EXHIBIT 10.3
Sub-Lease Agreement
This sub-lease agreement made on 1 day of May 1996 between
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Global Village Communication Inc. (the "Sub-lessor") and Global Center, Inc.
(the "Sub-lessee"), both corporations being Delaware companies. The effective
date for this Sub-Lease is April 1, 1996.
1) Global Center, Inc. accepts and will abide by the terms and conditions stated on the original lease signed by
Global Village Communication, Inc. on the 14th day of July, 1994. A copy of that Lease and the First
Amendment dated June 22, 1995 are attached.
2) The Term of the sub-lease is for 36 months from the effective date of the agreement.
3) The Rent shall be $12,860.75 per month for 36 months.
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4) The monthly common expenses will be distributed on the basis of total Square Feet used by Global Center as a
percentage of the total Square Feet leased by Global Village Communication. As of this lease date the numbers
are:
Total Square Ft. Leased By Global Village. 128,153.6
Total Global Center Sub-Leased per this leased 15,750.0
Global Centers Percentage 12.29%
The common expenses average approximately $33,925.00 per quarter of
which Global Centers portion would be approximately $4,169.00 per quarter.
These amounts will be paid monthly based on this average ($1,389.67) and
adjusted quarterly against the actual charges incurred by the landlord on
behalf of the lessee and sub-lessee. Global Village Communication will
provide Global Center with a reconciliation of the aforementioned common
expenses at the time they are provided by the landlord and any additional
sums due Global Village Communication are required to be paid within 15 days
by Global Center to Global Village Communication. If the actual amounts
incurred are less than the quarterly average, the amount overpaid will be
carried over to the following quarter.
TENANT
Global Village Communication, Inc.
/s/ XXXXXXX XXXXXX 5/23/96
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Name Date
Director and Chief Information Officer
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Title
SUB-LESSEE
Global Center, Inc.
/s/ XXX XXXXXXXXX 5/23/96
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Name Date
President
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Title
LANDLORD
Hermnan Xxxxxxxxxxx, Jr. And Xxxxxxx X. Xxxxxxxxxxx
/s/ XXXXXX XXXXXXXXXXX, XX. 7/10/96
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Name Date
/s/ XXXXXXX X. XXXXXXXXXXX 7/10/96
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Name Date
LEASE AGREEMENT
This Lease Agreement is made and entered into by and between XXXXXX
XXXXXXXXXXX, XX. and XXXXXXX X. XXXXXXXXXXX, jointly, the Landlord, and GLOBAL
VILLAGE COMMUNICATION, INC. a Delaware Corporation Tenant as of this 14th day of
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July, 1994.
1. DEMISE: In consideration of the rents and all other charges and payments
payable by Tenant, and for the agreements, terms and conditions to be performed
by Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES
HEREBY HIRE AND TAKE FROM LANDLORD, the Premises described below (the
"Premises"), upon the agreements, terms and conditions of this Lease for the
Term hereinafter stated.
2. PREMISES: The Premises demised by this Lease are approximately 73,648.6
square feet of space in the building at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx as shown on attached Exhibit A being in "as is" condition together
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with the outside areas to the extent set forth in paragraph 44 below and parking
set forth in paragraph 45 below. No easement for light or air is incorporated
in the Premises.
The Premises demised by this Lease shall also include the Tenant
Improvements on the terms and conditions set forth.
3. TERM: The term of this Lease (the "Term") shall be for the period of 66
months commencing on October 15, 1994.
Early possession of the Premises for the purpose of constructing tenant
improvements shall be on July 15, 1994, and subject to Addendum Two.
4. RENT:
(a) Base Rent. Tenant shall pay to Landlord, in advance on the first day of
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each calendar month, without further notice or demand and without offset or
deduction, the monthly installments of rent specified below:
Full Calendar Months Base Rental/Month/NNN
1-10 $24,304.04
11-22 $56,980.76
23-34 $59,887.94
35-46 $63,570.37
47-57 $67,349.71
58-66 $69,481.64
However, in order to have rent payable on the first day of each calendar
month, upon execution of this Lease, Tenant shall pay to Landlord base rental
and additional rent for the period October 15 through October 31, 1994 and the
Security Deposit hereafter set forth.
b) Additional Rent. In addition to the Base Rent, Tenant shall pay to
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Landlord, in accordance with this Paragraph 4, Tenant's proportionate share of
the following items related to the Building, the Property, and/or the Outside
Areas (as defined in Paragraph 4 (b) (3)) (the Additional Rent").
(1) Taxes and Assessments. All real estate taxes and assessments
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applicable to the Term. Real estate taxes and assessments shall include any form
of assessment, license, fee, tax, levy, penalty (if a result of Tenant's
delinquency), or tax (other than net income, estate, succession,
inheritance, transfer or franchise taxes), imposed by any authority having the
direct or indirect power to tax or by any city, county, state or federal
government or any improvement or other district or division thereof, whether
such tax is (i) determined by the area of the Premises, the Building or the
Property, or any part thereof or the Rent and other sums payable hereunder by
Tenant, including, but not limited to, any gross income or excise tax levied by
any of the foregoing authorities with respect to receipt of Rent or other sums
due under this Lease; (ii) upon any legal or equitable interest of Landlord in
the Premises, the Building or the Property, or any part thereof; (iii) upon this
transaction or any document to which Tenant is a party creating or transferring
any interest in the Premises, the Building or the Property; (iv) levied or
assessed in lieu of, in substitution for, or in addition to, existing or
additional taxes against the Premises, the Building or the Property, whether or
not now customary or within the contemplation of the parties; or (v) surcharge
against the parking area. Tenant and Landlord acknowledge that Proposition 13
was adopted by the voters of the State of California in the June, 1978 election
and that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such purposes as fire protection, street, sidewalk,
road, utility construction and maintenance, refuse removal and for other
governmental services which may formerly have been provided without charge to
property owners or occupants. It is the intention of the parties that all new
and increased assessments, taxes, fees, levies and charges due to Proposition 13
or any other cause are to be included within the definition of real property
taxes for purposes of this Lease.
(2) Insurance. All insurance premiums, including premiums for "all
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risk", fire and extended coverage (including earthquake endorsements) insurance
for the Building, public liability insurance, other insurance as Landlord deems
necessary, and any deductibles paid under policies of any such insurance.
(3) Outside Areas Expenses. All costs to operate, manage, maintain,
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repair, supervise, insure (including provision of public liability insurance)
and administer the areas outside of the Building ("Outside Areas"), including
but not limited to watering, fertilizing, landscaping, tree work, spraying,
window washing of exterior window surfaces, plant and tree replacement,
lighting, building alarm system, repair of paving and sidewalks, striping,
clean-up and sweeping.
(4) Parking Charges. Any parking charges or other costs levied,
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assessed or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by any governmental
authority or insurer in connection with the use or occupancy of the Building,
the Outside Areas and/or the Property.
(5) Maintenance and Repair of Building. All costs to maintain, repair,
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and replace the building, including structural portions of the roof, the roof
coverings, the foundations, the floor slab, the load bearing walls, and the
exterior walls (including the painting thereof) of the Building, and all costs
to maintain, repair and replace all utility and plumbing systems, fixtures and
equipment located outside the Building. Notwithstanding said provisions, the
cost of any improvement or replacement to the building under this sub-
paragraph, which exceeds $25,000.00 in cost and which has a useful life of more
than 5 years, shall be amortized on a straight-line basis together with interest
thereon at the rate of 8-1/2% per annum, and only the amortized portion of such
cost and interest shall be included in costs recoverable by Landlord. Also
notwithstanding anything to the contrary, Landlord shall not recover any costs
in excess of $5,000.00 per repair or replacement incurred in maintaining,
repairing or replacing the exterior load bearing walls, foundation, and
structural components of the roof. The
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portion of any such costs up to $5,000.00 per repair or replacement, shall be
passed through to Tenant.
(6) Management and Administration. All costs for management and
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administration of the Building and the Property, including a property management
fee, accounting, auditing, billing, postage, employee benefits, payroll taxes,
etc. All such expenses shall be reasonable and in accordance with good
management practices and shall not exceed 1% of annual Base Rent.
(c) Allocation of Costs.
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(1) If said real estate taxes and assessments are assessed against
the entire building and building site, each of greater extent than the
"Premises", the taxes and assessments allocated to the leased premises shall be
pro-rated on a square footage or other equitable basis, as calculated by
Landlord, such as the tax assessor's relative valuations. If the assessed value
of the Landlords premises is increased by the inclusion therein of a value
placed upon the personal property or improvements of the Tenant, and if the
Landlord pays the taxes based on such increased assessment, the Tenant shall,
upon demand, repay to the Landlord the portion of such taxes resulting from
such increase in assessment. In the event the Premises and any improvements
installed therein by Tenant or Landlord are valued by the assessor
disproportionately higher or lower than those of other Tenants in the building
or parcel, Tenant's share of the property taxes shall be readjusted upwards or
downwards accordingly, and Tenant agrees to such readjusted share. Such
determination shall be made by Landlord from the respective valuations assigned
in the assessor's work sheet or such other information as may be reasonably
available. Landlord's reasonable determination thereof, in good faith, shall be
conclusive. Increase in real estate taxes due to reappraisal because of transfer
of Landlord's interest to a third party, shall not be charged to Tenant under
this sub-paragraph (c) (1).
(2) Insurance, Outside Areas Expenses, Parking Charges, Maintenance
and repair of building, and management and administration expense shall be
charged to Tenant in proportion to that portion of the total rentable building
area on the site rented by Tenant hereunder. Until further buildings on the site
are completed, Tenant's share shall be calculated as 73,648.6 square
feet/163,706 square feet or 44.99%. Tenants share of expenses for insurance,
outside area and management and administration shall not exceed the amounts
shown below for the following periods:
October 15, 1994-December 31, 1995 - $64,074.28
January 1, 1996-December 31, 1996 - $55,678.34
January 1, 1997-December 31, 1997 - $58,462.26
January 1, 1998-December 31, 1998 - $61,385.37
January 1, 1999-December 31, 1999 - $64,454.64
January 1, 2000-April 14, 2000 - $19,739.23
Any excess of Tenant's share of expenses over said amounts, shall be carried
forward to the next succeeding year.
(d) Payment of Additional Rent.
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(1) Upon execution of this Lease, Landlord shall submit to
Tenant an estimate of monthly Additional Rent for the period between October 15,
1994 and the following December 31 and Tenant shall pay such estimated
Additional Rent in advance on a monthly basis concurrently with the payment of
the Base Rent. Tenant shall continue to make said monthly payments until
notified by Landlord of a change therein. By March
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1 of each calendar year, Landlord shall endeavor to provide to Tenant a
statement showing the actual Additional Rent due to Landlord for the prior
calendar year, prorated from the Commencement Date during the first year. If the
total of the monthly payments of Additional Rent that Tenant has made for the
prior calendar year (or portion thereof during which this Lease was in effect)
is less than the actual Additional Rent chargeable to Tenant for such prior
calendar year, then Tenant shall pay the difference in a lump sum within thirty
(30) days after receipt of such statement from Landlord. Any overpayment by
Tenant of Additional Rent for the prior calendar year shall be promptly refunded
to Tenant no later than April 15.
(2) The actual Additional Rent for the prior calendar year
shall be used for purposes of calculating Tenant's monthly payment of estimated
Additional Rent for the current year, subject to adjustment as provided above,
except that in any year in which resurfacing of the parking area or material
roof repairs are planned, Landlord may include the estimated cost of such work
in the estimated monthly Additional Rent. Landlord shall make final
determination of Additional Rent for the year in which this Lease terminates as
soon as possible after termination. Tenant shall remain liable for payment of
any amount due to Landlord in excess of the estimated Additional Rent previously
paid by Tenant, and, conversely, Landlord shall promptly return to Tenant any
overpayment, even though the Term has expired and Tenant has vacated the
Premises. Failure of Landlord to submit statements as called for herein shall
not be deemed a waiver of Tenant's obligation to pay Additional Rent as herein
provided. Tenant shall have the right to review and audit Landlord's records
relating to Additional Rent at Tenant's expense, at Landlord's business office,
provided Tenant has given Landlord reasonable prior notice.
(e) General Payment Terms. The Base Rent, Additional Rent and all
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other sums payable by Tenant to Landlord hereunder are referred to as the
"Rent". All Rent shall be paid without deduction, offset or abatement in lawful
money of the United States of America. Rent for any partial month during the
Term shall be prorated for the portion thereof falling due within the Term.
5. LATE CHARGE: Notwithstanding any other provision of this Lease,
Tenant hereby acknowledges that late payment to Landlord of Rent, or other
amounts due hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
If any Rent or other sums due from Tenant are not received by Landlord or by
Landlord's designated agent within ten (10) days after their due date, then
Tenant shall pay to Landlord a late charge equal to six percent (6%) of such
overdue amount, plus any attorneys' fees incurred by Landlord by reason of
Tenant's failure to pay Rent and/or other charges when due hereunder. Landlord
and Tenant hereby agree that such late charges represent a fair and reasonable
estimate of the cost that Landlord will incur by reason of Tenant's late
payment. Landlord's acceptance of such late charges shall not constitute a
waiver of Tenant's default with respect to such overdue amount or estop Landlord
from exercising any of the other rights and remedies granted under this Lease.
Initials:
Landlord ^^ Tenant ^^
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6. SECURITY DEPOSIT: Concurrently with Tenant's execution of the
Lease, Tenant shall deposit with Landlord the Security Deposit in the amount of
$57,300. as security for the full and faithful performance of each and every
term, covenant and condition of this Lease. Landlord may use, apply or retain
the whole or any part of the Security Deposit as may be reasonably necessary (a)
to remedy Tenant's default in the payment of any Rent, (b) to repair damage to
the Premises caused by Tenant, (c) to clean the
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Premises upon termination of this Lease, (d) to reimburse Landlord for the
payment of any amount which Landlord may reasonably spend or be required to
spend by reason of Tenant's default, or (e) to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default. Should
Tenant faithfully and fully comply with all of the terms, covenants and
conditions of this Lease, within thirty (30) days following the expiration of
the Term, the Security Deposit or any balance thereof shall be returned to
Tenant or, at the option of Landlord, to the last assignee of Tenant's interest
in this Lease. Landlord shall deposit said Security Deposit in a savings account
in a bank or savings and loan institution, and Tenant will be entitled to
interest thereon at the rate paid by the savings institution, payable to Tenant
at the termination of the lease. If Landlord so uses or applies all or any
portion of said deposit, within ten (10) days after written demand therefor
Tenant shall deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the full extent of the above amount, and Tenant's failure to
do so shall be a default under this Lease. In the event Landlord transfers its
interest in this Lease, Landlord shall transfer the then remaining amount of the
Security Deposit to Landlord's successor in interest, and thereafter Landlord
shall have no further liability to Tenant with respect to such Security Deposit.
7. POSSESSION:
(a) Tenant's Right of Possession. Tenant shall be entitled to
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occupancy of the Premises for fixturation commencing at the Early Occupancy
Period (See Addendum Two).
(b) Delay in Delivering Possession. If Landlord cannot deliver
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possession of the Premises to Tenant at the commencement of the Term, i.e., on
October 15, 1994, this Lease shall not be void or voidable, nor shall Landlord,
or Landlord's agents be liable to Tenant for any loss or damage resulting
therefrom. Tenant shall not be liable for Rent until Landlord delivers
possession of the Premises to Tenant. The expiration date of the Term shall be
extended by the same number of days that Tenant's possession of the Premises is
delayed.
8. USE OF PREMISES:
(a) Permitted Uses. The Premises shall be used only for R & D, general
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office, sales, administration, shipping/receiving, storage and light
manufacturing, to the extent permitted by governmental regulations. No printed
circuit board manufacture or wafer fabrication shall be permitted, or any
activities involving toxic substances, except that Tenant shall be permitted to
use customary office products and cleansers and minor quantities of cleaners and
solvents in connection with its business, but subject as to such cleaners and
solvents, the prior written consent of Landlord, which shall not be unreasonably
withheld.
(b) Compliance with Governmental Regulations. Tenant shall, at
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Tenant's expense, faithfully observe and comply with all Municipal, State and
Federal statutes, rules, regulations, ordinances, requirements, and orders, now
in force or which may hereafter be in force pertaining to the Premises or
Tenant's use thereof, including without limitation, any statutes, rules,
regulations, ordinances, requirements, or orders requiring installation of fire
sprinkler systems and removal of asbestos placed on the Premises by Tenant,
whether substantial in cost or otherwise, and all recorded covenants, conditions
and restrictions affecting the Property ("Private Restrictions") now in force or
which may hereafter be in force; provided that no such fixture Private
Restrictions shall materially affect Tenant's use and enjoyment of the Premises
or Property and provided, however, that Tenant shall not be required to make
structural changes to the Premises or Building not related to
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Tenant's specific use of the Premises unless the requirement for such changes is
imposed as a result of any improvements or additions made or proposed to be made
at Tenant's request. The judgment of any court of competent jurisdiction, or the
admission of Tenant in any action or proceeding against Tenant, whether Landlord
be a party thereto or not, that Tenant has violated any such rule, regulation,
ordinance, statute or Private Restrictions, shall be conclusive of that fact as
between Landlord and Tenant.
9. ACCEPTANCE OF PREMISES: By execution hereof, Tenant accepts the
Premises as suitable for Tenant's intended use and as being in good and sanitary
operating order, condition and repair, AS IS, and without representation or
warranty by Landlord as to the condition, or use or occupancy which may be made
thereof. Any exceptions to the foregoing must be by written agreement executed
by Landlord and Tenant, and specifically set forth in Addendum One.
10. SURRENDER: Tenant agrees that on the termination of this Lease,
Tenant shall surrender the premises in the same condition as herein agreed they
have been received, damage caused by war, earthquake and ordinary wear and tear
excepted but with carpets vacuumed and other floors "broom clean". At the time
of termination of this lease, Landlord may require any or all of the alterations
or additions installed by Tenant or by Landlord for the benefit of Tenant at
Tenant's request to be removed and the premises restored to their original
condition, whether or not said alterations or additions have become part of the
premises under paragraph 11 hereof. Notwithstanding the foregoing, Tenant shall
not be required to remove the Tenant Improvements made at the commencement of
the Term, and subsequent alterations and improvements unless (I) Tenant has not
requested Landlord's consent to them (whether or not such consent is required)
or, (II) Tenant has requested such consent and Landlord has notified Tenant, at
the time of Tenant's request for consent that such removal will be required.
Upon surrender of the premises, either at the expiration of the term or
otherwise, Lessee agrees to remove all personal property and rubbish from the
premises; but if not so removed by Tenant, Landlord may have the same removed at
Tenant's expense. All property of Tenant not so removed, unless such non-removal
is consented to by Landlord, shall be deemed abandoned by Tenant, provided that
in such event Tenant shall remain liable to Landlord for all costs incurred in
storing and disposing of such abandoned property of Tenant. If the Premises are
not surrendered at the end of the term or sooner termination of this lease,
Tenant hereby indemnifies 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. In the event of
surrender of this lease, Landlord shall have the option of terminating all
existing sub-leases or of assigning said sub-leases to Landlord.
11. ALTERATIONS AND ADDITIONS:
(a) Except for non-structural interior alterations and additions
costing less than $15,000.00 per alteration or addition, Tenant shall not make,
or permit to be made, any alteration or addition to the Premises, or any part
thereof, without the prior written consent of Landlord, such consent not to be
unreasonably withheld. Landlord's failure to disapprove proposed alterations or
additions within 10 working days after Landlord's receipt of the request for
approval, shall be deemed approval. Normal repair and maintenance work shall
not be deemed to be an alteration or addition to the Premises.
(b) Any alteration or addition to the Premises (including those in
subparagraph (a)) shall be at Tenant's sole cost and expense, in compliance with
all applicable laws and requirements requested by Landlord,
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and in accordance with plans and specifications submitted in writing to Landlord
and approved as to alterations and additions costing over $15,000.00.
(c) All additions, alterations or improvements, including, but not
limited to, heating, lighting, electrical, air conditioning, fire extinguishers,
lighting fixtures, ballasts, light globes, and tubes, hot water heaters, fixed
partitioning, drapery, wall covering and paneling, built-in cabinet work and
carpeting installations made by Tenant, together with all property that has
become an integral part of the Building, shall at once be and become the
property of Landlord, and shall not be deemed trade fixtures, but any or all are
subject to removal pursuant to paragraph 10 hereof. Notwithstanding the
foregoing, the following Tenant improvements, if paid for by Tenant and not
included in the Tenant Improvement Allowance, namely telecommunication and
computer-related equipment, including specialized flooring, cabling, air
conditioning equipment (for the sole purpose of cooling said computers), may be
removed by Tenant so long as Tenant repairs any damage caused by such removal.
(d) Tenant agrees not to proceed to make such alterations or
additions, notwithstanding consent from Landlord to do so, until five (5) days
after Tenants receipt of such consent.
12. MAINTENANCE OF PREMISES:
(a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its
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sole expense, (1) keep and maintain in good order, condition, and repair, and to
repair and to replace the Premise, and every part thereof, including glass,
windows, window frames, skylights, door closers, locks, storefronts, interior
and exterior doors and door frames, and the interior of the Premises, (excepting
only those portions of the Building to be maintained by Landlord, as provided in
Paragraph 12(c) below), (2) keep and maintain in good order and condition,
repair, and replace all utility and plumbing systems, fixtures and equipment,
including without limitation, electricity, gas, HVAC, water, and sewer, located
in or on the Premises, and furnish all expendables, including fluorescent tubes,
ballasts, light bulbs, paper goods and soaps, used in the Premises, (3) repair
all damage to the Building or the Outside Areas caused by the negligence or
willful misconduct of Tenant or its agents, employees, contractors or invitees
or other persons, including vandals. Tenant shall not do anything to cause any
damage, deterioration or unsightliness to the Building and the Outside Areas.
Tenant also agrees to maintain and pay for a service contract which meets the
manufacturer's recommendations of the air conditioning and heating systems
installed in the leased premises. Landlord reserves the right to hire a
licensed HVAC contractor to inspect annually the heating and air conditioning
system. If this contractor finds deficiencies in the condition of this system,
Tenant agrees to make all repairs and corrections within a reasonable period of
time at Tenant's expense, and after 30 days notice pay the cost of the
inspections by Landlord's contractor. If no deficiencies are found, Landlord
shall pay for the cost of the inspections.
(b) Landlord's Right to Maintain and Repair at Tenant's Expense.
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Notwithstanding the foregoing, Landlord shall have the right, but not the
obligation, at Tenant's expense, to enter the Premises and perform Tenant's
maintenance, repair and replacement work. Within thirty (30) days after invoice
therefor from Landlord, Tenant shall pay all reasonable costs and expenses
incurred by Landlord in connection with such maintenance, repair and replacement
work. Landlord shall have the right to perform Tenant's maintenance, repair and
replacement work only if Tenant fails to take appropriate remedial action within
ten (10) days after receiving written notice from Landlord specifying the nature
of Tenant's failure to comply with
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Paragraph 12(a) of the Lease. Notwithstanding the foregoing, if Tenant's failure
to maintain, repair or replace as required by Paragraph 12(a) of the Lease
creates an immediate danger of material further damage to the Premises, Landlord
shall not be required to give the notice to Tenant set forth in the previous
sentence.
(c) Maintenance by Landlord. Subject to the provisions of Paragraphs
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12(a), 22 and 23, and further subject to Tenant's obligation under Paragraph 4
to reimburse Landlord, in the form of Additional Rent, for Tenant's
Proportionate Share of the cost and expense of the following items, Landlord
agrees to repair and maintain the following items: the structural portions of
the roof and the roof coverings (provided that Tenant installs no additional air
conditioning or other equipment on the roof that damages structural portions of
the roof or the roof coverings), the foundation, the floor slab, the load
bearing walls, and the exterior walls (excluding any glass therein but including
the painting thereof) of the Building; the utility and plumbing systems,
(including fountain and sewer lines), fixtures and equipment located outside the
Building; and the parking areas, landscaping, sprinkler systems, alarm system,
sidewalks, driveways, curbs, and lighting systems in the Outside Areas.
Landlord shall not be required to repair or maintain conditions due to any act,
negligence or omission of Tenant or its agents, contractors, employees or
invitees. Landlord's obligation hereunder to repair and maintain is subject to
the condition precedent that Landlord shall have received written notice of the
need for such repairs and maintenance. Tenant shall promptly report in writing
to Landlord any defective condition known to it which Landlord is required to
repair.
(d) Tenant's Waiver of Rights. Tenant hereby expressly waives all
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rights to make repairs at the expense of Landlord or to terminate this Lease, as
provided for in California Civil Code Sections 1941 and 1942, and 1932 (1),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.
(e) Initial 12 month Maintenance by Landlord. Landlord shall pay at
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its expense for all repairs to the five Trane gas heaters and the five Trane air
conditioning units on the roof, less a $250.00 deductible for each call for
repairs, for the first twelve months after October 15, 1994, provided Tenant
gives Landlord 24 hours advance written notice of said need for repairs.
Landlord shall have the right to contract for said repairs, within a reasonable
period. Landlord shall also pay at its expense for all repairs to the roof, roof
membrane, and parking lot for the first twelve months after October 15, 1994.
This obligation of Landlord shall also extend to replacement of any
material, if repairs are not feasible.
Excluded from this obligation are any repairs or replacement directly caused
by Tenant, and its construction or misuse of the Premises.
The cost to Landlord Tinder this Paragraph 12(e) shall not be passed through
to Tenant under Paragraphs 4 (b) (5) and 12(a).
13. LANDLORD'S INSURANCE: Landlord shall purchase and keep in force fire,
extended coverage and "all risk" insurance covering the Building, and earthquake
coverage at the option of the Landlord. Tenant shall, at its sole cost and
expense, comply with any and all reasonable requirements pertaining to the
Premises of any insurer necessary for the maintenance of reasonable fire and
public liability insurance, covering building and appurtenances. Landlord, at
Tenant's cost, may maintain "Loss of Rents" insurance, insuring that the Rent
will be paid in a timely manner to Landlord for a period of at least twelve
(12) months if the Premises are destroyed or rendered unusable or inaccessible
by any cause insured against
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under this Lease. The premium for such Loss of Rents insurance shall be
Additional Rent as set forth in Paragraph 4(b) (2).
14. TENANT'S INSURANCE:
(a) Public Liability Insurance. Tenant shall, at Tenant's expense
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secure and keep in force a "broad form" public liability insurance and property
damage policy covering the Premises and the Outside Areas, insuring Tenant, and
naming Landlord and its lenders as additional insureds, against any liability
arising out of the ownership, use, occupancy or maintenance of the Premises and
all Outside Areas. The minimum limit of coverage of such policy shall be in the
amount of not less than One Million Dollars ($1,000,000.) for injury or death of
one person in any one accident or occurrence and in the amount of not less than
One Million Dollars ($1,000,000.) for injury or death of more than one person in
any one accident or occurrence, shall include an extended liability endorsement
providing contractual liability coverage (which shall include coverage for
Tenant's indemnification obligations in this Lease), and shall contain a
severability of interest clause or a cross liability endorsement. Such insurance
shall further insure Landlord and Tenant against liability for property damage
of at least One Million Dollars ($1,000,000.). The limit of any insurance shall
not limit the liability of Tenant hereunder. No policy shall be cancelable or
subject to reduction of coverage, without at least thirty (30) days prior
written notice to Landlord, and loss payable clauses shall be subject to
Landlord's approval. Such policies of insurance shall be issued as primary
policies and not contributing with or in excess of coverage that Landlord may
carry, by an insurance company authorized to do business in the State of
California for the issuance of such type of insurance coverage and rated A:XIII
or better in Best's Key Rating Guide. A copy of said policy or a certificate
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evidencing to Landlord's reasonable satisfaction that such insurance is in
effect shall be delivered to Landlord upon commencement of the Term, and
thereafter whenever said policies are renewed or modified, and also whenever
Landlord shall reasonable request.
(b) Personal Property Insurance. Tenant shall maintain in full force
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and effect on all of its fixtures and equipment on the Premises, a policy or
policies of fire and extended coverage insurance with standard coverage
endorsement to the extent of the full replacement cost thereof. During the term
of this Lease the proceeds from any such policy or policies of insurance shall
be used for the repair or replacement of the fixtures and equipment so insured.
Landlord shall have no interest in the insurance upon Tenant's equipment and
fixtures and will sign all documents reasonably necessary in connection with the
settlement of any claim or loss by Tenant. Landlord will not carry insurance on
Tenant's possessions. Tenant shall furnish Landlord with a certificate
evidencing to Landlord's reasonable satisfaction that such insurance is
currently in effect; and whenever required, shall satisfy Landlord that such
policy is in full force and effect.
15. INDEMNIFICATION:
(a) Of Landlord. Tenant shall indemnify and hold harmless Landlord and
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agents, employees, partners, shareholders, directors, invitees, and independent
contractors (collectively "Agents") of Landlord against and from any and all
claims, liabilities, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys' fees) arising from (1)
Tenant's use of the Premises or from any activity done, permitted or suffered by
Tenant, its agents, employees or independent contractors in and about the
Premises, the Building or the Property, and (2) any act, neglect, fault, willful
misconduct or omission of Tenant, or Tenant's Agents and invitees or from any
breach or default in the terms of this Lease by Tenant, and (3) any action or
proceeding brought on account of any matter
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in items (1) or (2). If any action or proceeding is brought against Landlord by
reason of any such claim, upon notice from Landlord, Tenant shall defend the
same at Tenant's expense by counsel reasonably satisfactory to Landlord. As a
material part of the consideration to Landlord, Tenant hereby assumes all risk
of damage to property or injury to persons in or about the Premises from any
cause whatsoever (except that which is caused by the sole active negligence or
willful misconduct by Landlord or its Agents or by the failure of Landlord to
observe any of the terms and conditions of this Lease), if such failure has
persisted for an unreasonable period of time after written notice of such
failure), and Tenant hereby waives all claims in respect thereof against
Landlord. The obligations of Tenant under this Paragraph 15 shall survive any
termination of this Lease.
(b) No Impairment of Insurance. The foregoing indemnity shall not
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relieve any insurance carrier of its obligations under any policies required to
be carried by either party pursuant to this Lease, to the extent that such
policies cover the peril or occurrence that results in the claim that is subject
to the foregoing indemnity.
16. SUBROGATION: Landlord and Tenant hereby mutually waive any claim
against the other during the Term for any injury to person or loss or damage to
any of their property located on or about the Premises, the Building or the
Property that is caused by or results from perils covered by insurance carried
by the respective parties, to the extent of the proceeds of such insurance
actually received with respect to such injury, loss or damage, whether or not
due to the negligence of the other party or its agents. Because the foregoing
waivers will preclude the assignment of any claim by way of subrogation to an
insurance company or any other person, each party now agrees to immediately give
to its insurer written notice of the terms of these mutual waivers. Nothing in
this Paragraph 16 shall relieve a party of liability to the other for failure to
carry insurance required by this Lease.
17. ABANDONMENT: Tenant shall not abandon the Premises at any time during
the Term. In the event of abandonment, the rights and remedies of Tenant and
Landlord shall be determined in accordance with the applicable California
statutes in effect at the time of abandonment.
18. FREE FROM LIENS: Tenant shall keep the Premises and the Property free
from any liens arising out of any work performed, materials furnished, or
obligations incurred by or for Tenant.
19. ADVERTISEMENTS AND SIGNS: Tenant shall not place or permit to be placed
in, upon, or about the Premises or the Property any signs, advertisements or
notices without obtaining Landlord's prior written consent or without complying
with applicable law, and will not conduct, or permit to be conducted, any sale
by auction on the Premises or otherwise on the Property. Tenant shall remove any
sign, advertisement or notice placed on the Premises by Tenant upon the
expiration of the Term or sooner termination of this Lease, and Tenant shall
repair any damage or injury to the Premises or the Property caused thereby, all
at Tenant's expense. If any signs are not removed, or necessary repairs not
made, Landlord shall have the right to remove the signs and repair any damage of
injury to the Premises at Tenant's sole cost and expense. Landlord hereby
consents to Tenant's installing, at its expense, such signs located either on
the Building, in front of the Building (on Arques Avenue), or on both,
provided that such signs shall be in keeping both in number and size as those
currently identifying Signetics. The special designs for the signs shall be
submitted to and must receive prior written approval of Landlord.
20. UTILITIES. Tenant shall pay for all water, sewer, gas, heat, light,
power, telephone service and all other materials and services supplied to the
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Premises. If Tenant fails to pay for any of the foregoing when due, Landlord may
pay the same and add such amount to the Rent.
It is understood that certain utility lines and controls, serving
premises other than the leased Premise, have been installed within the leased
Premise. It is agreed that such lines and controls may remain therein, and
access shall be provided by Tenant for the maintenance of said lines and
controls. Landlord shall give Tenant prior notice of such access and shall use
reasonable efforts to minimize any inconvenience to Tenant.
It is further understood that certain utility services, including water,
power, gas, sewer and HVAC are not separately metered to the Premises, but also
serve other adjoining premises. Landlord and Tenant agree that Landlord shall
submit at regular billing intervals, when utility bills are received, an
allocation of the monthly charges applicable to, each user by area occupied by
each. Said allocated charges shall constitute additional rent. Landlord and
Tenant agree that such allocation shall cease as to any service for which
Landlord shall arrange for a separate meter for the Premises. The allocated
costs shall also include the expense of maintenance, repair and replacement of
equipment providing distribution of said utility services, which shall be
charged on the same area basis.
21. ENTRY BY LANDLORD. Tenant shall permit Landlord and its Agents to enter
into and upon the Premises at all reasonable times, upon reasonable notice of no
less than twenty-four (24) hours, (except in the case of an emergency, for which
no notice shall be required), and subject to Tenant's reasonable security
arrangements, for the purpose of inspecting the same or showing the Premises to
prospective purchasers, lenders or tenants or to alter, improve, maintain and
repair the Premises as required or permitted of Landlord under the terms hereof,
without any liability to Tenant for any loss of occupation or quiet enjoyment of
the Premises thereby occasioned (except for actual damages resulting from the
negligence or willful misconduct of Landlord or its agents); and Tenant shall
permit Landlord to post notices of non-responsibility and ordinary "for sale" or
"for lease" signs, provided that Landlord may post such "for lease" signs and
exhibit the Premises to prospective tenants only during the six (6) months prior
to termination of this Lease. No such entry shall be construed to be a forcible
or unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises.
22. DESTRUCTION AND DAMAGE:
(a) If the Building is damaged by fire or other perils covered by
extended coverage insurance, Landlord shall, at Landlord's option:
(1) Subject to the provisions of Paragraph 4 of Addendum One
hereof, in the event of total destruction (which shall mean destruction or
damage in excess of twenty-five percent (25%) of the full insurable value
thereof) of the Building, elect either to commence promptly to repair and
restore the Building and prosecute the same diligently to completion, in which
event this lease shall remain in full force and effect; or not to repair or
restore the Building, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
occurrence of such destruction. If Landlord elects not to restore the Building,
this Lease shall be deemed to have terminated as of the date of such total
destruction.
(2) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding twenty-five percent (25%) of
the full insurable value thereof) of the Building for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and
11
restore such partial destruction and, if the damage thereto is such that the
Building may be substantially repaired or restored to its condition existing
immediately prior to such damage or destruction within one hundred eighty (180)
days from the date of such destruction, Landlord shall commence and proceed
diligently with the work of repair and restoration, in which event the Lease
shall continue in full force and effect. If such repair and restoration
requires longer than one hundred eighty (180) days or if the insurance proceeds
therefor (plus any amounts Tenant may elect or is obligated to contribute) are
not sufficient to cover the cost of such repair and restoration, Landlord may
elect either to so repair and restore, in which event the Lease shall continue
in full force and effect, or not to repair or restore, in which event the Lease
shall terminate. In either case, Landlord shall give written notice to Tenant of
its intention within sixty (60) days after the destruction occurs. If Landlord
elects not to restore the Building, this Lease shall be deemed to have
terminated as of the date of such partial destruction.
(3) Notwithstanding anything to the contrary contained in
this Paragraph 22, in the event of damage to the Building or the Premises
occurring during the last twelve (12) months of the Term, Landlord may elect to
terminate this Lease by written notice of such election given to Tenant within
thirty (30) days after the damage occurs.
(b) Subject to the provisions of Paragraph 4 of Addendum One hereon,
if the Building is damaged by any peril not covered by extended coverage
insurance, and the cost to repair such damage exceeds any amount Tenant may
agree to contribute, Landlord may elect either to commence promptly to repair
and restore the Building and prosecute the same diligently to completion, in
which event this Lease shall remain in full force and effect; or not to repair
or restore the Building, in which event this Lease shall terminate. Landlord
shall give Tenant written notice of its intention within sixty (60) days after
the occurrence of such damage. If Landlord elects not to restore the Building,
this Lease shall be deemed to have terminated as of the date on which Tenant
surrenders possession of the Premises to Landlord, except that if the damage to
the Premises materially impairs Tenant's ability to continue its business
operations in the Premises, then this Lease shall be deemed to have terminated
as of the date such damage occurred.
(c) In the event of repair and restoration as herein provided, the
monthly installments of Base Rent shall be abated proportionately in the ratio
which Tenant's use of the Premises is impaired during the period of such repair
or restoration, unless the damage was caused by the negligent or willful acts of
omissions of Tenant, in which event there shall be abatement of Base Rent only
to the extent of rental abatement insurance proceeds received by Landlord.
Tenant shall not be entitled to any compensation or damages for loss of use of
the whole or any part of the Premises and/or any inconvenience or annoyance
occasioned by such damage, repair or restoration.
(d) If Landlord is obligated to or elects to repair or restore as
herein provided, Landlord shall repair or restore only those portions of the
Building and Premises which were originally provided at Landlord's expense,
substantially to their condition existing immediately prior to the occurrence of
the damage or destruction; and Tenant shall promptly repair and restore, at
Tenant's expense, Tenant's fixtures, improvements, alterations and additions in
and to the Premises or Building which were not provided at Landlord's expense.
(e) Tenant hereby waives the provisions of California Civil Code
Section 1932(2) and Section 1933(4) which permit termination of a lease upon
destruction of the leased premises, and the provisions of any similar
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law now or hereinafter in effect, and the provisions of this Paragraph 22 shall
govern exclusively in case of such destruction.
23. CONDEMNATION: If twenty-five percent (25%) or more of the Building
or the parking area for the Premises is taken for any public or quasi-public
purpose by any lawful governmental power or authority, by exercise of the right
of appropriation, inverse condemnation, condemnation or eminent domain, or sold
to prevent such taking (each such event being referred to as a "Condemnation"),
Landlord or Tenant may, at its option, terminate this Lease as of the date title
vests in the condemning party. If the Building after any Condemnation and any
repairs by Landlord would be untenantable for the conduct of Tenant's business
operations, Tenant shall have the right to terminate this Lease as of the date
title vests in the condemning party. If either party elects to terminate this
Lease as provided herein, such election shall be made by written notice to the
other party given within thirty (30) days after the nature and extent of such
Condemnation have been finally determined. Tenant shall not because of such
taking assert any claim against Landlord. Landlord shall be entitled to receive
the proceeds of all Condemnation awards, (except separate awards for trade
fixtures and relocation expense), and Tenant hereby assigns to Landlord all of
its interest in such awards. If less than twenty-five percent (25) of the
Building or the parking area is taken, Landlord at its option may terminate this
Lease. If neither Landlord nor Tenant elects to terminate this Lease to the
extent permitted above, Landlord shall promptly proceed to restore the Premises,
to the extent of any Condemnation award received by Landlord, to substantially
their same condition as existed prior to such Condemnation, allowing for the
reasonable effects of such Condemnation, and a proportionate abatement shall be
made to the Base Rent corresponding to the time during which, and to the portion
of the floor area of the Building (adjusted for any increase thereto resulting
from any reconstruction) of which, Tenant is deprived on account of such
Condemnation and restoration. The provisions of California Code of Civil
Procedure Section 1265.130, which allows either party to petition the Superior
Court to terminate the Lease in the event of a partial taking of the Premises,
and any other applicable law now or hereafter enacted, are hereby waived by
Landlord and Tenant.
24. ASSIGNMENT AND SUBLETTING
(a) Tenant shall not voluntarily or by operation of law, (1) mortgage,
pledge, hypothecate or encumber this Lease or any interest herein, (2) assign or
transfer this Lease or any interest herein, sublet the Premises or any part
thereof, or any right or privilege appurtenant thereto, or allow any other
person (the employees, agents and invitees of Tenant excepted) to occupy or use
the Premises, or any portion thereof, without first obtaining the written
consent of Landlord, which consent shall not be withheld unreasonably. When
Tenant requests Landlord's consent to such assignment or subletting, it shall
notify Landlord in writing of the name and address of the proposed assignee or
subtenant and the nature and character of the business of the proposed assignee
or subtenant and shall provide current financial statements for the proposed
assignee or subtenant prepared in accordance with generally accepted accounting
principles. Tenant shall also provide Landlord with a copy of the proposed
sublet or assignment agreement, including all material terms and conditions
thereof. Landlord shall have the option, to be exercised within thirty (30) days
of receipt of the foregoing, to (1) cancel this Lease to the extent of the
proposed sublease as of the commencement date stated in the proposed sublease or
assignment, (2) acquire from Tenant the interest, or any portion thereof, in
this Lease and/or the Premises that Tenant proposes to assign or sublease, on
the same terms and conditions as stated in the proposed sublet or assignment
agreement, (3) consent to the proposed assignment or sublease, or (4) refuse its
consent to the proposed assignment or sublease, providing that such consent
shall not be unreasonably withheld.
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(b) Without otherwise limiting the criteria upon which Landlord may
withhold its consent, Landlord may take into account the reputation and credit
worthiness of the proposed assignee or subtenant, the character of the business
proposed to be conducted in the Premises or portion thereof sought to be
subleased, and the potential impact of the proposed assignment or sublease on
the economic value of the Premises. In any event, Landlord may withhold its
consent to any assignment or sublease, if (1) the actual use proposed to be
conducted in the Premises or portion thereof conflicts with the provisions of
Paragraph 8(a) or (b) above or with any other lease which restricts the use to
which any space in the Building may be put, or (2) the proposed assignment or
sublease requires unreasonable alterations, improvements or additions to the
Premises or portions thereof.
(c) If Landlord approves an assignment or subletting as herein
provided, Tenant shall pay to Landlord, as Additional Rent, 50% of the
difference, if any, between (1) the Base Rent plus Additional Rent allocable to
that part of the Premises affected by such assignment or sublease pursuant to
the provisions of this Lease, and (2) the rent and any additional rent paid by
the assignee or sublease to Tenant, after deducting the costs incurred by Tenant
in connection with any such assignment or sublease. The assignment or sublease
agreement, as the case may be, after approval by Landlord, shall not be amended
without Landlord's prior written consent, and shall contain a provision
directing the assignee or subtenant to pay the rent and other sums due
thereunder directly to Landlord upon receiving written notice from Landlord that
Tenant is in default under this Lease with respect to the payment of Rent.
Landlord's collection of such rent and other sums shall not constitute an
acceptance by Landlord of attornment by such assignee or subtenant. A consent to
one assignment subletting, occupation or use, and consent to any assignment or
subletting shall in no way relieve Tenant of any liability under this Lease. Any
assignment or subletting without Landlord's consent shall be void, and shall, at
the option of Landlord, constitute a Default under this Lease.
(d) Tenant shall pay Landlord's reasonable fees, not to exceed Five
Hundred Dollars ($500.00) per transaction, incurred in connection with
Landlord's review and processing of documents regarding any proposed assignment
or sublease.
(e) Tenant acknowledges and agrees that the restrictions, conditions
and limitations imposed by this Paragraph 24 on Tenant's ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or, use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that the Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof, to transfer or assign any right or
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof.
(f) Notwithstanding anything to the contrary herein, Landlord's
consent shall not be required for any transfer, assignment or subletting of the
Premises (or any portion thereof) to any entity which controls, is controlled
by, or is under common control with Tenant; to any entity which results from a
merger of or consolidation with Tenant; to any entity which acquires
substantially all of the assets of Tenant, as a going concern, with respect to
the business that is being conducted in the Premises; or to entity engaged in a
bona fide joint venture with Tenant.
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25. TENANT'S DEFAULT: The occurrence of any one of the following events
shall constitute an event of default on the part of Tenant ("Default"):
(a) The abandonment of the Premises by Tenant;
(b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of 10 calendar days
after the same is due;
(c) A general assignment by Tenant for the benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant, the
filing of a voluntary petition for an arrangement, the filing of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by Tenant's creditors, said involuntary petition remaining
undischarged for a period of sixty (60) days;
(e) Receivership, attachment, or other judicial seizure of substantially
all of Tenant's assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof;
(f) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraph 30 or 31 or 40.
(g) An assignment or sublease, or attempted assignment or sublease, of
this Lease or the Premises by Tenant contrary to the provision of Paragraph 24,
unless such assignment or sublease is expressly conditioned upon Tenant having
received Landlord's consent thereto;
(h) Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 6 above;
(i) Failure in the performance of any of Tenant's covenants, agreements
or obligations hereunder (except those failures specified as events of Default
in other Paragraphs or this Paragraph 25, which shall be governed by such other
Paragraphs), which failure continues for ten (10) calendar days after written
notice thereof from Landlord to Tenant provided that if Tenant has exercised
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reasonable diligence to cure such failure and such failure cannot be cured
within such ten (10) day period despite reasonable diligence, Tenant shall not
be in default under this subparagraph unless Tenant fails thereafter diligently
and continuously to prosecute the cure to completion; and
(j) Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. "Chronic
delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within (5) calendar days after
written notice thereof for any three (3) months (consecutive or nonconsecutive)
during any twelve (12) month period. In the event of a Chronic Delinquency, in
addition to Landlord's other remedies for Default provided in this Lease, at
Landlord's option, Landlord shall have the right to require that Rent be paid by
Tenant quarterly, in advance.
Tenant agrees that any notice given by Landlord pursuant to Paragraph
25(b), (i) or (j) above shall satisfy the requirements for notice under
California Code of Civil Procedure Section 1161, and Landlord shall not be
required to give any additional notice in order to be entitled to commence an
unlawful detainer proceeding.
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26. LANDLORD'S REMEDIES:
(a) Termination. In the event of any Default by Tenant, then in addition
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to any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and any other
sums due and payable which have been earned at the time of such termination;
plus
(2) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of award exceeds the amount of such rental loss that Tenant
proves could be reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, including, without limitation, any costs or expenses reasonably and
necessarily incurred by Landlord (i) in retaking possession of the Premises;
(ii) in maintaining, repairing, preserving, restoring, replacing, cleaning,
altering or rehabilitating the Premises or any portion thereof, including such
acts for reletting to a new tenant or tenants; (iii) for leasing commissions; or
(iv) for any other costs necessary or appropriate to relet the Premises; plus
(5) such reasonable attorneys' fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus
(6) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to twelve percent (12%)
per annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives
redemption of relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
Default or Tenant hereunder.
(b) Continuation of Lease. In the event of any Default by Tenant, then
---------------------
in addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
Default and abandonment and recover Rent as it becomes due, provided Tenant has
the right to sublet or assign, subject only to reasonable limitations).
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(c) Re-entry. In the event of any Default by Tenant, Landlord shall also
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have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.
(d) Reletting. In the event of the abandonment of the Premises by
---------
Tenant or in the event that Landlord shall elect to re-enter as provided in
Paragraph 26(b) or shall take possession of the Premises pursuant to legal
proceeding or pursuant to any notice provided by law, then if Landlord does not
elect to terminate this Lease as provided in Xxxxxxxxx 00(x), Xxxxxxxx may from
time to time, without terminating this Lease, relet the Premises or any part
thereof for such term or terms and at such rental or rentals and upon such other
terms and conditions as Landlord in its sole discretion may deem advisable with
the right to make alterations and repairs to the Premises. In the event that
Landlord shall elect to so relet, then rentals received by Landlord from such
reletting shall be applied in the following order: (1) to reasonable attorneys'
fees incurred by Landlord as a result of a Default and costs in the event suit
is filed by Landlord to enforce such remedies; (2) to the payment of any
indebtedness other than Rent due hereunder from Tenant to Landlord; (3) to the
payment of any reasonable costs of such reletting; (4) to the payment of the
costs of any reasonable alterations and repairs to the Premises; (5) to the
payment of Rent due and unpaid hereunder; and (6) the residue, if any, shall be
held by Landlord and applied in payment of future Rent and other sums payable by
Tenant hereunder as the same may become due and payable hereunder. Should that
portion of such rentals received from such reletting during any month, which is
applied to the payment of Rent hereunder, be less than the Rent payable during
the month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall
also pay to Landlord, as soon as ascertained, any costs and expenses reasonably
and necessarily incurred by Landlord in such reletting or in making such
alterations and repairs not covered by the rentals received from such reletting.
(e) Termination. No re-entry or taking of possession of the Premises by
-----------
Landlord pursuant to this Paragraph 26 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination thereof is decreed by a court of competent
jurisdiction. Notwithstanding any reletting without termination by Landlord
because of any Default by Tenant, Landlord may at any time after such reletting
elect to terminate this Lease for any such Default.
(f) Cumulative Remedies. The remedies herein provided are not exclusive
-------------------
and Landlord shall have any and all other remedies provided herein or by law or
in equity.
(g) No Surrender. No act or conduct of Landlord, whether consisting
------------
of the acceptance of the keys to the Premises, or otherwise, shall be deemed to
be or constitute an acceptance of the surrender of the Premises by Tenant prior
to the expiration of the Term, and such acceptance by Landlord of surrender by
Tenant shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord elects
in writing that such merger takes place, but shall operate as an assignment to
Landlord of any and all existing subleases, or Landlord may, at its option,
elect in writing to treat such surrender as a merger terminating Tenant's estate
under this Lease, and
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thereupon Landlord may terminate any or all such subleases by notifying the
sublessee of its election so to do within (5) days after such surrender.
27. ATTORNEY'S FEES: In the event any legal action or proceeding,
including arbitration and declaratory relief, is commenced for the purpose of
enforcing any rights or remedies pursuant to this Lease, the prevailing party
shall be entitled to recover from the non-prevailing party reasonable attorneys'
fees, as well as costs or suit, in said action or proceeding, whether or not
such action is prosecuted to judgment.
28. TAXES: Tenant shall be liable for and shall pay, prior to delinquency,
all taxes levied against personal property and trade or business fixtures of
Tenant. If any alteration, addition or improvement installed by Tenant pursuant
to Paragraph 11, or any personal property, trade fixture or other property of
Tenant, is assessed and taxed with the Property, Tenant shall pay such taxes to
Landlord within fifteen (15) days after delivery to Tenant of a statement
therefor.
29. EFFECT OF CONVEYANCE: The term "Landlord" as used in this Lease, means
only the owner for the time being of the Property containing the Building, so
that, in the event of any sale of the Property or the Building, Landlord shall
be and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder accruing from and after the transfer, and it shall be deemed
and construed, without further agreement between the parties and the purchaser
at any such sale, that the purchaser of the Property or the Building has assumed
and agreed to carry out any and all covenants and obligations of Landlord
hereunder.
30. TENANTS ESTOPPEL CERTIFICATE: From time to time, upon written request
of Landlord, Tenant shall execute, acknowledge and deliver to Landlord or its
designee, a written certificate stating (a) the date this Lease was executed,
the Commencement Date of the Term and the date the Term expires; (b) the date
Tenant entered into occupancy of the Premises; (c) the amount of Rent and the
date to which such Rent has been paid; (d) that this Lease is in full force and
effect and has not been assigned, modified, supplemented or amended in any way
(or, if assigned, modified, supplemented or amended, specifying the date and
terms of any agreement so affecting this Lease); (e) that this Lease represents
the entire agreement between the parties with respect to Tenant's right to use
and occupy the Premises (or specifying such other agreements, if any): (f) that
all obligations under this Lease to be performed by Landlord as of the date of
such certificate have been satisfied (or specifying those as to which Tenant
claims that Landlord has yet to perform); (g) that all required contributions by
Landlord to Tenant on account of Tenant's improvements have been received (or
stating exceptions thereto); (h) to the best of Tenant's knowledge that on such
date there exist no defenses or offsets that Tenant has against the enforcement
of this Lease by Landlord (or stating exceptions thereto; (i) that no Rent or
other sum payable by Tenant hereunder has been paid more than one (1) month in
advance (or stating exceptions thereto); (j) that security has been deposited
with Landlord, stating the amount thereof; and (k) any other matters evidencing
the status of this Lease that may be required either by a lender making a loan
to Landlord to be secured by a deed of trust covering the Premises or by a
purchaser of the Premises. Any such certificate delivered pursuant to this
Paragraph 30 may be relied upon by a prospective purchaser of Landlord's
interest or a mortgagee of Landlord's interest or assignee of any mortgage upon
Landlord's interest in the Premises. If Tenant shall fail to provide such
certificate within ten (10) days of receipt by Tenant of a written request by
Landlord as herein provided, such failure shall, at Landlord's election,
constitute a Default xxxxxx this Lease, and Tenant shall be deemed to have given
such certificate as above provided without modification and shall be deemed to
have given such certificate as above provided without
18
modification and shall be deemed to have admitted the accuracy of any
information supplied by Landlord to a prospective purchaser or mortgagee.
31. SUBORDINATION: Landlord shall have the right to cause this Lease to be
and remain subject and subordinate to any and all mortgages, deeds of trust
("Encumbrances") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof; provided only that in the event of the foreclosure of any such
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mortgage or deed of trust, so long as Tenant is not in default, the holder
thereof ("Holder") shall agree to recognize Tenant's rights under this Lease as
long as Tenant shall pay the Rent and observe and perform all the provisions of
this Lease to be observed and performed by Tenant. Within ten (10) days after
Landlord's written request, Tenant shall execute, acknowledge and deliver any
and all reasonable documents required by Landlord or the Holder to effectuate
such subordination. If Tenant fails to do so, such failure shall constitute a
Default by Tenant under this Lease. Notwithstanding anything to the contrary set
forth in this Paragraph 31, Tenant hereby attorns and agrees to attorn to any
person or entity purchasing or otherwise acquiring the Premises at any sale or
other proceeding or pursuant to the exercise of any other rights, powers or
remedies under such Encumbrance.
32. ENVIRONMENTAL COVENANTS:
(a) As used herein, the term "Hazardous Material" shall mean any
substance or material which has been determined by any state, federal or local
governmental authority to be capable of posing a risk of injury to health,
safety or property, including all of those materials and substances designated
as hazardous or toxic by the city in which the Premises are located, the U.S.
Environmental Protection Agency, the Consumer Product Safety Commissions, the
Food and Drug Administration, the California Water Resources Control Board, the
Regional Water Quality Control Board, San Francisco Bay Region, the California
Air Resources Board, CAL/OSHA Standards Board, Division of Occupational Safety
and Health, the California Department of Food and Agriculture, the California
Department of Health Services, and any federal agencies that have overlapping
jurisdiction with such California agencies, or any other governmental agency now
or hereafter authorized to regulate materials and substances in the environment.
Without limiting the generality of the foregoing, the term "Hazardous Material"
shall include all of those materials and substances defined as "hazardous
materials" or "hazardous waste" in Sections 66680 through 66685 of Title 22 of
the California Administrative Code, Division 4, Chapter 30, as the same
products, fractions, constituents and sub-constituents of petroleum or
petroleum-related substances, asbestos, and any other materials requiring
remediation now or in the future under federal, state or local statutes,
ordinances, regulations or policies.
(b) Tenant represents, warrants and covenants (i) that it will use
and store in, on or about the Premises, only those Hazardous Materials that are
necessary for Tenant to conduct its business activities on the Premises, (ii)
that, with respect to any such Hazardous Materials, Tenant shall comply with all
applicable federal, state and local laws, rules, regulations, policies and
authorities relating to the storage, use, disposal or cleanup of Hazardous
Materials, including, but not limited to, the obtaining of proper permits,
and (iii) that it will not dispose of any Hazardous Materials in, on or about
the Premises under any circumstances except as permitted by applicable law.
19
(c) Tenant shall immediately notify Landlord of any inquiry, test,
investigation or enforcement proceeding by or against Tenant, Landlord or the
Premises concerning a Hazardous Material. Tenant acknowledges that Landlord, as
the owner of the Premises, shall have the right to negotiate, defend, approve
and appeal, any action taken or order issued with regard to a Hazardous Material
by an applicable governmental authority. Landlord shall immediately notify
Tenant of any inquiry, test, investigation or enforcement proceeding against the
Premises concerning a Hazardous Material on the Premises. Tenant shall pay
Landlord's cost of negotiating, defending or appealing any action or order
issued with regard to Hazardous Material by an applicable governmental authority
if Tenant caused, permitted or suffered such Hazardous Material to come onto the
Premises. Landlord agrees to indemnify, defend and hold Tenant harmless from and
against the cost and expense of any remediation or cleanup work required by any
governmental agency to be performed on the Premises as a result of any Hazardous
Materials existing on the Premises on the date of this Lease.
(d) If Tenant's storage, use or disposal of any Hazardous Material in,
on or adjacent to the Premises results in any contamination of the Premises, the
soil or surface of groundwater (1) requiring remediation under federal, state or
local statutes, ordinances, regulations, or policies, or (2) at levels which are
unacceptable to Landlord, in Landlord's reasonable judgment, Tenant agrees to
clean up said contamination. Tenant further agrees to indemnify, defend and
hold Landlord harmless from and against any claims, liabilities, suits, causes
of action, costs, expenses or fees, including reasonable attorneys' fees and
costs, arising out of or in connection with any remediation, cleanup work,
inquiry or enforcement proceeding in connection therewith, and any Hazardous
Materials currently or hereafter used, stored or disposed of by Tenant or its
agents, employees, contractors or invitees in, on or adjacent to the Premises.
(e) Notwithstanding any other right of entry granted to Landlord under
this Lease, Landlord shall have the right upon reasonable prior written notice
(except in an emergency or in a situation where there is a danger of immediate
further contamination, in which case no prior notice will be required) to enter
the Premises or to have consultants enter the Premises throughout the term of
this Lease for the purpose of (1) determining whether the Premises are in
conformity with federal, state and local statues, regulations, ordinances, and
policies including those pertaining to the environmental condition of the
Premises, (2) conducting an environmental audit or investigation of the Premises
for purposes of sale, transfer, conveyance or financing, (3) determining whether
Tenant has complied with this Paragraph 32, and (4) determining the corrective
measures, if any, required of Tenant to ensure the safe use, storage and
disposal of Hazardous Materials, or to remove Hazardous Materials (except to the
extent used, stored or disposed of by Tenant or its agents, employees,
contractors or invitees in compliance with applicable law). Tenant agrees to
provide access and reasonable assistance for such inspections. Such inspections
may include, but are not limited to, entering the Premises or adjacent property
with drill rigs or other machinery for the purpose of obtaining laboratory
samples. Landlord shall not be limited in the number of such inspections during
the term of this Lease. To the extent such inspection disclose the presence of
Hazardous Materials used, stored or disposed of other than in accordance with
subparagraph (b) (ii) above, Tenant shall reimburse Landlord for the reasonable
cost of such inspections within ten (10) days of receipt of a written statement
thereof. If such consultants determine that the Premises are contaminated with
Hazardous Materials used, stored or disposed of by Tenant or its agents,
employees, contractors or invitees, Tenant shall, in a timely manner, at its
expense, remove such Hazardous Materials or otherwise comply with the
recommendations of such consultants to the reasonable
20
satisfaction of Landlord and any applicable governmental agencies. The right
granted to Landlord herein to inspect the Premises shall not create a duty on
Landlord's part to inspect the Premises, or liability of Landlord for Tenant's
use, storage or disposal of Hazardous Materials, it being understood that Tenant
shall be solely responsible for all liability in connection therewith. Landlord
shall be liable for the gross negligence or willful misconduct of Landlord or
its agents, employees or consultants in conducting the aforementioned
inspections.
(f) Tenant shall surrender that Premises to Landlord upon the
expiration or earlier termination of this Lease free of debris, waste and
Hazardous Materials used, stored or disposed of by Tenant or its agents,
employees, contractors or invitees, and in a condition which complies with all
governmental statutes, ordinances, regulations and policies,
recommendations of consultants hired by Landlord, and such other reasonable
requirements as may be imposed by Landlord.
(g) Tenant's obligations under this Paragraph 32 shall survive
termination of this Lease, and Tenant waives the Statute of Limitations, as to
Landlord, applicable to any action brought hereunder.
(h) Landlord hereby discloses to Tenant that the Premises and the
Property are in an area in which contamination of soils or groundwater by
Hazardous Materials exist. If Tenant desires more definite information
regarding the existence or possible existence of contamination by Hazardous
Materials of soils or groundwater of or beneath the Premises, the Property, or
other real property in the general area of the Property, then Tenant shall
investigate such matters.
33. NOTICES: All notices and demands which may or are to be required or
permitted to be given to either party by the other hereunder shall be in writing
and shall be sent by United States mail, postage prepaid, certified, or by
personal delivery or overnight courier, addressed to the addressee at the
address for such addressee as specified herein, or to such other place as such
party may from time to time designate in a notice to the other party given as
provided herein. Notice shall be deemed given upon the earlier of actual receipt
or the date On which delivery was attempted if Tenant refuses to receive.
34. WAIVER: The waiver of any breach of any term, covenant or condition of
this Lease 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 by Landlord shall
not be deemed to be a waiver of any preceding breach by Tenant, 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 delay or omission in the exercise of any right. or remedy of Landlord
on any Default by Tenant shall impair such a right or remedy or be construed as
a waiver. Any waiver by landlord of any Default must be in writing and shall not
be a waiver of any other Default concerning the same or any other provisions of
this Lease.
35. HOLDING OVER: Any holding over after the expiration of the Term,
without the express written consent of Landlord, shall constitute a Default and,
without limiting Landlord's remedies provided in this Lease, such holding over
shall be construed to be a tenancy at sufferance, at a rental rate of one
hundred twenty percent (120%) of the Base Rent last due in this Lease, plus
Additional Rent, and shall otherwise be on the terms and conditions herein
specified, so far as applicable.
21
36. SUCCESSORS AND ASSIGNS: The terms, covenants and conditions of this
Lease shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of all of the parties
hereto. If Tenant shall consist of more than one entity or person, the
obligations of Tenant under this Lease shall be joint and several.
37. TIME: Time is of the essence of this Lease and each and every term,
condition and provision herein.
38. BROKERS: Landlord represents and warrants to Tenant that neither it nor
its officers or agents not anyone acting on its behalf has dealt with any real
estate broker except Xxxxxxx Realty and Tenant represents to Landlord that
Cornish & Xxxxx is its sole real estate broker in such negotiations, and each
party agrees to indemnify and hold harmless the other from any claim or claims,
and costs and expenses, including attorney's fees, incurred by the indemnified
party in conjunction with any such claim or claims of any other broker or
brokers to a commission in connection with this Lease as a result of the actions
of the indemnifying party.
39. RULES AND REGULATIONS: Tenant agrees to comply with such reasonable
rules and regulations as Landlord may adopt from time to time for the orderly
and proper operating of the Building and parking and other common areas. Such
rules may include but shall not be limited to the following: (a) restriction of
employee parking to a limited, designated area or areas; and (b) regulation of
the removal, storage and disposal of Tenant's refuse and other rubbish at the
sole cost and expense of Tenant. The rules and regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant. Landlord shall not be
responsible to Tenant for the failure of any other person to observe and abide
by any of said rules and regulations.
40. MORTGAGEE PROTECTION:
(a) Modifications for Lender. If, in connection with obtaining financing
------------------------
for the Premises or any portion thereof, Landlord's lender shall request
reasonable modifications to this Lease as a condition to such financing, Tenant
shall not unreasonably withhold, delay or defer its consent to such
modifications, provided such modifications do not materially adversely affect
Tenant's rights or increase Tenant's obligations under this Lease.
(b) Rights to Cure. Tenant agrees to give to any trust deed or mortgage
--------------
holder ("Holder"), by registered mail, at the same time as it is given to
Landlord, a copy of any notice of default given to Landlord, provided that prior
-------------
to such notice Tenant has been notified, in writing, (by way of notice of
assignment of rents and leases, or otherwise) of the address of such Holder.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for is this Lease, then the Holder shall have an
additional twenty (20) days after expiration of such period, or after receipt of
such notice from Tenant (if such notice to the Holder is required by this
Paragraph 42(b), whichever shall last occur, within which to cure such default
or if such default cannot be cured within that time, then such additional time
as may be necessary if within such twenty (20) days, any Holder has commenced
and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings, if
necessary to effect such cure), in which event this Lease shall not be
terminated.
41. ENTIRE AGREEMENT: This Lease, including the Exhibits and any Addenda
attached hereto, which are hereby incorporated herein by this reference,
contains the entire agreement of the parties hereto, and no representations,
inducements, promises or agreements, oral or otherwise,
22
between the parties, not embodied herein or therein, shall be of any force and
effect.
42. CONSTRUCTION: This Lease shall be construed and interpreted in
accordance with the laws of the State of California. The parties acknowledge and
agree that no rule of construction to the effect that any ambiguities are to be
resolved against the drafting party shall be employed in the interpretation of
this Lease, including the Exhibits and any Addenda attached hereto. All captions
in this Lease are for reference only and shall not be used in the interpretation
of this Lease. Whenever required by the context of this Lease, the singular
shall include the plural, the masculine shall include the feminine, and vice
versa. If any provision of this Lease shall be determined to be illegal or
unenforceable, such determination shall not affect any other provision of this
Lease and all such other provisions shall remain in full force and effect.
43. REPRESENTATIONS AND WARRANTIES OF TENANT:
Tenant hereby makes the following representations and warranties, each of which
is material and being relied upon by Landlord, is true in all respects as of the
date of this Lease, and shall survive the expiration or termination of the
Lease.
(a) If Tenant is an entity, Tenant is duly organized, validly existing
and in good standing under the laws of the state of its organization and the
persons executing this Lease on behalf of Tenant have the full right and
authority to execute this Lease on behalf of Tenant and to bind Tenant without
the consent or approval of any other person or entity. Tenant has full power,
capacity, authority and legal right to execute and deliver this Lease and to
perform all of its obligations hereunder. This Lease is a legal, valid and
binding obligation of Tenant, enforceable in accordance with its terms.
(b) Tenant has not (1) made a general assignment for the benefit of
creditors, (2) filed any voluntary petition in bankruptcy or suffered the filing
of an involuntary petition by any creditors, (3) suffered the appointment of a
receiver to take possession of all or substantially all of its assets, (4)
suffered the attachment or other judicial seizure of all or substantially all of
its assets, (5) admitted in writing its inability to pay its debts as they come
due, or (6) made an offer of settlement, extension or composition to its
creditors generally.
Landlord and Tenant have executed and delivered this Lease as of the date
first hereinabove set forth.
44. OUTSIDE AREAS.
(a) Subject to the terms and conditions of this lease and such rules and
regulations as Landlord may from time to time prescribe, Tenant and Tenant's
employees, invitees, guests and customers shall have the nonexclusive right to
use the access roads, parking areas, and facilities provided and designated by
Landlord for the general use and convenience of the occupants of the building in
which the premises are located, which areas and facilities are referred to
herein at "Outside Area". This right shall terminate upon the termination of
this lease. Landlord reserves the right from time to time to make changes in
the shape, size, location, amount and extent of "Outside Area", and in
painting of exterior walls, Landlord further reserves the right to promulgate
such reasonable rules and regulations relating to the use of the "Outside Area",
and any part or parts thereof, as Landlord may deem appropriate for the best
interests of the occupants of the building. The rules and regulations shall be
binding upon Tenant upon delivery of a copy of them to Tenant and Tenant shall
abide by them and cooperate in their observance. Such rules and regulations may
be
23
amended by Landlord from time to time, with or without advance notice, and all
amendments shall be effective upon delivery of a copy to Tenant. Tenant agrees
to require its employees, executives, invitees, guests and customers to abide by
such rules and regulations including parking regulations.
(b) Landlord shall operate, manage and maintain the "Outside Area",
and landscaping and the surface of the exterior walls. The manner in which the
"Outside Area" shall be maintained and the expenditures for such maintenance
shall be at the discretion of Lessor.
(c) No materials, supplies, equipment, finished products or semi-
finished products, raw materials or articles of any nature shall be stored upon
or permitted to remain on any portion of the leased premises outside of the
building constructed thereon, except with the prior written consent of the
Landlord. No waste materials or refuse shall be dumped upon or permitted to
remain unreasonable upon any part of the leased premises outside of building
proper, unless approved by Landlord.
(d) Tenant shall not use solid hard tires on any fork lifts or dollies
on paved parking, truck loading or driveway areas, and in the event Tenant
violates this provision, Tenant shall be responsible for the cost of resurfacing
the entire area.
45. PARKING. Motor vehicle parking shall be non-exclusive, subject to
reallocation by Landlord from time to time. Landlord reserves the right to
designate from time to time the parking spaces for vehicles of Tenant and its
guests and invitees. Said spaces shall total 280 less the number eliminated by
revisions to existing handicap parking and the installation of a dock. The
current designation of 280 spaces is shown on attached Exhibit B (2 pages).
Tenant agrees that Landlord shall have no responsibility for policing these
parking spaces or seeing that they are used exclusively by Tenant's employees,
guests, or invitees. Tenant shall not at any time park or permit the parking of
Tenant's trucks or other vehicles, or the trucks or other vehicles of others in
driveways or adjacent to loading areas 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
vehicles or trucks, or the vehicles or trucks of Tenant's suppliers or invitees
in any portion of the "Parking Area" not designated by Landlord for such use by
Tenant. Tenant shall not park or permit to be parked inoperative vehicles or
equipment on any portion of the "Outside Area" and agrees that no vehicle will
be parked on the "Outside Area" for longer than eighteen (18) hours in any
twenty-four (24) hour period.
46. CALCULATION OF AREA:
The square footage of the leased premises (approximately 73,648.6 square
feet as set forth in Paragraph 2) has been calculated in this manner: the area
of the leased building, measured from the outer extent (drip line) of metal and
built-up roofed areas, or the outer walls, and to the center of interior party
walls. The Premises shall be deemed for all purposes and agreed to consist of
73,648.6 square feet.
47. TENANT IMPROVEMENTS:
Tenant shall select and retain an architect or facilities planner who
shall prepare "tenant improvement" drawings and specifications for revisions to
the premises which are accepted by Tenant in "AS IS" condition, subject to the
provisions of Addendum 1, Paragraph 1.
24
"Tenant Improvements" as stated in the Lease shall include only those
improvements within the Premises which are depicted on the Final Plans and
Specifications or described herein below.
The Tenant Improvements may include, but are not limited to:
(a) Partitioning, doors, floor coverings, finishes, ceilings, wall
coverings and painting, millwork and similar items.
(b) Electrical wiring, lighting fixtures, outlets and switches, and
other electrical work.
(c) Duct work, terminal boxes, defusers and accessories required for
the completion of the heating, ventilation and air conditioning systems serving
the Premises, including the cost of meter and key control for after-hour air
conditioning.
(d) Any additional Tenant requirements including, but not limited to
odor control, special heating, ventilation and air conditioning, noise or
vibration control or other special system.
(e) All fire and life safety control systems such as fire walls,
sprinklers, halon, fire alarms, including piping, wiring and accessories serving
the Premises.
(f) All plumbing, fixtures, pipes, and accessories serving the
Premises.
(g) Changes to handicapped parking or ramps.
Landlord shall provide in writing, not later than five (5) business days
after request therefor, approval or disapproval of preliminary and Final Plans
and Specifications. Landlord and Tenant shall indicate their approval of the
Final Plans and Specifications by initialing them. Upon completion of the Final
Plans and Specifications and approval thereof by Landlord and Tenant, Tenant
will obtain general contractor bids and furnish a cost breakdown to Landlord. In
the event the estimated Tenant Improvements Cost, based on such bids and the
reasonably anticipated costs of other items constituting the Tenant Improvement
Cost, exceeds the sum of the Tenant Improvements Allowance plus any amounts
which Tenant desires to pay as an Excess Tenant Improvements Costs, the Final
Plans and Specifications may be revised, at Tenant's cost and expense. Any such
revisions shall be subject to Landlord's approval, and the amended Final Plans
and Specifications, as approved by Landlord and Tenant, shall thereafter be
deemed to be the Final Plans and specifications for the Tenant Improvements. The
amended Final Plans and Specifications shall be approved by Landlord in writing
not later than five (5) business days after Tenant's request therefor. Tenant
shall thereafter submit such amended Final Plans and Specifications to general
contractors selected by Tenant and approved by Landlord for re-bidding, and
shall furnish a cost breakdown to Tenant. If the estimated Tenant Improvements
Cost, as determined by the bids based on the amended Final Plans and
Specifications and the reasonably anticipated costs or other items constituting
the Tenant Improvements Cost, result in an Excess Tenant Improvements Cost, then
Tenant may make further revisions as required to delete such items from the
Final Plans and Specifications in order to eliminate any Excess Tenant
Improvements Cost or, if Tenant does not elect to make further revisions, Tenant
shall pay such Excess Tenant Improvements Cost as and when required below.
When the Final Plans and Specifications (as amended, if required above) have
been approved by Landlord and Tenant, Tenant shall submit
25
such Final Plans and Specifications to all governmental authorities having
rights of approval over the Tenant Improvement work and shall apply for all
governmental approvals and building permits. Subject to its obligations, Tenant
shall thereafter commence and proceed to have completed construction of the
Tenant Improvements in a good and workmanlike manner by a general contractor
approved by Landlord.
Landlord shall provide an allowance for the planning and construction of
Tenant Improvements in the amount of Ten Dollars per square foot ($736,486.00).
In addition Landlord shall provide $10,000 plus an amount of up to $15,000,
the $15,000 to be matched by equal amount from the above Ten Dollar per square
foot tenant improvement allowance to correct non-conformities with current codes
as required by governmental authorities and to apply moisture sealant under
floor tiles. The total amount (a maximum of $761,486) shall be known as the
Tenant Improvement Allowance and shall be the maximum contribution by Landlord
for Tenant Improvement Costs including correcting any non-conformities to codes
or any other deficiencies. Should the actual cost of planning and constructing
those Tenant Improvements depicted on the Final Plans and Specifications be less
than the Tenant Improvements Allowance shall be reduced to an amount equal to
said actual cost.
The Tenant Improvements Cost ("Tenant Improvements Cost") shall include all
costs and expenses associated with the design, preparation, approval and
construction of the Tenant Improvements, including, but not limited, to the
following:
(a) All costs of preliminary and final architectural and engineering
plans and specifications for the Tenant Improvements, and engineering costs
associated with completion of the State of California energy utilization
calculations under Title 24 legislation;
(b) All costs of obtaining building permits and other necessary
authorizations from local governmental authorities;
(c) All costs of interior design and finish schedule plans and
specifications including as-build drawings;
(d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises;
(e) Utility connection fees.
In no event shall the Tenant Improvements Cost include any costs of procuring,
constructing or installing in the Premises any of Tenant's personal property or
trade fixtures.
In addition, Landlord shall, if requested to do so by Tenant at the time of
determining the final cost of the Tenant Improvements provide an additional
allowance of up to Five Dollars per square foot ("Additional Tenant Improvement
Funds"). The Additional Tenant Improvement Funds shall be used to construct and
install the Tenant Improvements and for no other purpose. Tenant shall reimburse
Landlord for the Additional Tenant Improvement Funds as provided for in this
Paragraph. The full amount of the Additional Tenant Improvement Funds, together
with interest thereon at the rate of eight and one-half percent (8-1/2%) per
annum, shall be amortized on a straight line basis over the number of months of
the Initial Term. The monthly amount resulting from such amortization
("Additional Tenant Improvement Funds Reimbursement") shall be added to the
monthly Base Rent amount set forth in Paragraph 4 of the Lease due by Tenant to
Landlord when Base Rent is due, as increased Base Rent. Any increase to Base
Rent
26
shall for purposes of this Lease constitute "Base Rent". Landlord shall
calculate the amount of the monthly Additional Tenant Improvement Funds
Reimbursement, and such amount shall be the Additional Tenant Improvement Funds
Reimbursement. Thereafter, Landlord and Tenant shall execute a memorandum to
this Lease setting forth the amount by which Base Rent has been increased.
Landlord shall reimburse Tenant for Tenant Improvement Costs (up to the sum
of the Tenant Improvement Allowance, and if applicable, the Additional Tenant
Improvement Funds) within 10 days after presentation of invoices therefor and
proof that such invoices have been paid by Tenant. Tenant shall be entitled to
submit paid invoices to Landlord from time to time (but not more frequently than
once every 30 days) during construction.
48. CONTINUING OPTION: Landlord grants Tenant an option to lease the
remaining space in the South wing of the building (approximately 54,585 square
feet currently occupied by Kalpana Inc. under sublease from Philips
Semiconductors). This option to lease shall be for a lease with terms and
condition identical to this lease with the following exception:
1) Base monthly rent shall be $.7765/square foot/month to be paid
monthly;
2) The $10.00/square foot tenant improvement allowance and Landlord's
maximum contribution to rectification of Code non-conformities ($.3394/square
foot) specified in Paragraph 47 shall be decreased to amounts which are
proportionate to the number of months of the term for the additional space
compared to sixty-six months. Example: if the term for the additional space is
fifty months, the amount for tenant improvements shall be $7.576/square foot
($10.00 x 50/66) and Landlord's maximum contribution to rectification of Code
non-conformities shall be $.2571/square foot ($.3394 x 50/66);
3) The additional $5.00 per square foot specified in Paragraph
47 for tenant improvements shall be available to Tenant for the same purpose
under the same terms and conditions;
4) If the optioned space is vacant at the time of the exercise of the
option, early occupancy shall commence immediately and rental and occupancy
shall commence 90 days after option exercise. If the space is occupied at the
time of exercise of the option, early occupancy shall commence immediately on
surrender of the premises by the existing tenant, and rental and occupancy shall
commence 60 days thereafter. No rental shall be charged by Landlord during early
occupancy periods.
5) The space subject to the option shall be solidly contiguous to the
premises under this lease and shall not be less than 18,415 square feet at each
option exercise with a natural break with the remaining space considering HVAC,
electrical, other utilities, and layout. The remaining space also must be
reasonably leasable by Lessor. This continuing option is subject to any right of
Diamond Computer Systems, Inc. under its lease with Landlord. This continuing
option shall be for the period ending December 31,1996, and shall not be
exercisable if the space is under lease or subject to a fully executed letter of
intent between Landlord and a third party. It is exercisable by Tenant by
written notice to Landlord to be received by Landlord only during the first
seven days of each month of the period ending December 31, 1996. To exercise
this continuing option, Tenant must have performed all the covenants and
obligations of Tenant and Tenant's financial condition must be at least equal
to that at the time of execution of this lease. If Tenant has not exercised said
option by April 7, 1995, Kalpana (lessee of adjoining space) may exercise its
option to extend its option to extend its lease
27
of the adjoining 54,585 square feet for a lease term expiring February 29, 1996.
In such event, the period in which Tenant's option may be exercised is extended
to June 30, 1997.
The term of the expanded lease, which the exercise of the option shall
implement, shall commence as set forth in sub-paragraph 4 above, and end on the
termination date of the base lease. However, the said term shall be extended if
the option to extend under the base lease has been exercised, to coincide with
the extended termination date of the base lease. The rental and other provisions
applicable to the extended option period of the base lease, including
arbitration, shall be applicable to the premises added under the continuing
option and in effect such added premises shall be part of the base lease.
49. RIGHT OF FIRST OFFER: In the event that any space becomes available to
Landlord in the north wing of the building (approximately 35,552 square feet
currently under lease to Diamond Computer Systems, Inc.) Landlord shall notify
Tenant in writing of its availability at rent at 100% of "Fair Market Value"
with a term to end on the same date as the ending date of this lease. Tenant
shall have five working days after receipt of said notice to express its
interest. However after the aforesaid five working days, Landlord shall have
the right to lease said space to any tenant as Landlord determines.
In the event that Landlord and Tenant cannot agree on a determination of
"Fair Market Rent", "Fair Market Rent" shall be determined in the same manner as
in paragraph 50 - option to extend this lease.
50. OPTION TO EXTEND: Landlord grants to Tenant an option to extend the
term of this lease for one period of five years subject to all terms and
conditions herein contained except this paragraph, the maximum on "outside area"
expense set forth in paragraph 4 (c) (2), paragraph 47 - Tenant Improvements,
and monthly rental including escalation which shall be determined as set forth
below. In order to exercise this option, Tenant must have performed all the
covenants and obligations of Tenant herein and at least six months before the
ending date of the initial term of this lease must have delivered to Landlord
written notice of the exercise of this option.
As of the date of exercise by Tenant of its option to extend, the monthly
base rental a maximum for "outside area" expenses and escalation of base rent,
all for the Extended Term shall be subject to negotiation between the Landlord
and Tenant. Not later than five (5) full calendar months prior to the expiration
date of the Initial Term, Landlord and Tenant shall meet and endeavor to agree
between themselves as to the fair market base monthly rental of the premises,
escalation thereof, and maximum for "outside area" expenses, all as of the
commencement of the Extended Term. If the parties are able to agree on such fair
market base monthly rental, escalation and maximum, said base monthly,
escalation and maximum rental shall be the rental escalation and maximum for the
premises during the Extended Term, the escalation agreed upon, and the maximum
"outside area" expenses. In the event the parties fail to agree upon said
amounts for the Extended Term, at least four (4) full calendar months prior to
commencement thereof, the base monthly rental for the Extended Term, including
escalation thereof, but not including maximum "outside area" expense, shall be
determined by appraisal in the manner hereafter set forth. Notwithstanding the
foregoing, Landlord and Tenant agree that the Outside Area Expense Maximum shall
in no event exceed, (a) for the first 12 months of the Extended Term, an amount
per square foot equal to 72 cents multiplied by a fraction, the numerator of
which is the CPI Index (hereinafter defined) for the month immediately prior to
the month in which the Extended Term commences and the denominator of which is
the CPI Index for the month immediately prior to the first full
28
calendar month of the Term hereof, and (b) for each subsequent 12 month period,
the Outside Area Expense maximum established for the previous 12 month period,
increased by 5%. As used herein "CPI Index" means the United States Department
of Labor's Bureau of Labor Statistic's Consumer Price Index, All Urban
Consumers, All Items, for the San Francisco-Oakland-San Xxxx area (1982-84=100)
or any comparable successor index.
In the event it becomes necessary under this subparagraph to determine the
fair market base monthly rental of the premises by appraisal, Landlord and
Tenant, no later than three (3) full calendar months prior to commencement of
the Extended Term, each shall appoint an experienced real estate appraiser with
at lease five (5) years experience in the leasing of industrial office property
in the general vicinity of the premises. The two appraisers so selected shall
each determine the fair market base monthly rental for the premises taking into
account the value of the property and comparable prevailing rentals including
escalations for a five (5) year term in that area. Such appraisers shall, within
twenty (20) business days after their appointment, complete there appraisals and
submit their appraisal reports to Landlord and Tenant. If the fair market
monthly base rental of the premises established in the two (2) appraisals varies
by ten percent (10%) or less of the higher rental, the average of the two shall
be controlling. If said fair market monthly base rental varies by more than ten
percent (10%) of the higher rental, said appraisers, within ten (10) days after
the submission of the last appraisal, shall appoint a third appraiser who shall
also meet the qualifications set forth above. Such third appraiser shall, within
twenty (20) business days after his appointment, determine by appraisal the fair
market monthly base rental of the premises, taking into account the same factors
referred to above, and submit his appraisal report to Landlord and Tenant. The
fair market monthly base rental determined by the third appraiser for the
premises shall be controlling, unless it is less than that set forth in the
lower appraisal previously obtained, in which case the value set forth in said
lower appraisal shall be controlling, or unless it is greater than that set
forth in the higher appraisal previously obtained, in which case the base rental
set forth in said higher appraisal shall be controlling. If either Landlord or
Tenant fails to appoint an appraiser or if an appraiser appointed by either of
them fails, after his appointment, to submit his appraisal within the required
period in accordance with the foregoing, the appraisal submitted by the other
appraiser shall be controlling. The term "fair market monthly base rental" used
for all purposes of this paragraph, shall include escalation over the five year
term. The cost of all appraisals under this subparagraph shall be borne equally
by Landlord and Tenant. Upon determination of the fair market base monthly
rental by appraisal and an agreement between Landlord and Tenant on a maximum
for "outside area" expenses the parties hereto shall immediately execute an
addendum to this Lease stating the fair market base monthly rental so
determined, the escalation applicable thereto, and the "outside area" expense
maximum, the latter item being subject to agreement between Landlord and Tenant,
but not arbitration.
In the event of exercise of the option to extend, the security deposit shall
continue to be held under the provisions of the lease, to be returned to Tenant
to the extent therein set forth, within 30 days after the termination of the
extension period and vacation of the premises by Tenant.
It is agreed that this Option to Extend is personal to Tenant and to
successor Tenant as defined by paragraph 24(f) and has been granted because of
specific use of the premises by Tenant and agreements in the lease concerning
Tenant's improvements. In the event this lease is assigned or sublet to any
third party or entity, this Option to Extend shall be null and void.
Landlord and Tenant have executed and delivered this Lease as of the date
first hereinabove set forth.
29
LANDLORD TENANT
Xxxxxx Xxxxxxxxxxx, Xx. and Global Village
Xxxxxxx X. Xxxxxxxxxxx Communication, Inc.
/s/ Xxxxxx Xxxxxxxxxxx, Xx. /s/ Xxxxx X. Xxxxxx
_____________________________ By _____________________________
Xxxxxx Xxxxxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxxxxxx Printed
_____________________________ Name: Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxxxxxx --------------------------
Title: VP Finance
--------------------------
000 Xxxxxxxx Xx.
Xxx Xxxxxx, XX 00000
By: ____________________________
Printed
Name:___________________________
30
ADDENDUM ONE
TO
LEASE AGREEMENT
dated
by and between
XXXXXX XXXXXXXXXXX, XX. AND XXXXXXX X. XXXXXXXXXXX
as Landlord,
and
GLOBAL VILLAGE COMMUNICATION, INC., as Tenant
MODIFICATIONS, ADDITIONS AND AMENDMENTS TO LEASE
The provisions of this Addendum One shall modify, amend and be in addition
to the provisions of the Lease. Where the provisions of this Addendum One are
inconsistent with the provisions of the Lease, the provisions of this Addendum
One shall govern.
1. Tenant, has inspected the premises and determined that the plumbing and
electrical systems, the HVAC and the roof are in good working order and
condition, with the following exceptions:
HVAC repairs per quote of May 31, 1994 by Precision Air, $11,620.00.
Roofing repairs, per quote of May 19, 1994 by Blues Roofing, $6,960.00.
Fire Extinguishers, units to be furnished in all installed cabinets.
Said work shall be accomplished pursuant to "Amendment to Lease", dated July 14,
1994 between Xxxxxx Xxxxxxxxxxx, Xx. and Xxxxxxx X. Xxxxxxxxxxx, as Lessors and
Signetics Corporation (now Philips Semiconductors) as Lessee, of premises at
0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx, which Amendment has been co-signed by
Global Village Communication, Inc.
2. Landlord warrants and represents to Tenant that to the best of
Landlord's knowledge the Premises on the date this Lease is executed are in
compliance with all such Regulatory Requirements and Private Restrictions and
that there is no asbestos on the Premises. Tenant shall not bring nor permit
asbestos to be brought onto the Premises.
3. In the event Tenant wishes to install additional air conditioning or
other equipment on the roof, Tenant shall furnish an engineer's report
certifying that the structural integrity of the roof and roof covering will not
be adversely affected by the proposed addition.
4. Notwithstanding the provisions of Paragraph 22 of the Lease to the
contrary, in the event Landlord elects to repair or restore the Premises and
such repair or restoration is reasonably estimated by Landlord to require more
than two hundred ten days (210) days from the date of destruction, Landlord
shall notify Tenant and Tenant shall have ten (10) days after receipt of such
notice to elect to terminate the Lease by giving written notice of such
election to Landlord. If Tenant so elects to terminate the Lease, such
termination shall be effective as of (i) if Tenant is in possession of the
Premises following such damage or destruction, the date Tenant surrenders
possession of the Premises to Landlord following Tenant's election to terminate
the Lease or (ii) if Tenant is unable to occupy the Premises following such
damage and destruction, the date on which the damage or destruction occurred.
EXHIBIT A
PHASE II
[PLAN DIAGRAM APPEARS HERE]
AMENDMENT TO LEASE
This agreement shall constitute an Amendment to the Lease dated July 31, 1984 of
premises known as 0000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx and consisting of a
building of approximately 128,154 square feet, together with common areas and
parking, all as described in said lease between Xxxxxx Xxxxxxxxxxx, Xx. and
Xxxxxxx X. Xxxxxxxxxxx, ("Lessors") and Signetics Corporation (now Philips
Semiconductors) (as "Lessee").
WHEREAS Lessors and Lessee intend to amend said lease by reducing the area of
the building leased to Lessees by 73,648.6 square feet effective October 15,
1994, and
WHEREAS the said lease expires November 30, 1994, and the Lessors and Lessee
have agreed that Lessee will pay Lessors the sum of $104,593.19 not later than
October 14, 1994 as consideration for the early termination of the 73,648.6
square foot portion of the area leased;
NOW THEREFORE IT IS HEREBY AGREED between the Lessors and Lessee as follows:
1. The July 31, 1984 lease of the premises at 0000 Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx is amended effective as of 12:01 A.M. October 15, 1994, so
that the 73,648.6 square foot portion of the premises described within the
yellow lines on Exhibits A and B hereto attached as a part hereof, is removed
from the premises leased, together with the right to 280 parking spaces as
designated, and said portion of the leased premises is surrendered by Lessee to
Lessors.
2. Rent for the premises remaining under said lease is reduced from
$191,003.61 per month to $81,233.84 per month, pro-rated for the period October
15 through 31, 1994 and in full for the month of November, 1994.
3. Lessee's share of common area expense is reduced from 78.283% to
33.295% also effective as of the date of this amendment and pro-rated for the
period October 15 through 31, 1994 and in full for the month of November, 1994.
4. The reduced rent and charges in paragraphs 2 and 3 hereof are payable by
Lessee to Lessor at the times provided in the lease.
5. Certain utility services, including water, power, gas, sewer, and HVAC
are metered to the entire premises, including the portion being removed from the
lease. The parties agree to allocate the bills for such utilities, when
received, for monthly charges applicable to each user, proportional to the area
served by such utilities. The allocated charges shall constitute additional
rent, payable as set forth in the lease.
6. Lessors and Lessee agree that without additional consideration and
without altering the provisions of paragraphs 2 and 3 hereof, Global Village
Communication, Inc., the tenant with whom Lessors are negotiating a lease for
the removed space in the building, may have early occupancy for the purpose of
installing tenant improvements from and after July 15, 1994. During the period
from the actual commencement of said early occupancy through October 14, 1994,
the cost of utilities, as described in Paragraph 5, shall be allocated as to
monthly charges, with the first $360.00 per day to Lessee, the next $135.00 per
day to Global Village Communication, Inc. and any remaining daily amount
divided equally between Lessee and Global Village Communication, Inc.
1
Said GLOBAL VILLAGE COMMUNICATIONS, INC. further indemnifies Lessee or damage
arising out of or caused by the early occupancy of GLOBAL VILLAGE
COMMUNICATIONS, INC. in the premises, or the acts or omissions of its
employees, agents, invitees, contractors, or sub-contractors.
Dated July 14 1994
GLOBAL VILLAGE COMMUNICATIONS, INC.
by /s/ Xxxxx X. Xxxxxx
---------------------
_____________________
3
EXHIBIT A
PHASE II
[PLAN DIAGRAM APPEARS HERE]
EXHIBIT B
PHASE II
[PLAN DIAGRAM APPEARS HERE]
