EXHIBIT 10.9
SUBLEASE
This "Sublease" is made this fourteenth day of June, 1996 by and between
Olivetti Advanced Technology Center Inc. a Delaware corporation, ("Olivetti",
including successors and assigns as "Subleasor") and MMC Networks Inc., a
California corporation ("MMC", including successors and assigns as "Subleasee").
Olivetti as "Tenant", is leasing from Xxxxxx Xxxxxxxxxxx, Xx. And Xxxxxxx X.
Xxxxxxxxxxx, jointly as "Landlord", ( the Master Lessor") those certain premises
located at 0000 Xxxx Xxxxxx Xxx., Xxxxxxxxx, Xxxxxxxxxx (the "Premises")
consisting of approximately 35,552 square feet pursuant to a lease dated
December 22, 1994 (the "Master Lease"). The Master Lease is attached to this
Sublease as Attachment 1. Olivetti leases to MMC and MMC leases from Olivetti
the Premises depicted on Exhibit A to the Master Lease on the terms and
conditions set forth below .
1. INCORPORATION OF MASTER LEASE PROVISIONS. This Sublease is subject to
all of the terms and conditions of the Master Lease. MMC hereby accepts, assumes
and agrees to perform all the obligations of Olivetti as Tenant under the Master
Lease and all of the terms and conditions of the Master Lease are incorporated
into this Sublease as terms and conditions (with each reference to Landlord and
Tenant deemed to refer to Olivetti and MMC respectively), excepting only
Sections 3, 4(a), 6, 7, 23, 29, 31, 33, 38, 40, 44(b), 47, 48 of the Master
Lease and Addendum One to the Master Lease. In the event of any conflict or
inconsistency between the incorporated terms of the Master Lease and the terms
of the Sublease, the terms of the Sublease will prevail as between MMC and
Olivetti. MMC will not cause or permit any act or omission which violates any
term or condition of the Master Lease. Olivetti will use all reasonable efforts
to cause Master Xxxxxx to perform its obligations under the Master Lease. In the
event of the termination for any reason of Olivetti's interest as Tenant under
the Master Lease, then this Sublease will terminate at the same time without any
liability of Olivetti to MMC, unless the termination results from a default of
Olivetti under the Master Lease which was not caused by MMC.
2. TERM. The term of this Sublease will be from September 1, 1996 (the
"Commencement Date") through the balance of the term of the Master Lease
(estimated to be March 31, 1999). If delivery of the Premises is delayed beyond
September 1, 1996 as the result of major physical damage to the Premises caused
by Olivetti or forces beyond Olivetti's reasonable control, them Olivetti will
not be liable for any damage caused thereby, nor will this Sublease be void or
voidable nor will the term hereof be extended by such delay; provided, however,
that the Commencement Date will be deferred until the physical damage is
repaired sufficiently to allow MMC to occupy the Premises. Notwithstanding the
foregoing, if it is reasonably foreseeable that the Commencement Date will be
delayed beyond October 1, 1996, then MMC can elect to cancel this Sublease on
written notice to Olivetti within thirty days after notice of the nature of the
damage and delay. In such event the parties will have no further obligations
under this Sublease, except with respect to indemnification for third party
claims for which each would have otherwise been responsible. MMC acknowledges
that it will not be entitled to exercise either option to extend the Master
Lease. After sublease execution, MMC will have reasonable access to the Premises
on not less that twenty-four hours notice to Olivetti for the purpose of space
planning, architectural design and engineering. Additionally, after August 18,
1996, (i) MMC may begin moving its furniture and equipment and begin installing
telephone and network cabling or other preparatory measures in all parts of the
Premises not then occupied by Olivetti or ATMI (see Item
9 Below) if Olivetti's and ATMI's use of the Premises is not disturbed, and (ii)
MMC can elect to occupy the Premises (other than the ATMI Spaces defined below)
if Olivetti has vacated the Premises. MMC will indemnify Olivetti from all loss,
liability and expense, including attorneys' and experts' fees and costs,
occasioned by such early access. Moreover, MMC's occupancy shall be subject to
all the terms and conditions of this Sublease except Base and Additional Rent
prior to the Commencement Date. Except as provided in the Master Lease in
connection with damage and destruction (Section 22), condemnation (Section 23)
and assignment (Section 24), Olivetti will not agree to any voluntary early
termination of the Master Lease with Master Lessor unless MMC is permitted to
continue to occupy the Premises on the same terms and conditions as this
Sublease; provided that MMC does not default on its obligations under this
Sublease in any material way.
3. BASE RENT. MMC will pay Forty-two Thousand Six Hundred Sixty-Two
Dollars and forty cents ($42,662.40) per month to Olivetti as base rent without
offset or deduction on the first day of each calendar month of the term of this
Sublease, without prior written notice or demand, from the Commencement Date to
the end of the term. The first month's base rent will be paid to Olivetti upon
the execution of this Sublease. Rent for any partial month will be prorated on
the basis of a thirty (30) day month. If MMC receives notice from Master Lessor
that Olivetti is in default for failure to pay Rent and if Olivetti does not
cure the default, then MMC, upon notice to Olivetti, may pay the actual Rent due
and offset such sum against the Base Rent otherwise payable to Olivetti, so long
as Olivetti's nonpayment was not caused by MMC's failure to pay Rent to
Olivetti.
4. SECURITY DEPOSIT. Upon the satisfaction or expiration of MMC's
environmental contingency described in Item 10 below, MMC will deposit with
Olivetti the sum of Forty-Two Thousand Six Hundred Sixty-Two Dollars and Forty
cents ($42,662.40) as a non-interest bearing security deposit for MMC's
performance under this Sublease. In the event MMC has performed all of the
terms and conditions of this Sublease throughout the term, the security deposit
will be returned to MMC upon termination of the Sublease and MMC's vacation of
the Premises after first deducting any sums owing to Olivetti pursuant to this
Sublease. In the event MMC breaches this Sublease, Olivetti can elect to use or
retain some or all of this security deposit to compensate for any loss, expense
or risk associated with the breach, all without seeking judicial relief. In the
event of such recourse to the security deposit, Olivetti is entitled to require
MMC to replenish the security deposit funds on ten days written notice. In no
event will MMC be entitled to have access to or acquire any portion of
Olivetti's deposit with the Master Lessor.
5. CONDITION OF PREMISES AND TENANT IMPROVEMENTS. Olivetti will deliver
the Premises to MMC "as is" in broom clean condition. MMC accepts the Premises
"as is". To Olivetti's knowledge, the roof, HVAC, plumbing and electrical
systems are in good working order and there are no Hazardous Materials on the
Premises as of the date of this Sublease. Repairs required prior to its vacation
of the Premises will remain Olivetti's responsibility until the Commencement
Date, unless the repair is caused by MMC or its agents. MMC shall surrender the
Premises in the same condition as received on the Commencement Date, excepting
normal wear and tear and damage resulting from factors beyond MMC's reasonable
control, such as war and earthquake, unless such damage is covered by insurance
or is the result of MMC's default, negligence or willful misconduct. In the
event MMC elects to perform tenant improvement work at the beginning of the
Sublease term, then the provisions of Section 47 of the Master Lease will govern
as though incorporated into this Sublease, substituting Olivetti for Landlord
and MMC for Tenant, subject to the
following modifications: (i) the fourth and eighth sentences of the fourth
paragraph are deleted and "five business days" is replaced with "ten business
days" in the first sentence of the fourth paragraph; (ii) the sixth paragraph is
deleted; and (iii) the eighth paragraph is replaced with the following new
eighth paragraph - "MMC will bear and timely pay all Tenant Improvement Costs
and provide Olivetti with a complete set of as-built drawings of the tenant
improvements upon completion". See also Attachment 2 which depicts these changes
in red line fashion.
6. OTHER MASTER LEASE INCORPORATIONS. The provisions of Sections 13, 29,
31, 40 and 44(b) are also incorporated by reference into this Sublease
substituting only MMC for Tenant and leaving the reference to Landlord
unchanged, it being understood that the Master Lessor will arrange the insurance
described in Section 13, is the owner and borrower described in Section 29, 31,
and 40 and will arrange for the care of the Outside Area described in Section
44(b). Section 38 of the Master Lease is also incorporated by reference into
this Sublease, substituting Olivetti for Landlord and MMC for Tenant, except
that the reference to "Xxxxxxx Realty" is replaced with "Xxxxxx/Xxxxx".
Finally, Paragraph 5 of Addendum One to the Master Lease is incorporated by
reference into this Sublease, substituting Olivetti for Landlord and MMC for
tenant.
7. NOTICES. All notices and demands of any kind required to be given by
Olivetti or MMC hereunder will be in writing and effective thirty-six hours
after depositing in the United States mail, postage prepaid and addressed to
Olivetti or MMC, as the case may be, at the address set forth below their
respective signatures or at such other address as they may designate from time
to time.
8. MISCELLANEOUS. Olivetti is responsible for the payment of the
brokerage commission on this transaction to Xxxxxx/Xxxxx Corporate Real Estate
Services per existing contract. The effectiveness of this Sublease is contingent
on MMC's timely payment of the security deposit referred to in Item 4 above, the
satisfaction or expiration of the contingencies described in Item 10 below, and
the written approval of the Master Lessor pursuant to the Master Lease. MMC can
elect to condition Master Lessor's approval on the following: (i) that MMC will
not be required to remove any improvements or alterations made by MMC at the
beginning of this Sublease and approved by Master Lessor and Olivetti; and (ii)
that Master Lessor confirms that Olivetti is in goodstanding under the Master
Lease at the time of Master Lessor's approval. MMC acknowledges that Master
Lessor may elect to recapture the Premises pursuant to the Master Lease rather
than consent to this Sublease. In such event, or if a contingency referred to
above or in Item 10 below is unsatisfied, then neither party will have any
further liability to the other except for unsatisfied, then neither party will
have any further liability to the other except for the return of the security
deposit and the indemnification undertakings described in Item 2 above (in
connection with early access). In the event Olivetti and MMC agree to the
transfer of certain personal property on the Premises, then the transfer will be
memorialized through a xxxx of sale in the form attached as Attachment 3. This
Sublease shall be binding on and inure to the benefit of the lawful heirs,
successors and assigns of Olivetti and MMC. Olivetti will not elect to cancel
this Sublease in connection with any future request by MMC for consent to an
assignment or sublease to a third party although Master Lessor reserves the
right to do so.
9. PRIOR SUBLEASE. This Sublease is currently subject to the provisions
of a Sublease agreement dated April 1, 1995 between Olivetti and Advanced
Telecommunications Modules, Inc. ("ATMI", including successors and assigns) by
which approximately 3000 rentable square feet of the Premises have been
subleased (the "ATMI Space"). Olivetti and ATMI have agreed to terminate such
prior sublease
and ATMI has agreed to vacate the ATMI Space by September 1, 1996, although ATMI
may incur delays in relocating to new space in another building. This prior
sublease is attached as Attachment 4. If ATMI does not timely vacate the
Premises and in no event vacate later than September 30, 1996, then (i) Olivetti
shall promptly bring an unlawful detainer (or other appropriate) action to cause
ATMI to vacate the Premises and shall diligently pursue such action to
conclusion: (ii) Base Rent will be reduced to $28,441.60 (twenty-eight thousand
four hundred forty-one dollars and sixty cents) from October 1 until ATMI
vacates the Premises: and (iii) Base Rent will be reduced to $33,062.40 (thirty-
three thousand sixty-two dollars and forty cents) for the month of September if
ATMI fails to vacate by September 1. The lower rent for the month of September
will also apply if ATMI fails to confirm with Olivetti by June 30, 1996 that
ATMI expects to vacate the Premises by September 1, 1996.
10. ENVIRONMENTAL AND ADA CONTINGENCIES. MMC can elect to cause a phase
I environmental survey to be performed immediately on the Premises at its
expense as well as further study the compliance of the Premises with the
American with disabilities Act ("ADA"). Olivetti believes that the Premises are
currently in compliance with the ADA based on its own tenant improvement work
performed with the previous eighteen months. Olivetti will share this
information with MMC and its agents. If MMC reasonably objects to the
environmental condition of the Premises based on such report or reasonably
concludes that the Premises are not in substantial compliance with the ADA and
so notifies Olivetti within fifteen days after the date of this Sublease, then
neither party will have any further liability to the other under this Sublease
except as set forth in Item 3 above.
SUBLESSEE: MMC Networks, Inc. SUBLESSOR: Olivetti Advanced
Technology Center, Inc.
/s/ Xxxx Xxxxxx /s/ Xxxxx Xxxxxxxx
By:________________________________ By:_________________________________
Xxxx Xxxxxx Xxxxx Xxxxxxxx
Name:______________________________ Name:_______________________________
0000 Xxxxx Xx. 0000 X. Xxxxxx Xxx.
Address:___________________________ Address:____________________________
Xxxxx Xxxxx, XX 00000 Xxxxxxxxx, XX 00000
___________________________ ____________________________
Attachments:
1 - Master Lease
2 - Marked Changes to Section 47
3 - Form of Xxxx of Sale
4 - Prior Sublease
ATTACHMENT 1 -- MASTER LEASE
(attach copy of Master Lease)
ATTACHMENT 2 - MARKED CHANGES TO SECTION 47
47. TENANT IMPROVEMENTS:
Tenant shall select and retain an architect or facilities planner who shall
prepare "tenant improvement" drawings and specifications for interior revisions
to the premises which are accepted by Tenant in "AS IS" condition, subject to
the provisions of Xxxxxxxx 0, Xxxxxxxxx 1.
"Tenant Improvements" as stated in the Lease shall be general in nature and
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 ten (10) 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.
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 Landlord.
When the Final Plans and Specifications (as amended, if required above)
have been approved by Landlord and Tenant, Tenant shall submit 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.
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.
ATTACHMENT 3 - FORM OF XXXX OF SALE
For good and valuable consideration, the undersigned "Seller" transfers all of
its right, title and interest in the personal property identified on the
attached list free of all liens and encumbrances to the undersigned "Buyer".
Buyer accepts the personal property "as is" and "where is". Seller also
transfers to Buyer any of its assignable warranties from third parties on the
personal property. THERE ARE NO OTHER WARRANTIES, EXPRESS OR IMPLIED,
ASSOCIATED WITH THE PERSONAL PROPERTY AND SELLER EXPRESSLY DISCLAIMS ANY OTHER
WARRANTIES, INCLUDING THE WARRANTIES OF MERCHANTIBILITY AND FITNESS FOR A
PARTICULAR PURPOSE. Buyer accepts the transfer of personal property on these
terms and acknowledges that the consideration paid to Seller reflects a
reasonable allocation of such risks.
BUYER: MMC Networks, Inc. SELLER: Olivetti Advanced
Technology Center, Inc.
/s/ Xxxxx Xxxxxxxx
By:_____________________________ By:_____________________________
Xxxxx Xxxxxxxx
Name:___________________________ Name:___________________________
0000 X. Xxxxxx Xxx.
Address:________________________ Address:________________________
Xxxxxxxxx, XX 00000
________________________________ ________________________________
ATTACHMENT 4 - PRIOR SUBLEASE
(attach prior Sublease with ATMI)
ATTACHMENT 4 - PRIOR SUBLEASE
SUBLEASE AGREEMENT
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THIS SUBLEASE AGREEMENT (the "Sublease") is entered into effective as of
April 1, 1995, between Olivetti Advanced Technology Center, Inc. ("Sublessor"),
and Advanced Telecommunications Modules, Inc. ("Sublessee").
WHEREAS, Xxxxxx Xxxxxxxxxxx, Xx. and Xxxxxxx X. Xxxxxxxxxxx, jointly,
("Lessor"), as lessor, and Sublessor, as lessee, executed a lease dated December
22, 1994, with respect to 35,552 square feet of certain real property premises
located at 0000/0000 X. Xxxxxx Xxx., Xxxxxxxxx, Xxxxxxxxxx 00000, ( the Leased
Space"). Said lease will be hereinafter referred to as the "Master Lease", a
copy of which is attached hereto as Exhibit "A".
NOW, THEREFORE, the parties agree as follows:
1. For and in consideration of the payment of the rental and the
performance of the covenants and agreements hereinafter set forth, Sublessor
leases to Sublessee and Sublessee leases from Sublessor premises of
approximately 3,000 rentable square feet located in the North-East corner of the
Leased Space (such space shall hereinafter be referred to as the Demised
Premises). The Demised Premises are designated on the diagram attached hereto as
Exhibit "B".
2. The term of this sublease agreement shall be for a period of 48 months
commencing on April 1, 1995, and termination on March 31, 1999.
3. Sublessee covenants and agrees to pay to Sublessor for the use and
occupancy of the Lease Premises during the term hereof, the monthly rental of
Two Thousand Five Hundred Five Dollars and no cents ($2,505). In addition,
Sublessee shall pay Sublessor, as additional rent, all operating expenses or
other charges assessed against Sublessor by Lessor pursuant to the Master Lease
attributable to the proportionate share of the Leased Space comprising the
Demised Premises. Sublessor and Sublessee hereby agree that such proportionate
share is 8.44% of the Leased Space. The monthly rental shall be paid in advance
on the first day of each calendar month. Rent for the period April 1 through
April 30 is due upon execution of this sublease.
3.1 In addition, Sublease agrees to pay Sublessor a proportionate
share of water, sewer, refuse, gas, heat, light, power, telephone service,
janitorial service, security service, and all other materials and services
supplied to the Leased Space that are paid by Sublessor. Sublessee shall
reimburse to sublessor its proportionate share of any insurance premiums Lessor
requires Sublessor to maintain as to the Leased Space. Any costs directly
attributable to Sublessee or specific requests made by Sublessee shall be passed
through for reimbursement to Sublessor to the extent such costs cannot be
invoiced directly by the vender to the Sublessee.
4. Landlord has provided to Sublessor an allowance for the planning and
construction of Tenant Improvements in the amount of Ten Dollars per square foot
for which the proportionate share of $30,000 is allocated to the Sublessee and
included in the monthly rent. Any Tenant Improvement costs associated with the
fitting-up of Sublessee's space in excess of such allowance are reimbursable to
Sublessor within 30 days after presentation of the cost break-down for the
Sublessee's area, Exhibit "C".
5. Upon execution of this Sublease, Sublessee shall deposit with Sublessor
$2,505 to be held by Sublessor as security for the performance of the
obligations of the Sublessee hereunder.
6. There exists at the Demised Premises certain office furniture and/or
fixture's and/or trade fixtures that are owned by Sublessor and that are also
described in Exhibit "D" to this Sublease (collectively the "Furniture and
Fixtures"). As additional consideration hereunder, Sublessee is hereby granted a
license to use said Furniture and Fixtures so long as Sublessee is not in
default hereunder, which license is further conditioned on Sublessee at its sole
cost and expense, maintaining said Furniture and Fixtures in good condition and
repair, free of liens, at the Demised Premises throughout the Term and returning
the same to Sublessor at the end of the Term in good condition and repair, free
of liens, and as it existed on the commencement date of the Term, normal wear
and tear excepted. Sublessee accepts said Furniture and fixtures "AS IS" and
"WITH ALL FAULTS" and Sublessor shall have no liability with respect to the
condition, design or any other aspect of same; Sublessee hereby assumes all risk
associated therewith.
7. Except as modified above, the terms, conditions and covenants of the
Lease between Sublessor and Landlord are hereby incorporated and shall bind
Sublessee as Tenant and Sublessor as Landlord.
8. Sublessor shall be responsible for and shall bear all expenses for
obtaining the consent of Landlord (including Landlord's expense) to this
sublease, and this sublease shall not be effective until such consent is
obtained, and Sublessee shall sign any documents reasonable requested by
Landlord as a condition to giving such consent.
9. This sublease and all its provisions shall be binding upon the heirs,
administrators, executors, successors, and assigns of the parties hereto.
10. This Sublease include the attached Exhibits A through D as Follows:
Exhibit A Master Lease
Exhibit B Schedule of Tenant Improvement Costs
Exhibit C Floor Plan
Exhibit D Furniture and Fixtures
IN WITNESS WHEREOF, the undersigned have executed this Sublease on
May 8 1995.
-----------,
OLIVETTI ADVANCED TECHNOLOGY ADVANCED TELECOMMUNICATIONS MODULES,
CENTER, INC. a Delaware INC. a Delaware corporation
cooperation
/s/ [SIGNATURE] /s/ P.A. Xxxxxx
By:_____________________________ By:_____________________________
P.A. Xxxxxx
________________________________ ________________________________
(print name) (print name)
Treasurer/Controller President & CEO
Title:____________________________ Title:____________________________
LEASE AGREEMENT
This Lease Agreement is made and entered into by and between XXXXXX
XXXXXXXXXXX, XX. and XXXXXXX X. XXXXXXXXXXX, jointly, the Landlord, and OLIVETTI
ADVANCED TECHNOLOGY CENTER, INC. a Delaware Corporation, Tenant as of this 22nd
----
day of December, 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 35,552
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 48
months commencing on April 1, 1995.
Early possession of the Premises for the purpose of constructing tenant
improvements shall be on February 1, 1995, and subject to Addendum One.
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
1-48 $29,685.92
Upon execution of this Lease, Tenant shall pay to Landlord base rental and
additional rent for the period April 1 through April 30, 1995 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
---------------------
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
1
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
---------
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,
----------------------
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, assessed
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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,
----------------------------------
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 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
-----------------------------
administration of the Building and the Property, including a property management
fee, accounting, auditing, billing, postage, employee
2
benefits, payroll taxes, etc. All such expenses shall be reasonable and in
accordance with good management practices and shall not exceed 2% of annual Base
Rent.
(c) Allocation of Costs.
-------------------
(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 35,552 square feet/163,706
square feet or 21.72%.
(d) Payment of Additional Rent.
--------------------------
(1) Upon execution of this Lease, Landlord shall submit to Tenant an
estimate of monthly Additional Rent for the period between April 1, 1995 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 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
3
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 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 _________
6. SECURITY DEPOSIT: Concurrently with Tenant's execution of the Lease, Tenant
shall deposit with Landlord the Security Deposit in the amount of $29,550. 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 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
4
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 occupancy of
----------------------------
the Premises for fixturation commencing at the Early Occupancy Period (See
Addendum One).
(b) Delay in Delivering Possession. If Landlord cannot deliver possession
------------------------------
of the Premises to Tenant at the commencement of the Term, 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. Tenant shall receive one day of
occupancy free of Base Rent for each day Early Occupancy is delayed beyond
February 15, 1995. If early occupancy is delayed beyond April 30, 1995, Tenant
may terminate this lease.
8. USE OF PREMISES:
(a) Permitted Uses. The Premises shall be used only for general office,
--------------
engineering, research and development, service and repair, and storage of
computer hardware and software products and components, 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 to 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 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 future 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 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
5
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, 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
6
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
Tenant's receipt of such consent
12. MAINTENANCE OF PREMISES:
(a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its 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 bi-monthly 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 approve
the contractor conducting the bi-monthly service and the Landlord shall receive
from Tenant copies of the inspection and service reports. Landlord also 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.
-----------------------------------------------------------
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 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 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
7
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 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.
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 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 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
-----------------------
evidencing to
8
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 and
---------------------------
effect on all outs 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 thereon 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
------------
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 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 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
9
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.
16. 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 Diamond Computer Systems. 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
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 further understood that certain utility services, including water,
and sewer 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
10
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 5 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) or the Building for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and 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 5 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.
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(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 extant 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 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
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(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 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.
(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 sublessee 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
13
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.
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;
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(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
-------------
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 non-consecutive)
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.
26. LANDLORD'S REMEDIES
(a) Termination. 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 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
15
(5) such reasonable attorneys fees incurred by Landlord as a result of
a Default, and costs in the event suit is tiled 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).
(c) Re-entry. In the event of any Default by Tenant, Landlord shall also
--------
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
16
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 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, provided that new landlord has signed an agreement to assume and
perform the obligations of the Landlord under the terms of this lease.
30. TENANT'S 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
17
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 under 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 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
-------------
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
18
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.
(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
19
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
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
20
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, shah 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.
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.
36. 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
Xxxxxx/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
21
financing, Tenant shall not unreasonably withhold, delay or defer its consent to
such modifications, provided such modifications do not adversely affect Tenant's
rights or increase Tenants 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 in 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, 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
22
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
he 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 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 137, less the number eliminated by
revisions to existing handicap parking. The current designation of 137 spaces is
shown on attached Exhibit B. 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
23
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 35,552 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. The Premises shall be deemed for all
purposes and agreed to consist of 35,552 square feet.
47. TENANT IMPROVEMENTS:
Tenant shall select and retain an architect or facilities planner who
shall prepare "tenant improvement" drawings and specifications for interior
revisions to the premises which are accepted by Tenant in "AS IS" condition,
subject to the provisions of Xxxxxxxx 0, Xxxxxxxxx 1
"Tenant Improvements" as stated in the Lease shall be general in
nature and 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
24
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 Landlord 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 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 ($355,520). In
addition, Landlord shall provide $25,000. to be matched by equal amounts from
the above Ten Dollar per square foot tenant improvement allowance to correct
non-conformities with current codes as required by governmental authorities.
This total amount ($380,520.) 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 Tenant contribute funds to reduce Landlord's contribution to the
Tenant Improvement Allowance and/or should the actual cost of planning and
constructing those Tenant Improvements depicted on the Final Plans and
Specifications be less than the Tenant Improvement Allowance, the Tenant
Improvement Allowance shall be reduced to an amount equal to said actual
contribution by Landlord and the base monthly rent shall be reduced by $.02585
for each $1.00 less than $355,520. contributed by Landlord as part of the Tenant
Improvement Allowance. Any reduction in the aforesaid $25,000. to be contributed
by Landlord to correct code non-conformities shall not reduce the base monthly
rent. A memorandum to this Lease shall be executed by Landlord and Tenant
setting forth the amount by which Base Rent has been decreased.
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;
25
(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.
Landlord shall reimburse Tenant for Tenant Improvement Costs (up to the sum of
the Tenant Improvement Allowance) 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. Tenant also shall give
Landlord a full and complete set of "As Built" Drawings of the tenant
improvements within thirty days of tenant improvement completion and occupancy
by Tenant.
48. OPTION TO EXTEND: Landlord grants to Tenant two options to extend the
term of this lease for a period of three years each subject to all terms and
conditions herein contained except this paragraph, paragraph 47 - Tenant
Improvements, and monthly rental 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 or of the first extended term of three years,
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 for the Extended Term of three years 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, or of the extended term as the
case may be, Landlord and Tenant shall meet and endeavor to agree between
themselves as to the fair market base monthly rental of the premises, as of the
commencement of the Extended Term. If the parties are able to agree on such fair
market base monthly rental, said base monthly rent shall be the rental for the
premises during the Extended Term. 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,
shall be determined by appraisal in the manner hereafter set forth.
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 least 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 three (3)year term in that area. Such appraisers shall, within
twenty (20) business days after their appointment, complete their 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
26
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 three 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, the parties hereto shall immediately
execute an addendum to this Lease stating the fair market base monthly rental
so determined.
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 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 other than to successor tenant as defined by
paragraph 24 (f), 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.
LANDLORD TENANT
Xxxxxx Xxxxxxxxxxx, Xx. and Olivetti Advanced Technology
Xxxxxxx X. Xxxxxxxxxxx Center, Inc.
/s/ Xxxxxx Xxxxxxxxxxx, Xx. /s/ X.X. Xxxxxxx
___________________________ By ______________________
Xxxxxx Xxxxxxxxxxx, Xx.
/s/ Xxxxxxx X. Xxxxxxxxxxx
__________________________ Printed
Xxxxxxx X. Xxxxxxxxxxx X.X. Xxxxxxx
Name: _____________________
Treasurer/Controller
Title: ______________________
000 Xxxxxxxx Xx.
Xxx Xxxxxx, XX 00000
By: ________________________
Printed
Name:______________________
Title: ______________________
27
ADDENDUM ONE
TO
LEASE AGREEMENT
dated
by and between
XXXXXX XXXXXXXXXXX, XX. and XXXXXXX X. XXXXXXXXXXX
as Landlord,
and
OLIIVETTI ADVANCED TECHNOLOGY CENTER, 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 accepts the premises in "As Is"
condition with the following exceptions:
1) The roof shall be inspected by a reputable roofing contractor
selected by Landlord and approved by Tenant, which approval shall
not be unreasonably withheld. Repairs recommended by this
inspection to place the roof in good condition prior to the lease
commencement date shall be accomplished with the cost to be borne
by Landlord.
2) The HVAC equipment on the roof shall be inspected by a reputable
HVAC contractor selected by Landlord and approved by Tenant,
which approval shall not be unreasonably withheld. Repairs or
replacements recommended by this inspection to place this
equipment in good condition prior to the lease commencement date
shall be accomplished with the cost to be borne by Landlord.
2. Tenant may for the purpose of installing Tenant Improvements, occupy
the Premises prior to the Commencement date of the Lease (Early Occupancy) on
February 1, 1995. If Tenant Improvements are completed prior to the Lease
Commencement date, Tenant may occupy the premises and carry on its business.
Said Early Occupancy shall be under all terms and provisions of this lease
except that no Base rent and Additional Rent shall be payable for this period.
Prior to February 1, 1995, subject to the approval of Diamond Computer Systems,
Tenant shall have reasonable access to the Premises for the purpose of
architectural and engineering planning.
3. Landlord warrants and represents to Tenant that to the best of
Landlord's knowledge on the date this Lease is executed there is no asbestos on
the Premises. Tenant shall not bring nor permit asbestos to be brought onto the
Premises.
4. 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.
5. 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 one hundred eighty (180) 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.
[MAP APPEARS HERE]
EXHIBIT A
XXXX. "X"
(XXXXX XXXX)
[MAP APPEARS HERE]
EXHIBIT B
(ARQUES)
[MAP APPEARS HERE]
EXHIBIT C
0000 Xxxx Xxxxxx
Xxxxxxxxx, XX
