BLDG: Quantum 6
OWNER: 500
PROP: 225
UNIT: 1
TENANT: 22501
LEASE AGREEMENT
THIS LEASE, made this 16th day of April, 1997 between XXXX XXXXXXXXX, Trustee,
or his Successor Trustee, UTA dated 7/20/77 (XXXX XXXXXXXXX SURVIVOR'S TRUST) as
amended, and XXXXXXX X. XXXXX, Trustee, or his Successor Trustee, UTA dated
7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST) as amended
____________________________________________, hereinafter called Landlord, and
QUANTUM CORPORATION, a Delaware corporation, hereinafter called Tenant.
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord
those certain premises (the "Premises") outlined in red on Exhibit "A", attached
hereto and incorporated herein by this reference thereto more particularly
described as follows:
All of that land containing approximately 9.56+/- acres and that certain
182,355+/- square foot two-story building ("Building 6") and parking appurtenant
thereto, to be constructed and installed by Landlord as shown within the area
outlined in Green on Exhibit A to be located on Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx, 00000. Said Premises is more particularly shown within the area
outlined in Red in Exhibit A attached hereto and incorporated herein by this
reference. The interior of the Leased Premises shall be improved by Landlord in
the configuration as shown in Red on Exhibit B to be attached hereto and
incorporated herein by this reference. The building shell shall be constructed
in accordance with the shell and site improvement specifications set forth on
Exhibit A, and the general building elevation set forth on Exhibit A.
The word "Premises" as used throughout this lease is hereby defined to include
the Hetch-Hetchy Land as described in Paragraph 49, the nonexclusive use of
landscaped areas, sidewalks and driveways in front of or adjacent to the
Premises, and the nonexclusive use of the area directly underneath or over such
sidewalks and driveways. The gross leasable area of the building shall be
measured from outside of exterior walls to outside of exterior walls, and shall
include any atriums, covered entrances or egresses and covered loading areas.
Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the conditions of such
performance and observance.
1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of office,
sales and R&D, and related uses necessary for the use of Tenant or any approved
assignee or subtenant to conduct its business providing any and all uses of the
Premises shall be subject to and in conformance with all governmental laws and
ordinances, and for no other purpose without Landlord's prior written consent,
Tenant shall not do or permit to be done in or about the Premises nor bring or
keep or permit to be brought or kept in or about the Premises anything which is
prohibited by or will in any way increase the existing rate of (or otherwise
affect) fire or any insurance covering the Premises or any part thereof, or any
of its contents without the prior written consent of Landlord, and provided
Tenant bears any cost related to such increased rate, or will cause a
cancellation of any insurance covering the Premises or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in, on or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Premises or neighboring premises or injure
or annoy them, or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. No sale by auction shall be
permitted on the Premises. Tenant shall not place any loads upon the floors,
walls, or ceiling which endanger the structure, or place any harmful fluids or
other materials in the drainage system of the building, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside of
the building in which the Premises are a part, except in trash containers placed
inside exterior enclosures designated by Landlord for that purpose or inside of
the building proper where designated by Landlord. 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 outside the
Premises. Tenant shall not place anything or allow anything to be placed near
the glass of any window, door partition or wall which may appear unsightly from
outside the Premises. No loudspeaker or other device, system or apparatus which
can be heard outside the Premises shall be used in or at the Premises without
the prior written consent of Landlord. Tenant shall not commit or suffer to be
committed any waste in or upon the Premises. Tenant shall indemnify, defend and
hold Landlord harmless against any loss, expense, damage, reasonable attorneys'
fees, or liability arising out of failure of Tenant to comply with any
applicable law that governs Tenant's use of the Premises. Tenant shall comply
with any covenant, condition, or restriction ("CC&R's") affecting the Premises.
The Provisions of this paragraph are for the benefit of Landlord only and shall
not be construed to be for the benefit of any tenant or occupant of the
Premises.
2. TERM AND COMMENCEMENT DATE OF LEASE: See Paragraph 40, 41 & 42 of this Lease.
3. POSSESSION If Landlord, for any reason whatsoever other than Landlord's
default, cannot deliver possession of said premises to Tenant at the
commencement of the said term, as hereinbefore specified, this Lease shall not
be void or voidable; no obligation of Tenant shall be affected thereby; nor
shall Landlord or Landlord's agents be liable to Tenant for any loss or damage
resulting therefrom; but in that event the commencement and termination dates of
the Lease, and all other dates affected thereby shall be revised to conform to
the date of Landlord's delivery of possession, as specified in Paragraph 2B,
above. The above is, however, subject to the provision that the period of delay
of delivery of the Premises shall not exceed 180 days from the commencement date
herein (except those delays caused by Acts of God, strikes, war, utilities,
governmental bodies, weather, unavailable materials, and delays beyond
Landlord's control shall be excluded in calculating such period) in which
instance Tenant, at its option, may, by written notice to Landlord, terminate
this Lease.
4. RENT
A. Basic Rent. Tenant agrees to pay to Landlord at such place as Landlord may
designate without deduction, offset, prior notice, or demand, and Landlord
agrees to accept as Basic Rent for the leased Premises the total sum of the
amount for the original Lease Term to be calculated pursuant to Paragraph 39.
B. Time for Payment. Full monthly rent is due in advance on the first day of
each calendar month. In the event that the term of this Lease commences on a
date other than the first day of a calendar month, on the date of commencement
of the term hereof Tenant shall pay to Landlord as rent for the period from such
date of commencement to the first day of the next succeeding calendar month that
proportion of the monthly rent hereunder which the number of days between such
date of commencement and the first day of the next succeeding calendar month
bears to thirty (30). In the event that the term of this Lease for any reason
ends on a date other than the last day of a calendar month, on the first day of
the last calendar month of the term hereof Tenant shall pay to Landlord as rent
for the period from said first day of said last calendar month to and including
the last day of the term hereof that proportion of the monthly rent hereunder
which the number of days between said first day of said last calendar month and
the last day of the term hereof bears to thirty (30).
C. Late Charge. Notwithstanding any other provision of this Lease, if Tenant
is in default in the payment of rental as set forth in this Paragraph 4 when
due, or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal ten percent (10%) of each rental payment so
in default.
D. Additional Rent. Beginning with the commencement date of the term of
thisease, Tenant shall pay to Landlord or to Landlord's designated agent in
addition to the Basic Rent and as Additional Rent the following:
(a) All Taxes relating to the Premises as set forth in Paragraph 9, and
(b) All insurance premiums relating to the Premises, as set forth in
Paragraph 12, and
(c) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue thereto
in the event of Tenant's failure to pay such amounts, and all damages,
reasonable costs and expenses which Landlord may incur by reason of default of
Tenant or failure on Tenant's part to comply with the terms of this Lease. In
the event of nonpayment by Tenant of Additional Rent, Landlord shall have all
the rights and remedies with respect thereto as Landlord has for nonpayment of
rent.
The Additional Rent due hereunder shall be paid to Landlord or Landlord's
agent (i) within five days for taxes and insurance and within thirty (30) days
for all other Additional Rent items after presentation of invoice from Landlord
or Landlord's agent setting forth such Additional rent and/or (ii) at the option
of Landlord, Tenant shall pay to Landlord monthly, in advance, Tenant's prorata
share of an amount estimated by Landlord to be Landlord's approximate average
monthly expenditure for such Additional Rent items, which estimated amount shall
be reconciled within 180 days of the end of each calendar year or more
frequently if Landlord elects to do so at Landlord's sole and absolute
discretion as compared to Landlord's actual expenditure for said Additional Rent
items, with Tenant paying to Landlord, upon demand, any amount of actual
expenses expended by Landlord in excess of said estimated amount, or Landlord
crediting to Tenant's account (providing Tenant is not in default in the
performance of any of the terms, covenants and conditions of this Lease, in
which case such amount shall be held by Landlord as a credit for Tenant's
account until such default has been cured) any amount of estimated payments made
by Tenant in excess of Landlord's actual expenditures for said Additional Rent
items.
E. Fixed Management Fee. Beginning with the Commencement Date of the Term of
this Lease, Tenant shall pay to Landlord, in addition to the Basic Rent and
Additional Rent, a fixed monthly management fee ("Management Fee") equal to 1%
of the Basic Rent due for each month during the Lease Term.
The respective obligations of Landlord and Tenant under this paragraph shall
survive the expiration or other termination of the term of this Lease, and if
the term hereof shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the term hereof expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.
F. Place of Payment of Rent and Additional Rent. All Basic Rent hereunder and
all payments hereunder for Additional Rent shall be paid to Landlord at the
office of Landlord at Xxxxx/Xxxxxxxxx, File 0000, Xxx 00000, Xxx Xxxxxxxxx, XX
00000 or to such other person or to such other place as Landlord may from time
to time designate in writing.
G. Security Deposit. Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of SEVEN HUNDRED ELEVEN THOUSAND ONE
HUNDRED EIGHTY FOUR AND 50/100 Dollars ($711,184.50). Said sum shall be held by
Landlord as a Security Deposit for the faithful performance by Tenant of all of
the terms, covenants, and conditions of this Lease to be kept and performed by
Tenant during the term hereof. If Tenant defaults with respect to any provision
of this Lease, including, but not limited to, the provisions relating to the
payment of rent and any of the monetary sums due herewith, Landlord may (but
shall not be required to) use, apply or retain all or any part of this Security
Deposit for the payment of any other amount which Landlord may spend by reason
of Tenant's default or to compensate Landlord for
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any other loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said Deposit is so used or applied, Tenant shall,
within ten (10) days after written demand therefor, deposit cash with Landlord
in the amount sufficient to restore the Security Deposit to its original amount.
Tenant's failure to do so shall be a material breach of this Lease. Landlord
shall not be required to keep this Security Deposit separate from its general
funds, and Tenant shall not be entitled to interest on such Deposit. If Tenant
fully and faithfully performs every provision of this Lease to be performed by
it, the Security Deposit or any balance thereof shall be returned to Tenant (or
at Landlord's option, to the last assignee of Tenant's interest hereunder) at
the expiration of the Lease term and after Tenant has vacated the Premises. In
the event of termination of Landlord's interest in this Lease, Landlord shall
transfer said Deposit to Landlord's successor in interest whereupon Tenant
agrees to release Landlord from liability for the return of such Deposit or the
accounting therefor. See Paragraph 50
5. ACCEPTANCE AND SURRENDER OF PREMISES By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair and accepts
the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. Any
exceptions to the foregoing must be by written agreement executed by Landlord
and Tenant. Tenant agrees on the last day of the Lease term, or on the sooner
termination of this Lease, to surrender the Premises promptly and peaceably to
Landlord in good condition and repair (damage by Acts of God, fire, normal wear
and tear excepted), with all interior walls cleaned so that they appear freshly
painted, and repaired and replaced, if damaged; all floors cleaned and waxed;
all carpets cleaned and shampooed; all broken, marred or nonconforming
accoustical ceiling tiles replaced; all windows washed; the airconditioning and
heating systems serviced by a reputable and licensed service firm and in good
operating condition and repair; the plumbing and electrical systems and lighting
in good order and repair, including replacement of any burned out or broken
light bulbs or ballasts; the lawn and shrubs in good condition including the
replacement of any dead or damaged plantings; the sidewalk, driveways and
parking areas in good order, condition and repair; together with all
alterations, additions, and improvements which may have been made in, to, or on
the Premises (except moveable trade fixtures installed at the expense of Tenant)
except that Tenant shall ascertain from Landlord within ninety (90) days before
the end of the term of this Lease whether Landlord desires to have the Premises
or any part or parts thereof restored to their condition and configuration as
when the Premises were delivered to Tenant and if Landlord shall so desire, then
Tenant shall restore said Premises or such part or parts thereof before the end
of this Lease at Tenant's sole cost and expense. Tenant, on or before the end of
the term or sooner termination of this Lease, shall remove all of Tenant's
personal property and trade fixtures from the Premises, and all property not so
removed on or before the end of the term or sooner termination of this Lease
shall be deemed abandoned by Tenant and title to same shall thereupon pass to
Landlord without compensation to Tenant. Landlord may, upon termination of this
Lease, remove all moveable furniture and equipment so abandoned by Tenant, at
Tenant's sole cost, and repair any damage caused by such removal at Tenant's
sole cost. If the Premises be not surrendered at the end of the term or sooner
termination of this Lease, Tenant shall indemnify Landlord against loss or
liability resulting from the delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding tenant founded
on such delay. Nothing contained herein shall be construed as an extension of
the term hereof or as a consent of Landlord to any holding over by Tenant. The
voluntary or other surrender of this Lease or the Premises by Tenant or a mutual
cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or subtenancies
or operate as an assignment to Landlord of all or any such subleases or
subtenancies. See Paragraph 51
6. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant (such consent not to be
unreasonably withheld), but at the cost of Tenant, and any addition to, or
alteration of, the Premises, except moveable furniture and trade fixtures, shall
at once become a part of the Premises and belong to Landlord. Landlord reserves
the right to approve all contractors and mechanics proposed by Tenant to make
such alterations and additions. Tenant shall retain title to all moveable
furniture and trade fixtures placed in the Premises. All heating, lighting,
electrical, airconditioning, floor to ceiling partitioning, drapery, carpeting,
and floor installations made by Tenant, together with all property that has
become an integral part of the Premises, shall not be deemed trade fixtures.
Tenant agrees that it will not proceed to make such alteration or additions,
without having obtained consent from Landlord to do so, and until five (5) days
from the receipt of such consent, in order that Landlord may post appropriate
notices to avoid any liability to contractors or material suppliers for payment
for Tenant's improvements. Tenant will at all times permit such notices to be
posted and to remain posted until the completion of work. Tenant shall, if
required by Landlord, secure at Tenant's own cost and expense, a completion and
lien indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises for
work claimed to have been done for, or materials claimed to have been furnished
to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after Tenant receives notice of the filing thereof, at the cost and expense
of Tenant. Any exceptions to the foregoing must be made in writing and executed
by both Landlord and Tenant. See Paragraph 51
7. TENANT MAINTENANCE Tenant shall, at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a high
standard of maintenance and repair, or replacement, and in good and sanitary
condition. Tenant's maintenance and repair responsibilities herein referred to
include, but are not limited to, janitorization, all windows (interior and
exterior), window frames, plate glass and glazing (destroyed by accident or act
of third parties), truck doors, plumbing systems (such as water and drain lines,
sinks, toilets, faucets, drains, showers and water fountains), electrical
systems (such as panels, conduits, outlets, lighting fixtures, lamps, bulbs,
tubes and ballasts), heating and airconditioning systems (such as compressors,
fans, air handlers, ducts, mixing boxes, thermostats, time clocks, boilers,
heaters, supply and return grills), structural elements and exterior surfaces of
the building, store fronts, roofs, downspouts, all interior improvements within
the premises including but not limited to wall coverings, window coverings,
carpet, floor coverings, partitioning, ceilings, doors (both interior and
exterior), including closing mechanisms, latches, locks, skylights (if any),
automatic fire extinguishing systems, and elevators and all other interior
improvements of any nature whatsoever, and all exterior improvements including
but not limited to landscaping, sidewalks, driveways, parking lots including
striping and sealing, sprinkler systems, lighting, ponds, fountains, waterways,
and drains. Tenant agrees to provide carpet xxxxxxx under all rolling chairs or
to otherwise be responsible for wear and tear of the carpet caused by such
rolling chairs if such wear and tear exceeds that caused by normal foot traffic
in surrounding areas. Areas of excessive wear shall be replaced at Tenant's sole
expense upon Lease termination. Tenant hereby waives all rights under, and
benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942 of the
California Civil Code and under any similar law, statute or ordinance now or
hereafter in effect. In the event any of the above maintenance responsibilities
apply to any other tenant(s) of Landlord where there is common usage with other
tenant(s), such maintenance responsibilities and charges shall be allocated to
the leased Premises by square footage or other equitable basis as calculated and
determined by Landlord. See Paragraph 52
8. UTILITIES Tenant shall pay promptly, as the same become due, all charges for
water, gas, electricity, telephone, telex and other electronic communication
service, sewer service, waste pick-up and any other utilities, materials or
services furnished directly to or used by Tenant on or about the Premises during
the term of this Lease, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed. In the event the above charges apply to any other tenant(s) of Landlord
where there is common usage with other tenant(s), such charges shall be
allocated to the leased Premises by square footage or other equitable basis as
calculated and determined by landlord.
Landlord shall not be liable for and Tenant shall not be entitled to any
abatement or reduction of rent by reason of any interruption or failure of
utility services to the Premises when such interruption or failure is caused by
accident, breakage, repair, strikes, lockouts, or other labor disturbances or
labor disputes of any nature, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord.
9. TAXES
A. Notwithstanding the following, Tenant is responsible for paying all real
estate taxes and assessments assessed on the Premises leased hereunder from
November 1, 1995. As Additional Rent and in accordance with Paragraph 4D of this
Lease, Tenant shall pay to Landlord, or if Landlord so directs, directly to the
Tax Collector, all Real Property Taxes relating to the Premises. In the event
the Premises leased hereunder consist of only a portion of the entire tax
parcel, Tenant shall pay to Landlord Tenant's proportionate share of such real
estate taxes allocated to the leased Premises by square footage or other
reasonable basis as calculated and determined by Landlord. If the tax billing
pertains 100% to the leased Premises, and Landlord chooses to have Tenant pay
said real estate taxes directly to the Tax Collector, then in such event it
shall be the responsibility of Tenant to obtain the tax and assessment bills and
pay, prior to delinquency, the applicable real property taxes and assessments
pertaining to the leased Premises, and failure to receive a xxxx for taxes
and/or assessments shall not provide a basis for cancellation of or
nonresponsibility for payment of penalties for nonpayment or late payment by
Tenant. The term "Real Property Taxes", as used herein, shall mean (i) all
taxes, assessments, levies and other charges of any kind or nature whatsoever,
general and special, foreseen and unforeseen (including all installments of
principal and interest required to pay any general or special assessments for
public improvements and any increases resulting from reassessments caused by any
change in ownership of the Premises) now or hereafter imposed by any
governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of, all or any
portion of the Premises (as now constructed or as may at any time hereafter be
constructed, altered, or otherwise changed) or Landlord's interest therein; any
improvements located within the Premises (regardless of ownership); the
fixtures, equipment and other property of Landlord, real or personal, that are
an integral part of and located in the Premises; or parking areas, public
utilities, or energy within the Premises; (ii) all charges, levies or fees
imposed by reason of environmental regulation or other governmental control of
the Premises; and (iii) all costs and fees (including
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reasonable attorneys' fees) incurred by Landlord in reasonably contesting any
Real Property Tax and in negotiating with public authorities as to any Real
Property Tax. If at any time during the term of this Lease the taxation or
assessment of the Premises prevailing as of the commencement date of this Lease
shall be altered so that in lieu of or in addition to any Real property Tax
described above there shall be levied, assessed or imposed (whether by reason of
a change in the method of taxation or assessment, creation of a new tax or
charge, or any other cause) an alternate or additional tax or charge (i) on the
value, use or occupancy of the Premises or Landlord's interest therein or (ii)
on or measured by the gross receipts, income or rentals from the Premises, on
Landlord's business of leasing the Premises, or computed in any manner with
respect to the operation of the Premises, then any such tax or charge, however
designated, shall be included within the meaning of the term "Real Property
Taxes" for purposes of this Lease. If any Real Property Tax is based upon
property or rents unrelated to the Premises, then only that part of such Real
Property Tax that is fairly allocable to the Premises shall be included within
the meaning of the term "Real Property Taxes". Notwithstanding the foregoing,
the term "Real Property Taxes" shall not include estate, inheritance, gift or
franchise taxes of Landlord or the federal or state net income tax imposed on
Landlord's income from all sources. See Paragraph 53
B. Taxes on Tenant's Property. Tenant shall be liable for and shall pay ten
days before delinquency, taxes levied against any personal property or trade
fixtures placed by Tenant in or about the Premises. If any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord or
Landlord's property or if the assessed value of the Premises is increased by the
inclusion therein of a value placed upon such personal property or trade
fixtures of Tenant and if Landlord, after written notice to Tenant, pays the
taxes based on such increased assessment, which Landlord shall have the right to
do regardless of the validity thereof, but only under proper protest if
requested by Tenant, Tenant shall upon demand, as the case may be, repay to
Landlord the taxes so levied against Landlord, or the proportion of such taxes
resulting from such increase in the assessment; provided that in any such event
Tenant shall have the right, in the name of Landlord and with Landlord's full
cooperation, to bring suit in any court of competent jurisdiction to recover the
amount of such taxes so paid under protest, and any amount so recovered shall
belong to Tenant.
10. LIABILITY INSURANCE Tenant, at Tenant's expense, agrees to keep in force
during the term of this Lease a policy of commercial general liability insurance
with combined single limit coverage of not less than Two Million Dollars
($2,000,000) per occurrence, for bodily injury and property damage occurring in,
on or about the Premises, including parking and landscaped areas. Such insurance
shall be primary and noncontributory as respects any insurance carried by
Landlord. The policy or policies effecting such insurance shall name Landlord as
additional insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant, its agents, employees or
invitees or otherwise by any conduct or transactions of any of said persons in
or about or concerning the Premises, including any failure of Tenant to observe
or perform any of its obligations hereunder; shall be issued by an insurance
company admitted to transact business in the State of California; and shall
provide that the insurance effected thereby shall not be canceled, except upon
thirty (30) days' prior written notice to Landlord. A certificate of insurance
of said policy shall be delivered to Landlord. If, during the term of this
Lease, in the considered opinion of Landlord's Lender, insurance advisor, or
counsel, the amount of insurance described in this Paragraph 10 is not adequate,
Tenant agrees to increase said coverage to such reasonable amount as Landlord's
Lender, insurance advisor, or counsel shall deem adequate.
11. TENANT'S PERSONAL PROPERTY INSURANCE AND XXXXXXX'X COMPENSATION INSURANCE
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk" form with a sprinkler leakage endorsement insuring the personal
property, inventory, trade fixtures, and leasehold improvements within the
leased Premises for the full replacement value thereof. The proceeds from any of
such policies shall be used for the repair or replacement of such items so
insured.
Tenant shall also maintain a policy or policies of xxxxxxx'x compensation
insurance and any other employee benefit insurance sufficient to comply with all
laws.
12. PROPERTY INSURANCE Landlord shall purchase and keep in force, and as
Additional Rent and in accordance with Paragraph 4D of this Lease, Tenant shall
pay to Landlord (or Landlord's agent if so directed by Landlord) Tenant's
proportionate share (allocated to the leased Premises by square footage or other
equitable basis as calculated and determined by Landlord) of the deductibles on
insurance claims and the cost of, policy or policies of insurance covering loss
or damage to the Premises (excluding routine maintenance and repairs and
incidental damage or destruction caused by accidents or vandalism for which
Tenant is responsible under Paragraph 7) in the amount of the full replacement
value thereof, providing protection against those perils included within the
classification of "all risks" insurance and flood and/or earthquake insurance,
if available, plus a policy of rental income insurance in the amount of one
hundred (100%) percent of twelve (12) months Basic Rent, plus sums paid as
Additional Rent. If such insurance cost is increased due to Tenant's use of the
Premises, Tenant agrees to pay to Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by Landlord for the Premises.
Landlord and Tenant do each hereby respectively release the other, to the
extent of insurance coverage of the releasing party, from any liability for loss
or damage caused by fire or any of the extended coverage casualties included in
the releasing party's insurance policies, irrespective of the cause of such fire
or casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver, then this waiver shall not take effect until
consent to such waiver is obtained. If such waiver is so prohibited, the insured
party affected shall promptly notify the other party thereof.
13. INDEMNIFICATION Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord for any injury to or death of any person or
damage to or destruction of property in or about the Premises by or from any
cause whatsoever, including, without limitation, gas, fire, oil, electricity or
leakage of any character from the roof, walls, basement or other portion of the
Premises but excluding, however, the willful misconduct or negligence of
Landlord, its agents, servants, employees, invitees, or contractors of which
negligence Landlord has knowledge and reasonable time to correct. Except as to
injury to persons or damage to property to the extent arising from the willful
misconduct or the negligence of Landlord, its agents, servants, employees,
invitees or contractors, and subject to the last two sentences of Paragraph 12,
Tenant shall hold Landlord harmless from and defend Landlord against any and all
expenses, including reasonable attorneys' fees, in connection therewith, arising
out of any injury to or death of any person or damage to or destruction of
property occurring in, on or about the Premises, or any part thereof, from any
cause whatsoever.
14. COMPLIANCE Tenant, at its sole cost and expense, shall promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public
officer; provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its
sole cost and expese, comply with any and all requirements pertaining to said
Premises, of any insurance orgainzation or company, necessary for the
maintenance of reasonable fire and public liability insurance covering
requirements pertaining to said Premises, of any insurance orgainzation or
company, necessary for the maintenance of reasonable fire and public liability
insurance covering the Premises. See Paragraphs 44 and 52
15. LIENS Tenant shall keep the Premises free from any liens arising out of any
work performed, materials furnished or obligation incurred by Tenant. In the
event that Tenant shall not, within ten (10) days following Tenant's receipt of
notice of the imposition of such lien, cause the same to be released of record,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but no obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien. All sums paid by Landlord for such purpose, and all expenses incurred
by it in connection therewith, shall be payable to Landlord by Tenant on demand
with interest at the prime rate of interest as quoted by the Bank of America.
16. ASSIGNMENT AND SUBLETTING Tenant shall not assign, transfer, or hypothecate
the leasehold estate under this Lease, or any interest therein, and shall not
sublet the Premises, or any part thereof, or any right or privilege appurtenant
thereto, or suffer any other person or entity to occupy or use the Premises, or
any portion thereof, without, in each case, the prior written consent of
Landlord which consent will not be unreasonably withheld. In the event Tenant is
allowed to assign, transfer or sublet the whole or any part of the Premises,
with the prior written
page 4 of 8
consent of Landlord, no assignee, transferee or subtenant shall assign or
transfer this Lease, either in whole or in part, or sublet the whole or any part
of the Premies, without also having obtained the prior written consent of
Landlord. A consent of Landlord to one assignment, transfer, hypothecation,
subletting, occupation or use by any other person shall not release Tenant from
any of Tenant's obligations hereunder or be deemed to be a consent to any
subsequent similar or dissimilar assignment, transfer, hypothecation,
subletting, occupation or use by any other person. Any such assignment,
transfer, hypothecation, subletting, occupation or use without such consent
shall be void and shall constitute a breach of this Lease by Tenant and shall,
at the option of Landlord exercised by written notice to Tenant, terminate this
Lease. The leasehold estate under this Lease shall not, nor shall any interest
therein, be assignable for any purpose by operation of law without the written
consent of Landlord. As a condition to its consent, Landlord shall require
Tenant to pay all reasonable expenses in connection with the assignment, and
Landlord shall require Tenant's assignee or transferee (or other assignees or
transferees) to assume in writing all of the obligations under this Lease and
for Tenant to remain liable to Landlord under the Lease. See Paragraphs 55 and
56
17. SUBORDINATION AND MORTGAGES In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lender's deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Notwithstanding any such subordination, Tenant's possession under this
Lease shall not be disturbed if Tenant is not in default and so long as Tenant
shall pay all rent and observe and perform all of the provisions set forth in
this Lease. See Xxxxxxxxx 00
00. ENTRY BY LANDLORD Landlord reserves, and shall at all reasonable times have,
the right to enter the Premises to inspect them; to perform any services to be
provided by Landlord hereunder; to make repairs or provide any services to a
contiguous tenant(s); to submit the Premises to prospective purchasers,
mortgagers or tenants; to post notices of nonresponsibility; and to alter,
improve or repair the Premises or other parts of the building, all without
abatement of rent, and may erect scaffolding and other necessary structures in
or through the Premises where reasonably required by the character of the work
to be performed; provided, however that the business of Tenant shall be
interfered with to the least extent that is reasonably practical. Any entry to
the Premises by Landlord for the purposes provided for herein shall not under
any circumstances be construed or deemed to be a forcible or unlawful entry into
or a detainer of the Premises or an eviction, actual or constructive, of Tenant
from the Premises or any portion thereof. See Xxxxxxxxx 00
00. BANKRUPTCY AND DEFAULT The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Tenant, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. If the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30)
days after an order for relief in a liquidation action or within thirty (30)
days after the commencement of any action.
Within thirty (30) days after court approval of the assumption of this Lease,
the trustee or receiver shall cure (or provide adequate assurance to the
reasonable satisfaction of Landlord that the trustee or receiver shall cure) any
and all previous defaults under the unexpired Lease and shall compensate
Landlord for all actual pecuniary loss and shall provide adequate assurance of
future performance under said Lease to the reasonable satisfaction of Landlord.
Adequate assurance of future performance, as used herein, includes, but shall
not be limited to: (i) assurance of source and payment of rent, and other
consideration due under this Lease; (ii) assurance that the assumption or
assignment of this Lease will not breach substantially any provision, such as
radius, location, use, or exclusivity provision, in any agreement relating to
the above described Premises.
Nothing contained in this section shall affect the existing right of Landlord
to refuse to accept an assignment upon commencement of or in connection with a
bankruptcy, liquidation, reorganization or insolvency action or an assignment of
Tenant for the benefit of creditors or other similar act. Nothing contained in
this Lease shall be construed as giving or granting or creating an equity in the
demised Premises to Tenant. In no event shall the leasehold estate under this
Lease, or any interest therein, be assigned by voluntary or involuntary
bankruptcy proceeding without the prior written consent of Landlord. In no event
shall this Lease or any rights or privileges hereunder be an asset of Tenant
under any bankruptcy, insolvency or reorganization proceedings.
The failure to perform or honor any covenant, condition or representation
made under this Lease shall constitute a default hereunder by Tenant upon
expiration of the appropriate grace period hereinafter provided. Tenant shall
have a period of ten (10) days from the date of written notice from Landlord
within which to cure any default in the payment of rental or adjustment thereto.
Tenant shall have a period of thirty (30) days from the date of written notice
from Landlord within which to cure any other default under this Lease. Upon an
uncured default of this Lease by Tenant, Landlord shall have the following
rights and remedies in addition to any other rights or remedies available to
Landlord at law or in equity:
(a) The rights and remedies provided for by California Civil Code Section
1951.2, including but not limited to, recovery of the worth at the time of award
of the amount by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of rental loss for the same period that Tenant
proves could be reasonably avoided, as computed pursuant to subsection (b) of
said Section 1951.2.
(b) The rights and remedies provided by California Civil Code Section
which allows Landlord to continue the Lease in effect and to enforce all of its
rights and remedies under this Lease, including the right to recover rent as it
becomes due, for so long as Landlord does not terminate Tenant's right to
possession; acts of maintenance or preservation, efforts to relet the Premises,
or the appointment of a receiver upon Landlord's initiative to protect its
interest under this Lease shall not constitute a termination of Tenant's right
to possession.
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.
(d) To the extent permitted by law, the right and power, after compliance
with all statutory requirements and in any event on not less than three (3)
business days prior written notice, to enter the Premises and remove therefrom
all persons and property, to store such property in a public warehouse or
elsewhere at the cost of and for the account of Tenant, and to sell such
property and apply such proceeds therefrom pursuant to applicable California
law. Landlord, may from time to time sublet the Premises or any part thereof for
such term or terms (which may extend beyond the term of this Lease) and at such
rent and such other terms as Landlord in its reasonable sole discretion may deem
advisable, with the right to make alterations and repairs to the Premises. Upon
each subletting, (i) Tenant shall be immediately liable to pay Landlord, in
addition to indebtedness other than rent due hereunder, the reasonable cost of
such subletting, including, but not limited to, reasonable attorneys' fees, and
any real estate commissions actually paid, and the cost of such reasonable
alterations and repairs incurred by Landlord and the amount, if any, by which
the rent hereunder for the period of such subletting (to the extent such period
does not exceed the term hereof) exceeds the amount to be paid as rent for the
Premises for such period or (ii) at the option of Landlord, rents received from
such subletting shall be applied first to payment of indebtedness other than
rent due hereunder from Tenant to Landlord; second, to the payment of any costs
of such subletting and of such alterations and repairs; third to payment of rent
due and unpaid hereunder; and the residue, if any, shall be held by Landlord and
applied in payment of future rent as the same becomes due hereunder. If Tenant
has been credited with any rent to be received by such subletting under option
(i) and such rent shall not be promptly paid to Landlord by the subtenant(s), or
if such rentals received from such subletting under option (ii) during any month
be less than that to be paid during that month by Tenant hereunder, Tenant shall
pay any such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. No taking possession of the Premises by Landlord, shall be
construed as an election on its part to terminate this Lease unless a written
notice of such intention be given to Tenant. Notwithstanding any such subletting
without termination, Landlord may at any time hereafter elect to terminate this
Lease for such previous breach.
(e) The right to have a receiver appointed for Tenant upon application by
Landlord, to take possession of the Premises and to apply any rental collected
from the Premises and to exercise all other rights and remedies granted to
Landlord pursuant to subparagraph d. above. See Xxxxxxxxx 00
00. ABANDONMENT Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease, and if Tenant shall abandon, vacate or surrender
said Premises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Tenant and left on the Premises shall be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.
21. DESTRUCTION In the event the Premises are destroyed in whole or in part from
any cause, except for routine maintenance and repairs and incidental
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damage and destruction caused from vandalism and accidents for which Tenant is
responsible under Xxxxxxxxx 0, Xxxxxxxx may, at its option:
(a) Rebuild or restore the Premises to their condition prior to the damage
or destruction, or
(b) Terminate this Lease.
If Landlord does not give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restrore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises. If
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargos, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord's obligation to rebuild or restore shall be
limited to the building and interior improvements constructed by Landlord as
they existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace of fully repair at Tenant's sole cost and expense
provided this Lease is not cancelled according to the provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect. Tenant hereby expressly waives the
provisions of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of the
California Civil Code.
In the event that the building in which the Premises are situated is damaged
or destroyed to the extent of not less than 33-1/3% of the replacement cost
thereof, Landloard may elect to terminate this Lease, whether the Premises be
injured or not. See Xxxxxxxxx 00
00. EMINENT DOMAIN If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award, or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation specifically awarded Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.
If any action or proceeding is commenced for such taking of the Premises or
any part thereof, or if Landlord is advised in writing by any entity or body
having the right or power of condemnation of its intention to condemn the
premises or any portion thereof, then Landlord shall have the right to terminate
this Lease by giving Tenant written notice thereof within sixty (60) days of the
date of receipt of said written advice, or commencement of said action or
proceeding, or taking conveyance, which termination shall take place as of the
first to occur of the last day of the calendar month next following the month in
which such notice is given or the date on which title to the Premises shall vest
in the condemmor.
In the event of such a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant can
no longer reasonably conduct its business, Tenant shall have the privilege of
terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to Landlord of its intention so to do, and upon
giving of such notice this Lease shall terminate on the last day of the calendar
month next following the month in which such notice is given, upon payment by
Tenant of the rent from the date of such taking or conveyance to the date of
termination.
If a portion of the Premises be taken by condemnation or conveyance in lieu
thereof and neither Landlord nor Tenant shall terminate this Lease as provided
herein, this Lease shall continue in full force and effect as to the part of the
Premises not so taken or conveyed, and the rent herein shall be apportioned as
of the date of such taking or conveyance so that thereafter the rent be paid by
Tenant shall be in the ratio that the area of the portion of the Premises not so
taken or conveyed bears to the total area of the Premises prior to such taking.
See Xxxxxxxxx 00
00. SALE OR CONVEYANCE BY LANDLORD In the event of a sale or conveyance of the
Premises or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any further
liability upon any of the terms, covenants or conditions (express or implied)
herein contained in favor of Tenant, and in such event, insofar as such transfer
is concerned, Tenant agrees to look soley to the responsibility of the successor
in interest of such transferor in and to the Premises and this Lease. This Lease
shall not be affected by any such sale or conveyance, and Tenant agrees to
attorn to the successor in interest of such transferor. See Xxxxxxxxx 00
00. ATTORNMENT TO LENDER OR THIRD PARTY In the event the interest of Landlord in
the land and buildings in which the leased Premises are located (whether such
interest of Landlord is a fee title interest or a leasehold interest) is
encumbered by deed of trust, and such interest is acquired by the lender or any
third party through judicial foreclosure or by exercise of a power of sale at
private trustee's foreclosure sale, Tenant hereby agrees to attorn to the
purchaser at any such foreclosure sale and to recognize such purchaser as the
Landlord under this Lease. In the event the lien of the deed of trust securing
the loan from a Lender to Landlord is prior and paramount to the lease, this
Lease shall nonetheless continue in full force and effect for the remainder of
the unexpired term hereof, at the same rental herein reserved and upon all the
other terms, conditions and covenants herein contained.
25. HOLDING OVER Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights in or to the leased Premises except as expressly provided
in this Lease. Any holding over after the expiration or other termination of the
term of this Lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred twenty five (125%) percent of the monthly Basic
Rent required during the last month of the Lease term.
26. CERTIFICATE OF ESTOPPEL Either party shall at any time upon not less than
ten (10) days prior written notice from the other party execute, acknowledge and
deliver to the requesting party a statement in writing (i) certifying that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect) and the date to which the rent and other charges are
paid in advance, if any, and (ii) acknowledging that there are not, to the best
of such party's knowledge, any uncured defaults on the part of the other party
hereunder, or specifying such defaults, if any, are claimed. Any such statement
may be conclusively relied upon by any prospective purchaser or encumbrancer of
the Premises. A party's failure to deliver such statement within such time shall
be conclusive upon the party receiving such request that this Lease is in full
force and effect, without modification except as may be represented by Landlord;
that there are no uncured defaults in the requesting party's performance, and
that not more than one month's rent has been paid in advance.
27. CONSTRUCTION CHANGES It is understood that the description of the Premises
and the location of ductwork, plumbing and other facilities therein are subject
to such minor changes as Landlord or Landlord's architect determines to be
desirable in the course of construction of the Premises, and no such changes
shall affect this Lease or entitle Tenant to any reduction of rent hereunder or
result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of
such drawings rests with the Tenant.
28. RIGHT OF LANDLORD TO PERFORM All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fail to pay any sum of money, or other rent, required to be paid by
it hereunder and such failure shall continue for five (5) days after written
notice thereof by Landlord, or shall fail to perform any other term or covenant
hereunder on its part to be performed, and such failure shall continue for
thirty (30) days after written notice thereof by Landlord, Landlord, without
waiving or releasing Tenant from any obligation of Tenant hereunder, may, but
shall not be obliged to, make any such payment or perform any such other term or
covenant on Tenant's part to be performed. All sums so paid by Landlord and all
necessary costs of such performance by Landlord together with interest thereon
at the rate of the prime rate or interest per annum as quoted by the Bank of
America from the date of such payment on performance by Landlord, shall be paid
(and Tenant covenants to make such payment) to Landlord on demand by Landlord,
and Landlord shall have (in addition to any other right or remedy of Landlord)
the same rights and remedies in the event of nonpayment by Tenant as in the case
of failure by Tenant in the payment of rent hereunder.
29. ATTORNEYS' FEES
A. In the event that either Landlord or Tenant should bring suit for the
possession of the Premises, for the recovery of any sum due under this Lease, or
because of the breach of any provision of this Lease, or for any other relief
against the other party hereunder, then all costs and expenses, including
reasonable attorneys' fees,
page 6 of 8
incurred by the prevailing party therein shall be paid by the other party, which
obligation on the part of the other party shall be deemed to have accrued on the
date of the commencement of such action and shall be enforceable whether or not
the action is prosecuted to judgment.
B. Should Landlord be named as a defendant in any suit brought against Tenant
in connection with or arising out of Tenant's occupancy hereunder, Tenant shall
pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorney's fee.
30. WAIVER The waiver by either party of the other party's failure to perform or
observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.
31. NOTICES All notices, demands, requests, advices or designations which may be
or are required to be given by either party to the other hereunder shall be in
writing. All notices, demands, requests, advices or designations by Landlord to
Tenant shall be sufficiently given, made or delivered if personally served on
Tenant by leaving the same at the Premises of if sent by United States certified
or registered mail, postage prepaid, addressed to Tenant at the Premises. All
notices, demands, requests, advices or designations by Tenant to Landlord shall
be sent by United States certified or registered mail, postage prepaid,
addressed to Landlord at its offices at Xxxxx/Xxxxxxxxx, 0000 Xxxxxxx Xxxxxxx
Xxxx., Xxxxx 000, Xxxxx Xxxxx, XX 00000. Each notice, request, demand, advice or
designation referred to in this paragraph shall be deemed received on the date
of the personal service or mailing thereof in the manner herein provided, as the
case may be.
32. EXAMINATION OF LEASE Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant.
33. DEFAULT BY LANDLORD Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event earlier than (30) days after written notice by Tenant to Landlord and to
the holder of any first mortgage or deed of trust covering the Premises whose
name and address shall have heretofore been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligations; provided,
however, that if the nature of Landlord's obligations is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.
34. CORPORATE AUTHORITY If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership)
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation (or partnership) in accordance with the
by-laws of said corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or partnership)
in accordance with its terms. If Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.
35. [DELETED]
36. LIMITATION OF LIABILITY In consideration of the benefits accruing hereunder.
Tenant and all successors and assigns covenant and agree that, in the event of
any actual or alleged failure, breach or default hereunder by Landlord:
(a) the sole and exclusive remedy shall be against Landlord's interest in
the Premises leased herein;
(b) no partner of Landlord shall be sued or named as a party in any suit
or action (except as may be necessary to secure jurisdiction of the
partnership);
(c) no service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership);
(d) no partner of Landlord shall be required to answer or otherwise plead
to any service of process;
(e) no judgment will be taken against any partner of Landlord;
(f) any judgment taken against any partner of Landlord may be vacated and
set aside at any time without hearing;
(g) no writ of execution will ever by levied against the assets of any
partner of Landlord;
(h) these covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.
37. SIGNS No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the written consent
of Landlord first had and obtained and Landlord shall have the right to remove
any such sign, placard, picture, advertisement, name or notice without notice to
and at the expense of Tenant. If Tenant is allowed to print or affix or in any
way place a sign in, on, or about the Premises, upon expiration or other sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign.
All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person reasonably approved of
by Landlord.
Tenant shall not place anything or allow anything to be placed near the glass
of any window, door partition or wall which may appear unsightly from outside
the Premises.
38. MISCELLANEOUS AND GENERAL PROVISIONS
A. Use of Building Name. Tenant shall not, without the written consent of
Landlord, use the name of the building for any purpose other than as the address
of the business conducted by Tenant in the Premises.
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B. Choice of Law; Severability. This Lease shall in all respects be governed
by and construed in accordance with the laws of the State of California. If any
provision of this Lease shall be invalid, unenforceable or ineffective for any
reason whatsoever, all other provisions hereof shall be and remain in full force
and effect.
C. Definition of Terms. The term "Premises" includes the space leased hereby
and any improvements now or hereafter installed therein or attached thereto. The
term "Landlord" or any pronoun used in place thereof includes the plural as well
as the singular and the successors and assigns of Landlord. The term "Tenant" or
any pronoun used in place thereof includes the plural as well as the singular
and individuals, firms, associations, partnerships and corporations, and their
and each of their respective heirs, executors, administrators, successors and
permitted assigns, according to the context hereof, and the provisions of this
Lease shall inure to the benefit of and bind such heirs, executors,
administrators, successors and permitted assigns.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used in
any gender include other genders. If there be more than on Tenant the
obligations of Tenant hereunder are joint and several. The paragraph headings of
this Lease are for convenience of reference only and shall have no effect upon
the construction or interpretation of any provision hereof.
D. Time of Essence. Time is of the essence of this Lease and of each and all
of its provisions.
E. Quitclaim. At the expiration or earlier termination of this Lease, Tenant
shall execute, acknowledge and deliver to Landlord, within ten (10) days after
written demand from Landlord to Tenant, any quitclaim deed or other document
required by any reputable title company, licensed to operate in the Sate of
California, to remove the cloud or encumbrance created by this Lease from the
real property of which Tenant's Premises are a part.
F. Incorporation of Prior Agreements; Amendments. This instrument along with
any exhibits and attachments hereto constitutes the entire agreement between
Landlord and Tenant relative to the Premises and this agreement and the exhibits
and attachments may be altered, amended or revoked only by an instrument in
writing signed by both Landlord and Tenant. Landlord and Tenant agree hereby
that all prior or contemporaneous oral agreements between and among themselves
and their agents or representatives relative to the leasing of the Premises are
merged in or revoked by this agreement.
G. Recording. Landlord and Tenant shall record a short form memorandum hereof
in the form attached hereto as Exhibit C.
H. Amendments for Financing. Tenant further agrees to execute any reasonable
amendments required by a lender to enable Landlord to obtain financing, so long
as Tenant's rights hereunder are not materially affected and there is no change
in the Basic Rent, Options to Renew, Lease Term or Construction obligations of
Landlord.
I. Additional Paragraphs. Paragraphs 39 through 65 are added hereto and are
included as a part of this lease.
J. Clauses, Plats and Riders. Clauses, plats and riders, if any, signed by
Landlord and Tenant and endorsed on or affixed to this Lease are a part hereof.
K. Diminution of Light, Air or View. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect his
Lease, entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year last written below.
LANDLORD:
XXXX XXXXXXXXX SURVIVOR'S TRUST
By /s/ Xxxx Xxxxxxxxx
-------------------------------
Xxxx Xxxxxxxxx, Trustee
Date: 6/30/97
--------------------------------
XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST
By /s/ Xxxxxxx X. Xxxxx
--------------------------------
Xxxxxxx X. Xxxxx, Trustee
Date: 6/26/97
--------------------------------
TENANT:
QUANTUM CORPORATION
a Delaware corporation
By /s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx,
Vice President Finance and
Corporate General Counsel
Date: June 25, 1997
---------------------------------
By /s/ Xxxx Xxxxx
----------------------------------
Xxxx Xxxxx,
Vice President Real Estate and
Corporate Services
Date: June 25, 1997
----------------------------------
page 8 of 8
Paragraphs 39 through 65 to Lease Agreement dated April 16, 1997, By and Between
THE XXXX XXXXXXXXX SURVIVOR'S TRUST AND THE XXXXXXX X. XXXXX SEPARATE PROPERTY,
as Landlord, and QUANTUM CORPORATION, a Delaware corporation, as Tenant for
182,355+/- Square Feet of Space Located on Sumac Drive, Milpitas, California.
39. BASIC RENT: In accordance with Paragraph 4A, and subject to the provisions
of Paragraphs 40 and 41, Basic Rent shall be payable as follows during the
indicated months of the term of the Lease based upon the gross leasable area
within the building that is part of the Premises:
Period Monthly Basic Rent
------ ------------------
Months 1-12
(plus the partial calendar month,
if any, following the Commencement Date *)
$1.60/sf
Months 13-24 $1.65/sf
Months 25-36 $1.70/sf
Months 37-48 $1.75/sf
Months 49-60 $1.80/sf
Months 61-72 $1.85/sf
Months 73-84 $1.90/sf
Months 85-96 $1.95/sf
Months 97-108 $2.00/sf
Months 109-120 $2.05/sf
Months 121-132 $2.10/sf
Months 133-144 $2.15/sf
Months 145-156 $2.20/sf
Months 157-168 $2.25/sf
Months 169-180 $2.30/sf
Example of calculation of Basic Rent per month for the period
commencing with the first through the twelfth months of said Lease:
Square footage of Building 182,355
Per square foot Basic Monthly Rent x $1.60
-----------
Basic Rent per Month $291.768.00
===========
* It is agreed in the event said Lease commences on a date other than
the first day of the month the Term of the Lease will be extended to account for
the number of days in the partial month. The Basic Rent during the resulting
partial month will be pro-rated (for the number of days in the partial month) at
the Basis Rent rate scheduled for the projected Commencement Date as shown
above.
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40. LEASE TERM AND COMMENCEMENT DATE: The following provisions relate to the
commencement and duration of the term of this Lease:
A. Lease Term: The term of this Lease shall commence on the
"Commencement Date" (as defined herein) which is projected to be May 1, 1998,
and shall continue for a period of fifteen (15) years plus the partial calendar
month, if any, in which the Commencement Date occurs, subject to the terms of
this Lease and subject to (i) earlier termination rights of Landlord in
accordance with the provisions of this Lease, and (ii) extension pursuant to the
options to renew granted by Paragraphs 41 and 42 and the provisions of this
Paragraph 40.C.
B. Commencement Date Defined: As used herein, the term "Commencement
Date" shall mean the later to occur of the following: (i) the date upon which
the "Improvements" are "Substantially Completed" or (ii) May 1, 1998, subject to
(a) delays caused by Tenant and/or Tenant's agents and (b) provided, however,
that if prior to the later of such dates Tenant's operating personnel enter into
occupancy of the Premises and commence the operation of Tenant's business within
the Premises, the Commencement Date shall be the date such personnel of Tenant
so enter into occupancy of the Premises. The term "Substantially Completed"
and/or "Substantial Completion" shall mean the date when all of the following
have occurred with respect to the Improvements in question: (i) the construction
of the Improvements in question has been substantially completed in accordance
with the approved plans therefor except for punch list items which do not
prevent Tenant from reasonably using the Premises to conduct Tenant's business;
(ii) Landlord has executed a certificate or statement representing that the
Improvements in question, for which Landlord is responsible, have been
substantially completed in accordance with the plans and specifications therefor
except for the punch list items which do not prevent Tenant from reasonably
using the Premises to conduct Tenant's business; and (iii) the Building
Department of the City of Milpitas has completed its final inspection of such
Improvements and has "signed off" the building inspection card approving such
work as complete except for punch list items which do not prevent Tenant from
reasonably using the Premises to conduct Tenant's business. Notwithstanding the
foregoing, Substantial Completion of the Interior Improvements shall not be
deemed to have occurred until Landlord has obtained final or conditional
approval from the Fire Department of the City of Milpitas that the Improvements
have been completed in accordance with such department's requirements (subject
only to conditions that do not prevent Tenant from occupying the Improvements).
C. Lease Terms Co-extensive: It is acknowledged that (i) Landlord has
granted Tenant, pursuant to a separate Option Agreement of even date herewith,
an Option to Lease an additional building on the parcel adjacent to the Premises
(the "Building 7 Lease"), and (ii) it is the intention of the parties that the
Term of this Lease be co-extensive with the term of the Building 7 Lease, such
that the terms of both leases ("the Leases") expire on the same date. In the
event Tenant exercises its Option to Lease Building 7 (pursuant to the terms and
conditions of the Option Agreement), it is hereby agreed that following the date
upon which the Commencement Date of the Building 7 Lease becomes established as
a date certain following completion of improvements and satisfaction of any
other conditions related to determining such date, the Term of this Lease shall
be extended such that the scheduled Termination Date of this Lease coincides
with the scheduled termination date of the Building 7 Lease. As soon as the
parties are able to implement the provisions of this Paragraph because the
Commencement Date of the Building 7 Lease has been determined following
completion of improvements and satisfaction of other appropriate conditions, the
parties shall execute an amendment to this Lease (i) extending the initial Term
of this Lease (if necessary) to be co-terminous with the initial termination
date of the Building 7 Lease and (ii) adjusting the Options to Extend
accordingly. The monthly Basic Rent on this Lease during the Extension Period
shall be increased by $.05 per square foot on the commencement date of said
Extension Period. For example, if the Building 7 Lease commences on May 1, 2004,
and this Lease commences the scheduled Commencement Date of May 1, 1998, the
initial Term of this Lease shall be extended by one year and the per square foot
monthly Basic Rent during the Extension Period shall be $2.35 per square foot.
The provisions of this Paragraph 40C also requires the terms of both of the
Leases to be extended accordingly if Tenant exercises its Option to Extend under
either of the Leases. The monthly Basic Rent during the extended term under each
of the Leases shall be increased by $.05 per square foot on the commencement
date of the extended term and thereafter on each and every anniversary of the
respective lease Commencement Date.
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41. FIRST FIVE-YEAR OPTION TO EXTEND: Landlord hereby grants to Tenant an option
to extend the term of this Lease for an additional five (5) year period upon the
following terms and conditions:
A. If Tenant elects to exercise the option to extend, Tenant shall give
Landlord written notice of Tenant's exercise of this option to extend at least
one hundred eighty (180) days prior to the expiration of the Basic Term hereof,
in which event the Lease shall be considered extended for an additional five (5)
year period upon the same terms and conditions as this Lease, absent this
Paragraph 41 and subject to the rental as set forth below. In the event that
Tenant fails to timely exercise Tenant's option as set forth herein in writing,
Tenant shall have no further option to extend this Lease or the Building 7
Lease, and this Lease shall continue in full force and effect for the full
remaining term hereof, absent this Paragraph 41.
B. The monthly Basic Rent for the option period shall be as follows in
the event the option is exercised:
Period Monthly Basic Rent
------ ------------------
Months 1-12 $2.35/sf
Months 13-24 $2.40/sf
Months 25-36 $2.45/sf
Months 37-48 $2.50/sf
Months 49-60 $2.55/sf
C. Notwithstanding anything contained herein, Tenant may not exercise
the option to renew granted by this Paragraph 41 at any time that Tenant is in
default (default for monetary and material default for non-monetary) of its
obligations under this Lease, if Tenant has received written notice from
Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be
cured, and if Landlord does not elect to terminate this Lease as a result of
such non-curable default by Tenant, Tenant may exercise the option to extend
granted by this Paragraph 41 notwithstanding such non-curable default.
42. SECOND FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the Lease
for an additional five (5) year period as set forth in Xxxxxxxxx 00, Xxxxxxxx
hereby grants to Tenant an option to extend the Term of this Lease for an
additional five (5) year period upon the following terms and conditions:
A. Tenant shall give Landlord written notice of Tenant's exercise of
this option to extend at least one hundred eighty (180) days prior to the
expiration of the Lease term as extended pursuant to Paragraph 41, in which
event the Lease shall be considered extended for an additional five (5) year
period upon the same terms and conditions as this Lease, absent this Paragraph
42.A and subject to the Rental as set forth below. In the event that Tenant
fails to timely exercise Tenant's option as set forth herein in writing, Tenant
shall have no further option to extend this Lease or the Building 7 Lease, and
this Lease shall continue in full force and effect for the full remaining term
hereof, absent this Paragraph 42.
B. The monthly Basic Rent for the option period shall be as follows in
the event the option is exercised:
Period Monthly Basic Rent
------ ------------------
Months 1-12 $2.60/sf
Months 13-24 $2.65/sf
Months 25-36 $2.70/sf
Months 37-48 $2.75/sf
Months 49-60 $2.80/sf
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C. Notwithstanding anything contained herein, Tenant may not exercise
the option to extend granted by this Paragraph 42 at any time that Tenant is in
default (default for monetary and material default for non-monetary) of its
obligations under this Lease, if Tenant has received written notice from
Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be
cured, and if Landlord does not elect to terminate this Lease as a result of
such non-curable default by Tenant, Tenant may exercise the option to extend
granted by this Paragraph 42 notwithstanding such non-curable default.
43. ASSESSMENT CREDITS: The demised property herein is subject to a special
assessment levied by the City of Milpitas in Improvement District No. 12. As a
part of said special assessment proceedings, additional bonds were sold and
assessments levied to provide for construction contingencies and reserve funds.
Interest will be earned on such funds created for contingencies and on reserve
funds which will be credited for the benefit of said assessment district. To the
extent surpluses are created in said district through unused contingency funds,
interest earnings or reserve funds, such surpluses shall be deemed the property
of Landlord. Notwithstanding that such surpluses may be credited on assessments
otherwise due against the demised premises, Tenant shall pay to Landlord, as
additional rent if, and at the time of any such credit of surpluses, an amount
equal to all such surpluses so credited.
44. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to
the existence or use of "Hazardous Materials" (as defined herein) on, in, under
or about the Premises and real property located beneath said Premises, which
includes the entire parcel of land on which the Premises are located as shown in
Green on Exhibit A attached hereto (hereinafter collectively referred to as the
"Property"):
A. As used herein, the term "Hazardous Materials" shall mean any
material, waste, chemical, mixture or byproduct which is or hereafter is
defined, listed or designated under Environmental Laws (defined below) as a
pollutant, or as a contaminant, or as a toxic or hazardous substance, waste or
material, or any other unwholesome, hazardous, toxic, biohazardous, or
radioactive material, waste, chemical, mixture or byproduct, or which is listed,
regulated or restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions thereof,
polychlorinated biphenyls, or asbestos). As used herein, the term "Environmental
Laws" shall mean any applicable Federal, State of California or local government
law (including common law), statute, regulation, rule, ordinance, permit,
license, order, requirement, agreement, or approval, or any determination,
judgment, directive, or order of any executive or judicial authority at any
level of Federal, State of California or local government (whether now existing
or subsequently adopted or promulgated) relating to pollution or the protection
of the environment, ecology, natural resources, or public health and safety.
B. Tenant shall notify Landlord prior to the occurrence of any Tenant's
Hazardous Materials Activities (defined below). Landlord acknowledges that
Tenant shall use, in compliance with applicable Environmental Laws, customary
household and office supplies (Tenant shall first provide Landlord with a list
of said materials use), such as mild cleaners, lubricants and copier toner. Any
and all of Tenant's Hazardous Materials Activities shall be conducted in
conformity with this Xxxxxxxxx 00, Xxxxxxxxx 14 of this Lease, and in compliance
with all Environmental Laws and regulations. As used herein, the term "Tenant's
Hazardous Materials Activities" shall mean any and all use, handling,
generation, storage, disposal, treatment, transportation, release, discharge, or
emission of any Hazardous Materials on, in, beneath, to, from, at or about the
Property, in connection with Tenant's use of the Property, or by Tenant or by
any of Tenant's agents, employees, contractors, vendors, invitees, visitors or
its future subtenants or assignees or other third parties (including "dumping"
by others) (or which Hazardous Materials originate on the surface of the
Premises any time after November 1, 1995, the date of the Option Agreement
related to said Lease, and before the Commencement Date of this Lease, but
excluding Hazardous Materials on the Premises prior to the Lease Commencement
Date because of the storage, use, disposal, or transportation of such materials
or waste by any of Landlord's contractors or otherwise arising out of
construction work performed by or under the direction of Landlord on the
Premises and Landlord shall be responsible for all required actions with respect
to such materials or wastes). Tenant agrees to provide Landlord with prompt
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written notice of any spill or release of Hazardous Materials at the Property
during the term of the Lease of which Tenant becomes aware, and further agrees
to provide Landlord with prompt written notice of any violation of Environmental
Laws in connection with Tenant's Hazardous Materials Activities of which Tenant
becomes aware. If Tenant's Hazardous Materials Activities involve Hazardous
Materials other than normal use of customary household and office supplies,
Tenant also agrees at Tenant's expense: (i) to install such Hazardous Materials
monitoring, storage and containment devices as may be required by Environmental
Laws, regulations and/or governing agencies; (ii) to provide Landlord with a
written inventory of such Hazardous Materials, including an update of same each
year upon the anniversary date of the Commencement Date of the Lease
("Anniversary Date"); and (iii) on each Anniversary Date to provide to Landlord
copies of all documentation and records, required by applicable Environmental
Laws to be prepared and submitted to governmental authorities, relating to use
at the Property of Hazardous Materials or to Tenant's Hazardous Materials
Activities, if any. If upon completion of Landlord's review of said
documentation and records, Landlord reasonably questions if Tenant is in
compliance with all applicable Environmental Laws with respect to Tenant's
Hazardous Materials Activities, Tenant agrees within thirty (30) days following
receipt of written notice from Landlord, to retain a qualified environmental
consultant, acceptable to Landlord, to evaluate whether Tenant is in compliance
with all applicable Environmental Laws with respect to Tenant's Hazardous
Materials Activities. Tenant, at its expense, shall submit to Landlord a report
from such environmental consultant which discusses the environmental
consultant's findings within two (2) months of each Anniversary Date. Tenant, at
its expense, shall promptly undertake and complete any and all steps necessary,
and in full compliance with applicable Environmental Laws, to fully correct any
and all problems or deficiencies identified by the environmental consultant, and
promptly provide Landlord with documentation of all such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at its
expense, shall (i) properly remove from the Property all Hazardous Materials
which come to be located at the Property in connection with Tenant's Hazardous
Materials Activities, and (ii) fully comply with and complete all facility
closure requirements of applicable Environmental Laws regarding Tenant's
Hazardous Materials Activities, including but not limited to (x) properly
restoring and repairing the Property to the extent damaged by such closure
activities, and (y) obtaining from the local Fire Department or other
appropriate governmental authority with any legal or regulatory jurisdiction a
written concurrence that closure has been completed in compliance with
applicable Environmental Laws. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any such closure activities.
D. If Landlord, upon consultation with Tenant, reasonably concludes
that the Property has become contaminated as a result of Tenant's Hazardous
Materials Activities, Landlord in addition to any other rights it may have under
this Lease or under Environmental Laws or other laws, may enter upon the
Property and conduct inspection, sampling and analysis, including but not
limited to obtaining and analyzing samples of soil and groundwater, for the
purpose of determining the nature and extent of such contamination except to the
extent that such activities may be inconsistent with Tenant's compliance with
Environmental Laws. Tenant shall promptly reimburse Landlord for the costs of
such an investigation, including but not limited to reasonable attorneys' fees
Landlord incurs with respect to such investigation to the extent, and only to
the extent, that it that discloses Hazardous Materials contamination for which
Tenant is liable under this Lease. Except as may be required of Tenant by
applicable Environmental Laws, Tenant shall not perform any sampling, testing,
or drilling to identify the presence of any Hazardous Materials at the Property,
without Landlord's prior written consent which shall not be unreasonably
withheld. Tenant shall promptly provide Landlord with copies of any claims,
notices, work plans, data and reports prepared, received or submitted in
connection with any sampling, testing or drilling performed pursuant to the
preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel acceptable to
Landlord, whose consent shall not unreasonably be withheld) and hold harmless
Landlord, its employees, assigns, successors, successors-in-interest, agents and
representatives from and against any and all claims (including but not limited
to third party claims from a private party or a government authority),
liabilities, obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including but not
limited to reasonable attorneys', consultants' and other experts' fees and
costs), and damages, which arise from or relate to: (i) Tenant's Hazardous
Materials Activities; (ii) any Hazardous Materials contamination caused by
Tenant prior to the
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Commencement Date of the Lease; or (iii) the breach of any obligation of Tenant
under this Paragraph 44 (collectively, "Tenant's Environmental
Indemnification"). Tenant's Environmental Indemnification shall include but is
not limited to the obligation to promptly and fully reimburse Landlord for
losses in or reductions to rental income, and diminution in fair market value of
the Property. Tenant's Environmental Indemnification shall further include but
is not limited to the obligation to diligently and properly implement to
completion, at Tenant's expense, any and all environmental investigation,
removal, remediation, monitoring, reporting, closure activities, or other
environmental response action as may be required by applicable Environmental
Laws, regulations or governing agencies (collectively, "Response Actions").
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
Response Actions.
F. Landlord hereby makes the following representations to Tenant, each
of which is made only to the best of Landlord's knowledge as of the date
Landlord executes this Lease, without any inquiry or investigation having been
made or required by Landlord regarding this subject, nor does Landlord have any
obligation to investigate or make inquiry regarding the subject:
(1) The soil and ground water on or under the Premises does
not contain Hazardous Materials in amounts which violate any laws to the extent
that any governmental entity could require either Landlord or Tenant to take any
remedial action with respect to such Hazardous Materials.
(2) During the time that Landlord has owned the Premises,
Landlord has received no notice of (i) any violation, or alleged violation, of
any law that has not been corrected to the satisfaction of the appropriate
authority, (ii) any pending claims relating to the presence of Hazardous
Material on the Premises, or (iii) any pending investigation by any governmental
agency concerning the Premises relating to Hazardous Materials.
G. Landlord and Tenant shall each give written notice to the other as
soon as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials which relates to the
Premises, and (ii) any contamination of the Premises by Hazardous Materials
which constitutes a violation of any law. Attached as Exhibit "D" hereto is a
list of Hazardous Materials that Tenant intends to use at the Premises. If
during the Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the Hazardous
Materials and the manner of their use, storage and disposal, and shall agree (i)
to use, store and dispose of such Hazardous Materials strictly in compliance
with all laws, regulations and governing agencies and (ii) that the indemnity
set forth in Paragraph 44 shall be applicable to Tenant's use of such Hazardous
Material.
H. Landlord or Tenant may, at any time, cause testing xxxxx to be
installed on the Premises, and may cause the ground water to be tested to detect
the presence of Hazardous Material by the use of such tests as are then
customarily used for such purposes. Testing xxxxx installed by Tenant shall be
paid for by Tenant. If tests conducted by Landlord disclose that Tenant has
violated any Hazardous Materials laws, or Tenant or parties on the Premises
during the Term of this Lease have contaminated the Premises as determined by
regulatory agencies pursuant to Hazardous Materials laws, or that Tenant has
liability to Landlord pursuant to Paragraph 44A, then Tenant shall pay for 100
percent of the cost of the test and all related expense. Prior to the expiration
of the Lease Term, Tenant shall remove any testing xxxxx it has installed at the
Premises, and return the Premises to the condition existing prior to the
installation of such xxxxx, unless Landlord requests in writing that Tenant
leave all or some of the testing xxxxx in which instance the xxxxx requested to
be left shall not be removed.
I. If any tests performed by Tenant or Landlord prior to the
Commencement Date disclose Hazardous Materials at the Premises, Landlord at its
expense will promptly take all reasonable action required by law with respect to
the existence of such Hazardous Materials at the Premises. The Commencement Date
shall not be delayed because of such action by Landlord unless occupation of the
Premises is prohibited by law.
J. The obligations of Landlord and Tenant under this Paragraph 44 shall
survive the expiration or earlier termination of the Term of this Lease. The
rights and obligations of Landlord and Tenant with respect to issues relating to
Hazardous Materials are exclusively established by this
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Paragraph 44.
45. APPROVALS: Whenever this Lease requires the approval or consent of either
Landlord or Tenant before an action may be taken, such approval or consent shall
not be unreasonably withheld or delayed.
46. LANDLORD'S RIGHT TO TERMINATE: It is understood that the Premises to be
leased by Tenant are to be constructed by Landlord, and that Landlord is
required to obtain the necessary building permits for the building shell before
construction of said Premises can commence. Therefore, it is agreed that in the
event Landlord cannot obtain all the necessary building permits for the building
shell by December 31, 1997, then either Landlord or Tenant can terminate this
Lease by written notice to the other party given within thirty (30) days
thereafter, without any liability to the other party of any type whatsoever, and
that this Lease Agreement shall be null and void as of the date of receipt of
such notice. Landlord agrees to use its best efforts to obtain the required
permits by December 31, 1997.
47. CROSS DEFAULT: As set forth in Paragraph 40C, Landlord and Tenant have
entered an Option Agreement related to Building 7. In the event Tenant exercises
its option to lease Building 7, and as a material part of the consideration for
the execution of this Lease by Landlord, it is agreed between Landlord and
Tenant that a default under this Lease, or a default under the Building 7 Lease
may, at the option of Landlord, be considered a default under both leases, in
which event Landlord shall be entitled (but in no event required) to apply all
rights and remedies of Landlord under the terms of one lease to both of the
Leases including, but not limited to, the right to terminate the Building 7
Lease or this Lease by reason of a default under the Building 7 Lease or
hereunder.
48. ADDRESS FOR LEASED PREMISES: It is understood that the address for the
Premises will be assigned by the City of Milpitas (the "City") upon issuance of
a building permit for the Interior Improvements. Once the address has been
assigned to the Premises by the City, this Lease shall thereafter be amended to
reflect the assigned address for the Premises leased hereunder.
49. HETCH-HETCHY LAND: Landlord hereby assigns to Tenant during the Term of this
Lease, all of Landlord's right, title, and interest, in and to the property
owned by the City and County of San Francisco shown in Orange on Exhibit A
attached hereto, and Tenant hereby assumes all responsibilities and liabilities
(including, but not limited to a fee and/or tax for the right to use said
property including any use provided for in the Deed attached hereto as Exhibit
E) that may be imposed by the City and County of San Francisco pertaining to
their property and Tenant's use and occupancy thereof. Tenant's right to use the
area outlined in Orange will continue until this right to use said property is
revoked or terminated by the City and County of San Francisco, at which time
said property outlined in Orange belonging to the City and County of San
Francisco will no longer be available for Tenant's use, and this lease will
continue in full force and effect excluding Tenant's right to use the property
outlined in Orange on Exhibit A attached hereto.
Tenant's use of the property owned by the City and County of San
Francisco shall be governed by the terms and conditions of the Deed dated
February 5, 1951 between Xxxxx Xxxxx Takeda and Xxxxxx Xxxxx Takeda, as
Grantors, and the City and County of San Francisco, as Grantee (the "Deed").
Said Deed is attached hereto as Exhibit E. Among the provisions of said Deed is
the restriction that the property shall not be used for parking, and Tenant
understands that at no time during the Term of the Lease shall Tenant be allowed
to use said property for parking.
Notwithstanding the foregoing, Tenant may use the Hetch-Hetchy Land for
such additional uses as may not be permitted in the Deed provided Tenant (i)
obtains the written permission from the City and County of San Francisco to do
so in form reasonably acceptable to landlord, (ii) removes the "bridge" which is
contemplated to go over said Hetch-Hetchy Land if requested by the City and
County of San Francisco and/or if Landlord requires said "bridge" to be removed
by the Lease Termination Date, (iii) pays all costs and expenses imposed by the
City and County of San Francisco in connection with such permission and use, and
(iv) Tenant indemnifies and holds harmless Landlord from any loss.
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expense, cost, claim, or liability arising in connection with such permission or
any use pursuant to such permission of the Hetch-Hetchy Land undertaken by
Tenant, its agents, employees, contractors, invitees, visitors, subtenants
and/or assignees. Landlord and Tenant agree that if the City of Milpitas will
not issue a building permit for Building 6 in the configuration and location for
which it is designed as of the date of this Lease because of the proximity to
the Hetch-Hetchy Land or for any other reason, then Tenant shall have the option
to cause Building 6 to be relocated on the land and redesigned in a new
configuration acceptable to the City, Landlord and Tenant, provided the square
footage of the relocated and redesigned building is no less than approximately
182,355 square feet and the parking allocation is not reduced due to said
redesign and/or relocation.
50. SECURITY DEPOSIT: The following provisions shall modify Paragraph 4G:
A. Within thirty (30) days after the expiration or earlier termination
of the Lease term and after Tenant has vacated the Premises, Landlord shall
return to Tenant the entire Security Deposit except for amounts that Landlord
has deducted therefrom that are needed by Landlord to cure defaults of Tenant
under the Lease or compensate Landlord for damages for which Tenant is liable
pursuant to this Lease. The use or disposition of the Security Deposit shall be
subject to the provisions of California Civil Code Section 1950.7.
B. During the first thirty (30) days following execution of this Lease
Agreement, and only during said thirty day period, Tenant shall have the
one-time option of satisfying its obligation with respect to an amount equal to
one-half (1/2) ($355,592.25) of the $711,184.50 Security Deposit required under
Paragraph 4.G. by providing to Landlord, at Tenant's sole cost, a letter of
credit which: (i) is drawn upon an institutional lender reasonably acceptable
and accessible to Landlord in form and content reasonably satisfactory to
Landlord; (ii) is in the amount of one-half (1/2) of the Security Deposit; (iii)
is for a term of at lease twelve (12) months; (iv) with respect to any letter of
credit in effect within the six month period immediately prior to the expiration
of the Lease term, shall provide that the term of such letter of credit shall
extend at least forty five (45) days past the Lease expiration date (including
any extensions thereof); and (v) may be drawn upon by Landlord upon submission
of a declaration of Landlord that Tenant is in default (as defined in Paragraph
19 and as modified by Paragraph 59). Landlord shall not be obligated to furnish
proof of default to such institutional lender, and Landlord shall only be
required to give the institutional lender written notification that Tenant is in
default and upon receiving such written notification from Landlord the
institutional lender shall be obligated to immediately deliver cash to Landlord
equal to the amount Landlord may spend or become obligated to spend by reason of
Tenant's default or to compensate Landlord for any loss or damage which Landlord
may suffer by reason of Tenant's default up to 1/2 of the total Security Deposit
required under Paragraph 4.G. Said letter of credit shall provide that if the
letter of credit is not renewed, replaced or extended within twenty (20) days
prior to its expiration date the issuer of the credit shall automatically issue
a cashiers check payable to Landlord in the amount of the letter of credit after
the date which is twenty (20) days before the expiration date, and no later than
the expiration date, without Landlord being required to make demand upon the
letter of credit. If Tenant provides Landlord with a letter of credit, within
thirty (30) days of the execution of this Lease, meeting the foregoing
requirements, one-half (1/2) of the cash Security Deposit (i.e., $355.592.25 of
the $711.184.50 Security Deposit) shall be returned to Tenant by Landlord
inasmuch as the cash deposit remaining and the Letter of Credit equal the total
Security Deposit required in Paragraph 4G. If Tenant defaults with respect to
any provisions of this Lease, including but not limited to provisions relating
to the payment of Rent, Landlord may (but shall not be required to) draw down on
the letter of credit for payment of any sum which Landlord may spend or become
obligated to spend by reason of Tenant's default, or to compensate Landlord for
any loss or damage which Landlord may suffer by reason of Tenant's default.
Landlord and Tenant acknowledge that such letter of credit will be treated as if
it were a cash security deposit, and such letter of credit may be drawn down
upon by Landlord upon demand and presentation of evidence of the identity of
Landlord to the issuer, in the event that Tenant defaults with respect to any
provision of this Lease and such default is not cured within any applicable cure
period. Notwithstanding anything to the contrary in this Lease, Landlord shall
not be obligated to furnish proof of default to such institutional lender and
Landlord is only required to give the institutional lender written notification
that Tenant is in default and upon receiving such written notification from
Landlord the institutional lender shall be obligated to immediately deliver cash
to Landlord equal to the amount Landlord may spend or become obligated to spend
by reason of Tenant's default, or to compensate Landlord for any loss or damage
which Landlord may suffer by reason of
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Tenant's default up to 1/2 of the total Security Deposit. Landlord acknowledges
that it is not entitled to draw down such letter of credit unless Landlord would
have been entitled to draw upon the cash security deposit pursuant to the terms
of Paragraph 4G of the Lease. Concurrently with the delivery of the required
information to the issuer, Landlord shall deliver to Tenant written evidence of
the default upon which the draw down was based, together with evidence that
Landlord has provided to Tenant the written notice of such default which was
required under the applicable provision of the Lease, and evidence of the
failure of Tenant to cure such default within the applicable grace period
following receipt of such notice of default. Any proceeds received by Landlord
by drawing upon the letter of credit shall be applied in accordance with the
provisions governing the Security Deposit imposed by Paragraph 4G and this
Paragraph 50. If Landlord draws upon the letter of credit, thereafter Tenant
shall once again have the right to post a letter of credit in place of one-half
(1/2) of a cash Security Deposit so long as Tenant is not then in default. In
any event Tenant will be obligated to replenish the amount drawn to restore the
Security Deposit to its original amount as provided for in Paragraph 4G. If any
portion of the letter of credit is used or applied pursuant hereto, Tenant
shall, within ten (10) days after receipt of a written demand therefor from
Landlord, restore and replace the value of such security by either (i)
depositing cash with Landlord in the amount equal to the sum drawn down under
the letter of credit, or (ii) increasing the letter of credit to its value
immediately prior to such application. Tenant's failure to replace the value of
the security as provided in the preceding sentence shall be a material breach of
its obligation under this Lease.
51. ALTERATIONS MADE BY TENANT: The provisions of this Paragraph 51 shall modify
Paragraphs 5 and 6:
A. As used herein, the term "Alteration" shall mean any alteration,
addition or improvement made by Tenant to the Premises during the term of the
Lease, but shall not include Tenant's trade fixtures so long as such trade
fixtures are not installed in such a manner that they have become an integral
part of the building.
B. Tenant shall not construct any Alterations or otherwise alter the
Premises without Landlord's prior written approval: (i) if Tenant is in default
under this Lease or any of the Existing Leases, or (ii) if Tenant is not in
default under this Lease or the Building 7 Lease (if Tenant has exercised its
Option to lease Building 7) and if the total cost of such Alterations exceeds
$20,000 per the scope of any single remodeling job to the Premises, or if such
Alteration is structural in nature and provided Tenant gives Landlord notice of
the planned alterations and a 1/8" scale sepia reflecting said alterations ten
(10) business days prior to the commencement of construction of said
alterations. Any other non-structural Alteration of less than $20,000 for the
total cost of the remodeling job may be undertaken by Tenant without Landlord's
prior written approval, except as noted herein, but with the understanding that
Tenant shall be obligated to restore the Premises as set forth in Paragraph 5 at
the termination of this Lease, except as otherwise provided in Paragraph 51.D.
Notwithstanding the foregoing, Tenant shall have the right to reconfigure
modular freestanding walls and partitions without Landlord's prior consent,
which are not part of the original Interior Improvements shown on Exhibit B and
which have been installed by Tenant and paid for by Tenant. Notwithstanding the
above, Tenant shall not have the right, without Landlord's prior written
consent, to remove any floor-to-ceiling partitions within the Premises.
C. At all times during the Lease Term (i) Tenant shall maintain and
keep up dated "as-built" plans for all Alterations constructed by Tenant, and
(ii) Tenant shall provide to Landlord copies of such "as-built" plans as such
Alterations are made.
D. Provided Tenant is not in default under this Lease or under any of
the Existing Leases, Tenant shall have the right to remove at any time during
the Lease term or prior to the expiration thereof any process equipment such as
clean hoods, thermal cycling xxxxxxxx, freon piping, high temperature furnaces,
air handlers, which equipment the parties agree for the purposes of this Lease
shall be deemed to be trade fixtures, so long as Tenant repairs all damage
caused by the installation and/or removal thereof, returns the Premises prior to
the termination of the Lease to the condition existing prior to the installation
of such item, and repairs and restores any so-called "doughnuts" or gaps in the
roof and/or floor tiles and/or ceiling and lighting resulting from such
installation and/or removal. At the time Tenant requests the consent of Landlord
to approve the installation of an Alteration requiring the consent of Landlord,
Tenant shall seek from Landlord a written statement of
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whether or not Landlord will require Tenant to remove such Alteration and
restore all or part of the Premises as required by Landlord in accordance with
this paragraph and Paragraph 5 at the expiration or earlier termination of the
term of the Lease. If Tenant does not obtain from Landlord a statement in
writing that Landlord will not require such Alteration to be removed, then at
the expiration or sooner termination of the term of the Lease, it is agreed that
Tenant may be required by Landlord to remove all or part of such Alterations,
and return the Premises to the condition existing prior to the installation of
such Alterations as provided for in Paragraph 5 above. In addition, if Tenant
has installed Alterations without Landlord's consent, if Landlord so requires,
Tenant shall also remove all or part of such Alterations so installed without
Landlord's consent as Landlord may designate and return the Premises to the
condition existing prior to the installation of such Alteration. Alterations for
which Landlord has given its written consent to Tenant that such Alteration need
not be removed, shall not be removed by Tenant at the expiration or earlier
termination of the term of the Lease.
E. At all times during the term of the Lease, Tenant shall have the
right to install and remove trade fixtures as defined in the Lease and installed
and paid for by Tenant, so long as Tenant repairs all damage caused by the
installation and removal thereof and returns the Premises to the condition
existing prior to the installation of such fixtures and repairs and restores any
so called "doughnuts" or gaps in the roof and/or floor (including floor
structure, sub-floor and appropriate floor covering for said area) and/or floor
tiles, and/or ceiling tiles, wall damage and lighting resulting from such
removal.
F. Notwithstanding anything to the contrary herein, Tenant shall be one
hundred percent (100%) responsible and liable for obtaining any and all permits
(and the cost related thereto) required by the governing agencies for any and
all alterations and/or modifications Tenant makes to the Leased Premises.
52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE
COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT'S USES OR REMODELING
OF THE PREMISES: The provisions of this Paragraph 53 shall modify Paragraphs 7
and 14:
A. If during the last five (5) years of the term of the Lease if Tenant
has not extended the Lease as provided for in Paragraphs 41 and 42, or during
either of the five (5) year extension periods permitted by Paragraphs 41 and 42
or Paragraph 40.C., it becomes necessary (due to any governmental requirement
for continued occupancy of the Premises) to make structural improvements
required by laws enacted or legal requirements imposed by governmental agency(s)
after the Commencement Date, and the cost for each required work or improvements
exceeds $100,000, then if such legal requirement is not imposed because of
Tenant's specific use of the Premises and is not "triggered" by Tenant's
Alterations or Tenant's application for a building permit or any other
governmental approval (collectively "Tenant's Actions") in which instance Tenant
shall be responsible for 100% of the cost of such improvements, Landlord shall
be responsible for paying the cost of such improvement and constructing such
improvement, subject to a cash contribution from Tenant of a portion of the cost
thereof as provided for and calculated in Paragraph 52B.
B. When Landlord makes an improvement pursuant to Paragraph 52A, and as
a condition to Landlord's obligation to construct such improvement, Tenant shall
make the following contribution in cash to Landlord for the cost thereof prior
to the commencement of the work by Landlord. It is agreed that Tenant shall pay
to Landlord 100% of the cost of the first $100,000.00 worth of each improvement.
After the first $100,000.00, all costs above $100,000.00 shall be divided by 15
and multiplied by the time period remaining in the last five years of the Lease
term from the date work on such improvement commences.
For example, if the improvement is not required as a result of Tenant's
Actions and if the cost of such improvement was $400,000 and there was one year
and six months remaining in the Lease term when the work commenced, then Tenant
would be responsible for reimbursing Landlord in cash
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$130,000.00 computed as follows:
Total Cost of Work $4O0,000.00
Tenant Responsible for
1st $100,000 -100,000.00
-----------
Total Amount To Be Amortized $300,000.00
$300,000.00/15 = $20,000.00/yr. x 1.5 yrs = $ 30,000.00
Tenant responsible for $100,000 + $30,000.00 = $130,000.00
C. If Landlord has made improvements, for which Tenant has reimbursed
Landlord for the cost thereof pursuant to Xxxxxxxxx 00X, and the term of this
Lease is subsequently extended pursuant to the exercise by Tenant of an option
to renew pursuant to Paragraph 41, or 42, upon the exercise of any such option
by Tenant, Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by Tenant. Using
the example in Paragraph 52B above, Tenant would owe Landlord the additional
amount of $270,000.00 ($400,000.00 - $130,000.00 = $270,000.00).
53. REAL PROPERTY TAXES: Paragraph 9 is modified by the following:
A. The term "Real Property Taxes" shall not include charges, levies or
fees directly related to the use, storage, disposal or release of Hazardous
Materials on the Premises unless directly related to Tenant's Activities at this
site or on other sites leased and/or owned by Tenant; however, Tenant shall be
responsible for general or special tax and/or assessments (related to Hazardous
Materials and/or toxic waste) imposed on the Property provided said special tax
and/or assessment is not imposed due to on-site originated contamination on the
Property (by third parties not related to Tenant) prior to the Lease
Commencement Date. Subject to the terms and conditions stated herein, Tenant
shall be responsible for paying one hundred percent (100%) of said taxes and/or
assessments allocated to the Property.
B. If any assessments for public improvements are levied against the
Premises, Landlord may elect either to pay the assessment in full or to allow
the assessment to go to bond. If Landlord pays the assessment in full, Tenant
shall pay to Landlord or any assignee or purchaser of the Premises each time
payment of Real Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the assessment to
go to bond.
C. Tenant at its cost shall have the right, at any time, to seek a
reduction in the assessed valuation of the Premises or to contest any Real
Property Taxes that are to be paid by Tenant. If Tenant seeks a reduction or
contests such Real Property Taxes, the failure on Tenant's part to pay such Real
Property Taxes being so contested shall not constitute a default so long as
Tenant complies with the provisions of this Paragraph. Landlord shall not be
required to join in any proceeding or contest brought by Tenant unless the
provisions of any law require that the proceeding or contest be brought by or in
the name of Landlord. In that case Landlord shall join in the proceedings or
contest or permit it to be brought in Landlord's name as long as Landlord is not
required to bear any cost. Tenant, on final determination of the proceeding or
contest, shall immediately pay or discharge its share of any Real Property Taxes
determined by any decision or judgment rendered, together with all costs,
charges, interest, and penalties incidental to the decision or judgment. If
Tenant does not pay the Real Property Taxes when due pursuant to the Lease and
Tenant seeks a reduction or contests them as provided in this paragraph, before
the commencement of the proceeding or contest Tenant shall furnish to Landlord a
surety bond in form reasonably satisfactory to Landlord issued by an insurance
company qualified to do business in California. The amount of the bond shall
equal 125% of the total amount of Real Property Taxes in dispute and any such
bond shall be assignable to any lender or purchaser of the Premises. The bond
shall hold Landlord and the Premises harmless from any damage arising out of the
proceeding or contest and shall insure the payment of any judgment that may be
rendered.
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54. PROPERTY INSURANCE: Paragraph 12 is modified by the following:
A. If Tenant so elects, Tenant may obtain from a third party insurance
company the insurance required to be carried by Landlord pursuant to Paragraph
12 so long as each of the following conditions is satisfied: (i) the Landlord is
not the Xxxx Xxxxxxxxx Survivor's Trust and/or the Xxxxxxx X. Xxxxx Separate
Property Trust or an affiliated entity or entities as the case may be; (ii) the
insurance to be carried by Tenant to satisfy this requirement strictly complies
with all of the provisions of Paragraph 12; (iii) such insurance shall name
Landlord as the insured and provide that it is to be payable to Landlord in the
same manner as if such insurance had been carried by Landlord pursuant to
Paragraph 12 (subject to the rights of any lender holding a mortgage or deed of
trust encumbering the Premises); (iv) each lender holding a mortgage or deed of
trust encumbering the Premises shall have given its written consent to Tenant
carrying such insurance and such insurance shall comply with the requirements of
any such lender; (v) Tenant must notify Landlord, by certified mail, no later
than one hundred eighty (180) days prior to the expiration date of Landlord's
insurance policy (which expiration date is currently 3/13/xx of a given year and
is subject to change; Landlord shall notify Tenant in the event Landlord's
insurance year changes) that Tenant will directly obtain the required insurance
coverage for the insurance year commencing 3/14/XX through 3/13/XX and each
insurance year through the termination date of this Lease, including any
extensions thereof, or until Tenant is no longer able to comply with all of the
provisions of this paragraph 55; (vi) the annual premium must be paid in full at
the commencement of the policy; (vii) the insurance policy must be issued for a
one-year period following the expiration date of Landlord's insurance policy
(i.e., from 3/14/XX to 3/13/XX; (viii) any and all deductibles required under
the policy will be paid entirely by Tenant; (ix) the terms of the coverage must
be broad form and cover all items to be covered as set forth in Paragraph 12 of
this Lease; (x) the Building and Premises must be insured for their full
replacement cost; (xi) the insurance policy containing the required coverage in
accordance with the provisions of this paragraph must be sent to Landlord for
retention within thirty (30) days prior to the expiration date of Landlord's
insurance policy, and may not be terminated or altered without thirty (30) days
written notice to Landlord by the company providing such insurance (it is agreed
that if the insurance policy is canceled or altered, Landlord will have the
right to obtain the property insurance coverage on said building, and Landlord
will xxxx the Tenant for the related insurance premium); and (xii) at all times
while Tenant is so carrying such insurance, Tenant is Quantum Corporation or a
successor entity and the then net worth of such corporation is equal to or
greater than the net worth of Quantum corporation as of the date of this Lease
is executed by Landlord and Tenant. Tenant shall provide such evidence as is
required by Landlord and any lender to establish that the insurance that Tenant
carries pursuant to this Paragraph 54 has been obtained and meets the
requirement of this Paragraph 54. Such insurance carried by Tenant shall be in
form and provided by an insurance company that is reasonably acceptable to
Landlord, which must be rated "A plus" or better by Best's Insurance Service (or
an equivalent rating from another rating agency should Best's no longer provide
such service). A copy of any such policy shall be delivered to Landlord. If
Tenant elects to insure and such insurance provided by Tenant does not satisfy
the requirements of Paragraph 12, in the event of a subsequent casualty, Tenant
shall be responsible for and shall pay for that portion of the restoration cost,
in excess of the insurance proceeds actually available, that would have been
covered by insurance satisfying the requirements of Paragraph 12.
55. ASSIGNMENT AND SUBLETTING: The following modifications are made to Paragraph
16:
A. In the event that Tenant seeks to make any assignment or sublease,
then Landlord, by giving Tenant written notice of its election within fifteen
(15) days after Tenant's notice of intent to assign or sublease has been given
to Landlord, shall have the right to elect (i) to withhold its consent to such
assignment or sublease, as permitted pursuant to Paragraph 1, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which
event Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the following shall
apply (except the following shall not apply to a "Permitted Transfer" described
in Paragraph 56):
(1) If Tenant assigns its interest in this Lease, then in
addition to the rental provided for in this Lease, Tenant shall pay to Landlord
fifty percent (50%) of all Rent and other consideration received by Tenant over
and above (i) the assignee's agreement to assume the obligations of Tenant under
this Lease and (ii) all "Permitted Transfer Costs" (as defined herein) related
to such assignment. As used herein, the term "Permitted Transfer Costs" shall
mean all reasonable leasing commissions
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paid to third parties not affiliated with Tenant in order to obtain the
assignment or Sublease in question.
(2) If Tenant sublets all or part of the Premises, then Tenant shall
pay to Landlord in addition to the Rent provided for in this Lease fifty percent
(50%) of the positive difference, if any, between (i) all rent and other
consideration paid or provided to Tenant by the subtenant, less (ii) all Rent
paid by Tenant to Landlord pursuant to this Lease which is allocable to the area
so sublet and all Permitted Transfer Costs related to such sublease. After
Tenant has recovered all Permitted Transfer Costs Tenant shall pay to Landlord
the amount specified in the preceding sentence on the same basis, whether
periodic or in lump sum, that such rent and other consideration is paid to
Tenant by its subtenant, within seven (7) days after it is received by Tenant.
(3) Tenant's obligations under this subparagraph shall survive any
assignment or sublease. At the time Tenant makes any payment to Landlord
required by this subparagraph, Tenant shall deliver an itemized statement of the
method by which the amount to which Landlord is entitled was calculated,
certified by Tenant as true and correct. Landlord shall have the right to
inspect Tenant's books and records relating to the payments due pursuant to this
subparagraph. Upon request therefor, Tenant shall deliver to Landlord copies of
all bills, invoices or other documents upon which its calculations are based.
(4) As used herein, the term "consideration" shall mean any
consideration of any kind received, or to be received (including, but not
limited to, services rendered and/or value received) by Tenant as a result of
the assignment or sublease, if such sums are paid or provided to Tenant for
Tenant's interest in this Lease or in the Premises.
(5) This Paragraph 55.A does not apply to a "Permitted Transfer", as
provided in Paragraph 56 hereof. The parties agree that if any of the following
transactions occur and do not qualify as "Permitted Transfers", Tenant must
obtain Landlord's consent to such transaction and if Landlord consents to any of
the following transactions which do not otherwise qualify as "Permitted
Transfers", then the provisions of this Paragraph 55.A shall not apply to the
following transactions: (i) a merger, consolidation or other reorganization in
which Tenant is not the surviving corporation so long as 95% of all assets and
liabilities of Tenant are permanently transferred to such assignee; and (ii) an
assignment of this Lease to a corporation which purchases or otherwise acquires
95% or more of the assets of Tenant so long as 95% of all assets and liabilities
of Tenant are permanently transferred to such assignee and Tenant remains liable
and responsible under the Lease to the extent Tenant continues in existence
following such transaction.
56. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding anything contained in
Paragraph 16, so long as Tenant otherwise complies with the provisions of
Paragraph 16 and the Permitted Transfer does not release Tenant from its
obligations hereunder, Tenant may enter into any of the following transfers (a
"Permitted Transfer") without Landlord's prior written consent, and the
provisions of Paragraph 55A shall not apply to any such Permitted Transfer:
A. Tenant may sublease all or part of the Premises or assign its
interest in this Lease to any corporation which controls, is controlled by, or
is under common control with Tenant by means of an ownership interest of more
than fifty percent (50%) providing Tenant remains liable for the payment of Rent
and full performance of the Lease;
B. Tenant may assign its interest in the Lease to a corporation which
results from a merger, consolidation or other reorganization in which Tenant is
not the surviving corporation so long as (i) 95% of all assets and liabilities
of Tenant are permanently transferred to such assignee, and (ii) immediately
prior to the merger, consolidation or other reorganization, the corporation into
which Tenant is to be merged has a net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or reorganization (whichever is greater), or
if it does not, Landlord is provided a guaranty of the Lease (in a form
reasonably acceptable to Landlord) from a corporation (a) that is the parent of,
or is otherwise affiliated with, the corporation into which Tenant is to be
merged, and (b) which has a current net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or reorganization (whichever is greater). In
the event there is not a permanent
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transfer of 95% or more of the assets and liabilities from Tenant to a third
party, and Tenant continues to exist as a separate entity, both companies shall
be jointly and severally liable for the full terms and conditions of the Lease;
C. Tenant may assign this Lease to a corporation which purchases or
otherwise acquires 95% or more of the assets of Tenant so long as 95% of all
assets and liabilities of Tenant are permanently transferred to such assignee
(in the event there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party and Tenant continues to exist as a
separate entity, both companies shall be jointly and severally liable for the
full terms and conditions of the Lease), and provided that immediately prior to
such assignment said corporation, has a net worth equal to or greater than the
net worth of Tenant (a) at the time of Lease execution or (b) at the time of
such assignment (whichever is greater), or if it does not, Landlord is provided
a guaranty of the Lease (in a form reasonably acceptable to Landlord) from a
corporation (a) that is the parent of, or is otherwise affiliated with, said
corporation and (b) which has a current net worth equal to or greater than the
net worth of Tenant at the time of Lease execution or at the time of such
assignment, (whichever is greater).
57. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that this
Lease shall not be subordinate to a mortgage or deed of trust unless the Lender
holding such mortgage or deed of trust enters into a written subordination,
non-disturbance and attornment agreement in which the Lender agrees that
notwithstanding any subordination of this Lease to such Lender's mortgage or
deed of trust, (i) such Lender shall recognize all of Tenant's rights under this
Lease, and (ii) in the event of a foreclosure this Lease shall not be terminated
so long as Tenant is not in material default of its obligations under this
Lease, but shall continue in effect and Tenant and such Lender (or any party
acquiring the Premises through such foreclosure) shall each be bound to perform
the respective obligations of Tenant and Landlord with respect to the Premises
arising after such foreclosure.
58. LANDLORD'S RIGHT TO ENTER: Notwithstanding the provisions of Paragraph 18,
(i) except in the event of an emergency, Landlord shall give Tenant twenty-four
(24) hours notice prior to entering the Premises, agrees to comply with any
reasonably safety and/or security regulations imposed by Tenant with respect to
such entry, and shall only enter the Premises when accompanied by Tenant or its
agent (so long as Tenant makes itself reasonably available for this purpose),
and (ii) Landlord may install "for lease" signs relating to the Premises only
during the last 150 days of the Lease term. Landlord agrees to use its
reasonable, good faith efforts such that any entry by Landlord, and Landlord's
agents, employees, contractors and invitees shall be performed in a manner with
as minimal interference as possible with Tenant's business at the Premises.
Subject to the foregoing, Tenant agrees to cooperate with Landlord and
Landlord's agents, employees and contractors so that responsibilities of
Landlord under the Lease can be fulfilled in a reasonable manner during normal
business hours so that no extraordinary costs are incurred by Landlord.
59. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with
respect to nonmonetary defaults not involving Tenant's failure to pay Basic Rent
or Additional Rent, Tenant shall not be in default of any non-monetary
obligation if (i) more than thirty (30) days is required to cure such
non-monetary default, and (ii) Tenant commences cure of such default as soon as
reasonably practicable after receiving written notice of such default from
Landlord and thereafter continuously and with due diligence prosecutes such cure
to completion.
60. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be in
default under the Lease if it leaves all or any part of Premises vacant so long
as (i) Tenant is performing all of its other obligations under the Lease
including the obligation to pay Basic Rent and Additional Rent (ii) Tenant
provides on-site security during normal business hours for those parts of the
Premises left vacant, (iii) such vacancy does not materially and adversely
affect the validity or coverage of any policy of insurance carried by Landlord
with respect to the Premises, and (iv) the utilities and heating and ventilation
system are operated to the extent necessary to prevent damage to the Premises or
its systems.
NHC
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61. DESTRUCTION: Paragraph 21 is modified by the following:
A. Notwithstanding anything to the contrary within Paragraph 21,
Landlord may terminate this Lease in the event of an uninsured event or if
insurance proceeds, net of the deductible, are insufficient to cover one hundred
percent of the rebuilding costs; provided, however, Tenant shall have the right
to elect, in its discretion, to contribute such excess funds to permit Landlord
to repair the Premises.
B. Except as provided in Xxxxxxxxx 00X, Xxxxxxxx may not terminate the
Lease if the Premises are damaged by a peril whereby the cost to replace and/or
repair is one hundred percent (100%) covered by the insurance carried by
Landlord pursuant to Paragraph 12, but instead shall restore the Premises in the
manner described by Paragraph 21.
C. If the Premises are damaged by a peril covered by the insurance
carried by Landlord pursuant to Xxxxxxxxx 00, Xxxxxxxx shall have the option to
terminate the Lease if each of the following conditions is satisfied: (i) the
cost to repair or the damage exceeds thirty-three percent (33%) of the then
replacement cost of the Premises; and (ii) the damage occurs at a time when
there is less than five (5) years remaining in the term of the Lease.
Notwithstanding the foregoing, if such damage occurs at a time when there is
less than five (5) years remaining in the term of the Lease and Landlord
notifies Tenant of Landlord's election to terminate the Lease pursuant to the
provisions of this Paragraph 6lB, if Tenant has the right to extend the term of
this Lease pursuant to either Paragraph 41 or 42 such that the remaining term of
the Lease (including the option period) will be more than five (5) years
following the date of such damage, this Lease shall not terminate if Tenant
notifies Landlord in writing of Tenant's exercise of an option to extend granted
to Tenant by either Paragraph 41 or 42. In such event, this Lease shall not
terminate, the term shall be so extended, and Landlord shall restore the
Premises in the manner provided in Paragraph 21.
D. If Landlord fails to obtain insurance as required pursuant to
Paragraph 12, and said insurance would have been available to cover any damage
or destruction to the Premises, Landlord shall be required to rebuild, at its
cost, net of the deductible which would have been required under said insurance
policy (which deductible Tenant is required to pay).
E. If the Premises are damaged by any peril, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the written opinion of
Landlord's architect or construction consultant as to when the restoration work
required of Landlord may be completed. Tenant shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised only by delivery to Landlord of a written notice of election to
terminate within seven (7) days after Tenant receives from Landlord the estimate
of the time needed to complete such restoration:
(1) The Premises are damaged by any peril (not caused by or
resulting from an action of Tenant or Tenant's agents, employees, contractors or
invitees) and, in the reasonable opinion of Landlord's architect or construction
consultant, the restoration of the Leased Premises cannot be substantially
completed within 180 days after the date of such damage (subject to force
majeure conditions); or
(2) The Premises are damaged by any peril (not caused by or
resulting from an action of Tenant or Tenant's agents, employees, contractors or
invitees) within twelve (12) months of the last day of the Lease term and
provided Tenant has not exercised an option to renew pursuant to the provisions
of Paragraph 41 or 42, and, in the reasonable opinion of Landlord's architect or
construction consultant, the restoration of the Leased Premises cannot be
substantially completed within sixty (60) days after the date of such damage and
Tenant has not exercised its Option to Extend said Term (or Extended Term as the
case may be).
62. EMINENT DOMAIN: Paragraph 22 is modified by the following:
Landlord may not terminate the Lease if less than one third (1/3) of
the building is taken by condemnation or if a taking by condemnation is only
threatened.
NHC
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Page 16
63. TRANSFER BY LANDLORD: The provisions of Paragraph 23 of the Lease to the
contrary notwithstanding, Landlord shall not be relieved of its obligations
under the Lease which may accrue after the date of a sale or other transfer
unless and until (i) the transferee agrees to assume and be bound by the terms
of this Lease and to perform all obligations of the Landlord under the Lease
which may accrue after the date of such transfer, and (ii) Landlord transfers
the cash balance of the Security Deposit (net of any offsets used to cure
defaults under the Lease) to its successor in interest (transferee) in
accordance with the provisions of California Civil Code Section 1950.7, as
amended or recodified.
64. LANDLORD'S LIEN WAIVER: Landlord, within thirty (30) days after demand from
Tenant, shall execute and deliver such lien waiver documents that are reasonably
required by any supplier, lessor, or lender in connection with the installation
in the Premises of the Tenant's personal property or trade fixtures providing
Landlord approves the form of any such waiver and Landlord's rights under this
Lease are not materially and adversely affected.
65. AUTHORITY TO EXECUTE. The parties executing this Lease Agreement hereby
warrant and represent that they are properly authorized to execute this Lease
Agreement and bind the parties on behalf of whom they execute this Lease
Agreement and to all of the terms, covenants and conditions of this Lease
Agreement as they relate to the respective parties hereto.
QUANTUM CORPORATION, XXXX XXXXXXXXX SURVIVOR'S
a Delaware corporation TRUST
By Xxxx Xxxxxxxxx
By /s/ Xxxxxx Xxxxxx -------------------------------------
------------------------------------- Xxxx Xxxxxxxxx, Trustee
Xxxxxx Xxxxxx, Vice President Finance
and Corporate General Counsel Date: 6/30/97
-------------------------------------
Date: June 25, 1997
-------------------------------------
XXXXXXX X. XXXXX SEPARATE
PROPERTY TRUST
By /s/ Xxxx Xxxxx
------------------------------------- By /s/ Xxxxxxx X. Xxxxx
Xxxx Xxxxx, Vice President Real Estate -------------------------------------
and Corporate Services Xxxxxxx X. Xxxxx, Trustee
Date: June 25, 1997 Date: 6/26/97
------------------------------------- -------------------------------------
Initial: __________
Lease 7
Building 7
OPTION AGREEMENT
THIS AGREEMENT dated April 16, 1997 by and between XXXX XXXXXXXXX,
Trustee, or his Successor Trustee, UTA dated 7/20/77 (XXXX XXXXXXXXX SURVIVOR'S
TRUST) as amended and XXXXXXX X. XXXXX, Trustee, or his Successor Trustee, UTA
dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST) as amended, hereinafter
called "Optionor", and QUANTUM CORPORATION, a Delaware corporation, hereinafter
called "Optionee".
WHEREAS, Optionor, as Lessor, and Optionee, as Lessee, have entered
into a Lease Agreement described as Lease 6, Building 6 for 182,355+/- square
feet of space, dated April 16, 1997, hereinafter referred to as the "Building 6
Lease". Said property covered by the Lease is located on Sumac Drive, Milpitas,
California, as shown within the area outlined in Orange on Exhibit "A" attached
hereto and by reference made a part hereof. The details of said Building 6 Lease
are more particularly described and set forth in the Building 6 Lease; and
WHEREAS, Optionor is willing to grant to Optionee the exclusive right
to lease from Optionor one (1) additional building on a parcel contiguous to the
parcel on which Building 6 is 1ocated for the use and occupancy by Optionee, if
Optionee elects to exercise said option, upon the terms and conditions set forth
herein;
NOW, THEREFORE, for the option consideration to be paid, receipt of
which is hereby acknowledged, and for the other consideration referred to
herein, the parties agree as follows:
ARTICLE I
GRANT OF OPTION TO LEASE
Provided that Optionee is not in material default of its obligations
(i) under the Building 6 Lease or if in material default has received written
notice of default from Optionor and such default has not been cured within the
period provided for in the Building 6 Lease (provided, however, if a
non-monetary default by Optionee under the Building 6 Lease cannot be cured, and
if Optionor does not elect to terminate the Building 6 Lease as a result of such
nonmonetary and non-curable default, Optionee may exercise the option provided
for herein), or (ii) under any provision of this Agreement or if in material
default has received written notice from Optionor of its intent to terminate
this Agreement because of such default and Optionee has failed to cure a default
in the payment of money within three (3) days after such notice or any other
default within ten (10) days after such notice, and subject to the provisions of
Article II, Optionor hereby grants to Optionee the exclusive right to lease that
certain real property consisting of approximately 12.297 acres of land, more or
less, located in the City of Milpitas, County of Santa Xxxxx, State of
California, and contained within the area outlined in Green on "Exhibit A"
attached hereto, and by reference made a part hereof (hereinafter referred to as
"Option Property"), on which Optionee shall have the option to lease additional
facilities from Optionor on the following terms and conditions:
A. OPTION PROPERTY: Said Option Property, consisting of approximately
12.297 acres, more or less, shall consist of one (1) separate (but not legally
subdivided) parcel of property, (APN 086-02-038) as shown on Exhibit "A", on
which a building (Building 7) of approximately 208,096+/- square feet shall be
constructed.
B. TERM OF OPTION: Optionee's option, as granted hereunder with respect
to the Option Property described above shall commence on the date of this Option
Agreement and shall terminate December 31, 1999 ("Option Period"), unless sooner
terminated, as provided for herein, and regardless of the commencement date of
the Building 6 Lease.
Initial: ALK JA NHC
------------
C. PUBLIC AGENCY REQUIREMENTS: The parties understand that the proposed
construction of the building on the Option Property is subject to any and all
requirements, now or in the future, of the City of Milpitas and/or County of
Santa Xxxxx, and/or City of San Xxxx, hereinafter individually and collectively
referred to as "Public Agency." It is agreed that in the event that the Public
Agency reduces the size of the option building (Building 7) and imposes land
rules and regulations affecting the Option Property to meet Public Agency
regulations and requirements, that the building to be constructed on the Option
Property shall be built as required to accommodate the requirements of the
Public Agency and the land use and/or entitlements pertaining thereto and that
this option shall be subject to all Public Agency requirements.
D. CONSIDERATION: As consideration for Optionor agreeing to the terms
hereof, Optionee agrees to pay, promptly, and prior to delinquency, all real
estate taxes and assessments assessed against the Option Property, from the
beginning of the Option Period through the termination date of this Agreement,
as they appear on the tax bills, provided, however, that if Optionee exercises
its option to lease, it is agreed that notwithstanding the foregoing, Optionee
shall continue to pay all real estate taxes and assessments attributable to the
Option Property through the commencement date of the lease of the Option
Property and will thereafter be responsible for paying all real estate taxes and
assessments as required under the new lease for the Option Property. For the
purpose of this Agreement, "real estate taxes and assessments" shall be defined
as set forth in Paragraph 9 of the Building 6 Lease. In addition, Optionee also
agrees to pay, on January 1, 1997, and on each anniversary date thereafter
during the Option Period, an amount equal to Ten Thousand and No/100 Dollars
($10,000) per acre per annum multiplied by the acreage contained within the
Option Property as additional consideration for this option. Optionee shall be
liable for the payment of the option consideration set forth above through the
termination of this option. Any payments to be made hereunder shall be prorated
accordingly to reflect the commencement and termination dates of this option.
For Example:
If the Option Property is 12.297 acres, then the additional option
consideration to be paid would be calculated as follows:
Option Property = 12.297 acres x $10,000.00/acre = $122,970.00, plus
real estate taxes and assessments
E. EXERCISE OF OPTION: Optionee shall exercise Optionee's right to
lease the Option Property by giving written notice to Optionor of Optionee's
exercise of this option at any time after execution of this Agreement by the
parties and prior to the expiration of the term of this option on December 31,
1999, unless the option is terminated earlier as provided for herein. Should
Optionee fail to timely exercise Optionee's option to lease the Option Property,
this Agreement shall be null and void, and Optionee shall have no further rights
under this Agreement, and Optionor shall be free to deal with third parties with
respect to the Option Property, without any obligation to Optionee whatsoever,
with Optionee remaining liable for payment of the option consideration as set
forth in Article I Section D above, through the termination date of this
Agreement.
F. LEASE TERMS IF OPTION TO LEASE IS TIMELY EXERCISED:
1. CONSTRUCTION OF NEW BUILDING AND INTERIOR IMPROVEMENTS: In
the event Optionee exercises its option, subject to Article I Section E on the
Option Property prior to the termination of the Option Period, Optionee will be
required to lease the entire building of approximately 208,096+/- square feet on
the Option Property, subject to any reduction as set forth in Article I Section
C above. The shell of the building to be erected by Optionor on the Option
Property in the event this option is exercised by Optionee shall be
architecturally compatible with, and of a quality of construction and type of
material used substantially the same as, the building provided for Optionee
pursuant to the Building 6 Lease.
Initial: ALK JA NHC
------------
-2-
The interior improvements (i.e., heating, lighting, electrical, plumbing, vinyl
tile and/or carpeted floors, acoustical suspended ceiling, interior partitioning
and doors, and the like) of the new building on the Option Property shall be
proportionately equal to the interior improvements under the Building 6 Lease
and Optionor will provide Optionee with a $25.00 per square foot Tenant
Improvement Allowance under the same basic terms and conditions as contained
within the Construction Letter attached hereto as Exhibit "B-2".
Notwithstanding any provisions to the contrary contained in the Construction
Letter attached as Exhibit "B-2" (subject to amendment related to the size of
the building and dates where appropriate), Optionor agrees to furnish to
Optionee, within sixty (60) days after Optionee's exercise of its option to
lease the Option Property, definitive shell plans for the building to be
constructed on the Option Property. As used herein, the term "definitive shell
plans" does not mean working drawings, but means and refers to shell design
plans showing such details as columns, windows, shear structure, "K" bases and
core area. Optionee agrees, within sixty (60) days after its receipt of such
definitive shell plans, to deliver to Optionor complete plans and specifications
for the interior improvements that Optionee wishes constructed in the new
building. If Optionee wishes to later change said plans or specifications, any
such changes shall be permitted subject to the terms and conditions of Paragraph
8 of the Construction Letter set forth in Exhibit "B-2", provided that in the
event the completion date of the building is delayed by such changes requested
by Optionee, the lease commencement date of the new building and rent
commencement shall be the date the new building would have been completed in the
absence of such changes requested by Optionee. Optionor shall have a reasonable
time period after the completion of the building and commencement date of the
lease to complete the landscaping and "punch list" items pertaining to the new
building without the commencement date of the lease and rent being affected. The
building shall be completed by Optionor and ready for occupancy by Optionee
within one (1) year after the date of exercise of the option by Optionee and the
lease agreement is executed by the parties regarding the Option Property,
subject to delays caused by strikes, acts of God, governmental restrictions, or
other causes beyond Optionor's control, in which instance the time period for
Optionor's completion of the building shall be extended accordingly; provided,
however, in no event shall the building be completed later than eighteen (18)
months after the exercise of the option by Optionee.
2. LEASE AGREEMENT: Optionee and Optionor shall execute a separate
lease agreement and construction letter (as set forth respectively in Exhibit
"B-1" and Exhibit "B-2") for the Option Property within thirty (30) days from
Optionee's exercise of such option. The terms and conditions of the lease
agreement pertaining to the Option Property shall be identical to the terms and
provisions of the Building 6 Lease, including without limitation the options to
extend the term, except as modified by this Agreement and except that the
provisions of Section F.1 above relating to shell and interior improvement
plans shall be incorporated therein and the provisions of Paragraph 40 ("Lease
Term and Commencement Date") of the Lease will be deleted and the provisions
coveting the Lease Term, Rental and Hazardous Waste and Toxic Materials, shall
be determined as follows:
(a) Lease Term and Commencement of Lease: The lease term for
the Option Property shall be for a minimum period of ten (10) years, or for a
term expiring conterminously with the lease term of the Building 6 Lease
(including the option to extend that term, if exercised by Optionee), whichever
time period is the longer, but in no event shall the lease term on the Option
Property be less than ten (10) years. The term of the lease shall commence as
soon as the building and leasehold improvements have been completed by Optionor,
unless Optionee delays completion of the building, in which event the lease will
commence on the date it would have been completed in the absence of the delays
caused by Optionee.
(b) Rental:
(1) Basic Monthly Rental: The initial monthly Basic
Rental (which amount does not include the Management Fee and/or Additional Rent
charges which Optionee will be responsible for, including but not limited to
taxes, insurance, utilities,
Initial: ALK JA NHC
------------
-3-
maintenance, etc., as described in Paragraph 4B of the Building 6 Lease) from
the commencement of the lease on the Option Property through the full term of
the lease (subject to the rental increases provided for in Section F.2.(b)(2)
below) shall be a sum equal to $1.60 absolute triple net per square foot per
month times the number of square feet contained within the new building to be
constructed; provided, however, that such Basic Rent shall be increased by 8%
(non-compounding) for each twelve (12) month period that commences on or after
August 1, 1998 or on or before the Commencement Date of the Lease of Building 7.
By way of example only, (i) if the Commencement Date occurred during the period
commencing on August 1, 1998 and ending on July 31, 1999, the Basic Rent of
$1.60 per square foot per month would be increased by 8%; (ii) if the
Commencement Date occurred during the period commencing on August 1, 1999 and
ending on July 31, 2000, the Basic Rent of $1.60 per square foot per month would
be increased by 16%; and (iii) if the Commencement Date occurred during the
period commencing on August 1, 2000 and ending on July 31, 2001, the Basic Rent
of $1.60 per square foot per month would be increased by 24%. By way of further
example, if the Commencement Date for the Building 7 Lease is October 1, 1999,
and the new building is 208,096 square feet, the adjusted Basic Rent would be
$386,226.18, calculated as follows:
Lease on Option Property to Commence: October 1, 1999
Size of Building was: 208,096 sq. ft.
Monthly Basic Rent Calculation:
$1.60 per sq. ft. x 208,096 sq. ft. = $332,953.60
Plus 8% annual increase per Twelve Month Period*:
(8/1/98-10/1/99) = 16% increase = $53,272.58
Adjusted Basic Rent as of Lease
Commencement Date of 10/01/99: $386,226.18
Adjusted
Number of Twelve Month Periods % Incr. Base Rent Basic Rent
--------------------------------------------------------------------------------
* (1) 8/1/98-7/31/99 x 8% 1st period
--------------------------------------------------------------------------------
* (2) 8/1/99-7/31/00 x 8% 2nd period
--------------------------------------------------------------------------------
16% Total Increase x $333,953.60 = $386,226.18
--------------------------------------------------------------------------------
Notwithstanding the foregoing, within thirty (30) days after Optionee exercises
its option to lease and Optionee has delivered the complete plans and
specifications for the Interior Improvements Optionee desires Optionor to
construct, as provided for in Section F.1 above, Optionor shall deliver to
Optionee Optionor's estimated, projected completion date for the building and
all interior improvements to be constructed by Optionor, it being agreed,
however, that such date is only an estimate and that the date the Lease shall
commence shall be as set forth in Section F.2(a) above. In the event the
completion of the building and interior improvements is delayed beyond the date
set forth in Optionor's schedule for any reason other than the acts of Optionee,
or acts of God, strikes, governmental restrictions, or other causes beyond
Optionor's control, then even if the commencement date occurs on August 1 or
later in that particular calendar year, the 8% annual increase in Basic Rent for
that particular year provided for in this Section shall be inapplicable.
(2) Annual Basic Rent Increase: It is understood and agreed
that on each and every anniversary of the lease commencement date the Basic Rent
will be increased by $.05 per square foot, including extensions of the Building
7 Lease if Optionee timely exercises either of the two five (5) year options to
extend the Lease. It is understood by the parties hereto, if Optionee exercises
its Option to Extend on either the Building 6 Lease or the Building 7 Lease, the
other Lease shall be automatically be extended, subject to the terms stated
herein and in each respective Lease.
(c) Security Deposit: The initial Security Deposit required under the
Building 7 Lease (which amount is subject to increase pursuant to Tenant's
exercise of any Option to Extend) shall be equal to the sum of the Basic Rent
for the first month in the initial
-4-
Initial: ALK JA NHC
------------
Lease Term plus the Basic Rent for the last month in the initial Lease Term. For
Example: if the Building 7 Lease commences on October 1, 1999 as shown in the
example in Paragraph 2(b)(1) above, and the length of the initial Lease Term is
ten years, the Security Deposit required under the Building 7 Lease would be
calculated as follows:
Basic Rent due 10/1/99: $386,226.18 = $1.856 per square foot
Rent increase over ten year term
= $1.856 + (9 x $0.05) = $0.45 per square foot
Basic Rent due 9/1/09 $479,869.38 = $2.306 per square foot
-----------
Security Deposit: $866,095.56
===========
(d) Hazardous Materials and Toxic Wastes: The parties agree
that the provisions of Paragraph 44 of the Building 6 Lease pertaining to
hazardous materials and toxic wastes shall be incorporated into the above
referenced lease to be executed, if the option to lease is exercised by
Optionee, with the exception that notwithstanding any provisions to the contrary
in said Paragraph 44 of the Building 6 Lease, Optionee shall have those
obligations thereunder with respect to site generated contamination on the
Option Property commencing on the date this Agreement is executed by all
parties, except as more particularly set forth in Article III Section F(3) of
this Agreement, Optionee shall have no responsibility whatsoever, including any
obligation to clean up or indemnify with respect to any hazardous materials or
toxic wastes present on the Option Property because of the storage, use,
disposal or transportation of such materials by any of Optionor's contractors or
otherwise arising out of construction work performed by or under the direction
of Optionor on the Option Property.
(e) Hetch-Hetchy Land: The following language will be included
within the Building 7 Lease related to the Hetch-Hetchy Land adjacent to the
Property: "Landlord hereby assigns to Tenant during the Term of this Lease, all
of Landlord's right, title, and interest, in and to the property owned by the
City and County of San Francisco shown in Orange on Exhibit A attached hereto,
and Tenant hereby assumes all responsibilities and liabilities (including, but
not limited to a fee and/or tax for the right to use said property including any
use provided for in the Deed attached hereto as Exhibit E) that may be imposed
by the City and County of San Francisco pertaining to their property and
Tenant's use and occupancy thereof. Tenant's right to use the area outlined in
Orange will continue until this right to use said property is revoked or
terminated by the City and County of San Francisco, at which time said property
outlined in Orange belonging to the City and County of San Francisco will no
longer be available for Tenant's use, and this lease will continue in full force
and effect excluding Tenant's right to use the property outlined in Orange on
Exhibit A attached hereto.
Tenant's use of the property owned by the City and County of San
Francisco shall be governed by the terms and conditions of the Deed dated
February 5, 1951 between Xxxxx Xxxxx Takeda and Xxxxxx Xxxxx Takeda, as
Grantors, and the City and County of San Francisco, as Grantee (the "Deed").
Said Deed is attached hereto as Exhibit E. Among the provisions of said Deed is
the restriction that the property shall not be used for parking, and Tenant
understands that at no time during the Term of the Lease shall Tenant be
allowed to use said property for parking.
Notwithstanding the foregoing, Tenant may use the Hetch-Hetchy Land for
such additional uses as may not be permitted in the Deed provided Tenant (i)
obtains the written permission from the City and County of San Francisco to do
so in form reasonably acceptable to landlord, (ii) removes the "bridge" which is
contemplated to go over said Hetch-Hetchy Land if requested by the City and
County of San Francisco and/or if Landlord requires said "bridge" to be removed
by the Lease Termination Date, (iii) pays all costs and expenses imposed by the
City and County of San Francisco in connection with such permission and use, and
(iv) Tenant indemnifies and holds harmless Landlord from any loss, expense,
cost, claim, or liability arising in connection with such permission or any use
pursuant to such permission of the Hetch-Hetchy Land undertaken by Tenant, its
agents, employees, contractors, invitees, visitors, subtenants
- 5-
Initial: ALK JA NHC
------------
and/or assignees. Landlord and Tenant agree that if the City of Milpitas will
not issue a building permit for Building 7 in the configuration and location for
which it is designed as of the date of this Lease because of the proximity to
the Hetch-Hetchy Land or for any other reason, then Tenant shall have the option
to cause Building 7 to be relocated on the land and redesigned in a new
configuration acceptable to the City, Landlord and Tenant, provided the square
footage of the relocated and redesigned building is no less than approximately
208,096 square feet and the parking allocation is not reduced due to said
redesign and/or relocation."
G. OPTIONEE'S RIGHT TO TERMINATE OPTION: In the event Optionee wishes
Optionor to discontinue holding the Option Property for Optionee's expansion
prior to the termination date of this Option Agreement, unless this option is
sooner terminated as provided for in this Agreement, Optionee may terminate this
Option Agreement by giving Optionor written notice of Optionee's termination of
this Option Agreement and paying to Optionor at the time of such notice of
termination the option consideration set forth in Article I Section D through
the date of Optionee's written notice of such option termination, after which
time Optionor shall be free to deal with third parties with respect to the
Option Property. In the case of early termination of this Agreement, any prepaid
consideration (including but not limited to taxes and assessments) related to
this Agreement will be prorated to the date of such early termination, and
Optionee will remain liable for payment of the option consideration, as set
forth in Article I Section D above, through the termination date of this
Agreement and for any accrued but unpaid consideration, and shall be refunded
that portion of the prepaid consideration which relates to the period after
termination.
H. TERMINATION OF OPTIONEE'S RIGHTS' In the event (i) Optionee does not
submit the complete plans and specifications for the interior improvements of
the building within the time period set forth in Article I Section F.1, and such
failure to submit plans is not remedied within thirty (30) days thereafter, or
(ii) Optionee does not execute a lease agreement with Optionor within thirty
(30) days after Optionee's exercise of Optionee's option to lease and such delay
is not unreasonably caused by Optionor, or (iii) Optionee is in default in any
of the terms, covenants or conditions of the Lease, such default has not been
cured within the period provided for in the Building 6 Lease, and Optionor has
given written notice to Optionee of its intent to terminate this Agreement
because of such default, or (iv) Optionee is in default of any other provisions
of this Agreement including, but not limited to, the consideration requirements
set forth in Article I Section D above, and (A) fails to cure such default
within three (3) days after written notice thereof, in the case of a failure to
pay any sums owing from Optionee pursuant to the terms hereof, or (B) fails to
cure a default in its performance of any other term or covenant to be kept by
Optionee hereunder, within ten (10) days after written notice of such default
from Optionor, or (v) Optionee is in material default of the Construction Letter
Agreement related to the Building 6 Lease and (A) fails to cure such default
within three (3) days after written notice of a monetary default, or (B) within
ten (10) days after written notice of any other default (provided if the default
cannot reasonably be cured within such ten (10) day period Optionee shall not be
in default if it promptly commences the cure and thereafter diligently
prosecutes the cure to completion), or (vi) if Optionee does not perform as
required under the provisions of Article II below, and (A) such failure
continues more than three (3) days after written notice from Optionor of an
intent to terminate this Option Agreement due to Optionee's default in the
payment of any sums owing thereunder, or (B) Optionee does not cure such default
within ten (10) days after written notice from Optionor that it intends to
terminate this Agreement due to Optionee's failure to perform any other term or
covenant to be kept by Optionee thereunder, then it is agreed that Optionee's
rights with respect to this Option Agreement and the Option Property shall
terminate if Optionor so elects, at Optionor's sole discretion, by giving
written notice of such termination to Optionee, with Optionor being free to deal
with third parties with respect to the Option Property and with the Building 6
Lease remaining in full force and effect in the event of such termination; in
which event, any prepaid consideration (including but not limited to taxes and
assessments) related to this Agreement will be prorated to the date of such
termination, and Optionee will remain liable for payment of the option
consideration as set forth in Article I Section D above, through the termination
date of this Agreement and shall be refunded that portion of the consideration
attributable to a period of time after termination. Optionee upon said
termination will immediately execute and record at
-6-
Initial: ALK JA NHC
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agreement relinquishing all of Optionee's rights to the Option Property as
contained in this Agreement.
ARTICLE II
OPTIONOR'S OPTION TO NOT CONSTRUCT BUILDING
ON OPTION PROPERTY - OPTIONEE'S OPTION TO BUY
Notwithstanding anything to the contrary in Article I above, entitled
"Grant of Option to Lease," it is agreed between the parties hereto that if
Optionor does not, in Optionor's sole and absolute discretion, choose or desire
for any reason whatsoever to construct such building on the Option Property, as
provided for in Article I above, then Optionor shall have the right to be
relieved from all responsibility to build and/or lease under said Article I,
with respect to the Option Property, providing Optionor gives written notice to
Optionee within sixty (60) days after Optionee exercises Optionee's option to
lease the new facility (Building 7) as provided for in Article I above, that
Optionor elects, at Optionor's sole and absolute discretion, not to construct
the new building on the Option Property in which event, and in no other event,
Optionor agrees to sell Optionee the Option Property upon the following terms
and conditions:
A. NOTICE TO EXERCISE OPTION TO BUY - DATE FOR CLOSE OF ESCROW:
Optionee must give notice to Optionor of Optionee's desire to purchase the
aforesaid Option Property within thirty (30) days after receipt of Optionor's
written notice to Optionee of Optionor's election not to construct as set forth
above. It is agreed if Optionee timely exercises this option, that Optionee
shall be committed and obligated to close escrow on or before sixty (60) days
after Optionor has given Optionee the written notice of Optionor's election not
to build as provided for above, subject to delays related to defects in title
under Article II Section G below, upon the terms and conditions hereinafter set
forth in this Article II and as otherwise provided for in this Agreement.
B. PURCHASE PRICE: The purchase price of the Option Property shall be
an amount equivalent to TWENTY FIVE DOLLARS ($25.00) per square foot of land,
plus an eight percent (8%) annual compound interest increase in the purchase
price (which increase shall begin accruing as of August 1, 1998), lawful cash
consideration, times the number of square feet contained within the Option
Property, and shall include easements but shall be exclusive of any area that
may be acquired in fee by eminent domain or condemnation by a Public Agency
prior to the close of escrow, plus Optionee shall assume any and all assessments
on the property existing as of the date of sale as reflected on the City and
County tax bills and any supplemental taxes that may be issued at a later date
for said property or proposed to be assessed against the property without
reduction in the purchase price.
C. SITE AND PARCEL MAP SURVEY: A survey will be made by a licensed
surveyor, elected by Optionor and paid for by Optionee, to determine the exact
square footage, and an appropriate parcel map recorded of the property to be
conveyed.
D. TITLE INSURANCE: Optionee will obtain, at Optionee's expense, from
Chicago Title Company a standard California Land Title Association (CLTA) Title
commitment in an amount equal to the purchase price of the Option Property, in
favor of Optionee to insure the Option Property, subject to the permitted
exceptions of title set forth in Article II Section E below.
E. TITLE: The Option Property shall be conveyed strictly on an "as is"
basis as set forth in Article II Section F below, and Optionee agrees to take
title to the Option Property on an "as is" basis and subject to the following
"permitted exceptions":
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Initial: ALK JA NHC
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(1) All non-delinquent real property taxes and assessments,
and bonds outstanding as of the close of escrow, and all exceptions as shown in
said Chicago Title Insurance Company's preliminary title report number 771722
dated April 14, 1997, and attached hereto as Exhibit "C" and by reference made a
part of this Agreement, except for any of Optionor's current and/or future loans
against said Option Property which loans, if any, shall be discharged by
Optionor at close of escrow.
(2) Any easements, right-of-way, utility or street easement
dedications required to be made or common driveway easements, covenants,
conditions, and restrictions now of record or of record at the time Optionee
exercises its option to buy the Option Property.
(3) Any other exceptions to title that do not unreasonably
affect the marketability, financeability, or Optionee's reasonable use thereof,
and any normal exclusions and provisions of the title company's standard Title
Insurance Policy and all matters that a current and accurate survey of the
property would disclose.
(4) The Waiver and Release Agreement set forth as Exhibit "D"
attached, which Optionee agrees to execute and record at the close of escrow.
F. "AS-IS": Optionee agrees that Optionee is purchasing the
Option Property subject to the following understanding and agreement: This is a
non-contingent and unconditional offer to purchase the property on an "as is"
basis. Optionee has inspected the Option Property including acreage,
improvements (if any) thereon, environmental and economic characteristics and
conditions as of the execution of this Agreement, and acknowledges that Optionee
has observed their physical characteristics (including acreage) and conditions,
and hereby waives any and all objections to the physical characteristics
(including acreage) and condition of the Option Property which would be
disclosed by such inspection or otherwise. Optionee acknowledges that Optionor
and its employees, agents, or representatives have not made, and do not make,
any representations, warranties, or agreements by or on behalf of Optionor as to
any matters concerning the Option Property and the present or future use therof,
or the suitability of the Option Property for Optionee's intended use. Optionee
is purchasing the Option Property hereunder strictly on an "as is" basis and
regardless of the condition and repair of the improvements (if any), or the
Option Property's topography, climate, air, water rights, utilities, water,
possible toxic waste or hazardous materials, present and future zoning, soil,
subsoil, purpose to which the Option Property is suited, drainage, access to
public roads, and proposed routes or enlargement of road or extensions thereof.
Optionee further acknowledges and agrees that the Option Property is, or may be,
subject to zoning, P.U.D., or other municipal ordinance restrictions, and is to
be purchased, conveyed and accepted by Optionee in its present condition "as
is", and that no patent or latent physical condition of the building or Option
Property, whether or not known or unknown or discovered at a later date, shall
affect this transaction and the purchase price paid for the Option Property
hereunder, and Optionee shall be obligated to close escrow notwithstanding the
condition of the Option Property or any improvements thereon. Optionee
acknowledges that in the event of a purchase of the Option Property by Optionee,
Optionor shall not have any obligation to Optionee to remove, clean up or
remediate any Hazardous Materials on the Option Property now, or discovered at a
later date. As used in this Agreement, the term "Hazardous Materials" shall mean
any substance or material which has been determined or is hereafter determined
by any state, federal or local governmental authority or regulatory body to be
capable of posing a risk of injury to health, safety and/or property, including,
but not limited to, all of those materials and substances designated as
hazardous or toxic by the Environmental Protection Agency, the California Water
Quality Board, the U.S. Department of Labor, the California Department of
Industrial Relations, the U.S. Department of Transportation, the California
Department of Food & Agriculture, the Consumer Product Safety Commission, the
U.S. Department of Health and Human Services, the U.S. Food and Drug
Administration, or any other local, state, or federal governmental agency or
authority or regulatory body now or hereafter authorized to regulate materials
and substances in the environment. Without limiting the generality of the
foregoing the term 'Hazardous Materials shall include all of those materials and
substances (i) defined as
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Initial: ALK JA NHC
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"toxic materials" in Sections 66680 through 66685 of Title 22 of the California
Administrative Code, Division 4, Chapter 30, as the same may be amended from
time to time, or (ii) any other hazardous or toxic substance, material or waste
which is or becomes regulated by any local governmental authority, any agency of
the State of California or any agency or the United States Government, as the
above may be amended from time to time. All work in connection with preparing
the Option Property for the use intended by Optionee, all costs incident
thereto, and all other costs, fees, studies, reports, approvals, plans, surveys,
permits and expenses whatsoever necessary or desirable in connection with
Optionee's acquiring, developing, using and/or operating the Option Property,
shall be obtained and paid for by, and shall be the sole responsibility of,
Optionee. Optionee has investigated and has knowledge of operative or proposed
governmental laws and regulations including, but not limited to, Zoning,
environmental (including specifically the regulations of the Environmental
Protection Agency and the Bay Area Pollution Control District) and land use laws
and regulations to which the Option Property may be subject, and shall acquire
the Option Property subject to the foregoing and to such other laws and
regulations that pertain to the Option Property. Optionee has neither received
nor relied upon any representations concerning such laws and regulations made by
Optionor, Optionor's employees, agents or any other person acting on or in
behalf of Optionor. Optionee hereby waives, releases, acquits and forever
discharges Optionor, Optionor's employees, agents or any other persons acting on
or in behalf of Optionor, of and from any and all claims, actions, causes of
action, demands, rights, damages, costs, expenses or compensation whatsoever,
direct or indirect, known or unknown, foreseen or unforeseen, that it now has,
or which may arise in the future, on account of or in any way growing out of, or
connected with, the existence or condition of any improvements or buildings on
the Option Property; any toxic wastes or hazardous materials located thereon;
any settlement or subsidence of any fill or filled ground on the Option Property
or settlement or subsidence of construction thereon, if any; or with any
operative or proposed governmental laws and regulations, including, but not
limited to, zoning, flood, earthquake, toxic and hazardous materials,
environmental and land use laws and regulations to which the Option Property may
be subject; or with Optionee's contemplated use and development of the Option
Property, or with any other condition of the Option Property or plans.
Any agreements, warranties or representations not expressly contained
herein shall in no way bind Optionor. Optionee expressly waives any right of
rescission and all claims for damages by reason of any statement,
representation, warranty, promise or covenant, if any, not contained in this
Agreement. The provisions of this Section shall survive the close of escrow.
G. TITLE DEFECTS: If title to the Option Property shall prove to be
defective or unmerchantable, Optionor shall have a reasonable time to perfect
same providing said period of time shall not exceed one hundred twenty (120)
days from Optionee's exercise of the option to purchase the Option Property as
provided for in Article II Section A above. If Optionor, after using due
diligence and all reasonable efforts, is unable to remove any such defect in the
title, either party may terminate this Option Agreement with Optionor having no
liability or obligations to Optionee or any other third party, it being agreed,
however, that Optionee may take title subject to such defect or imperfection
then existing. All matters concerning title to the Option Property shall merge
in the Grant Deed. In the event of any defect in or other matter affecting title
to the Option Property, Optionee hereby agrees to look only to the aforesaid
title insurance policy to secure any damages incurred by Optionee as a result of
said defect or matter.
H. DEED RESTRICTIONS: COVENANTS, CONDITIONS AND RESTRICTIONS TO BE
INCORPORATED WITH THE GRANT DEED TO THE OPTION PROPERTY SOLD: It is agreed that
the following language shall be incorporated into the Grant Deed to the Option
Property sold to Optionee hereunder:
1. Grantee, prior to building any buildings or making any
material improvements on the subject property shall submit the building plans
and specifications, building colors and landscaping plans, and obtain Grantor's
written approval of the same. Said approval shall not be unreasonably withheld
and shall be promptly given, providing that: (a) the architecture of any
building(s) to be constructed on the property deeded by Grantor to Grantee
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Initial: ALK JA NHC
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under this deed shall be similar and generally compatible with the architecture
of the building previously developed by Grantor for Grantee under the Building 6
Lease; (b) a landscape area is developed along the frontage of the street(s) and
will be located between the street and parking area closest to the street; and
(c) a perimeter driveway is developed in front of the building(s) which
generally runs near and parallel with the street(s).
2. Grantee shall maintain at all times and keep in first class
condition all landscaping, driveways, and the exterior of the building(s) and/or
improvements approved by Grantor in subsection (1) above, and shall not make
material changes in the landscaping, driveways and exterior of the building
without the Grantor's written consent, which shall be promptly given and not
unreasonably withheld.
3. No outside storage, change of building color, additions to
the building or signs shall be permitted without the Grantor's written approval,
which shall be promptly given and not unreasonably withheld.
4. "Grantor" as used herein shall mean and refer to the owner
of Building 6 (APN 086-02-039).
5. The restrictions contained in (1), (2), (3) and (4) above
shall be binding upon and inure to the benefit of the heirs, administrators,
successors, and assigns of the parties hereto for a period of twenty-five (25)
years from the recording of this deed.
I. COSTS: Taxes and assessments shall be paid by Optionee pursuant to
Article I Section C, and Optionee shall pay one hundred percent (100%) of the
title and title insurance costs, escrow fees, CLTA title policy, recording fees,
documentary stamps, transfer taxes, and all other normal closing costs.
J. TERMINATION OF OPTIONEE'S RIGHTS: In the event (i) Optionee does not
elect to timely purchase the Option Property as provided for above, or (ii)
Optionee does not close escrow within the prescribed period of time after
electing to purchase the Option Property, or (iii) Optionee is in default under
any of the terms, covenants or conditions of the Building 6 Lease, and such
default has not been cured within the period provided for in the Building 6
Lease, and Optionor has given written notice to Optionee of its intent to
terminate this Agreement because of such default, or (iv) Optionee is in
material default under any provisions of the Construction Letter Agreement
related to the Building 6 Lease and fails to cure such default within three (3)
days after written notice of a monetary default or within ten (10) days after
written notice of any other default (provided if the default cannot reasonably
be cured within such ten (10) day period Optionee shall not be in default, if it
promptly commences the cure and thereafter diligently prosecutes the cure to
completion), or (v) Optionee is in default of any of the terms and conditions of
this Agreement, and (A) fails to cure such default within three (3) days after
written notice thereof in the case of a failure to pay any sums owing from
Optionee hereunder, or (B) fails to cure a default in its performance of any
other term or covenant to be kept by Optionee hereunder, within ten (10) days
after written notice of such default from Optionor, then it is agreed that all
of the Optionee's rights with respect to this Option Agreement and the Option
Property shall terminate if Optionor so elects, at Optionor's sole discretion,
by giving written notice of such termination to Optionee, at which time this
option shall terminate, in which event any prepaid option consideration related
to this Agreement will be prorated to the date of such termination by Optionor,
and Optionee will remain liable for payment of the option consideration as set
forth in Article I Section C above through the termination date of this
Agreement by Optionor and shall be refunded that portion of the consideration
attributable to a period of time after termination.
-10-
Initial: ALK JA NHC
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ARTICLE III
GENERAL
A. NOTICES: Notices given hereunder shall be given either personally or
by registered or certified mail, postage prepaid, addressed to the parties as
hereinbelow set forth:
Optionor: XXXX XXXXXXXXX and XXXXXXX X. XXXXX
0000 Xxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
Copy to: XXXXXXX X. XXXXX
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, XX 00000
Optionee: QUANTUM CORPORATION
000 XxXxxxxx Xxxxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxx Xxxxxx, CFO
or at such other address as either party may hereafter designate in writing to
the other.
B. ATTORNEYS FEES: In any action which may be brought to enforce the
provisions of this Agreement, the prevailing party in such action shall be
entitled to recover from the other party a reasonable attorney's fee in addition
to costs and necessary disbursements.
C. ASSIGNMENT: Optionee may not, under any circumstances, assign its
rights under this Agreement to a third party, it being understood that this
right is granted strictly to Optionee, and to no other party. Notwithstanding
the foregoing, Optionee may assign its interest in this Agreement to a
corporation which results from a merger, consolidation or other reorganization
in which Optionee is not the surviving corporation, or to a corporation which
permanently purchases or otherwise permanently acquires 95% or more of the
assets of Optionee; provided however, in the event, if in any such assignment
there is not a complete transfer of all of the assets from Optionee to such
permitted assignee, and Optionee continues to exist as a separate entity, the
permitted assignee and Optionee shall be jointly and severally liable for the
full terms and conditions of this Agreement.
D. BINDING EFFECT: This Agreement shall inure to the benefit of and
shall be binding upon the heirs, personal representatives, successors, and
assigns of the parties hereto.
E. OPTIONOR'S REPRESENTATION TO OPTIONEE AND TESTING: Regarding
Hazardous Materials or toxic wastes on the Option Property subject to this
Agreement:
(1) Optionor hereby makes the following representations to
Optionee regarding Hazardous Materials and toxic wastes on the Option Property,
each of which is made only to the best of Optionor's knowledge as of the date
Optionor executes this Agreement, without any inquiry or investigation having
been made by Optionor regarding this subject, nor does Optionor have any
obligation to investigate or make inquiry regarding the subject inasmuch as
Optionee is conducting its own soil and water investigation of the Option
Property prior to, and within thirty (30) days following its execution of this
Agreement:
(a) The soil and ground water on or under the Option
Property does not contain Hazardous Materials in amounts which violate any laws
to the extent that any governmental entity could require Optionor to take any
remedial action with respect to such Hazardous Materials.
Initial: ALK JA NHC
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(b) During the time that Optionor has owned the
Option Property Optionor has received no notice of (i) any violation, or alleged
violation, of any law that has not been corrected to the satisfaction of the
appropriate authority, (ii) any pending claims relating to the presence of
Hazardous Material on the Option Property, or (iii) any pending investigation by
any governmental agency concerning the Option Property relating to Hazardous
Materials.
(2) Optionor or Optionee may, at any time, conduct soil
sampling of, and/or cause testing xxxxx to be installed on the Option Property,
and may cause the soil and the ground water to be tested to detect the presence
of Hazardous Material by the use of such tests as are then customarily used for
such purposes. Testing xxxxx installed by Optionee shall be paid for by
Optionee. Prior to the expiration or termination of the Option Period, Optionee
shall attempt to ascertain in writing from Optionor if Optionor wants Optionee
to remove any and/or all testing xxxxx it has installed at the Option Property,
and return the Option Property to the condition existing prior to the
installation of such xxxxx.
(3) If any tests performed by Optionor or Optionee during the
Option Period disclose Hazardous Materials (at or above then current action
levels as required by the governing agency) at the Option Property which are not
the responsibility of Optionee pursuant to the Building 6 Lease, prior to
Optionor and Optionee entering into a lease for the Option Property, Optionor at
its expense will promptly take all action required by law with respect to the
existence of such materials at the Option Property, except for dumping of
hazardous waste or toxic materials originating on the surface of the Option
Property after the date this Agreement is executed by all parties, which shall
be Optionee's obligation to promptly clean up and remove, and to pay for the
cost of such clean up and removal; provided, however, Optionee shall have no
responsibility whatsoever, including any obligation to clean up and remove any
Hazardous Materials or toxic wastes originating on the surface of the Option
Property because of the storage, use, disposal or transportation of such
materials or wastes by any of Optionor's contractors or otherwise arising out of
construction work performed by or under the direction of Optionor on the Option
Property, and Optionor shall be responsible for all required actions with
respect to such materials and wastes as provided above in this subsection (3).
Optionee's obligations with respect to Hazardous Materials or toxic wastes
thereafter originating on the surface of the Option Property shall terminate if
Optionee terminates its option, unless such wastes or materials originated on
the surface of the Option Property prior to such termination or originated from
the premises leased by Optionee under the Building 6 Lease or the Building
leased from Optionor by Optionee located at 0000 Xxxxxxxxxx Xxxxx, 000 XxXxxxxx
Xxxx., 000 Xxxxx Xxxxx, 0000 Xxxxx Xxxxx, and 0000 Xxxxx Xxxxx, in Milpitas
California. Notwithstanding the foregoing, if Optionee purchases the Option
Property, Optionor shall not be responsible for the clean up or removal of any
such toxic wastes and/or Hazardous Materials, as Optionee is buying the Option
Property "as is" and shall assume any and all responsibility for same.
(4) The obligations of Optionor and Optionee under this
Section F shall survive the expiration or earlier termination of this Agreement.
(5) If within thirty (30) days after this Agreement is signed
by Optionor and Optionee, any tests performed by Optionee disclose Hazardous
Materials or toxic wastes in material amounts which violate any laws to the
extent any governmental entity could require an owner or occupier of the Option
Property to take any remedial action with respect to such materials or wastes,
then Optionee shall have the right by written notice to Optionor, to
simultaneously terminate this Agreement and all other agreements between the
parties relative to the Option Property. Optionor may elect, at Optionor's sole
and absolute discretion, to remediate or haul away the Hazardous Materials or
toxic waste. In the event Optionor elects to remediate or haul away the
Hazardous Materials or toxic waste, Optionee will not have the option to
terminate any of the Agreements as outlined above.
F: RIGHTS AND OBLIGATIONS WITH RESPECT TO OPTION PROPERTY: Optionee
shall have the right to fence the Option Property, but except as provided in
this Section, Optionee shall not have the right to use the Option Property prior
to an exercise of the
Initial: ALK JA NHC
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-12-
option. Optionee shall, for any portion of the Option Property for which the
option has not been terminated, either arrange to have such portion of the
Option Property farmed, or periodically disked to control the growth of weeds
and keep the Option Property neat and clean and free from debris of any kind and
all at Optionee's cost and expense. Optionor agrees not to grant any other
person or entity the right to use the Option Property without the prior written
consent of Optionee, which shall not be unreasonably withheld or delayed.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date last written below.
OPTIONOR:
XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST
By /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Xxxxxxx X. Xxxxx, Trustee
Date: 6/26/97
--------------------------------------------------
XXXX XXXXXXXXX SURVIVOR'S TRUST
By /s/ Xxxx Xxxxxxxxx, Trustee
--------------------------------------------------
Xxxx Xxxxxxxxx, Trustee
Dated: 6/30/97
--------------------------------------------------
OPTIONEE:
QUANTUM CORPORATION,
a Delaware corporation
By /s/ Xxxxxx Xxxxxx
--------------------------------------------------
Xxxxxx Xxxxxx, Vice President Finance and Corporate
General Counsel
Dated: June 25, 1997
--------------------------------------------------
By /s/ Xxxx Xxxxx
--------------------------------------------------
Xxxx Xxxxx, Vice President Real Estate and Corporate
Services
Date: June 25, 1997
--------------------------------------------------
Initial: ALK JA NHC
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Quantum 5
AMENDMENT NO. 1
TO LEASE
THIS AMENDMENT NO. I is made and entered into this 16th day of April,
1997, by and between XXXX XXXXXXXXX, Trustee, or his Successor Trustee UTA dated
7/20/77 (XXXX XXXXXXXXX SURVIVOR'S TRUST) (previously known as the "Xxxx
Xxxxxxxxx Separate Property Trust") as amended, and XXXXXXX X. XXXXX, Trustee,
or his Successor Trustee UTA dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware
corporation, as TENANT.
RECITALS
A. WHEREAS, by Lease Agreement dated March 23, 1994 Landlord leased to
Tenant all of that certain 94,484+ square foot building located at 0000 Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx, the details of which are more particularly set
forth in said March 23, 1994 Lease Agreement, and
B. WHEREAS, said Lease was amended by the Commencement Letter dated
December 15, 1994 which established the January 1, 1995 Commencement Date of the
Lease, and the Termination Date of September 30, 2006, and,
C. WHEREAS, it is now the desire of the parties hereto to amend the
Lease by (i) extending the Term for five (5) years pursuant to Lease Paragraph
41 ("First Five-Year Option to Extend"), (ii) amending the Basic Rent schedule
and Aggregate Rent, (iii) adding a Third Option to Extend, (vi) amending
Paragraphs 47 ("Cross Default") and 12 ("Property Insurance"), (v) replacing
Lease Paragraph 52 ("Structural Capital Costs Regulated by Governmental Agencies
After the Commencement of this Lease not Caused by Tenant or Tenant's Uses or
Remodeling of the Premises"), and (vi) amending and/or replacing certain
provisions of the Lease commencing as of the commencement of the Third Extended
Term of said Lease Agreement as hereinafter set forth.
AGREEMENT
NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:
1. TERM OF LEASE: It is agreed between the parties that Tenant has
exercised its First Five-Year Option to Extend said Lease as detailed in Lease
Paragraph 41. Pursuant to the terms of said Paragraph 41, the Term of said Lease
Agreement shall be extended for an additional five (5) year period from the
schedule Lease Termination Date of September 30, 2006; therefore the Lease
Termination Date shall be changed from September 30, 2006 to September 30, 2011.
2. CONCURRENT EXERCISE OF OPTION TO EXTEND: Pursuant to Lease Paragraph
40C ("Lease Terms Co-Extensive"), it is understood between the parties that if
Tenant exercises its Option to Extend this Lease, the terms of the Xxxxxxxx 0,
Xxxxxxxx 0, Xxxxxxxx 0 and Building 4 Leases (the "Existing Leases") are to be
extended accordingly. The monthly Basic Rent during the extended term under each
of the Leases shall be increased by $.05 per square foot on the commencement
date of the extended term and thereafter on each and every anniversary of the
respective lease commencement date; therefore, concurrently with the execution
of this Amendment No. 1, Landlord and Tenant shall execute amendments to the
Existing Leases, extending the terms of each of the Existing Leases for five
years pursuant to said lease's respective First Five-Year Option to Extend. It
is also understood that in the event Tenant (i) exercises any of its Options to
Extend this Lease, or if Tenant exercises any of its Options to Extend any of
the Existing Leases, each of the five Leases shall be extended accordingly.
3. BASIC RENTAL FOR EXTENDED TERM OF LEASE: The monthly Basic Rental
for the Extended Term of Lease shall be as follows:
On October 1, 2006, the sum of ONE HUNDRED EIGHTY ONE THOUSAND FOUR
HUNDRED NINE AND 28/100 DOLLARS ($181,409.28) shall be due, and a like sum due
on the first day of each month thereafter through and including September 1,
2007.
JA
Initial: ALK
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Quantum 5
On October 1, 2007, the sum of ONE HUNDRED EIGHTY SIX THOUSAND ONE
HUNDRED THIRTY THREE AND 48/100 DOLLARS ($186,133.48) shall be due, and a like
sum due on the first day of each month thereafter through and including
September I, 2008.
On October 1, 2008, the sum of ONE HUNDRED NINETY THOUSAND EIGHT
HUNDRED FIFTY SEVEN AND 68/100 DOLLARS ($190,857,68) shall be due, and a like
sum due on the first day of each month thereafter through and including
September 1, 2009.
On October 1, 2009, the sum of ONE HUNDRED NINETY FIVE THOUSAND FIVE
HUNDRED EIGHTY ONE AND 88/100 DOLLARS ($195,581.88) shall be due, and a like sum
due on the first day of each month thereafter through and including September 1,
2010.
On October 1, 2010, the sum of TWO HUNDRED THOUSAND THREE HUNDRED SIX
AND 08/100 DOLLARS ($200,306.08) shall be due, and a like sum due on the first
day of each month thereafter through and including September 1,2011.
The Aggregate Basic Rent for the Lease shall be increased by
$11,451,460.80 or from $21,171,029.88 to $32,622,490.68.
4. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the
Lease for an additional five (5) year period pursuant to Lease Paragraph 42
("Second Five Year Option To Extend"), Landlord hereby grants to Tenant a third
option to extend the Term of this Lease for an additional five (5) year period
upon the following terms and conditions:
A. Tenant shall give Landlord written notice of Tenant's exercise of
this option to extend at least one hundred eighty (180) days prior to the
expiration of the Lease Term as extended pursuant to Lease Paragraph 42 ("Second
Five Year Option To Extend"), in which event the Lease shall be considered
extended for an additional five (5) year period upon the same terms and
conditions as this Lease, absent this Paragraph 4 and subject to the Rental as
set forth below. In the event that Tenant fails to timely exercise Tenant's
option as set forth herein in writing, Tenant shall have no further option to
extend this Lease or the Other Leases, and this Lease shall continue in full
force and effect for the full remaining term hereof, absent this Paragraph 4.
B. The monthly Basic Rent for the option period shall be as follows in
the event the option is exercised:
Period Monthly Basic Rent
------ ------------------
Months 1-12 $2.42/sf
Months 13-24 $2.47/sf
Months 25-36 $2.52/sf
Months 37-48 $2.57/sf
Months 49-60 $2.62/sf
C. Notwithstanding anything contained herein, Tenant may not exercise
the option to extend granted by this Paragraph 4 at any time that Tenant is in
default (default for monetary and material default for non-monetary) of its
obligations under this Lease, if Tenant has received written notice from
Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be
cured, and if Landlord does not elect to terminate this Lease as a result of
such non-curable default by Tenant, Tenant may exercise the option to extend
granted by this Paragraph 4 notwithstanding such non-curable default.
5. CROSS DEFAULT: Notwithstanding anything to the contrary in Paragraph
47 of this Lease, said Paragraph 47 is hereby amended to include the following:
"Landlord shall have the option of considering a default under this Lease or a
default under any of the Existing Leases (i.e. the leases for Xxxxxxxx 0,
Xxxxxxxx 0, Xxxxxxxx 0 xxx Xxxxxxxx 0)xx xx a default under all such leases,
only with respect to such leases under which Landlord is also the 'Landlord' at
the time such default occurs. By way of example, if at the time a default of
Tenant occurs under this Lease, Landlord has sold the premises described in any
of the Existing Leases and is no longer the 'Landlord' thereunder, then a
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default under this Lease shall not constitute a default under any of such
Existing Leases so sold by Landlord (unless the premises leased under this Lease
and the Existing Leases are sold to the same entity), and a default by Tenant
under any of such Existing Leases so sold by Landlord shall not constitute a
default under this Lease or any other of the Existing Leases then remaining
between Landlord and Tenant. However, if the Landlord under this Lease and the
Existing Leases is one in the same at the time of said default, said cross
default provisions shall apply."
6. PROPERTY INSURANCE: Lease Paragraph 12 ("Property Insurance") is
hereby amended to include the following: "Tenant acknowledges that as part of
the cost of insurance policies for the Premises, Tenant is responsible for the
payment of insurance deductibles on insurance claims as they relate to the
Premises subject to the limitations provided in Lease Paragraph 54 ("Property
Insurance") which limitations are applicable only during the initial Lease Term
and the First Lease Extension Period and the Second Lease Extension Period. Said
limitation provided for in Lease Paragraph 54 are null and void at the
commencement of the Third Lease Extended Term".
7. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER
THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT'S USES OR
REMODELING OF THE PREMISES: Lease Paragraph 52 ("Structural Capital Costs
Regulated by Governmental Agencies after the Commencement of this Lease Not
Caused by Tenant or Tenant's Uses or Remodeling of the Premises") is hereby
deleted and replaced with the following:
"52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL
AGENCIES AFTER THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR
TENANT'S USES OR REMODELING OF THE PREMISES: The provisions of this
Paragraph 52 shall modify Paragraphs 7 and 14:
A. If (i) during the last five (5) years of the First Extended
Term of the Lease if said Lease has not been extended as provided for
in Lease Paragraph 42 ("Second Five Year Option To Extend") or in
Paragraph 4 ("Third Five Year Option to Extend") above or Lease
Paragraph 40C ("Lease Terms Co-Extensive"), or (ii) during either of
the five (5) year extension periods permitted by Lease Paragraph 42 or
Paragraph 4 above, or Lease Paragraph 40C above, it becomes necessary
(due to any governmental requirement for continued occupancy of the
Premises) to make structural improvements required by laws enacted or
legal requirements imposed by governmental agency(s) after the
Commencement Date, and the cost for each required work or improvements
exceeds $100,000, then if such legal requirement is not imposed because
of Tenant's specific use of the Premises and is not "triggered" by
Tenant's Alterations or Tenant's application for a building permit or
any other governmental approval (collectively "Tenant's Actions") in
which instance Tenant shall be responsible for 100% of the cost of such
improvements, Landlord shall be responsible for paying the cost of such
improvement and constructing such improvement, subject to a cash
contribution from Tenant of a portion of the cost thereof as provided
for and calculated in Paragraph 52B.
B. When Landlord makes an improvement pursuant to Paragraph
52A, and as a condition to Landlord's obligation to construct such
improvement, Tenant shall make the following contribution in cash to
Landlord for the cost thereof prior to the commencement of the work by
Landlord. It is agreed that Tenant shall pay to Landlord 100% of the
cost of the first $100,000.00 worth of each improvement. After the
first $100,000.00, all costs above $100,000.00 shall be divided by 15
and multiplied by the time period remaining in the last five years of
the Lease Term from the date work on such improvement commences.
For example, if the improvement is not required as a result of
Tenant's Actions and if the cost of such improvement was $400,000 and
there was one year and six months remaining in the Lease term when the
work commenced, then Tenant would be responsible for reimbursing
Landlord in cash $130,000.00 computed as follows:
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Total Cost of Work $400,000.00
Tenant Responsible for
1st $100,000 - 100,000.00
Total Amount To Be Amortized $300,000.00
$300,00,0.00/15 = $20,000.00/yr. x 1.5 yrs = $ 30,000.00
Tenant responsible for $100,000 + $30,000.00 = $130,000.00
C. If Landlord has made improvements, for which Tenant has
reimbursed Landlord for the cost thereof pursuant to Xxxxxxxxx 00X, and
the term of this Lease is subsequently extended pursuant to the
exercise by Tenant of an option to renew pursuant to Lease Paragraph 42
or Paragraph 4 above, upon the exercise of any such option by Tenant,
Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by
Tenant. Using the example in Paragraph 52B above, Tenant would owe
Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00)."
8. THIRD OPTION PERIOD - LEASE PROVISION CHANGES: In the event Tenant
exercises its Third Option to Extend as provided for in Paragraph 4 above, the
following amendments (contained within Paragraphs 9 through 18) are herein made
to the Lease to be effective upon the commencement of the third option period
("Third Option Period"), or during any period following the expiration of the
Lease Term or expiration of the Lease when Tenant is in possession of the
Premises.
9. LATE CHARGE: Effective as of the first day of the Third Option
Period, the Late Charge referenced in Lease Paragraph 4.D ("Late Charge") shall
be changed from five percent (5 %) to ten percent (10%), and Lease Paragraph 49
("Limitation on Late Charge") shall be deleted in its entirety and of no further
force or effect.
10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the
Lease, effective as of the first day of the Third Option Period, and on the
first day of each month thereafter, Tenant shall pay to Landlord, in addition to
the Basic Rent and Additional Rent, a fixed monthly management fee ("Management
Fee") equal to one percent (1%) of the Basic Rent due for each month during the
Lease Term.
11. HAZARDOUS MATERIALS: Effective as of the first day of the Third
Option Period, Lease Paragraph 44 ("Hazardous Materials") shall be deleted in
its entirety and replaced with the following:
"44. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows
with respect to the existence or use of "Hazardous Materials" (as
defined herein) on, in, under or about the Premises and real property
located beneath said Premises, which includes the entire parcel of land
on which the Premises are located as shown in Green on Exhibit A to the
Lease (hereinafter collectively referred to as the "Property"):
A. As used herein, the term "Hazardous Materials" shall mean
any material, waste, chemical, mixture or byproduct which is or
hereafter is defined, listed or designated under Environmental Laws
(defined below) as a pollutant, or as a contaminant, or as a toxic or
hazardous substance, waste or material, or any other unwholesome,
hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or
restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions
thereof, polychlorinated biphenyls, or asbestos). As used herein, the
term "Environmental Laws" shall mean any applicable Federal, State of
California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or
order of any executive or judicial authority at any level of Federal,
State of California or local government
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(whether now existing or subsequently adopted or promulgated) relating
to pollution or the protection of the environment, ecology, natural
resources, or public health and safety.
B. Tenant shall notify Landlord prior to the occurrence of any
Tenant's Hazardous Materials Activities (defined below). Landlord
acknowledges that Tenant shall use, in compliance with applicable
Environmental Laws, customary household and office supplies (Tenant
shall first provide Landlord with a list of said materials use), such
as mild cleaners, lubricants and copier toner. Any and all of Tenant's
Hazardous Materials Activities shall be conducted in conformity with
this Xxxxxxxxx 00, Xxxxxxxxx 14 of this Lease, and in compliance with
all Environmental Laws and regulations. As used herein, the term
"Tenant's Hazardous Materials Activities" shall mean any and all use,
handling, generation, storage, disposal, treatment, transportation,
release, discharge, or emission of any Hazardous Materials on, in,
beneath, to, from, at or about the Property, in connection with
Tenant's use of the Property, or by Tenant or by any of Tenant's
agents, employees, contractors, vendors, invitees, visitors or its
future subtenants or assignees or other third parties (including
"dumping" by others) (or which Hazardous Materials originate on the
surface of the Premises any time on or after the Commencement Date of
this Lease, but excluding Hazardous Materials on the Premises prior to
the Lease Commencement Date because of the storage, use, disposal, or
transportation of such materials or waste by any of Landlord's
contractors or otherwise arising out of construction work performed by
or under the direction of Landlord on the Premises and Landlord shall
be responsible for all required actions with respect to such materials
or wastes). Tenant agrees to provide Landlord with prompt written
notice of any spill or release of Hazardous Materials at the Property
during the term of the Lease of which Tenant becomes aware, and further
agrees to provide Landlord with prompt written notice of any violation
of Environmental Laws in connection with Tenant's Hazardous Materials
Activities of which Tenant becomes aware. If Tenant's Hazardous
Materials Activities involve Hazardous Materials other than normal use
of customary household and office supplies, Tenant also agrees at
Tenant's expense: (i) to install such Hazardous Materials monitoring,
storage and containment devices as may be required by Environmental
Laws, regulations and/or governing agencies; (ii) to provide Landlord
with a written inventory of such Hazardous Materials, including an
update of same each year upon the anniversary date of the Commencement
Date of the Lease ("Anniversary Date"); and (iii) on each Anniversary
Date to provide to Landlord copies of all documentation and records,
required by applicable Environmental Laws to be prepared and submitted
to governmental authorities, relating to use at the Property of
Hazardous Materials or to Tenant's Hazardous Materials Activities, if
any. If upon completion of Landlord's review of said documentation and
records, Landlord reasonably questions if Tenant is in compliance with
all applicable Environmental Laws with respect to Tenant's Hazardous
Materials Activities, Tenant agrees within thirty (30) days following
receipt of written notice from Landlord, to retain a qualified
environmental consultant, acceptable to Landlord, to evaluate whether
Tenant is in compliance with all applicable Environmental Laws with
respect to Tenant's Hazardous Materials Activities. Tenant, at its
expense, shall submit to Landlord a report from such environmental
consultant which discusses the environmental consultant's findings
within two (2) months of each Anniversary Date. Tenant, at its expense,
shall promptly undertake and complete any and all steps necessary, and
in full compliance with applicable Environmental Laws, to fully correct
any and all problems or deficiencies identified by the environmental
consultant, and promptly provide Landlord with documentation of all
such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at
its expense, shall (i) properly remove from the Property all Hazardous
Materials which come to be located at the Property in connection with
Tenant's Hazardous Materials Activities, and (ii) fully comply with and
complete all facility closure requirements of applicable Environmental
Laws regarding Tenant's Hazardous Materials Activities, including but
not limited to (x) properly restoring and repairing the Property to the
extent damaged by such closure activities, and (y) obtaining from the
local Fire Department or other appropriate governmental authority with
any legal or regulatory jurisdiction a written concurrence that closure
has been completed in compliance with applicable
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Enviroamental Laws. Tenant shall promptly provide Landlord with copies
of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any such closure activities.
D. If Landlord, upon consultation with Tenant, reasonably
concludes that the Property has become contaminated as a result of
Tenant's Hazardous Materials Activities, Landlord in addition to any
other rights it may have under this Lease or under Environmental Laws
or other laws, may enter upon the Property and conduct inspection,
sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of
determining the nature and extent of such contamination except to the
extent that such activities may be inconsistent with Tenant's
compliance with Environmental Laws. Tenant shall promptly reimburse
Landlord for the costs of such an investigation, including but not
limited to reasonable attorneys' fees Landlord incurs with respect to
such investigation to the extent, and only to the extent, that it that
discloses Hazardous Materials contamination for which Tenant is liable
under this Lease. Except as may be required of Tenant by applicable
Environmental Laws, Tenant shall not perform any sampling, testing, or
drilling to identify the presence of any Hazardous Materials at the
Property, without Landlord's prior written consent which shall not be
unreasonably withheld. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared,
received or submitted in connection with any sampling, testing or
drilling performed pursuant to the preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel
acceptable to Landlord, whose consent shall not unreasonably be
withheld) and hold harmless Landlord, its employees, assigns,
successors, successors-in-interest, agents and representatives from and
against any and all claims (including but not limited to third party
claims from a private party or a government authority), liabilities,
obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including
but not limited to reasonable attorneys', consultants' and other
experts' fees and costs), and damages, which arise from or relate to:
(i) Tenant's Hazardous Materials Activities; (ii) any Hazardous
Materials contamination caused by Tenant prior to the Commencement Date
of the Lease; or (iii) the breach of any obligation of Tenant under
this Paragraph 44 (collectively, "Tenant's Environmental
Indemnification"). Tenant's Environmental Indemnification shall include
but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution
in fair market value of the Property. Tenant's Environmental
Indemnification shall further include but is not limited to the
obligation to diligently and properly implement to completion, at
Tenant's expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other
environmental response action as may be required by applicable
Environmental Laws, regulations or governing agencies (collectively,
"Response Actions"). Tenant shall promptly provide Landlord with copies
of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any Response Actions.
F. Landlord hereby makes the following representations to
Tenant, each of which is made only to the best of Landlord's knowledge
as of the date Landlord executes this Lease, without any inquiry or
investigation having been made or required by Landlord regarding this
subject, nor does Landlord have any obligation to investigate or make
inquiry regarding the subject:
(1) The soil and ground water on or under the Premises does
not contain Hazardous Materials in amounts which violate any laws to
the extent that any governmental entity could require either Landlord
or Tenant to take any remedial action with respect to such Hazardous
Materials.
(2) During the time that Landlord has owned the Premises,
Landlord has received no notice of (i) any violation, or alleged
violation, of any law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to the
presence of Hazardous Material on the Premises, or (iii) any pending
investigation by any governmental agency concerning the Premises
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relating to Hazardous Materials.
G. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication
received from any governmental authority concerning Hazardous Materials
which relates to the Premises, and (ii) any contamination of the
Premises by Hazardous Materials which constitutes a violation of any
law. Attached as Exhibit "C" to the Lease is a list of Hazardous
Materials that Tenant intends to use at the Premises. If during the
Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the
Hazardous Materials and the manner of their use, storage and disposal,
and shall agree (i) to use, store and dispose of such Hazardous
Materials strictly in compliance with all laws, regulations and
governing agencies and (ii) that the indemnity set forth in Paragraph
44 shall be applicable to Tenant's use of such Hazardous Material.
H. Landlord or Tenant may, at any time, cause testing xxxxx to
be installed on the Premises, and may cause the ground water to be
tested to detect the presence of Hazardous Material by the use of such
tests as are then customarily used for such purposes. Testing xxxxx
installed by Tenant shall be paid for by Tenant. If tests conducted by
Landlord disclose that Tenant has violated any Hazardous Materials,
laws, or Tenant or parties on the Premises during the Term of this
Lease have contaminated the Premises as determined by regulatory
agencies pursuant to Hazardous Materials laws, or that Tenant has
liability to Landlord pursuant to Paragraph 44A, then Tenant shall pay
for 100 percent of the cost of the test and all related expense. Prior
to the expiration of the Lease Term, Tenant shall remove any testing
xxxxx it has installed at the Premises, and return the Premises to the
condition existing prior to the installation of such xxxxx, unless
Landlord requests in writing that Tenant leave all or some of the
testing xxxxx in which instance the xxxxx requested to be left shall
not be removed.
I. If any tests performed by Tenant or Landlord prior to the
Commencement Date disclose Hazardous Materials at the Premises,
Landlord at its expense will promptly take all reasonable action
required by law with respect to the existence of such Hazardous
Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is
prohibited by law.
J. The obligations of Landlord and Tenant under this Paragraph
44 shall survive the expiration or earlier termination of the Term of
this Lease. The rights and obligations of Landlord and Tenant with
respect to issues relating to Hazardous Materials are exclusively
established by this Paragraph 44."
12. REAL ESTATE TAXES: Effective as of the first day of the Third
Option Period, Lease Paragraph 53 ("Real Estate Taxes") shall be deleted in its
entirety and replaced with the following:
"53. REAL PROPERTY TAXES: Paragraph 9 is modified by the
following:
A. The term "Real Property Taxes" shall not include charges,
levies or fees directly related to the use, storage, disposal or
release of Hazardous Materials on the Premises unless directly related
to Tenant's Activities at this site or on other sites leased and/or
owned by Tenant; however, Tenant shall be responsible for general or
special tax and/or assessments (related to Hazardous Materials and/or
toxic waste) imposed on the Property provided said special tax and/or
assessment is not imposed due to on-site originated contamination on
the Property (by third parties not related to Tenant) prior to the
Lease Commencement Date. Subject to the terms and conditions stated
herein, Tenant shall be responsible for paying one hundred percent (100
%) of said taxes and/or assessments allocated to the Property.
B. If any assessments for public improvements are levied
against the Premises, Landlord may elect either to pay the assessment
in full or to allow the asessment to go to bond. If Landlord pays the
assessment in full, Tenant shall pay to Landlord or any
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assignee or purchaser of the Premises each time payment of Real
Property Taxes is made a sum equal to that which would have been
payable (as both principal and interest) had Landlord allowed the
assessment to go to bond.
C. Tenant at its cost shall have the right, at any time, to
seek a reduction in the assessed valuation of the Premises or to
contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the
failure on Tenant's part to pay such Real Property Taxes being so
contested shall not constitute a default so long as Tenant complies
with the provisions of this Paragraph. Landlord shall not be required
to join in any proceeding or contest brought by Tenant unless the
provisions of any law require that the proceeding or contest be brought
by or in the name of Landlord. In that case Landlord shall join in the
proceedlngs or contest or permit it to be brought in Landlord's name as
long as Landlord is not required to bear any cost. Tenant, on final
determination of the proceeding or contest, shall immediately pay or
discharge its share of any Real Property Taxes determined by any
decision or judgment rendered, together with all costs, charges,
interest, and penalties incidental to the decision or judgment. If
Tenant does not pay the Real Property Taxes when due pursuant to the
Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant
shall furnish to Landlord a surety bond in form reasonably satisfactory
to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125 % of the total
amount of Real Property Taxes in dispute and any such bond shall be
assignable to any lender or purchaser of the Premises. The bond shall
hold Landlord and the Premises harmless from any damage arising out of
the proceeding or contest and shall insure the payment of any judgment
that may be rendered."
13. PROPERTY INSURANCE: Effective as of the first day of the Third
Option Period, section B of Lease Paragraph 54 ("Property Insurance") shall be
deleted in its entirety and be of no further force or effect.
14. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the
Third Option Period, Lease Paragraph 55 ("Assignment and Subletting") shall be
deleted in its entirety and replaced with the following:
"55. ASSIGNMENT AND SUBLETTING: The following modifications
are made to Paragraph 16:
A. In the event that Tenant seeks to make any assignment or
sublease, then Landlord, by giving Tenant written notice of its
election within fifteen (15) days after Tenant's notice of intent to
assign or sublease has been given to Landlord, shall have the right to
elect (i) to withhold its consent to such assignment or sublease, as
permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event
Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the
following shall apply (except the following shall not apply to a
"Permitted Transfer" described in Paragraph 56):
(1) If Tenant assigns its interest in this Lease, then in
addition to the rental provided for in this Lease, Tenant shall pay to
Landlord fifty percent (50%) of all Rent and other consideration
received by Tenant over and above (i) the assignee's agreement to
assume the obligations of Tenant under this Lease and (ii) all
"Permitted Transfer Costs" (as defined herein) related to such
assignment. As used herein, the term "Permitted Transfer Costs" shall
mean all reasonable leasing commissions paid to third parties not
affilliated with Tenant in order to obtain the assignment or sublease
in question.
(2) If Tenant sublets all or part of the Premises, then Tenant
shall pay to Landlord in addition to the Rent provided for in this
Lease fifty percent (50%) of the positive difference, if any, between
(i) all rent and other consideration paid or provided
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to Tenant by the subtenant, less (ii) all Rent paid by Tenant to
Landlord pursuant to this Lease which is allotable to the area so
sublet and all Permitted Transfer Costs related to such sublease. After
Tenant has recovered all Permitted Transfer Cost Tenant shall pay to
Landlord the amount specified in the preceding sentence on the same
basis, whether periodic or in lump sum, that such rent and other
consideration is paid to Tenant by its subtenant, within seven (7) days
after it is received by Tenant.
3) Tenant's obligations under this subparagraph shall survive
any assignment or sublease. At the time Tenant makes any payment to
Landlord required by this subparagraph, Tenant shall deliver an
itemized statement of the method by which the amount to which Landlord
is entitled was calculated, certified by Tenant as true and correct.
Landlord shall have the right to inspect Tenant's books and records
relating to the payments due pursuant to this subparagraph. Upon
request therefor, Tenant shall deliver to Landlord copies of all bills,
invoices or other documents upon which its calculations are based.
(4) As used herein, the term "consideration" shall mean any
consideration of any kind received, or to be received (including, but
not limited to, services rendered and/or value received) by Tenant as a
result of the assignment or sublease, if such sums are paid or provided
to Tenant for Tenant's interest in this Lease or in the Premises.
(5) This Paragraph 55.A does not apply to a "Permitted
Transfer", as provided in Paragraph 56 hereof. The parties agree that
if any of the following transactions occur and do not qualify as
"Permitted Transfers", Tenant must obtain Landlord's consent to such
transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as "Permitted Transfers",
then the provisions of this Paragraph 55.A shall not apply to the
following transactions: (i) a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as 95 % of all assets and liabilities of Tenant are permanently
transferred to such assignee; and (ii) an assignment of this Lease to a
corporation which purchases or otherwise acquires 95 % or more of the
assets of Tenant so long as 95 % of all assets and liabilities of
Tenant are permanently transferred to such assignee and Tenant remains
liable and responsible under the Lease to the extent Tenant continues
in existence following such transaction."
15. PERMITtED ASSIGNMENTS AND SUBLEASES: Effective as of the first day
of the Third Option Period, Lease Paragraph 56 ("Permitted Assignments and
Subleases") shall be deleted in its entirety and replaced with the following:
"56. PERMITtED ASSIGNMENTS AND SUBLEASES: Notwithstanding
anything contained in Paragraph 16, so long as Tenant otherwise
complies with the provisions of Paragraph 16 and the Permitted Transfer
does not release Tenant from its obligations hereunder, Tenant may
enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent, and the provisions of
Paragraph 55A shall not apply to any such Permitted Transfer:
A. Tenant may sublease all or part of the Premises or assign
its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50 %) providing Tenant
remains liable for the payment of Rent and full performance of the
Lease;
B. Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as (i) 95 % of all assets and liabilities of Tenant are permanently
transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which
Tenant is to be merged has a net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or reorganization (whichever is
greater), or if it does not, Landlord is provided a guaranty
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of the Lease (in a form reasonably acceptable to Landlord) from a
corporation (a) that is the parent of, or is otherwise affiliated with,
the corporation into which Tenant is to be merged, and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment, merger,
consolidation or reorganization (whichever is greater). In the event
there is not a permanent transfer of 95 % or more of the assets and
liabilities from Tenant to a third party, and Tenant continues to exist
as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease;
C. Tenant may assign this Lease to a corporation which
purchases or otherwise acquires 95 % or more of the assets of Tenant so
long as 95 % of all assets and liabilities of Tenant are permanently
transferred to such assignee (in the event there is not a permanent
transfer of 95 % or more of the assets and liabilities from Tenant to a
third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and
conditions of the Lease), and provided that immediately prior to such
assignment said corporation, has a net worth equal to or greater than
the net worth of Tenant (a) at the time of Lease execution or (b) at
the time of such assignment (whichever is greater), or if it does not,
Landlord is provided a guaranty of the Lease (in a form reasonably
acceptable to Landlord) from a corporation (a) that is the parent of,
or is otherwise affiliated with, said corporation and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment,
(whichever is greater)."
16. DESTRUCTION: Effective as of the first day of the Third Option
Period, Lease Paragraph 61 ("Destruction") shall be deleted in its entirety and
replaced with the following:
"61. DESTRUCTION: Paragraph 21 is modified by the following:
A. Notwithstanding anything to the contrary within Paragraph
21, Landlord may terminate this Lease in the event of an uninsured
event or if insurance proceeds, net of the deductible, are insufficient
to cover one hundred percent of the rebuilding costs; provided,
however, Tenant shall have the right to elect, in its discretion, to
contribute such excess funds to permit Landlord to repair the Premises.
B. Except as provided in Xxxxxxxxx 00X, Xxxxxxxx may not
terminate the Lease if the Premises are damaged by a peril whereby the
cost to replace and/or repair is one hundred percent (100 %) covered by
the insurance carried by Landlord pursuant to Paragraph 12, but instead
shall restore the Premises in the manner described by Paragraph 21.
C. If the Premises are damaged by a peril covered by the
insurance carried by Landlord pursuant to Xxxxxxxxx 00, Xxxxxxxx shall
have the option to terminate the Lease if each of the following
conditions is satisfied: (i) the cost to repair or the damage exceeds
thirty-three percent (33 %) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than
five (5) years remaining in the term of the Lease.
D. If Landlord fails to obtain insurance as required pursuant
to Paragraph 12, and said insurance would have been available to cover
any damage or destruction to the Premises, Landlord shall be required
to rebuild, at its cost, net of the deductible which would have been
required under said insurance policy (which deductible Tenant is
required to pay).
E. If the Premises are damaged by any peril, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written
opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be completed. Tenant
shall have the option to terminate this Lease in the event any of the
following occurs, which option may be exercised only by delivery to
Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time
needed to complete such
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restoration:
(1) The Premises are damaged by any peril (not caused by or
resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within 180 days after the
date of such damage (subject to force majeure conditions); or
(2) The Premises are damaged by any peril (not caused by or
resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) within twelve (12) months of the last day of
the Lease term, and, in the reasonable opinion of Landlord's architect
or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within sixty (60) days after the date
of such damage and Tenant has not exercised its Option to Extend said
Term (or Extended Term as the case may be)."
17. LIABILITY INSURANCE: Effective as of the first day of the Third
Option Period, the first sentence of Lease Paragraph 10 ("Liability Insurance")
shall be deleted and replaced with the following: "Tenant, at Tenant's expense,
agrees to keep in force during the Term of this Lease a policy of commercial
general liability insurance with combined single limit coverage of not less than
Two Million Dollars ($2,000,000) per occurrence for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped
areas."
18. LIMITATION OF LIABILITY: Effective as of the first day of the Third
Option Period, Lease Paragraph 36 ("Limitation of Liability") shall be deleted
in its entirety and replaced with the following:
"36. LIMITATION OF LIABILITY In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and
agree that, in the event of any actual or alleged failure, breach or
default hereunder by Landlord:
(i) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;
(ii) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of
the partnership);
(iii) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the
partnership);
(iv) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(v) no judgment will be taken against any partner of Landlord;
(vi) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(vii) no writ of execution will ever be levied against the assets of
any partner of Landlord;
(viii) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and
agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by statute or at common
law."
EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions
of said March 23, 1994 Lease Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
No. I to Lease as of the day and year last written below.
LANDLORD: TENANT:
XXXX XXXXXXXXX SURVIVOR'S QUANTUM CORPORATION
TRUST a Delaware corporation
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxxxx Xxxxxx
------------------ -----------------
Xxxx Xxxxxxxxx, Trustee
Xxxxxx Xxxxxx
Date: 6/30/97 Print or Type Name
XXXXXXX X. XXXXX SEPARATE Title: VP FINANCE AND CORP GENERAL
PROPERTY TRUST COUNSEL
Date: 6/25/97
By /s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx, Trustee
Date: 6/26/97
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AMENDMENT NO. 1
TO LEASE
THIS AMENDMENT NO. 1 is made and entered into this 16th day of April,
1997, by and between XXXX XXXXXXXXX, Trustee, or his Successor Trustee UTA dated
7/20/77 (XXXX XXXXXXXXX SURVIVOR'S TRUST) (previously known as the "Xxxx
Xxxxxxxxx Separate Property Trust") as amended, and XXXXXXX X. XXXXX, Trustee,
or his Successor Trustee UTA dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware
corporation, as TENANT.
RECITALS
A. WHEREAS, by Lease Agreement dated September 17, 1990 Landlord leased
to Tenant all of that certain 101,253+/- square foot building located at 0000
Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx, the details of which are more particularly
set forth in said September 17, 1990 Lease Agreement, and
B. WHEREAS, said Lease was amended by the Commencement Letter dated
December 6, 1991 which established the December 6, 1991 Lease Commencement Date,
and established the Termination Date of September 30, 2006, and,
C. WHEREAS, it is now the desire of the parties hereto to amend the
Lease by (i) extending the Term for five years, changing the Termination Date
from September 30, 2006 to September 30, 2011, (ii) amending the Basic Rent
schedule and Aggregate Rent accordingly, (iii) adding a third Five Year Option
to Extend, (iv) replacing Paragraphs 40C ("Lease Terms Co-extensive") and 47
("Cross Default") and 52 ("Structural Capital Costs Regulated by Governmental
Agencies After the Commencement of this Lease not Caused by Tenant or Tenant's
Uses or Remodeling of the Premises"), (v) amending Lease Paragraph 12 ("Property
Insurance") and (vi) amending and/or replacing certain provisions of the Lease
commencing as of the commencement of the Third Extended Term of said Lease as
hereinafter set forth.
AGREEMENT
NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:
1. TERM OF LEASE: It is agreed between the parties that Tenant has
exercised its First Five-Year Option to Extend the lease term of that certain
lease agreement dated March 23, 1994 for premises located at 0000 Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Building 5 Lease"), as detailed in Paragraph 41 of
said Building 5 Lease. Paragraph 40C of said Building 5 Lease provides that in
the event the term of said Building 5 Lease is extended for any reason
whatsoever, the terms of the Existing Leases (i.e. two of said leases dated
October 31, 1989 are for Premises located at 0000 Xxxxxxxxxx Xxxxx and 000
XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx (the "1989 Leases"); one of said leases
dated September 17, 1990 is for Premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx, and one of said leases dated April 10, 1992 is for Premises located
at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx) shall also be extended so that all
five Leases expire on the same date; therefore, it is agreed between the parties
that by exercising its Option to Extend the Building 5 Lease, Tenant has in
effect exercised its Option to Extend under Lease Paragraph 41 ("First Five-Year
Option to Extend"), and that pursuant to said Lease Paragraph 41, the Term of
this Lease Agreement shall be extended for an additional five (5) year period,
and the Lease Termination Date shall be changed from September 30, 2006 to
September 30, 2011.
2. BASIC RENTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic
Rental for the First Extended Term of Lease shall be as follows:
On October 1, 2006, the sum of ONE HUNDRED EIGHTY FIVE THOUSAND TWO
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HUNDRED NINETY TWO AND 99/100 DOLLARS ($185,292.99) shall be due, and a like sum
due on the first day of each month thereafter through and including September 1,
2007.
On October 1, 2007, the sum of ONE HUNDRED NINETY THOUSAND THREE
HUNDRED FIFTY FIVE AND 64/100 DOLLARS ($190,355.64) shall be due, and a like sum
due on the first day of each month thereafter through and including September 1,
2008.
On October 1, 2008, the sum of ONE HUNDRED NINETY FIVE THOUSAND FOUR
HUNDRED EIGHTEEN AND 29/100 DOLLARS ($195,418.29) shall be due, and a like sum
due on the first day of each month thereafter through and including September 1,
2009.
On October 1, 2009, the sum of TWO HUNDRED THOUSAND FOUR HUNDRED EIGHTY
AND 94/100 DOLLARS ($200,480.94) shall be due, and a like sum due on the first
day of each month thereafter through and including September 1, 2010.
On October 1, 2010, the sum of TWO HUNDRED FIVE THOUSAND FIVE HUNDRED
FORTY THREE AND 59/100 DOLLARS ($205,543.59) shall be due, and a like sum due on
the first day of each month thereafter through and including September 1,2011.
The Aggregate Basic Rent for the Lease shall be increased by
$11,725,097.40 or from $25,686,182.83 to $37,411,280.23.
3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the
Lease for an additional five (5) year period pursuant to Lease Paragraph 42
("Second Five Year Option To Extend"), Landlord hereby grants to Tenant a third
option to extend the Term of this Lease for an additional five (5) year period
upon the following terms and conditions:
A. Tenant shall give Landlord written notice of Tenant's exercise of
this option to extend at least one hundred eighty (180) days prior to the
expiration of the Lease Term as extended pursuant to Lease Paragraph 42 ("Second
Five Year Option To Extend"), in which event the Lease shall be considered
extended for an additional five (5) year period upon the same terms and
conditions as this Lease, absent this Paragraph 3 and subject to the Rental as
set forth below. In the event that Tenant fails to timely exercise Tenant's
option as set forth herein in writing, Tenant shall have no further option to
extend this Lease or the Other Leases, and this Lease shall continue in full
force and effect for the full remaining term hereof, absent this Paragraph 3.
B. The monthly Basic Rent for the option period shall be as follows in
the event the option is exercised:
Period Monthly Basic Rent
------ ------------------
Months 1-12 $2.33/sf
Months 13-24 $2.38/sf
Months 25-36 $2.43/sf
Months 37-48 $2.48/sf
Months 49-60 $2.53/sf
C. Notwithstanding anything contained herein, Tenant may not exercise
the option to extend granted by this Paragraph 3 at any time that Tenant is in
default (default for monetary and material default for non-monetary) of its
obligations under this Lease, if Tenant has received written notice from
Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be
cured, and if Landlord does not elect to terminate this Lease as a result of
such non-curable default by Tenant, Tenant may exercise the option to extend
granted by this Paragraph 3 notwithstanding such non-curable default.
4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C ("Lease Terms
Co-extensive") is hereby deleted in its entirety and replaced with the
following:
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"40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i)
Landlord and Tenant have previously executed four separate leases in
addition to this Lease: one of said leases dated October 31, 1989 is
for Premises located at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx
(the "Building One Lease"); one of said leases dated October 31, 1989
is for Premises located at 000 XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx
(the "Building Two Lease"); one of said leases dated April 10, 1992 is
for Premises located at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building 3 Lease"); and one of said leases dated March 23, 1994 is for
premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building 5 Lease") (hereinafter collectively referred to as the "Other
Leases"); and (ii) it is the intention of the parties that the term of
this Lease be co-extensive with the term of the Other Leases, such that
the terms of all five leases ("the Leases") expire on the same date.
The provisions of this Paragraph 40C also requires the terms of all the
Leases to be extended accordingly if Tenant exercises its Option to
Extend under any of the Leases. The monthly Basic Rent during the
extended term under each of the Leases shall be increased by $.05 per
square foot on the commencement date of the extended term and
thereafter on each and every anniversary of the respective lease's
commencement date of the extended term."
5. CROSS DEFAULT: Lease Paragraph 47 ("Cross Default") is hereby
deleted in its entirety and replaced with the following:
"47. CROSS DEFAULT: It is agreed between Landlord and Tenant
that a default under this Lease, or a default under any of the Other
Leases may, at the option of Landlord, be considered a default under
all Leases, in which event Landlord shall be entitled (but in no event
required) to apply all rights and remedies of Landlord under the terms
of one lease to all the Leases including, but not limited to, the right
to terminate any or all of the aforementioned Other Leases or this
Lease by reason of a default under the Leases or hereunder.
Notwithstanding the above, Landlord shall have the option of
considering a default under this Lease or a default under any of the
Other Leases to be a default under all such leases, only with respect
to such leases under which Landlord is also the 'Landlord' at the time
such default occurs. By way of example, if at the time a default of
Tenant occurs under this Lease, Landlord has sold the premises
described in any of the Other Leases and is no longer the 'Landlord'
thereunder, then a default under this Lease shall not constitute a
default under any of such Other Leases so sold by Landlord (unless the
premises leased under this Lease and the Other Leases are sold to the
same entity), and a default by Tenant under any of such Other Leases so
sold by Landlord shall not constitute a default under this Lease or any
other of the Other Leases then remaining between Landlord and Tenant.
However, if the Landlord under this Lease and the other Leases is one
in the same at the time of said default, said cross default provisions
shall apply."
6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER
THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT'S USES OR
REMODELING OF THE PREMISES: Lease Paragraph 52 ("Structural Capital Costs
Regulated by Governmental Agencies after the Commencement of this Lease Not
Caused by Tenant or Tenant's Uses or Remodeling of the Premises") is hereby
deleted and replaced with the following:
"52. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL
AGENCIES AFTER THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR
TENANT'S USES OR REMODELING OF THE PREMISES: The provisions of this
Paragraph 52 shall modify Paragraphs 7 and 14:
A. If (i) during the last five (5) years of the First Extended
Term of the Lease if said Lease has not been extended as provided for
in Lease Paragraph 42 ("Second Five Year Option To Extend") or in
Paragraph 3 ("Third Five Year Option to Extend")
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or Paragraph 4 ("Lease Terms Co-Extensive") above, or (ii) during
either of the five (5) year extension periods permitted by Lease
Paragraph 42 or Paragraph 3, or Paragraph 4 above, it becomes necessary
(due to any governmental requirement for continued occupancy of the
Premises) to make structural improvements required by laws enacted or
legal requirements imposed by governmental agency(s) after the
Commencement Date, and the cost for each required work or improvements
exceeds $100,000, then if such legal requirement is not imposed because
of Tenant's specific use of the Premises and is not "triggered" by
Tenant's Alterations or Tenant's application for a building permit or
any other governmental approval (collectively "Tenant's Actions") in
which instance Tenant shall be responsible for 100% of the cost of
such improvements, Landlord shall be responsible for paying the cost of
such improvement and constructing such improvement, subject to a cash
contribution from Tenant of a portion of the cost thereof as provided
for and calculated in Paragraph 52B.
B. When Landlord makes an improvement pursuant to Paragraph
52A, and as a condition to Landlord's obligation to construct such
improvement, Tenant shall make the following contribution in cash to
Landlord for the cost thereof prior to the commencement of the work by
Landlord. It is agreed that Tenant shall pay to Landlord 100% of the
cost of the first $100,000.00 worth of each improvement. After the
first $100,000.00, all costs above $100,000.00 shall be divided by 15
and multiplied by the time period remaining in the last five years of
the Lease Term from the date work on such improvement commences.
For example, if the improvement is not required as a result of
Tenant's Actions and if the cost of such improvement was $400,000 and
there was one year and six months remaining in the Lease term when the
work commenced, then Tenant would be responsible for reimbursing
Landlord in cash $130,000.00 computed as follows:
Total Cost of Work $400,000.00
Tenant Responsible for
1st $100,000 -100,000.00
-----------
Total Amount To Be Amortized $300,000.00
$300,000.00/15 = $20,000.00/yr. x 1.5 yrs = $ 30,000.00
Tenant responsible for $100,000 + $30,000.00 = $130,000.00
C. If Landlord has made improvements, for which Tenant has
reimbursed Landlord for the cost thereof pursuant to Xxxxxxxxx 00X, and
the term of this Lease is subsequently extended pursuant to the
exercise by Tenant of an option to renew pursuant to Lease Paragraph 42
or Paragraph 3 above, upon the exercise of any such option by Tenant,
Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by
Tenant. Using the example in Paragraph 52B above, Tenant would owe
Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00)."
7. PROPERTY INSURANCE: Lease Paragraph 12 ("Property Insurance") is
hereby amended to include the following: "Tenant acknowledges that as part of
the cost of insurance policies for the Premises, Tenant is responsible for the
payment of insurance deductibles on insurance claims as they relate to the
Premises subject to the limitations provided in Lease Paragraph 54 ("Property
Insurance") which limitations are applicable only during the initial Lease Term
and the First Lease Extension Period and the Second Lease Extension Period. Said
limitation provided for in Lease Paragraph 54 are null and void at the
commencement of the Third Lease Extended Term".
8. THIRD OPTION PERIOD - LEASE PROVISION CHANGES: In the event Tenant
exercises its Third Option to Extend as provided for in Paragraph 3 above, the
following amendments (contained within Paragraphs 9 through 19) are herein made
to the Lease to be effective upon the commencement of the third option period
("Third Option Period"), or during any period fo11owing the
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expiration of the Lease Term or expiration of the Lease when Tenant is in
possession of the Premises.
9. LATE CHARGE: Effective as of the first day of the Third Option
Period, the Late Charge referenced in Lease Paragraph 4.D ("Late Charge") shall
be changed from five percent (5%) to ten percent (10%), and Lease Paragraph 49
("Limitation on Late Charge") shall be deleted in its entirety and of no further
force or effect.
10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the
Lease, effective as of the first day of the Third Option Period, and on the
first day of each month thereafter, Tenant shall pay to Landlord, in addition to
the Basic Rent and Additional Rent, a fixed monthly management fee ("Management
Fee") equal to one percent (1%) of the Basic Rent due for each month during the
Lease Term.
11. HAZARDOUS MATERIALS: Effective as of the first day of the Third
Option Period, Lease Paragraph 44 ("Hazardous Materials") shall be deleted in
its entirety and replaced with the following:
"44. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows
with respect to the existence or use of "Hazardous Materials" (as
defined herein) on, in, under or about the Premises and real property
located beneath said Premises, which includes the entire parcel of land
on which the Premises are located as shown in Green on Exhibit A to the
Lease (hereinafter collectively referred to as the "Property"):
A. As used herein, the term "Hazardous Materials" shall mean
any material, waste, chemical, mixture or byproduct which is or
hereafter is defined, listed or designated under Environmental Laws
(defined below) as a pollutant, or as a contaminant, or as a toxic or
hazardous substance, waste or material, or any other unwholesome,
hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or
restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions
thereof, polychlorinated biphenyls, or asbestos). As used herein, the
term "Environmental Laws" shall mean any applicable Federal, State of
California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or
order of any executive or judicial authority at any level of Federal,
State of California or local government (whether now existing or
subsequently adopted or promulgated) relating to pollution or the
protection of the environment, ecology, natural resources, or public
health and safety.
B. Tenant shall notify Landlord prior to the occurrence of any
Tenant's Hazardous Materials Activities (defined below). Landlord
acknowledges that Tenant shall use, in compliance with applicable
Environmental Laws, customary household and office supplies (Tenant
shall first provide Landlord with a list of said materials use), such
as mild cleaners, lubricants and copier toner. Any and all of Tenant's
Hazardous Materials Activities shall be conducted in conformity with
this Xxxxxxxxx 00, Xxxxxxxxx 14 of this Lease, and in compliance with
all Environmental Laws and regulations. As used herein, the term
"Tenant's Hazardous Materials Activities" shall mean any and all use,
handling, generation, storage, disposal, treatment, transportation,
release, discharge, or emission of any Hazardous Materials on, in,
beneath, to, from, at or about the Property, in connection with
Tenant's use of the Property, or by Tenant or by any of Tenant's
agents, employees, contractors, vendors, invitees, visitors or its
future subtenants or assignees or other third parties (including
"dumping" by others) (or which Hazardous Materials originate on the
surface of the Premises any time on or after the Commencement Date of
this Lease, but excluding Hazardous Materials on the Premises prior to
the Lease Commencement Date because of the storage, use, disposal, or
transportation of such materials or waste by any of Landlord's
contractors or otherwise arising out of construction work performed by
or under the direction of Landlord on the Premises and Landlord shall
be responsible for
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all required actions with respect to such materials or wastes). Tenant
agrees to provide Landlord with prompt written notice of any spill or
release of Hazardous Materials at the Property during the term of the
Lease of which Tenant becomes aware, and further agrees to provide
Landlord with prompt written notice of any violation of Environmental
Laws in connection with Tenant's Hazardous Materials Activities of
which Tenant becomes aware. If Tenant's Hazardous Materials Activities
involve Hazardous Materials other than normal use of customary
household and office supplies, Tenant also agrees at Tenant's expense:
(i) to install such Hazardous Materials monitoring, storage and
containment devices as may be required by Environmental Laws,
regulations and/or governing agencies; (ii) to provide Landlord with a
written inventory of such Hazardous Materials, including an update of
same each year upon the anniversary date of the Commencement Date of
the Lease ("Anniversary Date"); and (iii) on each Anniversary Date to
provide to Landlord copies of all documentation and records, required
by applicable Environmental Laws to be prepared and submitted to
governmental authorities, relating to use at the Property of Hazardous
Materials or to Tenant's Hazardous Materials Activities, if any. If
upon completion of Landlord's review of said documentation and records,
Landlord reasonably questions if Tenant is in compliance with all
applicable Environmental Laws with respect to Tenant's Hazardous
Materials Activities, Tenant agrees within thirty (30) days following
receipt of written notice from Landlord, to retain a qualified
environmental consultant, acceptable to Landlord, to evaluate whether
Tenant is in compliance with all applicable Environmental Laws with
respect to Tenant's Hazardous Materials Activities. Tenant, at its
expense, shall submit to Landlord a report from such environmental
consultant which discusses the environmental consultant's findings
within two (2) months of each Anniversary Date. Tenant, at its expense,
shall promptly undertake and complete any and all steps necessary, and
in full compliance with applicable Environmental Laws, to fully correct
any and all problems or deficiencies identified by the environmental
consultant, and promptly provide Landlord with documentation of all
such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at
its expense, shall (i) properly remove from the Property all Hazardous
Materials which come to be located at the Property in connection with
Tenant's Hazardous Materials Activities, and (ii) fully comply with and
complete all facility closure requirements of applicable Environmental
Laws regarding Tenant's Hazardous Materials Activities, including but
not limited to (x) properly restoring and repairing the Property to the
extent damaged by such closure activities, and (y) obtaining from the
local Fire Department or other appropriate governmental authority with
any legal or regulatory jurisdiction a written concurrence that closure
has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims,
notices, work plans, data and reports prepared, received or submitted
in connection with any such closure activities.
D. If Landlord, upon consultation with Tenant, reasonably
concludes that the Property has become contaminated as a result of
Tenant's Hazardous Materials Activities, Landlord in addition to any
other rights it may have under this Lease or under Environmental Laws
or other laws, may enter upon the Property and conduct inspection,
sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of
determining the nature and extent of such contamination except to the
extent that such activities may be inconsistent with Tenant's
compliance with Environmental Laws. Tenant shall promptly reimburse
Landlord for the costs of such an investigation, including but not
limited to reasonable attorneys' fees Landlord incurs with respect to
such investigation to the extent, and only to the extent, that it that
discloses Hazardous Materials contamination for which Tenant is liable
under this Lease. Except as may be required of Tenant by applicable
Environmental Laws, Tenant shall not perform any sampling, testing, or
drilling to identify the presence of any Hazardous Materials at the
Property, without Landlord's prior written consent which shall not be
unreasonably withheld. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared,
received or submitted in connection with any sampling, testing or
drilling performed pursuant to the preceding sentence.
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E. Tenant shall indemnify, defend (with legal counsel
acceptable to Landlord, whose consent shall not unreasonably be
withheld) and hold harmless Landlord, its employees, assigns,
successors, successors-in-interest, agents and representatives from and
against any and all claims (including but not limited to third party
claims from a private party or a government authority), liabilities,
obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including
but not limited to reasonable attorneys', consultants' and other
experts' fees and costs), and damages, which arise from or relate to:
(i) Tenant's Hazardous Materials Activities; (ii) any Hazardous
Materials contamination caused by Tenant prior to the Commencement Date
of the Lease; or (iii) the breach of any obligation of Tenant under
this Paragraph 44 (collectively, "Tenant's Environmental
Indemnification"). Tenant's Environmental Indemnification shall include
but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution
in fair market value of the Property. Tenant's Environmental
Indemnification shall further include but is not limited to the
obligation to diligently and properly implement to completion, at
Tenant's expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other
environmental response action as may be required by applicable
Environmental Laws, regulations or governing agencies (collectively,
"Response Actions"). Tenant shall promptly provide Landlord with copies
of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any Response Actions.
F. Landlord hereby makes the following representations to
Tenant, each of which is made only to the best of Landlord's knowledge
as of the date Landlord executes this Lease, without any inquiry or
investigation having been made or required by Landlord regarding this
subject, nor does Landlord have any obligation to investigate or make
inquiry regarding the subject:
(1) The soil and ground water on or under the
Premises does not contain Hazardous Materials in amounts which violate
any laws to the extent that any governmental entity could require
either Landlord or Tenant to take any remedial action with respect to
such Hazardous Materials.
(2) During the time that Landlord has owned the
Premises, Landlord has received no notice of (i) any violation, or
alleged violation, of any law that has not been corrected to the
satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or
(iii) any pending investigation by any governmental agency concerning
the Premises relating to Hazardous Materials.
G. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication
received from any governmental authority concerning Hazardous Materials
which relates to the Premises, and (ii) any contamination of the
Premises by Hazardous Materials which constitutes a violation of any
law. Attached as Exhibit "C" to the Lease is a list of Hazardous
Materials that Tenant intends to use at the Premises. If during the
Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the
Hazardous Materials and the manner of their use, storage and disposal,
and shall agree (i) to use, store and dispose of such Hazardous
Materials strictly in compliance with all laws, regulations and
governing agencies and (ii) that the indemnity set forth in Paragraph
44 shall be applicable to Tenant's use of such Hazardous Material.
H. Landlord or Tenant may, at any time, cause testing xxxxx to
be installed on the Premises, and may cause the ground water to be
tested to detect the presence of Hazardous Material by the use of such
tests as are then customarily used for such purposes. Testing xxxxx
installed by Tenant shall be paid for by Tenant. If tests conducted by
Landlord disclose that Tenant has violated any Hazardous Materials
laws, or Tenant or parties on the Premises during the Term of this
Lease have contaminated the Premises as determined by regulatory
agencies pursuant to Hazardous Materials laws, or that Tenant has
liability to Landlord pursuant to Paragraph 44A,
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then Tenant shall pay for 100 percent of the cost of the test and all
related expense. Prior to the expiration of the Lease Term, Tenant
shall remove any testing xxxxx it has installed at the Premises, and
return the Premises to the condition existing prior to the installation
of such xxxxx, unless Landlord requests in writing that Tenant leave
all or some of the testing xxxxx in which instance the xxxxx requested
to be left shall not be removed.
I. If any tests performed by Tenant or Landlord prior to the
Commencement Date disclose Hazardous Materials at the Premises,
Landlord at its expense will promptly take all reasonable action
required by law with respect to the existence of such Hazardous
Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is
prohibited by law.
J. The obligations of Landlord and Tenant under this Paragraph
44 shall survive the expiration or earlier termination of the Term of
this Lease. The rights and obligations of Landlord and Tenant with
respect to issues relating to Hazardous Materials are exclusively
established by this Paragraph 44."
12. SECURITY DEPOSIT: Effective as of the first day of the Third Option
Period, Lease Paragraph 50 ("Security Deposit") shall be deleted in its entirety
and replaced with the following:
"50. SECURITY DEPOSIT: The following provisions shall modify
Lease Xxxxxxxxx 0X.
A. Within thirty (30) days after the expiration or earlier
termination of the Lease term and after Tenant has vacated the
Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed
by Landlord to cure defaults of Tenant under the Lease or compensate
Landlord for damages for which Tenant is liable pursuant to this Lease.
The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.
B. During the first thirty (30) days following Tenant's
exercise of its Third Option to Extend, and only during said thirty day
period, Tenant shall have the one-time option of satisfying its
obligation with respect to an amount equal to one-half (1/2)
($136,691.55) of the $273,383.10 Security Deposit required under Lease
Paragraph 4F by providing to Landlord, at Tenant's sole cost, a letter
of credit which: (i) is drawn upon an institutional lender reasonably
acceptable and accessible to Landlord in form and content reasonably
satisfactory to Landlord; (ii) is in the amount of one-half (1/2) of
the Security Deposit; (iii) is for a term of at least twelve (12)
months; (iv) with respect to any letter of credit in effect within the
six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at
least forty five (45) days past the Lease expiration date (including
any extensions thereof); and (v) may be drawn upon by Landlord upon
submission of a declaration of Landlord that Tenant is in default (as
defined in Paragraph 19 and as modified by Paragraph 59). Landlord
shall not be obligated to furnish proof of default to such
institutional lender, and Landlord shall only be required to give the
institutional lender written notification that Tenant is in default and
upon receiving such written notification from Landlord the
institutional lender shall be obligated to immediately deliver cash to
Landlord equal to the amount Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant's default
up to 1/2 of the total Security Deposit required under Lease Xxxxxxxxx
0X. Said letter of credit shall provide that if the letter of credit is
not renewed, replaced or extended within twenty (20) days prior to its
expiration date the issuer of the credit shall automatically issue a
cashiers check payable to Landlord in the amount of the letter of
credit after the date which is twenty (20) days before the expiration
date, and no later than the expiration date, without Landlord being
required to make demand upon the letter of credit. If Tenant provides
Landlord with a letter of credit, within thirty (30) days of the
execution of this Lease, meeting the foregoing requirements, one-half
(1/2) of the
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cash Security Deposit (i.e.: $136.691.55 of the $273.383.10 Security
Deposit) shall be returned to Tenant by Landlord inasmuch as the cash
deposit remaining and the Letter of Credit equal the total Security
Deposit required in Lease Xxxxxxxxx 0X. If Tenant defaults with respect
to any provisions of this Lease, including but not limited to
provisions relating to the payment of Rent, Landlord may (but shall not
be required to) draw down on the letter of credit for payment of any
sum which Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any loss or damage
which Landlord may suffer by reason of Tenant's default. Landlord and
Tenant acknowledge that such letter of credit will be treated as if it
were a cash security deposit, and such letter of credit may be drawn
down upon by Landlord upon demand and presentation of evidence of the
identity of Landlord to the issuer, in the event that Tenant defaults
with respect to any provision of this Lease and such default is not
cured within any applicable cure period. Notwithstanding anything to
the contrary in this Lease, Landlord shall not be obligated to furnish
proof of default to such institutional lender and Landlord is only
required to give the institutional lender written notification that
Tenant is in default and upon receiving such written notification from
Landlord the institutional lender shall be obligated to immediately
deliver cash to Landlord equal to the amount Landlord may spend or
become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant's default up to 1/2 of the total Security Deposit.
Landlord acknowledges that it is not entitled to draw down such letter
of credit unless Landlord would have been entitled to draw upon the
cash security deposit pursuant to the terms of Paragraph 4F of the
Lease. Concurrently with the delivery of the required information to
the issuer, Landlord shall deliver to Tenant written evidence of the
default upon which the draw down was based, together with evidence that
Landlord has provided to Tenant the written notice of such default
which was required under the applicable provision of the Lease, and
evidence of the failure of Tenant to cure such default within the
applicable grace period following receipt of such notice of default.
Any proceeds received by Landlord by drawing upon the letter of credit
shall be applied in accordance with the provisions governing the
Security Deposit imposed by Lease Paragraph 4F and this Paragraph 50.
If Landlord draws upon the letter of credit, thereafter Tenant shall
once again have the right to post a letter of credit in place of
one-half (1/2) of a cash Security Deposit so long as Tenant is not then
in default. In any event Tenant will be obligated to replenish the
amount drawn to restore the Security Deposit to its original amount as
provided for in Xxxxxxxxx 0X. If any portion of the letter of credit is
used or applied pursuant hereto, Tenant shall, within ten (10) days
after receipt of a written demand therefor from Landlord, restore and
replace the value of such security by either (i) depositing cash with
Landlord in the amount equal to the sum drawn down under the letter of
credit, or (ii) increasing the letter of credit to its value
immediately prior to such application. Tenant's failure to replace the
value of the security as provided in the preceding sentence shall be a
material breach of its obligation under this Lease."
13. REAL ESTATE TAXES: Effective as of the first day of the Third Option
Period, Lease Paragraph 53 ("Real Estate Taxes") shall be deleted in its
entirety and replaced with the following:
"53. REAL PROPERTY TAXES: Paragraph 9 is modified by the
following:
A. The term "Real Property Taxes" shall not include charges,
levies or fees directly related to the use, storage, disposal or
release of Hazardous Materials on the Premises unless directly related
to Tenant's Activities at this site or on other sites leased and/or
owned by Tenant; however, Tenant shall be responsible for general or
special tax and/or assessments (related to Hazardous Materials and/or
toxic waste) imposed on the Property provided said special tax and/or
assessment is not imposed due to on-site originated contamination on
the Property (by third parties not related to Tenant) prior to the
Lease Commencement Date. Subject to the terms and conditions stated
herein, Tenant shall be responsible for paying one hundred percent
(100%) of said taxes and/or assessments allocated to the Property.
B. If any assessments for public improvements are levied
against the Premises, Landlord may elect either to pay the assessment
in full or to allow the assessment to go
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to bond. If Landlord pays the assessment in full, Tenant shall pay to
Landlord or any assignee or purchaser of the Premises each time payment
of Real Property Taxes is made a sum equal to that which would have
been payable (as both principal and interest) had Landlord allowed the
assessment to go to bond.
C. Tenant at its cost shall have the right, at any time, to
seek a reduction in the assessed valuation of the Premises or to
contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the
failure on Tenant's part to pay such Real Property Taxes being so
contested shall not constitute a default so long as Tenant complies
with the provisions of this Paragraph. Landlord shall not be required
to join in any proceeding or contest brought by Tenant unless the
provisions of any law require that the proceeding or contest be brought
by or in the name of Landlord. In that case Landlord shall join in the
proceedings or contest or permit it to be brought in Landlord's name as
long as Landlord is not required to bear any cost. Tenant, on final
determination of the proceeding or contest, shall immediately pay or
discharge its share of any Real Property Taxes determined by any
decision or judgment rendered, together with all costs, charges,
interest, and penalties incidental to the decision or judgment. If
Tenant does not pay the Real Property Taxes when due pursuant to the
Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant
shall furnish to Landlord a surety bond in form reasonably satisfactory
to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125% of the total
amount of Real Property Taxes in dispute and any such bond shall be
assignable to any lender or purchaser of the Premises. The bond shall
hold Landlord and the Premises harmless from any damage arising out of
the proceeding or contest and shall insure the payment of any judgment
that may be rendered."
14. PROPERTY INSURANCE: Effective as of the first day of the Third
Option Period, section B of Lease Paragraph 54 ("Property Insurance") shall be
deleted in its entirety and be of no further force or effect.
15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the
Third Option Period, Lease Paragraph 55 ("Assignment and Subletting") shall be
deleted in its entirety and replaced with the following:
"55. ASSIGNMENT AND SUBLETTING: The following modifications
are made to Paragraph 16:
A. In the event that Tenant seeks to make any assignment or
sublease, then Landlord, by giving Tenant written notice of its
election within fifteen (15) days after Tenant's notice of intent to
assign or sublease has been given to Landlord, shall have the right to
elect (i) to withhold its consent to such assignment or sublease, as
permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event
Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the
following shall apply (except the following shall not apply to a
"Permitted Transfer" described in Paragraph 56):
(1) If Tenant assigns its interest in this Lease,
then in addition to the rental provided for in this Lease, Tenant shall
pay to Landlord fifty percent (50%) of all Rent and other consideration
received by Tenant over and above (i) the assignee's agreement to
assume the obligations of Tenant under this Lease and (ii) all
"Permitted Transfer Costs" (as defined herein) related to such
assignment. As used herein, the term "Permitted Transfer Costs" shall
mean all reasonable leasing commissions paid to third parties not
affiliated with Tenant in order to obtain the assignment or sublease in
question.
(2) If Tenant sublets all or part of the Premises,
then Tenant shall pay to Landlord in addition to the Rent provided for
in this Lease fifty percent (50%) of the
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positive difference, if any, between (i) all rent and other
consideration paid or provided to Tenant by the subtenant, less (ii)
all Rent paid by Tenant to Landlord pursuant to this Lease which is
allocable to the area so sublet and all Permitted Transfer Costs
related to such sublease. After Tenant has recovered all Permitted
Transfer Costs Tenant shall pay to Landlord the amount specified in the
preceding sentence on the same basis, whether periodic or in lump sum,
that such rent and other consideration is paid to Tenant by its
subtenant, within seven (7) days after it is received by Tenant.
3) Tenant's obligations under this subparagraph shall survive
any assignment or sublease. At the time Tenant makes any payment to
Landlord required by this subparagraph, Tenant shall deliver an
itemized statement of the method by which the amount to which Landlord
is entitled was calculated, certified by Tenant as true and correct.
Landlord shall have the right to inspect Tenant's books and records
relating to the payments due pursuant to this subparagraph. Upon
request therefor, Tenant shall deliver to Landlord copies of all bills,
invoices or other documents upon which its calculations are based.
(4) As used herein, the term "consideration" shall mean any
consideration of any kind received, or to be received (including, but
not limited to, services rendered and/or value received) by Tenant as a
result of the assignment or sublease, if such sums are paid or provided
to Tenant for Tenant's interest in this Lease or in the Premises.
(5) This Paragraph 55.A does not apply to a "Permitted
Transfer", as provided in Paragraph 56 hereof. The parties agree that
if any of the following transactions occur and do not qualify as
"Permitted Transfers", Tenant must obtain Landlord's consent to such
transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as "Permitted Transfers",
then the provisions of this Paragraph 55.A shall not apply to the
following transactions: (i) a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee; and (ii) an assignment of this Lease to a
corporation which purchases or otherwise acquires 95% or more of the
assets of Tenant so long as 95% of all assets and liabilities of
Tenant are permanently transferred to such assignee and Tenant remains
liable and responsible under the Lease to the extent Tenant continues
in existence following such transaction."
16. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day
of the Third Option Period, Lease Paragraph 56 ("Permitted Assignments and
Subleases") shall be deleted in its entirety and replaced with the following:
"56. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding
anything contained in Paragraph 16, so long as Tenant otherwise
complies with the provisions of Paragraph 16 and the Permitted Transfer
does not release Tenant from its obligations hereunder, Tenant may
enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent, and the provisions of
Paragraph 55A shall not apply to any such Permitted Transfer:
A. Tenant may sublease all or part of the Premises or assign
its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant
remains liable for the payment of Rent and full performance of the
Lease;
B. Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as (i) 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which
Tenant is to be merged has a net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or
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reorganization (whichever is greater), or if it does not, Landlord is
provided a guaranty of the Lease (in a form reasonably acceptable to
Landlord) from a corporation (a) that is the parent of, or is otherwise
affiliated with, the corporation into which Tenant is to be merged, and
(b) which has a current net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or reorganization (whichever is
greater). In the event there is not a permanent transfer of 95% or
more of the assets and liabilities from Tenant to a third party, and
Tenant continues to exist as a separate entity, both companies shall be
jointly and severally liable for the full terms and conditions of the
Lease;
C. Tenant may assign this Lease to a corporation which
purchases or otherwise acquires 95% or more of the assets of Tenant so
long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee (in the event there is not a permanent
transfer of 95% or more of the assets and liabilities from Tenant to a
third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and
conditions of the Lease), and provided that immediately prior to such
assignment said corporation, has a net worth equal to or greater than
the net worth of Tenant (a) at the time of Lease execution or (b) at
the time of such assignment (whichever is greater), or if it does not,
Landlord is provided a guaranty of the Lease (in a form reasonably
acceptable to Landlord) from a corporation (a) that is the parent of,
or is otherwise affiliated with, said corporation and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment,
(whichever is greater)."
17. DESTRUCTION: Effective as of the first day of the Third Option
Period, Lease Paragraph 61 ("Destruction") shall be deleted in its entirety and
replaced with the following:
"61. DESTRUCTION: Paragraph 21 is modified by the following:
A. Notwithstanding anything to the contrary within Paragraph
21, Landlord may terminate this Lease in the event of an uninsured
event or if insurance proceeds, net of the deductible, are insufficient
to cover one hundred percent of the rebuilding costs; provided,
however, Tenant shall have the right to elect, in its discretion, to
contribute such excess funds to permit Landlord to repair the Premises.
B. Except as provided in Xxxxxxxxx 00X, Xxxxxxxx may not
terminate the Lease if the Premises are damaged by a peril whereby the
cost to replace and/or repair is one hundred percent (100%) covered by
the insurance carried by Landlord pursuant to Paragraph 12, but instead
shall restore the Premises in the manner described by Paragraph 21.
C. If the Premises are damaged by a peril covered by the
insurance carried by Landlord pursuant to Xxxxxxxxx 00, Xxxxxxxx shall
have the option to terminate the Lease if each of the following
conditions is satisfied: (i) the cost to repair or the damage exceeds
thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than
five (5) years remaining in the term of the Lease.
D. If Landlord fails to obtain insurance as required pursuant
to Paragraph 12, and said insurance would have been available to cover
any damage or destruction to the Premises, Landlord shall be required
to rebuild, at its cost, net of the deductible which would have been
required under said insurance policy (which deductible Tenant is
required to pay).
E. If the Premises are damaged by any peril, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written
opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be completed. Tenant
shall have the option to terminate this Lease in the event any of the
following occurs, which option may be exercised only by delivery to
Landlord of a written notice of election to terminate within seven (7)
days after
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Tenant receives from Landlord the estimate of the time needed to
complete such restoration:
(1) The Premises are damaged by any peril (not caused by or
resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within 180 days after the
date of such damage (subject to force majeure conditions); or
(2) The Premises are damaged by any peril (not caused by or
resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) within twelve (12) months of the last day of
the Lease term, and, in the reasonable opinion of Landlord's architect
or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within sixty (60) days after the date
of such damage and Tenant has not exercised its Option to Extend said
Term (or Extended Term as the case may be)."
18. LIABILITY INSURANCE: Effective as of the first day of the Third
Option Period, the first sentence of Lease Paragraph 10 ("Liability Insurance")
shall be deleted and replaced with the following: "Tenant, at Tenant's expense,
agrees to keep in force during the Term of this Lease a policy of commercial
general liability insurance with combined single limit coverage of not less than
Two Million Dollars ($2,000,000) per occurrence for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped
areas."
19. LIMITATION OF LIABILITY: Effective as of the first day of the Third
Option Period, Lease Paragraph 36 ("Limitation of Liability") shall be deleted
in its entirety and replaced with the following:
"36. LIMITATION OF LIABILITY In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and
agree that, in the event of any actual or alleged failure, breach or
default hereunder by Landlord:
(i) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;
(ii) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of
the partnership);
(iii) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the
partnership);
(iv) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(v) no judgment will be taken against any partner of Landlord;
(vi) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(vii) no writ of execution will ever be levied against the assets of
any partner of Landlord;
(viii) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and
agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by statute or at common
law."
EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of
said September 17, 1990 Lease Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No.
1 to Lease as of the day and year last written below.
LANDLORD: TENANT:
XXXX XXXXXXXXX SURVIVOR'S TRUST QUANTUM CORPORATION
a Delaware corporation
By /s/ Xxxx Xxxxxxxxx, By /s/ Xxxxxx Xxxxxx
--------------------- ---------------------
Xxxx Xxxxxxxxx, Trustee
Xxxxxx Xxxxxx
------------------------
Date: 6/30/97 Print or Type Name
----------
XXXXXXX X. XXXXX SEPARATE Title: VP FINANCE AND CORP GENERAL
PROPERTY TRUST COUNSEL
By /s/ Xxxxxxx X. Xxxxx Date: 6/25/97
-------------------------- ------------
Xxxxxxx X. Xxxxx, Trustee
Date: 6/26/97
---------
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AMENDMENT NO. 1
TO LEASE
THIS AMENDMENT NO. 1 is made and entered into this 16th day of April,
1997, by and between XXXX XXXXXXXXX, Trustee, or his Successor Trustee UTA dated
7/20/77 (XXXX XXXXXXXXX SURVIVOR'S TRUST) (previously known as the "Xxxx
Xxxxxxxxx Separate Property Trust") as amended, and XXXXXXX X. XXXXX, Trustee,
or his Successor Trustee UTA dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware
corporation, as TENANT.
RECITALS
A. WHEREAS, by Lease Agreement dated April 10, 1992 Landlord leased to
Tenant all of that certain 60,128+/- square foot building located at 000 Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx, the details of which are more particularly set
forth in said April 10, 1992 Lease Agreement, and
B. WHEREAS, said Lease was amended by the Commencement Letter dated
April 2, 1993 which established the February 26, 1993 Lease Commencement Date,
and established the Termination Date of September 30, 2006, and,
C. WHEREAS, it is now the desire of the parties hereto to amend the
Lease by (i) extending the Term for five years, changing the Termination Date
from September 30, 2006 to September 30, 2011, (ii) amending the Basic Rent
schedule and Aggregate Rent accordingly, (iii) adding a third Five Year Option
to Extend, (iv) replacing Paragraphs 41C ("Lease Terms Co-extensive") and 48
("Cross Default") and 53 ("Structural Capital Costs Regulated by Governmental
Agencies After the Commencement of this Lease not Caused by Tenant or Tenant's
Uses or Remodeling of the Premises"), (v) amending Lease Paragraph 12 ("Property
Insurance") and (vi) amending and/or replacing certain provisions of the Lease
commencing as of the commencement of the Third Extended Term of said Lease as
hereinafter set forth.
AGREEMENT
NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:
1. TERM OF LEASE: It is agreed between the parties that Tenant has
exercised its First Five-Year Option to Extend the lease term of that certain
lease agreement dated March 23, 1994 for premises located at 0000 Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Building 5 Lease"), as detailed in Paragraph 41 of
said Building 5 Lease. Paragraph 40C of said Building 5 Lease provides that in
the event the term of said Building 5 Lease is extended for any reason
whatsoever, the terms of the Existing Leases (i.e. two of said leases dated
October 31, 1989 are for Premises located at 0000 Xxxxxxxxxx Xxxxx and 000
XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx (the "1989 Leases"); one of said leases
dated September 17, 1990 is for Premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx, and one of said leases dated April 10, 1992 is for Premises located
at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx) shall also be extended so that all
five Leases expire on the same date; therefore, it is agreed between the parties
that by exercising its Option to Extend the Building 5 Lease, Tenant has in
effect exercised its Option to Extend under Lease Paragraph 42 ("First Five-Year
Option to Extend"), and that pursuant to said Lease Paragraph 42, the Term of
this Lease Agreement shall be extended for an additional five (5) year period,
and the Lease Termination Date shall be changed from September 30, 2006 to
September 30, 2011.
2. BASIC RENTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic
Rental for the First Extended Term of Lease shall be as follows:
On October 1, 2006, the sum of ONE HUNDRED ELEVEN THOUSAND EIGHT
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HUNDRED THIRTY EIGHT AND 08/100 DOLLARS ($111,838.08) shall be due, and a like
sum due on the first day of each month thereafter through and including
September l, 2007.
On October l, 2007, the sum of ONE HUNDRED FOURTEEN THOUSAND EIGHT
HUNDRED FORTY FOUR AND 48/100 DOLLARS ($114,844.48) shall be due, and a like sum
due on the first day of each month thereafter through and including September 1,
2008.
On October l, 2008, the sum of ONE HUNDRED SEVENTEEN THOUSAND EIGHT
HUNDRED FIFTY AND 88/100 DOLLARS ($117,850.88) shall be due, and a like sum due
on the first day of each month thereafter through and including September l,
2009.
On October l, 2009, the sum of ONE HUNDRED TWENTY THOUSAND EIGHT
HUNDRED FIFTY SEVEN AND 28/100 DOLLARS ($120,857.28) shall be due, and a like
sum due on the first day of each month thereafter through and including
September 1, 2010.
On October l, 2010, the sum of ONE HUNDRED TWENTY THREE THOUSAND EIGHT
HUNDRED SIXTY THREE AND 68/100 DOLLARS ($123,863.68) shall be due, and a like
sum due on the first day of each month thereafter through and including
September l, 2011.
The Aggregate Basic Rent for the Lease shall be increased by
$7,071,052.80 or from $14,463,454.34 to $21,534,507.14.
3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the
Lease for an additional five (5) year period pursuant to Lease Paragraph 43
("Second Five Year Option To Extend"), Landlord hereby grants to Tenant a third
option to extend the Term of this Lease for an additional five (5) year period
upon the following terms and conditions:
A. Tenant shall give Landlord written notice of Tenant's exercise of
this option to extend at least one hundred eighty (180) days prior to the
expiration of the Lease Term as extended pursuant to Lease Paragraph 43 ("Second
Five Year Option To Extend"), in which event the Lease shall be considered
extended for an additional five (5) year period upon the same terms and
conditions as this Lease, absent this Paragraph 3 and subject to the Rental as
set forth below. In the event that Tenant fails to timely exercise Tenant's
option as set forth herein in writing, Tenant shall have no further option to
extend this Lease or the Other Leases, and this Lease shall continue in full
force and effect for the full remaining term hereof, absent this Paragraph 3.
B. The monthly Basic Rent for the option period shall be as follows in
the event the option is exercised:
Period Monthly Basic Rent
------ ------------------
Months 1-12 $2.36/sf
Months 13-24 $2.41/sf
Months 25-36 $2.46/sf
Months 37-48 $2.51/sf
Months 49-60 $2.56/sf
C. Notwithstanding anything contained herein, Tenant may not exercise
the option to extend granted by this Paragraph 3 at any time that Tenant is in
default (default for monetary and material default for non-monetary) of its
obligations under this Lease, if Tenant has received written notice from
Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be
cured, and if Landlord does not elect to terminate this Lease as a result of
such non-curable default by Tenant, Tenant may exercise the option to extend
granted by this Paragraph 3 notwithstanding such non-curable default.
4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C ("Lease Terms
Co-extensive") is hereby deleted in its entirety and replaced with the
following:
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"40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i)
Landlord and Tenant have previously executed four separate leases in
addition to this Lease: one of said leases dated October 31, 1989 is
for Premises located at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx
(the "Building One Lease"); one of said leases dated October 31, 1989
is for Premises located at 000 XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx
(the "Building Two Lease"); one of said leases dated September 17, 1990
is for Premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building Four Lease"); and one of said leases dated March 23, 1994 is
for premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building 5 Lease") (hereinafter collectively referred to as the "Other
Leases"); and (ii) it is the intention of the parties that the term of
this Lease be co-extensive with the term of the Other Leases, such that
the terms of all five leases ("the Leases") expire on the same date.
The provisions of this Paragraph 40C also requires the terms of all the
Leases to be extended accordingly if Tenant exercises its Option to
Extend under any of the Leases. The monthly Basic Rent during the
extended term under each of the Leases shall be increased by $.05 per
square foot on the commencement date of the extended term and
thereafter on each and every anniversary of the respective lease's
commencement date of the extended term."
5. CROSS DEFAULT: Lease Paragraph 48 ("Cross Default") is hereby
deleted in its entirety and replaced with the following:
"48. CROSS DEFAULT: It is agreed between Landlord and Tenant
that a default under this Lease, or a default under any of the Other
Leases may, at the option of Landlord, be considered a default under
all Leases, in which event Landlord shall be entitled (but in no event
required) to apply all rights and remedies of Landlord under the terms
of one lease to all the Leases including, but not limited to, the right
to terminate any or all of the aforementioned Other Leases or this
Lease by reason of a default under the Leases or hereunder.
Notwithstanding the above, Landlord shall have the option of
considering a default under this Lease or a default under any of the
Other Leases to be a default under all such leases, only with respect
to such leases under which Landlord is also the 'Landlord' at the time
such default occurs. By way of example, if at the time a default of
Tenant occurs under this Lease, Landlord has sold the premises
described in any of the Other Leases and is no longer the 'Landlord'
thereunder, then a default under this Lease shall not constitute a
default under any of such Other Leases so sold by Landlord (unless the
premises leased under this Lease and the Other Leases are sold to the
same entity), and a default by Tenant under any of such Other Leases so
sold by Landlord shall not constitute a default under this Lease or any
other of the Other Leases then remaining between Landlord and Tenant.
However, if the Landlord under this Lease and the Other Leases is one
in the same at the time of said default, said cross default provisions
shall apply."
6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER THE
COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT'S USES OR REMODELING
OF THE PREMISES: Lease Paragraph 53 ("Structural Capital Costs Regulated by
Governmental Agencies after the Commencement of this Lease Not Caused by Tenant
or Tenant's Uses or Remodeling of the Premises") is hereby deleted and replaced
with the following:
"53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL
AGENCIES AFTER THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR
TENANT'S USES OR REMODELING OF THE PREMISES: The provisions of this
Paragraph 53 shall modify Paragraphs 7 and 14:
A. If (i) during the last five (5) years of the First Extended
Term of the Lease if said Lease has not been extended as provided for
in Lease Paragraph 43 ("Second Five Year Option To Extend") or in
Paragraph 3 ("Third Five Year Option to Extend".)
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or Paragraph 4 ("Lease Terms Co-Extensive") above, or (ii) during
either of the five (5) year extension periods permitted by Lease
Paragraph 43 or Paragraph 3, or Paragraph 4 above, it becomes necessary
(due to any governmental requirement for continued occupancy of the
Premises) to make structural improvements required by laws enacted or
legal requirements imposed by governmental agency(s) after the
Commencement Date, and the cost for each required work or improvements
exceeds $100,000, then if such legal requirement is not imposed because
of Tenant's specific use of the Premises and is not "triggered" by
Tenant's Alterations or Tenant's application for a building permit or
any other governmental approval (collectively "Tenant's Actions") in
which instance Tenant shall be responsible for 100% of the cost of such
improvements, Landlord shall be responsible for paying the cost of such
improvement and constructing such improvement, subject to a cash
contribution from Tenant of a portion of the cost thereof as provided
for and calculated in Paragraph 53B.
B. When Landlord makes an improvement pursuant to Paragraph
53A, and as a condition to Landlord's obligation to construct such
improvement, Tenant shall make the following contribution in cash to
Landlord for the cost thereof prior to the commencement of the work by
Landlord. It is agreed that Tenant shall pay to Landlord 100% of the
cost of the first $100,000.00 worth of each improvement. After the
first $100,000.00, all costs above $100,000.00 shall be divided by 15
and multiplied by the time period remaining in the last five years of
the Lease Term from the date work on such improvement commences.
For example, if the improvement is not required as a result of
Tenant's Actions and if the cost of such improvement was $400,000 and
there was one year and six months remaining in the Lease term when the
work commenced, then Tenant would be responsible for reimbursing
Landlord in cash $130,000.00 computed as follows:
Total Cost of Work $400,O00.OO
Tenant Responsible for
1st $100,000 -100,000.00
-----------
Total Amount To Be Amortized $300,000.00
$300,000.00/15 = $20,000.00/yr. x 1.5 yrs = $ 30,000.00
Tenant responsible for $100,000 + $30,000.00 = $130,000.00
C. If Landlord has made improvements, for which Tenant has
reimbursed Landlord for the cost thereof pursuant to Xxxxxxxxx 00X, and
the term of this Lease is subsequently extended pursuant to the
exercise by Tenant of an option to renew pursuant to Lease Paragraph 43
or Paragraph 3 above, upon the exercise of any such option by Tenant,
Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by
Tenant. Using the example in Paragraph 53B above, Tenant would owe
Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00)."
7. PROPERTY INSURANCE: Lease Paragraph 12 ("Property Insurance") is
hereby amended to include the following: "Tenant acknowledges that as part of
the cost of insurance policies for the Premises, Tenant is responsible for the
payment of insurance deductibles on insurance claims as they relate to the
Premises subject to the limitations provided in Lease Paragraph 55 ("Property
Insurance") which limitations are applicable only during the initial Lease Term
and the First Lease Extension Period and the Second Lease Extension Period. Said
limitation provided for in Lease Paragraph 55 are null and void at the
commencement of the Third Lease Extended Term".
8. THIRD OPTION PERIOD - LEASE PROVISION CHANGES: In the event Tenant
exercises its Third Option to Extend as provided for in Paragraph 3 above, the
following amendments (contained within Paragraphs 9 through 19) are herein made
to the Lease to be effective upon the commencement of the third option period
("Third Option Period"), or during any period following the expiration of the
Lease Term or expiration of the Lease when Tenant is in possession of the
Premises.
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9. LATE CHARGE: Effective as of the first day of the Third Option
Period, the Late Charge referenced in Lease Paragraph 4.D ("Late Charge") shall
be changed from five percent (5%) to ten percent (10%), and Lease Paragraph 50
("Limitation on Late Charge") shall be deleted in its entirety and of no further
force or effect.
10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the
Lease, effective as of the first day of the Third Option Period, and on the
first day of each month thereafter, Tenant shall pay to Landlord, in addition to
the Basic Rent and Additional Rent, a fixed monthly management fee ("Management
Fee") equal to one percent (1%) of the Basic Rent due for each month during the
Lease Term.
11. HAZARDOUS MATERIALS: Effective as of the first day of the Third
Option Period, Lease Paragraph 45 ("Hazardous Materials") shall be deleted in
its entirety and replaced with the following:
"45. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows
with respect to the existence or use of "Hazardous Materials" (as
defined herein) on, in, under or about the Premises and real property
located beneath said Premises, which includes the entire parcel of land
on which the Premises are located as shown in Green on Exhibit A to the
Lease (hereinafter collectively referred to as the "Property"):
A. As used herein, the term "Hazardous Materials" shall mean
any material, waste, chemical, mixture or byproduct which is or
hereafter is defined, listed or designated under Environmental Laws
(defined below) as a pollutant, or as a contaminant, or as a toxic or
hazardous substance, waste or material, or any other unwholesome,
hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or
restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions
thereof, polychlorinated biphenyls, or asbestos). As used herein, the
term "Environmental Laws" shall mean any applicable Federal, State of
California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or
order of any executive or judicial authority at any level of Federal,
State of California or local government (whether now existing or
subsequently adopted or promulgated) relating to pollution or the
protection of the environment, ecology, natural resources, or public
health and safety.
B. Tenant shall notify Landlord prior to the occurrence of any
Tenant's Hazardous Materials Activities (defined below). Landlord
acknowledges that Tenant shall use, in compliance with applicable
Environmental Laws, customary household and office supplies (Tenant
shall first provide Landlord with a list of said materials use), such
as mild cleaners, lubricants and copier toner. Any and all of Tenant's
Hazardous Materials Activities shall be conducted in conformity with
this Xxxxxxxxx 00, Xxxxxxxxx 14 of this Lease, and in compliance with
all Environmental Laws and regulations. As used herein, the term
"Tenant's Hazardous Materials Activities" shall mean any and all use,
handling, generation, storage, disposal, treatment, transportation,
release, discharge, or emission of any Hazardous Materials on, in,
beneath, to, from, at or about the Property, in connection with
Tenant's use of the Property, or by Tenant or by any of Tenant's
agents, employees, contractors, vendors, invitees, visitors or its
future subtenants or assignees or other third parties (including
"dumping" by others) (or which Hazardous Materials originate on the
surface of the Premises any time on or after the Commencement Date of
this Lease, but excluding Hazardous Materials on the Premises prior to
the Lease Commencement Date because of the storage, use, disposal, or
transportation of such materials or waste by any of Landlord's
contractors or otherwise arising out of construction work performed by
or under the direction of Landlord on the Premises and Landlord shall
be responsible for all required actions with respect to such materials
or wastes). Tenant agrees to provide Landlord with prompt written
notice of any spill or release of Hazardous Materials at
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the Property during the term of the Lease of which Tenant becomes
aware, and further agrees to provide Landlord with prompt written
notice of any violation of Environmental Laws in connection with
Tenant's Hazardous Materials Activities of which Tenant becomes aware.
If Tenant's Hazardous Materials Activities involve Hazardous Materials
other than normal use of customary household and office supplies,
Tenant also agrees at Tenant's expense: (i) to install such Hazardous
Materials monitoring, storage and containment devices as may be
required by Environmental Laws, regulations and/or governing agencies;
(ii) to provide Landlord with a written inventory of such Hazardous
Materials, including an update of same each year upon the anniversary
date of the Commencement Date of the Lease ("Anniversary Date"); and
(iii) on each Anniversary Date to provide to Landlord copies of all
documentation and records, required by applicable Environmental Laws to
be prepared and submitted to governmental authorities, relating to use
at the Property of Hazardous Materials or to Tenant's Hazardous
Materials Activities, if any. If upon completion of Landlord's review
of said documentation and records, Landlord reasonably questions if
Tenant is in compliance with all applicable Environmental Laws with
respect to Tenant's Hazardous Materials Activities, Tenant agrees
within thirty (30) days following receipt of written notice from
Landlord, to retain a qualified environmental consultant, acceptable to
Landlord, to evaluate whether Tenant is in compliance with all
applicable Environmental Laws with respect to Tenant's Hazardous
Materials Activities. Tenant, at its expense, shall submit to Landlord
a report from such environmental consultant which discusses the
environmental consultant's findings within two (2) months of each
Anniversary Date. Tenant, at its expense, shall promptly undertake and
complete any and all steps necessary, and in full compliance with
applicable Environmental Laws, to fully correct any and all problems or
deficiencies identified by the environmental consultant, and promptly
provide Landlord with documentation of all such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at
its expense, shall (i) properly remove from the Property all Hazardous
Materials which come to be located at the Property in connection with
Tenant's Hazardous Materials Activities, and (ii) fully comply with and
complete all facility closure requirements of applicable Environmental
Laws regarding Tenant's Hazardous Materials Activities, including but
not limited to (x) properly restoring and repairing the Property to the
extent damaged by such closure activities, and (y) obtaining from the
local Fire Department or other appropriate governmental authority with
any legal or regulatory jurisdiction a written concurrence that closure
has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims,
notices, work plans, data and reports prepared, received or submitted
in connection with any such closure activities.
D. If Landlord, upon consultation with Tenant, reasonably
concludes that the Property has become contaminated as a result of
Tenant's Hazardous Materials Activities, Landlord in addition to any
other rights it may have under this Lease or under Environmental Laws
or other laws, may enter upon the Property and conduct inspection,
sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of
determining the nature and extent of such contamination except to the
extent that such activities may be inconsistent with Tenant's
compliance with Environmental Laws. Tenant shall promptly reimburse
Landlord for the costs of such an investigation, including but not
limited to reasonable attorneys' fees Landlord incurs with respect to
such investigation to the extent, and only to the extent, that it that
discloses Hazardous Materials contamination for which Tenant is liable
under this Lease. Except as may be required of Tenant by applicable
Environmental Laws, Tenant shall not perform any sampling, testing, or
drilling to identify the presence of any Hazardous Materials at the
Property, without Landlord's prior written consent which shall not be
unreasonably withheld. Tenant shall promptly provide Landlord with
copies of any claims, notices, work plans, data and reports prepared,
received or submitted in connection with any sampling, testing or
drilling performed pursuant to the preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel
acceptance to Landlord, whose consent shall not unreasonably be
withheld) and hold harmless Landlord, its
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employees, assigns, successors, successors-in-interest, agents and
representatives from and against any and all claims (including but not
limited to third party claims from a private party or a government
authority), liabilities, obligations, losses, causes of action,
demands, governmental proceedings or directives, fines, penalties,
expenses, costs (including but not limited to reasonable attorneys',
consultants' and other experts' fees and costs), and damages, which
arise from or relate to: (i) Tenant's Hazardous Materials Activities;
(ii) any Hazardous Materials contamination caused by Tenant prior to
the Commencement Date of the Lease; or (iii) the breach of any
obligation of Tenant under this Paragraph 45 (collectively, "Tenant's
Environmental Indemnification"). Tenant's Environmental Indemnification
shall include but is not limited to the obligation to promptly and
fully reimburse Landlord for losses in or reductions to rental income,
and diminution in fair market value of the Property. Tenant's
Environmental Indemnification shall further include but is not limited
to the obligation to diligently and properly implement to completion,
at Tenant's expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other
environmental response action as may be required by applicable
Environmental Laws, regulations or governing agencies (collectively,
"Response Actions"). Tenant shall promptly provide Landlord with copies
of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any Response Actions.
F. Landlord hereby makes the following representations to
Tenant, each of which is made only to the best of Landlord's knowledge
as of the date Landlord executes this Lease, without any inquiry or
investigation having been made or required by Landlord regarding this
subject, nor does Landlord have any obligation to investigate or make
inquiry regarding the subject:
(1) The soil and ground water on or under the
Premises does not contain Hazardous Materials in amounts which violate
any laws to the extent that any governmental entity could require
either Landlord or Tenant to take any remedial action with respect to
such Hazardous Materials.
(2) During the time that Landlord has owned the
Premises, Landlord has received no notice of (i) any violation, or
alleged violation, of any law that has not been corrected to the
satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or
(iii) any pending investigation by any governmental agency concerning
the Premises relating to Hazardous Materials.
G. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication
received from any governmental authority concerning Hazardous Materials
which relates to the Premises, and (ii) any contamination of the
Premises by Hazardous Materials which constitutes a violation of any
law. Attached as Exhibit "C" to the Lease is a list of Hazardous
Materials that Tenant intends to use at the Premises. If during the
Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the
Hazardous Materials and the manner of their use, storage and disposal,
and shall agree (i) to use, store and dispose of such Hazardous
Materials strictly in compliance with all laws, regulations and
governing agencies and (ii) that the indemnity set forth in Paragraph
45 shall be applicable to Tenant's use of such Hazardous Material.
H. Landlord or Tenant may, at any time, cause testing
xxxxx to be installed on the Premises, and may cause the ground water
to be tested to detect the presence of Hazardous Material by the use of
such tests as are then customarily used for such purposes. Testing
xxxxx installed by Tenant shall be paid for by Tenant. If tests
conducted by Landlord disclose that Tenant has violated any Hazardous
Materials laws, or Tenant or parties on the Premises during the Term of
this Lease have contaminated the Premises as determined by regulatory
agencies pursuant to Hazardous Materials laws, or that Tenant has
liability to Landlord pursuant to Paragraph 45A, then Tenant shall pay
for 100 percent of the cost of the test and all related expense. Prior
to the expiration of the Lease Term, Tenant shall remove any testing
xxxxx it has
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installed at the Premises, and return the Premises to the condition
existing prior to the installation of such xxxxx, unless Landlord
requests in writing that Tenant leave all or some of the testing xxxxx
in which instance the xxxxx requested to be left shall not be removed.
I. If any tests performed by Tenant or Landlord prior to the
Commencement Date disclose Hazardous Materials at the Premises,
Landlord at its expense will promptly take all reasonable action
required by law with respect to the existence of such Hazardous
Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is
prohibited by law.
J. The obligations of Landlord and Tenant under this Paragraph
45 shall survive the expiration or earlier termination of the Term of
this Lease. The rights and obligations of Landlord and Tenant with
respect to issues relating to Hazardous Materials are exclusively
established by this Paragraph 45."
12. SECURITY DEPOSIT: Effective as of the first day of the Third Option
Period, Lease Paragraph 51 ("Security Deposit") shall be deleted in its entirety
and replaced with the following:
"51. SECURITY DEPOSIT: The following provisions shall modify
Lease Paragraph 4F:
A. Within thirty (30) days after the expiration or earlier
termination of the Lease term and after Tenant has vacated the
Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed
by Landlord to cure defaults of Tenant under the Lease or compensate
Landlord for damages for which Tenant is liable pursuant to this Lease.
The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.
B. During the first thirty (30) days following Tenant's
exercise of its Third Option to Extend, and only during said thirty day
period, Tenant shall have the one-time option of satisfying its
obligation with respect to an amount equal to one-half (1/2)
($83,277.28) of the $166,554.56 Security Deposit required under Lease
Paragraph 4F by providing to Landlord, at Tenant's sole cost, a letter
of credit which: (i) is drawn upon an institutional lender reasonably
acceptable and accessible to Landlord in form and content reasonably
satisfactory to Landlord; (ii) is in the amount of one-half (1/2) of
the Security Deposit; (iii) is for a term of at lease twelve (12)
months; (iv) with respect to any letter of credit in effect within the
six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at
least forty five (45) days past the Lease expiration date (including
any extensions thereof); and (v) may be drawn upon by Landlord upon
submission of a declaration of Landlord that Tenant is in default (as
defined in Paragraph 19 and as modified by Paragraph 60). Landlord
shall not be obligated to furnish proof of default to such
institutional lender, and Landlord shall only be required to give the
institutional lender written notification that Tenant is in default and
upon receiving such written notification from Landlord the
institutional lender shall be obligated to immediately deliver cash to
Landlord equal to the amount Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant's default
up to 1/2 of the total Security Deposit required under Lease Xxxxxxxxx
0X. Said letter of credit shall provide that if the letter of credit is
not renewed, replaced or extended within twenty (20) days prior to its
expiration date the issuer of the credit shall automatically issue a
cashiers check payable to Landlord in the amount of the letter of
credit after the date which is twenty (20) days before the expiration
date, and no later than the expiration date, without Landlord being
required to make demand upon the letter of credit. If Tenant provides
Landlord with a letter of credit, within thirty (30) days the execution
of this Lease, meeting the foregoing requirements one-half (1/2) of the
cash Security Deposit (i.e., $83,277.28 of the $166,554.56 Security
Deposit) shall be returned to Tenant by Landlord inasmuch deposit
remaining and the Letter
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of Credit equal the total Security Deposit required in Lease Xxxxxxxxx
0X. If Tenant defaults with respect to any provisions of this Lease,
including but not limited to provisions relating to the payment of
Rent, Landlord may (but shall not be required to) draw down on the
letter of credit for payment of any sum which Landlord may spend or
become obligated to spend by reason of Tenant's default, or to
compensate Landlord for any loss or damage which Landlord may suffer by
reason of Tenant's default. Landlord and Tenant acknowledge that such
letter of credit will be treated as if it were a cash security deposit,
and such letter of credit may be drawn down upon by Landlord upon
demand and presentation of evidence of the identity of Landlord to the
issuer, in the event that Tenant defaults with respect to any provision
of this Lease and such default is not cured within any applicable cure
period. Notwithstanding anything to the contrary in this Lease,
Landlord shall not be obligated to furnish proof of default to such
institutional lender and Landlord is only required to give the
institutional lender written notification that Tenant is in default and
upon receiving such written notification from Landlord the
institutional lender shall be obligated to immediately deliver cash to
Landlord equal to the amount Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant's default
up to 1/2 of the total Security Deposit. Landlord acknowledges that it
is not entitled to draw down such letter of credit unless Landlord
would have been entitled to draw upon the cash security deposit
pursuant to the terms of Paragraph 4F of the Lease. Concurrently with
the delivery of the required information to the issuer, Landlord shall
deliver to Tenant written evidence of the default upon which the draw
down was based, together with evidence that Landlord has provided to
Tenant the written notice of such default which was required under the
applicable provision of the Lease, and evidence of the failure of
Tenant to cure such default within the applicable grace period
following receipt of such notice of default. Any proceeds received by
Landlord by drawing upon the letter of credit shall be applied in
accordance with the provisions governing the Security Deposit imposed
by Lease Paragraph 4F and this Paragraph 51. If Landlord draws upon the
letter of credit, thereafter Tenant shall once again have the right to
post a letter of credit in place of one-half (1/2) of a cash Security
Deposit so long as Tenant is not then in default. In any event Tenant
will be obligated to replenish the amount drawn to restore the Security
Deposit to its original amount as provided for in Xxxxxxxxx 0X. If any
portion of the letter of credit is used or applied pursuant hereto,
Tenant shall, within ten (10) days after receipt of a written demand
therefor from Landlord, restore and replace the value of such security
by either (i) depositing cash with Landlord in the amount equal to the
sum drawn down under the letter of credit, or (ii) increasing the
letter of credit to its value immediately prior to such application.
Tenant's failure to replace the value of the security as provided in
the preceding sentence shall be a material breach of its obligation
under this Lease."
13. REAL ESTATE TAXES: Effective as of the first day of the Third
Option Period, Lease Paragraph 54 ("Real Estate Taxes") shall be deleted in its
entirety and replaced with the following:
"54. REAL PROPERTY TAXES: Paragraph 9 is modified by the
following:
A. The term "Real Property Taxes" shall not include charges,
levies or fees directly related to the use, storage, disposal or
release of Hazardous Materials on the Premises unless directly related
to Tenant's Activities at this site or on other sites leased and/or
owned by Tenant; however, Tenant shall be responsible for general or
special tax and/or assessments (related to Hazardous Materials and/or
toxic waste) imposed on the Property provided said special tax and/or
assessment is not imposed due to on-site originated contamination on
the Property (by third parties not related to Tenant) prior to the
Lease Commencement Date. Subject to the terms and conditions stated
herein, Tenant shall be responsible for paying one hundred percent
(100%) of said taxes and/or assessments allocated to the Property.
B. If any assessments for public improvements are levied
against the Premises, Landlord may elect either to pay the assessment
in full or to allow the assessment to go to bond. If Landlord pays the
assessment in full, Tenant shall pay to Landlord or any assignee or
purchaser of the Premises each time payment of Real Property Taxes is
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made a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to go to
bond.
C. Tenant at its cost shall have the right, at any time, to
seek a reduction in the assessed valuation of the Premises or to
contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the
failure on Tenant's part to pay such Real Property Taxes being so
contested shall not constitute a default so long as Tenant complies
with the provisions of this Paragraph. Landlord shall not be required
to join in any proceeding or contest brought by Tenant unless the
provisions of any law require that the proceeding or contest be brought
by or in the name of Landlord. In that case Landlord shall join in the
proceedings or contest or permit it to be brought in Landlord's name as
long as Landlord is not required to bear any cost. Tenant, on final
determination of the proceeding or contest, shall immediately pay or
discharge its share of any Real Property Taxes determined by any
decision or judgment rendered, together with all costs, charges,
interest, and penalties incidental to the decision or judgment. If
Tenant does not pay the Real Property Taxes when due pursuant to the
Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant
shall furnish to Landlord a surety bond in form reasonably satisfactory
to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125% of the total amount
of Real Property Taxes in dispute and any such bond shall be assignable
to any lender or purchaser of the Premises. The bond shall hold
Landlord and the Premises harmless from any damage arising out of the
proceeding or contest and shall insure the payment of any judgment that
may be rendered."
14. PROPERTY INSURANCE: Effective as of the first day of the Third
Option Period, section B of Lease Paragraph 55 ("Property Insurance") shall be
deleted in its entirety and be of no further force or effect.
15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the
Third Option Period, Lease Paragraph 56 ("Assignment and Subletting") shall be
deleted in its entirety and replaced with the following:
"56. ASSIGNMENT AND SUBLETTING: The following modifications
are made to Paragraph 16:
A. In the event that Tenant seeks to make any assignment or
sublease, then Landlord, by giving Tenant written notice of its
election within fifteen (15) days after Tenant's notice of intent to
assign or sublease has been given to Landlord, shall have the right to
elect (i) to withhold its consent to such assignment or sublease, as
permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event
Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the
following shall apply (except the following shall not apply to a
"Permitted Transfer" described in Paragraph 57):
(1) If Tenant assigns its interest in this Lease,
then in addition to the rental provided for in this Lease, Tenant shall
pay to Landlord fifty percent (50%) of all Rent and other consideration
received by Tenant over and above (i) the assignee's agreement to
assume the obligations of Tenant under this Lease and (ii) all
"Permitted Transfer Costs" (as defined herein) related to such
assignment. As used herein, the term "Permitted Transfer Costs" shall
mean all reasonable leasing commissions paid to third parties not
affiliated with Tenant in order to obtain the assignment or sublease in
question.
(2) If Tenant sublets all or part of the Premises,
then Tenant shall pay to Landlord in addition to the Rent provided for
in this Lease fifty percent (50%) of the positive difference, if any,
between (i) all rent and other consideration paid or provided to Tenant
by the subtenant, less (ii) all Rent paid by Tenant to Landlord
pursuant to
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this Lease which is allocable to the area so sublet and all Permitted
Transfer Costs related to such sublease. After Tenant has recovered all
Permitted Transfer Costs Tenant shall pay to Landlord the amount
specified in the preceding sentence on the same basis, whether periodic
or in lump sum, that such rent and other consideration is paid to
Tenant by its subtenant, within seven (7) days after it is received by
Tenant.
3) Tenant's obligations under this subparagraph shall
survive any assignment or sublease. At the time Tenant makes any
payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which
Landlord is entitled was calculated, certified by Tenant as true and
correct. Landlord shall have the right to inspect Tenant's books and
records relating to the payments due pursuant to this subparagraph.
Upon request therefor, Tenant shall deliver to Landlord copies of all
bills, invoices or other documents upon which its calculations are
based.
(4) As used herein, the term "consideration" shall
mean any consideration of any kind received, or to be received
(including, but not limited to, services rendered and/or value
received) by Tenant as a result of the assignment or sublease, if such
sums are paid or provided to Tenant for Tenant's interest in this Lease
or in the Premises.
(5) This Paragraph 56.A does not apply to a
"Permitted Transfer", as provided in Paragraph 57 hereof. The parties
agree that if any of the following transactions occur and do not
qualify as "Permitted Transfers", Tenant must obtain Landlord's consent
to such transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as "Permitted Transfers",
then the provisions of this Paragraph 56.A shall not apply to the
following transactions: (i) a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee; and (ii) an assignment of this Lease to a
corporation which purchases or otherwise acquires 95% or more of the
assets of Tenant so long as 95% of all assets and liabilities of Tenant
are permanently transferred to such assignee and Tenant remains liable
and responsible under the Lease to the extent Tenant continues in
existence following such transaction."
16. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day
of the Third Option Period, Lease Paragraph 57 ("Permitted Assignments and
Subleases") shall be deleted in its entirety and replaced with the following:
"57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding
anything contained in Paragraph 16, so long as Tenant otherwise
complies with the provisions of Paragraph 16 and the Permitted Transfer
does not release Tenant from its obligations hereunder, Tenant may
enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent, and the provisions of
Paragraph 56A shall not apply to any such Permitted Transfer:
A. Tenant may sublease all or part of the Premises or assign
its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant
remains liable for the payment of Rent and full performance of the
Lease;
B. Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as (i) 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which
Tenant is to be merged has a net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or reorganization (whichever is
greater), or if it does not, Landlord is provided a guaranty of the
Lease (in a form reasonably acceptable to Landlord) from a corporation
(a) that
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is the parent of, or is otherwise affiliated with, the corporation into
which Tenant is to be merged, and (b) which has a current net worth
equal to or greater than the net worth of Tenant at the time of Lease
execution or at the time of such assignment, merger, consolidation or
reorganization (whichever is greater). In the event there is not a
permanent transfer of 95% or more of the assets and liabilities from
Tenant to a third party, and Tenant continues to exist as a separate
entity, both companies shall be jointly and severally liable for the
full terms and conditions of the Lease;
C. Tenant may assign this Lease to a corporation which
purchases or otherwise acquires 95% or more of the assets of Tenant so
long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee (in the event there is not a permanent
transfer of 95% or more of the assets and liabilities from Tenant to a
third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and
conditions of the Lease), and provided that immediately prior to such
assignment said corporation, has a net worth equal to or greater than
the net worth of Tenant (a) at the time of Lease execution or (b) at
the time of such assignment (whichever is greater), or if it does not,
Landlord is provided a guaranty of the Lease (in a form reasonably
acceptable to Landlord) from a corporation (a) that is the parent of,
or is otherwise affiliated with, said corporation and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment,
(whichever is greater)."
17. DESTRUCTION: Effective as of the first day of the Third Option
Period, Lease Paragraph 62 ("Destruction") shall be deleted in its entirety and
replaced with the following:
"62. DESTRUCTION: Paragraph 21 is modified by the following:
A. Notwithstanding anything to the contrary within Paragraph
21, Landlord may terminate this Lease in the event of an uninsured
event or if insurance proceeds, net of the deductible, are insufficient
to cover one hundred percent of the rebuilding costs; provided,
however, Tenant shall have the right to elect, in its discretion, to
contribute such excess funds to permit Landlord to repair the Premises.
B. Except as provided in Xxxxxxxxx 00X, Xxxxxxxx may not
terminate the Lease if the Premises are damaged by a peril whereby the
cost to replace and/or repair is one hundred percent (100%) covered by
the insurance carried by Landlord pursuant to Paragraph 12, but instead
shall restore the Premises in the manner described by Paragraph 21.
C. If the Premises are damaged by a peril covered by the
insurance carried by Landlord pursuant to Xxxxxxxxx 00, Xxxxxxxx shall
have the option to terminate the Lease if each of the following
conditions is satisfied: (i) the cost to repair or the damage exceeds
thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than
five (5) years remaining in the term of the Lease.
D. If Landlord fails to obtain insurance as required pursuant
to Paragraph 12, and said insurance would have been available to cover
any damage or destruction to the Premises, Landlord shall be required
to rebuild, at its cost, net of the deductible which would have been
required under said insurance policy (which deductible Tenant is
required to pay).
E. If the Premises are damaged by any peril, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written
opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be completed. Tenant
shall have the option to terminate this Lease in the event any of the
following occurs, which option may be exercised only by delivery to
Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time
needed to complete such restoration:
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(1) The Premises are damaged by any peril (not caused
by or resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within 180 days after the
date of such damage (subject to force majeure conditions); or
(2) The Premises are damaged by any peril (not caused
by or resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) within twelve (12) months of the last day of
the Lease term, and, in the reasonable opinion of Landlord's architect
or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within sixty (60) days after the date
of such damage and Tenant has not exercised its Option to Extend said
Term (or Extended Term as the case may be)."
18. LIABILITY INSURANCE: Effective as of the first day of the Third
Option Period, the first sentence of Lease Paragraph 10 ("Liability Insurance")
shall be deleted and replaced with the following: "Tenant, at Tenant's expense,
agrees to keep in force during the Term of this Lease a policy of commercial
general liability insurance with combined single limit coverage of not less than
Two Million Dollars ($2,000,000) per occurrence for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped
areas."
19. LIMITATION OF LIABILITY: Effective as of the first day of the Third
Option Period, Lease Paragraph 36 ("Limitation of Liability") shall be deleted
in its entirety and replaced with the following:
"36. LIMITATION OF LIABILITY In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and
agree that, in the event of any actual or alleged failure, breach or
default hereunder by Landlord:
(i) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;
(ii) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of
the partnership);
(iii) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the
partnership);
(iv) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(v) no judgment will be taken against any partner of Landlord;
(vi) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(vii) no writ of execution will ever be levied against the assets of
any partner of Landlord;
(viii) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and
agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by statute or at common
law."
EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions
of said April 10, 1992 Lease Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
No. 1 to Lease as of the day and year last written below.
LANDLORD: TENANT:
XXXX XXXXXXXXX SURVIVOR'S QUANTUM CORPORATION
TRUST a Delaware corporation
By /s/ Xxxx Xxxxxxxxx By /s/ Xxxxxx Xxxxxx
------------------ -----------------
Xxxx Xxxxxxxxx, Trustee
Date: 6/30/97 Xxxxxx Xxxxxx
--------- ---------------------
Print or Type Name
XXXXXXX X. XXXXX SEPARATE Title: FINANCE AND CORP GENERAL
PROPERTY TRUST COUNSEL
------------------------
By /s/ Xxxxxxx X. Xxxxx Date: June 25, 1997
------------------- ---------------
Xxxxxxx X. Xxxxx, Trustee
Date: 6/26/97
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AMENDMENT NO. 3
TO LEASE
THIS AMENDMENT NO. 3 is made and entered into this 16th day of April,
1997, by and between XXXX XXXXXXXXX, Trustee, or his Successor Trustee UTA dated
7/20/77 (XXXX XXXXXXXXX SURVIVOR'S TRUST) (previously known as the "Xxxx
Xxxxxxxxx Separate Property Trust") as amended, and XXXXXXX X. XXXXX, Trustee,
or his Successor Trustee UTA dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware
corporation, as TENANT.
RECITALS
A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased
to Tenant all of that certain 176,516+/- square foot building located at 000
XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx, the details of which are more particularly
set forth in said October 31, 1989 Lease Agreement, and
B. WHEREAS, said Lease was amended by Letter Agreement dated October
31, 1989 which provided for a Basic Rent Credit for the period commencing with
the Lease Commencement Date and ending on May 31, 1991, and
C. WHEREAS, said Lease was amended by Letter Agreement dated April 24,
1990 which canceled the reduction in Basic Rent Credit Letter dated October 31,
1989, and
D. WHEREAS, said Lease was amended by Amendment No. 1 dated April 24,
1990 which which delayed the Lease Commencement Date from December 15, 1990 to
April 1, 1991, and,
E. WHEREAS, said Lease was amended by the Commencement Letter dated
March 7, 1991 which changed the Commencement Date of the Lease from April 1,
1991 to April 7, 1991, and established the Termination Date of September 30,
2006, and,
E. WHEREAS, said Lease was amended by Amendment No. 2 dated June 8,
1992 which replaced Lease Exhibit A and amended the description of the Premises,
and
F. WHEREAS, it is now the desire of the parties hereto to amend the
Lease by (i) extending the Term for five years, changing the Termination Date
from September 30, 2006 to September 30, 2011, (ii) amending the Basic Rent
schedule and Aggregate Rent accordingly, (iii) adding a third Five Year Option
to Extend, (iv) replacing Paragraphs 41C ("Lease Terms Co-extensive") and 48
("Cross Default") and 53 ("Structural Capital Costs Regulated by Governmental
Agencies After the Commencement of this Lease not Caused by Tenant or Tenant's
Uses or Remodeling of the Premises"), (v) amending Lease Paragraph 12 ("Property
Insurance") and (vi) amending and/or replacing certain provisions of the Lease
commencing as of the commencement of the Third Extended Term of said Lease as
hereinafter set forth.
AGREEMENT
NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:
1. TERM OF LEASE: It is agreed between the parties that Tenant has
exercised its First Five-Year Option to Extend the lease term of that certain
lease agreement dated March 23, 1994 for premises located at 0000 Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Building 5 Lease"), as detailed in Paragraph 41 of
said Building 5 Lease. Paragraph 40C of said Building 5 Lease provides that in
the event the term of said Building 5 Lease is extended for any reason
whatsoever, the terms of the Existing Leases (i.e. two of said leases dated
October 31, 1989 are for Premises 1ocated at 0000 Xxxxxxxxxx Xxxxx and 000
XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx (the "1989 Leases"); one of said leases
dated September 17, 1990 is for Premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx
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and one of said leases dated April 10, 1992 is for Premises located at 000 Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx) shall also be extended so that all five Leases
expire on the same date; therefore, it is agreed between the parties that by
exercising its Option to Extend the Building 5 Lease, Tenant has in effect
exercised its Option to Extend under Lease Paragraph 42 ("First Five-Year Option
to Extend"), and that pursuant to said Lease Paragraph 42, the Term of this
Lease Agreement shall be extended for an additional five (5) year period, and
the Lease Termination Date shall be changed from September 30, 2006 to September
30, 2011.
2. BASIC RENTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic
Rental for the First Extended Term of Lease shall be as follows:
On October 1, 2006, the sum of THREE HUNDRED EIGHT THOUSAND NINE
HUNDRED THREE AND NO/100 DOLLARS ($308,903.00) shall be due, and a like sum due
on the first day of each month thereafter through and including September 1,
2007.
On October 1, 2007, the sum of THREE HUNDRED SEVENTEEN THOUSAND SEVEN
HUNDRED TWENTY EIGHT AND 80/100 DOLLARS ($317,728.80) shall be due, and a like
sum due on the first day of each month thereafter through and including
September 1, 2008.
On October 1, 2008, the sum of THREE HUNDRED TWENTY SIX THOUSAND FIVE
HUNDRED FIFTY FOUR AND 60/100 DOLLARS ($326,554.60) shall be due, and a like sum
due on the first day of each month thereafter through and including September 1,
2009.
On October 1, 2009, the sum of THREE HUNDRED THIRTY FIVE THOUSAND THREE
HUNDRED EIGHTY AND 40/100 DOLLARS ($335,380.40) shall be due, and a like sum due
on the first day of each month thereafter through and including September 1,
2010.
On October 1, 2010, the sum of THREE HUNDRED FORTY FOUR THOUSAND TWO
HUNDRED SIX AND 20/100 DOLLARS ($344,206.20) shall be due, and a like sum due on
the first day of each month thereafter through and including September 1, 2011.
The Aggregate Basic Rent for the Lease shall be increased by
$19,593,276.00 or from $44,409,491.18 to $64,002,767.18.
3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the
Lease for an additional five (5) year period pursuant to Lease Paragraph 43
("Second Five Year Option To Extend"), Landlord hereby grants to Tenant a third
option to extend the Term of this Lease for an additional five (5) year period
upon the following terms and conditions:
A. Tenant shall give Landlord written notice of Tenant's exercise of
this option to extend at least one hundred eighty (180) days prior to the
expiration of the Lease Term as extended pursuant to Lease Paragraph 43 ("Second
Five Year Option To Extend"), in which event the Lease shall be considered
extended for an additional five (5) year period upon the same terms and
conditions as this Lease, absent this Paragraph 3 and subject to the Rental as
set forth below. In the event that Tenant fails to timely exercise Tenant's
option as set forth herein in writing, Tenant shall have no further option to
extend this Lease or the Other Leases, and this Lease shall continue in full
force and effect for the full remaining term hereof, absent this Paragraph 3.
B. The monthly Basic Rent for the option period shall be as follows in
the event the option is exercised:
Period Monthly Basic Rent
------ -----------------
Months 1-12 $2.25/sf
Months 13-24 $2.30/sf
Months 25-36 $2.35/sf
Months 37-48 $2.40/sf
Months 49-60 $2.45/sf
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C. Notwithstanding anything contained herein, Tenant may not exercise
the option to extend granted by this Paragraph 3 at any time that Tenant is in
default (default for monetary and material default for non-monetary) of its
obligations under this Lease, if Tenant has received written notice from
Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be
cured, and if Landlord does not elect to terminate this Lease as a result of
such non-curable default by Tenant, Tenant may exercise the option to extend
granted by this Paragraph 3 notwithstanding such non-curable default.
4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C ("Lease Terms
Co-extensive") is hereby deleted in its entirety and replaced with the
following:
"40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i)
Landlord and Tenant have previously executed four separate leases in
addition to this Lease: one of said leases dated October 31, 1989 is
for Premises located at 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx
(the "Building One Lease"); one of said leases dated September 17, 1990
is for Premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building Four Lease"); one of said leases dated April 10, 1992 is for
Premises located at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building 3 Lease"); and one of said leases dated March 23, 1994 is for
premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building 5 Lease") (hereinafter collectively referred to as the "Other
Leases"); and (ii) it is the intention of the parties that the term of
this Lease be co-extensive with the term of the Other Leases, such that
the terms of all five leases ("the Leases") expire on the same date.
The provisions of this Paragraph 40C also requires the terms of all the
Leases to be extended accordingly if Tenant exercises its Option to
Extend under any of the Leases. The monthly Basic Rent during the
extended term under each of the Leases shall be increased by $.05 per
square foot on the commencement date of the extended term and
thereafter on each and every anniversary of the respective lease's
commencement date of the extended term."
5. CROSS DEFAULT: Lease Paragraph 48 ("Cross Default") is hereby
deleted in its entirety and replaced with the following:
"48. CROSS DEFAULT: It is agreed between Landlord and Tenant
that a default under this Lease, or a default under any of the Other
Leases may, at the option of Landlord, be considered a default under
all Leases, in which event Landlord shall be entitled (but in no event
required) to apply all rights and remedies of Landlord under the terms
of one lease to all the Leases including, but not limited to, the right
to terminate any or all of the aforementioned Other Leases or this
Lease by reason of a default under the Leases or hereunder.
Notwithstanding the above, Landlord shall have the option of
considering a default under this Lease or a default under any of the
Other Leases to be a default under all such leases, only with respect
to such leases under which Landlord is also the 'Landlord' at the time
such default occurs. By way of example, if at the time a default of
Tenant occurs under this Lease, Landlord has sold the premises
described in any of the Other Leases and is no longer the 'Landlord'
thereunder, then a default under this Lease shall not constitute a
default under any of such Other Leases so sold by Landlord (unless the
premises leased under this Lease and the Other Leases are sold to the
same entity), and a default by Tenant under any of such Other Leases so
sold by Landlord shall not constitute a default under this Lease or any
other of the Other Leases then remaining between Landlord and Tenant.
However, if the Landlord under this Lease and the Other Leases is one
in the same at the time of said default, said cross default provisions
shall apply."
6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER
THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT'S USES OR
REMODELING OF THE PREMISES: Lease Paragraph 53 ("Structural Capital Costs
Regulated by Governmental Agencies after the Commencement of this Lease Not
Caused by Tenant or
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Tenant's Uses or Remodeling of the Premises") is hereby deleted and replaced
with the following:
"53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL
AGENCIES AFTER THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR
TENANT'S USES OR REMODELING OF THE PREMISES: The provisions of this
Paragraph 53 shall modify Paragraphs 7 and 14:
A. If (i) during the last five (5) years of the First Extended
Term of the Lease if said Lease has not been extended as provided for
in Lease Paragraph 43 ("Second Five Year Option To Extend") or in
Paragraph 3 ("Third Five Year Option to Extend") or Paragraph 4 ("Lease
Terms Co-Extensive") above, or (ii) during either of the five (5) year
extension periods permitted by Lease Paragraph 43 or Paragraph 3, or
Paragraph 4 above, it becomes necessary (due to any governmental
requirement for continued occupancy of the Premises) to make structural
improvements required by laws enacted or legal requirements imposed by
governmental agency(s) after the Commencement Date, and the cost for
each required work or improvements exceeds $100,000, then if such legal
requirement is not imposed because of Tenant's specific use of the
Premises and is not "triggered" by Tenant's Alterations or Tenant's
application for a building permit or any other governmental approval
(collectively "Tenant's Actions") in which instance Tenant shall be
responsible for 100% of the cost of such improvements, Landlord shall
be responsible for paying the cost of such improvement and constructing
such improvement, subject to a cash contribution from Tenant of a
portion of the cost thereof as provided for and calculated in Paragraph
53B.
B. When Landlord makes an improvement pursuant to Paragraph
53A, and as a condition to Landlord's obligation to construct such
improvement, Tenant shall make the following contribution in cash to
Landlord for the cost thereof prior to the commencement of the work by
Landlord. It is agreed that Tenant shall pay to Landlord 100% of the
cost of the first $100,000.00 worth of each improvement. After the
first $100,000.00, all costs above $100,000.00 shall be divided by 15
and multiplied by the time period remaining in the last five years of
the Lease Term from the date work on such improvement commences.
For example, if the improvement is not required as a result of
Tenant's Actions and if the cost of such improvement was $400,000 and
there was one year and six months remaining in the Lease term when the
work commenced, then Tenant would be responsible for reimbursing
Landlord in cash $130,000.00 computed as follows:
Total Cost of Work $400,000.00
Tenant Responsible for
1st $100,000 -100.000.00
-----------
Total Amount To Be Amortized $300,000.00
$300,000.00/15 = $20,000.00/yr. x 1.5 yrs = $ 30,000.00
Tenant responsible for $100,000 + $30,000.00 = $130,000.00
C. If Landlord has made improvements, for which Tenant has
reimbursed Landlord for the cost thereof pursuant to Xxxxxxxxx 00X, and
the term of this Lease is subsequently extended pursuant to the
exercise by Tenant of an option to renew pursuant to Lease Paragraph 43
or Paragraph 3 above, upon the exercise of any such option by Tenant,
Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by
Tenant. Using the example in Paragraph 53B above, Tenant would owe
Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00)."
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7. PROPERTY INSURANCE: Lease Paragraph 12 ("Property Insurance") is
hereby amended to include the following: "Tenant acknowledges that as part of
the cost of insurance policies for the Premises, Tenant is responsible for the
payment of insurance deductibles on insurance claims as they relate to the
Premises subject to the limitations provided in Lease Paragraph 55 ("Property
Insurance") which limitations are applicable only during the initial Lease Term
and the First Lease Extension Period and the Second Lease Extension Period. Said
limitation provided for in Lease Paragraph 55 are null and void at the
commencement of the Third Lease Extended Term".
8. THIRD OPTION PERIOD - LEASE PROVISION CHANGES: In the event Tenant
exercises its Third Option to Extend as provided for in Paragraph 3 above, the
following amendments (contained within Paragraphs 9 through 19) are herein made
to the Lease to be effective upon the commencement of the third option period
("Third Option Period"), or during any period following the expiration of the
Lease Term or expiration of the Lease when Tenant is in possession of the
Premises.
9. LATE CHARGE: Effective as of the first day of the Third Option
Period, the Late Charge referenced in Lease Paragraph 4.D ("Late Charge") shall
be changed from five percent (5%) to ten percent (10%), and Lease Paragraph 50
("Limitation on Late Charge") shall be deleted in its entirety and of no further
force or effect.
10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the
Lease, effective as of the first day of the Third Option Period, and on the
first day of each month thereafter, Tenant shall pay to Landlord, in addition to
the Basic Rent and Additional Rent, a fixed monthly management fee ("Management
Fee") equal to one percent (1%) of the Basic Rent due for each month during the
Lease Term.
11. HAZARDOUS MATERIALS: Effective as of the first day of the Third
Option Period, Lease Paragraph 45 ("Hazardous Materials") shall be deleted in
its entirety and replaced with the following:
"45. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows
with respect to the existence or use of "Hazardous Materials" (as
defined herein) on, in, under or about the Premises and real property
located beneath said Premises, which includes the entire parcel of land
on which the Premises are located as shown in Green on Exhibit A to the
Lease (hereinafter collectively referred to as the "Property"): ,
A. As used herein, the term "Hazardous Materials" shall mean
any material, waste, chemical, mixture or byproduct which is or
hereafter is defined, listed or designated under Environmental Laws
(defined below) as a pollutant, or as a contaminant, or as a toxic or
hazardous substance, waste or material, or any other unwholesome,
hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or
restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions
thereof, polychlorinated biphenyls, or asbestos). As used herein, the
term "Environmental Laws" shall mean any applicable Federal, State of
California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or
order of any executive or judicial authority at any level of Federal,
State of California or local government (whether now existing or
subsequently adopted or promulgated) relating to pollution or the
protection of the environment, ecology, natural resources, or public
health and safety.
B. Tenant shall notify Landlord prior to the occurrence of any
Tenant's Hazardous Materials Activities (defined below). Landlord
acknowledges that Tenant shall use, in compliance with applicable
Environmental Laws, customary household and office supplies (Tenant
shall first provide Landlord with a list of said materials use), such
as mild cleaners, lubricants and copier toner. Any and all of Tenant's
Hazardous Materials Activities shall be conducted in conformity with
this Paragraph
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45, Paragraph 14 of this Lease, and in compliance with all
Environmental Laws and regulations. As used herein, the term "Tenant's
Hazardous Materials Activities" shall mean any and all use, handling,
generation, storage, disposal, treatment, transportation, release,
discharge, or emission of any Hazardous Materials on, in, beneath, to,
from, at or about the Property, in connection with Tenant's use of the
Property, or by Tenant or by any of Tenant's agents, employees,
contractors, vendors, invitees, visitors or its future subtenants or
assignees or other third parties (including "dumping" by others) (or
which Hazardous Materials originate on the surface of the Premises any
time on or after the Commencement Date of this Lease, but excluding
Hazardous Materials on the Premises prior to the Lease Commencement
Date because of the storage, use, disposal, or transportation of such
materials or waste by any of Landlord's contractors or otherwise
arising out of construction work performed by or under the direction of
Landlord on the Premises and Landlord shall be responsible for all
required actions with respect to such materials or wastes). Tenant
agrees to provide Landlord with prompt written notice of any spill or
release of Hazardous Materials at the Property during the term of the
Lease of which Tenant becomes aware, and further agrees to provide
Landlord with prompt written notice of any violation of Environmental
Laws in connection with Tenant's Hazardous Materials Activities of
which Tenant becomes aware. If Tenant's Hazardous Materials Activities
involve Hazardous Materials other than normal use of customary
household and office supplies, Tenant also agrees at Tenant's expense:
(i) to install such Hazardous Materials monitoring, storage and
containment devices as may be required by Environmental Laws,
regulations and/or governing agencies; (ii) to provide Landlord with a
written inventory of such Hazardous Materials, including an update of
same each year upon the anniversary date of the Commencement Date of
the Lease ("Anniversary Date"); and (iii) on each Anniversary Date to
provide to Landlord copies of all documentation and records, required
by applicable Environmental Laws to be prepared and submitted to
governmental authorities, relating to use at the Property of Hazardous
Materials or to Tenant's Hazardous Materials Activities, if any. If
upon completion of Landlord's review of said documentation and records,
Landlord reasonably questions if Tenant is in compliance with all
applicable Environmental Laws with respect to Tenant's Hazardous
Materials Activities, Tenant agrees within thirty (30) days following
receipt of written notice from Landlord, to retain a qualified
environmental consultant, acceptable to Landlord, to evaluate whether
Tenant is in compliance with all applicable Environmental Laws with
respect to Tenant's Hazardous Materials Activities. Tenant, at its
expense, shall submit to Landlord a report from such environmental
consultant which discusses the environmental consultant's findings
within two (2) months of each Anniversary Date. Tenant, at its expense,
shall promptly undertake and complete any and all steps necessary, and
in full compliance with applicable Environmental Laws, to fully correct
any and all problems or deficiencies identified by the environmental
consultant, and promptly provide Landlord with documentation of all
such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at
its expense, shall (i) properly remove from the Property all Hazardous
Materials which come to be located at the Property in connection with
Tenant's Hazardous Materials Activities, and (ii) fully comply with and
complete all facility closure requirements of applicable Environmental
Laws regarding Tenant's Hazardous Materials Activities, including but
not limited to (x) properly restoring and repairing the Property to the
extent damaged by such closure activities, and (y) obtaining from the
local Fire Department or other appropriate governmental authority with
any legal or regulatory jurisdiction a written concurrence that closure
has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims,
notices, work plans, data and reports prepared, received or submitted
in connection with any such closure activities.
D. If Landlord, upon consultation with Tenant, reasonably
concludes that the Property has become contaminated as a result of
Tenant's Hazardous Materials Activities, Landlord in addition to any
other rights it may have under this Lease or under Environmental Laws
or other laws, may enter upon the Property and conduct inspection,
sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of
determining the nature and extent
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of such contamination except to the extent that such activities may be
inconsistent with Tenant's compliance with Environmental Laws. Tenant
shall promptly reimburse Landlord for the costs of such an
investigation, including but not limited to reasonable attorneys' fees
Landlord incurs with respect to such investigation to the extent, and
only to the extent, that it that discloses Hazardous Materials
contamination for which Tenant is liable under this Lease. Except as
may be required of Tenant by applicable Environmental Laws, Tenant
shall not perform any sampling, testing, or drilling to identify the
presence of any Hazardous Materials at the Property, without Landlord's
prior written consent which shall not be unreasonably withheld. Tenant
shall promptly provide Landlord with copies of any claims, notices,
work plans, data and reports prepared, received or submitted in
connection with any sampling, testing or drilling performed pursuant to
the preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel
acceptable to Landlord, whose consent shall not unreasonably be
withheld) and hold harmless Landlord, its employees, assigns,
successors, successors-in-interest, agents and representatives from and
against any and all claims (including but not limited to third party
claims from a private party or a government authority), liabilities,
obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including
but not limited to reasonable attorneys', consultants' and other
experts' fees and costs), and damages, which arise from or relate to:
(i) Tenant's Hazardous Materials Activities; (ii) any Hazardous
Materials contamination caused by Tenant prior to the Commencement Date
of the Lease; or (iii) the breach of any obligation of Tenant under
this Paragraph 45 (collectively, "Tenant's Environmental
Indemnification"). Tenant's Environmental Indemnification shall include
but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution
in fair market value of the Property. Tenant's Environmental
Indemnification shall further include but is not limited to the
obligation to diligently and properly implement to completion, at
Tenant's expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other
environmental response action as may be required by applicable
Environmental Laws, regulations or governing agencies (collectively,
"Response Actions"). Tenant shall promptly provide Landlord with copies
of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any Response Actions.
F. Landlord hereby makes the following representations to
Tenant, each of which is made only to the best of Landlord's knowledge
as of the date Landlord executes this Lease, without any inquiry or
investigation having been made or required by Landlord regarding this
subject, nor does Landlord have any obligation to investigate or make
inquiry regarding the subject:
(1) The soil and ground water on or under the
Premises does not contain Hazardous Materials in amounts which violate
any laws to the extent that any governmental entity could require
either Landlord or Tenant to take any remedial action with respect to
such Hazardous Materials.
(2) During the time that Landlord has owned the
Premises, Landlord has received no notice of (i) any violation, or
alleged violation, of any law that has not been corrected to the
satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or
(iii) any pending investigation by any governmental agency concerning
the Premises relating to Hazardous Materials.
G. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication
received from any governmental authority concerning Hazardous Materials
which relates to the Premises, and (ii) any contamination of the
Premises by Hazardous Materials which constitutes a violation of any
law. Attached as Exhibit "C" to the Lease is a list of Hazardous
Materials that Tenant intends to use at the Premises. If during the
Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the
Hazardous Materials and the manner of their use, storage and
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disposal, and shall agree (i) to use, store and dispose of such
Hazardous Materials strictly in compliance with all laws, regulations
and governing agencies and (ii) that the indemnity set forth in
Paragraph 45 shall be applicable to Tenant's use of such Hazardous
Material.
H. Landlord or Tenant may, at any time, cause testing xxxxx to
be installed on the Premises, and may cause the ground water to be
tested to detect the presence of Hazardous Material by the use of such
tests as are then customarily used for such purposes. Testing xxxxx
installed by Tenant shall be paid for by Tenant. If tests conducted by
Landlord disclose that Tenant has violated any Hazardous Materials
laws, or Tenant or parties on the Premises during the Term of this
Lease have contaminated the Premises as determined by regulatory
agencies pursuant to Hazardous Materials laws, or that Tenant has
liability to Landlord pursuant to Paragraph 45A, then Tenant shall pay
for 100 percent of the cost of the test and all related expense. Prior
to the expiration of the Lease Term, Tenant shall remove any testing
xxxxx it has installed at the Premises, and return the Premises to the
condition existing prior to the installation of such xxxxx, unless
Landlord requests in writing that Tenant leave all or some of the
testing xxxxx in which instance the xxxxx requested to be left shall
not be removed.
I. If any tests performed by Tenant or Landlord prior to the
Commencement Date disclose Hazardous Materials at the Premises,
Landlord at its expense will promptly take all reasonable action
required by law with respect to the existence of such Hazardous
Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is
prohibited by law.
J. The obligations of Landlord and Tenant under this Paragraph
45 shall survive the expiration or earlier termination of the Term of
this Lease. The rights and obligations of Landlord and Tenant with
respect to issues relating to Hazardous Materials are exclusively
established by this Paragraph 45."
12. SECURITY DEPOSIT: Effective as of the first day of the Third Option
Period, Lease Paragraph 51 ("Security Deposit") shall be deleted in its entirety
and replaced with the following:
"51. SECURITY DEPOSIT: The following provisions shall modify
Lease Paragraph 4F:
A. Within thirty (30) days after the expiration or earlier
termination of the Lease term and after Tenant has vacated the
Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed
by Landlord to cure defaults of Tenant under the Lease or compensate
Landlord for damages for which Tenant is liable pursuant to this Lease.
The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.
B. During the first thirty (30) days following Tenant's
exercise of its Third Option to Extend, and only during said thirty day
period, Tenant shall have the one-time option of satisfying its
obligation with respect to an amount equal to one-half (1/2)
($238,296.60) of the $476,593.20 Security Deposit required under Lease
Paragraph 4F by providing to Landlord, at Tenant's sole cost, a letter
of credit which: (i) is drawn upon an institutional lender reasonably
acceptable and accessible to Landlord in form and content reasonably
satisfactory to Landlord; (ii) is in the amount of one-half (1/2) of
the Security Deposit; (iii) is for a term of at lease twelve (12)
months; (iv) with respect to any letter of credit in effect within the
six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at
least forty five (45) days past the Lease expiration date (including
any extensions thereof); and (v) may be drawn upon by Landlord upon
submission of a declaration of Landlord that Tenant is in default (as
defined in Paragraph 19 and as modified by Paragraph 60). Landlord
shall not be obligated to furnish proof of default to such
institutional lender, and Landlord shall only be required to give the
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institutional lender written notification that Tenant is in default and
upon receiving such written notification from Landlord the
institutional lender shall be obligated to immediately deliver cash to
Landlord equal to the amount Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant's default
up to 1/2 of the total Security Deposit required under Lease Xxxxxxxxx
0X. Said letter of credit shall provide that if the letter of credit is
not renewed, replaced or extended within twenty (20) days prior to its
expiration date the issuer of the credit shall automatically issue a
cashiers check payable to Landlord in the amount of the letter of
credit after the date which is twenty (20) days before the expiration
date, and no later than the expiration date, without Landlord being
required to make demand upon the letter of credit. If Tenant provides
Landlord with a letter of credit, within thirty (30) days of the
execution of this Lease, meeting the foregoing requirements, one-half
(1/2) of the cash Security Deposit (i.e., $238.296.60 of the
$476.593.20 Security Deposit) shall be returned to Tenant by Landlord
inasmuch as the cash deposit remaining and the Letter of Credit equal
the total Security Deposit required in Lease Xxxxxxxxx 0X. If Tenant
defaults with respect to any provisions of this Lease, including but
not limited to provisions relating to the payment of Rent, Landlord may
(but shall not be required to) draw down on the letter of credit for
payment of any sum which Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant's default.
Landlord and Tenant acknowledge that such letter of credit will be
treated as if it were a cash security deposit, and such letter of
credit may be drawn down upon by Landlord upon demand and presentation
of evidence of the identity of Landlord to the issuer, in the event
that Tenant defaults with respect to any provision of this Lease and
such default is not cured within any applicable cure period.
Notwithstanding anything to the contrary in this Lease, Landlord shall
not be obligated to furnish proof of default to such institutional
lender and Landlord is only required to give the institutional lender
written notification that Tenant is in default and upon receiving such
written notification from Landlord the institutional lender shall be
obligated to immediately deliver cash to Landlord equal to the amount
Landlord may spend or become obligated to spend by reason of Tenant's
default, or to compensate Landlord for any loss or damage which
Landlord may suffer by reason of Tenant's default up to 1/2 of the
total Security Deposit. Landlord acknowledges that it is not entitled
to draw down such letter of credit unless Landlord would have been
entitled to draw upon the cash security deposit pursuant to the terms
of Paragraph 4F of the Lease. Concurrently with the delivery of the
required information to the issuer, Landlord shall deliver to Tenant
written evidence of the default upon which the draw down was based,
together with evidence that Landlord has provided to Tenant the written
notice of such default which was required under the applicable
provision of the Lease, and evidence of the failure of Tenant to cure
such default within the applicable grace period following receipt of
such notice of default. Any proceeds received by Landlord by drawing
upon the letter of credit shall be applied in accordance with the
provisions governing the Security Deposit imposed by Lease Paragraph 4F
and this Paragraph 51. If Landlord draws upon the letter of credit,
thereafter Tenant shall once again have the right to post a letter of
credit in place of one-half (1/2) of a cash Security Deposit so long as
Tenant is not then in default. In any event Tenant will be obligated to
replenish the amount drawn to restore the Security Deposit to its
original amount as provided for in Xxxxxxxxx 0X. If any portion of the
letter of credit is used or applied pursuant hereto, Tenant shall,
within ten (10) days after receipt of a written demand therefor from
Landlord, restore and replace the value of such security by either (i)
depositing cash with Landlord in the amount equal to the sum drawn down
under the letter of credit, or (ii) increasing the letter of credit to
its value immediately prior to such application. Tenant's failure to
replace the value of the security as provided in the preceding sentence
shall be a material breach of its obligation under this Lease."
13. REAL ESTATE TAXES: Effective as of the first day of the Third
Option Period, Lease Paragraph 54 ("Real Estate Taxes") shall be deleted in its
entirety and replaced with the following:
"54. REAL PROPERTY TAXES: Paragraph 9 is modified by the
following:
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A. The term "Real Property Taxes" shall not include charges,
levies or fees directly related to the use, storage, disposal or
release of Hazardous Materials on the Premises unless directly related
to Tenant's Activities at this site or on other sites leased and/or
owned by Tenant; however, Tenant shall be responsible for general or
special tax and/or assessments (related to Hazardous Materials and/or
toxic waste) imposed on the Property provided said special tax and/or
assessment is not imposed due to on-site originated contamination on
the Property (by third parties not related to Tenant) prior to the
Lease Commencement Date. Subject to the terms and conditions stated
herein, Tenant shall be responsible for paying one hundred percent
(100%) of said taxes and/or assessments allocated to the Property.
B. If any assessments for public improvements are levied
against the Premises, Landlord may elect either to pay the assessment
in full or to allow the assessment to go to bond. If Landlord pays the
assessment in full, Tenant shall pay to Landlord or any assignee or
purchaser of the Premises each time payment of Real Property Taxes is
made a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to go to
bond.
C. Tenant at its cost shall have the right, at any time, to
seek a reduction in the assessed valuation of the Premises or to
contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the
failure on Tenant's part to pay such Real Property Taxes being so
contested shall not constitute a default so long as Tenant complies
with the provisions of this Paragraph. Landlord shall not be required
to join in any proceeding or contest brought by Tenant unless the
provisions of any law require that the proceeding or contest be brought
by or in the name of Landlord. In that case Landlord shall join in the
proceedings or contest or permit it to be brought in Landlord's name as
long as Landlord is not required to bear any cost. Tenant, on final
determination of the proceeding or contest, shall immediately pay or
discharge its share of any Real Property Taxes determined by any
decision or judgment rendered, together with all costs, charges,
interest, and penalties incidental to the decision or judgment. If
Tenant does not pay the Real Property Taxes when due pursuant to the
Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant
shall furnish to Landlord a surety bond in form reasonably satisfactory
to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125% of the total amount
of Real Property Taxes in dispute and any such bond shall be assignable
to any lender or purchaser of the Premises. The bond shall hold
Landlord and the Premises harmless from any damage arising out of the
proceeding or contest and shall insure the payment of any judgment that
may be rendered."
14. PROPERTY INSURANCE: Effective as of the first day of the Third
Option Period, section B of Lease Paragraph 55 ("Property Insurance") shall be
deleted in its entirety and be of no further force or effect.
15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the
Third Option Period, Lease Paragraph 56 ("Assignment and Subletting") shall be
deleted in its entirety and replaced with the following:
"56. ASSIGNMENT AND SUBLETTING: The following modifications
are made to Paragraph 16:
A. In the event that Tenant seeks to make any assignment or
sublease, then Landlord, by giving Tenant written notice of its
election within fifteen (15) days after Tenant's notice of intent to
assign or sublease has been given to Landlord, shall have the right to
elect (i) to withhold its consent to such assignment or sublease, as
permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event
Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the
following shall apply (except the following shall not apply to a
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"Permitted Transfer" described in Paragraph 57):
(1) If Tenant assigns its interest in this Lease,
then in addition to the rental provided for in this Lease, Tenant shall
pay to Landlord fifty percent (50%) of all Rent and other consideration
received by Tenant over and above (i) the assignee's agreement to
assume the obligations of Tenant under this Lease and (ii) all
"Permitted Transfer Costs" (as defined herein) related to such
assignment. As used herein, the term "Permitted Transfer Costs" shall
mean all reasonable leasing commissions paid to third parties not
affiliated with Tenant in order to obtain the assignment or sublease in
question.
(2) If Tenant sublets all or part of the Premises,
then Tenant shall pay to Landlord in addition to the Rent provided for
in this Lease fifty percent (50%) of the positive difference, if any,
between (i) all rent and other consideration paid or provided to Tenant
by the subtenant, less (ii) all Rent paid by Tenant to Landlord
pursuant to this Lease which is allocable to the area so sublet and all
Permitted Transfer Costs related to such sublease. After Tenant has
recovered all Permitted Transfer Costs Tenant shall pay to Landlord the
amount specified in the preceding sentence on the same basis, whether
periodic or in lump sum, that such rent and other consideration is paid
to Tenant by its subtenant, within seven (7) days after it is received
by Tenant.
(3) Tenant's obligations under this subparagraph
shall survive any assignment or sublease. At the time Tenant makes any
payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which
Landlord is entitled was calculated, certified by Tenant as true and
correct. Landlord shall have the right to inspect Tenant's books and
records relating to the payments due pursuant to this subparagraph.
Upon request therefor, Tenant shall deliver to Landlord copies of all
bills, invoices or other documents upon which its calculations are
based.
(4) As used herein, the term "consideration" shall
mean any consideration of any kind received, or to be received
(including, but not limited to, services rendered and/or value
received) by Tenant as a result of the assignment or sublease, if such
sums are paid or provided to Tenant for Tenant's interest in this Lease
or in the Premises.
(5) This Paragraph 56.A does not apply to a
"Permitted Transfer", as provided in Paragraph 57 hereof. The parties
agree that if any of the following transactions occur and do not
qualify as "Permitted Transfers", Tenant must obtain Landlord's consent
to such transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as "Permitted Transfers",
then the provisions of this Paragraph 56.A shall not apply to the
following transactions: (i) a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee; and (ii) an assignment of this Lease to a
corporation which purchases or otherwise acquires 95% or more of the
assets of Tenant so long as 95% of all assets and liabilities of Tenant
are permanently transferred to such assignee and Tenant remains liable
and responsible under the Lease to the extent Tenant continues in
existence following such transaction."
16. PERMITtED ASSIGNMENTS AND SUBLEASES: Effective as of the first day
of the Third Option Period, Lease Paragraph 57 ("Permitted Assignments and
Subleases") shall be deleted in its entirety and replaced with the following:
"57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding
anything contained in Paragraph 16, so long as Tenant otherwise
complies with the provisions of Paragraph 16 and the Permitted Transfer
does not release Tenant from its obligations hereunder, Tenant may
enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent, and the provisions of
Paragraph 56A shall not apply to any such Permitted Transfer:
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A. Tenant may sublease all or part of the Premises or
assign its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with Tenant by means of an
ownership interest of more than fifty percent (50%) providing Tenant
remains liable for the payment of Rent and full performance of the
Lease;
B. Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as (i) 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which
Tenant is to be merged has a net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or reorganization (whichever is
greater), or if it does not, Landlord is provided a guaranty of the
Lease (in a form reasonably acceptable to Landlord) from a corporation
(a) that is the parent of, or is otherwise affiliated with, the
corporation into which Tenant is to be merged, and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment, merger,
consolidation or reorganization (whichever is greater). In the event
there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party, and Tenant continues to exist
as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease;
C. Tenant may assign this Lease to a corporation which
purchases or otherwise acquires 95% or more of the assets of Tenant so
long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee (in the event there is not a permanent
transfer of 95% or more of the assets and liabilities from Tenant to a
third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and
conditions of the Lease), and provided that immediately prior to such
assignment said corporation, has a net worth equal to or greater than
the net worth of Tenant (a) at the time of Lease execution or (b) at
the time of such assignment (whichever is greater), or if it does not,
Landlord is provided a guaranty of the Lease (in a form reasonably
acceptable to Landlord) from a corporation (a) that is the parent of,
or is otherwise affiliated with, said corporation and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment,
(whichever is greater)."
17. DESTRUCTION: Effective as of the first day of the Third Option
Period, Lease Paragraph 62 ("Destruction") shall be deleted in its entirety and
replaced with the following:
"62. DESTRUCTION: Paragraph 21 is modified by the following:
A. Notwithstanding anything to the contrary within Paragraph
21, Landlord may terminate this Lease in the event of an uninsured
event or if insurance proceeds, net of the deductible, are insufficient
to cover one hundred percent of the rebuilding costs; provided,
however, Tenant shall have the right to elect, in its discretion, to
contribute such excess funds to permit Landlord to repair the Premises.
B. Except as provided in Xxxxxxxxx 00X, Xxxxxxxx may not
terminate the Lease if the Premises are damaged by a peril whereby the
cost to replace and/or repair is one hundred percent (100%) covered by
the insurance carried by Landlord pursuant to Paragraph 12, but instead
shall restore the Premises in the manner described by Paragraph 21.
C. If the Premises are damaged by a peril covered by the
insurance carried by Landlord pursuant to Xxxxxxxxx 00, Xxxxxxxx shall
have the option to terminate the Lease if each of the following
conditions is satisfied: (i) the cost to repair or the damage exceeds
thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than
five (5) years remaining in the term of the Lease.
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D. If Landlord fails to obtain insurance as required pursuant
to Paragraph 12, and said insurance would have been available to cover
any damage or destruction to the Premises, Landlord shall be required
to rebuild, at its cost, net of the deductible which would have been
required under said insurance policy (which deductible Tenant is
required to pay).
E. If the Premises are damaged by any peril, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written
opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be completed. Tenant
shall have the option to terminate this Lease in the event any of the
following occurs, which option may be exercised only by delivery to
Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time
needed to complete such restoration:
(1) The Premises are damaged by any peril (not caused
by or resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within 180 days after the
date of such damage (subject to force majeure conditions); or
(2) The Premises are damaged by any peril (not caused
by or resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) within twelve (12) months of the last day of
the Lease term, and, in the reasonable opinion of Landlord's architect
or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within sixty (60) days after the date
of such damage and Tenant has not exercised its Option to Extend said
Term (or Extended Term as the case may be)."
18. LIABILITY INSURANCE: Effective as of the first day of the Third
Option Period, the first sentence of Lease Paragraph 10 ("Liability Insurance")
shall be deleted and replaced with the following' "Tenant, at Tenant's expense,
agrees to keep in force during the Term of this Lease a policy of commercial
general liability insurance with combined single limit coverage of not less than
Two Million Dollars ($2,000,000) per occurrence for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped
areas."
19. LIMITATION OF LIABILITY: Effective as of the first day of the Third
Option Period, Lease Paragraph 36 ("Limitation of Liability") shall be deleted
in its entirety and replaced with the following:
"36. LIMITATION OF LIABILITY In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and
agree that, in the event of any actual or alleged failure, breach or
default hereunder by Landlord:
(i) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;
(ii) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of
the partnership);
(iii) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the
partnership);
(iv) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(v) no judgment will be taken against any partner of Landlord;
(vi) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(vii) no writ of execution will ever be levied against the assets of
any partner of Landlord;
(viii) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
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Tenant agrees that each of the foregoing covenants and
agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by statute or at common
law."
EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of
said October 31, 1989 Lease Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No.
3 to Lease as of the day and year last written below.
LANDLORD: TENANT:
XXXX XXXXXXXXX SURVIVOR'S TRUST QUANTUM CORPORATION
a Delaware corporation
By /s/ Xxxx Xxxxxxxxx, Trustee By /s/ Xxxxxx Xxxxxx
------------------------------ -------------------------------
Xxxx Xxxxxxxxx, Trustee
Xxxxxx Xxxxxx
-----------------------------------
Date: 6/30/97 Print or Type Name
------------
Title: FINANCE AND CORPORATE GENERAL
-----------------------------
COUNSEL
-----------------------------
XXXXXXX X. XXXXX SEPARATE
PROPERTY TRUST Date: June 25, 1997
----------------
By /s/ Xxxxxxx X. Xxxxx
----------------------
Xxxxxxx X. Xxxxx, Trustee
Date: 6/26/97
-------------------
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AMENDMENT NO. 3
TO LEASE
THIS AMENDMENT NO. 3 is made and entered into this 16th day of April,
1997, by and between XXXX XXXXXXXXX, Trustee, or his Successor Trustee UTA dated
7/20/77 (XXXX XXXXXXXXX SURVIVOR'S TRUST) (previously known as the "Xxxx
Xxxxxxxxx Separate Property Trust") as amended, and XXXXXXX X. XXXXX, Trustee,
or his Successor Trustee UTA dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY
TRUST) as amended, collectively as LANDLORD, and QUANTUM CORPORATION, a Delaware
corporation, as TENANT.
RECITALS
A. WHEREAS, by Lease Agreement dated October 31, 1989 Landlord leased
to Tenant all of that certain 155,734+/- square foot building located at 0000
Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx, the details of which are more
particularly set forth in said October 31, 1989 Lease Agreement, and
B. WHEREAS, said Lease was amended by Letter Agreement dated October
31, 1989 which provided for a Basic Rent Credit for the period commencing with
the Lease Commencement Date and ending on May 31, 1991, and
C. WHEREAS, said Lease was amended by Amendment No. 1 dated April 24,
1990 which canceled the reduction in Basic Rent Credit Letter dated October 31,
1989, and which delayed the Lease Commencement Date from December 15, 1990 to
April 1, 1991, and,
D. WHEREAS, said Lease was amended by the Commencement Letter dated
March 4, 1991 which changed the Commencement Date of the Lease from April 1,
1991 to March 1, 1991, and established the Termination Date of July 31, 2006,
and,
E. WHEREAS, said Lease was amended by Amendment No. 2 dated June 26,
1991 which extended the Term of the Lease for an additional two month period,
amended the Basic Rent schedule and Aggregate Rent accordingly, and amended the
deadlines in which Tenant could exercise its Option to Extend pursuant to Lease
Paragraphs 42 and 43, and
F. WHEREAS, it is now the desire of the parties hereto to amend the
Lease by (i) extending the Term for five years, changing the Termination Date
from September 30, 2006 to September 30, 2011, (ii) amending the Basic Rent
schedule and Aggregate Rent accordingly, (iii) adding a third Five Year Option
to Extend, (iv) replacing Paragraphs 41C ("Lease Terms Co-extensive") and 48
("Cross Default") and 53 ("Structural Capital Costs Regulated by Governmental
Agencies After thee Commencement of this Lease not Caused by Tenant or Tenant's
Uses or Remodeling of the Premises"), (v) amending Lease Paragraph 12 ("Property
Insurance") and (vi) amending and/or replacing certain provisions of the Lease
commencing as of the commencement of the Third Extended Term of said Lease as
hereinafter set forth.
AGREEMENT
NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:
1. TERM OF LEASE: It is agreed between the parties that Tenant has
exercised its First Five-Year Option to Extend the lease term of that certain
lease agreement dated March 23, 1994 for premises located at 0000 Xxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Building 5 Lease"), as detailed in Paragraph 41 of
said Building 5 Lease. Paragraph 40C of said Building 5 Lease provides that in
the event the term of said Building 5 Lease is extended for any reason
whatsoever, the terms of the Existing Leases (i.e. two of said leases dated
October 31, 1989 are for Premises located at 0000 Xxxxxxxxxx Xxxxx and 000
XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx (the "1989 Leases"); one of said leases
dated September 17, 1990 is for Premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx,
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and one of said leases dated April 10, 1992 is for Premises located at 000 Xxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx) shall also be extended so that all five Leases
expire on the same date; therefore, it is agreed between the parties that by
exercising its Option to Extend the Building 5 Lease, Tenant has in effect
exercised its Option to Extend under Lease Paragraph 42 ("First Five-Year Option
to Extend"), and that pursuant to said Lease Paragraph 42, the Term of this
Lease Agreement shall be extended for an additional five (5) year period, and
the Lease Termination Date shall be changed from September 30, 2006 to September
30, 2011.
2. BASIC RENTAL FOR FIRST EXTENDED TERM OF LEASE: The monthly Basic
Rental for the First Extended Term of Lease shall be as follows:
On October 1, 2006, the sum of TWO HUNDRED SEVENTY TWO THOUSAND FIVE
HUNDRED THIRTY FOUR AND 50/100 DOLLARS ($272,534.50) shall be due, and a like
sum due on the first day of each month thereafter through and including
September 1, 2007.
On October 1, 2007, the sum of TWO HUNDRED EIGHTY THOUSAND THREE
HUNDRED TWENTY ONE AND 20/100 DOLLARS ($280,321.20) shall be due, and a like sum
due on the first day of each month thereafter through and including September 1,
2008.
On October 1, 2008, the sum of TWO HUNDRED EIGHTY EIGHT THOUSAND ONE
HUNDRED SEVEN AND 90/100 DOLLARS ($288,107.90) shall be due, and a like sum due
on the first day of each month thereafter through and including September 1,
2009.
On October 1, 2009, the sum of TWO HUNDRED NINETY FIVE THOUSAND EIGHT
HUNDRED NINETY FOUR AND 60/100 DOLLARS ($295,894.60) shall be due, and a like
sum due on the first day of each month thereafter through and including
September 1, 2010.
On October 1, 2010, the sum of THREE HUNDRED THREE THOUSAND SIX HUNDRED
EIGHTY ONE AND 30/100 DOLLARS ($303,681.30) shall be due, and a like sum due on
the first day of each month thereafter through and including September 1, 2011.
The Aggregate Basic Rent for the Lease shall be increased by
$17,286,474.00 or from $39,587,582.80 to $56,874,056.80.
3. THIRD FIVE-YEAR OPTION TO EXTEND: Provided Tenant has extended the
Lease for an additional five (5) year period pursuant to Lease Paragraph 43
("Second Five Year Option To Extend"), Landlord hereby grants to Tenant a third
option to extend the Term of this Lease for an additional five (5) year period
upon the following terms and conditions:
A. Tenant shall give Landlord written notice of Tenant's exercise of
this option to extend at least one hundred eighty (180) days prior to the
expiration of the Lease Term as extended pursuant to Lease Paragraph 43 ("Second
Five Year Option To Extend"), in which event the Lease shall be considered
extended for an additional five (5) year period upon the same terms and
conditions as this Lease, absent this Paragraph 3 and subject to the Rental as
set forth below. In the event that Tenant fails to timely exercise Tenant's
option as set forth herein in writing, Tenant shall have no further option to
extend this Lease or the Other Leases, and this Lease shall continue in full
force and effect for the full remaining term hereof, absent this Paragraph 3.
B. The monthly Basic Rent for the option period shall be as follows in
the event the option is
Period Monthly Basic Rent
------ ------------------
Months 1-12 $2.25/sf
Months 13-24 $2.30/sf
Months 25-36 $2.35/sf
Months 37-48 $2.40/sf
Months 49-60 $2.45/sf
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C. Notwithstanding anything contained herein, Tenant may not exercise
the option to extend granted by this Paragraph 3 at any time that Tenant is in
default (default for monetary and material default for non-monetary) of its
obligations under this Lease, if Tenant has received written notice from
Landlord that Tenant is in default, and such default has not been timely cured
within the time period provided for in this Lease; provided, however, that if
such default of Tenant is not for money due under this Lease and cannot be
cured, and if Landlord does not elect to terminate this Lease as a result of
such non-curable default by Tenant, Tenant may exercise the option to extend
granted by this Paragraph 3 notwithstanding such non-curable default.
4. LEASE TERMS CO-EXTENSIVE: Lease Paragraph 40C ("Lease Terms
Co-extensive") is hereby deleted in its entirety and replaced with the
following:
"40C. LEASE TERMS CO-EXTENSIVE: It is acknowledged that (i)
Landlord and Tenant have previously executed four separate leases in
addition to this Lease: one of said leases dated October 31, 1989 is
for Premises located at 000 XxXxxxxx Xxxx., Xxxxxxxx, Xxxxxxxxxx (the
"Building Two Lease"); one of said leases dated September 17, 1990 is
for Premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building Four Lease"); one of said leases dated April 10, 1992 is for
Premises located at 000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building 3 Lease"); and one of said leases dated March 23, 1994 is for
premises located at 0000 Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the
"Building 5 Lease") (hereinafter collectively referred to as the "Other
Leases"); and (ii) it is the intention of the parties that the term of
this Lease be co-extensive with the term of the Other Leases, such that
the terms of all five leases ("the Leases") expire on the same date.
The provisions of this Paragraph 40C also requires the terms of all the
Leases to be extended accordingly if Tenant exercises its Option to
Extend under any of the Leases. The monthly Basic Rent during the
extended term under each of the Leases shall be increased by $.05 per
square foot on the commencement date of the extended term and
thereafter on each and every anniversary of the respective lease's
commencement date of the extended term."
5. CROSS DEFAULT: Lease Paragraph 48 ("Cross Default") is hereby
deleted in its entirety and replaced with the following:
"48. CROSS DEFAULT: It is agreed between Landlord and Tenant
that a default under this Lease, or a default under any of the Other
Leases may, at the option of Landlord, be considered a default under
all Leases, in which event Landlord shall be entitled (but in no event
required) to apply all rights and remedies of Landlord under the terms
of one lease to all the Leases including, but not limited to, the right
to terminate any or all of the aforementioned Other Leases or this
Lease by reason of a default under the Leases or hereunder.
Notwithstanding the above, Landlord shall have the option of
considering a default under this Lease or a default under any of the
Other Leases to be a default under all such leases, only with respect
to such leases under which Landlord is also the 'Landlord' at the time
such default occurs. By way of example, if at the time a default of
Tenant occurs under this Lease, Landlord has sold the premises
described in any of the Other Leases and is no longer the 'Landlord'
thereunder, then a default under this Lease shall not constitute a
default under any of such Other Leases so sold by Landlord (unless the
premises leased under this Lease and the Other Leases are sold to the
same entity), and a default by Tenant under any of such Other Leases so
sold by Landlord shall not constitute a default under this Lease or any
other of the Other Leases then remaining between Landlord and Tenant.
However, if the Landlord under this Lease and the Other Leases is one
in the same at the time of said default, said cross default provisions
shall apply."
6. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL AGENCIES AFTER
THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR TENANT'S USES OR
REMODELING OF THE PREMISES: Lease Paragraph 53 ("Structural Capital Costs
Regulated by Governmental Agencies after the Commencement of this Lease Not
Caused by Tenant or
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Tenant's Uses or Remodeling of the Premises") is hereby deleted and replaced
with the following:
"53. STRUCTURAL CAPITAL COSTS REGULATED BY GOVERNMENTAL
AGENCIES AFTER THE COMMENCEMENT OF THIS LEASE NOT CAUSED BY TENANT OR
TENANT'S USES OR REMODELING OF THE PREMISES: The provisions of this
Paragraph 53 shall modify Paragraphs 7 and 14:
A. If (i) during the last five (5) years of the First Extended
Term of the Lease if said Lease has not been extended as provided for
in Lease Paragraph 43 ("Second Five Year Option To Extend") or in
Paragraph 3 ("Third Five Year Option to Extend") or Paragraph 4 ("Lease
Terms Co-Extensive") above, or (ii) during either of the five (5) year
extension periods permitted by Lease Paragraph 43 or Paragraph 3, or
Paragraph 4 above, it becomes necessary (due to any governmental
requirement for continued occupancy of the Premises) to make structural
improvements required by laws enacted or legal requirements imposed by
governmental agency(s) after the Commencement Date, and the cost for
each required work or improvements exceeds $100,000, then if such legal
requirement is not imposed because of Tenant's specific use of the
Premises and is not "triggered" by Tenant's Alterations or Tenant's
application for a building permit or any other governmental approval
(collectively "Tenant's Actions") in which instance Tenant shall be
responsible for 100% of the cost of such improvements, Landlord shall
be responsible for paying the cost of such improvement and constructing
such improvement, subject to a cash contribution from Tenant of a
portion of the cost thereof as provided for and calculated in Paragraph
53B.
B. When Landlord makes an improvement pursuant to Paragraph
53A, and as a condition to Landlord's obligation to construct such
improvement, Tenant shall make the following contribution in cash to
Landlord for the cost thereof prior to the commencement of the work by
Landlord. It is agreed that Tenant shall pay to Landlord 100% of the
cost of the first $100,000.00 worth of each improvement. After the
first $100,000.00, all costs above $100,000.00 shall be divided by 15
and multiplied by the time period remaining in the last five years of
the Lease Term from the date work on such improvement commences.
For example, if the improvement is not required as a result of
Tenant's Actions and if the cost of such improvement was $400,000 and
there was one year and six months remaining in the Lease term when the
work commenced, then Tenant would be responsible for reimbursing
Landlord in cash $130,000.00 computed as follows:
Total Cost of Work $400,000.00
Tenant Responsible for
1st $100,000 -100,000.00
----------
Total Amount To Be Amortized $300,000.00
$300,000.00/15 = $20,000.00/yr. x 1.5 yrs = $ 30,000.00
Tenant responsible for $100,000 + $30,000.00 = $130,000.00
C. If Landlord has made improvements, for which Tenant has
reimbursed Landlord for the cost thereof pursuant to Xxxxxxxxx 00X, and
the term of this Lease is subsequently extended pursuant to the
exercise by Tenant of an option to renew pursuant to Lease Paragraph 43
or Paragraph 3 above, upon the exercise of any such option by Tenant,
Tenant shall pay to Landlord an additional sum equal to the total
amount of said improvement less the amount previously paid for by
Tenant. Using the example in Paragraph 53B above, Tenant would owe
Landlord the additional amount of $270,000.00 ($400,000.00 -
$130,000.00 = $270,000.00)."
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7. PROPERTY INSURANCE: Lease Paragraph 12 ("Property Insurance") is
hereby amended to include the following: "Tenant acknowledges that as part of
the cost of insurance policies for the Premises, Tenant is responsible for the
payment of insurance deductibles on insurance claims as they relate to the
Premises subject to the limitations provided in Lease Paragraph 55 ("Property
Insurance") which limitations are applicable only during the initial Lease Term
and the First Lease Extension Period and the Second Lease Extension Period. Said
limitation provided for in Lease Paragraph 55 are null and void at the
commencement of the "Third Lease Extended Term".
8. THIRD OPTION PERIOD - LEASE PROVISION CHANGES: In the event Tenant
exercises its Third Option to Extend as provided for in Paragraph 3 above, the
following amendments (contained within Paragraphs 9 through 19) are herein made
to the Lease to be effective upon the commencement of the third option period
("Third Option Period"), or during any period following the expiration of the
Lease Term or expiration of the Lease when Tenant is in possession of the
Premises.
9. LATE CHARGE: Effective as of the first day of the Third Option
Period, the Late Charge referenced in Lease Paragraph 4.D ("Late Charge") shall
be changed from five percent (5%) to ten percent (10%), and Lease Paragraph 50
("Limitation on Late Charge") shall be deleted in its entirety and of no further
force or effect.
10. MANAGEMENT FEE: Notwithstanding anything to the contrary in the
Lease, effective as of the first day of the Third Option Period, and on the
first day of each month thereafter, Tenant shall pay to Landlord, in addition to
the Basic Rent and Additional Rent, a fixed monthly management fee ("Management
Fee") equal to one percent (1%) of the Basic Rent due for each month during the
Lease Term.
11. HAZARDOUS MATERIALS: Effective as of the first day of the Third
Option Period, Lease Paragraph 45 ("Hazardous Materials") shall be deleted in
its entirety and replaced with the following:
"45. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows
with respect to the existence or use of "Hazardous Materials" (as
defined herein) on, in, under or about the Premises and real property
located beneath said Premises, which includes the entire parcel of land
on which the Premises are located as shown in Green on Exhibit A to the
Lease (hereinafter collectively referred to as the "Property"):
A. As used herein, the term "Hazardous Materials" shall mean
any material, waste, chemical, mixture or byproduct which is or
hereafter is defined, listed or designated under Environmental Laws
(defined below) as a pollutant, or as a contaminant, or as a toxic or
hazardous substance, waste or material, or any other unwholesome,
hazardous, toxic, biohazardous, or radioactive material, waste,
chemical, mixture or byproduct, or which is listed, regulated or
restricted by any Environmental Law (including, without limitation,
petroleum hydrocarbons or any distillates or derivatives or fractions
thereof, polychlorinated biphenyls, or asbestos). As used herein, the
term "Environmental Laws" shall mean any applicable Federal, State of
California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or
order of any executive or judicial authority at any level of Federal,
State of California or local government (whether now existing or
subsequently adopted or promulgated) relating to pollution or the
protection of the environment, ecology, natural resources, or public
health and safety.
B. Tenant shall notify Landlord prior to the occurrence of any
Tenant's Hazardous Materials Activities (defined below). Landlord
acknowledges that Tenant shall use, in compliance with applicable
Environmental Laws, customary household and office supplies (Tenant
shall first provide Landlord with a list of said materials use), such
as mild cleaners, lubricants and copier toner. Any and all of Tenant's
Hazardous Materials Activities shall be conducted in conformity with
this Paragraph
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45, Paragraph 14 of this Lease, and in compliance with all Environmental Laws
and regulations. As used herein, the term "Tenant's Hazardous Materials
Activities" shall mean any and all use, handling, generation, storage, disposal,
treatment, transportation, release, discharge, or emission of any Hazardous
Materials on, in, beneath, to, from, at or about the Property, in connection
with Tenant's use of the Property, or by Tenant or by any of Tenant's agents,
employees, contractors, vendors, invitees, visitors or its future subtenants or
assignees or other third parties (including "dumping" by others) (or which
Hazardous Materials originate on the surface of the Premises any time on or
after the Commencement Date of this Lease, but excluding Hazardous Materials on
the Premises prior to the Lease Commencement Date because of the storage, use,
disposal, or transportation of such materials or waste by any of Landlord's
contractors or otherwise arising out of construction work performed by or under
the direction of Landlord on the Premises and Landlord shall be responsible for
all required actions with respect to such materials or wastes). Tenant agrees to
provide Landlord with prompt written notice of any spill or release of Hazardous
Materials at the Property during the term of the Lease of which Tenant becomes
aware, and further agrees to provide Landlord with prompt written notice of any
violation of Environmental Laws in connection with Tenant's Hazardous Materials
Activities of which Tenant becomes aware. If Tenant's Hazardous Materials
Activities involve Hazardous Materials other than normal use of customary
household and office supplies, Tenant also agrees at Tenant's expense: (i) to
install such Hazardous Materials monitoring, storage and containment devices as
may be required by Environmental Laws, regulations and/or governing agencies;
(ii) to provide Landlord with a written inventory of such Hazardous Materials,
including an update of same each year upon the anniversary date of the
Commencement Date of the Lease ("Anniversary Date"); and (iii) on each
Anniversary Date to provide to Landlord copies of all documentation and records,
required by applicable Environmental Laws to be prepared and submitted to
governmental authorities, relating to use at the Property of Hazardous Materials
or to Tenant's Hazardous Materials Activities, if any. If upon completion of
Landlord's review of said documentation and records, Landlord reasonably
questions if Tenant is in compliance with all applicable Environmental Laws with
respect to Tenant's Hazardous Materials Activities, Tenant agrees within thirty
(30) days following receipt of written notice from Landlord, to retain a
qualified environmental consultant, acceptable to Landlord, to evaluate whether
Tenant is in compliance with all applicable Environmental Laws with respect to
Tenant's Hazardous Materials Activities. Tenant, at its expense, shall submit to
Landlord a report from such environmental consultant which discusses the
environmental consultant's findings within two (2) months of each Anniversary
Date. Tenant, at its expense, shall promptly undertake and complete any and all
steps necessary, and in full compliance with applicable Environmental Laws, to
fully correct any and all problems or deficiencies identified by the
environmental consultant, and promptly provide Landlord with documentation of
all such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at
its expense, shall (i) properly remove from the Property all Hazardous
Materials which come to be located at the Property in connection with
Tenant's Hazardous Materials Activities, and (ii) fully comply with and
complete all facility closure requirements of applicable Environmental
Laws regarding Tenant's Hazardous Materials Activities, including but
not limited to (x) properly restoring and repairing the Property to the
extent damaged by such closure activities, and (y) obtaining from the
local Fire Department or other appropriate governmental authority with
any legal or regulatory jurisdiction a written concurrence that closure
has been completed in compliance with applicable Environmental Laws.
Tenant shall promptly provide Landlord with copies of any claims,
notices, work plans, data and reports prepared, received or submitted
in connection with any such closure activities.
D. If Landlord, upon consultation with Tenant, reasonably
concludes that the Property has become contaminated as a result of
Tenant's Hazardous Materials Activities, Landlord in addition to any
other rights it may have under this Lease or under Environmental Laws
or other laws, may enter upon the Property and conduct inspection,
sampling and analysis, including but not limited to obtaining and
analyzing samples of soil and groundwater, for the purpose of
determining the nature and extent
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of such contamination except to the extent that such activities may be
inconsistent with Tenant's compliance with Environmental Laws. Tenant
shall promptly reimburse Landlord for the costs of such an
investigation, including but not limited to reasonable attorneys' fees
Landlord incurs with respect to such investigation to the extent, and
only to the extent, that it that discloses Hazardous Materials
contamination for which Tenant is liable under this Lease. Except as
may be required of Tenant by applicable Environmental Laws, Tenant
shall not perform any sampling, testing, or drilling to identify the
presence of any Hazardous Materials at the Property, without Landlord's
prior written consent which shall not be unreasonably withheld. Tenant
shall promptly provide Landlord with copies of any claims, notices,
work plans, data and reports prepared, received or submitted in
connection with any sampling, testing or drilling performed pursuant to
the preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel
acceptable to Landlord, whose consent shall not unreasonably be
withheld) and hold harmless Landlord, its employees, assigns,
successors, successors-in-interest, agents and representatives from and
against any and all claims (including but not limited to third party
claims from a private party or a government authority), liabilities,
obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including
but not limited to reasonable attorneys', consultants' and other
experts' fees and costs), and damages, which arise from or relate to:
(i) Tenant's Hazardous Materials Activities; (ii) any Hazardous
Materials contamination caused by Tenant prior to the Commencement Date
of the Lease; or (iii) the breach of any obligation of Tenant under
this Paragraph 45 (collectively, "Tenant's Environmental
Indemnification"). Tenant's Environmental Indemnification shall include
but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution
in fair market value of the Property. Tenant's Environmental
Indemnification shall further include but is not limited to the
obligation to diligently and properly implement to completion, at
Tenant's expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other
environmental response action as may be required by applicable
Environmental Laws, regulations or governing agencies (collectively,
"Response Actions"). Tenant shall promptly provide Landlord with copies
of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any Response Actions.
F. Landlord hereby makes the following representations to
Tenant, each of which is made only to the best of Landlord's knowledge
as of the date Landlord executes this Lease, without any inquiry or
investigation having been made or required by Landlord regarding this
subject, nor does Landlord have any obligation to investigate or make
inquiry regarding the subject:
(1) The soil and ground water on or under the
Premises does not contain Hazardous Materials in amounts which violate
any laws to the extent that any governmental entity could require
either Landlord or Tenant to take any remedial action with respect to
such Hazardous Materials.
(2) During the time that Landlord has owned the
Premises, Landlord has received no notice of (i) any violation, or
alleged violation, of any law that has not been corrected to the
satisfaction of the appropriate authority, (ii) any pending claims
relating to the presence of Hazardous Material on the Premises, or
(iii) any pending investigation by any governmental agency concerning
the Premises relating to Hazardous Materials.
G. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication
received from any governmental authority concerning Hazardous Materials
which relates to the Premises, and (ii) any contamination of the
Premises by Hazardous Materials which constitutes a violation of any
law. Attached as Exhibit "C' to the Lease is a list of Hazardous
Materials that Tenant intends to use at the Premises. If during the
Lease Term Tenant proposes to use other Hazardous Materials at the
Premises, Tenant shall inform Landlord of such use, identifying the
Hazardous Materials and the manner of their use, storage and
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disposal, and shall agree (i) to use, store and dispose of such
Hazardous Materials strictly in compliance with all laws, regulations
and governing agencies and (ii) that the indemnity set forth in
Paragraph 45 shall be applicable to Tenant's use of such Hazardous
Material.
H. Landlord or Tenant may, at any time, cause testing xxxxx to
be installed on the Premises, and may cause the ground water to be
tested to detect the presence of Hazardous Material by the use of such
tests as are then customarily used for such purposes. Testing xxxxx
installed by Tenant shall be paid for by Tenant. If tests conducted by
Landlord disclose that Tenant has violated any Hazardous Materials
laws, or Tenant or parties on the Premises during the Term of this
Lease have contaminated the Premises as determined by regulatory
agencies pursuant to Hazardous Materials laws, or that Tenant has
liability to Landlord pursuant to Paragraph 45A, then Tenant shall pay
for 100 percent of the cost of the test and all related expense. Prior
to the expiration of the Lease Term, Tenant shall remove any testing
xxxxx it has installed at the Premises, and return the Premises to the
condition existing prior to the installation of such xxxxx, unless
Landlord requests in writing that Tenant leave all or some of the
testing xxxxx in which instance the xxxxx requested to be left shall
not be removed.
I. If any tests performed by Tenant or Landlord prior to the
Commencement Date disclose Hazardous Materials at the Premises,
Landlord at its expense will promptly take all reasonable action
required by law with respect to the existence of such Hazardous
Materials at the Premises. The Commencement Date shall not be delayed
because of such action by Landlord unless occupation of the Premises is
prohibited by law.
J. The obligations of Landlord and Tenant under this Paragraph
45 shall survive the expiration or earlier termination of the Term of
this Lease. The rights and obligations of Landlord and Tenant with
respect to issues relating to Hazardous Materials are exclusively
established by this Paragraph 45."
12. SECURITY DEPOSIT: Effective as of the first day of the Third Option
Period, Lease Paragraph 51 ("Security Deposit") shall be deleted in its entirety
and replaced with the following:
"51. SECURITY DEPOSIT: The following provisions shall modify
Lease Paragraph 4F:
A. Within thirty (30) days after the expiration or earlier
termination of the Lease term and after Tenant has vacated the
Premises, Landlord shall return to Tenant the entire Security Deposit
except for amounts that Landlord has deducted therefrom that are needed
by Landlord to cure defaults of Tenant under the Lease or compensate
Landlord for damages for which Tenant is liable pursuant to this Lease.
The use or disposition of the Security Deposit shall be subject to the
provisions of California Civil Code Section 1950.7.
B. During the first thirty (30) days following Tenant's
exercise of its Third Option to Extend, and only during said thirty day
period, Tenant shall have the one-time option of satisfying its
obligation with respect to an amount equal to one-half (1/2)
($210,240.90) of the $420,481.80 Security Deposit required under Lease
Paragraph 4F by providing to Landlord, at Tenant's sole cost, a letter
of credit which: (i) is drawn upon an institutional lender reasonably
acceptable and accessible to Landlord in form and content reasonably
satisfactory to Landlord; (ii) is in the amount of one-half (1/2) of
the Security Deposit; (iii) is for a term of at least twelve (12)
months; (iv) with respect to any letter of credit in effect within the
six month period immediately prior to the expiration of the Lease term,
shall provide that the term of such letter of credit shall extend at
least forty five (45) days past the Lease expiration date (including
any extensions thereof); and (v) may be drawn upon by Landlord upon
submission of a declaration of Landlord that Tenant is in default (as
defined in Paragraph 19 and as modified by Paragraph 60). Landlord
shall not be obligated to furnish proof of default to such
institutional lender, and Landlord shall only be required to give the
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institutional lender written notification that Tenant is in default and
upon receiving such written notification from Landlord the
institutional lender shall be obligated to immediately deliver cash to
Landlord equal to the amount Landlord may spend or become obligated to
spend by reason of Tenant's default or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant's default
up to 1/2 of the total Security Deposit required under Lease Xxxxxxxxx
0X. Said letter of credit shall provide that if the letter of credit is
not renewed, replaced or extended within twenty (20) days prior to its
expiration date the issuer of the credit shall automatically issue a
cashiers check payable to Landlord in the amount of the letter of
credit after the date which is twenty (20) days before the expiration
date, and no later than the expiration date, without Landlord being
required to make demand upon the letter of credit. If Tenant provides
Landlord with a letter of credit, within thirty (30) days of the
execution of this Lease, meeting the foregoing requirements, one-half
(1/2) of the cash Security Deposit (i.e., $210,240.90 of the
$420,481.80 Security Deposit) shall be returned to Tenant by Landlord
inasmuch as the cash deposit remaining and the Letter of Credit equal
the total Security Deposit required in Lease Xxxxxxxxx 0X. If Tenant
defaults with respect to any provisions of this Lease, including but
not limited to provisions relating to the payment of Rent, Landlord may
(but shall not be required to) draw down on the letter of credit for
payment of any sum which Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any
loss or damage which Landlord may suffer by reason of Tenant's default.
Landlord and Tenant acknowledge that such letter of credit will be
treated as if it were a cash security deposit, and such letter of
credit may be drawn down upon by Landlord upon demand and presentation
of evidence of the identity of Landlord to the issuer, in the event
that Tenant defaults with respect to any provision of this Lease and
such default is not cured within any applicable cure period.
Notwithstanding anything to the contrary in this Lease, Landlord shall
not be obligated to furnish proof of default to such institutional
lender and Landlord is only required to give the institutional lender
written notification that Tenant is in default and upon receiving such
written notification from Landlord the institutional lender shall be
obligated to immediately deliver cash to Landlord equal to the amount
Landlord may spend or become obligated to spend by reason of Tenant's
default, or to compensate Landlord for any loss or damage which
Landlord may suffer by reason of Tenant's default up to 1/2 of the
total Security Deposit. Landlord acknowledges that it is not entitled
to draw down such letter of credit unless Landlord would have been
entitled to draw upon the cash security deposit pursuant to the terms
of Paragraph 4F of the Lease. Concurrently with the delivery of the
required information to the issuer, Landlord shall deliver to Tenant
written evidence of the default upon which the draw down was based,
together with evidence that Landlord has provided to Tenant the written
notice of such default which was required under the applicable
provision of the Lease, and evidence of the failure of Tenant to cure
such default within the applicable grace period following receipt of
such notice of default. Any proceeds received by Landlord by drawing
upon the letter of credit shall be applied in accordance with the
provisions governing the Security Deposit imposed by Lease Paragraph 4F
and this Paragraph 51. If Landlord draws upon the letter of credit,
thereafter Tenant shall once again have the right to post a letter of
credit in place of one-half (1/2) of a cash Security Deposit so long as
Tenant is not then in default. In any event Tenant will be obligated to
replenish the amount drawn to restore the Security Deposit to its
original amount as provided for in Xxxxxxxxx 0X. If any portion of the
letter of credit is used or applied pursuant hereto, Tenant shall,
within ten (10) days after receipt of a written demand therefor from
Landlord, restore and replace the value of such security by either (i)
depositing cash with Landlord in the amount equal to the sum drawn down
under the letter of credit, or (ii) increasing the letter of credit to
its value immediately prior to such application. Tenant's failure to
replace the value of the security as provided in the preceding sentence
shall be a material breach of its obligation under this Lease."
13. REAL ESTATE TAXES: Effective as of the first day of the Third
Option Period, Lease Paragraph 54 ("Real Estate Taxes") shall be deleted in its
entirety and replaced with the following:
"54. REAL PROPERTY TAXES: Paragraph 9 is modified by the
following:
A. The term "Real Property Taxes" shall not include charges,
levies or fees
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directly related to the use, storage, disposal or release of Hazardous
Materials on the Premises unless directly related to Tenant's
Activities at this site or on other sites leased and/or owned by
Tenant; however, Tenant shall be responsible for general or special tax
and/or assessments (related to Hazardous Materials and/or toxic waste)
imposed on the Property provided said special tax and/or assessment is
not imposed due to on-site originated contamination on the Property (by
third parties not related to Tenant) prior to the Lease Commencement
Date. Subject to the terms and conditions stated herein, Tenant shall
be responsible for paying one hundred percent (100%) of said taxes
and/or assessments allocated to the Property.
B. If any assessments for public improvements are levied
against the Premises, Landlord may elect either to pay the assessment
in full or to allow the assessment to go to bond. If Landlord pays the
assessment in full, Tenant shall pay to Landlord or any assignee or
purchaser of the Premises each time payment of Real Property Taxes is
made a sum equal to that which would have been payable (as both
principal and interest) had Landlord allowed the assessment to go to
bond.
C. Tenant at its cost shall have the right, at any time, to
seek a reduction in the assessed valuation of the Premises or to
contest any Real Property Taxes that are to be paid by Tenant. If
Tenant seeks a reduction or contests such Real Property Taxes, the
failure on Tenant's part to pay such Real Property Taxes being so
contested shall not constitute a default so long as Tenant complies
with the provisions of this Paragraph. Landlord shall not be required
to join in any proceeding or contest brought by Tenant unless the
provisions of any law require that the proceeding or contest be brought
by or in the name of Landlord. In that case Landlord shall join in the
proceedings or contest or permit it to be brought in Landlord's name as
long as Landlord is not required to bear any cost. Tenant, on final
determination of the proceeding or contest, shall immediately pay or
discharge its share of any Real Property Taxes determined by any
decision or judgment rendered, together with all costs, charges,
interest, and penalties incidental to the decision or judgment. If
Tenant does not pay the Real Property Taxes when due pursuant to the
Lease and Tenant seeks a reduction or contests them as provided in this
paragraph, before the commencement of the proceeding or contest Tenant
shall furnish to Landlord a surety bond in form reasonably satisfactory
to Landlord issued by an insurance company qualified to do business in
California. The amount of the bond shall equal 125% of the total amount
of Real Property Taxes in dispute and any such bond shall be assignable
to any lender or purchaser of the Premises. The bond shall hold
Landlord and the Premises harmless from any damage arising out of the
proceeding or contest and shall insure the payment of any judgment that
may be rendered."
14. PROPERTY INSURANCE: Effective as of the first day of the Third
Option Period, section B of Lease Paragraph 55 ("Property Insurance") shall be
deleted in its entirety and be of no further force or effect.
15. ASSIGNMENT AND SUBLETTING: Effective as of the first day of the
Third Option Period, Lease Paragraph 56 ("Assignment and Subletting") shall be
deleted in its entirety and replaced with the following:
"56. ASSIGNMENT AND SUBLETTING' The following modifications
are made to Paragraph 16:
A. In the event that Tenant seeks to make any assignment or
sublease, then Landlord, by giving Tenant written notice of its
election within fifteen (15) days after Tenant's notice of intent to
assign or sublease has been given to Landlord, shall have the right to
elect (i) to withhold its consent to such assignment or sublease, as
permitted pursuant to Paragraph 16, or (ii) to permit Tenant to so
assign the Lease or sublease such part of the Premises, in which event
Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the
following shall apply (except the following shall not apply to a
"Permitted Transfer" described in Paragraph 57):
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(1) If Tenant assigns its interest in this Lease,
then in addition to the rental provided for in this Lease, Tenant shall
pay to Landlord fifty percent (50%) of all Rent and other consideration
received by Tenant over and above (i) the assignee's agreement to
assume the obligations of Tenant under this Lease and (ii) all
"Permitted Transfer Costs" (as defined herein) related to such
assignment. As used herein, the term "Permitted Transfer Costs" shall
mean all reasonable leasing commissions paid to third parties not
affiliated with Tenant in order to obtain the assignment or sublease in
question.
(2) If Tenant sublets all or part of the Premises,
then Tenant shall pay to Landlord in addition to the Rent provided for
in this Lease fifty percent (50%) of the positive difference, if any,
between (i) all rent and other consideration paid or provided to Tenant
by the subtenant, less (ii) all Rent paid by Tenant to Landlord
pursuant to this Lease which is allocable to the area so sublet and all
Permitted Transfer Costs related to such sublease. After Tenant has
recovered all Permitted Transfer Costs Tenant shall pay to Landlord the
amount specified in the preceding sentence on the same basis, whether
periodic or in lump sum, that such rent and other consideration is paid
to Tenant by its subtenant, within seven (7) days after it is received
by Tenant.
(3) Tenant's obligations under this subparagraph shall
survive any assignment or sublease. At the time Tenant makes any
payment to Landlord required by this subparagraph, Tenant shall deliver
an itemized statement of the method by which the amount to which
Landlord is entitled was calculated, certified by Tenant as true and
correct. Landlord shall have the right to inspect Tenant's books and
records relating to the payments due pursuant to this subparagraph.
Upon request therefor, Tenant shall deliver to Landlord copies of all
bills, invoices or other documents upon which its calculations are
based.
(4) As used herein, the term "consideration" shall
mean any consideration of any kind received, or to be received
(including, but not limited to, services rendered and/or value
received) by Tenant as a result of the assignment or sublease, if such
sums are paid or provided to Tenant for Tenant's interest in this Lease
or in the Premises.
(5) This Paragraph 56.A does not apply to a
"Permitted Transfer", as provided in Paragraph 57 hereof. The parties
agree that if any of the following transactions occur and do not
qualify as "Permitted Transfers", Tenant must obtain Landlord's consent
to such transaction and if Landlord consents to any of the following
transactions which do not otherwise qualify as "Permitted Transfers",
then the provisions of this Paragraph 56.A shall not apply to the
following transactions: (i) a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee; and (ii) an assignment of this Lease to a
corporation which purchases or otherwise acquires 95% or more of the
assets of Tenant so long as 95% of all assets and liabilities of Tenant
are permanently transferred to such assignee and Tenant remains liable
and responsible under the Lease to the extent Tenant continues in
existence following such transaction."
16. PERMITTED ASSIGNMENTS AND SUBLEASES: Effective as of the first day
of the Third Option Period, Lease Paragraph 57 ("Permitted Assignments and
Subleases") shall be deleted in its entirety and replaced with the following:
"57. PERMITTED ASSIGNMENTS AND SUBLEASES: Notwithstanding
anything contained in Paragraph 16, so long as Tenant otherwise
complies with the provisions of Paragraph 16 and the Permitted Transfer
does not release Tenant from its obligations hereunder, Tenant may
enter into any of the following transfers (a "Permitted Transfer")
without Landlord's prior written consent, and the provisions of
Paragraph 56A shall not apply to any such Permitted Transfer:
A. Tenant may sublease all or part of the Premises or assign
its interest in this Lease to any corporation which controls, is
controlled by, or is under common control
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with Tenant by means of an ownership interest of more than fifty
percent (50%) providing Tenant remains liable for the payment of Rent
and full performance of the Lease;
B. Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation so long
as (i) 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee, and (ii) immediately prior to the merger,
consolidation or other reorganization, the corporation into which
Tenant is to be merged has a net worth equal to or greater than the net
worth of Tenant at the time of Lease execution or at the time of such
assignment, merger, consolidation or reorganization (whichever is
greater), or if it does not, Landlord is provided a guaranty of the
Lease (in a form reasonably acceptable to Landlord) from a corporation
(a) that is the parent of, or is otherwise affiliated with, the
corporation into which Tenant is to be merged, and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment, merger,
consolidation or reorganization (whichever is greater). In the event
there is not a permanent transfer of 95% or more of the assets and
liabilities from Tenant to a third party, and Tenant continues to exist
as a separate entity, both companies shall be jointly and severally
liable for the full terms and conditions of the Lease;
C. Tenant may assign this Lease to a corporation which
purchases or otherwise acquires 95% or more of the assets of Tenant so
long as 95% of all assets and liabilities of Tenant are permanently
transferred to such assignee (in the event there is not a permanent
transfer of 95% or more of the assets and liabilities from Tenant to a
third party and Tenant continues to exist as a separate entity, both
companies shall be jointly and severally liable for the full terms and
conditions of the Lease), and provided that immediately prior to such
assignment said corporation, has a net worth equal to or greater than
the net worth of Tenant (a) at the time of Lease execution or (b) at
the time of such assignment (whichever is greater), or if it does not,
Landlord is provided a guaranty of the Lease (in a form reasonably
acceptable to Landlord) from a corporation (a) that is the parent of,
or is otherwise affiliated with, said corporation and (b) which has a
current net worth equal to or greater than the net worth of Tenant at
the time of Lease execution or at the time of such assignment,
(whichever is greater)."
17. DESTRUCTION: Effective as of the first day of the Third Option
Period, Lease Paragraph 62 ("Destruction") shall be deleted in its entirety and
replaced with the following:
"62. DESTRUCTION: Paragraph 21 is modified by the following:
A. Notwithstanding anything to the contrary within Paragraph
21, Landlord may terminate this Lease in the event of an uninsured
event or if insurance proceeds, net of the deductible, are insufficient
to cover one hundred percent of the rebuilding costs; provided,
however, Tenant shall have the right to elect, in its discretion, to
contribute such excess funds to permit Landlord to repair the Premises.
B. Except as provided in Xxxxxxxxx 00X, Xxxxxxxx may not
terminate the Lease if the Premises are damaged by a peril whereby the
cost to replace and/or repair is one hundred percent (100%) covered by
the insurance carried by Landlord pursuant to Paragraph 12, but instead
shall restore the Premises in the manner described by Paragraph 21.
C. If the Premises are damaged by a peril covered by the
insurance carried by Landlord pursuant to Xxxxxxxxx 00, Xxxxxxxx shall
have the option to terminate the Lease if each of the following
conditions is satisfied: (i) the cost to repair or the damage exceeds
thirty-three percent (33%) of the then replacement cost of the
Premises; and (ii) the damage occurs at a time when there is less than
five (5) years remaining in the term of the Lease.
D. If Landlord fails to obtain insurance as required pursuant
to Paragraph 12,
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and said insurance would have been available to cover any damage or
destruction to the Premises, Landlord shall be required to rebuild, at
its cost, net of the deductible which would have been required under
said insurance policy (which deductible Tenant is required to pay).
E. If the Premises are damaged by any peril, then as soon as
reasonably practicable, Landlord shall furnish Tenant with the written
opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be completed. Tenant
shall have the option to terminate this Lease in the event any of the
following occurs, which option may be exercised only by delivery to
Landlord of a written notice of election to terminate within seven (7)
days after Tenant receives from Landlord the estimate of the time
needed to complete such restoration:
(1) The Premises are damaged by any peril (not caused
by or resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased
Premises cannot be substantially completed within 180 days after the
date of such damage (subject to force majeure conditions); or
(2) The Premises are damaged by any peril (not caused
by or resulting from an action of Tenant or Tenant's agents, employees,
contractors or invitees) within twelve (12) months of the last day of
the Lease term, and, in the reasonable opinion of Landlord's architect
or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within sixty (60) days after the date
of such damage and Tenant has not exercised its Option to Extend said
Term (or Extended Term as the case may be)."
18. LIABILITY INSURANCE: Effective as of the first day of the Third
Option Period, the first sentence of Lease Paragraph 10 ("Liability Insurance")
shall be deleted and replaced with the following: "Tenant, at Tenant's expense,
agrees to keep in force during the Term of this Lease a policy of commercial
general liability insurance with combined single limit coverage of not less than
Two Million Dollars ($2,000,000) per occurrence for bodily injury and property
damage occurring in, on or about the Premises, including parking and landscaped
areas."
19. LIMITATION OF LIABILITY: Effective as of the first day of the Third
Option Period, Lease Paragraph 36 ("Limitation of Liability") shall be deleted
in its entirety and replaced with the following:
"36. LIMITATION OF LIABILITY: In consideration of the benefits
accruing hereunder, Tenant and all successors and assigns covenant and
agree that, in the event of any actual or alleged failure, breach or
default hereunder by Landlord:
(i) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;
(ii) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of
the partnership);
(iii) no service of process shall be made against any partner of
Landlord (except as may be necessary to secure jurisdiction of the
partnership);
(iv) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(v) no judgment will be taken against any partner of Landlord;
(vi) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(vii) no writ of execution will ever be levied against the assets of
any partner of Landlord;
(viii) these covenants and agreements are enforceable both by Landlord
and also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and
agreements shall be
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applicable to any covenant or agreement either expressly contained in
this Lease or imposed by statute or at common law."
EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of
said October 31, 1989 Lease Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No.
3 to Lease as of the day and year last written below.
LANDLORD: TENANT:
XXXX XXXXXXXXX SURVIVOR'S QUANTUM CORPORATION
TRUST a Delaware corporation
By /s/ Xxxx Xxxxxxxxx, By /s/ Xxxxxx Xxxxxx
------------------- -------------------
Xxxx Xxxxxxxxx, Trustee
Xxxxxx Xxxxxx
-----------------
Date: 6/30/97 Print or Type Name
---------
XXXXXXX X. XXXXX SEPARATE Title: FINANCE AND CORP GENERAL
PROPERTY TRUST COUNSEL
------------------------
Date: 6/25/97
--------
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx, Trustee
Date: 6/26/97
---------
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Lease 6
Building 6
QUANTUM CORPORATION
000 XxXxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attention: Xxxx Xxxxx
RE: CONSTRUCTION AGREEMENT RELATED TO LEASE AGREEMENT DATED APRIL 16, 1997,
BY AND BETWEEN THE XXXX XXXXXXXXX SURVIVOR'S TRUST AND THE XXXXXXX X.
XXXXX SEPARATE PROPERTY TRUST, AS LANDLORD, AND QUANTUM CORPORATION, A
DELAWARE CORPORATION, AS TENANT, FOR ALL OF THAT CERTAIN 182,355+/-
SQUARE FOOT BUILDING TO BE CONSTRUCTED BY LANDLORD FOR TENANT, LOCATED
ON SUMAC DRIVE, IN MILPITAS, CALIFORNIA.
Gentlemen:
This letter will confirm our agreement relative to the shell of the
building and interior improvements related thereto to be constructed by Landlord
on the property leased under the lease referenced above, hereinafter referred to
as the "Lease", and shall be considered a part of the Lease.
1. DEFINITIONS: As used in this construction letter, the following
terms shall have the following meanings, and terms which are not defined below,
but which are defined in the Lease which are used in this construction letter,
shall have the meanings ascribed to them by the Lease:
A. Design Criteria: The term "Design Criteria" shall mean
those plans and specifications for the Improvements to be constructed by
Landlord and/or Tenant (as the case may be) as hereinafter set forth and (i) the
building elevations to be depicted on Exhibit "A" to the Lease and (ii) the
building shell design criteria described on Exhibit "A" to the Lease, and shall
include the other plans for the Improvements when completed by the parties as
provided for in this Agreement.
B. Shell Improvements: The term "Shell Improvements" shall
mean the following which are to be constructed by Landlord in accordance with
the Design Criteria: (i) the shell of a two story industrial building containing
approximately +/- 182,355 square feet, consisting of foundation, first and
second story floor slab and second story floor deck, load bearing walls, roof
system, roof membrane, standard width interior stairways, exterior doors and
exterior door hardware; and (ii) all paving and parking areas, striping,
sidewalks, parking curbs, gutters, irrigation system, landscaping, storm sewer,
and main utility service conduits (excluding electrical panel which is part of
Interior Improvements) from the street to the building perimeter, transformer
pad, the main plumbing line into the building, water and sewer connection fees
including cost to hook up to Milpitas sewer system, but excluding roof screens,
building connectors, parking lot lighting, and utility pads including exterior
walls and all other construction elements of any such utility pads and
electrical panels.
C. Interior Improvements: The term "Interior Improvements"
shall mean all improvements to be constructed by Landlord and paid for by the
parties as hereinafter set forth, within the building shell and/or not included
in the Shell Improvements set forth in Paragraph lB above e.g., by way of
example interior improvements shall include and not be limited to the fire
sprinkler system, elevators (if any), loading docks (if any), roof screens,
building connectors,
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drop ceilings, interior plumbing, heating and air conditioning system,
electrical system, parking lot lighting, carpeting, vinyl floor covering,
painting, interior walls and movable floor to ceiling partitioning, utility pads
(including all construction elements of subject utility pads, including but not
limited to, the exterior walls), normal contractor's fees, architect's fees,
engineer's fees and any City or governmental fees for connection to utilities.
D. Improvements: The term "Improvements" shall mean the Shell
Improvements and the Interior Improvements.
E. Performance Schedule: The term "Performance Schedule" shall
mean the estimated times for commencement and performance of construction
obligations contained in Paragraph 2 of this Agreement.
F. Architect: The term "Architect" shall mean (i) Xxxxxx
Associates and/or Xxxxx/Arrillaga or such other licensed architect as is
approved by Landlord with respect to the Shell Improvements, and (ii) such
licensed architect as is approved by Landlord and Tenant with respect to the
Interior Improvements.
G. Prime Contractor(s): The term "Prime Contractor" shall mean
(i) Xxxxx X. Xxxxx & Sons, Inc., or such other contractor selected by Landlord
for the construction of the Shell Improvements and (ii) such licensed general
contractor as is approved by Landlord and Tenant with respect to the Interior
Improvements.
H. Substantial Completion: The term "Substantial Completion"
(and "Substantially Completed") shall mean the date when all of the following
have occurred with respect to the Improvements in question: (i) the construction
of the Improvements in question has been substantially completed in accordance
with the approved plans therefor except for punch list items which do not
prevent Tenant from reasonably using the Premises to conduct Tenant's business;
(ii) Landlord has executed a certificate or statement representing that such
Improvements that Landlord is responsible for completing have been substantially
completed in accordance with the plans and specifications therefor except for
punch list items which do not prevent Tenant from reasonably using the Premises
to conduct Tenant's business and incomplete items related to delays caused
directly and/or indirectly by Tenant; and (iii) if applicable, the Building
Department of the City of Milpitas has completed its final inspection of such
Improvements and has "signed off" the building inspection card approving such
work as complete except for punch list items which do not prevent Tenant from
reasonably using the Premises to conduct Tenant's business.
I. Target Commencement Date: The term "Target Commencement
Date" shall mean May 1, 1998, subject to delays caused by (i) by the governing
agency(ies) approval and/or (ii) strikes, acts of God, governmental
restrictions, or other causes beyond Landlord's control, in which instance the
time period for Landlord's completion of the building shall be extended
accordingly.
2. Performance Schedule: Landlord and Tenant desire to cause the
Improvements to be Substantially Completed by the Target Commencement Date. The
Target Commencement Date is based upon information gathered and estimates made
by Landlord, which are reflected in the Construction Schedule. Achieving
Substantial Completion of the Improvements by the Target Commencement Date
requires that certain objectives be met within certain time periods. Set forth
in this paragraph is a schedule of certain critical dates relating to Landlord's
and Tenant's respective obligations regarding the construction of the Shell
Improvements and the Interior Improvements (the "Performance Schedule") that
must be adhered to in order to achieve Substantial Completion of all
Improvements by the Target Commencement Date. Landlord and Tenant shall each be
obligated to use reasonable efforts to perform their respective obligations
within the time periods set forth in the Performance Schedule and elsewhere in
this Improvement Agreement. Subject to the provisions of Paragraph 8 hereof, the
parties acknowledge that the Performance Schedule is only an estimate of the
time needed to complete certain stages of the
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construction process, and the failure of either party to accomplish any step in
the process set forth in the Performance Schedule within the applicable time
period shall not constitute a default by either party unless such failure
constitutes a breach of the obligation of a party to use reasonable efforts to
perform its obligations within the time periods set forth in the Performance
Schedule and elsewhere in this construction letter and appropriate notice has
been given and any applicable cure period has expired. The Performance Schedule
is as follows:
Action Responsible
Items Due Date Party,
A. Delivery of Provided to Tenant by Landlord Landlord
Definitive Shell on January 30, 1997 (Shell
Plans to Tenant Plans showing columns,
windows, shear structure, "K"
bases and core area(s)).
B. Approval of Provided to Landlord by Tenant Tenant
Definitive Shell on March 3, 1997
Plans by Tenant and
Delivery of Tenant's
Shell Requirements
C. Delivery of Final April 30, 1997 Landlord
Shell Plans to
Tenant
D. Approval of Final Within 5 days after Tenant Tenant
Shell Plans by receives final shell working
Tenant drawings
E. Obtain Building July 7, 1997 Landlord
Permit for Shell
Improvements
F. Delivery to Landlord May 23, 1997 Tenant
of Preliminary
Interior Improvement
Plans
G. Approval of Within 5 days after Landlord Landlord
Preliminary Interior receives Preliminary Interior
Improvement Plans by Improvement Plans
Landlord
H. Delivery of Final August 5, 1997 Tenant
Interior Improvement
Plans to Landlord
I. Approval by Landlord Within 5 days after Landlord Landlord
of Final Interior receives Final Interior Plans
Plans
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J. Commencement of As soon as reasonably possible Landlord
Construction of after receipt of
Improvements building permit
K. Substantial May 1, 1998 Landlord
Completion of
Improvements
3. DEVELOPMENT OF PLANS FOR IMPROVEMENTS' Plans for the Shell
Improvements shall be developed in accordance with the following:
A. Development of Definitive Shell Plans: Tenant and Landlord
have agreed to the basic architectural design and areas to contain landscaping
and parking relating to the Premises as shown on Exhibit "A" to the Lease. On or
before the due date specified in the Performance Schedule, Landlord shall cause
Architect to prepare and deliver to Tenant for its review and approval
definitive plans for the Shell Improvements which are the logical and reasonable
development of the Design Criteria and Exhibit "A" and show such details as
columns, windows, shear structure, "K" bases and core area(s) (the "Definitive
Shell Plans"). On or before the due date specified in the Performance Schedule,
Tenant shall either approve such plans or notify Landlord in writing or its
specific objections to the Definitive Shell Plans. With regard to such approval
the parties agree as follows: (i) the Basic Rent and the amount of Landlord's
Interior Improvement allowance pursuant to paragraph 6B hereof are based upon
the gross leasable area of the building; (ii) the gross leasable area of the
building shall be measured from the outside of exterior walls and shall include
any atriums, covered entrances or egresses, and covered loading areas; (iii)
that part of the gross leasable area of the building occupied by indentations,
building overhangs, covered entrances, and covered loading areas shall not
consist of more than five percent (5%) of the total gross leasable area; and
(iv) the Definitive Shell Plans shall be modified to conform with the intent and
restfictions set forth in phrases (i), (ii) and (iii) above and in this
sentence; and (v) Tenant's Shell Requirements (as hereinafter defined) shall not
affect the exterior appearance or structural integrity or cost of the Premises,
and it is agreed that any increased cost in the Shell Improvements as a result
of any of Tenant's Shell or Interior Requirements shall be a cost to be paid for
by Tenant. If Tenant reasonably objects to the Definitive Shell Plans, Landlord
shall cause Architect to revise the Definitive Shell Plans to address such
objections in a manner consistent with the parameters for the Shell Improvements
set forth in this construction letter and the Design Criteria and shall resubmit
such revised Definitive Shell Plans as soon as reasonably practicable to Tenant
for its approval. When such revised Definitive Shell Plans are resubmitted to
Tenant, it shall either approve such plans or notify Landlord of any further
objections in writing within five (5) business days after receipt thereof. If
Tenant has further objections to the revised Definitive Shell Plans, Landlord
and Tenant shall immediately cause Architect to meet and confer with Tenant's
construction consultant and the Prime Contractor, who together and (by majority
vote of Landlord, Tenant, Architect, Tenant's construction consultant, and Prime
Contractor) shall apply the standards set forth in this construction letter and
the Design Criteria to resolve Tenant's objections and incorporate such
resolution into the Definitive Shell Plans, which process Landlord and Tenant
shall cause to be completed within five (5) business days after the conclusion
of the five (5) business day referred to the immediately preceding sentence, and
the decision of the majority of the parties set forth above shall be binding on
Tenant and Landlord. Tenant furnished to Landlord on April 18, 1997 schematic
plans and specifications for plumbing, electrical, heating and air conditioning
that affect the construction of the Shell Improvements as well as other items
that were required to be constructed as part of the Shell Improvements without
modification being required at a later time ("Tenant's Shell Requirements").
B. Development of Final Shell Plans: Landlord shall cause
Architect to complete and submit to Tenant for its approval final working
drawings for the Shell Improvements by the due date specified in the Performance
Schedule which are the logical and
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reasonable development of the Design Criteria and the Definitive Shell Plans and
which incorporate and are consistent with Tenant's reasonable Shell
Requirements. Tenant shall approve the final plans for the Shell Improvements or
notify Landlord in writing of its specific objections by the due date specified
in the Performance Schedule. If Tenant so objects, the parties shall confer and
reach agreement upon final working drawings for the Shell Improvements within
five (5) business days after Tenant has notified Landlord of its objections. In
the event Tenant and Landlord do not resolve all of Tenant's objections within
such five (5) business day time period, Landlord and Tenant shall immediately
cause Architect to meet and confer with Tenant's construction consultant and the
Prime Contractor, who together and (by majority vote of Landlord, Tenant,
Architect, Tenant's construction consultant, and Prime Contractor) shall apply
the standards set forth in this construction letter to resolve Tenant's
objections and incorporate such resolution into the final working drawings for
the Shell Improvements, which process Landlord and Tenant shall cause to be
completed within five (5) business days after the conclusion of the five (5)
business day period referred to in the immediately preceding sentence and the
decision of the majority of the parties set forth above shall be binding on
Tenant and Landlord. The final working drawings so approved by Landlord and
Tenant or by majority vote as set forth above (including all changes made to
resolve Tenant's objections approved by the majority of the parties pursuant to
the immediately preceding sentence) are referred to herein as the "Final Shell
Plans".
C. Governmental Approvals: As soon as the Final Shell Plans
have been approved by Landlord and Tenant, Landlord shall apply for site
development approval and a building permit for the Shell Improvements, and shall
diligently prosecute to completion such approval process.
D. Commencement of Shell Improvements: As soon as reasonably
possible after receipt of a building permit for the Shell Improvements (acts of
God and delays beyond Landlord's control excepted), Landlord shall commence
construction of the Shell Improvements and shall diligently prosecute such
construction to completion, using all reasonable efforts to achieve Substantial
Completion of the Shell Improvements by the due date specified in the
Performance Schedule.
4. DEVELOPMENT OF PLANS FOR INTERIOR IMPROVEMENTS: Plans for the Interior
Improvements shall be developed in accordance with the following:
A. Development of Preliminary Interior Plans: On or before the
due date specified in the Performance Schedule, Tenant shall prepare and deliver
to Landlord for its review and approval preliminary plans for the Interior
Improvements (the "Preliminary Interior Plans"). On or before the due date
specified in the Performance Schedule, Landlord shall either approve such plans
in writing or notify Tenant in writing of its specific objections to the
Preliminary Interior Plans. If Landlord so objects, Tenant shall revise the
Preliminary Interior Plans to address such objections in a manner consistent
with the parameters for the Interior Improvements set forth in this construction
letter and shall resubmit such revised Preliminary Interior Plans as soon as
reasonably practicable (but in no event later than 10 days) to Landlord for its
approval. It is agreed that Tenant's Preliminary Interior Improvement plans
shall not affect the exterior appearance or structural integrity or cost of the
Shell Improvements, and it is further agreed that Landlord will not object to
reasonable structural changes (subject to the provisions of Paragraph 8) as long
as Tenant agrees to pay for any additional cost for same and the exterior
appearance of the Shell Improvements is not altered. When the revised
Preliminary Interior Plans are resubmitted to Landlord, it shall either approve
such plans in writing or notify Tenant of any further objections in writing
within three (3) business days after receipt thereof. If Landlord has further
objections to the revised Preliminary Interior Plans, Landlord and Tenant shall
immediately meet and confer and together shall apply the standards set forth in
this construction letter to resolve Landlord's objections and incorporate such
resolution into the Preliminary Interior Plans, which process Landlord and
Tenant shall cause to be completed within three (3) business days after the
conclusion of the three (3) business day period referred to
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in the immediately preceding sentence. In resolving Landlord's objections, the
parties agree to act reasonably so as to promptly finalize the Preliminary
Interior Plans. Paragraph 8 hereof shall apply to any failure of Tenant to
promptly and reasonably work with Landlord in this regard.
B. Development of Final Interior Plans: Within 90 days after
Tenant's receipt of the Definitive Shell Plans (which date shall be extended by
one day for each day in excess of 10 days that Landlord fails to approve the
Preliminary Interior Plans), Tenant shall cause Architect to complete and submit
to Landlord for its approval final working drawings for the Interior
Improvements which are the logical and reasonable development of the Preliminary
Interior Plans. Landlord shall approve in writing the final plans for the
Interior Improvements or notify Tenant in writing of its specific objections by
the due date specified in the Performance Schedule. It is agreed that Tenant's
final interior plans shall not affect the exterior appearance or structural
integrity or cost of the Shell Improvements, and it is further agreed that
Landlord will not object to reasonable structural changes (subject to the
provisions of Paragraph 8) as long as Tenant agrees to pay for any additional
cost for same and the exterior appearance of the Shell Improvements is not
altered. If Landlord so objects, the parties shall confer and use, their best
efforts to reach agreement upon final working drawings for the Interior
Improvements and together shall apply the standards set forth in this
construction letter to resolve Landlord's objections and incorporate such
resolution into the final working drawings for the Shell Improvements, which
process Landlord and Tenant shall cause to be completed within six (6) business
days after Landlord has notified Tenant of its objections. In resolving
Landlord's objections, the parties agree to act reasonably so as to promptly
finalize the final interior plans, it being agreed that the provisions of
paragraph 8 of this Agreement shall apply to any failure of Tenant to promptly
and reasonably finalize the interior plans. The final working drawings so
approved by Landlord and Tenant (including all changes made to resolve
Landlord's objections approved by Landlord and Tenant pursuant to the above) are
referred to herein as the "Final Interior Plans' and shall be considered a part
of Exhibit "B" to the Lease.
C. Building Permit: As soon as the Final Interior Plans have
been approved by Landlord and Tenant, Landlord shall apply for a building permit
for the Interior Improvements, and shall diligently prosecute to completion such
approval process.
D. Commencement of Interior Improvements: On or before the due
date specified in the Performance Schedule (acts of God and delays beyond
Landlord's control excepted), Landlord shall commence construction of the
Interior Improvements and shall diligently prosecute such construction to
completion, using all reasonable efforts to achieve Substantial Completion of
the Interior Improvements by the date specified in the Performance Schedule.
5. CONSTRUCTION OF IMPROVEMENTS: The Improvements to be constructed as
part of the Premises in connection with the Lease shall be paid for by the
parties as hereinafter set forth in Paragraph 6 and constructed in the following
manner:
A. Construction of Improvements by Landlord: The Shell
Improvements and Interior Improvements shall be constructed by Landlord in
accordance with the Final Shell Plans and the Final Interior Plans; it being
agreed, however, that if the Shell Improvements and/or Interior Improvements, as
finally constructed, do not conform exactly to the plans and specifications as
set forth in the Final Shell Plans and Final Interior Plans and as provided for
in the Lease, and the general appearance, structural integrity, and Tenant's use
and occupancy of the Premises and/or the building and the interior improvements
relating thereto are not unreasonably affected by such deviation, it is agreed
that the Commencement Date of the Lease, and Tenant's obligation to pay rental
thereunder, shall not be affected, and Tenant hereby agrees, in such event, to
accept the Premises and/or building and interior improvements in their
configuration as constructed by Landlord.
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B. Construction Contract for Interior Improvements: The
Interior Improvements shall be constructed, in conformance (except as provided
above) with the Final Interior Plans approved by Landlord and Tenant. Landlord
and Tenant shall participate equally in the negotiations with Prime Contractor
to establish the Prime Contractor's fee, or profit, overhead, and the general
conditions of a contract with Prime Contractor for the construction of the
Interior Improvements. The final Interior Improvements contract with the Prime
Contractor shall be subject to the prior approval of both Landlord and Tenant.
Tenant agrees not to unreasonably object to and to promptly execute such final
contract with the Prime Contractor so long as the Prime Contractor's fees,
general conditions, and overhead are reasonable when compared to industry
standards for comparable sized jobs. In the event Tenant unreasonably objects to
such contract and does not timely execute the same, Tenant agrees to be liable
for the delay as set forth in paragraph 8 and the Lease will commence on the
scheduled Lease commencement date regardless of whether or not the building is
ready for Tenant's occupancy. It is agreed that all subcontractors for the
Interior Improvements shall be chosen by a competitive bid process where (i)
Tenant shall have the right to approve subcontractors who bid on specific parts
of the job, (ii) unless otherwise approved by Tenant, the job shall be awarded
to the lowest responsible bidder, (iii) Tenant shall have the right to cause a
subcontract to be rebid (one time only without Tenant being liable for delay) if
Tenant does not approve the low bid (as provided below). Landlord shall submit
the proposed list of sub-contractors who shall be asked to bid for the project
to Tenant. Tenant shall have three (3) business days from its receipt of the
proposed bid list within which to approve the bid list or to add additional
bidders. Failure of Tenant to disapprove any name included on such bid list in
writing within such three (3) business day period or to add additional bidders
shall be deemed to be approval by Tenant of the bid list as so presented. As
soon as the bid of the Prime Contractor (and all subcontractors) is obtained,
Landlord shall submit it to Tenant for review and approval. Any Prime Contractor
or subcontractor bid not specifically disapproved in writing by Tenant within
three (3) business days after Tenant's receipt of the bid shall be deemed to
constitute approval thereof by Tenant and any original bid of Prime Contractor
or subcontractor disapproved shall be rebid again and Tenant shall not have the
right to object to the revised bid as long as the revised bid is not greater
than the original bid in which event Tenant shall accept the original bid. Once
the bids of the Prime Contractor and subcontractors and the contract terms have
been approved as set forth above, Landlord shall enter into a fixed price
construction contract for the Interior Improvements. However, if the final bid
of the Prime Contractor (including all subcontractors' bids) to construct the
Interior Improvements in accordance with the Final Interior Plans would result
in Interior Improvement Costs which exceed Landlord's Interior Improvement
allowance, then (and only one time) the following shall apply: Tenant shall have
ten (10) business days from the day it receives notice of the final bid from
Landlord within which to revise the plans for the Interior Improvements and
resubmit same to Landlord and Prime Contractor and in the event Tenant fails to
revise the plans for the Interior Improvements and submit same to Landlord and
Prime Contractor within said ten (10) day period then it is agreed that Tenant
has elected to accept the Prime Contractor's and all subcontractors' bids and to
pay the entire excess amount pursuant to the provisions of subparagraph 6B,
below. (Notwithstanding the foregoing, however, if, after Tenant has revised the
plans, the Interior Improvements Costs will still exceed Landlord's Interior
Improvement allowance, Tenant shall pay such excess amount as provided in
subparagraph 6B below.) Tenant's election to revise the plans for the Interior
Improvements (one time only) in the event the bid exceeds the amount of
Landlord's Interior Improvement allowance, as set forth above, shall not be
deemed to be a delay on Tenant's part which would result in a change of the
commencement of Tenant's obligation to pay rent pursuant to paragraph 8 hereof,
provided that such revision shall be completed within said ten (10) business day
period and the provisions of paragraph 8 hereof shall apply to any subsequent
revision. In the event Landlord's Interior Improvement allowance is exceeded for
the construction contract for the Interior Improvements, then it is agreed that
Landlord and Tenant shall enter into a fixed price contract with Prime
Contractor for the Interior Improvements which by its terms provides that each
party is obligated to pay only for its respective share of the fixed costs
thereof as set forth in Paragraph 6, and as stated in such contract.
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It is expressly acknowledged and agreed by Tenant that the
opportunity set forth above, whereby Tenant may revise the plans, is a one time
opportunity and, if Tenant so elects to revise the plans, thereafter Tenant
shall be subject to the provisions of Paragraph 8 of this Agreement and the bid
received by Landlord based on such revised plans shall be considered final,
shall be accepted by Tenant and construction shall proceed without any further
changes except as permitted by Paragraph 7.
C. Inspection on Following Completion: As soon as the Interior
Improvements are Substantially Completed (as that term is defined herein),
Landlord and Tenant shall conduct a joint walk-through of the Premises, and
inspect such Interior Improvements, using their best efforts to discover all
incomplete or defective construction. After such inspection has been completed,
Landlord shall prepare, and both parties shall sign, a list of all "punch list"
items which the parties agree are to be corrected by Landlord (but which shall
exclude any damage or defects caused by Tenant, its employees, agents or parties
Tenant has contracted with to work on the Premises). It is agreed that the Lease
will commence on the Commencement Date regardless of whether or not a "punch
list" exists. Landlord shall use reasonable efforts to complete and/or repair
such "punch list" items within thirty (30) days after executing such list, it
being agreed however, that the existence of any "punch list" items will not
result in any delay of the Commencement Date and will not result in any right of
rent reduction. Tenant shall have the right to occupy the Premises and the Lease
and Tenant's obligation to pay rent shall commence as soon as the Improvements
are Substantially Completed, subject to performance by Tenant of its obligations
under this subparagraph and the Lease. Tenant's taking possession of any part of
the Premises shall be deemed to be an acceptance by Tenant of Landlord's work of
improvement, in accordance with the terms of the Lease, except for the "punch
list" items noted and latent defects that could not reasonably have been
discovered by Tenant during its inspection of the Interior Improvements prior to
completion of the list of "punch list" items. With regard to any such latent
defects or other defects in construction, Tenant shall promptly give written
notice to Landlord when any such defect becomes reasonably apparent specifically
describing such defect, and Landlord shall repair such defect as soon thereafter
as practical; provided, however, the provisions of the immediately preceding
sentence regarding such latent defects, and of this sentence, shall be of no
force and effect if Tenant shall fail to give any such written notice to
Landlord within ninety (90) days after commencement of the term of the Lease
after which time Tenant shall be responsible for all latent and construction
defects not specified in said ninety (90) day period regardless if additional
defects are discovered at a later date and Landlord shall have no obligation for
same. Notwithstanding anything contained herein or in the Lease, Tenant's
obligation to pay rent under the Lease shall commence on the Commencement Date
as specified in the Lease, regardless of whether Tenant completes such
walk-through inspection or has executed and/or completed such list of the "punch
list" items, unless the Lease term has previously commenced, and Tenant's
obligation to pay rent under the Lease has begun, prior to the date of delivery
of possession because of a Tenant delay in the course of construction, as
provided in paragraph 8 hereof.
6. PAYMENT OF CONSTRUCTION COSTS:
A. Shell Improvements: Landlord agrees to furnish the Shell
Improvements at its cost, including the paving and parking areas, striping,
curbs, and gutters as shown on Exhibit "A" of the Lease, the main plumbing line
into the building and landscaping and irrigation system for the building.
Stubbing of the actual plumbing fixtures will be an Interior Improvement Cost,
and not considered a part of the Shell Improvements.
B. Landlord's Interior Improvements Allowance: Landlord agrees
to furnish Tenant with an Interior Improvement allowance of Twenty-Five Dollars
($25.00) per square foot of gross leasable area within the building to be
constructed as part of the Shell Improvements (e.g,, Four Million Five Hundred
Fifty Eight Thousand Eight Hundred Seventy Five Dollars ($4,558,875.00) if the
gross leasable area of the building is 182,355 square feet). This allowance
shall be considered Landlord's total monetary contribution with respect to tthe
Interior
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Improvements, which allowance shall be used for the payment of the direct cost
of constructing the Interior Improvements including, but not limited to, the
fire sprinkler system, loading docks (if any), roof screens, building
connectors, elevators (if any), drop ceilings, interior plumbing, heating and
air conditioning system, electrical system, parking lot lighting, carpeting,
vinyl floor covering, painting, interior walls and movable floor to ceiling
partitioning, utility pads (including all construction elements of subject
utility pads including, but not limited to, the exterior walls), normal
contractor's fees, architect's fees, engineer's fees, and any City or
governmental fees for connection to utilities (the "Interior Improvement
Costs"). Notwithstanding the foregoing, the term "Interior Improvement Costs"
shall not include any of the following: (i) real property taxes and assessments
accruing prior to the Commencement Date; (ii) interest on funds borrowed or
imputed interest on funds reserved by Landlord to fund the construction; (iii)
any administrative or development fee paid to Landlord or any affiliate.
C. Proportionate Allocation of Interior Improvements: Tenant
hereby specifically agrees that the Interior Improvements to be constructed in
the Premises leased hereunder shall be spread proportionately throughout the
building.
D. Liability for Interior Improvement Costs Above Landlord's
Allowance: It is further agreed that Tenant shall be responsible for and pay one
hundred percent (100 %) of the Interior Improvement Costs relating to the
Interior Improvements in excess of those that are paid for with Landlord's
allowance as set forth in subparagraph 6B above. In addition, Tenant shall be
responsible for and pay any additional construction costs and expenses related
to the Shell Improvements occasioned by changes or modifications in the
Preliminary or Final Shell Plans made by Tenant pursuant to paragraph 7 or that
are necessary to accommodate Interior Improvements.
E. Manner of Reimbursement by Tenant: If the total Interior
Improvement Costs exceeds Landlord's allowance, Tenant shall pay a proportionate
share of each progress payment due to the contractor constructing the Interior
Improvements, which bears the same relationship to the total amount of the
progress payment in question as the amount Tenant is obligated to pay for the
Cost of constructing the Interior Improvements. For purposes of illustration
only, if the total cost of constructing the Interior Improvements is $5,000,000
then Tenant's share thereof would be $441,125.00 (the excess over Landlord's
total allowance of $4,558,875.00 assuming the area of the building is 182,355
square feet), or 8.823% of the total cost. If the first progress payment due the
contractor is $500,000 then Tenant's share of such progress payment would be
$44,115.00 (or 8.823% of such progress payment). For each succeeding progress
payment, Tenant would likewise be obligated for 8.823% thereof, with the
exception that Landlord, at its option, may retain a pro rata share of the final
ten percent (10%) of the interior contract until 62 days after recordation of a
Notice of Completion on the Premises. Tenant shall pay its share of any progress
payment to Landlord within ten (10) business days after receipt of a written
statement therefor from Landlord, together with reasonable documentation
substantiating the amount set forth in such statement. If Tenant fails to pay
any such amount when due, then Landlord may (but without the obligation to do
so) advance such funds on Tenant's behalf, and Tenant shall be obligated to
reimburse Landlord for the amount of the funds so advanced on its behalf and all
costs incurred by Landlord in so doing, including interest thereon at a rate
equal to the borrowing rate then charged by Landlord's bank, whether or not
Landlord has actually borrowed such moneys or merely advanced them from its own
funds. Any amounts paid to Landlord by Tenant pursuant to this paragraph shall
be held by Landlord only for disbursement to the contractor in payment of any
such excess Interior Improvement Costs.
7. CHANGES, MODIFICATIONS, OR ADDITIONS TO THE PLANS, SPECIFICATIONS
AND/OR PREMISES: Once the Final Shell Plans and Final Interior Plans have been
finally approved by Landlord and Tenant, then thereafter neither party shall
have the right to order extra work or change orders (except for de minimis
changes which will not materially or substantially impact or affect Tenant's use
of the Premises) with respect to the construction of the Improvements without
the prior written consent of the other party, which consent shall not be
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unreasonably withheld or delayed, provided there is a reasonable basis for such
change. Tenant shall not, however, make any such changes without Landlord's
prior written approval. All extra work or change orders requested by either
Landlord or Tenant shall be made in writing, shall specify the amount of delay
or the time saved resulting therefrom, and shall become effective and a part of
the approved plans once approved in writing by both parties. If any such change
or extra work will result in the cost of the Interior Improvements being in
excess of Landlord's allowance, as set forth in subparagraph 6D, above, Tenant
shall pay the entire amount of such excess, as provided in subparagraph 6D,
above.
8. TENANT DELAYS: Landlord and Tenant acknowledge that the date on
which Tenant's obligation to pay rent under the Lease would otherwise commence
may be delayed because of a delay in completion of construction of the
Improvements due to (i) Tenant's failure to submit to Landlord plans and
specifications for the Improvements by the due date set in the Performance
Schedule, (ii) Tenant's failure to give any necessary approval or consent by the
dates set forth herein, (iii) any act by Tenant which interferes with or delays
construction of the Improvements, including Tenant's entry to install trade
fixtures pursuant to paragraph 10 hereof, (iv) any changes, modifications and/or
additions in the Improvements requested by Tenant and approved by Landlord, or
(v) special materials or equipment ordered or specified by Tenant that cannot be
obtained by Landlord at normal cost within a reasonable period of time because
of limited availability. It is the intent of the parties hereto that the
commencement of Tenant's obligation to pay rent under the Lease not be delayed
by any of such causes or by any other act of Tenant (except as expressly
provided herein) and, in the event it is so delayed, Tenant's obligation to pay
rent under the Lease shall commence as of the date it would otherwise have
commenced absent delay caused by Tenant, provided that within a reasonable
period of time after learning of the occurrence of the cause of any such delay,
Landlord notifies Tenant in writing of the fact that such delay has occurred and
the known or anticipated extent of any such delay.
9. ACCOUNTING: When the Interior Improvements are Substantially
Completed, Landlord shall submit to Tenant a final and detailed written
accounting of all Interior Improvement Costs paid by Landlord, which shall be
true and correct, to the best of Landlord's knowledge. Tenant shall have the
right to audit the books, records and supporting documents of the Landlord or if
Landlord directs, of the Prime Contractor to the extent reasonably necessary to
determine the accuracy of such accounting, related to the Interior Improvements,
during normal business hours, after giving Landlord at least five (5) business
days prior notice. Tenant shall bear the cost of such audit. Any such audit
shall be conducted, if at all, within sixty (60) days after Landlord delivers
such accounting to Tenant.
10. TENANT'S RIGHT TO INSTALL TRADE FIXTURES: When the construction of
the Interior Improvements has proceeded to the point where Tenant's work of
installing its fixtures and equipment (including modular furniture systems,
telephone systems, cabling, communications systems, security systems, antennas
and signs) in the Premises can be commenced in accordance with good construction
practices and will not interfere with the completion of the Improvements by
Landlord, Landlord shall notify Tenant to that effect and shall permit Tenant,
and its authorized representatives and contractors, to have access to the
Premises for the purpose of installing Tenant's trade fixtures and equipment;
provided, however, that Landlord shall permit Tenant to enter the Premises for
the foregoing purposes at least fifteen (15) days prior to the estimated
Commencement Date. Landlord and Prime Contractor shall use reasonable efforts to
cooperate fully with Tenant and its representatives and contractors in
connection with such installation work by Tenant. Any such installation work by
Tenant, or its authorized representatives and contractors, shall be undertaken
at their sole risk, free from Rent, and upon the following conditions:
A. If the entry into the Premises by Tenant, or its
representatives or contractors, unreasonably interferes with or delays
Landlord's construction work notwithstanding Landlord's reasonable efforts to
cooperate, after eight (8) hours notice of such fact to Tenant (i) Tenant shall
cause the party responsible for such interference or delay to leave the
Premises, or
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(ii) Tenant shall cause to be taken such steps as may be necessary in the Prime
Contractor's reasonable opinion to alleviate such interference or delay. If
either (i) or (ii) have not been completed, then Tenant shall be responsible for
delay of the job and subject to the provisions of Paragraph 8;
B. Any contractor used by Tenant in connection with such entry
and installation shall be subject to Landlord's approval, but which may be
withheld if such contractor is nonunion and its entry on the Premises would
unreasonably interfere with Landlord's work;
C. All of the terms of the Lease shall apply to any entry by
Tenant pursuant to this paragraph (including provisions of the Lease regarding
indemnification and insurance), except that, subject to the provisions of
Paragraphs 8 and 10A and B above, Tenant shall not be obligated as a result of
such entry to pay any Base Monthly Rent or Additional Rent;
D. It is agreed that Landlord shall not be required to fix any
defects caused to the Improvements made by Tenant, Tenant's employees, agents or
parties Tenant has contracted with or to work on the Premises;
E. Subject to the provisions of Paragraph 8, Tenant and its
agents and contractors shall be permitted to enter the Premises prior to the
Commencement Date for the purpose of installing Tenant's trade fixtures and
equipment as listed above. Any entry or installation work by Tenant and its
agents in the Premises pursuant to Paragraph 10 shall (i) be undertaken at
Tenant's sole risk, (ii) not interfere with or delay Landlord's work in the
Premises, and (iii) not be deemed occupancy or possession of the Premises for
purposes of the Lease. Tenant shall indemnify, defend, and hold Landlord
harmless from any and all loss, damage, liability, expense (including reasonable
attorneys fees), claim or demand of whatsoever character direct or
consequential, including, but without limiting thereby the generality of the
foregoing, injury to or death of persons and damage to or loss of property
arising out of the exercise by Tenant of any early entry right granted
hereunder.
11. DELIVERY OF DOCUMENTS: Landlord shall within thirty (30) days after
the same is obtained by Landlord, deliver to Tenant any temporary or permanent
certificate of occupancy issued by the City of Milpitas with respect to any of
the Improvements.
12. TAX INCREASES DURING CONSTRUCTION PERIOD: In the event prior to the
Commencement Date there is an interim or supplemental reassessment of the
Premises based upon the added value of the Improvements, then when Tenant
accepts occupancy of the Premises Tenant shall pay any interim or supplemental
taxes (but no penalties or interest in connection therewith) that have been
levied against the Premises and are attributable to the added value of the
Improvements during the period prior to Tenant's occupancy of the Premises.
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Please execute this agreement in the space provided below, indicating
your agreement with the above, and return all copies. A fully executed copy will
be returned to you for your records after execution by the Landlord.
AGREED: Respectfully yours,
QUANTUM CORPORATION, XXXX XXXXXXXXX SURVIVOR TRUST
A Delaware corporation
By /s/ Xxxxxx Xxxxxx By /s/ Xxxx Xxxxxxxxx
------------------- ---------------------
Xxxxxx Xxxxxx, Vice President Finance Xxxx Xxxxxxxxx, Trustee
and Corporate General Counsel
Date: 6/30/97
Date: June 25, 1997 ---------
-------------
XXXXXXX X. XXXXX SEPARATE
By /s/ Xxxx Xxxxx PROPERTY TRUST
------------------
Xxxx Xxxxx, Vice President Real Estate
and Corporate Services By /s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx, Trustee
Date: June 25, 1997
------------- Date: 6/29/97
---------
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