EXHIBIT 10.16
STANDARD FORM LEASE
PARTIES: This Lease, executed in duplicate at Cupertino, California, on April
, 1996, by and between Xxxx & Xxxx Developers, a California General
Partnership, and Amati Communications Corporation, a Delaware Corporation,
hereinafter called respectively Lessor and Lessee, without regard to number
or gender.
USE: WITNESSETH: That Lessor hereby leases to Lessee, and Lessee hires from
Lessor, for the purpose of conducting therein office, research and
development, light manufacturing, and warehouse activities, and any other
legal activity; and for no other purpose without obtaining the prior written
consent of Lessor.
PREMISES: The real property with appurtenances as shown on Exhibit A.1 (the
"Premises") situated in the City of San Xxxx, County of Santa Xxxxx, State of
California, and more particularly described as follows:
Lessee's portion of the Premises is 48,677 square feet of building,
including all improvements thereto, as shown on Exhibit A.2 including
the right to use up to 169 unreserved parking spaces as shown on
Exhibit A.3. The address for the leased portion of the Premises is
0000 Xxxxxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx. Lessee's pro-rata share
of the building is 64.2%.
TERM: The term shall be for sixty (60) months and fifteen (15) days unless
extended pursuant to Section 35 of this Lease (the "Lease Term"), commencing
on the 15th day of July, 1996 (the "Commencement Date"), and ending on the
31st day of July, 2001.
RENT: Base rent shall be payable in monthly installments as follows:
Base rent Estimated CAC Total
--------- ------------- -----
Days 1 through 15 $29,206 $ 7,302 $36,508
Months 1 through 12 $58,412 $14,603* $73,015
Monthly base rent to increase by 3% on the annual anniversary of the
Commencement Date each year during the Lease Term over the prior year's rent.
CAC charges to be adjusted per Common Area Charges Section below.
Base rent as scheduled above shall be payable in advance on or before the
first day of each calendar month during the Lease Term. The term "Rent," as
used herein, shall be deemed to be and to mean the base monthly rent and all
other sums required to be paid by Lessee pursuant to the terms of this Lease.
Rent shall be paid in lawful money of the United States of America, without
offset or deduction, and shall be paid to Lessor at such place or places as
may be designated from time to time by Lessor. Rent for any period less than
a calendar month shall be a pro rata portion of the monthly installment.
Upon execution of this Lease, Lessee shall deposit with Lessor the first
month's rent.
COMMON AREA CHARGES: Lessee shall pay to Lessor, as additional Rent, an
amount equal to 20.64% of the total common area charges of the Project and
64.2% of the total common area charges for the Premises as defined below (the
common area charges for the Project and the common area charges for the
Premises collectively referred to herein as ("CAC")). Lessee shall pay to
Lessor as Rent, on or before the first day of each calendar month during the
Lease Term, subject to adjustment and reconciliation as provided hereinbelow,
the sum of Fourteen Thousand Six Hundred Three Dollars ($14,603), said sum
representing Lessee's estimated monthly payment of Lessee's percentage share
of CAC. It is understood and agreed that Lessee's obligation under this
paragraph shall be prorated to reflect the Commencement Date and the end of
the Lease Term. Upon execution of this Lease, Lessee shall deposit with
Lessor the first month's estimated CAC.
Lessee's estimated monthly payment of CAC payable by Lessee during the
calendar year in which the Lease commences is set forth above. At or prior
to the commencement of each succeeding calendar year term (or as soon as
practical thereafter), Lessor shall provide Lessee with Lessee's estimated
monthly payment for CAC which Lessee shall pay to Lessor as Rent. Within 120
days of the end of the calendar year and the end of the Lease Term, Lessor
shall provide Lessee a statement of actual CAC incurred including capital
reserves for the preceding year or other applicable period in the case of a
termination year. If such statement shows that Lessee has paid less than its
actual percentage, then Lessee shall on demand pay to Lessor the amount of
such deficiency. If such statement shows that Lessee has paid more than its
actual percentage, then Lessor shall, at its option, promptly refund such
excess to Lessee or credit the amount thereof to the Rent next becoming due
from Lessee. Lessor reserves the right to revise any estimate of CAC if the
actual or projected CAC show an increase or decrease in excess of 10% from an
earlier estimate for the same period. In such event, Lessor shall provide a
revised estimate to Lessee, together with an
explanation of the reasons therefor, and Lessee shall revise its monthly
payments accordingly. Lessor's and Lessee's obligation with respect to
adjustments at the end of the Lease Term or earlier expiration of this Lease
shall survive the Lease Term or earlier expiration.
As used in this Lease, CAC shall include but are not limited to, (i) all
items as specified in Paragraphs 5(b), 6, 9, 12, 16 and 31; (ii) utility
costs related to the common areas of the Samaritan Project (the "Project" as
shown on Exhibit A.3) and utility costs related to Lessee's portion of the
Premises; (iii) all costs and expenses including but not limited to supplies,
materials, equipment and tools used or required in connection with the
operation and maintenance of the Project; (iv) licenses, permits and
inspection fees; (v) all other costs incurred by Lessor in maintaining and
operating the Project; (vi) all reserves for capital replacements; and (vii)
an amount equal to three percent (3%) of the actual expenditures for the
aggregate of all CAC, as compensation for Lessor's accounting and processing
services. Lessee shall have the right to review the CAC applicable to this
Lease annually.
SECURITY DEPOSIT: Lessee shall deposit with Lessor the sum of Seventy Three
Thousand Fifteen Dollars ($73,015) (the "Security Deposit"). The Security
Deposit shall be held by Lessor as security for the faithful performance by
Lessee of all of the terms, covenants, and conditions of this Lease
applicable to Lessee. If Lessee commits a default as provided for herein,
including but not limited to a default with respect to the provisions
contained herein relating to the condition of the Premises, Lessor may (but
shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any amount which Lessor may spend by
reason of default by Lessee. If any portion of the Security Deposit is so
used or applied, Lessee shall, within ten days after written demand therefor,
deposit cash with Lessor in an amount sufficient to restore the Security
Deposit to its original amount. Lessee's failure to do so shall be a default
by Lessee. Any attempt by Lessee to transfer or encumber its interest in the
Security Deposit shall be null and void. Upon execution of this Lease,
Lessee shall deposit with Lessor the Security Deposit.
LATE CHARGES: Lessee hereby acknowledges that a late payment made by Lessee
to Lessor of Rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited
to, processing and accounting charges, and late charges, which may be imposed
on Lessor according to the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Rent or any other sum due from
Lessee is not received by Lessor or Lessor's designee within ten (10) days
after such amount is due, Lessee shall pay to Lessor a late charge equal to
five (5%) percent of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payments made by Lessee. Acceptance of such
late charges by Lessor shall in no event constitute a waiver of Lessee's
default with respect to such overdue amount, nor shall it prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
QUIET ENJOYMENT: Lessor covenants and agrees with Lessee that upon Lessee
paying Rent and performing its covenants and conditions under this Lease,
Lessee shall and may peaceably and quietly have, hold and enjoy the Premises
for the Lease Term, subject, however, to the rights reserved by Lessor
hereunder.
IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. POSSESSION: Possession shall be deemed tendered on July 1, 1996. Rent shall
commence on the Commencement Date.
2. LESSEE'S IMPROVEMENTS: Lessor and Lessee hereby agree that the following
terms and conditions represent the parties mutual understanding and agreement
with respect to Lessee's improvements to the Premises.
1. Lessee shall pay the first Two Hundred Fifty Thousand Dollars ($250,000)
for Lessee's tenant improvements to the Premises with no reimbursement by
Lessor.
2. Lessor shall reimburse Lessee for the next Two Hundred Fifty Thousand
Dollars ($250,000) for additional tenant improvements made by Lessee to the
Premises.
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3. Lessor shall also pay Lessee for any additional tenant improvements
necessary in excess of $500,000, up to a maximum of Two Hundred Thousand
Dollars ($200,000) ("Additional TI Funding"), which amount shall be
amortized over the first eighteen (18) months of the Lease Term at 10%
interest per annum, and shall be paid by Lessee to Lessor as additional
Rent, during the first eighteen months of the Lease Term. The amortized
cost for the Additional TI Funding is not included in the base rent
provided for above. The additional Rent to be paid by Lessee to Lessor if
Lessee uses the maximum Additional TI Funding of $200,000 shall be Twelve
Thousand Eleven Dollars ($12,011) per month.
4. All of Lessor's reimbursements to Lessee for tenant improvements
shall be subject to: (a) Lessee paying the first Two Hundred Fifty
Thousand Dollars ($250,000) for tenant improvements to the Premises, (b)
Lessee requesting Lessor to pay up to Four Hundred Fifty Thousand
Dollars ($450,000) for additional tenant improvements to the Premises,
(c) Lessee executing a UCC-1 fixture filing in favor of Lessor or its
assigns securing Lessor or its assigns interest in all tenant
improvements at the Premises, (d) Lessee providing Lessor with evidence
of the costs paid by Lessee for the tenant improvements to the Premises,
(e) Lessee providing Lessor with copies of lien releases from all
suppliers and contractors applicable to the tenant improvements, and (f)
Lessee providing Lessor with a copy of the final inspections from the
City of San Xxxx applicable to the tenant improvements at the Premises.
5. If at any time after the execution of the Lease, Amati's cash
position falls below Five Hundred Thousand Dollars ($500,000), Amati
shall immediately reduce the principal amount of the Additional TI
Funding by paying to Lessor One Hundred Thousand Dollars ($100,000). After
receipt of the One Hundred Thousand Dollars ($100,000), Lessor shall
provide Lessee with a recalculation of the required amortization payments
applicable to the Additional TI Funding.
6. Lessee shall be responsible for designing, contracting and completing
the tenant improvements at the Premises. Lessee may use the services of
Hallmark Construction; however, in no event will the contractor's
failure to complete the tenant improvements on time result in a delay of
the Commencement Date or Lessee's obligation to commence paying Rent.
7. All tenant improvements shall be completed in a good and workmanlike
manner, in compliance with all government codes, requirements and
regulations, and with all necessary permits. Lessee understands and
acknowledges that the tenant improvements contemplated herein will force
modifications to the Premises to comply with government codes, requirements
and regulations and Lessee shall be responsible for these modifications.
8. Lessor shall review and approve all plans, schedules, and costs for the
tenant improvements to be made to the Premises and Lessor's approval shall
not be unreasonably withheld. If Lessee has not heard back from Lessor
within five (5) business days, then the plans submitted shall be deemed
approved. Time is of the essence. Lessor's primary concern in reviewing
and approving the plans for the tenant improvements is the location of any
restrooms in addition to the overall layout of the Premises. Lessor is
willing to review preliminary single line drawing for layout purposes and
Lessor shall provide any comments within two (2) business days.
9. Lessee and its contractors shall not change or affect the structural
components or structural characteristics of the Premises without signed
engineering drawings and specific written approval of Lessor.
10. Lessee and its contractors shall not change or affect the service of
HVAC, electrical, plumbing, or other services to Lessor's vacant space or
to other tenants at the Premises.
11. Lessee and its general contractor shall provide general liability
insurance in the amount of not less than Five Million Dollars ($5,000,000)
naming Lessor as an additional insured prior to starting any work at the
Premises and prior to taking possession of the Premises.
2.1 ACCEPTANCE OF PREMISES AND COVENANTS TO SURRENDER: . As a material
inducement to the execution and delivery of this Lease by Lessor, Lessee is
leasing the portion of the Premises in an "AS IS" physical condition and in an
"AS IS" state of repair. .Lessor represents that the Premises are in good order
and repair, and comply with all requirements for occupancy as of the date of
lease execution. Lessee agrees on the last day of the Lease Term, or on the
sooner termination of this Lease, to surrender the Premises to Lessor in Good
Condition and Repair. Good Condition and Repair ("Good Condition and Repair")
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shall not mean original condition, but shall mean that the Premises are in a
commercially acceptable condition suitable for occupancy by a reasonable
lessee. The interior walls of all office and warehouse areas, the floors of
all office and warehouse areas, all suspended ceilings and any carpeting are
to be cleaned and in Good Condition and Repair. Lessee also agrees to
surrender unto Lessor all alterations, additions, and improvements which may
have been made in, to, or on the Premises by Lessee, except that Lessee shall
ascertain from Lessor, within (30) days before the end of the Lease Term or
earlier termination of this Lease, whether Lessor desires to have the
Premises or any part or parts thereof restored to their condition as of the
Commencement Date of this Lease; if Lessor shall so desire, then Lessee shall
restore said Premises or such part or parts thereof before the end of the
Lease Term or earlier termination of this Lease at Lessee's sole cost and
expense. Lessee, on or before the end of the Lease Term or sooner
termination of this Lease, shall remove all its personal property and trade
fixtures from the Premises, and all such property not so removed shall be
deemed to be abandoned by Lessee. Lessee shall reimburse Lessor for all
disposition costs incurred by Lessor relative to Lessee's abandoned property.
If the Premises are not surrendered at the end of the Lease Term or earlier
termination of this Lease, Lessee shall indemnify Lessor against loss or
liability resulting from any delay caused by Lessee in surrendering the
Premises including, without limitation, any claims made by any succeeding
Lessee founded on such delay.
3. USES PROHIBITED: Lessee shall not commit, or suffer to be committed, any
waste upon the Premises, or any nuisance, or other act or thing which may
disturb the quiet enjoyment of any other tenant in or around the buildings in
which the subject Premises are located or allow any sale by auction upon the
Premises, or allow the Premises to be used for any improper, immoral,
unlawful or objectionable purpose, or place any loads upon the floor, walls,
or ceiling which may endanger the structure, or use any machinery or
apparatus which will in any manner vibrate or shake the Premises or the
building of which it is a part, or place any harmful liquids in the drainage
system of the building. No waste materials or refuse shall be dumped upon or
permitted to remain upon any part of the Premises outside of the building
proper. No materials, supplies, equipment, finished products or
semi-finished products, raw materials or articles of any nature shall be
stored upon or permitted to remain on any portion of the Premises outside of
the building structure, unless approved by the local, state federal or other
applicable governing authority. Lessor consents to Lessee's use of materials
which are incidental to the normal, day-to-day operations of any office user,
such as copier fluids, cleaning materials, etc., but this does not relieve
Lessee of any of its obligations not to contaminate the Premises or related
real property or violated any Hazardous Materials Laws.
4. ALTERATIONS AND ADDITIONS: Lessee shall not make, or suffer to be made,
any alteration or addition to said Premises, or any part thereof, without the
express, advance written consent of Lessor; any addition or alteration to
said Premises, except movable furniture and trade fixtures, shall become at
once a part of the realty and belong to Lessor at the end of the Lease Term
or earlier termination of this Lease. Alterations and additions which are
not deemed as trade fixtures shall include HVAC systems, lighting systems,
electrical systems, partitioning, carpeting, or any other installation which
has become an integral part of the Premises. Lessee agrees that it will not
proceed to make such alterations or additions until all required government
permits have been obtained and after having obtained consent from Lessor to
do so, until five (5) days from the receipt of such consent, so that Lessor
may post appropriate notices to avoid any liability to contractors or
material suppliers for payment for Lessee's improvements. Lessee shall at
all times permit such notices to be posted and to remain posted until the
completion of work. At the end of the Lease Term or earlier termination of
this Lease, Lessee shall remove and shall be required to remove its special
tenant improvements and all related equipment installed by Lessee at or
during the Lease Term and Lessee shall return the Premises to the condition
that existed before the installation of the special tenant improvements.
Notwithstanding the above, Lessor agrees to allow any reasonable alterations
and improvements and will use its best efforts to notify Lessee at the time
of approval if such improvements or alterations are to be removed at Lease
Expiration or earlier termination of this Lease.
5. MAINTENANCE OF PREMISES:
(a) Lessee shall at its sole cost and expense keep and maintain the
interior of the Premises, including, but not limited to, all lighting
systems, temperature control systems and plumbing systems, in Good
Condition and Repair, including any required replacements. Lessee shall
maintain all wall surfaces and floor coverings in Good Condition and
Repair, free of holes, gouges, or defacements.
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(b) Lessor shall keep and maintain in Good Condition and Repair including
replacements, at Lessee's expense, based on a pro-rata share of cost based on
square footage or costs directly related to Lessee's use of the Premises the
following, which shall be included in the monthly CAC:
1. The exterior of the building, any appurtenances and every part
thereof, including but not limited to, glazing, sidewalks, parking
areas, electrical systems, HVAC systems, roof membrane, and painting
of exterior walls.
2. The HVAC by a service contract with a licensed air conditioning and
heating contractor which contract shall provide for a minimum of bi-
monthly maintenance of all air conditioning and heating equipment at
the Premises including HVAC repairs or replacements which are either
excluded from such service contract or any existing equipment
warranties.
3. The landscaping by a landscape contractor to water, maintain, trim
and replace, when necessary, any shrubbery and landscaping at the
Premises.
4. The roof membrane by a service contract with a licensed reputable
roofing contractor which contract shall provide for a minimum of semi-
annual maintenance, cleaning of storm gutters, drains, removing of
debris and trimming overhanging trees, repair of the roof and
application of a finish coat every five years at the Premises.
5. Extermination services.
6. Fire monitoring services.
(c) Lessee hereby waives any and all rights to make repairs at the expense of
Lessor as provided in Section 1942 of the Civil Code of the State of
California, and all rights provided for by Section 1941 of said Civil Code.
(d) Lessor shall be responsible for the repair of any structural defects in
the Premises including the roof structure (not membrane), exterior walls and
foundation during the Lease Term.
6. HAZARD INSURANCE: Lessee shall not use, or permit said Premises, or any
part thereof, to be used, for any purpose other than that for which said
Premises are hereby leased; and no use shall be made or permitted to be made
of the Premises, nor acts done, which may cause a cancellation of any
insurance policy covering said building, or any part thereof, nor shall
Lessee sell or permit to be kept, used or sold, in or about said Premises,
any article which may be prohibited by a standard form fire insurance policy.
Lessee shall, at its sole cost and expense, comply with any and all
requirements, pertaining to said Premises, of any insurance organization or
company, necessary for the maintenance of reasonable fire and general
liability insurance, covering said building and appurtenances. Lessor agrees
to purchase and keep in force fire and extended coverage insurance covering
loss or damage to the Premises in amounts not to exceed the full replacement
cost of said Premises as determined by Lessor, with proceeds payable to
Lessor. Lessee acknowledges that the insurance referenced above does not
include coverage for Lessee's personal property. In the event of a loss per
the insurance provisions of this paragraph, Lessee shall be responsible for
deductibles up to a maximum of $5,000 per occurrence. Lessee agrees to pay
to the Lessor as additional Rent, on demand, the full cost of said insurance
as evidenced by insurance xxxxxxxx to Lessor.. If said insurance xxxxxxxx
cover the Premises, and Lessee does not occupy the entire Premises, the
insurance premiums and deductibles shall be allocated to the portion of the
Premises occupied by Lessee on a pro-rata square footage or other equitable
basis, as determined by Lessor. It is understood and agreed that Lessee's
obligation under this paragraph will be prorated to reflect the Commencement
Date and the end of the Lease Term.
Lessor and Lessee hereby waive any rights each may have against the other
related to any loss or damage caused to Lessor or Lessee as the case may be,
or to the Premises or its contents, and which may arise from any risk
generally covered by fire and extended coverage insurance. The parties shall
provide that their respective insurance policies insuring the property or the
personal property include a waiver of any right of subrogation which said
insurance company may have against Lessor or Lessee, as the case may be.
Lessor shall maintain in full force and effect, a policy of rental loss
insurance, in an amount equal to the amount of Rent payable by Lessee
commencing on the date of loss during the next ensuing one (1) year, as
reasonably determined by Lessor with proceeds payable to Lessor ("Loss of
Rents Insurance. Lessee agrees to pay to the Lessor as additional Rent, on
demand, the full cost of said insurance as evidenced by insurance xxxxxxxx to
the Lessor which shall be included in Lessee's monthly CAC.
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7. ABANDONMENT: Lessee shall not vacate or abandon the Premises at any time
during the Lease Term; and if Lessee shall abandon, vacate or surrender said
Premises, or be dispossessed by process of law, or otherwise, any personal
property belonging to Lessee and left on the Premises shall be deemed to be
abandoned, at the option of Lessor. Notwithstanding the above, the Premises
shall not be considered vacated or abandoned if Lessee maintains the Premises
in Good Condition and Repair, provides security, pays the required Rent to
Lessor, and is not in default.
8. FREE FROM LIENS: Lessee shall keep the subject Premises and the property
in which the subject Premises are situated, free from any and all liens
including but not limited to liens arising out of any work performed,
materials furnished, or obligations incurred by Lessee. However, the Lessor
shall allow Lessee to contest a lien claim, so long as the claim is
discharged prior to any foreclosure proceeding being initiated against the
property and provided Lessee provides Lessor a bond if the lien exceeds
$5,000.
9. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Lessee shall, at its sole cost
and expense, comply with all of the requirements of all local, municipal,
state and federal authorities now in force, or which may hereafter be in
force, pertaining to Lessee's use and occupancy of the said Premises, and
shall faithfully observe in the use of the Premises all local and municipal
ordinances and state and federal statutes now in force or which may hereafter
be in force. After completion of Lessee's improvements as provided for in
Section 2 of this Lease and except as stated above, Lessee shall not be
required to pay for the construction of any single improvement required under
this paragraph in excess of $25,000, unless such improvement is required to
comply with Lessee's particular use of the Premises; if such improvement is
not required due to Lessee's particular use of the Premises and such
improvement cost exceeds $25,000, such improvement cost shall be amortized
over the estimated useful life of the improvement, not to exceed 10 years at
Xxxxx Fargo prime rate plus one percent (1%). Lessee shall pay to Lessor the
amortized costs of such improvement on a monthly basis over the remaining
lease term and any extensions thereof, which shall be included in Lessee's
monthly CAC.
10. LESSEE'S INSURANCE: Lessee, as a material part of the consideration to be
rendered to Lessor, hereby waives all claims against Lessor and Lessor's
Agents for damages to goods, wares and merchandise, and all other personal
property in, upon or about said Premises, and for injuries to persons in,
upon or about said Premises, from any cause arising at any time, and Lessee
will hold Lessor and Lessor's Agents exempt and harmless from any damage or
injury to any person, or to the goods, wares and merchandise and all other
personal property of any person, arising from the use or occupancy of the
Premises by Lessee, or from the failure of Lessee to keep the Premises in
good condition and repair, as herein provided. Lessee shall secure and keep
in force a standard policy of commercial general liability insurance and
property damage policy covering the Premises, including parking areas,
insuring the Lessee. A certificate of said policy naming Lessor as an
additional insured shall be delivered to Lessor and will have a combined
single limit for both bodily injury, death and property damage in an amount
not less than five million dollars ($5,000,000.00). The limits of said
insurance shall not, however, limit the liability of Lessee hereunder. Lessee
shall obtain a written obligation on the part of the insurer to notify Lessor
30 days in advance in writing before any cancellation thereof. Lessee shall
obtain, at Lessee's sole cost and expense, a policy of fire and extended
coverage insurance including coverage for direct physical loss special form,
and a sprinkler leakage endorsement insuring the personal property of Lessee.
The proceeds from any personal property damage policy shall be payable to
Lessee. Lessee shall, at its sole cost and expense, comply with all of the
insurance requirements of all local, municipal, state and federal authorities
now in force, or which may hereafter be in force, pertaining to Lessee's use
and occupancy of the said Premises.
11. ADVERTISEMENTS AND SIGNS: Lessee shall not place or permit to be placed,
in, upon or about the Premises any unusual or extraordinary signs, or any
signs not approved by the city, local, state, federal or other applicable
governing authority. Lessee shall not place, or permit to be placed upon the
Premises, any signs, advertisements or notices without the written consent of
the Lessor, and such consent shall not be unreasonably withheld. A sign so
placed on the Premises shall be so placed upon the understanding and
agreement that Lessee will remove same at the end of the Lease Term or
earlier termination of this Lease and repair any damage or injury to the
Premises caused thereby, and if not so removed by Lessee, then Lessor may
have the same removed at Lessee's expense.
12. UTILITIES: Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities supplied to the Premises. Any charges for
sewer usage or related fees shall be the obligation of Lessee and paid for by
Lessee. If any such services are not
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separately metered to Lessee, Lessee shall pay a reasonable proportion of all
charges which are jointly metered, the determination to be made by Lessor
acting reasonably and on any equitable basis. Lessee's share of water, gas,
and electricity serving the Premises and the Project shall be included in
Lessee's monthly CAC, subject to adjustment as provided in the Common Area
Charges Section of this Lease. Lessor shall not be liable to Lessee for any
disruption in any of the utility services to the Premises.
13. ATTORNEY'S FEES: In case suit should be brought for the possession of the
Premises, for the recovery of any sum due hereunder, or because of the breach
of any other covenant herein, the losing party shall pay to the prevailing
party reasonable attorney's fee which shall be deemed to have accrued on the
commencement of such action and shall be enforceable whether or not such
action is prosecuted to judgment.
14.1 DEFAULT: The occurrence of any of the following shall constitute a
default and breach of this Lease by Lessee: a) Any failure by Lessee to pay
Rent or to make any other payment required to be made by Lessee hereunder
when due if not cured within ten (10) days after written notice thereof by
Lessor to Lessee; b) The abandonment or vacation of the Premises by Lessee
except as provided in Section 7; c) A failure by Lessee to observe and
perform any other provision of this Lease to be observed or performed by
Lessee, where such failure continues for thirty days after written notice
thereof by Lessor to Lessee; provided, however, that if the nature of such
default is such that the same cannot be reasonably cured within such thirty
(30) day period, Lessee shall not be deemed to be in default if Lessee shall,
within such period, commence such cure and thereafter diligently prosecute
the same to completion; d) The making by Lessee of any general assignment for
the benefit of creditors; the filing by or against Lessee of a petition to
have Lessee adjudged a bankrupt or of a petition for reorganization or
arrangement under any law relating to bankruptcy; e) the appointment of a
trustee or receiver to take possession of substantially all of Lessee's
assets or Lessee's interest in this Lease, or the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease.
14.2 SURRENDER OF LEASE: In the event of any such default by Lessee, then in
addition to any other remedies available to Lessor at law or in equity,
Lessor shall have the immediate option to terminate this Lease before the end
of the Lease Term and all rights of Lessee hereunder, by giving written
notice of such intention to terminate. In the event that Lessor terminates
this Lease due to a default of Lessee, then Lessor may recover from Lessee:
a) the worth at the time of award of any unpaid Rent which had been earned at
the time of such termination; plus b) the worth at the time of award of
unpaid Rent which would have been earned after termination until the time of
award exceeding the amount of such rental loss that the Lessee proves could
have been reasonably avoided; plus c) the worth at the time of award of the
amount by which the unpaid Rent for the balance of the Lease Term after the
time of award exceeds the amount of such rental loss that the Lessee proves
could have been reasonably avoided; plus d) any other amount necessary to
compensate Lessor for all the detriment proximately caused by Lessee's
failure to perform his obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom; and e) at Lessor's
election, such other amounts in addition to or in lieu of the foregoing as
may be permitted from time to time by applicable California law. As used in
(a) and (b) above, the "worth at the time of award" is computed by allowing
interest at the rate of Xxxxx Fargo's prime rate plus two percent (2%) per
annum. As used in (c) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
14.3 RIGHT OF ENTRY AND REMOVAL: In the event of any such default by Lessee,
Lessor shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of and for the account of Lessee.
14.4 ABANDONMENT: In the event of the vacation or abandonment, except as
provided in Section 7, of the Premises by Lessee or in the event that Lessor
shall elect to re-enter as provided in paragraph 14.3 above or shall take
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, and Lessor does not elect to terminate this Lease as
provided in paragraph 14.2 above, then Lessor may from time to time, without
terminating this Lease, either recover all Rent as it becomes due or relet
the Premises or any part thereof for such term or terms and at such rental
rates and upon such other terms and conditions as Lessor, in its sole
discretion, may deem advisable with the right to make alterations and repairs
to the Premises. In the event that Lessor elects to relet the Premises, then
Rent received by Lessor from such reletting shall be applied; first, to the
payment of any indebtedness other than Rent due hereunder from Lessee to
Lessor; second, to the payment
7
of any cost of such reletting; third, to the payment of the cost of any
alterations and repairs to the Premises; fourth, to the payment of Rent due
and unpaid hereunder; and the residue, if any, shall be held by Lessor and
applied to the payment of future Rent as the same may become due and payable
hereunder. Should that portion of such Rent received from such reletting
during any month, which is applied by the payment of Rent hereunder according
to the application procedure outlined above, be less than the Rent payable
during that month by Lessee hereunder, then Lessee shall pay such deficiency
to Lessor immediately upon demand therefor by Lessor. Such deficiency shall
be calculated and paid monthly. Lessee shall also pay to Lessor, as soon as
ascertained, any costs and expenses incurred by Lessor in such reletting or
in making such alterations and repairs not covered by the rentals received
from such reletting.
14.5 NO IMPLIED TERMINATION: No re-entry or taking possession of the Premises
by Lessor pursuant to 14.3 or 14.4 of this Article 14 shall be construed as
an election to terminate this Lease unless a written notice of such intention
is given to Lessee or unless the termination thereof is decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Lessor because of any default by Lessee, Lessor may at any time after such
reletting elect to terminate this Lease for any such default.
15. SURRENDER OF LEASE: The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work a merger, and shall,
at the option of Lessor, terminate all or any existing subleases or sub
tenancies, or may, at the option of Lessor, operate as an assignment to him
of any or all such subleases or sub tenancies.
16. TAXES: Lessee shall pay and discharge punctually and when the same shall
become due and payable without penalty, all real estate taxes, personal
property taxes, taxes based on vehicles utilizing parking areas in the
Premises, taxes computed or based on rental income (other than federal, state
and municipal net income taxes), environmental surcharges, privilege taxes,
excise taxes, business and occupation taxes, school fees or surcharges, gross
receipts taxes, sales and/or use taxes, employee taxes, occupational license
taxes, water and sewer taxes, assessments (including, but not limited to,
assessments for public improvements or benefit), assessments for local
improvement and maintenance districts, and all other governmental impositions
and charges of every kind and nature whatsoever, regardless of whether now
customary or within the contemplation of the parties hereto and regardless of
whether resulting from increased rate and/or valuation, or whether
extraordinary or ordinary, general or special, unforeseen or foreseen, or
similar or dissimilar to any of the foregoing (all of the foregoing being
hereinafter collectively called "Tax" or "Taxes") which, at any time during
the Lease Term, shall be applicable or against the Premises, or shall become
due and payable and a lien or charge upon the Premises under or by virtue of
any present or future laws, statutes, ordinances, regulations, or other
requirements of any governmental authority whatsoever. The term
"Environmental Surcharge" shall include any and all expenses, taxes, charges
or penalties imposed by the Federal Department of Energy, Federal
Environmental Protection Agency, the Federal Clean Air Act, or any
regulations promulgated thereunder, or any other local, state or federal
governmental agency or entity now or hereafter vested with the power to
impose taxes, assessments or other types of surcharges as a means of
controlling or abating environmental pollution or the use of energy in regard
to the use, operation or occupancy of the Premises. The term "Tax" shall
include, without limitation, all taxes, assessments, levies, fees,
impositions or charges levied, imposed, assessed, measured, or based in any
manner whatsoever (i) in whole or in part on the Rent payable by Lessee under
this Lease, (ii) upon or with respect to the use, possession, occupancy,
leasing, operation or management of the Premises, (iii) upon this transaction
or any document to which Lessee is a party creating or transferring an
interest or an estate in the Premises, (iv) upon Lessee's business operations
conducted at the Premises, (v) upon, measured by or reasonably attributable
to the cost or value of Lessee's equipment, furniture, fixtures and other
personal property located on the Premises or the cost or value of any
leasehold improvements made in or to the Premises by or for Lessee,
regardless of whether title to such improvements shall be in Lessor or
Lessee, or (vi) in lieu of or equivalent to any Tax set forth in this Section
16. In the event any such Taxes are payable by Lessor and it shall not be
lawful for Lessee to reimburse Lessor for such Taxes, then the Rent payable
thereunder shall be increased to net Lessor the same net rent after
imposition of any such Tax upon Lessor as would have been payable to Lessor
prior to the imposition of any such Tax. It is the intention of the parties
that Lessor shall be free from all such Taxes and all other governmental
impositions and charges of every kind and nature whatsoever. However,
nothing contained in this Section 16 shall require Lessee to pay any Federal
or State income, franchise, estate, inheritance, succession, transfer or
excess profits tax imposed upon Lessor. If any general or special
assessment is levied and assessed against the Premises, Lessor agrees to use
its best reasonable efforts to cause the assessment to become a lien on the
Premises securing repayment of a bond sold to finance the improvements to
which the assessment relates which is payable in installments of principal
and interest over the maximum term allowed by law. It is
8
understood and agreed that Lessee's obligation under this paragraph will be
prorated to reflect the Commencement Date and the end of the Lease Term. It
is further understood that if Taxes cover the Premises and Lessee does not
occupy the entire Premises, the Taxes will be allocated to the portion of the
Premises occupied by Lessee based on a pro-rata square footage or other
equitable basis. Taxes billed by Lessor to Lessee shall be included in the
monthly CAC.
Subject to any limitations or restrictions imposed by any deeds of trust or
mortgages now or hereafter covering or affecting the Premises, Lessee shall have
the right to contest or review the amount or validity of any Tax by appropriate
legal proceedings but which is not to be deemed or construed in any way as
relieving, modifying or extending Lessee's covenant to pay such Tax at the time
and in the manner as provided in this Section 16. However, as a condition of
Lessee's right to contest, if such contested Tax is not paid before such contest
and if the legal proceedings shall not operate to prevent or stay the collection
of the Tax so contested, Lessee shall, before instituting any such proceeding,
protect the Premises and the interest of Lessor and of the beneficiary of a deed
of trust or the mortgagee of a mortgage affecting the Premises against any lien
upon the Premises by a surety bond, issued by an insurance company acceptable to
Lessor and in an amount equal to one and one-half (1 1/2) times the amount
contested or, at Lessor's option, the amount of the contested Tax and the
interest and penalties in connection therewith. Any contest as to the validity
or amount of any Tax, whether before or after payment, shall be made by Lessee
in Lessee's own name, or if required by law, in the name of Lessor or both
Lessor and Lessee. Lessee shall defend, indemnify and hold harmless Lessor
from and against any and all costs or expenses, including attorneys' fees, in
connection with any such proceedings brought by Lessee, whether in its own name
or not. Lessee shall be entitled to retain any refund of any such contested Tax
and penalties or interest thereon which have been paid by Lessee. Nothing
contained herein shall be construed as affecting or limiting Lessor's right to
contest any Tax at Lessor's expense.
17. NOTICES: Unless otherwise provided for in this Lease, any and all written
notices or other communication (the "Communication") to be given in
connection with this Lease shall be given in writing and shall be given by
personal delivery, facsimile transmission or by mailing by registered or
certified mail with postage thereon or recognized overnight courier, fully
prepaid, in a sealed envelope addressed to the intended recipient as follows:
(a) to the Lessor at: 00000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Fax No: (000) 000-0000
(b) to the Lessee at: 0000 Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx
Attention:
Fax No:
or such other addresses, facsimile number or individual as may be designated
by a Communication given by a party to the other parties as aforesaid. Any
Communication given by personal delivery shall be conclusively deemed to have
been given and received on a date it is so delivered at such address provided
that such date is a business day, otherwise on the first business day
following its receipt, and if given by registered or certified mail, on the
day on which delivery is made or refused or if given by recognized overnight
courier, on the first business day following deposit with such overnight
courier and if given by facsimile transmission, on the day on which it was
transmitted provided such day is a business day, failing which, on the next
business day thereafter.
18. ENTRY BY LESSOR: Lessee shall permit Lessor and its agents to enter into
and upon said Premises at all reasonable times within business hours and
provided Lessor is escorted by a Lessee employee using the minimum amount of
interference and inconvenience to Lessee and Lessee's business, subject to
any security regulations of Lessee, for the purpose of inspecting the same or
for the purpose of maintaining the building in which said Premises are
situated, or for the purpose of making repairs, alterations or additions to
any other portion of said building, including the erection and maintenance of
such scaffolding, canopies, fences and props as may be required, without any
rebate of Rent and without any liability to Lessee for any loss of occupation
or quiet enjoyment of the Premises; and shall permit Lessor and his agents,
at any time within ninety (90) days prior
9
to the end of the Lease Term, to place upon said Premises any usual or
ordinary "For Sale" or "For Lease" signs and exhibit the Premises to
prospective tenants at reasonable hours.
19. DESTRUCTION OF PREMISES: In the event of a partial destruction of the
said Premises during the Lease Term from any cause which is covered by
Lessor's property insurance, Lessor shall forthwith repair the same, provided
such repairs can be made within ninety (90) days under the laws and
regulations of State, Federal, County, or Municipal authorities, but such
partial destruction shall in no way annul or void this Lease, except that
Lessee shall be entitled to a proportionate reduction of Rent while such
repairs are being made to the extent of payments received by Lessor under its
Loss of Rents Insurance coverage. With respect to any partial destruction
which Lessor is obligated to repair or may elect to repair under the terms of
this paragraph, the provision of Section 1932, Subdivision 2, and of Section
1933, Subdivision 4, of the Civil Code of the State of California are waived
by Lessee. In the event that the building in which the subject Premises may
be situated is destroyed to an extent greater than thirty-three and one-third
(33 1/3%) of the replacement cost thereof, Lessor or Lessee may elect to
terminate this Lease, whether the subject Premises is insured or not. A
total destruction of the building in which the subject Premises are situated
shall terminate this Lease. Notwithstanding the above, Lessor is only
obligated to repair or rebuild to the extent of available insurance proceeds
including any deductible amount. Should Lessor determine that insufficient
or no insurance proceeds are available for repair or reconstruction of
Premises, Lessor, at its sole option, may terminate the Lease. Lessee shall
have the option of continuing this Lease by agreeing to pay all repair costs
to the subject Premises.
20. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease, or any
interest therein, and shall not sublet the said Premises or any part thereof,
or any right or privilege appurtenant thereto, or cause any other person or
entity (a bona fide subsidiary or affiliate of Lessee excepted) to occupy or
use the Premises, or any portion thereof, without the advance written
reasonable consent of Lessor except as stated herein. Any such assignment or
subletting without such consent shall be void, and shall, at the option of
the Lessor, terminate this Lease. This Lease shall not, or shall any
interest therein, be assignable, as to the interest of Lessee, by operation
of law, without the written consent of Lessor. Notwithstanding Lessor's
obligation to provide reasonable approval, Lessor reserves the right to
withhold its consent for any proposed sublessee or assignee of Lessee if the
proposed sublessee or assignee is a user or generator of Hazardous Materials.
If Lessee desires to assign its rights under this Lease or to sublet, all or
a portion of the subject Premises to a party other than a bona fide
subsidiary or affiliate of Lessee, Lessee shall first notify Lessor of the
proposed terms and conditions of such assignment or subletting. Lessor shall
have the right of first refusal to enter into a direct Lessor-lessee
relationship with such party under such proposed terms and conditions, in
which event Lessee shall be relieved of its obligations hereunder to the
extent of the Lessor-lessee relationship entered into between Lessor and such
third party. Notwithstanding the foregoing, Lessee may assign this Lease to a
successor in interest, whether by merger or acquisition, provided there is no
substantial reduction in the net worth of the resulting entity and the
resulting entity is not a user or generator of Hazardous Materials. Whether
or not Lessor's consent to a sublease or assignment is required, in the event
of any sublease or assignment, Lessee shall be and shall remain primarily
liable for the performance of all conditions, covenants, and obligations of
Lessee hereunder and, in the event of a default by an assignee or sublessee,
Lessor may proceed directly against the original Lessee hereunder and/or any
other predecessor of such assignee or sublessee without the necessity of
exhausting remedies against said assignee or sublessee.
21. CONDEMNATION: If any part of the Premises shall be taken for any public
or quasi-public use, under any statute or by right of eminent domain or
private purchase in lieu thereof, and a part thereof remains which is
susceptible of occupation hereunder, this Lease shall as to the part so
taken, terminate as of the date title vests in the condemnor or purchaser,
and the Rent payable hereunder shall be adjusted so that the Lessee shall be
required to pay for the remainder of the Lease Term only that portion of Rent
as the value of the part remaining. The rental adjustment resulting will be
computed at the same Rental rate for the remaining part not taken; however,
Lessor shall have the option to terminate this Lease as of the date when
title to the part so taken vests in the condemnor or purchaser. If all of
the Premises, or such part thereof be taken so that there does not remain a
portion susceptible for occupation hereunder, this Lease shall thereupon
terminate. If a part or all of the Premises be taken, all compensation
awarded upon such taking shall be payable to the Lessor. Lessee may file a
separate claim and be entitled to any award granted to Lessee
22. EFFECTS OF CONVEYANCE: The term "Lessor" as used in this Lease, means only
the owner for the time being of the land and building constituting the Premises,
so that, in the event of any sale of said land or building, or in the event of a
Lease of said building, Lessor shall be and hereby is entirely freed and
relieved of all covenants and obligations of Lessor hereunder, and it
10
shall be deemed and construed, without further agreement between the parties
and the purchaser of any such sale, or the Lessor of the building, that the
purchaser or lessor of the building has assumed and agreed to carry out any
and all covenants and obligations of the Lessor hereunder. If any security
is given by Lessee to secure the faithful performance of all or any of the
covenants of this Lease on the part of Lessee, Lessor may transfer and
deliver the security, as such, to the purchaser at any such sale of the
building, and thereupon the Lessor shall be discharged from any further
liability.
23. SUBORDINATION: This Lease, in the event Lessor notifies Lessee in
writing, shall be subordinate to any ground lease, deed of trust, or other
hypothecation for security now or hereafter placed upon the real property at
which the Premises are a part and to any and all advances made on the
security thereof and to renewals, modifications, replacements and extensions
thereof. Lessee agrees to promptly execute any documents which may be
required to effectuate such subordination. Notwithstanding such
subordination, if Lessee is not in default and so long as Lessee shall pay
the Rent and observe and perform all of the provisions and covenants required
under this Lease, Lessee's right to quiet possession of the Premises shall
not be disturbed or effected by any subordination.
24. WAIVER: The waiver by Lessor of any breach of any term, covenant or
condition, herein contained shall not be construed to be a waiver of such
term, covenant or condition or any subsequent breach of the same or any other
term, covenant or condition therein contained. The subsequent acceptance of
Rent hereunder by Lessor shall not be deemed to be a waiver of Lessee's
breach of any term, covenant, or condition of the Lease.
25. HOLDING OVER: Any holding over after the end of the Lease Term requires
Lessor's written approval prior to the end of the Lease Term, which,
notwithstanding any other provisions of this Lease, Lessor may withhold and
shall be construed to be a tenancy at sufferance from month to month. Lessee
shall pay to Lessor monthly base rent equal to one and one-half (1.5) times
the monthly base rent installment due in the last month of the Lease Term and
all other additional rent and all other terms and conditions of the Lease
shall apply, so far as applicable. Holding over by Lessee without written
approval of Lessor shall subject Lessee to the liabilities and obligations
provided for in this Lease and by law, including, but not limited to those in
Section 2.1 of this Lease. Lessee shall indemnify and hold Lessor harmless
against any loss or liability resulting from any delay caused by Lessee in
surrendering the Premises, including without limitation, any claims made or
penalties incurred by any succeeding lessee or by Lessor. No holding over
shall be deemed or construed to exercise any option to extend or renew this
Lease in lieu of full and timely exercise of any such option as required
hereunder.
26. SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained
shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of all of the
parties hereto; and all of the parties hereto shall be jointly and severally
liable hereunder.
27. ESTOPPEL CERTIFICATES: Lessee shall at any time during the Lease Term,
upon not less than ten (10) days prior written notice from Lessor, execute
and deliver to Lessor a statement in writing certifying that, this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification) and the dates to which the Rent and other charges have
been paid in advance, if any, and acknowledging that there are not, to
Lessee's knowledge, any uncured defaults on the part of Lessor hereunder or
specifying such defaults if they are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Lessee's failure to deliver such a statement within such time shall
be conclusive upon the Lessee that (a) this Lease is in full force and
effect, without modification except as may be represented by Lessor; (b)
there are no uncured defaults in Lessor's performance.
28. TIME: Time is of the essence of the Lease.
29. CAPTIONS: The headings on titles to the paragraphs of this Lease are not
a part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof. This instrument contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in writing signed
by all of the parties hereto or their respective successors in interest.
30. PARTY NAMES: Landlord and Tenant may be used in various places in this Lease
as a substitute for Lessor and Lessee respectively.
11
31. EARTHQUAKE INSURANCE: As a condition of Lessor agreeing to waive the
requirement for earthquake insurance, Lessee agrees that it shall pay, as
additional Rent, which shall be included in the monthly CAC, an amount not to
exceed Nineteen Thousand Four Hundred Seventy Dollars ($19,470) per year for
earthquake insurance if Lessor desires to obtain some form of earthquake
insurance in the future, if and when available, on terms acceptable to Lessor.
32. HABITUAL DEFAULT: Notwithstanding anything to the contrary contained in
Section 14 herein, Lessor and Lessee agree that if Lessee shall have
defaulted in the payment of Rent for three or more times during any twelve
month period during the Lease Term, then such conduct shall, at the option of
the Lessor, represent a separate event of default which cannot be cured by
Lessee. Lessee acknowledges that the purpose of this provision is to prevent
repetitive defaults by the Lessee under the Lease, which constitute a
hardship to the Lessor and deprive the Lessor of the timely performance by
the Lessee hereunder.
33. HAZARDOUS MATERIALS
33.1 DEFINITIONS: As used herein, the following terms shall have the following
meaning:
a. The term "Hazardous Materials" shall mean (i) polychlorinated biphenyls;
(ii) radioactive materials and (iii) any chemical, material or substance
now or hereafter defined as or included in the definitions of "hazardous
substance" "hazardous water", "hazardous material", "extremely hazardous
waste", "restricted hazardous waste" under Section 25115, 25117 or 15122.7,
or listed pursuant to Section 25140 of the California Health and Safety
Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined
as "hazardous substance" under Section 25316 of the California Health and
Safety Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous
Substances Account Act), (iii) defined as "hazardous material", "hazardous
substance", or "hazardous waste" under Section 25501 of the California
Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials
Release, Response, Plans and Inventory), (iv) defined as a "hazardous
substance" under Section 25181 of the California Health and Safety Code,
Division 20l, Chapter 6.7 (Underground Storage of Hazardous Substances),
(v) petroleum, (vi) asbestos, (vii) listed under Article 9 or defined as
"hazardous" or "extremely hazardous" pursuant to Article II of Title 22 of
the California Administrative Code, Division 4, Chapter 20, (viii) defined
as "hazardous substance" pursuant to Section 311 of the Federal Water
Pollution Control Act, 33 U.S.C. 1251 et seq. or listed pursuant to Section
1004 of the Federal Water Pollution Control Act (33 U.S.C. 1317), (ix)
defined as a "hazardous waste", pursuant to Section 1004 of the Federal
Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq., (x) defined
as "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Responsibility Compensations, and Liability Act, 42 U.S.C.
9601 et seq., or (xi) regulated under the Toxic Substances Control Act, 156
U.S.C. 2601 et seq.
b. The term "Hazardous Materials Laws" shall mean any local, state and
federal laws, rules, regulations, or ordinances relating to the use,
generation, transportation, analysis, manufacture, installation, release,
discharge, storage or disposal of Hazardous Material.
c. The term "Lessor's Agents" as used herein shall mean Lessor's agents,
representatives, employees, contractors, subcontractors, directors,
officers and partners.
d. The term "Lessee's Agents" as used herein shall mean Lessee's agents,
representatives, employees, contractors, subcontractors, directors,
officers, partners, invitees or any other person in or about the Premises.
33.2 LESSEE'S RIGHT TO INVESTIGATE: Lessee shall be entitled to cause such
inspection, soils and ground water tests, and other evaluations to be made of
the Premises as Lessee deems necessary regarding (i) the presence and use of
Hazardous Materials in or about the Premises, and (ii) the potential for
exposure to Lessee's employees and other persons to any Hazardous Materials
used and stored by previous occupants in or about the Premises. Lessee shall
provide Lessor with copies of all inspections, tests and evaluations. Lessee
shall indemnify, defend and hold Lessor harmless from any cost, claim or
expense arising from such entry by Lessee or from the performance of any such
investigation by such Lessee.
33.3 LESSOR'S REPRESENTATIONS: Lessor hereby represents and warrants to the
best of Lessor's knowledge that the Premises are, as of the date of this
Lease, in compliance with all Hazardous Material Laws.
12
33.4 LESSEE'S OBLIGATION TO INDEMNIFY: Lessee, at its sole cost and expense,
shall indemnify, defend, protect and hold Lessor and Lessor's Agents harmless
from and against any and all cost or expenses, including those described
under subparagraphs i, ii and iii herein below set forth, arising from or
caused in whole or in part, directly or indirectly by:
a. Lessee's or Lessee's Agents' use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation of Hazardous
Material to, in, on, under, about or from the Premises; or
b. Lessee's or Lessee's Agents failure to comply with Hazardous Material
laws; or
c. Any release of Hazardous Material to, in, on, under, about, from or onto
the Premises caused by Lessee or Lessee's Agents or occurring during the
Lease Term, except ground water contamination from other parcels where the
source is from off the Premises not arising from or caused by Lessee or
Lessee's Agents.
The cost and expenses indemnified against include, but are not limited to the
following:
i. Any and all claims, actions, suits, proceedings, losses, damages,
liabilities, deficiencies, forfeitures, penalties, fines, punitive damages,
cost or expenses;
ii. Any claim, action, suit or proceeding for personal injury (including
sickness, disease, or death), tangible or intangible property damage,
compensation for lost wages, business income, profits or other economic
loss, damage to the natural resources of the environment, nuisance,
pollution, contamination, leaks, spills, release or other adverse effects
on the environment;
iii. The cost of any repair, clean-up, treatment or detoxification of the
Premises necessary to bring the Premises into compliance with all Hazardous
Material Laws, including the preparation and implementation of any closure,
disposal, remedial action, or other actions with regard to the Premises,
and expenses (including, without limitation, reasonable attorney's fees and
consultants fees, investigation and laboratory fees, court cost and
litigation expenses).
33.5 LESSEE'S OBLIGATION TO REMEDIATE CONTAMINATION: Lessee shall, at its
sole cost and expense, promptly take any and all action necessary to
remediate contamination of the Premises by Hazardous Materials during the
Lease Term.
33.6 OBLIGATION TO NOTIFY: Lessor and Lessee shall each give written notice
to the other as soon as reasonably practical of (i) any communication
received from any governmental authority concerning Hazardous Material which
related to the Premises and (ii) any contamination of the Premises by
Hazardous Materials which constitutes a violation of any Hazardous Material
Laws.
33.7 SURVIVAL: The obligations of Lessee under this Section 33 shall survive the
Lease Term or earlier termination of this Lease.
33.8 CERTIFICATION AND CLOSURE: On or before the end of the Lease Term or
earlier termination of this Lease, Lessee shall deliver to Lessor a
certification executed by Lessee stating that, to the best of Lessee's
knowledge, there exists no violation of Hazardous Material Laws resulting
from Lessee's obligation in Paragraph 33. If pursuant to local ordinance,
state or federal law, Lessee is required, at the expiration of the Lease
Term, to submit a closure plan for the Premises to a local, state or federal
agency, then Lessee shall furnish to Lessor a copy of such plan.
33.9 PRIOR HAZARDOUS MATERIALS: Lessee shall have no obligation to clean up
or to hold Lessor harmless with respect to, any Hazardous Material or wastes
discovered on the Premises which were not introduced into, in, on, about,
from or under the Premises during the Lease Term or ground water
contamination from other parcels where the source is from off the Premises
not arising from or caused by Lessee or Lessee's Agents.
34. BROKERS: Lessor and Lessee represent that they have not utilized or
contacted a real estate broker or finder with respect to this Lease other than
Colliers Xxxxxxx ("CP") and Lessee agrees to indemnify and hold Lessor harmless
against any claim, cost, liability or cause of action asserted by any broker or
finder claiming through Lessee other than CP. Lessor shall at its sole cost and
expense pay the brokerage commission per Lessor's standard commission schedule
to CP in connection with this transaction. Lessor represents and warrants that
it has not utilized or contacted a real estate broker or finder with respect to
this Lease other than CP and Lessor agrees to indemnify and hold Lessee harmless
against any claim, cost, liability or cause of action asserted by any broker or
finder claiming through Lessor.
35. OPTION TO EXTEND
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A. OPTION: Lessor hereby grants to Lessee one (1) option to extend the Lease
Term, with the extended term to be for a period of five (5) years, on the
following terms and conditions:
(i) Lessee shall give Lessor written notice of its exercise of its option
to extend no earlier than twenty-four (24) calendar months, nor later than
six (6) calendar months before the Lease Term would end but for said
exercise. Time is of the essence.
(ii) Lessee may not extend the Lease Term pursuant to any option granted by
this section 35 if Lessee is in default as of the date of the exercise of
its option. If Lessee has committed a default by Lessee as defined in
Section 14 or 32 that has not been cured or waived by Lessor in writing by
the date that any extended term is to commence, then Lessor may elect not
to allow the Lease Term to be extended, notwithstanding any notice given by
Lessee of an exercise of this option to extend.
(iii) All terms and conditions of this Lease shall apply during the
extended term, except that the base rent and rental increases for each
extended term shall be determined as provided in Section 35 (B) below
(iv) Once Lessee delivers a notice of exercise of its options to extend the
Lease Term, Lessee may not withdraw such exercise and subject to the
provisions of this Section 35, such notice shall operate to extend the
Lease Term. Upon any extension of the Lease Term pursuant to this Section
35, the term "Lease Term" as used in this Lease shall thereafter include
the then extended term.
(v) The option rights of Amati Communications Corporation granted under
this Section 35 are granted for Amati Communications Corporation's personal
benefit and may not be assigned or transferred by Amati Communications
Corporation or exercised if Amati Communications Corporation is not
occupying the Premises at the time of exercise.
B. EXTENDED TERM RENT - OPTION PERIOD: The monthly Rent for the Premises
during the extended term shall equal the fair market monthly Rent for the
Premises as of the commencement date of the extended term, but in no case,
less than the Rent during the last month of the prior Lease term. Promptly
upon Lessee's exercise of the option to extend, Lessee and Lessor shall meet
and attempt to agree on the fair market monthly Rent for the Premises as of
the commencement date of the extended term. In the event the parties fail to
agree upon the amount of the monthly Rent for the extended term prior to
commencement thereof, the monthly Rent for the extended term shall be
determined by appraisal in the manner hereafter set forth; provided, however,
that in no event shall the monthly Rent for the extended term be less than in
the immediate preceding period. Annual base rent increases during the
extended term shall be three percent (3%) per year. In the event it becomes
necessary under this paragraph to determine the fair market monthly Rent of
the Premises by appraisal, Lessor and Lessee each shall appoint a real estate
appraiser who shall be a member of the American Institute of Real Estate
Appraiser ("AIREA") and such appraisers shall each determine the fair market
monthly Rent for the Premises taking into account the value of the Premises
and the amenities provided by the outside areas, the common areas, and the
Building, and prevailing comparable Rentals in the area. Such appraisers
shall, within twenty (20) business days after their appointment, complete
their appraisals and submit their appraisal reports to Lessor and Lessee. If
the fair market monthly Rent of the Premises established in the two (2)
appraisals varies by five percent (5%) or less of the higher Rent, the
average of the two shall be controlling. If said fair market monthly Rent
varies by more than five percent (5%) of the higher Rental, said appraisers,
within ten (10) days after submission of the last appraisal, shall appoint a
third appraiser who shall be a member of the AIREA and who shall also be
experienced in the appraisal of Rent values and adjustment practices for
commercial properties in the vicinity of the Premises. Such third appraiser
shall, within twenty (20) business days after his appointment, determine by
appraisal the fair market monthly Rent of the Premises taking into account
the same factors referred to above, and submit his appraisal report to Lessor
and Lessee. The fair market monthly Rent determined by the third appraiser
for the Premises shall be controlling, unless it is less than that set forth
in the lower appraisal previously obtained, in which case the value set forth
in said lower appraisal shall be controlling, or unless it is greater than
that set forth in the higher appraisal previously obtained in which case the
Rent set for in said higher appraisal shall be controlling. If either Lessor
or Lessee fails to appoint an appraiser, or if an appraiser appointed by
either of them fails, after his appointment to submit his appraisal within
the required period in accordance with the foregoing, the appraisal submitted
by the appraiser properly appointed and timely submitting his appraisal shall
be controlling. If the two appraisers appointed by Lessor and Lessee are
unable to agree upon a third appraiser within the required period in
accordance
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with the foregoing, application shall be made within twenty (20) days
thereafter by either Lessor or Lessee to AIREA, which shall appoint a member
of said institute willing to serve as appraiser. The cost of all appraisals
under this subparagraph shall be borne equally be Lessor and Lessee.
36. APPROVALS: Whenever in this Lease the Lessor's or Lessee's consent is
required, such consent shall not be unreasonably or arbitrarily withheld or
delayed. In the event that the Lessor or Lessee does not respond to a
request for any consents which may be required of it in this Lease within ten
business days of the request of such consent in writing by the Lessee or
Lessor, such consent shall be deemed to have been given by the Lessor or
Lessee.
37. AUTHORITY: Each party executing this Lease represents and warrants that
he or she is duly authorized to execute and deliver the Lease. If executed
on behalf of a corporation, that the Lease is executed in accordance with the
by-laws of said corporation (or a partnership that the Lease is executed in
accordance with the partnership agreement of such partnership), that no other
party's approval or consent to such execution and delivery is required, and
that the Lease is binding upon said individual, corporation (or partnership)
as the case may be in accordance with its terms.
38. INDEMNIFICATION OF LESSOR: Except to the extent caused by the sole
negligence or willful misconduct of Lessor or Lessor's Agents, Lessee shall
defend, indemnify and hold Lessor harmless from and against any and all
obligations, losses, costs, expenses, claims, demands, attorney's fees,
investigation costs or liabilities on account of, or arising out of the use,
condition or occupancy of the Premises or any act or omission to act of
Lessee or Lessee's Agents or any occurrence in, upon, about or at the
Premises, including, without limitation, any of the foregoing provisions
arising out of the use, generation, manufacture, installation, release,
discharge, storage, or disposal of Hazardous Materials by Lessee or Lessee's
Agents. It is understood that Lessee is and shall be in control and
possession of the Premises and that Lessor shall in no event be responsible
or liable for any injury or damage or injury to any person whatsoever,
happening on, in, about, or in connection with the Premises, or for any
injury or damage to the Premises or any part thereof. This Lease is entered
into on the express condition that Lessor shall not be liable for, or suffer
loss by reason of injury to person or property, from whatever cause, which in
any way may be connected with the use, condition or occupancy of the Premises
or personal property located herein. The provisions of this Lease permitting
Lessor to enter and inspect the Premises are for the purpose of enabling
Lessor to become informed as to whether Lessee is complying with the terms of
this Lease and Lessor shall be under no duty to enter, inspect or to perform
any of Lessee's covenants set forth in this Lease. Lessee shall further
indemnify, defend and hold harmless Lessor from and against any and all
claims arising from any breach or default in the performance of any
obligation to Lessee's part to be performed under the terms of this Lease.
The provisions of Section 38 shall survive the Lease Term or earlier
termination of this Lease with respect to any damage, injury or death
occurring during the Lease Term.
39. LESSOR'S LIABILITY: If Lessee should recover a money judgment against
Lessor arising in connection with this Lease, the judgment shall be satisfied
only out of the Lessor's interest in the Premises and neither Lessor or any
of its partners shall be liable personally for any deficiency.
40. MISCELLANEOUS PROVISIONS: All rights and remedies hereunder are
cumulative and not alternative to the extent permitted by law and are in
addition to all other rights or remedies in law and in equity.
41. CHOICE OF LAW: This lease shall be construed and enforced in accordance
with the substantive laws of the State of California. The language of all
parts of this lease shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either Lessor or Lessee.
42. ENTIRE AGREEMENT: This Lease, including the attached exhibits, is the
entire agreement between the parties, and there are no agreements or
representations between the parties except as expressed herein. Except as
otherwise provided for herein, no subsequent change or addition to this Lease
shall be binding unless in writing and signed by the parties hereto.
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IN WITNESS WHEREOF, Lessor and Lessee have executed these presents, the day and
year first above written.
LESSOR LESSEE
XXXX & XXXX DEVELOPERS AMATI COMMUNICATIONS CORPORATION
By:_____________________________ By:_________________________________
signature of authorized representative signature of authorized representative
________________________________ ____________________________________
printed name printed name
________________________________ ____________________________________
title title
________________________________ ____________________________________
date date
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Exhibit E
Lessee Approval Deadlines
Lease signed 03/15/96
Approval of site plan 03/15/96
Approval of building elevation 03/15/96
Approval of restroom, stairs and underground plumbing 03/15/96
Approval of preliminary floor plan, single line 03/15/96
Approval of final shell plans 03/30/96
Approval of interior plans and specifications 04/15/96
Final selection of all material and interior finishes for
construction such as carpet, ceramic tile, paint and any other
lessee selected materials & finishes 05/15/96
Lessee shall not unreasonably withhold approval of final shell or interior
plans if they conform in general to the preliminary site plan, preliminary
elevation, and floor plans.
The Commencement Date shall be extended one day for each day Lessee does not
meet each deadline set forth on this Exhibit E.
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