LEASE
Between
XXXXX X. XXXXXXX AND XXXXX X. XXXXXXX, TRUSTEES
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and
EIP MICROWAVE, INC.
-------------------
LEASE
This Lease is made this 6th day of AUGUST 1998, between XXXXX X. AND
XXXXX X. XXXXXXX. TRUSTEES ("LANDLORD"), AND EIP MICROWAVE, INC. ("TENANT"),
who agree as follows:
1. RECITALS: This Lease is made with reference to the following facts and
objectives:
A. LANDLORD is the Owner of the Premises commonly known as 000
Xxxxxxxxxxx Xx., Xxx Xxxx, Xxxxxxxxxx which consist generally of a
multi-tenant building.
B. TENANT is willing to lease the Premises from LANDLORD pursuant
to the provisions stated in this Lease.
C. TENANT wishes to lease the Premises for purposes of operating
assembly, testing, distribution of electronic equipment and research and
development.
D. TENANT has examined the Premises and is fully informed of
their condition.
2. PREMISES: LANDLORD leases to TENANT and TENANT leases from LANDLORD the
real property located in the City of XXX XXXX, Xxxxxx xx XXXXX XXXXX, Xxxxx
xx Xxxxxxxxxx, described as 000 Xxxxxxxxxxx Xx., Xxx Xxxx, Xxxxxxxxxx
("Premises").
3. TERM: The term shall commence October 1, 1998, and shall expire
September 30, 2001.
4. DELIVERY OF POSSESSION: If LANDLORD is unable to deliver possession of
the Premises by the date specified for the commencement of the term, LANDLORD
shall not be liable for any damage caused for failing to deliver possession,
and this Lease shall not be void or voidable. TENANT shall not be liable for
Rent until LANDLORD delivers possession of the Premises to TENANT, but the
term shall not be extended by the delay. If LANDLORD does not deliver
possession of the Premises to TENANT within twelve (12) months of the date of
execution of this Lease, either LANDLORD or TENANT can elect to terminate
this Lease by giving notice to the other at any time before the date LANDLORD
delivers possession of the Premises to TENANT.
5. ACCEPTANCE OF PREMISES: TENANT'S taking possession of the Premises on
commencement of the term shall constitute TENANT'S acknowledgment that the
Premises are in good condition.
6. RENT:
A. BASE RENT: TENANT shall pay to LANDLORD as monthly Rent ("Base
Rent"), without deduction, setoff, prior notice, or demand, the sum of PER
SCHEDULE A Dollars ($______), per month in advance of the first (1st) day of
each month, commencing on the date the term commences, and continuing during
the term. Monthly Rent for the first month or portion of it shall be paid on
the day the term commences. Monthly Rent for any partial month shall be
prorated at the rate of one-thirtieth (1/30th) of the monthly Rent per day.
Monthly Rent shall be adjusted according to the schedule attached hereto as
Schedule A. Base Rent and all other sums payable to LANDLORD hereunder shall
be herein referred to as Rent.
All Rent shall he paid to LANDLORD at the address to which notices to
LANDLORD are given.
B. LATE CHARGES: LANDLORD hereby acknowledges that late payment by
TENANT of Rent will cause LANDLORD 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 upon LANDLORD by any Lender.
Accordingly, if any Rent shall not be received by LANDLORD on or before the
date such amount shall be due, then, without any requirement for notice to
TENANT, TENANT shall pay to LANDLORD a late charge equal to six percent (6%)
of each such overdue amount. If payment is not made within five (5) days
after the payment is due, the amount of the late charge shall increase to ten
percent (10%) of such overdue amount. The parties hereby agree that such late
charge represents a fair and reasonable estimate of the costs LANDLORD will
incur by reason of such late payment. Acceptance of such late charge by
LANDLORD shall in no event constitute a waiver of TENANT'S Default or Breach
with respect to such overdue amount, nor prevent the exercise of any of the
other rights and remedies granted hereunder. In the event that a late charge
becomes payable hereunder, whether or not collected, for three (3)
installments of Base Rent at any time during the term, then notwithstanding
any provision of this Lease to the contrary, Base Rent shall, at LANDLORD'S
option, become due and payable quarterly in advance.
7. COMMON AREAS - OPERATING COSTS:
TENANT shall pay to LANDLORD at the times set forth in this paragraph
TENANT'S Share (as defined in Paragraph 16) of LANDLORD's operating costs for
the building and outside areas in which the Premises are located; in monthly
installments payable with the Base Rent, as established by LANDLORD in
accordance with Paragraph 16 hereof.
LANDLORD'S operating costs include, without limitation, all costs of any
kind paid or incurred by LANDLORD in operating, cleaning, equipping,
protecting, lighting, repairing. replacing and maintaining the areas of the
building not leased or available for lease to tenants, common areas,
landscaping, parking areas and walkways. The costs shall include, without
limitation. utilities, supplies, janitorial services, employees' wages,
social security and unemployment insurance contributions, union benefits,
rubbish removal, maintenance and replacement of landscaping. and premiums for
commercial general liability insurance and all risk property insurance. These
costs shall include a reasonable reserve for repair and replacement of
equipment used in the maintenance and operation of the building and all costs
except those properly charged as a capital expense and depreciation of the
original cost of construction. TENANT'S Share, of such expense, shall be
considered to he a TENANT cost for purposes of Paragraph 16 hereof.
LANDLORD shall keep full, accurate, and separate books of account
covering LANDLORD'S operating costs, and the statement to TENANT shall
accurately reflect the total operating costs and TENANT'S share. The books of
account shall be retained by LANDLORD for a period of at least ten (10)
months after the expiration of each calendar year. TENANT shall have the
right at all reasonable times during the term to inspect the books of account.
8. SECURITY DEPOSIT: On execution of this Lease, TENANT shall deposit with
LANDLORD FOURTEEN THOUSAND FIVE HUNDRED FIFTY-THREE Dollars ($14,553.00) as a
security deposit for the performance by TENANT of the provisions of this
Lease. If TENANT is in default, LANDLORD can use the security deposit, or any
portion of it, to cure the default or to compensate LANDLORD for all damage
sustained by LANDLORD resulting from TENANT'S default. TENANT shall
immediately on demand pay to LANDLORD a sum equal to the portion of the
security deposit expended or applied by LANDLORD as provided in this
paragraph so as to maintain the security deposit in the sum initially
deposited with LANDLORD. If TENANT is not in default at the expiration or
termination of this Lease, LANDLORD shall return the security deposit to
TENANT. LANDLORD'S obligation with respect to the security deposit are those
of a debtor and not a trustee. LANDLORD can maintain the security deposit
separate and apart from LANDLORD'S general funds or can commingle the
security deposit with LANDLORD'S general and other funds. LANDLORD shall not
be required to pay TENANT interest on the security deposit.
9. TAXES; ASSESSMENTS:
A. PERSONAL PROPERTY TAXES: TENANT shall pay before delinquency all
taxes, assessments, license fees, and other charges ("taxes") that are levied
and assessed against TENANT'S personal property installed or located in or on
the Premises, and that become payable during the term. On demand by LANDLORD,
TENANT shall furnish LANDLORD with satisfactory evidence of these payments.
B. REAL PROPERTY TAXES: TENANT shall pay to LANDLORD Tenant's Share
of the amount, if any. by which Real Property Taxes applicable to the
Premises for any fiscal tax year increase over the Real Property Taxes for
The fiscal tax year during which the term commences. As used herein, the term
"Real Property Taxes" shall include any form of assessment, real estate,
general, special, ordinary or extraordinary or rental levy or tax (other than
inheritance, personal income or estate taxes), improvement bond and/or
license fee imposed upon or levied against any legal or equitable interest of
LANDLORD in the Premises, LANDLORD'S right to other income therefrom and/or
LANDLORD'S business of leasing, by any authority having the direct or
indirect power to tax. Real Property Taxes shall also include any charge or
increase imposed by reason of events occurring during the term of this Lease,
including, but not limited to, a change in ownership of the Premises.
TENANT'S said share of such real property taxes shall be considered to
be a TENANT cost for purposes of Paragraph 16 hereof.
If any general or special assessment is levied and assessed against the
building, other improvements, or land of which the Premises are a part,
LANDLORD can elect to either pay the assessment in full or allow the
assessment to go to bond. If LANDLORD pays the assessment in full, TENANT
shall pay to LANDLORD each time a 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.
10. USE: TENANT shall use the Premises for assembly, testing, distributing
of electronic equipment and research and development, and for no other use
without LANDLORD'S prior written consent.
A. LIMITATIONS ON USE: TENANT'S use of the Premises as provided in
this Lease shall be in accordance with the following:
(1) CANCELLATION OF INSURANCE: INCREASE IN INSURANCE RATES:
TENANT shall not do, bring, or keep anything in or about the Premises that
will cause a cancellation of any insurance covering the building in which the
Premises are located.
If the rate of any insurance carried by LANDLORD is increased as a
result of TENANT'S use, TENANT shall pay to LANDLORD within ten (10) days
before the date LANDLORD is obligated to pay a premium on the insurance, or
within ten (10) days after LANDLORD delivers to TENANT a certified statement
from LANDLORD'S insurance carrier stating that the rate increase was caused
solely by an activity of TENANT on the Premises as
permitted in this Lease, whichever date is later, a sum equal to the
difference between the original premium and the increased premium.
(2) COMPLIANCE WITH LAWS: TENANT shall comply with all laws,
covenants or restrictions of record, building codes, regulations and
ordinances (collectively "laws") concerning the Premises or TENANT'S use of
the Premises, including, without limitation, the obligation at TENANT'S cost
to alter, maintain, or restore the Premises in compliance and conformity with
all laws relating to the condition, use, or occupancy of the Premises during
the term. If any law is changed after the commencement date of this Lease so
as to require during the term the construction of an addition and/or an
alteration of the building, or the reinforcement or other physical
modification of the Building ("Capital Expenditure"), LANDLORD and TENANT
shall allocate the cost of such work as follows:
(a) Subject to subparagraph (c) below, if such Capital
Expenditures are required as a result of the specific and unique use of the
Premises by Tenant as compared with uses by tenants in general, TENANT shall
be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last two (2) years of this Lease
and the cost thereof exceeds six (6) months' Base Rent, TENANT may instead
terminate this Lease unless LANDLORD notifies TENANT, in writing, within ten
(10).days after receipt of TENANT'S termination notice that LANDLORD has
elected to pay the difference between the actual cost thereof and the amount
equal to six (6) months' Base Rent. If TENANT elects termination, TENANT
shall immediately cease the use of the Premises which requires such Capital
Expenditure and deliver to LANDLORD written notice specifying a termination
date at least ninety (90) days thereafter. Such termination date shall,
however, in no event be earlier than the last day that TENANT could legally
utilize the Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the
specific and unique use of the Premises by TENANT (such as, governmentally
mandated seismic modifications), then Landlord shall pay the cost thereof and
such cost shall be prorated between the parties and TENANT shall only be
obligated to pay each month during the remainder of the term on the date on
which Base Rent is due an amount equal to the product of multiplying the cost
of such replacement by a fraction, the numerator of which is one (1) and the
denominator of which is the useful life as reasonably determined by LANDLORD
(including interest at the rate often percent (10%) per annum, with TENANT
reserving the right to prepay the obligation at any time); provided, however,
that if such Capital Expenditure is required during the last two years of
this Lease or if LANDLORD reasonably determines that it is not economically
feasible to pay its share thereof, LANDLORD shall have the option to
terminate this Lease upon ninety (90) days prior written notice to TENANT
unless TENANT notifies LANDLORD, in writing, within ten (10) days after
receipt of LANDLORD'S termination notice that TENANT will pay for such
Capital Expenditure. If LANDLORD does not elect to terminate, and fails to
tender its share of any such Capital Expenditure, TENANT may advance such
funds and deduct same, with interest, from Rent until LANDLORD'S share of
such costs have been fully paid. If TENANT is unable to finance TENANT'S
share, or if the balance of the Rent due and payable for the remainder of
this Lease is not sufficient to fully reimburse TENANT on an offset basis,
TENANT shall have the right to terminate this Lease upon thirty (30) days
written notice to Lessor.
(c) Notwithstanding the above, the provisions concerning
Capital Expenditures are intended to apply only to non-voluntary, unexpected,
and new Applicable Requirements. If the Capital Expenditures are instead
triggered by TENANT as a result of an actual or proposed change in use,
change in intensity of use, or modification to the Premises then, and in that
event, TENANT shall be fully responsible for the cost thereof, and TENANT
shall not have any right to terminate this Lease.
(3) WASTE; NUISANCE: TENANT shall not use the Premises in any manner
that will constitute waste, nuisance, or unreasonable annoyance (including,
without limitation, the use of loudspeakers or sound or light apparatus that
can be heard or seen outside the Premises) to owners or occupants of adjacent
properties.
TENANT shall not use the Premises for sleeping, washing clothes,
cooking, or the preparation, manufacture or mixing of anything that might
emit any odor or objectionable noises or lights onto adjacent properties.
(4) OVERLOADING: TENANT shall not do anything on the Premises
that will overload, cause damage to, vibrate or shake the building in which
the Premises are located.
11. MAINTENANCE:
A. TENANT'S MAINTENANCE: Subject to the provisions of paragraphs
10.A(2) (Compliance With Laws), 11.C Landlord's Maintenance), 17
(Destruction) and 18 (Condemnation), TENANT at its cost shall maintain, in
good condition, all portions of the Premises (whether or not the portion of
the Premises requiring repairs, or the means of repairing the same, are
reasonably or readily accessible to TENANT, and whether or not the need for
such repairs occurs as a result of TENANT'S use, or any prior use, the
elements or the age of the Premises). TENANT shall also be responsible for
keeping the roof and roof drainage clean and
free of debris. TENANT'S obligations shall include restorations, replacements
or renewals when necessary to keep the Premises and all improvements thereon
or a part thereof in good order, condition and state of repair.
B. SERVICE CONTRACTS: TENANT shall, at TENANT'S sole expense, procure
and maintain contracts, with copies to LANDLORD, in customary form and
substance for, and with contractors specializing and experienced in the
maintenance of the following equipment and improvements: (i) HVAC equipment;
(ii) fire extinguishing systems, including fire alarm and/or smoke detection;
and (iii) any other equipment as reasonably required by LANDLORD.
C. LANDLORD'S MAINTENANCE: LANDLORD, at its cost, shall maintain, in
good condition, the surface and structural elements of the roof, foundations
and bearing wall. Except as herein provided, LANDLORD shall have no
obligation to maintain the Premises.
TENANT shall be liable for any damage to the building in which the
Premises are located resulting from the acts or omissions of TENANT or its
authorized representatives.
12. ALTERATIONS: TENANT shall not make any alterations to the Premises
without LANDLORD'S consent. All work with respect to allowed alterations
shall be performed by MAI Industries, Inc., or such other contractor as may
be designated by LANDLORD. With respect to allowed alterations. TENANT shall:
(i) prior to commencing work, acquire all applicable governmental permits,
copies of which, together with the plans therefor, shall be furnished
LANDLORD prior to commencing work; (ii) comply with all conditions of said
permits and perform all work in a good and workmanlike manner with good and
sufficient materials; (iii) upon completion, provide LANDLORD "as-built"
plans and specifications; and (iv) for work not performed by MAI Industries,
Inc., which costs an amount greater than Ten Thousand Dollars ($10,000.00),
provide a lien and completion bond in an amount equal to one hundred fifty
percent (150%) of the estimated cost of the work. Any alterations made shall
remain and be surrendered with the Premises on expiration or termination of
the term, except that LANDLORD can elect within thirty (30) days before
expiration of the term, or within thirty (30) days after termination of the
term, to require TENANT to remove any alterations that TENANT has made to the
Premises. If LANDLORD so elects, TENANT at its cost shall restore the
Premises to the condition designated by LANDLORD in its election, before the
last day of the term, or within thirty (30) days after notice of election is
given, whichever is later.
If TENANT makes any alterations to the Premises as provided in this
paragraph, the alterations shall not be commenced until twenty (20) days
after the LANDLORD has received notice from TENANT stating the date the
installation of the alterations is to commence so that LANDLORD can post and
record an appropriate Notice of Nonresponsibility.
13. MECHANICS' LIENS: TENANT shall pay all costs for construction done by
it or caused to be done by it on the Premises as permitted by this Lease.
TENANT shall keep the building, other improvements, and land of which the
Premises are a part free and clear of all mechanic's liens resulting from
construction done by or for TENANT.
TENANT shall have the right to contest the correctness or the validity
of any such lien if, immediately on demand by LANDLORD, TENANT procures and
records a lien release bond issued by a corporation authorized to issue
surety bonds in California in an amount equal to one and one-half (1 - 1/2)
times the amount of the claim of lien. The bond shall meet the requirements
of Civil Code Section 3143 and shall provide for the payment of any sum that
the claimant may recover on the claim (together with costs of suit, if it
recovers in the action).
14. UTILITIES AND SERVICES:
A. TENANT'S UTILITIES AND SERVICES: TENANT shall make all
arrangements for and pay for all utilities, telecommunication services, and
all other services furnished to or used by TENANT or by the Premises,
including, without limitation, gas, electricity, water, telecommunication
service and trash collections. TENANT shall also pay for any and all
connection charges and other maintenance and repair of any cabling or other
systems required to supply such utility service to the Premises. TENANT shall
have reasonable access to any wiring or cabling within the Premises. If the
wiring or cabling is in a portion of the building in which the Premises is a
part, but is not accessible from the Premises, TENANT shall notify LANDLORD
of the requirement of any such repairs so that reasonable arrangements can be
made for TENANT to effect any such needed repairs. TENANT agrees that
LANDLORD shall have no responsibility whatsoever for providing any utility
service or providing utility service lines, wiring or cable maintenance,
repair or replacement and that the responsibility for all utilities and all.
utility service lines, wiring or cabling shall be with TENANT. TENANT agrees
to indemnify and hold LANDLORD free and harmless from and against any and all
claims, liabilities or damages resulting to TENANT from the failure or
interruption of use of any utility services, or otherwise resulting to any
person or to any property as a result of TENANT'S repair, maintenance or
replacement, or failure thereof, of any utility system required to be
maintained hereunder.
15. INDEMNITY AND EXCULPATION: INSURANCE:
A. EXCULPATION OF LANDLORD: LANDLORD shall not be liable for injury
or damage to the person or goods, wares, merchandise or other property of
TENANT, TENANT'S
employees, contractors, invitees, customers, or any other person in or about
the Premises, whether such damage or injury is caused by or results from
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, fire sprinklers, wires, appliances,
plumbing, HVAC or lighting fixtures, or from any other cause, whether the
said injury or damage results from conditions arising upon the Premises or
upon other portions of the Building of which the Premises are a part, or from
other sources or places. LANDLORD shall not be liable for any damages arising
from any act or neglect of any other tenant of LANDLORD. Notwithstanding
LANDLORD'S negligence or breach of this Lease, LANDLORD shall under no
circumstances be liable for injury to TENANT'S business or for any loss of
income or profit therefrom.
B. INDEMNITY: TENANT shall indemnify, protect, defend and hold
harmless the Premises, LANDLORD and its agents, partners and lenders, from
and against any and all claims, loss of rents and/or damages, liens,
judgments, penalties, attorneys' and consultants' fees, expenses and/or
liabilities arising out of, involving, or in connection with the use and/or
occupancy of the Premises by TENANT. If any action or proceeding is brought
against LANDLORD by reason of any of the foregoing matters, TENANT shall upon
notice defend the same at TENANT'S expense by counsel reasonably satisfactory
to LANDLORD and LANDLORD shall cooperate with TENANT in such defense.
LANDLORD need not have first paid any such claim in order to be defended or
indemnified.
C. PUBLIC LIABILITY AND PROPERTY DAMAGE INSURANCE:
(1) CARRIED BY TENANT: TENANT shall obtain and keep in force a
Commercial General Liability Policy of Insurance, ISO form CGO001, or its
equivalent, protecting TENANT and LANDLORD against claims for bodily injury,
personal injury and property damage based upon or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than Two Million Dollars
($2,000,000.00) per occurrence with an "ADDITIONAL INSURED-MANAGERS OR
LESSORS OF PREMISES ENDORSEMENT", ISO form CG2011, or its equivalent, and
contain the "AMENDMENT OF THE POLLUTION EXCLUSION ENDORSEMENT", ISO form
CG0041, or its equivalent, for damage caused by heat, smoke or fumes from a
hostile fire. The Policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage for
liability assumed under this Lease as an "insured contract" for the
performance of TENANT'S indemnity obligations under this Lease. The limits of
said insurance shall not, however, limit the liability of TENANT nor relieve
TENANT of any obligation hereunder. All insurance carried by TENANT shall be
primary to and not contributory with any similar insurance carried by
LANDLORD, whose insurance shall be considered excess insurance only.
(2) CARRIED BY LANDLORD: LANDLORD shall maintain liability
insurance as described in Paragraph 15.C.(1), in addition to, and not in lieu
of, the insurance required to be maintained by TENANT. TENANT shall not be
named as an additional insured therein.
D. TENANT'S FIRE INSURANCE: TENANT at its cost shall maintain on all
its personal property, TENANT'S improvements, and alterations, in, on, or
about the Premises, a property insurance on an all-risk policy form, with
vandalism and malicious mischief endorsements, to the extent of at least one
hundred percent (100%) of their full replacement value. The proceeds from any
such policy shall be used by TENANT for the replacement of personal property
or the restoration of TENANT'S improvements or alterations.
E. PLATE GLASS INSURANCE: TENANT at its cost shall maintain full
coverage plate glass insurance on the Premises.
F. BOILER AND MACHINERY INSURANCE: TENANT at its cost shall maintain
boiler and machinery insurance on all boilers, air-conditioning equipment,
and other pressure vessels and systems located in, on or about the Premises.
If any of these items and the damage that may be caused by them are not
covered by the standard fire and extended coverage insurance referred to in
this Paragraph, the boiler and machinery insurance shall have limits of not
less than Five Hundred Thousand Dollars ($500,000.00) per occurrence.
The insurance policy shall be issued in the names of LANDLORD, TENANT,
and LANDLORD'S lender, as their interests appear. The insurance policy shall
provide that any proceeds shall be made payable to LANDLORD as provided in
this Paragraph.
In case this Lease is terminated, the insurance policy, all rights under
it, and the insurance proceeds shall be assigned to LANDLORD at LANDLORD'S
election.
G. FIRE INSURANCE: LANDLORD, as a TENANT cost, shall maintain on the
building and other improvements in which the Premises are located the
following policy or policies:
(1) fire and extended coverage insurance, with vandalism and
malicious mischief endorsements, and such other endorsements as LANDLORD
deems appropriate. The amount of such insurance shall be equal to the lull
replacement cost of the Premises, as the same shall exist from time to time,
or the amount required by lenders. TENANT'S alteration, trade
fixtures and personal property shall be insured by TENANT under Paragraph
15.D and not by LANDLORD. Such policy or policies shall insure against all
risks of direct physical loss or damage (including the perils of flood and/or
earthquake if required by a lender and/or generally maintained by owners of
similar buildings in the vicinity of the Premises), including coverage for
debris removal and the enforcement of any laws requiring the upgrading,
demolition, reconstruction or replacement of any portion of the Premises as
the result of a covered loss. The policy or policies shall also contain an
agreed valuation provision in lieu of any coinsurance claim, waiver of
subrogation and inflation guard protection.
(2) loss of Rent coverage insuring the loss of full Rent
(including TENANT costs) for one (1) year.
H. WAIVER OF SUBROGATION: The parties release each other, and their
respective authorized representatives, from any claims for damage to any
person or to the Premises and the building and other improvements in which
the Premises are located and to the fixtures, personal property, TENANT'S
improvements, and alterations of either LANDLORD or TENANT in or on the
Premises and the building and other improvements in which the Premises are
located that are caused by or result from risks insured against, under any
insurance policies carried by the parties and in force at the time of any
such damage.
Each party shall cause each insurance policy obtained by it to provide
that the insurance company waives all right of recovery by way of subrogation
against either party in connection with any damage covered by any policy.
Neither party shall be liable to the other for any damage caused by fire or
any of the risks insured against under any insurance policy required by this
Lease. If any insurance policy cannot be obtained with a waiver of
subrogation, or is obtainable only by the payment of an additional premium
charge above that charged by insurance companies issuing policies without
waiver of subrogation, the party undertaking to obtain the insurance shall
notify the other party of this fact. The other party shall have a period of
thirty (30) days after receiving the notice either to place the insurance
with a company that is reasonably satisfactory to the other party and that
will carry the insurance with a waiver of subrogation, or to agree to pay the
additional premium if such a policy is obtainable at additional cost. If the
insurance cannot be obtained or the party in whose favor a waiver of
subrogation is desired refuses to pay the additional premium charged, the
other party is relieved of the obligation to obtain a waiver of subrogation
rights with respect to the particular insurance involved.
I. OTHER INSURANCE MATTERS: All the insurance required under this
Lease shall:
(1) Be issued by insurance companies authorized to do business in
the State of California, with a financial rating of at least an A-VII status
as rated in the most recent edition of Best's Insurance Reports.
(2) Be issued as a primary policy.
(3) Contain an endorsement requiring thirty (30) days written
notice from the insurance company to both parties and LANDLORD'S lender for
or reduction of coverage, ten (10) days notice for cancellation for
non-payment of premium.
Each policy, or a certificate of the policy, together with evidence of
payment of premiums, shall be deposited with the other party at the
commencement of the term, and on renewal of the policy not less than ten (10)
days before expiration of the term of the policy.
16. TENANT'S SHARE OF TENANT COSTS: TENANT shall pay to LANDLORD an amount
estimated by LANDLORD to be TENANT'S Share of TENANT costs (as defined
herein), for the calendar year or other accounting period used by LANDLORD,
on the first day of each month, commencing on the date the term commences, or
on the first day of the month following the month the term commences if the
term commences on a day other than the first day of a month, as the case may
be, and continuing during the term. TENANT'S Share (TENANT's Share) of TENANT
costs shall be the ratio of the total TENANT costs (as defined herein) that
the total number of square feet in the Premises bears to the total number of
leasable square feet in the building or buildings located on the land of
which the Premises are a part. TENANT costs that cover a period which is in
any part not within the term of this Lease shall be prorated. TENANT costs
are those items designated as a TENANT cost herein.
LANDLORD shall furnish to TENANT a statement showing the total actual
TENANT costs, TENANT'S Share of TENANT costs for the accounting period, and
the payments made by TENANT with respect to each accounting period within
ninety (90) days after the end of each accounting period, covering the
accounting period just ended. Each statement shall be prepared, signed and
certified to be correct by LANDLORD, or by an officer of LANDLORD if LANDLORD
is a corporation.
If TENANT'S Share of actual TENANT costs for the accounting period
exceeds the payments made by TENANT, TENANT shall pay LANDLORD the deficiency
within thirty (30) days after receipt of the statement. If TENANT'S payments
made during the accounting period exceed TENANT'S Share of actual TENANT
costs, LANDLORD shall credit the excess to the next installment of TENANT's
costs.
17. DESTRUCTION:
A. DESTRUCTION DUE TO RISK COVERED BY INSURANCE: If, during the term,
the Premises or the building and other improvements in which the Premises are
located are totally or partially destroyed from a risk covered by the
insurance described in Paragraph 15, above, rendering the Premises totally or
partially inaccessible or unusable, LANDLORD shall restore the Premises or
the building and other improvements in which the Premises are located to
substantially the same condition as they were in immediately before
destruction, excepting LANDLORD shall have no obligation to restore TENANT'S
alterations additions or improvements. Such destruction shall not terminate
this Lease. If the existing laws do not permit the restoration, either party
can terminate this Lease immediately by giving notice to the other party.
If the cost of the restoration of the building exceeds the amount of
proceeds received from the insurance required under Paragraph 15, above,
LANDLORD can elect to terminate this Lease by giving notice to TENANT within
thirty (30) days after determining that the restoration cost will exceed the
insurance proceeds. In the case of destruction to the Premises only, whereby
the cost of the restoration of the Premises exceeds the amount of proceeds
received from the insurance required under Paragraph 15, above, and if
LANDLORD elects to terminate this Lease TENANT, within fifteen (15) days
after receiving LANDLORD'S notice to terminate, can elect to pay to LANDLORD,
at the time TENANT notified LANDLORD of its election, the difference between
the amount of insurance proceeds and the cost of restoration, in which case
LANDLORD shall restore the Premises, and TENANT shall diligently restore its
improvements, alterations and additions. LANDLORD shall give TENANT
satisfactory evidence that all sums contributed by TENANT as provided in this
paragraph have been expended by LANDLORD in paying the cost of restoration.
If LANDLORD elects to terminate this Lease and TENANT does not elect to
contribute toward the cost of restoration as provided in this paragraph, this
Lease shall terminate.
B. DESTRUCTION DUE TO RISK NOT COVERED BY INSURANCE: If, during the
term, the Premises or the building and other improvements in which the
Premises are located are totally or partially destroyed from a risk not
covered by the insurance described in Paragraph 15, rendering the Premises
totally or partially inaccessible or unusable, LANDLORD shall restore the
Premises or the building and other improvements in which the Premises are
located to substantially the same condition as they were in immediately
before destruction, excepting for TENANT'S improvements, alterations and
additions. Such destruction shall not terminate this Lease. If the existing
laws do not permit the restoration, either party can terminate this Lease
immediately by giving notice to the other party.
If the cost of restoration exceeds five percent (5%) of the then
replacement value of the Premises or the building and other improvements in
which the Premises are located that are destroyed, LANDLORD can elect to
terminate this Lease by giving notice to TENANT within thirty (30) days after
determining the restoration cost and replacement value.
In case of destruction to the improvements only, if LANDLORD elects to
terminate this Lease TENANT, within fifteen (15) days after receiving
LANDLORD'S notice to terminate, can elect to pay to LANDLORD, at the time
TENANT notifies LANDLORD of its election, the difference between five percent
(5%) of the then replacement value of the Premises and the actual cost of
restoration, in which case LANDLORD shall restore die Premises. LANDLORD
shall give TENANT satisfactory evidence that all sums contributed by TENANT
as provided in this paragraph have been expended by LANDLORD in paying the
cost of restoration.
If LANDLORD elects to terminate this Lease and TENANT does not elect to
perform the restoration or contribute toward the cost of restoration as
provided in this paragraph, this Lease shall terminate.
C. ABATEMENT OR REDUCTION OF RENT: In case of destruction there shall
be no abatement or reduction of Rent.
D. LOSS DURING LAST PART OF TERM: If destruction to the Premises
occurs during the last year of the term, LANDLORD can terminate this Lease by
giving notice to TENANT, not more than ninety (90) days after the destruction.
E. WAIVER OF CIVIL CODE SECTIONS: TENANT waives the provisions of
Civil Code Section 1932(2) and Civil Code Section 1933(4) with respect to any
destruction of the Premises.
18. CONDEMNATION:
A. DEFINITIONS:
(1) "Condemnation" means: (a) the exercise of any governmental
power, whether by legal proceedings or otherwise, by a condemnor; and (b) a
voluntary sale or transfer by LANDLORD to any condemnor, either under threat
of condemnation or while legal proceedings for condemnation are pending.
(2) "Date of taking" means the date the condemnor has the right to
possession of the property being condemned.
(3) "Award" means all compensation, sums, or anything of value
awarded, paid or received on a total or partial condemnation.
(4) "Condemnor" means any public or quasi-public authority, or
private corporation or individual, having the power of condemnation.
If, during the term or period of time between the execution of this
Lease and the date the term commences, there is any taking of all or any part
of the building, other improvements, or land of which the Premises are a part
or any interest in this Lease by condemnation, the rights and obligations of
the parties shall be determined pursuant to this Paragraph 18.
B. TOTAL TAKING: If the Premises are totally taken by condemnation,
this Lease shall terminate on the date of taking.
C. PARTIAL TAKING: If any portion of the Premises is taken by
condemnation this Lease shall remain in effect, except that TENANT can elect
to terminate this Lease if the remaining portion of the Premises is rendered
unsuitable for TENANT'S continued use of the Premises. If TENANT elects to
terminate this Lease, TENANT must exercise its right to terminate pursuant to
this paragraph by giving notice to LANDLORD within twenty (20) days after the
nature and the extent of the taking have been finally determined. If TENANT
elects to terminate this Lease as provided in this paragraph, TENANT also
shall notify LANDLORD of the date of termination, which date shall not be
earlier than (30) days nor later than sixty (60) days after TENANT has
notified LANDLORD of its election to terminate; except that this Lease shall
terminate on the date of taking if the date of taking falls on a date before
the date of termination as designated by TENANT. If TENANT does not terminate
this Lease within the twenty (20) day period, this Lease shall continue in
full force and effect, except that minimum monthly Rent shall be reduced
pursuant to paragraph 18(D).
D. EFFECT ON RENT: If any portion of the Premises is taken by
condemnation and this Lease remains in full force and effect, on the date of
taking the minimum monthly Rent shall be reduced by an amount that is in the
same ratio to minimum monthly Rent as the value of the area or the portion of
the Premises taken bears to the total value of the Premises immediately before
the date of taking.
E. AWARD-DISTRIBUTION: The award shall belong to and be paid to
LANDLORD, except that TENANT shall receive from the award a sum attributable to
TENANT'S improvements or alterations made to the Premises by TENANT in
accordance with this Lease, which TENANT'S improvements or alterations TENANT
has the right to remove from the Premises pursuant to the provisions of this
Lease but elects not to remove.
TENANT shall have the right to independently pursue a TENANT award.
19. ASSIGNMENT:
A. VOLUNTARY ASSIGNMENT SUBLETTING AND ENCUMBERING:
(1) TENANT shall not voluntarily or by operation of law (1)
mortgage, pledge, hypothecate or encumber this Lease or any interest herein,
(2) assign or transfer this Lease or any interest herein, sublet the premises
or any part thereof, or any right or privilege appurtenant thereto, or allow
any other person (the employees, agents and invitees of Tenant excepted) to
occupy or use the Premises, or any portion thereof; without first obtaining
the written consent of LANDLORD, which consent shall not be withheld
unreasonably. When TENANT requests LANDLORD'S consent to such assignment or
subletting, it shall notify LANDLORD in writing of the name and address of
the proposed assignee or subtenant and shall provide current financial
statements for the proposed assignee or subtenant prepared in accordance with
generally accepted accounting principles. TENANT shall also provide LANDLORD
with a copy of the proposed sublet or assignment agreement, including all
material terms and conditions thereof. LANDLORD shall have the option, to be
exercised within thirty (30) days of receipt of the foregoing, to (1) cancel
this Lease as of the commencement date stated in the proposed sublease or
assignment, (2) acquire from Tenant the interest, or any portion thereof, in
this Lease and/or the Premises that TENANT proposes to assign or sublease, on
the same terms and conditions as stated in the proposed sublet or assignment
agreement, (3) consent to the proposed assignment or sublease, or (4) refuse
its consent to the proposed assignment or sublease, providing that such
consent shall not be unreasonably withheld.
(2) Without otherwise limiting the criteria upon which LANDLORD
may withhold its consent, LANDLORD may take into account the reputation and
credit worthiness of the proposed assignee or subtenant, the character of the
business proposed to be conducted in the Premises or portion thereof sought
to be subleased, and the potential impact of the proposed assignment or
sublease on the economic value of the Premises. In any event, LANDLORD may
withhold its consent to any assignment or sublease, if (1) the actual use
proposed to be conducted in the Premises or portion thereof conflicts with
the provisions of Paragraph 10, or (2) the proposed assignment or sublease
requires alterations, improvements or additions to the Premises or portions
thereof.
(3) If LANDLORD approves an assignment or subletting as herein
provided, TENANT shall pay to LANDLORD, as additional Rent, the difference,
if any, between (I) the Base Rent plus TENANT's Share of TENANT's costs
allocable to that part of the Premises affected by such assignment or
sublease pursuant to the provisions of this Lease, and (2) the Base
Rent and any additional Rent payable by the assignee or sublessee to TENANT,
after deducting the costs incurred by TENANT in connection with any such
assignment or sublease.
(4) TENANT shall pay LANDLORD'S reasonable fees, not to exceed One
Thousand Dollars ($1 .000.00) per transaction incurred in connection with
LANDLORD'S review and processing of documents regarding any proposed
assignment or sublease.
If TENANT is a partnership, a withdrawal or change, voluntary,
involuntary, or by operation of law, of any partner of the dissolution of the
partnership, shall be deemed a voluntary assignment. If TENANT consists of
more than one person, a purported assignment, voluntary, involuntary, or by
operation of law, from one person to the other shall be deemed a voluntary
assignment. If TENANT is a corporation, any dissolution, merger,
consolidation, or other reorganization of TENANT, or the sale or other
transfer of a controlling percentage of the capital stock of TENANT, or the
sale of forty-five percent (45%) of the value of the assets of TENANT, shall
be deemed a voluntary assignment. The phrase "controlling percentage" means
the ownership of, and the right to vote, stock possessing at least forty-five
percent (45%) of the total combined voting power of all classes of TENANT'S
capital stock issued, outstanding, and entitled to vote for the election of
directors. This paragraph shall not apply to corporations the stock of which
is traded through an exchange or over the counter.
B. INVOLUNTARY ASSIGNMENT: No interest of TENANT in this Lease shall
be assignable by operation of law (including without limitation, the transfer
of this Lease by testacy or intestacy). Each of the following acts shall be
considered an involuntary assignment:
(1) If TENANT is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors, or institutes a proceeding under the
Bankruptcy Act in which TENANT is the bankrupt; or, if TENANT is a
partnership or consists of more than one (1) person or entity, if any partner
of the partnership or other person or entity is or becomes bankrupt or
insolvent, or makes an assignment for the benefit of creditors;
(2) If a writ of attachment or execution is levied on this Lease;
(3) If in any proceeding or action to which TENANT is a party, a
receiver is appointed with authority to take possession of the Premises.
An involuntary assignment shall constitute a default by TENANT and
LANDLORD shall have the right to elect to terminate this Lease in which case
this Lease shall not be treated as an asset of TENANT.
If a writ of attachment or execution is levied on this Lease, TENANT
shall have thirty (30) days in which to cause the attachment or execution to
be removed. If any involuntary proceeding in bankruptcy is brought against
TENANT, or if a receiver is appointed, TENANT shall have sixty (60) days in
which to have the involuntary proceeding dismissed or the receiver removed.
20. DEFAULT:
A. TENANT'S DEFAULT: The occurrence of any of the following shall
constitute a default by TENANT:
(1) Failure to pay Rent when due, if the failure continues for
three (3) days after notice has been give to TENANT.
(2) Abandonment and vacation of the Premises (failure to occupy
and operate the Premises for ten (10) consecutive days shall be deemed an
abandonment and vacation).
(3) Failure to perform any other provision of this Lease if the
failure to perform is not cured within thirty (30) days after notice has been
given to TENANT. If the default cannot reasonably be cured within thirty (30)
days, TENANT shall not be in default of this Lease if TENANT commences to
cure the default within the thirty (30) day period and diligently and in good
faith continues to cure the default.
No notice given pursuant to this paragraph shall be deemed forfeiture or a
termination of this Lease unless LANDLORD so elects in the notice. The notice
periods provided in this paragraph are intended to satisfy all notice
requirements imposed by LANDLORD by law (including, without limitation,
California Code of Civil Procedure Section 1161) and are to run concurrent
with, and not in addition to, any such requirements.
B. LANDLORD'S REMEDIES: LANDLORD shall have the following remedies if
TENANT commits a default. These remedies are not exclusive; they are
cumulative in addition to any remedies now or later allowed by law.
LANDLORD can continue this Lease in full force and effect, and the Lease
will continue in effect as long as LANDLORD does not terminate TENANT'S right
to possession, and LANDLORD shall have the right to collect Rent when due.
During the period TENANT is in default, LANDLORD can enter the Premises and
relet them, or any part of them, to third parties for TENANT'S account.
TENANT shall be liable immediately to LANDLORD for all costs LANDLORD incurs
in reletting the Premises, including, without limitation, brokers'
commissions, expenses of remodeling the Premises required by the reletting,
and like costs. Reletting can be for a period shorter or longer than the
remaining term of this Lease. TENANT
shall pay to LANDLORD the Rent due under this Lease on the dates the Rent is
due, less the Rent LANDLORD receives from any reletting. No act by LANDLORD
allowed by this paragraph shall terminate this Lease unless LANDLORD notifies
TENANT that LANDLORD elects to terminate this Lease. After TENANT'S default
and for as long as LANDLORD does not terminate TENANT'S right to possession
of the Premises, if TENANT obtains LANDLORD'S consent TENANT shall have The
right to assign or sublet its interest in this Lease, but TENANT shall not be
released from liability. LANDLORD'S consent to a proposed assignment or
subletting shall not be unreasonably withheld.
LANDLORD can terminate TENANT'S right to possession of the Premises at
any time. No act by LANDLORD other than giving notice to TENANT shall
terminate this Lease. Acts of maintenance, efforts to relet the Premises or
the appointment of a receiver on LANDLORD'S initiative to protect LANDLORD'S
interest under this Lease shall not constitute a termination of TENANT'S
right to possession. On termination, LANDLORD has the right to recover from
TENANT:
(1) The worth, at the time of the award of the unpaid Rent that
had been earned at the time of termination of this Lease;
(2) The worth, at the time of the award of the amount by which the
unpaid Rent that would have been earned after the date of termination of this
Lease until the time of award exceeds the amount of the loss of Rent that
TENANT proves could have been reasonably avoided;
(3) The worth, at the time of the award of the amount of which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of the loss of Rent that TENANT proves could have been reasonably
avoided; and
(4) Any other amount, and court costs, necessary to compensate
LANDLORD for all detriment proximately caused by TENANT'S default.
"The worth, at the time of the award," as used in (1) and (2) of this
paragraph, is to be computed by allowing interest at the rate of ten percent
(10%) per annum. "The worth, at the time of the award," as referred to in (3)
of this paragraph, is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of the
award, plus one percent (1%).
If TENANT is in default of this Lease LANDLORD shall have the right to
have a receiver appointed to collect Rent and conduct TENANT'S business.
Neither the filing of a petition for the appointment of a receiver nor the
appointment itself shall constitute an election by LANDLORD to terminate this
Lease.
LANDLORD, at any time after TENANT commits default, can cure the default
at TENANT'S cost. If LANDLORD at anytime, by reason of TENANT'S default, pays
any sum or does any act that requires the payment of any sum, the sum paid by
LANDLORD shall be due immediately from TENANT to LANDLORD at the time the sum
is paid, and if paid at a later date shall bear interest at the rate of ten
percent (10%) per annum from the date the sum is paid by LANDLORD until
LANDLORD is reimbursed by TENANT. The sum, together with interest on it,
shall be additional Rent.
C. LANDLORD'S DEFAULT: LANDLORD shall not be deemed in breach of
this Lease unless LANDLORD fails within a reasonable time to perform an
obligation to be performed by LANDLORD. For purposes of this paragraph, a
reasonable time shall in no event be less than twenty (20) days after receipt
by LANDLORD of written notice specifying wherein such obligation of LANDLORD
has not been performed. Provided, however, that of the nature of LANDLORD's
obligation is such that more than thirty (30) days are reasonably required
for its performance, then LANDLORD shall not be in breach if performance is
commenced within such thirty (30) day period and diligently prosecuted to
completion.
Rent not paid when due shall bear interest at the rate of ten percent
(10%) per xxxxx from the date due until paid. Interest is payable in addition
to the potential late charge provided for in Paragraph 6.B.
21. SIGNS; ADVERTISING: LANDLORD reserves the exclusive right to the roof,
and to all exterior walls or parts of the Premises, and access thereto and
the same are not covered by this Lease, and TENANT agrees that no signs,
advertisements or notices whatsoever shall be inscribed, painted, affixed or
displayed on, to or in any part of the outside or inside, or on the roof of
the Premises, without written consent of LANDLORD. Any signs so placed on the
Premises shall be so placed upon the understanding and agreement that TENANT
will remove same at the termination of the tenancy herein created and repair
any damage or injury to the Premises caused thereby, and if not so removed by
TENANT then LANDLORD may have same removed at TENANT'S cost.
A. COMPLIANCE WITH LAWS: Any sign that TENANT has the right to place,
construct, and maintain shall comply with all laws, and TENANT shall obtain
any approval required by such laws. LANDLORD makes no representation with
respect to TENANT'S ability to obtain such approval.
22. LANDLORD'S ENTRY ON PREMISES: LANDLORD and its authorized
representatives shall have the right to enter the Premises at all reasonable
times for any of the following purposes:
(1) To determine whether the Premises are in good condition and whether
TENANT is complying with its obligations under this lease;
(2) To do any necessary maintenance and to make any restoration to the
Premises or the building and other improvements in which the Premises are
located that LANDLORD has the right or obligation to perform;
(3) To serve, post, or keep posted any notices required or allowed
under the provisions of this Lease;
(4) To post "for sale" signs at any time during the term, to post "for
Rent" or "for lease" signs during the last six (6) months of the term, or
during any period while TENANT is in default;
(5) To show the Premises to prospective brokers, agents, buyers,
tenants, or persons interested in an exchange, at any time during the term;
(6) To shore the foundations, footings, and walls of the Premises or
the building in which the Premises are located and to erect scaffolding and
protective barricades around and about the Premises, but not so as to prevent
entry to the Premises, and to do any other act or thing necessary for the
safety or preservation of the Premises or the building and other improvements
in which the Premises are located if any excavation or other construction is
undertaken or is about to be undertaken on any adjacent property or nearby
street. LANDLORD'S right under this provision extends to the owner of the
adjacent property on which excavation or construction is to take place and
the adjacent property owner's authorized representatives.
LANDLORD shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance, or other damage arising out of
LANDLORD'S entry on the Premises as provided in this Paragraph, except damage
resulting from the acts or omissions of LANDLORD or its authorized
representatives.
TENANT shall not be entitled to an abatement or reduction of Rent
if LANDLORD exercises any rights reserved in this Paragraph.
LANDLORD shall conduct its activities on the Premises as allowed in this
Paragraph in a manner that will cause the lease possible inconvenience,
annoyance, or disturbance to TENANT.
23. SUBORDINATION; ESTOPPEL:
(A) SUBORDINATION: This Lease is and shall be subordinate to any
encumbrance now of record or recorded after the date of this Lease affecting
the building, other improvements, and land of which the Premises are a part.
Such subordination is effective without any further act of TENANT.
TENANT shall from time to time on request from LANDLORD execute and deliver
any documents or instruments that may be required by a lender to effectuate
any subordination. If TENANT fails to execute and deliver any such documents
or instruments, TENANT irrevocably constitutes and appoints LANDLORD as
TENANT'S special attorney-in-fact to execute and deliver any such documents
or instruments.
B. RIGHT TO ESTOPPEL CERTIFICATES: Each party, within twenty (20)
days after notice from the other party, shall execute and deliver to the
other party, in recordable form, a certificate stating that this Lease is
unmodified and in full force and effect, or in full force and effect as
modified, and stating the modifications. The certificate also shall state the
amount of minimum monthly Rent, the dates to which the Rent has been paid in
advance, and the amount of any security deposit or prepaid Rent.
Failure to deliver the certificate within the twenty (20) days shall be
conclusive upon the party failing to deliver the certificate for the benefit
of the party requesting the certificate and any successor to the party
requesting the certificate, that this Lease is in full force and effect and
has not been modified except as may be represented by the party requesting
the certificate.
If a party fails to deliver the certificate within the twenty (20) days,
the party failing to deliver the certificate irrevocably constitutes and
appoints the other party as its special attorney-in-fact to execute and
deliver the certificate to any third party.
24. NOTICE: Any notice, demand, request, consent, approval, or
communication that either party desires or is required to give to the other
party or any other person shall be in writing and either serviced personally
or sent by prepaid, first-class mail. Any notice, demand, request, consent,
approval, or communication that either party desires or is required to give
to the other party shall be addressed to the other party at the address set
forth next to their respective signatures on this Lease. Either party may
change its address by notifying the other party of the change of address.
Notice shall be deemed communicated within forty-eight (48) hours from the
time of mailing if mailed as provided in this Paragraph.
25. WAIVER: No delay or omission in the exercise of any right or remedy of
LANDLORD on any default by TENANT shall impair such a right or remedy or be
construed as a waiver. The receipt and acceptance by LANDLORD of delinquent
Rent shall not constitute a waiver of any
other default; it shall constitute only a waiver of timely payment for the
particular Rent payment involved.
No act or conduct of LANDLORD, including, without limitation, the
acceptance of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by TENANT before the expiration of the term. Only a
notice from LANDLORD to TENANT shall constitute acceptance of the surrender
of the Premises and accomplish a termination of the lease.
LANDLORD'S consent to or approval or any act by TENANT requiring
LANDLORD'S consent or approval shall not be deemed to waive or render
unnecessary LANDLORD'S consent to or approval of any subsequent act by TENANT.
Any waiver by LANDLORD of any default must be in writing and shall not
be a waiver of any other default concerning the same or any other provision
of the Lease.
26. RECORDATION; OUITCLAIM DEED:
A. RECORDATION: This Lease shall not be recorded, except that if
either party requests the other party to do so, the parties shall execute a
memorandum of lease in recordable form.
B. QUITCLAIM DEED: TENANT shall execute and deliver to LANDLORD on
the expiration or termination of this Lease, immediately upon LANDLORD'S
request, a quitclaim deed to the Premises, in recordable form, designating
LANDLORD as transferee.
27. SALE OR TRANSFER OF PREMISES:
A. EFFECT ON LEASE: If LANDLORD sells or transfers all or any portion
of the building, other improvements, and land of which the Premises are a
part LANDLORD, on consummation of the sale or transfer, shall be released
from any liability thereafter accruing under this Lease. If any security
deposit or prepaid Rent has been paid by TENANT, LANDLORD can transfer the
security deposit or prepaid Rent to LANDLORD'S successor and on such transfer
LANDLORD shall be discharged from any further liability in reference to the
security deposit or prepaid Rent.
28. ATTORNEYS' FEES: If either party becomes a party to any litigation
concerning this Lease, the Premises, or the building or other improvements in
which the Premises are located, by reason of any act or omission of the other
party or its authorized representatives, and not by any act or omission of
the party that becomes a party to that litigation or any act or omission of
its authorized representatives, the party that causes the other party to
become involved in the litigation shall be liable to that party for
reasonable attorneys' fees and court costs incurred by it in the litigation.
If either party commences an action against the other party arising out
of or in connection with this Lease, the prevailing party shall be entitled
to have and recover from the losing party reasonable attorneys' fees and
costs of suit. In addition, LANDLORD shall be entitled to attorneys' fees,
costs and expenses incurred in the preparation and service of notices of
default and consultations in connection therewith, whether or not legal
action is subsequently commenced in connection with such default or resulting
breach.
29. SURRENDER OF PREMISES: HOLDING OVER:
A. SURRENDER OF PREMISES: On expiration of the Lease term, TENANT
shall surrender to LANDLORD the Premises and all TENANT'S improvements and
alterations in good condition except for ordinary wear and tear occurring
after the last necessary maintenance made by TENANT and destruction to the
Premises, except for alterations that TENANT has the right to remove or is
obligated to remove under the provisions of this Lease. TENANT shall remove
all its personal property within the above stated time. TENANT shall perform
all restoration made necessary by the removal of any alterations or TENANT'S
personal property within the time periods stated in this Paragraph.
LANDLORD can elect to retain or dispose of in any manner any alterations
or TENANT'S personal property that TENANT does not remove from the Premises
on expiration or termination of the term as allowed or required by this Lease
by giving at least ten (10) days notice to TENANT. Title to any such
alterations or TENANT'S personal property that LANDLORD elect to retain or
dispose of on expiration of the ten (10) day period shall vest in LANDLORD.
TENANT waives all claims against LANDLORD for any damage to TENANT resulting
from LANDLORD'S retention or disposition of any such alterations or TENANT'S
personal property. TENANT shall be liable to LANDLORD for LANDLORD'S costs
for storing, removing, and disposing of any alterations or TENANT'S personal
property.
If TENANT fails to surrender the Premises to LANDLORD on expiration of
the Lease term as required by this paragraph, TENANT shall hold LANDLORD
harmless from all damages resulting from TENANT'S failure to surrender the
Premises, including, without limitation, claims made by a succeeding tenant
resulting from TENANT'S failure to surrender the Premises.
B. HOLDING OVER: If TENANT, with LANDLORD'S consent, remains in
possession of the Premises after expiration or termination of the term, or
after the date in any notice given by LANDLORD to TENANT terminating this
Lease, such possession by TENANT shall be deemed to be a month-to-month
tenancy terminable on thirty (30) days notice given at any time
by either party. All provisions of this Lease except those pertaining to term
and option to extend (if any) shall apply to the month-to-month tenancy.
30. MISCELLANEOUS PROVISIONS:
A. TIME OF ESSENCE: Time is of the essence of each provision of this
Lease.
B. CONSENT OF PARTIES: Whenever consent or approval of either party
is required, that party shall not unreasonably withhold such consent or
approval.
C. SUCCESSORS: This Lease shall be binding on and inure to the
benefit of the parties and their successors.
D. RENT PAYABLE IN U.S. MONEY: Rent and all other sums payable under
this Lease must be paid in lawful money of the United States of America.
E. CALIFORNIA LAW: This Lease shall be construed and interpreted in
accordance with the laws of the State of California.
F. INTEGRATED AGREEMENT; MODIFICATION: This Lease contains all the
agreements of the parties and cannot be amended or modified except by a
written agreement.
G. PROVISIONS ARE COVENANTS AND CONDITIONS: All provisions, whether
covenants or conditions, on the part of TENANT shall be deemed to be both
covenants and conditions.
H. CAPTIONS; TABLE OF CONTENTS: The captions and the table of
contents of this Lease shall have no effect on its interpretation.
I. SINGULAR AND PLURAL: When required by the context of this Lease,
the singular shall include the plural.
J. JOINT AND SEVERAL OBLIGATIONS: "Party" shall mean LANDLORD or
TENANT; and if more than one person or entity is LANDLORD or TENANT, the
obligations imposed on that party shall be joint and several.
K. SEVERABILITY: The unenforceability, invalidity, or illegality of
any provision shall not render the other provisions unenforceable, invalid,
or illegal.
31. COST OF LIVING ADJUSTMENT: The monthly Rental shall be adjusted at the
rate of N/A % percent per annum on each anniversary date of this Lease during
the term of the Lease.
32. POLLUTION CONTROL: TENANT shall at TENANTS sole cost satisfy all
applicable governmental agencies in handling neutralization and pollution
control.
33. DAMAGE REPAIRS: TENANT shall be solely responsible and at its own cost
and repair all damage to the Premises and shall make all reasonable efforts
to prevent damage to the Premises and to any adjacent Premises and to any
appurtenance due to any chemical process and to carry out repairs within a
reasonable time in the event any damage is caused thereby. Adequate
ventilation to be provided by TENANT at its cost to prevent damage due to
corrosive atmosphere.
34. ADDENDA: The provisions of Addenda I - II - III are incorporated
into this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date and year first above written, at _________________, California.
TENANT: LANDLORD:
EIP Microwave, Inc. Xxxxx X. Xxxxxxx, Trustee
Xxxxx X. Xxxxxxx, Trustee
By: /s/ XXXXXXX X. XXXXXXXX, XX. By: /s/ XXXXX X. XXXXXXX,
---------------------------- ---------------------
/s/ XXXXX X. XXXXXXX
---------------------
TRUSTEES
Address: 0000 X.X. Xxxxxxx Xxxxxx, Xxx. 000 Address: 000 Xxxxxxxxxxx Xx.
Xxxxxxxx, XX 00000 Xxx Xxxx, XX 00000
35. EARLY POSSESSION: TENANT shall be allowed possession of the PREMISES
September 1, 1998 rent and expense free. TENANT shall pay its utility
expenses during this month of early occupancy.
ADDENDUM II
1 HAZARDOUS SUBSTANCES.
(1) REPORTABLE USES REQUIRE CONSENT. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, or waste whose
presence, use, manufacture, disposal, transportation, or release, either by
itself or in combination with other materials expected to be on the Premises,
is either: (i) potentially injurious to the public health, safety or welfare,
the environment or the Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a basis for potential liability of LANDLORD
to any governmental agency or third party under any applicable statute or
common law theory. Hazardous Substances shall include, but not be limited to,
hydrocarbons, petroleum, gasoline, and/or crude oil or any products,
by-products or fractions thereof. TENANT shall not engage in any activity in
or on the Premises which constitutes a Reportable Use of Hazardous Substances
without the express prior written consent of LANDLORD and timely compliance
(at TENANT's expense) with all Applicable Requirements. "Reportable Use"
shall mean (i) the installation or use of any above or below ground storage
tank, (ii) the generation, possession, storage, use, transportation, or
disposal of a Hazardous Substance that requires a permit from, or with
respect to which a report, notice, registration or business plan is required
to be filed with, any governmental authority, and/or (iii) the presence at
the Premises of a Hazardous Substance with respect to which any Applicable
Requirements requires that a notice be given to persons entering or occupying
the Premises or neighboring properties. Notwithstanding the foregoing, TENANT
may use any ordinary and customary materials reasonably required to be used
in the normal course of the Agreed Use, so long as such use is in compliance
with all Applicable Requirements, is not a Reportable Use, and does not
expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose LANDLORD to any liability therefor. In
addition, LANDLORD may condition its consent to any Reportable Use upon
receiving such additional assurances as LANDLORD reasonably deems necessary
to protect itself, the public, the Premises and/or the environment against
damage, contamination, injury and/or liability, including, but not limited
to, the installation (and removal on or before Lease expiration or
termination) of protective modifications (such as concrete encasements)
and/or increasing the Security Deposit.
(2) DUTY TO INFORM LANDLORD. If TENANT knows, or has reasonable cause
to believe, that a Hazardous Substance has come to be located in, on, under
or about the Premises, other than as previously consented to by LANDLORD,
TENANT shall immediately give written notice of such fact to LANDLORD, and
provide LANDLORD with a copy of any report, notice, claim or other
documentation which it has concerning the presence of such Hazardous
Substance.
(3) TENANT REMEDIATION. TENANT shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under or about the Premises
(including through the plumbing or sanitary sewer system) and shall promptly,
at TENANT's expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of
any contamination of, and for the maintenance, security and/or monitoring of
the Premises or neighboring properties, that was caused or materially
contributed to by TENANT, or pertaining to or involving any Hazardous
Substance brought onto the Premises during the term of this Lease, by or for
TENANT, or any third party.
(4) TENANT INDEMNIFICATION. TENANT shall indemnity, defend and hold
LANDLORD, its agents employees, lenders and ground LANDLORD, if any, harmless
from and against any and all loss of rents and/or damages, liabilities,
judgments, claims, expenses, penalties, and attorneys' and consultants' fees
arising out of or involving any Hazardous Substance brought onto the Premises
by or for TENANT, or any third party (provided, however, that TENANT shall
have no liability under this Lease with respect to underground migration of
any Hazardous Substance under the Premises from adjacent properties).
TENANT's obligations shall include, but not be limited to, the effects of any
contamination or injury to person, property or the environment created or
suffered by TENANT, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination
of this Lease. No termination, cancellation or release agreement entered into
by LANDLORD and TENANT shall release TENANT from its obligations under this
Lease with respect to Hazardous Substances, unless specifically so agreed by
LANDLORD in writing at the time of such agreement.
(e) LANDLORD TERMINATION OPTION. If a Hazardous Substance Condition
occurs during the term of this Lease, unless TENANT is legally responsible
therefor (in which case TENANT shall make the investigation and remediation
thereof required by the Applicable
Requirements and this Lease shall continue in full force and effect, but
subject to LANDLORD's rights under Paragraph 6.2(d), LANDLORD may, at
LANDLORD's option, either (i) investigate and remediate such Hazardous
Substance Condition, if required, as soon as reasonably possible at
LANDLORD's expense, in which event this Lease shall continue in full force
and effect, or (ii) if the estimated cost to remediate such condition exceeds
twelve (12) times the then monthly Base Rent or One Hundred Thousand Dollars
($100,000.00), whichever is greater, give written notice to TENANT, within
thirty (30) days after receipt by LANDLORD of knowledge of the occurrence of
such Hazardous Substance Condition, of LANDLORD'S desire to terminate this
Lease as of the date sixty (60) days following the date of such notice. In
the event LANDLORD elects to give a termination notice, TENANT may, within
ten (10) days thereafter, give written notice to LANDLORD of TENANT's
commitment to pay the amount by which the cost of the remediation of such
Hazardous Substance Condition exceeds an amount equal to twelve (12) times
the then monthly Base Rent or One Hundred Thousand Dollars ($100,000.00),
whichever is greater. TENANT shall provide LANDLORD with said filings or
satisfactory assurance thereof within thirty (30) days following such
commitment. In such event, this Lease shall continue in full force and
effect, and LANDLORD shall proceed to make such remediation as soon as
reasonably possible after the required filings are available. If TENANT does
not give such notice and provide the required filings or assurance thereof
within the time provided, this Lease shall terminate as of the date specified
in LANDLORD's notice of termination.
(f) TENANT'S COMPLIANCE WITH APPLICABLE REQUIREMENTS. Except as
otherwise provided in this Lease, TENANT shall, at TENANT's sole expense,
fully, diligently and in a timely manner, materially comply with all
Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of LANDLORD's engineers
and/or consultants which relate in any manner to the Premises, without regard
to whether said requirements are now in effect or become effective after the
Start Date. TENANT shall, within ten (10) days after receipt of LANDLORD's
written request, provide LANDLORD with copies of all permits and other
documents, and other information evidencing TENANT's compliance with any
Applicable Requirements specified by LANDLORD, and shall immediately upon
receipt, notify LANDLORD in writing (with copies of any documents involved)
of any threatened or actual claim, notice, citation, warning, complaint or
report pertaining to or involving the failure of TENANT or the Premises to
comply with any Applicable Requirements.
(g) INSPECTION; COMPLIANCE. LANDLORD and LANDLORD's Lender and
consultants shall have the right to enter into Premises at any time, in the
case of any emergency, and otherwise at reasonable times, for the purpose of
inspecting the condition of the Premises and for verifying compliance by
TENANT with this Lease. The cost of any such inspections shall be paid by
LANDLORD, unless a violation of Applicable Requirements, or a contamination
is found to exist or be imminent, or the inspection is requested or ordered
by a governmental authority. In such case, TENANT shall upon request
reimburse LANDLORD for the cost of such inspections, so long as such
inspection is reasonably related to the violation or contamination.
ADDENDUM III
ADDENDUM TO LEASE
The following additions, deletions and modifications are hereby
incorporated into the attached Lease.
2. Paragraph 2 is hereby modified by adding the following phrase
in the second (2nd) line after the words, "State of California":
"as indicated in the plan attached hereto as Addendum I and
commonly"
4. Paragraph 4 is hereby modified by deleting the phrase, "within
twelve (12) months of" appearing in the fifth (5th) line, and adding the
following in place of the deletion:
"within sixty (60) days after"
7. Paragraph 7 is deleted in its entirety.
9. Paragraph 9 is deleted in its entirety.
10. Paragraph 10.A(2) is hereby modified by deleting the parenthetical
"(collectively "laws")" appearing in the second (2nd) line and inserting the
following in place of the deletion:
"(collectively, "Laws")"
Paragraph 10.A(2)(a) is hereby modified be deleting the word,
"immediately" appearing in the seventh (7th) line and adding the following in
place of the deletion:
"as soon as commercially practical"
Paragraph 10.A(2)(b) is hereby deleted in its entirety, and the
following is inserted in its place:
"(b) If such Capital Expenditure is not the result of the specific and
unique use of the Premises by TENANT (such as, governmentally mandated
seismic modifications), then LANDLORD shall pay the cost thereof and
such cost shall be prorated between the parties and TENANT shall only
be obligated to pay each month during the remainder of the term of the
date on which Base Rent is due an amount determined by (i) multiplying
the required Capital Expenditure by a fraction, the numerator of which
is one (1) and the denominator of which is the useful life (in months)
of the improvement for which such Capital Expenditure was made, as
reasonably determined by LANDLORD (including interest at the rate of
ten percent (10%) per annum, and (ii) multiplying that result by a
fraction the numerator of which is the number of leasable square feet
in the Premises and the denominator of which is the number of leasable
square feet in the Building. In lieu of monthly payments calculated as
set forth in the preceeding sentence, TENANT shall have the right to
pay a prorata portion of the cost of such Capital Expenditure, based
on (i) the useful life of the improvement for which such Capital
Expenditure was made, (ii) the remaining term of the Lease, and (iii)
the leasable square footage of the Premises as it relates to the total
leasable square footage of the Building. If such Capital Expenditure
is required during the last twelve (12) months of the term of the
Lease or if LANDLORD reasonably determines that it is not economically
feasible to pay its share thereof, LANDLORD shall have the option to
terminate this Lease upon ninety (90) days prior written notice to
TENANT unless TENANT notifies LANDLORD, in writing, within ten (10)
days of receipt of LANDLORD'S termination notice that TENANT will pay
for such Capital Expenditure. If LANDLORD does not elect to
terminate, and fails to proceed with such Capital Expenditure, TENANT
may, but shall be under no obligation to, advance such funds and
deduct same, with interest, from Rent until LANDLORD' share of such
costs have been fully paid. If TENANT is unable to finance TENANT'S
share of any required Capital Expenditure, or if the balance of the
Rent due and payable for the remainder of this Lease is not sufficient
to fully reimburse TENANT on an offset basis, TENANT shall have the
right to terminate this Lease upon thirty (30) days written notice to
LANDLORD."
11. Paragraph 11.A is hereby deleted in its entirety and the following
is inserted in its place:
"A. TENANT'S MAINTENANCE: Subject to the provisions of Paragraph 10.A(2)
(Compliance With Laws), 11.C (LANDLORD'S Maintenance), 17
(Destruction) and 18 (Condemnation), TENANT at its cost shall
maintain, in good condition, reasonable wear and tear excepted, all
interior portions of the Premises, and all windows and doors on the
Premises. TENANT shall also be responsible for keeping the roof and
roof drainage clean and free of debris. TENANT'S obligations shall
include restorations, replacements or renewals when necessary to keep
the Premises and all improvements thereon or a part thereof for which
TENANT is responsible hereunder in good order, condition and state of
repair, reasonable wear and tear excepted.
B. SERVICE CONTRACTS: TENANT shall, at TENANT'S sole expense, procure
and maintain contracts, with copies to LANDLORD, in customary form and
substance for, and with contractors experienced in the maintenance of
the following equipment and improvements: (i) HVAC equipment; (ii)
fire extinguishing systems, including fire alarm and smoke detection;
and (iii) any other equipment as reasonably required by LANDLORD.
C. LANDLORD'S MAINTENANCE: LANDLORD, at its sole cost and expense, shall
maintain, in good condition, the exterior of the Building in which the
Premises is located, including without limitation, maintaining the
surface and structural elements of the roof in a sound and leak-free
condition, and maintaining the foundations, and bearing wall(s).
Except as herein provided, LANDLORD shall have no obligation to
maintain the Premises.
TENANT shall be liable for any damage to the Building in which
the Premises are located resulting from the acts or omissions of
TENANT or its authorized representatives."
" and to all exterior walls and parts of the Premises"
27. Paragraph 27.A is hereby deleted in its entirety and the following
is inserted in its place:
"A. EFFECT ON LEASE: If LANDLORD sells or transfers all or any
portion of the Building, other improvements, and land of which
the Premises are a part, LANDLORD, on consummation of the sale or
transfer shall be released from any liability thereafter accruing
under this lease, but with respect to TENANT, shall retain
liability for any acts or omissions of LANDLORD or its authorized
representatives accruing and written notice of which has been
given to LANDLORD by TENANT prior to the date of such transfer,
unless such liability is assumed by LANDLORD'S transferee in a
written agreement approved by TENANT. If any security deposit or
prepaid Rent has been paid by TENANT, LANDLORD can transfer the
security deposit or prepaid Rent to LANDLORD'S successor and on
such transfer LANDLORD shall be discharged from any further
liability in reference to the security deposit or prepaid rent,
provided that such transferee shall have assumed LANDLORD'S
obligations hereunder in a written agreement approved by TENANT."
31. Paragraph 31 is deleted in its entirety.
33. Paragraph 33 is hereby modified by adding the following phrase in
the third (3rd) line after the words, "chemical process":
"conducted by TENANT or on TENANT'S behalf"
ADDENDUM II: Subparagraph (1) of Addendum II is hereby modified by
deleting the phrase, "Applicable Requirements" at the end of the sixteenth
(16th) line, and adding the following in place of the deletion:
"Laws"
RENT SCHEDULE A
Base Rent to be as follows:
For Month 1 thru 12 $14,553.00
For Month 13 thru 24 $16,008.00
For Month 25 thru 36 $17,609.00
