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EXHIBIT 10.28
LEASE
FERRARI BROTHERS,
a California general partnership
Landlord
ANALOG DEVICES, INC.,
a Massachusetts corporation
Tenant
DATED: June 16 , 1995
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ADDRESS OF PREMISES:
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Fabrication Facility
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LEASE SUMMARY
Parties:
Landlord: Ferrari Brothers, a California general partnership
Tenant: Analog Devices, Inc., a Massachusetts corporation
Premises: Approximately 27,379 square feet of space as shown
in EXHIBIT A.
Building: 000 Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx
Scheduled Commencement
Date: June 16 , 1995
Expiration Date: March 31, 2000
Base Rent: Thirty Five Thousand Dollars ($35,000) per month
Security Deposit: A certificate of deposit as described in Paragraph 4
Tenant's Share of Building: 43.4%
Option(s) to Extend: Three (3) five-year options
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TABLE OF CONTENTS
PAGE
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1. Premises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
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2. Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
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3. Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
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3.1 Initial Base Rent. . . . . . . . . . . . . . . . . . . . . . . .2
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3.2 Rental Adjustment. . . . . . . . . . . . . . . . . . . . . . . .2
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3.3 Manner of Payment. . . . . . . . . . . . . . . . . . . . . . . .3
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3.4 Late Payment Charge. . . . . . . . . . . . . . . . . . . . . . .3
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4. Security Deposit. . . . . . . . . . . . . . . . . . . . . . . . . . .3
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5. Taxes.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
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5.1 Tenant's Personal Property.. . . . . . . . . . . . . . . . . . .4
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5.2 Real Property Taxes. . . . . . . . . . . . . . . . . . . . . . .4
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6. Use.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
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6.1 Permitted Uses . . . . . . . . . . . . . . . . . . . . . . . . .6
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6.2 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . .6
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7. Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . .7
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8. Restrictions on Use.. . . . . . . . . . . . . . . . . . . . . . . . 10
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9. Operating Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 10
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9.1 Operating Expenses . . . . . . . . . . . . . . . . . . . . . . 10
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9.2 Monthly Payments.. . . . . . . . . . . . . . . . . . . . . . . 12
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10. Maintenance and Repairs.. . . . . . . . . . . . . . . . . . . . . . 12
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10.1 Tenant's Obligations . . . . . . . . . . . . . . . . . . . . . 12
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10.2 Landlord's Obligations.. . . . . . . . . . . . . . . . . . . . 13
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10.3 Landlord to Maintain and Control Outside Areas . . . . . . . . 14
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10.4 HVAC Replacement and Parking Lot Resurfacing . . . . . . . . . 14
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11. Alterations.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
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11.1 Landlord's Consent Required. . . . . . . . . . . . . . . . . . 15
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11.2 Plans and Permits. . . . . . . . . . . . . . . . . . . . . . . 15
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11.3 Construction Work Done by Tenant . . . . . . . . . . . . . . . 15
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11.4 Roof Repairs . . . . . . . . . . . . . . . . . . . . . . . . . 16
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11.5 Title to Alterations . . . . . . . . . . . . . . . . . . . . . 16
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11.6 Mechanics' Liens . . . . . . . . . . . . . . . . . . . . . . . 17
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12. Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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13. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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13.1 Indemnity by Tenant. . . . . . . . . . . . . . . . . . . . . . 18
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13.2 Indemnity by Landlord. . . . . . . . . . . . . . . . . . . . . 18
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14. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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14.1 Tenant's Liability Insurance . . . . . . . . . . . . . . . . . 19
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14.2 Landlord's Property Insurance. . . . . . . . . . . . . . . . . 19
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14.3 Tenant's Property Insurance. . . . . . . . . . . . . . . . . . 20
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14.4 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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14.5 Insurance Policies . . . . . . . . . . . . . . . . . . . . . . 21
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14.6 Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . 22
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14.7 No Limitation of Liability.. . . . . . . . . . . . . . . . . . 22
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15. Damage or Destruction. . . . . . . . . . . . . . . . . . . . . . . . 22
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15.1 Partial Damage - Insured . . . . . . . . . . . . . . . . . . . 22
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15.2 Partial Damage - Uninsured . . . . . . . . . . . . . . . . . . 23
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15.3 Total Destruction. . . . . . . . . . . . . . . . . . . . . . . 24
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15.4 Damage Near End of Term. . . . . . . . . . . . . . . . . . . . 24
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15.5 Abatement of Rent. . . . . . . . . . . . . . . . . . . . . . . 24
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15.6 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
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15.7 Tenant's Property. . . . . . . . . . . . . . . . . . . . . . . 25
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15.8 Notice of Damage . . . . . . . . . . . . . . . . . . . . . . . 25
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15.9 Replacement Cost . . . . . . . . . . . . . . . . . . . . . . . 25
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15.10 Disbursement Account.. . . . . . . . . . . . . . . . . . . . . 25
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16. Condemnation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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16.1 Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . 26
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16.2 Total Taking . . . . . . . . . . . . . . . . . . . . . . . . . 26
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16.3 Distribution of Award. . . . . . . . . . . . . . . . . . . . . 26
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16.4 Sale Under Threat of Condemnation. . . . . . . . . . . . . . . 27
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16.5 Temporary Taking . . . . . . . . . . . . . . . . . . . . . . . 27
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17. Assignment and Subletting.. . . . . . . . . . . . . . . . . . . . . 27
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17.1 Prohibition of Assignment and Subletting . . . . . . . . . . . 27
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17.2 Documentation. . . . . . . . . . . . . . . . . . . . . . . . . 27
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17.3 Terms and Conditions . . . . . . . . . . . . . . . . . . . . . 28
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18. Events of Default and Remedies. . . . . . . . . . . . . . . . . . . 29
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18.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 29
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18.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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19. Advertisements and Signs. . . . . . . . . . . . . . . . . . . . . . 32
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20. Entry by Landlord . . . . . . . . . . . . . . . . . . . . . . . . . 32
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21. Subordination and Attornment. . . . . . . . . . . . . . . . . . . . 32
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22. Estoppel Certificates and Financial Statements. . . . . . . . . . . 33
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23. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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24. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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25. Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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26. Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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27. Holding Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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28. Transfer of Premises by Landlord. . . . . . . . . . . . . . . . . . 35
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29. Option(s) to Extend Term. . . . . . . . . . . . . . . . . . . . . . 35
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29.1 Exercise of Option . . . . . . . . . . . . . . . . . . . . . . 35
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29.2 Rent During Extended Term. . . . . . . . . . . . . . . . . . . 36
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29.3 Rental Adjustments During Extended Term. . . . . . . . . . . . 37
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30. Parking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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31. Reasonable Consent. . . . . . . . . . . . . . . . . . . . . . . . . 37
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32. Cure Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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32.1 Cure by Landlord . . . . . . . . . . . . . . . . . . . . . . . 38
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32.2 Cure by Tenant.. . . . . . . . . . . . . . . . . . . . . . . . 38
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33. Mortgagee Protection.. . . . . . . . . . . . . . . . . . . . . . . . 39
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34. General Provisions.. . . . . . . . . . . . . . . . . . . . . . . . . 39
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34.1 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 39
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34.2 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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34.3 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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34.4 California Law . . . . . . . . . . . . . . . . . . . . . . . . 39
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34.5 Partial Invalidity . . . . . . . . . . . . . . . . . . . . . . 39
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34.6 No Warranties. . . . . . . . . . . . . . . . . . . . . . . . . 40
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34.7 Successors and Assigns . . . . . . . . . . . . . . . . . . . . 40
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34.8 Rules and Regulations. . . . . . . . . . . . . . . . . . . . . 40
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34.9 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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34.10 Memorandum of Lease. . . . . . . . . . . . . . . . . . . . . . 40
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34.11 Reasonable Expenditures .. . . . . . . . . . . . . . . . . . . 40
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34.12 Amendments to Accommodate Lenders. . . . . . . . . . . . . . . 41
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34.13 Merger.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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34.14 Force Majeure. . . . . . . . . . . . . . . . . . . . . . . . . 41
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34.15 Exhibits.. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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EXHIBITS
Exhibit "A" -- Premises
Exhibit "B" -- Property Description
Exhibit "C" -- Plans and Specifications for Tenant Improvements
Exhibit "D" -- Plans and Specifications for Additional Improvements
Exhibit "E" -- Nondisturbance Agreement
Exhibit "F" -- Memorandum of Lease
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LEASE
This Lease is made and entered into as of June 1, 1995, by and between
Ferrari Brothers, a California general partnership ("Landlord"), whose
address is 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000,
and Analog Devices, Inc., a Massachusetts corporation ("Tenant"), whose
address is 0 Xxxxxxxxxx Xxx, Xxxxxxx, Xxxxxxxxxxxxx 00000-0000, Attn: Mr.
Xxxxxxx Xxxx.
Landlord and Tenant agree to the terms, covenants and conditions of
this Lease, as follows:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord for the term, at the rental, and upon all of the other
terms, covenants and conditions set forth herein, those certain premises (the
"Premises") as shown on EXHIBIT "A" attached hereto consisting of
approximately 27,379 square feet of space within that certain building (the
"Building") situated in the City of Sunnyvale, County of Santa Xxxxx, State
of California, commonly known as 000 Xxxxxxx Xxxxx and more particularly
described in EXHIBIT "B" attached hereto. Tenant is entering into this Lease
in conjunction with its acquisition of certain fabrication facility assets
situated on the Premises from Performance Semiconductor Corporation ("PSC"),
the prior tenant of the Premises.
Tenant shall also have the exclusive right to use the loading docks (if any)
contiguous to the Premises and located within the Outside Areas, and the
nonexclusive right to use all other portions of the Outside Areas in common
with other tenants from time to time occupying space within the Building
together with their respective agents, contractors, and other invitees.
Landlord reserves the right to grant such easements burdening the Outside
Areas as Landlord in its reasonable discretion deems appropriate provided the
same do not unreasonably interfere with Tenant's ability to use the Outside
Areas. Tenant at it sole expense shall maintain the water monitoring xxxxx
located within the Outside Areas as shown on EXHIBIT "B."
The parcel of land on which the Building is situated, together with the
Building and all other improvements now or hereafter located thereon, is
hereafter called the "Project."
The portion of the parcel of land described above not covered by the
Building is hereafter called the "Outside Areas."
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"Tenant's Share" as used in this Lease means that percentage of the
total number of square feet of leasable space in the Building which is
contained in the Premises, which the parties agree is Forty-Three and Four
Tenths percent (43.4%).
2. TERM. The term of this Lease shall commence on June 16, 1995 (the
"Commencement Date"), and end on March 31, 2000 (the "Expiration Date"),
unless sooner terminated pursuant to the provisions hereof.
3. Rent.
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3.1 INITIAL BASE RENT. Commencing on the Commencement Date, Tenant
shall pay to Landlord for each calendar month of the term of this Lease,
monthly base rent (hereafter called "Base Rent"), in the amount of Thirty
Five Thousand Dollars ($35,000). Base Rent shall be subject to adjustment
from time to time as set forth in Paragraph 3.2.
3.2 RENTAL ADJUSTMENT. The monthly Base Rent payable hereunder
shall be adjusted as of April 1, 1996 and as of April 1 of each successive
year (each such date herein called a "Rental Adjustment Date") during the
term of this Lease to reflect any changes in the cost of living. The
adjustment or adjustments, if any, shall be calculated upon the basis of the
United States Department of Labor, Bureau of Labor Statistics CONSUMER PRICE
INDEX FOR ALL URBAN CONSUMERS, FOR SAN FRANCISCO-OAKLAND-SAN XXXX
(1982-84=100), hereafter referred to as the "Index". The Index for said
subgroup most recently published as of April 1, 1995 shall be considered the
"base". On the first Rental Adjustment Date, the monthly Base Rent shall be
adjusted by the percentage increase, if any, in the Index as of the Rental
Adjustment Date, over the base. On each subsequent Rental Adjustment Date,
the monthly Base Rent (as previously adjusted) shall be further adjusted by
the percentage increase, if any, in the Index as of the Rental Adjustment
Date over the Index as of the preceding Rental Adjustment Date. When the
Base Rent is determined upon the Rental Adjustment Date, Landlord shall give
Tenant written notice to that effect indicating how the new Base Rent figure
was computed in accordance with this paragraph. If the Index does not exist
on any Rental Adjustment Date in the same format as referred to in this
paragraph, Landlord shall substitute in lieu thereof an index reasonably
comparable to the Index referred to above which is then published by the
Bureau of Labor Statistics, or by a successor or similar governmental agency,
or, if no governmental agency then publishes an index, Landlord shall
substitute therefor any commonly accepted index designed to reflect changes
in the cost of living which is published by a reputable private organization.
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3.3 MANNER OF PAYMENT. Tenant shall pay to Landlord the rent
calculated as set forth above without deduction, offset, or abatement (except
as expressly otherwise provided in Paragraphs 15.5, 16.1, and 16.5 below),
and without prior notice or demand, in advance on the first day of each
calendar month of the term of this Lease. Rent shall be payable in lawful
money of the United States to Landlord at 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000 or at such other place as Landlord may from
time to time designate in writing. Tenant's obligation to pay rent for any
partial month shall be prorated on the basis of a thirty (30) day month.
3.4 LATE PAYMENT CHARGE. If any installment of rent or any other
sum due from Tenant is not received by Landlord within ten (10) days after
the due date, Tenant shall pay to Landlord an additional sum of Seven Hundred
Dollars ($700.00). Such sum shall represent liquidated damages for, and a
reasonable estimate of, Landlord's administrative costs of collection, the
exact amount of which would be extremely difficult or impractical to fix.
Landlord's acceptance of such late charge shall not excuse any default by
Tenant hereunder, and shall not preclude Landlord from pursuing any other
rights and remedies it may have relating to such default.
4. SECURITY DEPOSIT. Prior to the Commencement Date, Tenant shall
establish a Certificate of Deposit in the name of Analog Devices, Inc. in
favor of Ferrari Brothers, a California general partnership, in the sum of
Nineteen Thousand Three Hundred Sixty Two Dollars and Twenty Two Cents
($19,362.22). It is specifically agreed that Landlord shall have access to
the funds represented by the Certificate of Deposit only for the purposes and
under the conditions set forth herein. The Certificate of Deposit shall be
renewable on an annual basis and shall be renewed by Tenant at least thirty
(30) days prior to the scheduled maturity thereof each year. The Certificate
of Deposit, as the same may be renewed from time-to-time, shall remain in
effect at least until the sooner of the expiration of this Lease or thirty
(30) days after the sooner termination thereof, and in all events at least
until ten (10) days after Tenant has vacated the Premises. If Tenant fails
to pay rent or any other sum due hereunder, or otherwise defaults with
respect to any provision of this Lease, Landlord may draw sums from the
Certificate of Deposit for the payment of any rent or other sum in default,
or to compensate Landlord for the payment of any other sum, including
attorneys' fees, which Landlord spends by reason of Tenant's default.
Landlord may draw upon the Certificate of Deposit without prejudice to any
other remedy Landlord may have by reason of Tenant's default or breach. If
Landlord so draws all or a portion of the Certificate of Deposit, Tenant
shall, within twenty (20) days after demand in writing therefor, restore the
amount of the Certificate of Deposit to the original amount thereof.
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5. Taxes.
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5.1 TENANT'S PERSONAL PROPERTY. Tenant shall pay directly to the
charging authority prior to delinquency all taxes assessed against and levied
upon Tenant's leasehold improvements, trade fixtures, furnishings, equipment
and all other personal property and merchandise of Tenant situated in or
about the Premises.
5.2 REAL PROPERTY TAXES. Tenant's Share of all Real Property
Taxes (as hereafter defined) levied with respect to the Project shall be
deemed Operating Expenses as described in Paragraph 9 below.
The term "Real Property Taxes" as used herein shall mean (i)
all taxes, assessments, levies, and other charges of any kind or nature
whatsoever, general and special (including all installments of principal and
interest required to pay for any general or special assessments for public
improvements, services, or benefits and any increases resulting from
reassessments caused by any change in ownership, new construction, or change
in valuation), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or
indirect power to tax or levy assessments, which are levied or assessed
against or with respect to (a) the value, occupancy or use of the Project (as
now constructed or as may at any time hereinafter be constructed, altered, or
otherwise changed), (b) the fixtures, equipment, and other real or personal
property of Landlord that are an integral part of the Project, (c) the gross
receipts, income, and rentals from the Project, or (d) the use of the Outside
Areas, public utilities, or energy within the Project; (ii) all charges,
levies or fees imposed by reason of environmental regulation or other
governmental control of the Project; (iii) all new exercise, transaction,
sales, privilege or other taxes now or hereafter imposed upon Landlord as a
result of this Lease; and (iv) all reasonable costs and fees (including
attorneys' fees) incurred by Landlord in contesting any Real Property Taxes
pertaining to the Project and in negotiating with public authorities as to
any Real Property Taxes pertaining to the Project. If at any time during the
lease term the taxation or assessment of the Project prevailing as of the
Commencement Date shall be altered so that in lieu of or in addition to any
Real Property Taxes described above there shall be levied, assessed or
imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an
alternate, substitute, or additional tax or charge (i) on the value, use or
occupancy of the Project, (ii) on or measured by the gross receipts, income,
or rentals from the Project, or on Landlord's business of leasing the
Project, or (iii) computed in any manner with respect to the operation of the
Project, then any such tax or charge, however designated, shall be included
within the meaning of the term "Real Property Taxes" for purposes of the
Lease. If any Real Property Tax
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is based upon property or rents unrelated to the Project, then only that part
of such Real Property Tax that is fairly allocable to the Project shall be
included within the meaning of the term "Real Property Taxes."
Notwithstanding the foregoing, the term "Real Property Taxes" shall not
include estate, inheritance, transfer, gift or franchise taxes of Landlord or
the federal or state net income tax imposed on Landlord's income from all
sources.
Notwithstanding the foregoing, Tenant shall have no obligation
to pay any increase in Real Property Taxes due to a reassessment of the value
of the Premises under Article XIIIA of the California Constitution to the
extent such reassessment results from new construction on land adjacent to
the Premises owned by Landlord and included within the tax parcel of which
the Premises are a part. Nothing in this paragraph shall be construed to
relieve Tenant of the obligation of paying its share of increases in taxes
under said Article XIIIA or any other provision of law in accordance with the
provisions of this Lease, except as specifically set forth above in this
paragraph.
Real Property Taxes shall be prorated on the basis of a
365-day year to account for any fractional portion of a fiscal tax year
included in the Lease term at the commencement or expiration of the term.
If any general or special assessment is levied and assessed
against the Premises, Landlord may elect either to pay the assessment in full
or to allow the assessment to go to bond. If Landlord pays the assessment in
full, Operating Expenses shall include a sum equal to that which would have
been payable (as both principal and interest) had Landlord allowed the
assessment to go to bond.
Tenant shall have the right, upon written request to Landlord,
to inspect each and every original tax xxxx relating to taxes assessed during
the Lease term against the Premises or the tax parcel of which the Premises
are a part. Landlord shall make such original tax xxxx available for
Tenant's inspection at Landlord's headquarters or at such other reasonable
place as Landlord may determine, during reasonable business hours.
Tenant at its cost shall have the right, at any time, to
contest any Real Property Taxes that are to be paid by Tenant, provided that
Tenant shall first pay any Real Property Taxes it desires to contest.
Landlord shall not be required to join in any contest brought by Tenant
unless the provisions of any law require that the contest be brought by or in
the name of Landlord or any owner of the Premises. In that case Landlord
shall join in the contest or permit it to be brought in Landlord's
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name as long as Landlord is not required to bear any cost. Tenant, on final
determination of the contest, shall immediately pay or discharge any decision
or judgement rendered, together with all costs, charges, interest, and
penalties incidental to the decision or judgement.
Notwithstanding anything to the contrary, Tenant shall only be
required to pay charges by the Environmental Protection Agency or other
governmental agencies relating to cleaning up contamination on, under, or
about the Premises to the extent such contamination results from Tenant's use
of the Premises or is caused by Tenant to exist in, on, or about the
Premises, and such expense shall be limited to costs incurred to perform such
investigations and clean-up as may be required by law. It is expressly
understood that, except as otherwise provided in Paragraph 7 below, Tenant
shall have no liability in connection with any contamination of the Premises
occurring before Tenant's entry into the Premises, or occurring after
expiration or sooner termination of the Lease term and Tenant's vacating of
the Premises, except to the extent Tenant causes such contamination.
6. Use.
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6.1 PERMITTED USES. The Premises shall be used and occupied only
for the following purposes: office, research, development, manufacturing and
sale of electronic components, and for no other use or purpose without first
obtaining Landlord's written consent which shall not be unreasonably
withheld.
6.2 COMPLIANCE WITH LAW. Tenant shall at its sole expense at all
times during the Lease term comply with all laws, statutes, ordinances,
regulations, codes or other rules and regulations of lawful governmental
authority (collectively "Regulations") relating to the Premises.
Notwithstanding anything to the contrary in this Lease, Landlord shall
perform and pay for all modifications to the structure of the Building (i.e.,
the exterior walls, roof structure and building foundation), required in
order to comply with any such Regulations, unless the need for compliance is
(a) caused by Tenant's particular use of the Premises (rather than merely
being a requirement for all buildings within the jurisdiction of such
governmental authority), or (b) caused by any new construction performed by
or on behalf of Tenant in, on or about the Premises (except to the extent
that during the process of such new construction violations of codes in
effect at the time Landlord constructed the Building are found, in which case
Landlord shall be solely liable for the cost of curing such violations).
Tenant shall perform and pay for any and all improvements or other
modifications required to be made with respect to any improvements made to
the Premises by Tenant, and all other portions of the Premises except as
provided in the
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second sentence of this paragraph. Without limiting the generality of the
foregoing, Tenant specifically shall perform and pay at its sole cost for any
and all work required to bring the Premises into compliance with the
Americans with Disabilities Act and the Toxic Gas Ordinance.
7. Hazardous Materials.
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As used herein, "Hazardous Materials" means any hazardous, toxic,
environmentally damaging or radioactive materials, substances or wastes,
including, but not limited to, those materials, substances or wastes: (1)
defined or listed as hazardous or extremely hazardous materials or wastes
pursuant to Title 22, Division 4, Chapter 30, of the California Code of
Regulations, as may be amended; (2) defined or listed as hazardous substances
pursuant to the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. _ 9601, et seq., as may be amended; (3) defined or
listed as hazardous or acutely hazardous wastes pursuant to the Resource
Conservation and Recovery Act, 42 U.S.C. _ 6901, et seq., as may be amended;
and/or (4) which consist in whole or part of petroleum, petroleum fractions,
petroleum products or petroleum distillates.
Tenant shall not cause or permit to be discharged from or about the
Premises, the Building, or the Project any Hazardous Materials. Without
limiting the foregoing, Tenant shall not cause or permit to be discharged any
Hazardous Materials into the groundwater or soils underlying or adjacent to
the Premises, Building or Project. Prior to its occupancy of the Premises
Tenant shall provide Landlord with a copy of the following items relating to
Tenant's bringing, using, or storing any Hazardous Materials on the Premises:
(i) a copy of Tenant's Material Safety Data Sheet in the same form submitted
to OSHA, (ii) a written detailed description of where on the Premises Tenant
intends to store Hazardous Materials and the manner (volume and type of
containers for each Hazardous Material, and method of securing the same
against movement) in which such Hazardous Materials will be stored, and (iii)
a general description of the processes for which the Hazardous Materials will
be used. Tenant shall deliver to Landlord in writing a detailed description
of any updates to or other modifications of the foregoing as and when they
occur.
Tenant, at its sole expense shall comply with all applicable
governmental rules, regulations, codes, ordinances, statutes, directives and
other requirements (collectively, "Laws") respecting Hazardous Materials in
connection with Tenant's activities and the activities of its agents,
employees, contractors and invitees on or about the Premises, the Building or
the Project. Tenant, at its sole cost, shall perform all investigations,
clean-up and other response actions which may be required by any
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governmental authority in, on, or about the Project, to the extent the same
relate to Hazardous Materials the existence of which in, on or about the
Project was caused by Tenant or its agents, contractors, employees, or
invitees. For purposes of this Paragraph 7 and all other provisions of this
Lease, any Hazardous Materials existing in, on or about the Project which are
of the same type, or which are derivative combinations or products thereof,
of any Hazardous Materials or other chemicals or substances which have at any
time been used, stored, generated, or released in, at, about or from the
Premises shall be deemed to have been released and caused to exist in, on or
about the Project by Tenant unless Tenant demonstrates by a preponderance of
the evidence that the existence of such Hazardous Materials was not caused by
Tenant. For purposes of this Paragraph 7, Hazardous Materials located in, on
or about the Premises, Building, or Project shall include without limitation
Hazardous Materials situated in the groundwater or soil.
Tenant shall indemnify, protect, defend and hold harmless Landlord
from and against all costs (including, but not limited to, environmental
response costs and Landlord's attorneys' and experts' fees and costs),
expenses, claims, judgments, losses, demands, liabilities, causes of action,
governmental directives, proceedings or hearings, relating to the use,
handling, generation, storage, transportation, release or disposal of
Hazardous Materials by Tenant, or its employees, agents, invitees or
contractors on, in, beneath, about or from, the Premises, the Building or the
Project, and/or relating to the breach of any of Tenant's obligations under
this Paragraph 7. Tenant's obligation to defend shall mean with legal
counsel approved by Landlord, which approval shall not unreasonably be
withheld or delayed. Without limitation of the foregoing, in the event
Tenant, its employees, agents, invitees or contractors, causes or has caused
the presence of Hazardous Materials in, on, or about the Premises, or in the
groundwater or land underlying the Premises or the Building, or, in, on, or
about any groundwater or land adjacent to, on, in the vicinity of the
Premises, Tenant shall indemnify, protect, defend, and hold harmless Landlord
from and against the cost of environmental consultants, attorneys, and other
consultants as Landlord determines are appropriate to assist Landlord in (1)
investigating the source, extent, and composition of such Hazardous
Materials, (2) cleaning up or otherwise remediating the same, (3) dealing
with any potential or actual liability of Landlord and/or Tenant respecting
such Hazardous Materials, and (4) otherwise dealing with such Hazardous
Materials. Tenant shall reimburse Landlord for (i) losses in or reductions
to rental income resulting from Tenant's use, handling, generation, storage,
transportation, release or disposal of Hazardous Materials; (ii) all costs of
clean-up or other alterations to the Premises, the Building or the Project
necessitated by Tenant's use, handling, generation, storage, transportation,
release or disposal of Hazardous Materials; and (iii) any diminution in the
fair market value of the Project caused by
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Tenant's use, handling, generation, storage, transportation, release or
disposal of Hazardous Materials.
Tenant shall notify Landlord in writing, immediately upon becoming
aware of: (1) any environmental investigation, clean-up or other
environmental response action requested, demanded, instituted or to be
instituted by any person, including but not limited to a governmental entity,
relating to any release or migration of Hazardous Materials on, in, beneath,
to or adjacent to the Premises, the Building or the Project; (2) any
environmental investigation, cleanup or other environmental response action
requested, demanded, instituted or to be instituted by any person, including
a governmental entity, relating to the use, handling, generation, storage,
transportation, release or disposal of Hazardous Materials by Tenant, its
employees, agents, invitees or contractors on, in, beneath, about or from the
Premises, the Building or the Project; (3) any claim or demand made or
threatened by any person, including but not limited to a governmental entity,
against the Landlord or Tenant, the Premises, the Building or the Project
relating to damages, contribution, cost recovery, compensation, loss or
injury relating to or claimed to result from any Hazardous Materials that
have come to be located on or about the Premises, the Building or the
Project; or (4) any data, workplans, proposals or reports submitted to any
governmental entity arising out of or in connection with any Hazardous
Materials on or about the Premises, the Building or the Project, including
but not limited to any complaints, notices, warnings or asserted violations
in connection therewith.
Landlord shall have the right, but not the obligation, in its sole
discretion, to conduct any inspections of the Premises, the Building and the
Project regarding Hazardous Materials on, in, beneath or about same.
Landlord shall give Tenant forty-eight (48) hours advance notice of any such
inspection, except in the event of an emergency situation. When conducting
any such inspections, Landlord shall avoid unreasonably disrupting Tenant's
activities. Tenant shall provide Landlord with reasonable cooperation to
facilitate any such inspection by Landlord, its agents or representatives.
Under no circumstances shall Tenant install, temporarily or
permanently, any underground or below-floor tanks relating to the use,
storage or disposal of Hazardous Materials.
Prior to the expiration or termination of this Lease, Tenant shall
decontaminate, remove or clean any equipment, improvements or facilities used
by Tenant at the Premises, Building or Project in connection with Hazardous
Materials, in full compliance with applicable Laws.
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To the extent any of the provisions of this Lease conflict with the
provisions of Paragraph 7, the provisions of Paragraph 7 shall be
controlling. The obligations of Tenant under this Paragraph 7 shall survive
the expiration of the Lease term.
8. RESTRICTIONS ON USE. Tenant shall not use or permit the use of the
Premises in any manner that will tend to create waste on the Premises or
constitute a nuisance to any other occupant or user of the Building or any
neighboring building. Tenant shall not place any harmful liquids or other
substances in the drainage system of the Building or use any apparatus,
machinery or other equipment in or about the Premises that may cause
substantial noise or vibration or overload existing electrical systems, or
otherwise place any unusual loads upon the floors, walls, or ceilings of the
Premises which may overload the Premises or jeopardize the structural
integrity of the Building or any part thereof. Tenant shall not make any
penetrations of the roof or exterior of the Building without the prior
written approval of Landlord. No materials or articles of any nature shall
be stored upon any portion of the Outside Areas unless located within an
enclosure approved by Landlord.
9. Operating Expenses.
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9.1 OPERATING EXPENSES. Tenant shall pay to Landlord as
additional rent hereunder one-half (1/2) of Tenant's Share of the total
amount of Operating Expenses (as defined below) as may be paid or incurred by
Landlord during the term of this Lease.
The term "Operating Expenses" shall mean all costs and
disbursements which Landlord shall pay or become obligated to pay in
connection with maintaining, repairing, managing and operating the Project,
including, without limitation (i) Real Property Taxes, (ii) the insurance
premiums for insurance which Landlord is required or entitled to maintain
related to the Project as described below in Xxxxxxxxx 00, (xxx) the
maintenance, repair and operation of the Project, including but not limited
to, all labor, materials, supplies and services, and the cost of all
maintenance contracts, used or consumed in performing Landlord's maintenance
and repair obligations hereunder, (iv) landscaping costs related to the
Project, (v) wages, salaries and benefits of all employees or consultants
engaged in the operation, maintenance and security of the Project, including
taxes, insurance and benefits relating thereto, (vi) any replacements or
capital improvements to the Project, except as otherwise specified in
Paragraph 6.2 above or in Xxxxxxxxx 00 xxxxx, (xxx) utility services which
are not separately metered to the premises of the tenants of the Building,
and (viii) janitorial services. Additionally, Tenant's Share of Operating
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Expenses shall include a management fee for Landlord's management, operation
and administration of the Project equal to five percent (5%) of the total
Operating Expenses hereunder excluding insurance premiums and Real Property
Taxes. To the extent the useful life of any improvement or item repaired or
replaced by Landlord in connection with its maintenance or repair of the
Project exceeds three (3) years, as reasonably determined by Landlord, the
cost thereof shall be amortized, together with interest thereon at the
prevailing rate available to Landlord from commercial banks, over such
reasonable period as Landlord shall determine and such amortized cost shall
be included in Operating Expenses. If the useful life of any such
improvement or item repaired or replaced is three (3) years or less, then the
cost thereof shall be deemed expensed and included immediately in its
entirety in Operating Expenses, except as otherwise specified in Paragraph
6.2 above or in Paragraph 10 below.
In addition to the foregoing, Tenant shall reimburse Landlord
in full upon demand for any damage to the Premises, the Building or the
Outside Areas which is caused by Tenant, its agents, employees, contractors
or invitees.
Notwithstanding anything to the contrary, it is expressly
understood that Operating Expenses do not include (i) amounts due under loans
encumbering the Premises, or payments of rent under ground leases of the
Premises, (ii) depreciation of the Building or of any building service
equipment, (iii) brokerage commissions incurred in connection with leasing
all or any portion of the Building, (iv) attorneys' fees, accounting costs,
and other costs directly related to leasing space in the Building, (v) damage
caused by the active negligence, wilful misconduct, or omissions (subject to
Paragraph 32.1) of the Landlord or its employees, agents, or contractors,
(vi) damage to the Project caused by any other tenants of the Project, or
their respective employees, agents, or contractors, and (vii) expenses
related to repairing construction defects in the Building shell.
Tenant shall have the right to inspect the books and records
of Landlord relating to the calculation of Operating Expenses no more often
than one time in any twelve month period during the term of the Lease for
purposes of verifying the accuracy of Landlord's calculation of the amount of
Operating Expenses. Tenant shall exercise such right by delivery to Landlord
of notice of Tenant's desire to so inspect such books and records, and dates
and times during normal business hours during which Tenant would like to
inspect the same, whereupon Landlord shall reasonably cooperate with Tenant
to provide reasonable access to such books and records at Landlord's offices.
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9.2 MONTHLY PAYMENTS. Tenant shall pay to Landlord on the first
day of each calendar month during the term hereof an amount estimated by
Landlord to be one-twelfth (1/12) of Tenant's Share of one half (1/2) of the
Operating Expenses for such twelve (12) month period. Landlord estimates
that one-twelfth (1/12) of Tenant's Share of one half (1/2) of the Operating
Expenses for the initial year of the term will be $2,387 (based on annual
Operating Expenses for the Project of $132,000). On or before March 15 of
each calendar year during the term hereof Landlord shall furnish Tenant a
statement prepared in accordance with generally accepted accounting
principles, consistently applied, covering the preceding calendar year and
the payments made by Tenant with respect to such period as set forth in this
Paragraph 9. If Tenant's payments for Operating Expenses during said period
did not equal one-half (1/2) of the actual amount of Tenant's share of
Operating Expenses, Tenant shall pay to Landlord the deficiency with its next
due installment of Base Rent after receipt of such statement. If said
payments exceed the actual amount due hereunder, Landlord shall credit the
excess against the next installment(s) of Base Rent. Operating Expenses
shall be prorated as of the Commencement Date and the Expiration Date (or the
date of any sooner termination of the term of this Lease) to reflect the
portion of the calendar year occurring within the lease term.
10. Maintenance and Repairs.
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10.1 TENANT'S OBLIGATIONS. Except as otherwise specifically
provided herein, Tenant shall, at Tenant's expense, keep in good and safe
condition, order and repair the Premises and every part thereof, including
without limitation, all plumbing, heating, air conditioning, ventilating,
fire sprinklers, electrical and lighting facilities, systems, appliances, and
equipment within the Premises; and all fixtures, interior walls, interior
surfaces of exterior walls, floors, ceilings, windows, doors, entrances, all
glass (including plate glass), and skylights located within the Premises.
Prior to the Commencement Date or promptly thereafter, Tenant at its sole
cost shall install an electrical meter measuring all electrical service
provided to the Premises, and shall install a new transformer serving only
the Premises; such installation shall be subject to the provisions of
Paragraph 11 hereof relating to alterations to the Premises. Tenant shall,
at Tenant's expense, maintain at all times during the term of this Lease the
heating, ventilating and air conditioning ("HVAC") systems serving the
Premises in a manner reasonably satisfactory to Landlord, which maintenance
at a minimum shall include replacement of filters, oiling and lubricating of
machinery, parts replacement, adjustment of drive belts, oil changes,
weatherproofing of all exposed HVAC equipment and ducts, and other preventive
maintenance; provided, however, that Tenant shall have the benefit of all
warranties available to Landlord regarding the equipment in said systems.
Tenant hereby waives the benefit of any statute now or
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hereafter in effect which would otherwise afford Tenant the right to make
repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Premises in good condition, order and repair.
Tenant specifically waives all rights it may have under Sections 1932(1),
1941, and 1942 of the California Civil Code, and any similar or successor
statute or law.
Notwithstanding anything to the contrary contained in the
Lease, Tenant shall in no event be responsible for performing, or paying for
the performance of, repair and maintenance of the Premises or the Building to
the extent the same: (i) is caused by the active negligence, wilful
misconduct, or omissions (subject to Paragraph 32.1) of Landlord or its
agents, employees or contractors, (ii) is necessitated by the negligence or
wilful misconduct of other tenants in the Building, or their agents,
employees, or contractors; (iii) is necessitated by the occurrence of any
peril required to be insured under policies of insurance required to be
obtained by Landlord under this Lease, or (iv) results from construction
defects of the Building. The liability of Tenant shall also be limited to
the extent Landlord receives reimbursement from others, including insurers,
guarantors, other tenants in the Building, and contractors.
10.2 LANDLORD'S OBLIGATIONS. Landlord shall keep in good
condition, order and repair the foundation and exterior walls of the Building
(excluding the interior of all walls and the exterior and interior of all
windows, doors, plate glass, and show cases), and the exterior roof of the
Building (except that Tenant shall repair at Tenant's expense any damage
caused by the activities of Tenant, Tenant's HVAC maintenance service
contractor, and/or Tenant's other agents on the roof, including but not
limited to the installation of air conditioning equipment and/or duct work,
or other roof penetrations, and improper flashing or caulking, and any damage
to exposed air conditioning equipment and duct-work installed by or for
Tenant). Expenses incurred by Landlord in connection with the above
described obligations shall be Operating Expenses hereunder, except for
expenses incurred in connection with maintaining the roof structure (but not
the roof membrane), foundation and exterior walls of the Building which shall
be borne solely by Landlord. Notwithstanding the foregoing, Tenant shall not
be required to pay as Operating Expenses the cost of any repair or
maintenance respecting the roof membrane which Tenant is able to demonstrate
to the reasonable satisfaction of Landlord is required as a result of
Landlord's activity on the roof or a defect in construction performed by
Landlord. Landlord shall also paint the Building from time to time as
reasonably necessary, and the cost thereof shall be an Operating Expense.
Landlord shall exercise reasonable diligence in performing such repairs as
soon as practicable. However, Landlord shall have no obligation to make
repairs under this Paragraph 10.2 until a reasonable time after Landlord's
receipt of written notice from Tenant of the need for such repairs.
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Except as otherwise specifically provided herein, there shall be no abatement
of rent or other sums payable by Tenant prior to or during any repairs by
Tenant or Landlord, and Tenant waives all claims for loss of business or lost
profits relating to any such repairs.
10.3 LANDLORD TO MAINTAIN AND CONTROL OUTSIDE AREAS. Landlord
shall maintain the Outside Areas, together with all facilities and
improvements now or hereafter located thereon, and together with all street
improvements or other improvements adjacent thereto as may be required from
time to time by governmental authority. The manner in which such areas shall
be maintained and the expenditures therefor shall be at the sole discretion
of Landlord; provided that Landlord maintains the Outside Areas in such a
fashion as achieves substantially the same level of quality in which Landlord
maintained the Outside Areas during PSC's occupancy of the Premises.
Landlord shall at all times have exclusive control of the Outside Areas and
may at any time temporarily close any part thereof, may exclude and restrain
anyone from any part thereof (except the bona fide customers, employees and
invitees of Tenant who use the Outside Areas in accordance with the rules and
regulations that Landlord may from time to time promulgate), and Landlord may
change the configuration of the Outside Areas or the location of facilities
thereon so long as any such change by Landlord does not unreasonably
interfere with Tenant's use of the Premises. Landlord shall also be entitled
to employ third parties to operate and maintain all or any part of such areas
on such terms and conditions as Landlord shall in its sole discretion deem
reasonable and proper. In exercising any such rights, Landlord shall make a
reasonable effort to minimize any disruption of Tenant's business.
10.4 HVAC REPLACEMENT AND PARKING LOT RESURFACING. If the HVAC
equipment (or any portion thereof) servicing the office portion of the
Premises (as opposed to the manufacturing portion of the Premises, for which
Tenant shall be solely liable for HVAC replacement costs) must be replaced at
any time during the Lease term, or the parking lot adjacent to the Building
servicing the tenants of the Building requires Major Resurfacing (as defined
below), as reasonably determined by Landlord, at any time during the Lease
term, then the cost of such replacement or resurfacing, as the case may be,
shall be borne by both Landlord and Tenant in accordance with the following
formula. Tenant shall pay such portion of the cost which is equal to 43.4%
of a fraction, the numerator of which is the number of years remaining in the
Lease term, and the denominator of which is the useful life (as reasonably
determined by Landlord) of the new HVAC system, or the resurfaced parking
lot, as the case may be. In the event Tenant should exercise any options to
extend the Lease term which extended terms commence after such replacement or
resurfacing, then Tenant shall
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pay to Landlord upon commencement of each such extended term the difference
between the amount owed by Tenant pursuant to the immediately preceding
sentence, and the amount calculated pursuant to the preceding sentence
assuming that the remaining term of the Lease includes the years of such
extended term. For purposes of this subparagraph, "Major Resurfacing" shall
be defined to mean any resurfacing of the parking lot the cost of which
exceeds Ten Thousand Dollars ($10,000.00); to the extent the cost of
resurfacing is less than Ten Thousand Dollars ($10,000.00), then the entire
cost shall be an Operating Expense in the year in which it is incurred by
Landlord.
11. Alterations.
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11.1 LANDLORD'S CONSENT REQUIRED. Tenant shall not, without
Landlord's prior written consent (which consent shall not unreasonably be
withheld or delayed beyond thirty (30) days after Tenant's written request to
Landlord to make the same) make any alterations, improvements, additions, or
utility installations (collectively called "alterations") in, on or about the
Premises, except for nonstructural alterations which during any twelve (12)
month period, in the aggregate, cost no more than Twenty Thousand Dollars
($20,000). As used in this Paragraph 11.1, the term "utility installation"
means power panels, wiring, fluorescent fixtures, space heaters, conduits,
air conditioning and plumbing. Should Tenant make any alterations
requiring the prior written consent of Landlord without obtaining such
consent, Tenant shall immediately remove the same at Tenant's expense upon
demand by Landlord.
11.2 PLANS AND PERMITS. Any alteration that Tenant shall desire to
make in or about the Premises and which requires the consent of Landlord
shall be presented to Landlord in written form, with proposed detailed plans
and specifications therefor prepared at Tenant's sole expense. Any consent
by Landlord thereto shall be deemed conditioned upon Tenant's acquisition of
all permits required to make such alteration from all appropriate
governmental agencies, the furnishing of copies thereof to Landlord prior to
commencement of the work, and the compliance by Tenant with all conditions of
said permits in a prompt and expeditious manner, all at Tenant's sole
expense. Upon completion of any alterations whether or not Landlord's
consent thereto is required, Tenant, at Tenant's sole cost, shall immediately
deliver to Landlord "as-built" plans and specifications therefor.
11.3 CONSTRUCTION WORK DONE BY TENANT. All construction work
required or permitted to be done by Tenant shall be performed by licensed
contractors in a prompt, diligent, and good and workmanlike manner, and shall
not materially
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diminish the value of the Building. Furthermore, all such construction work
shall conform in quality and design with the Premises existing as of the time
such work is performed. In addition, all such construction work shall be
performed in compliance with all applicable statutes, ordinances,
regulations, codes and orders of governmental authorities and insurers of the
Premises. Tenant or its agents shall obtain and pay for all licenses and
permits necessary therefor.
11.4 ROOF REPAIRS. All installation of air conditioning equipment
and duct work requiring penetration of the roof shall be properly flashed and
caulked. Any electrical or refrigeration conduits or other piping or
materials installed by Tenant in the Building shall be installed beneath the
surface of the roof (and not on the surface of the roof), and Tenant shall
thereafter repair and re-roof the affected portions of the roof surface. Any
equipment placed by Tenant on the roof shall be elevated and supported by
Tenant so as not to inhibit drainage or Landlord's repair of the roof
pursuant to Paragraph 10.2.
11.5 TITLE TO ALTERATIONS. Except as otherwise provided
hereinbelow, Tenant shall at all times retain title to any alterations, and
shall be entitled to claim any depreciation, investment tax credits, and
other tax benefits available in connection therewith. Tenant shall also be
entitled to remove any alterations installed by Tenant at its own expense,
provided such removal can be accomplished without causing damage to
structural portions of the Building, and provided further that Tenant at its
sole expense promptly repairs any and all damage occasioned by such removal.
If at the time Tenant installs or constructs any alterations, Tenant requests
and receives Landlord's permission to leave such alterations on the Premises
upon expiration or sooner termination of the Lease term, then Tenant shall
have no obligation to remove the same upon expiration or sooner termination
of the Lease term. If Tenant fails at the time of installation to request or
obtain Landlord's consent to leaving such alterations on the Premises upon
expiration or sooner termination of the Lease term, then Landlord shall be
entitled to require Tenant to remove the same and restore the Premises to its
original condition subject to reasonable wear and tear, perils, and Acts of
God, prior to expiration or promptly after sooner termination of the Lease
term, at Tenant's sole cost and expense. Tenant shall be entitled to leave
the Tenant Improvements in the Premises upon expiration or sooner termination
of the Lease term. Tenant shall be obligated to remove the Additional
Improvements upon expiration or sooner termination of the Lease term. The
rights of Landlord and obligations of Tenant under this paragraph shall
survive termination of the Lease term.
All alterations and other property of Tenant which remain on
the Premises upon expiration or sooner termination of the Lease term, subject
to the
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preceding subparagraph, shall be deemed abandoned by Tenant and at Landlord's
sole election shall be deemed the sole property of Landlord without need for
consideration therefor from Landlord to Tenant.
Landlord, within ten (10) days after demand from Tenant, shall
execute and deliver any documents required by any supplier, lessor, or lender
in connection with the installation in the Premises of Tenant's personal
property or Tenant's trade fixtures in which Landlord waives any rights it
may have or require with respect to that property, if the supplier, lessor,
or lender agrees in writing that (a) it will remove that property from the
Premises before the expiration of the Lease term or within thirty (30) days
after sooner termination of the term, provided that if it does not remove the
property within said period it shall have waived any rights it may have had
to the property, and (b) it shall repair any damage to the Premises
occasioned by such removal at its sole cost and expense within five (5) days
after such removal.
11.6 MECHANICS' LIENS. Tenant shall keep the Premises, the
Building, and the Project free from any liens arising out of any work
performed, materials furnished or obligations incurred by Tenant. In the
event that Tenant shall not, within ten (10) days following the imposition of
any such lien, cause the same to be released of record, Landlord shall have,
in addition to all other remedies provided herein and by law, the right, but
no obligation, to cause the same to be released by such means as Landlord
shall deem proper, including payment of the claim giving rise to such lien.
All sums paid by Landlord for such purpose, and all reasonable expenses
incurred by it in connection therewith, shall be payable to Landlord by
Tenant on demand with interest at the rate of ten percent (10%) per annum, or
the maximum rate permitted by law, whichever is less. Tenant shall give
Landlord notice of the date of commencement of any work in the Premises not
less than ten (10) days prior thereto, and Landlord shall have the right to
post notices of non-responsibility or similar notices in or on the Premises
in connection therewith.
12. UTILITIES. Prior to Tenant's occupancy of the Premises, or
promptly thereafter, Tenant at its sole cost shall separately meter all
utilities serving the Premises. For all periods of time prior to such
separate metering, Tenant shall pay fifty percent (50%) of all utilities
costs which are not separately metered and which are provided to the
Building. Such separate metering shall be deemed an alteration of the
Premises which is subject to the provisions of Paragraph 11 above. Tenant
shall pay when due directly to the charging authority all charges for water,
gas, electricity, telephone, refuse pickup, janitorial services, and all
other utilities and services supplied or furnished to the Premises during the
term of this Lease, together with any taxes thereon. In no event shall
Landlord be liable to Tenant for failure or
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interruption of any such utilities or services, unless caused by the willful
misconduct of Landlord, and no such failure or interruption shall entitle
Tenant to terminate this Lease or to withhold rent or other sums due
hereunder. Landlord shall not be responsible for providing security guards
or other security protection for all or any portion of the Premises, and
Tenant shall at its own expense provide or obtain such security services as
Tenant shall desire to insure the safety of the Premises.
13. Indemnity.
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13.1 INDEMNITY BY TENANT. Tenant shall indemnify, protect, defend,
and hold harmless Landlord from and against any and all claims, damages,
loss, proceedings, causes of action, costs, expense or liability due to, but
not limited to, bodily injury, including death resulting at any time
therefrom, and/or property damage, now or hereafter arising from any act,
work or things done or permitted to be done or otherwise suffered, or any
omission in or about the Premises, the Building, or the Project, by Tenant or
by any of Tenant's agents, employees, contractors, or invitees, or from any
breach or default by Tenant in the performance of any obligation on the part
of Tenant to be performed under the terms of this Lease, except to the extent
such damage, loss, expense or liability is caused by the active negligence,
willful misconduct or omission (subject to Paragraph 32.1) of Landlord or its
agents, employees or contractors. Tenant shall also indemnify Landlord from
and against all damage, loss, expense (including without limitation,
attorneys' fees, costs of investigation, and expert witness fees), and
liability incurred or suffered by Landlord in the defense of or arising out
of or resulting from any claim or any action or proceeding brought thereon.
In the event any action or proceeding shall be brought against Landlord by
reason of any such claim, Tenant upon notice from Landlord shall defend the
same at Tenant's expense with counsel reasonably satisfactory to Landlord.
The obligations of Tenant contained in this paragraph shall survive the
termination of this Lease.
13.2 INDEMNITY BY LANDLORD. Landlord hereby indemnifies Tenant
from and against all damages arising out of any damage to any person or
property occurring in, on or about the Premises and the Building resulting
from the active negligence, wilful misconduct, or omissions (subject to
Paragraph 32.1) of Landlord or its employees, agents and contractors, or from
a breach of Landlord's obligations under the Lease, except to the extent
caused by the acts or omissions of Tenant or its authorized representatives.
Landlord's obligation under this paragraph to indemnify Tenant shall be
limited to the sum that exceeds the amount of insurance proceeds, if any,
received by Tenant as a result of such damage.
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Notwithstanding the foregoing or any other provision in this Lease,
Landlord shall in no event be liable to Tenant for lost profits of Tenant
unless the same result from the wilful misconduct of Landlord, and Tenant
hereby releases Landlord from liability for any such loss profits to such
extent. This provision shall not be construed to release Landlord from any
claim for damages arising from Landlord's wilful misconduct, to the extent
such damages do not relate to lost profits.
14. Insurance.
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14.1 TENANT'S LIABILITY INSURANCE. Tenant shall, at its sole cost
and expense, obtain and keep in force during the term of this Lease either
Comprehensive General Liability insurance or Commercial General Liability
insurance applying to the use and occupancy of the Premises and the business
operated by Tenant, or any other occupant, on the Premises. Such insurance
shall include Broad Form Contractual liability insurance coverage. Such
coverage shall have a minimum combined single limit of liability of at least
Five Million Dollars ($5,000,000). All such policies shall be written to
apply to all bodily injury, property damage, personal injury and other
covered loss, however occasioned. All such policies shall be endorsed to add
Landlord and any lender or other party having an interest in the Premises
named by Landlord as an additional insured and to provide that any insurance
maintained by Landlord shall be excess insurance only. All such insurance
shall provide for severability of interests; shall provide that an act or
omission of one of the insureds shall not reduce or avoid coverage to the
other insureds; and shall afford coverage for all claims based on acts,
omissions, injury and damage, which claims occurred or arose (or the onset of
which occurred or arose) in whole or in part during the policy period. The
limits of all insurance described in this Paragraph 14.1 shall not, however,
limit the liability of Tenant hereunder.
14.2 LANDLORD'S PROPERTY INSURANCE. Landlord shall obtain and keep
in force during the term of this Lease a policy or policies of insurance
covering loss or damage to the Project in the amount of the full replacement
value thereof, providing protection against all perils included within the
classification of fire, extended coverage, vandalism, malicious mischief,
special extended perils (all risk), including boiler and machinery coverage
and an inflation endorsement, and, if available, flood and/or earthquake.
Such coverage shall include the Tenant Improvements described on EXHIBIT "C",
but shall exclude coverage of (i) the Additional Improvements described on
Exhibit "D" and all other leasehold improvements, additions, and alterations
other than the Tenant Improvements described on EXHIBIT "C" existing from
time to time on the Premises, and (iii) merchandise, fixtures, equipment and
other personal property of Tenant. In addition, Landlord shall obtain and
keep in force,
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during the term of this Lease, a policy of rental loss insurance
covering a period of one year, commencing on the date of loss, with proceeds
payable to Landlord, which insurance may also cover all Real Property Taxes,
insurance premiums, other Operating Expenses, and other sums payable by
Tenant to Landlord hereunder for said period. The insurance coverage may
include sprinkler leakage insurance if the Building contains fire sprinklers.
Tenant shall have no interest in or right to the proceeds of any such
insurance carried by Landlord.
Landlord shall make available to Tenant for Tenant's
inspection all insurance bills received by Landlord from time to time
relating to insurance required to be obtained by Landlord pursuant to this
paragraph. It is understood that Landlord's insurance policy covering the
Premises shall also cover the full replacement value of the Tenant
Improvements, and that the proceeds of such insurance shall belong to
Landlord and Tenant shall have no interest therein. In the event Tenant
reasonably demonstrates to Landlord that Landlord can obtain insurance for
the Premises, or the Building if Landlord obtains insurance for the entire
Building rather than the Premises alone, at a rate which is 90% or less of
the premiums charged for such insurance as has been obtained by Landlord,
then Landlord at Tenant's written request shall obtain a policy of property
insurance at such lower rate, provided such policy can be obtained with an
insurer authorized to do business in the State of California which insurer
has a financial rating of at least A 14 as rated in the most recent addition
of Best's Insurance Reports, and such policy has reasonably comparable
coverage and deductible amounts. Tenant shall not be required to pay any
increases in property insurance costs to the extent such increases are caused
by other tenants' uses of the Building in which the Premises are located.
Similarly, Tenant shall be solely liable for any increases in property
insurance costs to the extent such increases are caused by Tenant's use of
the Premises or Tenant's activities thereon.
14.3 TENANT'S PROPERTY INSURANCE. Tenant shall, at Tenant's sole
expense, obtain and keep in force during the term of this Lease, a policy of
fire and extended coverage insurance including a standard "all risk"
endorsement, insuring (i) the Additional Improvements described on EXHIBIT
"D" and all other leasehold improvements, additions, and alterations existing
from time to time in or to the Premises other than the Tenant Improvements
described on EXHIBIT "C", and (iii) merchandise, fixtures, equipment and
other personal property of Tenant within the Premises. Such insurance
coverage shall be for the full replacement value thereof, as the same may
increase from time to time due to inflation or otherwise. The proceeds from
any such policies shall be used for the repair or replacement of such items
so insured (except for the proceeds arising from damage to the Additional
Improvements, which may be used as Tenant desires for purposes which may be
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unrelated to repair or replacement of the Additional Improvements), and
Landlord shall have no interest in the proceeds of such insurance.
14.4 PAYMENT. Tenant's Share of the premiums for the insurance
obtained by Landlord pursuant to Paragraph 14.2 shall be deemed an Operating
Expense hereunder. Upon request by Tenant, Landlord shall consult with
Tenant and reasonably cooperate with Tenant to achieve the mix of premium
amounts and deductible amounts for such insurance that are satisfactory to
Tenant; provided that, Landlord's determination of the amounts thereof shall
be final and Tenant's comments regarding same shall be advisory only. Tenant
shall pay to Landlord the entire amount of any deductibles and other amounts
not paid by Landlord's insurance carriers relating to claims under Landlord's
insurance policies resulting from the acts or omissions of Tenant, or its
agents, employees, and invitees. Tenant shall pay such deductibles to
Landlord within thirty (30) days after receipt by Tenant of a copy of
reasonable evidence of the amount due. Notwithstanding the foregoing,
Landlord may obtain liability insurance and property insurance for the
Project separately, or together with other buildings and improvements under
blanket policies of insurance. In the latter case Tenant shall be liable for
only such portion of the premiums for such blanket policies as are allocable
to the Premises, as reasonably determined by the insurer or Landlord. If the
term of this Lease does not commence or expire concurrently with the
commencement or expiration, respectively, of the period covered by such
insurance, Tenant's liability for premiums shall be prorated on an annual
basis.
14.5 INSURANCE POLICIES. The insurance required to be obtained by
Tenant pursuant to this paragraph shall be primary insurance and (a) shall
provide that the insurer shall be liable for the full amount of the loss up
to and including the total amount of liability set forth in the declarations
without the right of contribution from any other insurance coverage of
Landlord, (b) shall be in a form and contain a deductible amount satisfactory
to Landlord, (c) shall be carried with companies acceptable to Landlord, and
(d) shall specifically provide that such policies shall not be subject to
cancellation, reduction of coverage or other change except after at least
fifteen (15) days prior written notice to Landlord. The policy or policies,
or duly executed certificates for them, together with satisfactory evidence
of payment of the premium thereon, shall be deposited with Landlord on or
prior to the Commencement Date, and upon each renewal of such policies, which
shall be effected not less than fifteen (15) days prior to the expiration
date of the term of such coverage. Tenant shall not do or permit to be done
anything which shall invalidate any of the insurance policies referred to in
this Paragraph 14.
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14.6 WAIVER OF SUBROGATION. Tenant and Landlord each hereby waives
any and all rights of recovery against the other, or against the officers,
employees, agents and representatives of the other, for loss of or damage to
the property of the waiving party or the property of others under its
control, where such loss or damage is insured against under any insurance
policy carried by Landlord or Tenant and in force at the time of such loss or
damage. Tenant and Landlord shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease. Landlord
and Tenant shall use their best efforts to cause each insurance policy
obtained by such party to provide that the insurance company waives all
rights of recovery by way of subrogation against the other party in
connection with any damage covered by such policy and, if any such waiver of
subrogation is not obtained, shall promptly notify the other party of such
fact.
14.7 NO LIMITATION OF LIABILITY. Landlord makes no representation
that the limits of liability specified to be carried by Tenant or Landlord
under the terms of this Lease are adequate to protect any party. If Tenant
believes that the insurance coverage required under this Lease is
insufficient to adequately protect Tenant, Tenant shall provide, at its own
expense, such additional insurance as Tenant deems adequate.
15. Damage or Destruction.
---------------------
15.1 PARTIAL DAMAGE - INSURED. Subject to the provisions of
Paragraphs 15.3 and 15.4 below, if the Premises or the Building, as the case
may be, are damaged such that restoration thereof can in Landlord's
reasonable estimation be completed within two hundred ten (210) days, and the
damage is caused by a peril required to be insured against by Landlord
pursuant to Xxxxxxxxx 00, Xxxxxxxx shall at Landlord's expense repair such
damage as soon as reasonably possible and this Lease shall continue in full
force and effect. In the event Landlord maintains earthquake insurance
(which the parties acknowledge Landlord is not obligated by this Lease to
carry), then subject to the provisions of Paragraphs 15.3 and 15.4 below, if
the Premises or the Building, as the case may be, are damaged such that
restoration thereof can in Landlord's reasonable estimation be completed
within two hundred ten (210) days, and the damage is caused by earthquake,
Landlord shall, subject to the following provisions of this Paragraph 15.1,
repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. At such time as the amount of the
deductible for the earthquake damage is determined by the insurance company
and Landlord agrees to such amount, Landlord shall deliver notice thereof to
Tenant. On or before the Tenant's Share Payment Date (as defined below),
Tenant
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shall deliver to a depository in accordance with the provisions of
Paragraph 15.10 the following sums in cash or other readily available funds:
(i) 43.4% of the amount by which the amount of such deductible exceeds Fifty
Thousand Dollars ($50,000), provided that Tenant shall not be obligated to
pay more than 43.4% of Fifty Thousand Dollars ($50,000) under this
subparagraph (i), and (ii) 43.4% of one half of the amount by which such
deductible exceeds One Hundred Thousand Dollars ($100,000). The formula set
forth in the preceding sentence is based upon the Landlord paying the first
Fifty Thousand Dollars ($50,000) of the earthquake deductible, all tenants in
the Building together paying the next Fifty Thousand Dollars ($50,000) of the
earthquake deductible, and Landlord on the one hand and said Building tenants
on the other hand each paying one half of any earthquake deductible amount
exceeding One Hundred Thousand Dollars ($100,000) (all such amounts payable
by all tenants of the Building herein called the "Aggregate Building Tenants'
Share"). The "Tenant's Share Payment Date" shall mean (i) fifteen (15) days
after Landlord delivers notice to Tenant of the deductible amount if the
amount of the earthquake deductible payable by Tenant pursuant to the
foregoing is Fifty Thousand Dollars ($50,000) or less, and (ii) forty five
(45) days after Landlord delivers notice to Tenant of the deductible amount
if the amount payable by Tenant is more than Fifty Thousand Dollars
($50,000). In the event Tenant fails to pay such amount for any reason by
the Tenant's Share Payment Date, or in the event Landlord does not receive by
the Tenant's Share Payment Date the Aggregate Building Tenants' Share, then
Landlord shall have no obligation to commence or complete repair of such
earthquake damage, and shall be entitled to terminate this Lease by delivery
to Tenant of notice of such termination within ten (10) days after the
Tenant's Share Payment Date; provided that Landlord shall be entitled to, but
shall have no obligation to, repair all such earthquake damage at Landlord's
expense, including payment of the deductible, such election to so repair to
be made by Landlord's delivery of notice thereof to Tenant within ten (10)
days after the Tenant's Share Payment Date, in which event this Lease shall
remain in full force and effect.
15.2 PARTIAL DAMAGE - UNINSURED. Subject to the provisions of
Paragraphs 15.3 and 15.4, if at any time during the term hereof the Premises
are damaged and the damage is caused by a peril (other than earthquake) not
required to be insured by Landlord pursuant to Xxxxxxxxx 00, Xxxxxxxx may at
Landlord's option either (a) repair such damage as soon as reasonably
possible at Landlord's expense, in which event this Lease shall continue in
full force and effect, or (b) give written notice of termination of this
Lease to Tenant within thirty (30) days after the date of the occurrence of
such damage, with the effective date of such termination to be the date of
the occurrence of such damage. In the event Landlord gives such notice of
termination of this Lease, Tenant shall have the right, within ten (10) days
after receipt
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of such notice, to agree in writing on a basis satisfactory to Landlord to
pay for the entire cost of repairing such damage less only the amount of
insurance proceeds, if any, received by Landlord, in which event the notice
of termination shall be ineffective and this Lease shall continue in full
force and effect, and Landlord shall proceed to make such repairs as soon as
reasonably possible. If Tenant does not give such notice within such ten
(10) day period, this Lease shall be terminated pursuant to such notice of
termination by Landlord.
15.3 TOTAL DESTRUCTION. If at any time during the term hereof the
Premises are destroyed such that restoration thereof cannot in Landlord's
reasonable estimation be completed in two hundred ten (210) days, from any
cause whether or not covered by the insurance maintained pursuant to
Paragraph 14, this Lease shall at the election of Landlord or Tenant
terminate as of the date of such destruction. Landlord and Tenant shall
exercise their respective rights to terminate this Lease under this
subparagraph 15.3 by delivery of notice of termination to the other within
thirty (30) days after Landlord notifies Tenant of the estimated period of
restoration. In the event neither party elects to so terminate this Lease,
Landlord shall at Landlord's expense repair such damage, and restore the
Premises and the Tenant Improvements to their condition existing immediately
prior to such damage as soon as reasonably possible, and this Lease shall
continue in full force and effect.
15.4 DAMAGE NEAR END OF TERM. If the Premises are destroyed or
damaged in whole or in part to the extent of One Hundred Thousand Dollars
($100,00.00) or more whether from an insured or uninsured casualty, during
the last year of the term of this Lease, either party may at its option
cancel and terminate this Lease as of the date of occurrence of such damage
by giving written notice to the other party within thirty (30) days after the
date of occurrence of such damage. Notwithstanding the foregoing, if Tenant
is then entitled to exercise any option to extend the term of this Lease
pursuant to other provisions of this Lease, and Tenant exercises such option
in accordance with such provision, then this Lease shall not be terminated
under this subparagraph (although it may be terminated in accordance with
subparagraph 15.3 above or other provisions of this Lease, to the extent
applicable).
15.5 ABATEMENT OF RENT. Notwithstanding anything to the contrary
contained in this Lease, if the Premises are damaged, the Base Rent payable
hereunder for the period commencing on the occurrence of such damage shall be
abated until completion of repair or restoration of such damage, or
termination of the Lease (if the Lease is terminated pursuant to other
provisions of this Lease). Such abatement of Base Rent shall be in
proportion to the extent to which Tenant's use of the Premises is impaired
during said period of time; provided that, nothing herein shall
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be construed to preclude Landlord from being entitled to collect the
full amount of any rental loss insurance proceeds. In addition to abatement
of Base Rent, Tenant's obligation to pay Operating Expenses shall also be
abated to the extent of proceeds therefor, if any, received by Landlord under
the rent abatement policy required to be maintained by Landlord under
Paragraph 14.2 above. Except for such abatement of Base Rent and Operating
Expenses, if any, and subject to Paragraph 13.2, Tenant shall have no claim
against Landlord for any damage suffered by reason of any such damage,
destruction, repair or restoration.
15.6 WAIVER. Tenant waives the provisions of California Civil Code
Sections 1932(2) and 1933(4), and any similar or successor statutes relating
to termination of leases when the thing leased is substantially or entirely
destroyed, and agrees that any such occurrence shall instead be governed by
the terms of this Lease.
15.7 TENANT'S PROPERTY. Landlord's obligation to rebuild or
restore shall not include restoration of the Additional Improvements, or
Tenant's trade fixtures, equipment, merchandise, or any other improvements,
alterations or additions made by Tenant to the Premises after the
Commencement Date or made by PSC at any time during its occupancy of the
Premises from 1985 through May of 1995.
15.8 NOTICE OF DAMAGE. Tenant shall notify Landlord within five
(5) days after the occurrence thereof of any damage to all or any portion of
the Premises. In no event shall Landlord have any obligation to repair or
restore the Premises pursuant to this Paragraph 15 until a reasonable period
of time after Landlord's receipt of notice from Tenant of the nature and
scope of any damage to the Premises, and a reasonable period of time to
collect insurance proceeds arising from such damage (unless such damage is
clearly not covered by insurance then in effect covering the Premises).
Landlord shall proceed diligently to collect insurance proceeds, and shall
commence any obligation it may have to repair the Premises as promptly as
reasonably possible.
15.9 REPLACEMENT COST. The determination by a third party expert
or consultant, selected by Landlord in its reasonable discretion, of the
estimated period of repair of any damage shall be conclusive for purposes of
this Paragraph 15. Such determination shall be made within thirty (30) days
of the date of damage, provided Tenant notifies Landlord of such damage in
accordance with subparagraph 15.8 above.
15.10 DISBURSEMENT ACCOUNT. In the event Landlord is required
to restore the Premises pursuant to any of the provisions of this Paragraph
15, then Landlord shall deposit any insurance proceeds received in connection
therewith with
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an institutional trustee or other depository reasonably acceptable to Tenant,
and the proceeds of such insurance shall be drawn from time to time to cover
costs of such restoration only upon submission by Landlord of invoices for
such costs or other reasonable evidence of Landlord of the costs incurred to
the date of such requested draw.
16. Condemnation.
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16.1 PARTIAL TAKING. Subject to Paragraph 16.5, if part of the
Premises is taken for any public or quasi-public use, under any statute or
right of eminent domain (collectively a "taking"), and a part of the Premises
remains which is reasonably suitable for Tenant's continued occupancy for the
uses permitted by this Lease, and a portion of the parking area within the
Project remains which is equivalent to at least eighty percent (80%) of the
parking area in the Project as of the Commencement Date, this Lease shall, as
to the part so taken, terminate as of the date the condemnor or purchaser
takes possession of the property being taken, and the monthly Base Rent
payable hereunder shall be reduced in the same proportion that the floor area
of the portion of the Premises so taken bears to the floor area of the
Premises immediately prior to such taking. Landlord shall, at its own cost
and expense, make all necessary repairs or alterations to the Premises in
order to make the portion of the Premises not taken a complete architectural
unit. Such work shall not, however, exceed the scope of the work done by
Landlord in originally constructing the Premises. Each party hereto waives
the provisions of California 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.
16.2 TOTAL TAKING. Subject to Paragraph 16.5, if all of the
Premises are taken, or such part thereof is taken so that there does not
remain a portion of the Premises suitable for Tenant's continued occupancy
for the uses permitted hereunder, or more than twenty percent (20%) of the
parking area in the Project as of the Commencement Date is taken, such taking
shall be treated as a total taking and this Lease shall terminate upon the
date possession shall be taken by the condemning authority.
16.3 DISTRIBUTION OF AWARD. All compensation awarded upon a taking
governed by Paragraph 16.1 or Paragraph 16.2 shall belong to and be paid to
Landlord, except that Tenant shall be entitled to make a separate claim to
the taking authority for all losses it suffers as a consequence of the
taking, including losses relating to loss of use of the Additional
Improvements.
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16.4 SALE UNDER THREAT OF CONDEMNATION. A sale by Landlord to any
authority having the power of eminent domain, either under threat of
condemnation or while condemnation proceedings are pending, shall be deemed a
taking under the power of eminent domain for purposes of this Paragraph 16.
16.5 TEMPORARY TAKING. If all or any part of the Premises is
occupied, taken, or appropriated by military or other public or quasi-public
use or other governmental authority for less than one hundred eighty (180)
consecutive days, it shall not constitute a taking of the Premises which
would be governed by Paragraph 16.1 or Paragraph 16.2. In such event, during
such a "temporary taking," all of the provisions of this Lease shall remain
in force and effect, except that the monthly Base Rent and Operating Expenses
payable during such temporary taking shall be reduced in the same proportion
that the floor area of the portion of the Premises so occupied, taken, or
appropriated bears to the floor area of the Premises as of the day
immediately preceding the occupation, taking, or appropriation. Any award
that may be paid in connection with such a temporary taking shall be paid to
Landlord. In the event a taking which appears, at its commencement, to be
only a temporary taking nevertheless continues for one hundred eighty (180)
consecutive days or more, a partial or total taking, as the case may be,
shall be deemed to have occurred on the one hundred eightieth (180th)
consecutive day of such taking, and shall be governed by the provisions of
either Paragraph 16.1 or Paragraph 16.2 as the case may be.
17. Assignment and Subletting.
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17.1 PROHIBITION OF ASSIGNMENT AND SUBLETTING. Tenant shall not
assign this Lease, or any interest therein, voluntarily or involuntarily, 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
Tenant excepted) to occupy or use the Premises, or any portion thereof,
without the prior written consent of Landlord in each instance pursuant to
the terms and conditions set forth below, which consent shall not
unreasonably be withheld or delayed beyond the twenty (20) day period
specified in Paragraph 17.2. Any assignment or subletting by Tenant without
the written consent of Landlord shall be void and shall, at the option of
Landlord, terminate this Lease.
17.2 DOCUMENTATION. Prior to any assignment or sublease which
Tenant desires to make, Tenant shall provide to Landlord the name and address
of the proposed assignee or sublessee, a statement of the proposed use of the
Premises by the assignee or sublessee (including an indication of the extent
to and manner in which Hazardous Materials will be utilized), and true and
complete copies of all documents relating to Tenant's prospective agreement
to assign or sublease, and shall specify all
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consideration to be received by Tenant for such assignment or sublease in the
form of lump sum payments, installments of rent, or otherwise. For purposes
of this Paragraph 17, the term "consideration" shall include, without
limitation, all monies or other consideration of any kind, if such sums are
related to Tenant's interest in this Lease or in the Premises, including but
not limited to, bonus money, and payments (in excess of book value thereof)
for Tenant's assets, fixtures, inventory, accounts, good will, equipment,
furniture, general intangibles, and any capital stock or other equity
ownership of Tenant. Within twenty (20) days after the receipt of such
written notice, Landlord shall either consent in writing to such proposed
assignment or sublease subject to the terms and conditions hereinafter set
forth, or notify Tenant in writing that Landlord refuses such consent,
specifying reasonable grounds for such refusal.
17.3 TERMS AND CONDITIONS. As a condition to Landlord's granting
its consent to any assignment or sublease, Tenant and the proposed assignee
or sublessee must demonstrate to Landlord's reasonable satisfaction that the
assignee or sublessee is financially responsible and that the proposed use
does not pose an unreasonable risk (as determined by Landlord in its
reasonable discretion) of contamination of the Project with Hazardous
Materials and is not otherwise injurious to the Premises. Without limiting
the generality of the foregoing, Landlord shall be entitled to withhold
consent to any proposed assignment of this Lease unless Tenant demonstrates
to the reasonable satisfaction of Landlord that the proposed assignee has a
net worth equal to at least the greater of (a) Eleven Million Dollars
($11,000,000.00), or (b) such greater net worth as Analog Devices, Inc. or
its successor may have at the time of such proposed assignment, up to
Eighteen Million Dollars ($18,000,000.00). As a condition for granting its
consent to any proposed assignment or subletting, Landlord may require that
Tenant agree to pay to Landlord, as additional rent, as and when received by
Tenant, and after first deducting reasonable real estate brokerage
commissions and attorneys' fees, if any, incurred in connection with such
assignment or subletting, fifty percent (50%) of the excess, if any, of (i)
the fair market value rent (triple net) of the Premises, determined as set
forth below, assuming such amount is payable for the duration of the term of
such assignment or sublease, over (ii) the Base Rent payable by Tenant to
Landlord under the Lease at the time of such sublease or assignment, assuming
such amount is payable for the duration of the term of such assignment or
sublease. The fair market value rent for the Premises, for purposes of the
preceding sentence, shall be determined without regard to the value added to
the Premises by the specialized additions and improvements to the Premises
installed by Tenant at its own expense or previously installed by PSC at
PSC's expense solely for its manufacturing business on the Premises, such as
clean rooms, process equipment, and trade fixtures. In the event Landlord
and Tenant are unable to agree upon the fair market value rent
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of the Premises, the dispute shall be arbitrated in accordance with the rules
of the American Arbitration Association.
Tenant may assign its interest in the Lease without the prior
written consent of Landlord to any corporation which controls or is
controlled by Analog Devices, Inc., or any corporation which results from a
merger or consolidation with Analog Devices, Inc.; provided that such
assignment is made to an entity that satisfies the net worth criteria set
forth hereinabove.
Each assignment or sublease agreement to which Landlord has
consented shall be an instrument in writing in form satisfactory to Landlord,
and shall be executed by both Tenant and the assignee or sublessee, as the
case may be. Each such assignment or sublease agreement shall recite that it
is and shall be subject and subordinate to the provisions of this Lease, that
the assignee or sublessee accepts such assignment or sublease and agrees to
perform all of the obligations of Tenant hereunder, and that the termination
of this Lease shall, at Landlord's sole election, constitute a termination of
every such assignment or sublease. In the event Landlord shall consent to an
assignment or sublease, Analog Devices, Inc. shall nonetheless remain
primarily liable for all obligations and liabilities of Tenant under this
Lease, including but not limited to the payment of rent.
18. Events of Default and Remedies.
------------------------------
18.1 EVENTS OF DEFAULT. A breach of this Lease shall exist if any
of the following events (hereinafter referred to as "Event of Default") shall
occur:
(1) Failure of Tenant to pay within five (5) days after
delivery of notice from Landlord that any installment of rent of other
payment required to be made by Tenant hereunder is due;
(2) Tenant's failure to perform any other term, covenant or
condition contained in this Lease and such failure shall have continued for
thirty (30) days after written notice of such failure is delivered to Tenant
or such longer period as may reasonably be necessary to cure such failure
provided Tenant commences such cure within said thirty (30) days and
thereafter diligently prosecutes the same to completion;
(3) Tenant's vacating or abandonment of Premises;
(4) Tenant's assignment of its assets for the benefit of its
creditors;
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(5) The sequestration of, attachment of, or execution on, any
substantial part of the property of Tenant or on a property essential to the
conduct of Tenant's business, shall have occurred and Tenant shall have
failed to obtain a return or release of such property within thirty (30) days
thereafter, or prior to sale pursuant to such sequestration, attachment of
whichever is earlier; or
(6) A court having jurisdiction shall have made or entered
any decree or order (a) adjudging Tenant to be bankrupt or insolvent, (b)
approving as properly filed a petition seeking reorganization of Tenant or an
arrangement under the bankruptcy laws or any other applicable debtors' relief
law or statute of the United States or any State thereof, (c) appointing a
receiver, trustee or assignee of Tenant in bankruptcy or insolvency or for
its property, or (d) directing the winding up or liquidation of Tenant; and
such decree or order shall have continued for a period of thirty (30) days;
or Tenant shall have voluntarily submitted to or filed a petition seeking any
such decree of order.
18.2 REMEDIES. Upon any Event of Default, Landlord shall have the
following remedies, in addition to all other rights and remedies provided by
law, to which Landlord may resort cumulatively, or in the alternative:
(1) RECOVERY OF RENT. Landlord shall be entitled to keep
this Lease in full force and effect (whether or not Tenant shall have
abandoned the Premises) and to enforce all of its rights and remedies under
this Lease, including the right to recover rent and other sums as they become
due, plus interest at the rate of ten percent (10%) per annum from the due
date of each installment of rent or other sum until paid.
(2) TERMINATION. Landlord may terminate this Lease by giving
Tenant written notice of termination. On the giving of such notice all
Tenant's rights in the Premises and the Building and parcel of which the
Premises are a part shall terminate. Upon the giving of the notice of
termination, Tenant shall surrender and vacate the Premises in the condition
required by Paragraph 26, and Landlord may reenter and take possession of the
Premises and all the remaining improvements and property and eject Tenant or
any of Tenant's subtenants, assignees or other person or persons claiming any
right under or through Tenant or eject some and not others or eject none.
This Lease may also be terminated by a judgement specifically providing for
termination. Any termination under this paragraph shall not release Tenant
from the payment of any sum then due Landlord or from any claim for damages
or rent previously accrued or then accruing against Tenant. In no event
shall any one or more of the following actions by Landlord constitute a
termination of this Lease:
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(a) maintenance and preservation of the Premises;
(b) efforts to relet the Premises;
(c) appointment of a receiver in order to protect
Landlord's interest hereunder;
(d) consent to any subletting of the Premises or
assignment of this Lease by Tenant, whether pursuant to provisions hereof
concerning subletting and assignment or otherwise; or
(e) any other action by Landlord or Landlord's agents
intended to mitigate the adverse effects from any breach of this Lease by
Tenant.
(3) DAMAGES. In the event this Lease is terminated pursuant
to subparagraph 18.2(2) above, Landlord shall be entitled to damages in the
following sums:
(a) the worth at the time of award of the unpaid rent
which had been earned at the time of termination; plus
(b) 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 Tenant proves
could have been reasonably avoided; plus
(c) 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 Tenant proves could be reasonably
avoided; and
(d) any other amounts necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease, or which in the ordinary course of
things would be likely to result therefrom including, without limitation, the
following: (i) expenses for cleaning, repairing or restoring the Premises;
(ii) expenses for altering, remodeling or otherwise improving the Premises
for the purposes of reletting; (iii) costs of carrying the Premises such as
taxes and insurance premiums thereon, utilities and security precautions;
(iv) expenses in retaking possession of the Premises; (v) attorneys' fees and
court costs; and (vi) any unamortized real estate brokerage commission paid
in connection with this Lease.
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(e) The "worth at the time of award" of the amounts
referred to in subparagraphs (a) and (b) of this paragraph is computed by
allowing interest at the rate of ten percent (10%) per annum. The "worth at
the time of award" of the amount referred to in subparagraph (c) of this
paragraph is computed by discounting such amount at the discount rate of the
Federal Reserve Board of San Francisco at the time of award plus one percent
(1%). The term "rent" as used in this paragraph shall include all sums
required to be paid by Tenant to Landlord pursuant to the terms of this
Lease.
19. ADVERTISEMENTS AND SIGNS. Tenant shall not place or permit to be
placed any sign, display, advertisement, or decoration ("sign") on the
exterior of the Building, or elsewhere in the Project or on the Premises,
without the prior written consent of Landlord as to the color, size, style,
character, content, and location of each such sign. Upon termination of this
Lease, Tenant shall remove any sign which it has placed in the Project or on
the Premises or the Building, and shall repair any damage caused by the
installation or removal of such sign.
20. ENTRY BY LANDLORD. Landlord and its agents shall be entitled to
enter into and upon the Premises at all reasonable times, upon reasonable
notice (except in the case of an emergency, in which event no notice shall be
required), for the following purposes: (i) to perform Landlord's maintenance
and repair responsibilities; (ii) to post notices of non-responsibility for
alterations, additions, or repairs; or (iii) to place upon the Premises any
ordinary "for sale" signs and to show the Premises to prospective purchasers
or lenders; and, during the ninety (90) day period prior to the expiration of
this Lease, or upon any Event of Default, to place upon the Premises any
usual or ordinary "for lease" signs and exhibit the Premises to prospective
tenants at reasonable hours.
Landlord's rights of entry as set forth in this Paragraph 20 shall be
subject to the reasonable security regulations of Tenant, and to the
requirement that Landlord use reasonable efforts to minimize interference
with Tenant's business activities on the Premises.
21. Subordination and Attornment.
----------------------------
Notwithstanding anything contained in this Lease, and except with
respect to any existing deeds of trust or other liens encumbering the Project
or any portion thereof as of the Commencement Date (which the parties
acknowledge are prior to this Lease, subject to such rights as Tenant may
receive in the event a non-disturbance agreement is obtained from the
beneficiary of such deed of trust or other lienholder
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concurrently with the execution of this Lease), this Lease shall not be
subject to or subordinate to any ground or underlying lease or to any lien,
mortgage, deed of trust, or security interest now or hereafter affecting the
Premises, nor shall Tenant be required to execute any documents subordinating
this Lease, unless the ground lessor, lender, or other holder of the interest
to which this Lease shall be subordinated agrees to execute a recognition and
non-disturbance agreement in substantially the form set forth on EXHIBIT "E".
22. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS. Tenant shall
within seven (7) days following request by Landlord: (a) execute and deliver
to Landlord any documents, including estoppel certificates, in the form
presented to Tenant by Landlord (1) certifying that this Lease has not been
modified and is 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, (2) stating the date to which the rent and other
charges are paid in advance, if at all, (3) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or if there are uncured defaults on the part of Landlord, stating
the nature of such uncured defaults, and (4) evidencing the status of this
Lease as may be required either by a lender making a loan to Landlord to be
secured by a deed of trust or mortgage encumbering the premises or a
purchaser of the premises from Landlord; and (b) deliver to Landlord the best
available current (and public, if the stock of Tenant is publicly traded over
a United States nationally recognized stock exchange) financial statements of
Tenant with an opinion of a certified public accountant, if available,
including a balance sheet and profit and loss statement for the then current
fiscal year, and the two (2) immediately prior fiscal years (if available),
all prepared in accordance with generally accepted accounting principles
consistently applied. Landlord shall only be entitled to request such
financial statements in connection with an intended disposition or
refinancing of the Building.
Landlord shall within seven (7) days following request by Tenant, provided
such request is made only in connection with a proposed assignment or
sublease of Tenant's interest in this Lease pursuant to Paragraph 17 above:
(a) execute and deliver to Tenant an estoppel certificate in the form
presented to Landlord by Tenant (1) certifying that this Lease has not been
modified and is 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, (2) stating the date to which the rent and other
charges are paid in advance, if at all, and (3) acknowledging that there are
not, to Landlord's knowledge, any uncured defaults on the part of Tenant
hereunder, or if there are uncured defaults on the part of Tenant, stating
the nature of such uncured defaults.
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23. NOTICES. Any notice, approval, request, demand, or consent
(collectively "notice") required or desired to be given under this Lease
shall be in writing and shall be personally served or delivered by commercial
courier (with signed receipt) or United States mail, registered or certified,
postage prepaid, and addressed to the party to be served at the last address
given by that party to the other party under the provisions of this
paragraph. At the date of execution of this Lease, the addresses of Landlord
and Tenant are as set forth above in the preamble to this Lease. Either
party may change its address by notice to the other party. Any notice
delivered by United States mail pursuant to this paragraph shall be deemed to
have been delivered five (5) days after the posted date of mailing.
24. WAIVER. The waiver by either party 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 Landlord shall not be deemed to be a waiver
of any preceding breach by Tenant of any term, covenant or condition of this
Lease, other than the failure of Tenant to pay the particular rental so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent. No term, covenant or condition shall be
deemed to have been waived by either party unless such waiver is in writing
and signed by the party making such waiver.
25. ATTORNEY'S FEES. If any action proceeding at law or in equity, or
an arbitration proceeding (collectively an "action"), shall be brought to
recover any rent under this Lease, or for or on account of any breach of or
to enforce or interpret any of the terms, covenants, or conditions of this
Lease, or for the recovery of possession of the Premises, the prevailing
party shall be entitled to recover from the other party as a part of such
action, or in a separate action brought for that purpose, its reasonable
attorney's fees and costs and expenses (including expert witness fees)
incurred in connection with the prosecution or defense of such action.
"Prevailing party" within the meaning of this paragraph shall include,
without limitation, a party who brings an action against the other after the
other is in breach or default, if such action is dismissed upon the other's
payment of the sums allegedly due or upon the other's performance of the
covenants allegedly breached, or if the party commencing such action or
proceeding obtains substantially the relief sought by it in such action,
whether or not such action proceeds to a final judgment or determination.
26. SURRENDER. Tenant shall, upon expiration or sooner termination of
this Lease, surrender the Premises to Landlord with all Additional
Improvements removed and all damage occasioned by such removal repaired, and
otherwise in good and clean
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broom swept condition (reasonable wear and tear and damage due to causes
beyond the reasonable control of Tenant excepted) with the HVAC equipment
serving the Premises in operating order and in good repair. Tenant, on or
before the expiration or sooner termination of this Lease, shall remove all
of its personal property and trade fixtures from the Premises. If the
Premises are not so surrendered at the expiration or sooner termination of
this Lease, Tenant shall indemnify Landlord against loss or liability
resulting from delay by Tenant in so surrendering the Premises, including
without limitation, any claims made by any succeeding tenant founded on such
delay, and losses to Landlord due to lost opportunities to lease to
succeeding tenants.
27. HOLDING OVER. This Lease shall terminate without further notice at
the expiration of the Lease term. Any holding over by Tenant after
expiration shall not constitute a renewal or extension of the Lease term or
give Tenant any rights in or to the Premises unless otherwise expressly
provided in this Lease. Any holding over after expiration of the Lease term
with the express written consent of Landlord shall be construed to be a
tenancy from month to month, at one hundred fifty percent (150%) of the
monthly Base Rent for the last month of the Lease term, and shall otherwise
be on the terms and conditions herein specified insofar as applicable, unless
otherwise mutually agreed in writing by the parties.
28. TRANSFER OF PREMISES BY LANDLORD. The term "Landlord" as used in
this Lease, so far as the covenants or obligations on the part of Landlord
are concerned, shall be limited to mean and include only the owner at the
time in question of the fee title to the Premises. In the event of any
transfer of such fee title, the Landlord herein named (and in case of any
subsequent transfer or conveyance, the then grantor) shall after the date of
such transfer or conveyance be automatically freed and relieved of all
liability with respect to performance of any covenants or obligations on the
part of Landlord contained in this Lease thereafter to be performed;
provided, that any funds in the hands of Landlord or the then grantor at the
time of such transfer in which Tenant has an interest, shall be turned over
to the grantee. The covenants and obligations contained in this Lease on the
part of Landlord shall, subject to the foregoing, be binding upon each
Landlord hereunder only during his or its respective period of ownership.
29. Option(s) to Extend Term.
------------------------
29.1 EXERCISE OF OPTION. Subject to the provisions of this
Paragraph 29, Tenant shall have the right to extend the term of this Lease
for three (3) additional periods of five (5) years each, unless the term is
sooner terminated as provided in this Lease. Unless otherwise expressly
agreed in writing by the parties hereto, the term of
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this Lease shall in no event extend beyond March 31, 2015. Tenant shall
exercise each of such rights, if at all, only by giving Landlord written
notice of exercise of such right on or before nine (9) months prior to the
then scheduled expiration date of the Lease term, and only if Tenant is not
in default under this Lease when Tenant exercises such right (provided,
Tenant has received notice of such default and has not cured said default
within the time permitted for such cure). If Tenant fails to exercise any
such rights to extend in accordance with this Paragraph 29, such right shall
terminate. The second right to extend may be exercised only if the first
right to extend has previously been properly exercised, and the third right
to extend may be exercised only if the second right to extend has previously
been properly exercised. If Tenant exercises any such rights in accordance
with this Paragraph 29, the term of this Lease shall be extended for one
period of five (5) years subject to the agreements, covenants, conditions,
and provisions set forth in this Lease, except for the amount of Base Rent
payable by Tenant, which shall be determined as set forth in Paragraph 29.2.
29.2 RENT DURING EXTENDED TERM. The monthly Base Rent during each
such extended term of this Lease shall initially be equal to the fair market
rent of the Premises as of the commencement date of such extended term. Such
fair market rent shall take into account the rent adjustment mechanism to be
employed during such extended term.
The parties shall have thirty (30) days after Landlord
receives notice of Tenant's exercise of its right to extend the term in which
to agree on minimum monthly Base Rent during the extended term. If the
parties agree on the minimum monthly Base Rent for the extended term during
such thirty (30) day period, they shall immediately execute an amendment to
this Lease stating the minimum monthly Base Rent for such extended term.
If the parties are unable to agree on the minimum monthly Base
Rent for the extended term within such thirty (30) day period, then within
said thirty (30) days each party, at its cost and by giving notice to the
other party, shall appoint an appraiser with at least five (5) years' full
time commercial appraisal or brokerage experience in the Sunnyvale area to
appraise and set the minimum monthly Base Rent for the extended term. Said
appraisers shall be instructed to determine the fair market rent for the
Premises within thirty (30) days after their appointment, and to base their
determination on the rent which will be applicable as of the commencement of
the applicable extended term for comparable space in comparable buildings in
comparable geographic areas leased on terms comparable to this Lease, taking
into account the rent adjustment mechanism to be employed during such
extended term. Such rent determination shall not take into account
improvements to
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the Premises made by Tenant or on Tenant's behalf at Tenant's sole
expense, or any Additional Improvements. If the higher appraisal of rent is
not more than one hundred five percent (105%) of the lower appraisal of rent,
the average of their appraised values shall be adopted by the parties. If
the higher appraisal is greater than one hundred five percent (105%) of the
lower, then the two appraisers shall within five (5) days of the initial
appraisal determinations appoint a third appraiser who shall make his
determination within thirty (30) days of his appointment, and the two closest
in dollar terms of the three offered rent determinations shall be averaged
and adopted by the parties as the monthly Base Rent during the upcoming
extended term. In no event shall the Base Rent determined by the appraisers
be less than the then existing monthly Base Rent. In the event the Base Rent
so determined is higher than Tenant's highest previously negotiated offer
Tenant may elect, by written notice to Landlord within three (3) days after
receipt of the appraisers' determination, to terminate this Lease effective
as of the date this Lease would have expired but for Tenant's earlier
exercise of said option to extend the term, in which event Tenant's earlier
exercise of said option shall be deemed rescinded. Tenant shall pay all
costs of the appraisers in the event Tenant so elects to rescind its exercise
and terminates this Lease.
29.3 RENTAL ADJUSTMENTS DURING EXTENDED TERM. The Base Rent during
the first, or if it is the case, the second or third extended term,
determined pursuant to Paragraph 29.2 of this Lease shall be adjusted
annually throughout such term to reflect any increase in the cost of living
during the extended term in the manner specified in Paragraph 3.2 with
respect to the initial term. For the purposes of this paragraph, all other
definitions set forth in Paragraph 3.2 of this Lease shall apply, except that
the term "base" shall mean the last published Index in effect on the first
day of the extended term in question.
30. PARKING. Tenant shall have the nonexclusive use of Tenant's Share
of the parking spaces in the Outside Areas as designated from time to time by
Landlord. Tenant shall not at any time park or permit the parking of
Tenant's trucks or other vehicles, or trucks or other vehicles of others,
adjacent or loading areas so as to interfere in any way with the use of such
areas, nor shall Tenant at any time park or permit the parking of Tenant's
vehicles or trucks, or the vehicles or trucks of Tenant's suppliers or
others, in any portion of the Outside Areas not designated by Landlord for
such use by Tenant. Tenant shall not park or permit to be parked any
inoperative vehicles or equipment on any portion of the Outside Areas.
31. REASONABLE CONSENT. Whenever any party's approval or consent is
required by this Lease, such consent or approval shall not be unreasonably
withheld or delayed.
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32. Cure Period.
-----------
32.1 CURE BY LANDLORD. Landlord shall not be deemed to be in
default in the performance of any obligation required to be performed by it
hereunder unless and until it has failed to perform such obligation within
the period of time specifically provided herein, or if no period of time has
been provided, then within thirty (30) days after receipt of written notice
by Tenant to Landlord specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are reasonably required for its
performance, then Landlord shall not be deemed to be in default if it shall
commence such performance within such thirty (30) day period and thereafter
diligently prosecute the same to completion. It is understood that, for
purposes of Paragraphs 9.1, 13 and 10.1, the term "omissions", as used
therein, shall mean only omissions by Landlord which if not cured with the
time period permitted in this Paragraph 32 would result in a default of
Landlord hereunder.
32.2 CURE BY TENANT. In the event Landlord is deemed in default
with respect to its obligation to repair and maintain the roof of the
Building as provided elsewhere in this Lease, Tenant shall be entitled, after
written notice to such effect to Landlord, to make such repairs and shall
have the right to demand reimbursement by Landlord of the cost thereof, with
interest thereon at the rate of ten percent (10%) or the highest rate allowed
by law, whichever is less, from the date of the expenditure until repaid. In
addition, in the event a condition exists with respect to any portion of the
Premises which Landlord is required to repair under the Lease, and such
condition is the direct and immediate cause of an emergency situation which
presents a clear and present threat to the physical safety of persons on or
about the Premises or of property of Tenant or its agents, employees, or
contractors located on or about the Premises, then subject to the following,
Tenant shall be entitled to make such repairs as are reasonably necessary to
reduce such threat to a reasonably acceptable level. As soon as Tenant
becomes aware of any such condition, it shall make every reasonable effort to
contact Landlord by telephone or in person and inform Landlord of the
condition; if upon so informing Landlord of the condition, Landlord elects to
correct the condition as soon as Tenant would otherwise be able to correct
the condition, then Tenant shall have no right to correct the condition and
Landlord shall correct the same. If Tenant is unable to contact Landlord
after exhausting reasonable efforts to do so, or does in fact contact
Landlord but Landlord does not elect to correct the condition as quickly as
Tenant is able to correct the condition, then Tenant shall be entitled to
make such repairs and shall have the right to demand reimbursement by
Landlord of the cost thereof, with interest thereon at the rate of ten
percent (10%) or
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the highest rate allowed by law, whichever is less, from the date of the
expenditure until repaid.
33. MORTGAGEE PROTECTION. In the event of any default on the part of
Landlord, Tenant will give notice by registered or certified mail to any
beneficiary of a deed or trust or mortgagee of a mortgage, encumbering the
Premises whose address shall have been furnished to Tenant, and before
exercising any remedy of Tenant to terminate this Lease, shall allow such
beneficiary or mortgagee a reasonable opportunity to cure the default,
including time to obtain possession of the Premises by power or sale or
judicial foreclosure, if such should prove necessary to effect a cure.
34. General Provisions.
------------------
34.1 ENTIRE AGREEMENT. This instrument including the Exhibits
attached hereto contains all of the agreements and conditions made between
the parties hereto and may not be modified orally or in any manner other than
by an agreement in writing signed by all of the parties hereto or their
respective successors in interest. Any executed copy of this Lease shall be
deemed an original for all purposes.
34.2 TIME. Time is of the essence with respect to the performance
of each and every provision of this Lease in which time of performance is a
factor. All references to days contained in this Lease shall be deemed to
mean calendar days, unless otherwise specifically stated.
34.3 CAPTIONS. The captions and headings of the numbered
paragraphs of this Lease are inserted solely for the convenience of the
parties hereto, and are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
34.4 CALIFORNIA LAW. This Lease shall be construed and interpreted
in accordance with the laws of the State of California. The language in all
parts of this Lease shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either Landlord or Tenant,
and without regard to which party prepared this Lease.
34.5 PARTIAL INVALIDITY. If any provision of this Lease is held by
a court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of the provisions hereof shall nonetheless continue in full force
and effect and shall in no way be affected, impaired, or invalidated thereby.
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34.6 NO WARRANTIES. Any agreements, warranties or representations
not expressly contained herein shall not bind either Landlord or Tenant, and
Landlord and Tenant expressly waive all claims for damages by reason of any
statement, representation, warranty, promise or agreement, if any, not
expressly contained in this Lease.
34.7 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, shall inure to the
benefit of and bind the heirs, executors, administrators, assigns, and any
other person or entity succeeding lawfully, and pursuant to the provisions of
this Lease, to the rights or obligations of the respective parties hereto.
34.8 RULES AND REGULATIONS. Landlord may from time to time
promulgate reasonable rules and regulations for the use, safety, care and
cleanliness of the Premises and the Project. Such rules and regulations
shall be binding upon Tenant upon delivery of a copy thereof to Tenant, and
Tenant shall abide by all such rules and regulations. If there is a conflict
between such rules and regulations and any of the provisions of this Lease,
the provisions of this Lease shall prevail.
34.9 AUTHORITY. The individuals signing this Lease hereby
represent and warrant that they have all necessary power and authority to
execute and deliver this Lease on behalf of Landlord and Tenant,
respectively.
34.10 MEMORANDUM OF LEASE. This Lease shall not be recorded.
Concurrently with execution of this Lease, the parties shall execute and
acknowledge a short form memorandum of this Lease in the form attached hereto
as EXHIBIT "F". Simultaneously with execution of such memorandum, Tenant
shall execute and deliver to Landlord for recordation upon the expiration or
sooner termination of this Lease, a quitclaim deed to the Premises, in
recordable form, designating Landlord as transferee. Any recordation by
Landlord of such quitclaim deed prior to expiration or sooner termination of
this Lease shall be deemed a default by Landlord hereunder. In the event
Landlord later transfers its interest in the Premises prior to expiration or
sooner termination of this Lease, such quitclaim deed shall be relinquished
to Tenant and Tenant shall simultaneously execute and deliver to Landlord a
new quitclaim deed designating Landlord's successor in interest as the
transferee, which quitclaim deed shall again only be recorded upon expiration
or sooner termination of this Lease.
34.11 REASONABLE EXPENDITURES. An expenditure by a party, for
which such party shall demand reimbursement from the other party, shall be
limited to the fair market value of the goods and services involved, shall be
reasonably incurred, and
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shall be substantiated by documentary evidence available for inspection and
review by the other party or its representative during normal business hours.
34.12 AMENDMENTS TO ACCOMMODATE LENDERS. Tenant agrees to
execute any amendments required by a lender to enable Landlord to obtain
replacement permanent financing so long as Tenant's rights and obligations
hereunder are not materially adversely affected and provided such amendments
are of the type normally required by such lender for similar loans. Tenant
shall not have any obligations under any such agreements unless and until
Tenant signs the same.
34.13 MERGER. The voluntary or other surrender of this Lease,
or a mutual cancellation thereof, shall not work an automatic merger, but
shall, at the sole option of Landlord, either terminate all or any existing
subleases or subtenancies, or operate as an assignment to Landlord of any or
all of such subleases or subtenancies.
34.14 FORCE MAJEURE. Any prevention of or delay in the
performance by a party hereto of its obligations under this Lease caused by
inclement weather, labor disputes (including strikes and lockouts), inability
to obtain materials or reasonable substitutes therefor, governmental
restrictions, regulations, controls, action or inaction, civil commotion,
fire or other causes beyond the reasonable control of the party obligated to
perform (except financial inability), shall excuse the performance by such
party of its obligations hereunder (except the obligation of Tenant to pay
rent and other sums hereunder) for a period of one day for each such day of
delay.
34.15 EXHIBITS. The following exhibits are hereby made a part
of this Lease.
Exhibit "A" -- Premises
Exhibit "B" -- Property Description
Exhibit "C" -- Plans and Specifications for Tenant Improvements
Exhibit "D" -- Plans and Specifications for Additional Improvements
Exhibit "E" -- Nondisturbance Agreement
Exhibit "F" -- Memorandum of Lease
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the
dates set forth below.
LANDLORD: TENANT:
FERRARI BROTHERS, ANALOG DEVICES, INC.,
a California general partnership a Massachusetts corporation
By: /s/ illegible By: /s/ illegible
-------------------------- -----------------------
Its General Partners Its Vice Pres., Finance
----------------------- -----------------------
Dated: June 16-1996 Dated: June 7, 1995
----------------------- --------------------
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EXHIBIT "A"
(SCHEMATIC OF FLOOR PLAN)
50
Legal Description
All that certain real property situate in the city of Sunnyvale, County of
Santa Xxxxx, State of California, described as follows:
That portion of Lots 24 and 25, W.E. Xxxxxxxx'x Subdivision No. 3, as shown on
a Map recorded in Book K of Maps, page 95, Records of Santa Xxxxx County,
California, being more particularly described as follows:
Beginning at a point on the Southeasterly line of Lot 25, as said Lot is shown
on the Map of said Tract, said point being the Southeasterly corner of that
certain tract of land described in the Deed to the city and County of San
Francisco, recorded in Book 2155, Page 377 of Official Records;
thence along the Southeasterly line of said Lot 25, and the Southeasterly line
of Lot 24, as shown upon said Map, S 15 degrees 37 minutes 51 seconds W. 367.21
feet, more or less to the Northeasterly corner of that certain tract of land
conveyed to the State of California by Deed recorded in Book 4253, Page 92 of
Official Records:
thence along the line of the land so conveyed to the State of California N.
70 degrees 09 minutes 03 seconds W. 263.24 feet;
thence along a tangent curve t the right with a radius of 358.00 feet, through
an angle of 85 degrees 36 minutes 48 seconds an arc length of 534.94 feet to
the property line common to the lands now or formerly of Xxxx Xxxx, et ux, and
of City and County of San Francisco, a municipal corporation; said point being
distant thereon S. 73 degrees 35 minutes 22 seconds E. 133.01 feet from the
center line of Fairoaks Avenue, as said Avenue is shown upon said Map herein
referred to:
thence Southeasterly along the Southwesterly line of the land of the City and
County of San Francisco, 593.47 feet, more or less to the point of beginning.
Exhibit "B"
51
PERFORMANCE SEMICONDUCTOR
TENANT IMPROVEMENTS
000 X. Xxxxxxx Xx. by 1995 definition
Description:
Office Area Construction (22)
Lobby
Conference Rooms (2)
Restroom/Shower Facility
Support Area (maint.)
Light Manufacturing (Rooms 3) Area
Exterior Storage Rooms (2)
Cafeteria (1242)
Corridor System (1hr)
HVAC Units (6) #0, #0, #0, #0, #0
Ceiling Tile System
Fire Sprinklers Above/Below Ceiling
Floor System Carpet/Tile
Electrical Sub-Panels/Fit-Up
Lighting
Painting
Exhaust Fans
Hot Water Heater
Exhibit "C" Plan A 610-TI's
52
PERFORMANCE SEMICONDUCTOR
WAFER MANUFACTURING ADDITIONAL IMPROVEMENTS
000 X. Xxxxxxx Xx. by 1995 definition
Description:
Clean Room Tunnels 1 (15), 2 (11), 3 (11), 4 (10), 5 (12)
Air Handlers/Duct furnace/Cooling coils: #0, #0, #0, #0
Air Showers (3)
Fir Sprinklers Manufacturing and Exhaust Ducting
Exhaust Scrubber #1 and #2/Duct Work
Alarm/Detection System
Emergency Generator System
Vacuum System A/B
Floor System (Mipolam)
Electrical Fit-Up Manufacturing Support Equipment
Lighting
Process Piping Gas (ss) (cu)
Process Piping D.I. (PVDF), AWN Drain Lines (PVC, CPVC)
Process Piping Trench System
External Support Equipment and Tank Farm
Process Chilled Water System, Mixing Manifold, Piping Extension, Electrical
Panel
Acid and HF Waste Treatment Equipment/System/Vault
Tunnel #3 Wall System, Temperature/Humidity Control
Exhibit "D" FAC-AI
53
RECORDING REQUESTED BY, AND
WHEN RECORDED RETURN TO:
Xxxxxxx Xxx Xxxx, Esq.
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
NON-DISTURBANCE AGREEMENT
000 Xxxxxxx Xxxxx -- Fabrication Facility
THIS NON-DISTURBANCE AGREEMENT (the "Agreement") is made and entered into as of
the 16th day of June, 1995, by and among Analog Devices, Inc., a Massachusetts
corporation ("Tenant"), FERRARI BROTHERS, a California general partnership
("Landlord"), and COAST FEDERAL BANK, formerly known as Coast Savings and Loan
Association, ("Lender"), based on the follows:
A. Landlord and Tenant have executed a lease)the "Lease") dated as of June
16, 1995 covering certain premises therein described (the "Premises")
consisting of approximately 27,379 square feet of floor space in an
approximately 63,500 square foot building located on that certain parcel of
real estate commonly known as 610,620, and 000 Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxx. A legal description of said parcel is attached hereto and
incorporated herein by this reference as Exhibit "A" (said parcel f real estate
and the Premises are sometimes collectively referred to herein as the
"Property");
B. Landlord has executed a First Deed of Trust (the "Deed of Trust") recorded
on May 22, 1985 as Instrument No. 8417024 Book J353, Page 195 et seq. of the
Official Records of Santa Xxxxx County, California in favor of Lender, payable
upon the terms and conditions described therein;
C. The parties desire to acknowledge that the loan secured by the Deed of
Trust shall unconditionally be and remain at all times a lien or charge upon
the Property, prior and superior to the Lease and to the leasehold estate
created thereby; and
D. The parties hereto desire to assure Tenant's possession and control of the
Property under this Lease upon the terms and conditions therein contained.
NOW THEREFORE, for and in consideration of the mutual covenants and promises
herein and other god and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by the parties hereto, the parties agree as
follows:
AGREEMENT
1. The Lease is and shall be subject and subordinate to the Deed of Trust, and
to all renewals, modifications, consolidations, replacements and extensions
thereof, and to all future advances made thereunder.
Analog Devices Nondisturbance Agreement
June 16, 1995
1
EXHIBIT "E"
54
2. Should Lender become the owner of the Property, or should the Property be
sold by reason of foreclosure, or other proceedings brought to enforce the Deed
of Trust which encumbers the Property, or should the Property be transferred by
deed in lieu of foreclosure, or should any portion of the Property be sold
under a trustee's sale, the Lease shall continue in full force and effect as a
direct lease between the then owner of the Property covered by the Deed of
Trust and Tenant, upon, and subject to, all of the terms, covenants and
conditions of the Lease for the balance of the term thereof remaining,
including any extension therein provided. Tenant does hereby agree to attorn
to Lender or to any such owner as its landlord, and Lender hereby agrees that
it will accept such attornment.
3. Notwithstanding any other provision of this Agreement, Lender shall not be
(a) liable for any previously accrued default of any landlord under the Lease
(including Landlord) as of the date Lender forecloses or otherwise takes title
to the Property; (b) subject to any offsets or defenses which have accrued
prior to the date of foreclosure, unless Tenant shall have delivered to lender
written notice of the default which gave rise to such offset or defense and
permitted Lender the same right to cure such default as is permitted Landlord
under the Lease; (c) bound by any rent or other sums that Tenant may have paid
under the Lease more than one month in advance; (d) bound by any amendment or
modification of the Lease hereafter made without Lender's prior written
consent; (e) responsible for the return of any security deposit delivered to
Landlord under the Lease and not subsequently received by Lender.
4. If Lender sends written notice to Tenant to direct its rent payments under
the Lease to Lender instead of Landlord, then Tenant agrees to follow the
instructions set forth in such written instructions and deliver rent payments
to Lender; however, Landlord and Lender agree that Tenant shall be credited
under the Lease for any rent payments sent to lender pursuant to such written
notice.
5. All notices which may or are required to be sent under this Agreement shall
be in writing and shall be sent by first class certified U.S. mail, postage
prepaid, return receipt requested, and sent to the party at the address
appearing below its signature hereof or such other address as any party shall
hereafter inform the other party by written notice given as set forth above.
All notices delivered as set forth above shall be deemed effective five (5)
days after the posted date of deposit in the U.S. mail.
6. The Deed of Trust shall not cover or encumber and shall not be construed as
subjecting in any manner to the lien thereof any of Tenant's trade fixtures,
furniture, equipment or other personal property at any time placed or installed
in the Premises, or the Additional Improvements (as defined in the Lease).
7. Landlord and Tenant each acknowledges that the other is not in default or
breach of any of its obligations under the Lease as of the date hereof.
Analog Devices Nondisturbance Agreement
June 16, 1995
2
55
8. this Non-Disturbance Agreement shall inure to the benefit of and be binding
upon the parties hereto, their successors in interest, heirs and assigns and
any subsequent owner of the Property secured by the Deed of Trust.
9. Should any action or proceeding be commenced to enforce any of the
provisions of this Non-Disturbance Agreement or in connection with its meaning,
the prevailing party in such action shall be awarded, in addition to any other
relief it may obtain, its reasonable costs and expenses and reasonable
attorneys' fees.
IN WITNESS WHEREOF, the parties hereto have caused this Non-Disturbance
Agreement to be executed as of the day and year first above written.
LENDER:
COAST FEDERAL BANK,
a
----------------------
By:
------------------------
Name:
----------------------
Title:
---------------------
---------------------------
---------------------------
---------------------------
(address)
TENANT:
Analog Devices Inc.,
a Massachusetts corporations
By:
------------------------
Its:
-----------------------
---------------------------
---------------------------
---------------------------
(address)
Analog Devices Nondisturbance Agreement
June 16, 1995
3
56
LANDLORD:
FERRARI BROTHERS,
a California general partnership
By:
------------------------------
Xxx Xxxxxxx, general partner
0000 Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
Attn: Xxx Xxxxxxx
Analog Devices Nondisturbance Agreement
June 16, 1995
4
57
(Acknowledgement of Lender)
STATE OF CALIFORNIA )
)SS.
COUNTY OF LOS ANGELES )
On June 16, 1995 before me, Xxxxx X. Xxxxxx, a Notary Public in and for said
County and State, personally appeared Xxxxxxx Xxxxxx, personally known to me to
be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed same in his authorized capacity, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature:
-----------------------------
Analog Devices Nondisturbance Agreement
June 16, 1995
5
58
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Xxxxxxx Xxx Xxxx, Esq.
00000 X. XxXxxx Xxxx., Xxx 000
Xxxxxxxxx, XX 00000
MEMORANDUM OF LEASE
This Memorandum of Lease, dated June , 1995 for reference purposes only, is
made and entered into between FERRARI BROTHERS, a California general
partnership (hereafter called "Landlord"), and Analog Devices, Inc., a
Massachusetts corporation (hereafter called ("Tenant").
Landlord hereby leases to Tenant certain premises consisting of approximately
twenty-seven thousand three hundred seventy-nine (27,379) square feet (the
"Premises") within that certain building (the "Building") located at 000
Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx. A legal description of the parcel of
land on which the Building is situated is attached as Exhibit "A" hereto and
incorporated herein by reference. Such lease is governed by the provisions of
that certain unrecorded lease between the parties hereto (the "Lease"), dated
June , 1995, which provisions are incorporated herein by reference as though
written out at length herein. Terms undefined herein shall have the meanings
ascribed to them in the Lease.
The term of the Lease shall be the five (5) year period commencing on June ,
1995 and ending on March 31, 2000. Tenant shall have three options to extend
the term for successive additional periods of five (5) years each on the terms
set forth in the Lease.
The purpose of this Memorandum of Lease is to give notice of the existence of
the Lease. This Memorandum in no way modifies the Lease or any terms thereof.
EXHIBIT "F"
F-1
59
IN WITNESS WHEREOF, the parties hereto have caused this Memorandum of Lease
to be executed as of the day and year first above written.
TENANT:
Analog Devices Inc.,
a Massachusetts corporations
By:
------------------------
Name:
----------------------
Title:
---------------------
LANDLORD:
FERRARI BROTHERS,
a California general partnership
By:
------------------------
Name:
----------------------
Title:
---------------------
Exhibit "F"
F-2
60
(Acknowledgement of Landlord)
STATE OF MASSACHUSETTS )
)SS.
COUNTY OF NORFOLK )
On June 7, 1995 before me, Xxxxx X. Xxxxxxx, a Notary Public in and for said
County and State, personally appeared Xxxxxx X. XxXxxxxxx, personally known to
me to be the person whose name is subscribed to the within instrument and
acknowledged to me that he executed same in his authorized capacity, or the
entity upon behalf of which the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature:
-----------------------------
Exhibit "F"
F-3
