. Compliance with Laws. Lessee shall, at its own cost, comply with and
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observe all requirements of all municipal, county, state, and federal
authority now in force, or which may hereafter be in force, pertaining to
the use and occupancy of the Premises.
18. Subordination. Lessee agrees that this Lease shall, at the option of
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Lessor, be subjected and subordinated to any mortgage, deed of trust, or
other instrument of security, which has been or shall be placed on the land
and building, or land or building of which the Premises form a part, and
this subordination is hereby made effective without any further act of
Lessee or Lessor. The Lessee shall, at any time hereinafter, on demand,
execute any instruments, releases, or other documents that may be required
by any mortgagee, mortgagor, trustor, or beneficiary under any deed of
trust, for the purpose of subjecting or subordinating this Lease to the
lien of any such mortgage, deed of trust, or other instrument of security.
If Lessee fails to execute and deliver any such documents or instruments,
Lessee irrevocably constitutes and appoints Lessor as Lessee's special
attorney-in-fact to execute and deliver any such documents or instruments.
19. Abandonment. Lessee shall not vacate or abandon the Premises at any time
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during the term; and if Lessee shall abandon, vacate, or surrender said
Premises, or be dispossessed by process of law, or otherwise, any personal
property belonging to Lessee and left on the Premises shall be deemed to be
abandoned, at the option of Lessor, except such property as may be
mortgaged to Lessor; provided, however, that Lessee shall not be deemed to
have abandoned or vacated the Premises so long as Lessee continues to pay
all rents as and when due, and otherwise performs pursuant to the terms and
conditions of this Lease.
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20. Assignment and Subletting. Lessee's interest in this Lease is not
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assignable, by operation of law or otherwise, nor shall Lessee have the
right to sublet the Premises, transfer any interest of Lessee's therein, or
permit any use of the Premises by another party, without the prior written
consent of Lessor to such assignment, subletting, or transfer of use.
If Lessee is a partnership, a withdrawal or change, voluntary,
involuntary, or by operation of law, of any partner(s) owning fifty percent
(50%) or more of the partnership, of the dissolution of the partnership,
shall be deemed as a voluntary assignment.
If Lessee consists of more than one person, a purported assignment,
voluntary, involuntary, or by operation of law, from one person to the
other or from a majority of persons to the others, shall be deemed a
voluntary assignment.
If Lessee is a corporation, any dissolution, merger, consolidation, or
other reorganization of Lessee, or the sale or other transfer of a
controlling percentage of the capital stock of Lessee, or sale of at least
fifty-one percent (51%) of the value of the assets of Lessee, shall be
deemed a voluntary assignment. The phrase "controlling percentage" means
the ownership of, and the right to vote, stock possessing at least
fifty-one percent (51%) of the total combined voting power of all classes
of Lessee's capital stock issued, outstanding, and entitled to vote for the
election of directors. This Paragraph shall not apply to corporations the
stock of which is traded through an exchange or over the counter.
In the event of any subletting or transfer which is consented to, or
not consented to, by Lessor, a subtenant or transferee agrees to pay monies
or other consideration, whether by increased rent or otherwise, in excess
of or in addition to those provided for herein, then all of such excess or
additional monies or other consideration shall be paid solely to Lessor,
and this shall be one of the conditions to obtaining Lessor's consent.
Lessee immediately and irrevocably assigns to Lessor, as security for
Lessee's obligations under this Lease, all rent from any subletting of all
or a part of the Premises as permitted by this Lease, and Lessor, as
assignee and as attorney-in-fact for Lessee, or a receiver for Lessee
appointed on Lessor's application, may collect such rent and apply it
toward Lessee's obligations under this Lease; except that, until the
occurrence of an act of default by the Lessee, Lessee shall have the right
to collect such rent.
A consent to one assignment, subletting, occupation, or use by another
party shall not be deemed to be a consent to any subsequent assignment,
subletting, occupation, or use by another party. Any assignment or
subletting without such consent shall be void and shall, at the option of
the Lessor, terminate this Lease. Lessor's waiver or consent to any
assignment or subletting hereunder shall not relieve Lessee from any
obligation under this Lease unless the consent shall so provide. If Lessee
requests Lessor to consent to a proposed assignment or subletting, Lessee
shall pay to Lessor, whether or not consent is ultimately given, Lessor's
reasonable attorneys' fees incurred in conjunction with each such request.
21. Parking Charges. Lessee agrees to pay upon demand, based on its percent of
---------------
occupancy of the entire Premises, its pro-rata share of any parking
charges, surcharges, or any other cost hereafter levied or assessed by
local, state, or federal governmental agencies in connection with the use
of the parking facilities serving the Premises, including, without
limitation, parking surcharge imposed by or under the authority of the
Federal Environmental Protection Agency.
22. Insolvency or Bankruptcy. Either (1.) the appointment of a receiver to
------------------------
take possession of all or substantially all of the assets of Lessee, or
(2.) a general assignment by Lessee for the benefit of creditors, or (3.)
any action taken or suffered by Lessee under any insolvency or bankruptcy
act shall constitute a breach of this Lease by Lessee. Upon the happening
of any such event, this
9
Lease shall terminate ten (10) days after written notice of termination
from Lessor to Lessee. This section is to be applied consistent with the
applicable state and federal law in effect at the time such event occurs.
23. Lessor Loan or Sale. Lessee agrees promptly following request by Lessor to
-------------------
(1.) execute and deliver to Lessor any documents, including estoppel
certificates presented to Lessee by Lessor, (a.) 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 (b.) acknowledging that there are
not, to Lessee's knowledge, any uncured defaults on the part of Lessor
hereunder, and (c.) evidencing the status of the Lease as may be required
either by a lender making a loan to Lessor, to be secured by deed of trust
or mortgage covering the Premises, or a purchaser of the Premises from
Lessor, and (2.) to deliver to Lessor the current financial statements of
Lessee with an opinion of a certified public accountant, including a
balance sheet and profit and loss statement, for the current fiscal year
and the two immediately prior fiscal years, all prepared in accordance with
Generally Accepted Accounting Principles consistently applied. Lessee's
failure to deliver an estoppel certificate within three (3) days following
such request shall constitute a default under this Lease and shall be
conclusive upon Lessee that this Lease is in full force and effect and has
not been modified except as may be represented by Lessor. If Lessee fails
to deliver the estoppel certificates within the three (3) days, Lessee
irrevocably constitutes and appoints Lessor as its special attorney-in-fact
to execute and deliver the certificate to any third party.
24. Surrender of Lease. The voluntary or other surrender of this Lease by
------------------
Lessee, or a mutual cancellation thereof, shall not work a merger nor
relieve Lessee of any of Lessee's obligations under this Lease, and shall,
at the option of Lessor, terminate all or any existing Subleases or
Subtenancies, or may, at the option of Lessor, operate as an assignment to
him of any or all such Subleases or Subtenancies.
25. Attorneys' Fees. If, for any reason, any suit be initiated to enforce any
---------------
provision of this Lease, the prevailing party shall be entitled to legal
costs, expert witness expenses, and reasonable attorneys' fees, as fixed by
the court.
26. Notices. All notices to be given to Lessee may be given in writing,
-------
personally, or by depositing the same in the United States mail, postage
prepaid, and addressed to Lessee at the said Premises, whether or not
Lessee has departed from, abandoned, or vacated the Premises. Any notice or
document required or permitted by this Lease to be given Lessor shall be
addressed to Lessor at the address set forth below, or at such other
address as it may have theretofore specified by notice delivered in
accordance herewith:
LESSOR: LOS GATOS BUSINESS XXXX
XXXX XXXXXX XXX 00000
XXXX XXXX, XXXXXXXXXX 00000-0000
LESSEE: TRANSCRIPTION ENTERPRISES LIMITED
000 XXXXXXXX XXX
XXX XXXXX, XXXXXXXXXX 00000
10
27. Transfer of Security. If any security be given by Lessee to secure the
--------------------
faithful performance of all or any of the covenants of this Lease on the
part of Lessee, Lessor may transfer and/or deliver the security, as such,
to the purchaser of the reversion, in the event that the reversion be sold,
and thereupon Lessor shall be discharged from any further liability in
reference thereto, upon the assumption by such transferee of lessor's
obligations under this Lease.
28. Waiver. The waiver by Lessor or Lessee of any breach of any term,
------
covenant, or condition, herein contained shall not be deemed to be a waiver
of such term, covenant, or condition, or any subsequent breach of the same
or any other term, covenant, or condition herein contained. The subsequent
acceptance of rent hereunder by lessor shall not be deemed to be a waiver
of any preceding breach by Lessee of any term, covenant, or condition of
this Lease, other than the failure of Lessee to pay the particular rental
so accepted, regardless of Lessor's knowledge of such preceding breach at
the time of acceptance of such rent.
29. Holding Over. Any holding over after the expiration of the term or any
------------
extension thereof, with the consent of lessor, shall be construed to be a
tenancy from month-to-month, at a rental of one and one-half (1 1/2) times
the previous month's rental rate per month, and shall otherwise be on the
terms and conditions herein specified, so far as applicable.
30. Covenants, Conditions, and Restrictions. Attached hereto, marked Exhibit
---------------------------------------
"C" and by this reference incorporated as if set out in full, are
Covenants, Conditions, and Restrictions pertaining to Los Gatos Business
Park. As a condition to this Lease, Lessee agrees to abide by all of said
Covenants, Conditions, and Restrictions. Moreover, such reasonable rules
and regulations as may be hereafter adopted by Lessor for the safety, care,
and cleanliness of the Premises and the preservation of good order thereon,
are hereby expressly made a part hereof, and Lessee agrees to obey all such
rules and regulations.
31. Limitation on Lessor's Liability. If Lessor is in default of this Lease,
--------------------------------
and, as a consequence, Lessee recovers a money judgment against Lessor, the
judgment shall be satisfied only out of the proceeds of sale received on
execution of the judgment and levy against the right, title, and interest
of Lessor in the Premises, or in the building, other improvements, and land
of which the Premises are part, and out of rent or other income from such
real property receivable by Lessor or out of the consideration received by
Lessor from the sale or other disposition of all or any part of Lessor's
right, title, and interest in the Premises or in the building, other
improvements, and land of which the Premises are part. Neither Lessor nor
any of the partners comprising the partnership designated as Lessor shall
be personally liable for any deficiency.
11
32. Miscellaneous.
-------------
A. Time is of the essence of this Lease, and of each and all of its
provisions.
B. The term "building" shall mean the building in which the Premises
are situated.
C. If the building is leased to more than one tenant, then each such
tenant, its agents, officers, employees, and invitees, shall have the
non-exclusive right (in conjunction with the use of the part of the
building leased to such Tenant) to make reasonable use of any
driveways, sidewalks, and parking areas located on the parcel of land
on which the building is situated, except such parking areas as may
from time to time be leased for exclusive use by other Tenant(s).
D. Lessee's such reasonable use of parking areas shall not exceed that
percent of the total parking areas which is equal to the ratio which
floor space of the Premises bears to floor space of the building.
E. The term "assign" shall include the term "transfer."
F. The invalidity or unenforceability of any provision of this Lease
shall not affect the validity or enforceability of the remainder of
this Lease.
G. All parties hereto have equally participated in the preparation of
this Lease.
H. The headings and titles to the Paragraphs of this Lease are not a part
of this Lese and shall have no effect upon the construction or
interpretation of any part thereof.
I. Lessor has made no representation(s) whatsoever to Lessee (express or
implied) except as may be expressly stated in writing in this Lease
instrument.
J. This instrument contains all of the agreements and conditions made
between the parties hereto, and may not be modified orally or in any
other manner than by agreement in writing, signed by all of the
parties hereto or their respective successors in interest.
K. It is understood and agreed that the remedies herein given to Lessor
shall be cumulative, and the exercise of any one remedy by Lessor
shall not be to the exclusion of any other remedy.
L. The covenants and conditions herein contained shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors,
executors, and administrators, and assigns of all the parties hereto;
and all of the parties hereto shall jointly and severally be liable
hereunder.
M. This Lease has been negotiated by the parties hereto and the language
hereof shall not be construed for or against either party.
12
N. All exhibits to which reference is made are deemed incorporated into
this Lease, whether covenants or conditions, on the part of Lessee
shall be deemed to be both covenants and conditions.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease on the date first
above-written.
LESSOR: LESSEE:
LOS GATOS BUSINESS PARK, TRANSCRIPTION ENTERPRISES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP A CALIFORNIA CORPORATION
By: /s/ Xxxxxx X. Xxxxx III By: /s/ Xxxxx XxxXxxx
XXXXXX X. XXXXX, III AUTHORIZED OFFICER
GENERAL PARTNER
DATE: 7/16/90 DATE: 7/12/90
------- -------
13
ADDENDUM
TO THAT CERTAIN LEASE DATED MAY 10, 1990, BY AND BETWEEN LOS GATOS BUSINESS
PARK, A CALIFORNIA LIMITED PARTNERSHIP, LESSOR, AND TRANSCRIPTION ENTERPRISES,
LIMITED, A CALIFORNIA CORPORATION, LESSEE.
The following wording is added to the base Lease:
34. First Right of Refusal. Lessor here by grants to Lessee a right of first
----------------------
and second refusal to lease additional space in the building as shown in
Exhibit "B." Lessee shall have three (3) business days after receipt of
Lessor's notification of proposal to accept the same in writing, upon the
--------
identical terms and conditions outlined herein. Failure by Lessee to accept
within three (3) days shall be deemed a rejection. Lessor's notification
shall be defined as Lessor's written offer or proposal to a third party. If
Lessee defaults under this Lease, this right of first refusal shall be null
and void.
35. Option to Extend.
----------------
Lessor hereby grants to Lessee the right to extend the term of this Lease
for one (1) three (3)-year period, provided that:
(i) Lessor receives written notice from Lessee six (6) months prior to the
expiration date of said Lease.
(ii) Lessee is not in default when exercising its option to extend term
or when the option to extend term commences.
Upon receipt by Lessor of Lessee's written notice, Lessor and Lessee shall
have thirty (30) days to agree upon a fair market rental rate. If Lessor
and Lessee are unable to agree within said thirty (30)-day period, this
option to extend term shall be null and void, and neither party hereto
shall have the right to seek Court or other third-party relief. In no event
shall the rent paid during the option to extend term to less than the rent
paid the last month of the original term of the Lease.
All other terms and conditions of the Base Lease remain in full force
and effect.
36. The following wording shall be added to Paragraph 6:
As a material consideration in making this Lease, Lessee reports to Lessor
that it is not now nor shall be a user of toxic or hazardous chemicals. In
the event that Lessee does at some future time use toxic materials, every
legal remedy shall be applicable, and the following paragraph shall apply:
Should, at any time during the term of this Lease, or for a period of five
(5) years after the termination or expiration of this Lease, there be
charges or findings of toxic waste, spillage, or other contaminants found
by a governmental agency to be hazardous and requiring removal or remedial
work of the same, Lessee hereunder shall be assumed responsible for, and
hold Lessor harmless from, all claims, obligations, liabilities, and costs,
including reasonable attorneys' fees,
14
for the removal, remedial work, or other action required by the
governmental agency so prescribing said action, or any other agency having
jurisdiction unless lessee can demonstrate that such toxic waste, spillage,
or other contaminants may be present on the Premises, Lessor may order a
soils report, or its equivalent, at Lessee's expense. Lessee shall pay such
costs within fifteen (15) days from the date of invoice by Lessor. If any
such toxic waste, spillage, or other contaminants are found upon the
Premises, Lessee shall deposit with Lessor, within fifteen (15) days of
notice from Lessor to Lessee to do so, the amount necessary to remove such
substances and remedy the problem.
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
LESSOR LESSEE
LOS GATOS BUSINESS PARK, TRANSCRIPTION ENTERPRISES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP A CALIFORNIA CORPORATION
By: /s/ Signature Illegible^^ By: /s/ Signature Illegible^^
XXXXXX X. XXXXX, III AUTHORIZED OFFICER
GENERAL PARTNER
DATE: 7/16/90 DATE: 7/12/90
------- -------
15
[EXHIBIT OMITTED]
[EXHIBIT OMITTED]
[EXHIBIT OMITTED]
ADDENDUM II
TO THAT CERTAIN LEASE DATED MAY 10, 1990, BY AND BETWEEN LOS GATOS BUSINESS
PARK, LESSOR, AND TRANSCRIPTION ENTERPRISES, LIMITED, LESSEE.
To that certain Lease the following wording is added:
37. Exercise of Option
------------------
Lessee and Lessor have agreed that Lessee will exercise the Option to
Extend shown in the first Addendum #35, of one (1) three-(3)-year option.
Rent for the option period shall be as follows:
Date Amount
---- ------
8/1/93 - 7/31/96 $2,873.00
All other terms and conditions of the base Lease remain in full force and
effect.
AGREED AND ACCEPTED:
LESSOR LESSEE
Los Gatos Business Park Transcription Enterprises
/s/ Signature Illegible^^ /s/ Signature Illegible^^
Xxxxxx X. Xxxxx, III Authorized Officer
General Partner
Date: 4/12/93 Date: April 8, 1993
------- -------------
ADDENDUM III
REFERENCE IS MADE TO THAT LEASE BY AND BETWEEN LOS GATOS BUSINESS PARK, LESSOR,
AND TRANSCRIPTION ENTERPRISES, LIMITED, INC., 000-X XXXXXXXX XXX, XXX XXXXX,
XXXXXX, DATED MAY 10, 1990.
To that certain Lease the following wording is added:
LEASE EXTENSION
---------------
Lessor and Lessee have agreed to extend the term of the Lease for a period of
three (3) years, August 1, 1996 and terminating July 31, 1999.
Rent for the extended term shall be as follows:
Period Monthly Rent/NNN
------ ----------------
08/01/96 - 07/31/97 $2,873.00
08/01/97 - 07/31/98 $2,993.00
08/01/98 - 07/31/99 $3,112.00
OPTION TO EXPAND
----------------
Lessor shall grant to Lessee the option to lease the additional plus or
minus2,106 square feet known as 000-X Xxxxxxxx Xxx, as shown on Exhibit D upon
expiration of the existing lease, December 31, 1996. Lessee shall exercise said
option by giving Lessor notice of its intention no later than July 1, 1996.
Should Lessee exercise its option to expand, Lessor and Lessee agree that the
term for both spaces (+/-4,500 square feet) shall be extended four (4) years,
commencing January 1, 1997 and terminating December 31, 2000. Total monthly rent
would be as follows:
Period Monthly Rent/NNN
------ ----------------
01/01/97 - 12/31/97 $5.400.00
01/01/98 - 12/31/98 $5,625.00
01/01/99 - 12/31/99 $5,850.00
01/01/00 - 12/31/00 $6,075.00
Provided that Lessee has exercised its option to expand, Lessor agrees to
provide Lessee with an allowance of $18,000 for mutually agreeable tenant
improvements to be installed by Lessor's contractor.
OPTION TO EXTEND TERM
---------------------
Lessor hereby grants to Lessee the right to extend the term of this Lease for
one (1) five (5) year period, provided that:
(i) Lessor receives written notice from Lessee six (6) months prior to the
expiration date of said Lease.
(ii) Lessee is not in default when exercising its option to extend term
or when the option to extend term commences.
Rent for the option period shall be the then prevailing market rent for similar
buildings in Los Gatos.
All other terms and conditions of the base Lease remain in full force and
effect.
AGREED AND ACCEPTED:
LESSOR LESSEE
Los Gatos Business Park Transcription Enterprises, Ltd.
/s/ Signature Illegible^^ /s/ Signature Illegible^^
Xxxxxx X. Xxxxx, III Authorized Representative
General Partner
Date: 1/30/96 Date: 1/29/96
------- -------
[EXHIBIT OMITTED]
ADDENDUM IV
REFERENCE IS MADE TO THAT LEASE BY AND BETWEEN LOS GATOS BUSINESS PARK, LESSOR,
AND TRANSCRIPTION ENTERPRISES, LIMITED, INC., 000-X XXXXXXXX XXX, XXX XXXXX,
XXXXXX, DATED MAY 10, 1990.
To that certain Lease the following wording is added:
EXPANSION
---------
Lessee hereby exercises its option to lease the additional plus or minus2,106
square feet known as 000-X Xxxxxxxx Xxx, as shown on Exhibit upon expiration of
the existing lease, December 31, 1996. As per the terms of the expansion option,
Lessor and Lessee agree that the term for both spaces (+/-4,500 square feet)
shall be extended four (4) years, commencing January 1, 1997 and terminating
December 31, 2000. Total monthly rent will be as follows:
Period Monthly Rent/NNN
------ ----------------
01/01/97 - 12/31/97 $5,400.00
01/01/98 - 12/31/98 $5,625.00
01/01/99 - 12/31/99 $5,850.00
01/01/00 - 12/31/00 $6,075.00
Lessor agrees to provide Lessee with an allowance of $18,000 for mutually
agreeable tenant improvements to be installed by Lessor's contractor.
All other terms and conditions of the base Lease remain in full force and
effect.
AGREED AND ACCEPTED:
LESSOR LESSEE
Los Gatos Business Park Transcription Enterprises, Ltd.
/s/ Signature Illegible>^^ /s/ Signature Illegible>^^, PRESIDENT
Xxxxxx X. Xxxxx, III Authorized Representative
General Partner
Date:6/26/96 Date: June 21, 1996
------- -------------
TRANSCRIPTION ENTERPRISES LIMITED
000 XXXXXXXX XXX
XXX XXXXX, XX 00000
LIST OF BANK ACCOUNTS
NAME ACCOUNT NUMBER
Xxxxxxx Xxxxx
Fairmont Plaza
00 Xxxx Xxx Xxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 233-07B70
Bank of America
Los Gatos Branch 0142
000 Xxxxx Xxxxx Xxxx Xxxxxx
Xxx Xxxxx, XX 00000 00000 00000
ABN AMRO Bank NV
Xxxxxxxxxxxxxxxxx 000
Xxxxxxx 00
0000 XX Roermond 52 80 52 659
The Netherlands 52 80 53 841
Xxxxx Bank
ChungAng Branch
00, Xx-xxxx, Xxxxx-xx
Xxxxx, Xxxxx 002-13-02840-0
TRANSCRIPTION ENTERPRISES LIMITED
000 XXXXXXXX XXX
XXX XXXXX, XX 00000
LIST OF SHAREHOLDERS
--------------------
SHAREHOLDER NAME/ADDRESS NUMBER OF SHARES OF COMMON
------------------------ --------------------------
STOCK OWNED
-----------
Xxxxx Xxxxxxxx 500,000
00000 Xxxxx Xxxx
Xxx Xxxxx, XX 00000
Xxxxx X. XxxXxxx 250,000
00000 Xxxxxxxx Xxxx
Xxx Xxxxx, XX 00000
Xxxxxx and Xxxxx Xxxxxxxx 4,000
0000 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Xxxxxx Nation 18,500
0000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
Xxxxx XxXxxxxx 4,000
000 Xxxxxxx Xxx #X000
Xxx Xxxxx, XX 00000
Xxxx X. Xxxxxxxx 2,000
X.X. Xxx 000
Xxxxxx Xxxxxx, XX 00000
Xxxxxxx Xxxxxxx-Xxxxx 2,000
0000 Xxxxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Xxxx Xxxxxx 10,000
000 Xxx Xxxx Xxxxx
Xxxxxx, XX 00000
SHAREHOLDER NAME/ADDRESS NUMBER OF SHARES OF COMMON
------------------------ --------------------------
STOCK OWNED
-----------
Xxxx Xxxxxxx 5,000
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Xxxxxxx Xxxx 2,000
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
TOTAL OUTSTANDING SHARES 797,500
TRANSCRIPTION ENTERPRISES LIMITED
000 XXXXXXXX XXX
XXX XXXXX, XX 00000
LIST OF OFFICERS AND DIRECTORS
------------------------------
NAME ANNUAL COMPENSATION
---- -------------------
Xxxxx Xxxxxxxx 1999 0
Director, President, Chief Executive Officer 1998 0
1997 0
Xxxxx X. XxxXxxx 1999 0
Director, Secretary, Treasurer 1998 0
1997 0
Xxxxxxx Xxxxx 1999 0
Director 1998 0
1997 0
