Exhibit 10.8
LEASE AGREEMENT
THIS LEASE, dated October 9, 1996, by and between: XXXX XXXXXX LATHING
COMPANY, LLC ("Lessor") and CATAPULT COMMUNICATIONS, A California Corporation
("Lessee"), is made with reference to the following facts:
A. Lessor is the owner of certain industrial property (the "Industrial
Center") located at 000 Xxxxx Xxxxxxx, and 000 Xxxxx Xxxxxxx Xxxx (Buildings A,
B, C, D, E, F, G, and I) Mountain View, California, consisting of (8) eight
buildings having a floor area of approximately 106,132 square feet and related
parking facilities and landscaped areas.
B. Lessee desires to rent a portion of the Industrial Center and Lessor
has agreed to lease the same to Lessee, on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:
ARTICLE 1. DEMISED PREMISES AND COMMON AREAS
1.01 Lessor does hereby lease to Lessee, and Lessee does hereby rent from
Lessor, that portion of the Industrial Center consisting of approximately 10,000
plus an additional 7,500 square feet as shown in Article 3. Rent., for a total
of 17,750 square feet, as shown on the drawing attached hereto as Exhibit "A"
and made a part hereof, commonly referred to as 000 Xxxxx Xxxxxxx Xxxx, Suites A
& B (the "Demised Premises"), together with the right to use the Common Areas of
the Industrial Center as hereinafter described. The parties hereby stipulate
and agree that the Demised Premises constitutes 9.42% initially and 16.72%
subsequently of the total leasable floor area of the Industrial Center.
1.02 Lessee shall have the non-exclusive right to use the Common Areas of
the Industrial Center, subject to any reasonable rules and regulations
concerning such use as may be adopted from time to time by Lessor. The term
"Common Areas" shall mean those areas within the Industrial Center provided and
designated by Lessor for the general non-exclusive use by the occupants of the
Industrial Center and their respective employees, customers and invitees,
including parking areas, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, driveways, and landscaped areas. Lessor reserves the right
of exclusive control and management of the Common Areas, including the right, in
Lessor's sole discretion:
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(a) To make alterations or construct additional improvements within the
Common Areas;
(b) To temporarily close any of the Common Areas for maintenance purposes,
so long as reasonable access to the Demised Premises remains
available; and
(c) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Industrial Center, or any
portion thereof.
ARTICLE 2. TERM
2.01 The term of this Lease shall be a period of five (5) years,
commencing on February 10, 1997, and ending on February 9, 2002, unless
sooner terminated as provided herein.
2.02 If Lessor, for any reason whatsoever, is unable to deliver possession
of the Demised Premises to Lessee on the commencement date specified in Section
2.01 above, Lessor shall not be liable to Lessee for any loss or damage
resulting therefrom, nor shall this Lease be void or voidable, but in such event
Lessee shall not be liable for rent or other sums due Lessor until possession of
the Demised Premises is offered to Lessee. No delay in delivery of possession
shall operate to extend the term hereof unless otherwise stipulated in writing
by the parties. Notwithstanding the above, lessor will make every effort to
enable Lessee to occupy premise no later than ninety days from City Permit
approval.
2.03 Provided that Lessee is not then in default in the performance of any
of Lessee's obligations hereunder, Lessee shall have the option to extend the
term for an additional period of one (1) three (3) year term. Such option can
only be exercised by Lessee giving written notice thereof to Lessor at least one
hundred twenty (120) days prior to expiration of the initial term of the lease.
The rent during the option period shall be as follows:
Year 1: 17,750 sq.ft.@$.85 NNN/sq.ft./mo
($15,087.50 per month)
Year 2: 17,750 sq.ft.@$.87 NNN/sq.ft./mo
($15,442.50 per month)
Year 3: 17,750 sq.ft.@$.89 NNN/sq.ft./mo
($15,797.50 per month)
ARTICLE 3. RENT
3.01 Lessee shall pay to Lessor as Base Rent for the Demised Premises, in
lawful money of the United States, payable in
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advance on or before the first day of each calendar month without any deduction,
offset or demand, the following amounts:
Year 1: 10,000 sq.ft. @$.75 NNN/sq.ft./mo
($7500.00 per month)
Year 2: (Months 13-15) 10,000 sq.ft.@$.75 NNN/sq.ft./mo
($7,500.00 per month)
(Months 16-24) *17,750 sq.ft.@$.77 NNN/sq.ft./mo
($13,667.50 per month)
*Assumes improvements for 7,750 square feet expansion space are in place and
delivered by 16th month of the lease term.
Year 3: 17,750 sq.ft.@$.79 NNN/sq.ft./mo
($14,022.50 per month)
Year 4: 17,750 sq.ft.@$.81 NNN/sq.ft./mo
($14,377.50 per month)
Year 5: 17,750 sq.ft.@$.83 NNN/sq.ft./mo
($14,732.50 per month)
3.02 If the commencement date is not the first day of a calendar month, or
if the termination date is not the last day of a calendar month, the monthly
rental for the fractional month shall be prorated on the basis of a thirty (30)
day month.
3.03 Lessee acknowledges that late payment of rent and any other charges
provided herein will cause Lessor to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
determine. Such costs include, without limitation, processing and accounting
charges, late charges that may be imposed on Lessor by the terms of any
encumbrances against the Industrial Center and penalties on delinquent tax
payments. Lessee therefore agrees that if any installment of rent or other
charge payable by Lessee hereunder is not received by Lessor within ten (10)
days after the same becomes due, Lessor shall be entitled to collect an
additional sum equal to one percent (1.%) of the delinquent payment for each
month or fraction thereof that the rent or other charge remains unpaid.
Acceptance of any late charge shall not constitute a waiver of Lessee's default
with respect to the overdue amount, nor prevent Lessor from exercising any other
rights and remedies available to Lessor hereunder or provided by law.
ARTICLE 4. SECURITY DEPOSIT
4.01 Lessee has deposited with Lessor the sum of Three Thousand Three
Hundred Thirty Two and 45/100 Dollars ($3,332.45) as and for a security deposit.
Upon adjustment of the Base Rent in accordance with Section 3.01 (b), the
security deposit shall be increased to an amount equal to the Adjusted Base Rent
for one
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amount equal to the Adjusted Base Rent for one (1) month and Lessee shall
promptly deposit the increase with Lessor.
4.02 If Lessee defaults with respect to any provision of this Lease, Lessor
may use, apply or retain all or any part of the security deposit to cure such
default or to compensate Lessor for all damages sustained by Lessor resulting
from Lessee's default. If any portion of said deposit is so used or applied,
Lessee shall within ten (10) days after written demand therefor, deposit cash
with Lessor in an amount sufficient to restore the security deposit to its
original amount, and Lessee's failure to do so shall constitute a material
breach of this Lease. Lessor's obligations with respect to the security deposit
are those of a debtor and not a trustee. Lessor shall not be required to
segregate the security deposit as a separate fund and Lessee shall not be
entitled to any interest thereon. If Lessee shall fully and faithfully perform
every provision of this Lease to be performed by Lessee, the security deposit or
any balance thereof shall be returned to Lessee within thirty (30) days after
termination of the Lease.
ARTICLE 5. USE
5.01 The Demised Premises shall be used and occupied by Lessee solely for
Office, Electronic R&D, Distribution and Warehouse and for no other or
additional purpose without the prior written consent of Lessor.
5.02 Lessee shall not use the Demised Premises or permit anything to be
done in or about the Demised Premises which is prohibited by or will in any way
conflict with any law, statute, ordinance or governmental rule or regulation now
in force or which may hereafter be in force, or which is prohibited by the
standard form of fire insurance policy, or will in any way increase the existing
rate of any fire or other insurance covering the Industrial Center or any of its
contents, or cause any change or cancellation of such insurance. The judgment
of any court of competent jurisdiction or the admission of Lessee in any action
against Lessee, whether Lessor be a party thereto or not, that Lessee has
violated any law, statute, ordinance or governmental rule, regulation or
requirement, shall be conclusive of that fact as between Lessor and Lessee.
Lessee shall not do or permit anything to be done in or about the Demised
Premises which will in any way obstruct or interfere with the rights of other
tenants in the Industrial Center, or injure or annoy them, or use or allow the
Demised Premises to be used for any improper, immoral, unlawful or objectionable
purpose, nor shall Lessee cause, maintain or permit any nuisance in, on or about
the Demised Premises or commit or suffer to be committed any waste in, on or
about the Demised Premises.
ARTICLE 6. LEASEHOLD IMPROVEMENTS
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6.01 Lessor shall perform, at Lessor's own expense, the alterations and
improvements to the Demised Premises as described in Article 30. Acceptance of
the Demised Premises shall constitute acceptance of any alterations and
improvements therein performed by Lessor and shall further constitute an
acknowledgment by Lessee that the Demised Premises are in good order, condition,
and repair.
6.02 Lessee may perform, at Lessee's own expense, the alterations and
improvements to the Demised Premises as described in Exhibit "B", attached
hereto and made a part hereof, and Lessor hereby consents to the performance of
such work. Lessee may have access to the Demised Premises prior to the
commencement of the lease term for the purpose of installing Lessee's
improvements, provided that such work does not obstruct or interfere with the
work being performed therein by Lessor. No delay by Lessee in the completion of
Lessee's work, shall delay commencement of the lease term on the date specified
in Section 2.01, unless such delay was directly and primarily caused by Lessor.
Lessor may submit a bid to Lessee for performance of the work described in
Exhibit "B" by Lessor, but Lessee shall not be obligated to utilize the services
of Lessor and may select any licensed contractor to perform such work. Lessee
shall not be required to remove lease hold improvements at the end of the lease
term.
6.03 Except as expressly provided herein, Lessor shall have no obligation
to make any alterations or improvements to the Demised Premises for the benefit
of Lessee. Lessee acknowledges that neither Lessor nor anyone acting on
Lessor's behalf has made any representation or warranty as to the suitability or
fitness of the Demised Premises for the conduct of Lessee's business or for any
other purpose.
ARTICLE 7. UTILITIES AND SERVICES
7.01 Lessor shall provide separate electricity and gas meters for the
Demised Premises. Lessee shall establish its own account with the utility
company to provide electricity and gas service to the Demised Premises and shall
pay all fees and charges for such services directly to the utility company.
7.02 Lessee shall pay, as additional rent, the cost of the following
utilities and services furnished to the Demised Premises:
(a) 9.42% initially and 16.72% subsequently of all water, sewer, and
Common Area maintenance charges for the Industrial Center, as billed to Lessee
by Lessor, including but not limited
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to, landscape maintenance, lighting maintenance, utility charges, and parking
lot sweeping.
(b) Garbage collection charges attributable to the Demised Premises, as
billed to Lessee by Lessor according to Lessee's actual usage thereof.
The foregoing charges shall be due and payable to Lessor within ten (10) days
after receipt of a billing therefor by Lessee. Billing shall occur on a monthly
basis. If requested, lessor shall provide lessee copies of the actual bills for
charges lessee is responsible to pay his pro rata share of. (See paragraph 31
below)
7.03 Lessor shall maintain the Common Areas of the Industrial Center in
good condition and repair, except for damage occasioned by the act of Lessee or
Lessee's agents or invitees, which damage shall be repaired by Lessor at
Lessee's expense. Lessor shall have no obligation to provide janitorial service
for the Demised Premises.
7.04 Lessor shall not be in default hereunder or be liable for any damages
directly or indirectly resulting from, nor shall the rent provided herein be
abated by reason of Lessor's failure to furnish or delay in furnishing any
utilities or services when such failure or delay is caused by accident,
breakage, repairs, strikes, lockouts or other labor dispute, or by limitation,
curtailment, rationing or restrictions on use of electricity, gas, water or
other utility, or any other cause, similar or dissimilar, beyond the reasonable
control of Lessor.
ARTICLE 8. INDEMNITY AND INSURANCE
8.01 Lessee hereby waives any and all claims against Lessor for damage to
any property or injury to or death of any person in, upon or about the Demised
Premises, arising at any time and from any cause other than solely by reason of
the negligence or willful misconduct of Lessor. Lessee further expressly
indemnifies and holds Lessor harmless from and against any and all claims,
demands, causes of action, liabilities, costs or expenses, including attorney's
fees, occasioned by or in any way connected with the condition, use or misuse of
the Demised Premises, or occasioned by any act or omission of Lessee and
Lessee's agents, servants, employees, invitees or other persons who may come
upon the Demised Premises, except for damage to any property or injury to or
death of any person caused solely by the negligence or willful misconduct of
Lessor.
8.02 Lessee hereby agrees to maintain in full force and effect at all times
during the term of this Lease, at Lessee's expense, a policy or policies of
comprehensive general liability insurance, insuring against all liability of
Lessee and Lessee's
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authorized representatives, agents and invitees arising out of or in connection
with Lessee's use and occupancy of the Demised Premises and also insuring
performance by Lessee of the indemnity provisions set forth in Section 8.01. The
initial amount of such insurance shall be at least $1,000,000.00, and shall be
subject to periodic increase based upon inflation, provided increased amount is
commercially reasonable and available, recommendations by Lessor's insurance
advisors, and other relevant factors. However, the amount of such general
liability insurance shall not limit Lessee's liability nor relieve Lessee of any
obligations under this Lease. The general liability insurance policy shall name
Lessor as an insured party thereunder, and no cancellation or reduction in
coverage will be made without thirty (30) days prior written notice by Lessee to
Lessor unless lessee is prevented from giving thirty (30) days notice due to
circumstances beyond lessee's control. A copy of the policy or a certificate of
insurance shall be furnished to Lessor.
8.03 Lessor shall maintain in full force and effect a policy or policies
covering loss or damage to the Industrial Center, to the extent of the
replacement value thereof. Such policy or policies shall provide protection
against all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, and any other perils (excluding flood
and earthquake) which Lessor deems necessary. Lessor shall also maintain in
full force and effect a rental income insurance policy, with loss payable to
Lessor, in an amount equal to one year's gross rent from the Industrial Center,
which insurance shall also cover all real estate taxes and insurance costs for
said period. Lessee shall pay to Lessor, as additional rent, an amount equal to
9.42% initially and 16.72% subsequently of the premiums paid by Lessor for the
hazard and rental income insurance policies described herein, such amount to be
paid within ten (10) days after Lessee's receipt of a billing therefor from
Lessor. Lessee shall be responsible for maintaining its own insurance covering
the personal property, trade fixtures and removable leasehold improvements owned
by Lessee and located upon the Demised Premises.
8.04 Lessor and Lessee each hereby waive any and all rights of recovery
against the other, or against the agents, employees or representatives of the
other, on account of loss or damage to the property of the waiving party to the
extent that such loss or damage is insured against under any insurance policies
which either Lessor or Lessee may have in force at the time of such loss or
damage. Lessee shall, upon obtaining the insurance required hereunder, give
notice to the insurance carrier that the foregoing mutual waiver of subrogation
is contained in this Lease and Lessee shall cause each insurance policy obtained
by Lessee to provide that the insurance company waives all right of recovery by
way of subrogation against either Lessor or Lessee in connection with any damage
covered by such policy.
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ARTICLE 9. REPAIRS AND MAINTENANCE
9.01 Lessee shall, at all times during the term hereof and at Lessee's own
expense, keep and maintain the Demised Premises and every part thereof in good
condition and repair. Lessee hereby waives all rights to make repairs at the
expense of Lessor or in lieu thereof to vacate the Demised Premises as provided
by California Civil Code Section 1942 or any other law, statute or ordinance now
or hereafter in effect. (see paragraph 31 below)
9.02 The obligations of Lessee to maintain the Demised Premises shall not
include the roof or structural components of the building or any replacement of
the air conditioning units or replacement of the compressor or heat exchanger
within such units. Moreover, Lessor hereby warrants to Lessee that all
mechanical, electrical, plumbing and other systems within the Demised Premises
are in good operating condition and repair and Lessor will be responsible for
any necessary repairs or replacements thereof, beyond normal maintenance, for a
period of one (1) year from the commencement of the lease term, provided such
repair or replacement is not the result of any failure to maintain or any
negligent act or omission by Lessee. (see paragraph 31 below)
ARTICLE 10. TAXES AND ASSESSMENTS
10.01 Lessee shall pay to Lessor, as additional rent, 9.42% initially and
16.72% subsequently of all real property taxes levied or assessed against the
Industrial Center during the Lease term, except that:
(a) Lessee shall pay 100% of any increase in real property taxes
attributable to the alterations and improvements described in Exhibits "A" and
"B" attached hereto, and any other alterations or improvements to the
Demised Premises constructed by or for the benefit of Lessee;
(b) Lessee shall not be charged for any increase in real property
taxes after the date hereof solely attributable to alterations or improvements
constructed or installed within the Industrial Center as leasehold improvements
for the use and benefit of any other tenant or tenants.
(c) Lessee shall not be responsible for tax increases associated with
a sale or transfer of the property.
10.02 Payment by Lessee of the real property taxes referred to herein shall
be made within ten (10) days after Lessor furnishes to Lessee a copy of the tax
xxxx showing the total amount of property taxes levied or assessed against the
Industrial Center,
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the amount thereof payable by Lessee, and the calculation utilized by Lessor to
determine such amount. Billing shall be in two installments made by Lessor on
or about February 1, and November 1, of each year of the Lease.
10.03 As used herein, the term "real property taxes" shall include any form
of real estate tax or assessment, general, special, ordinary or extraordinary,
and any license fee, commercial rental tax, improvement bond or bonds, levy or
tax imposed on the Industrial Center by any authority having the direct or
indirect power to tax, including any city, state or federal agency, or any
school, sanitary, fire, street, drainage, or other improvement district. The
term shall also include any tax, fee, levy, assessment, or charge imposed by any
taxing authority upon Lessor's right to receive, or the receipt of, rent or
income from the Industrial Center, or against Lessor's business of leasing the
Industrial Center. However, the term "real property taxes" does not include
Lessor's federal or state personal income or franchise taxes.
10.04 Lessee shall pay prior to delinquency all taxes levied or assessed
against the trade fixtures, equipment, furnishings, and other personal property
of Lessee located upon the Demised Premises or elsewhere. When possible, Lessee
shall cause said trade fixtures, equipment, furnishings, and other personal
property to be assessed and billed separately from the real property of Lessor.
If any of Lessee's personal property shall be assessed with Lessor's real
property, Lessee shall pay Lessor the taxes attributable to Lessee within ten
(10) days after Lessor furnishes to Lessee a written statement describing the
property in question and showing the amount of tax thereon payable by Lessee.
ARTICLE 11. ALTERATIONS AND IMPROVEMENTS
11.01 Except for the leasehold improvements authorized to be performed by
Lessee under Section 6.02, Lessee shall not, without the prior written
consent of Lessor (which consent shall not be unreasonably withheld), make
any alterations, additions or improvements in, on or about the Demised
Premises, if the alterations and improvements exceed $10,000.00 in cost. As
a condition to giving such consent, Lessor may require Lessee to provide
Lessor a surety bond or other security satisfactory to Lessor to insure
Lessor against mechanics' and materialmen's liens and to insure completion of
the work.
11.02 All alterations, additions and improvements, whether temporary or
permanent in character, made by Lessee in, on or about the Demised Premises,
except movable trade fixtures installed at the expense of Lessee, shall, in the
absence of a written request by Lessor, which written request shall be given at
the time Lessee requests permission to make improvement, for their removal,
become the property of Lessor and shall remain
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upon and be surrendered with the Demised Premises at the termination of this
Lease by lapse of time or otherwise without compensation to Lessee.
ARTICLE 12. DAMAGE OR DESTRUCTION
12.01 If the demised Premises, or other portion of the Industrial Center of
which the Demised Premises constitute a part, are damaged, by fire or other
casualty, Lessor shall forthwith repair the same, provided such repairs can, in
Lessor's opinion, be completed within ninety (90) days. In such event, this
Lease shall remain in full force and effect except that if there is damage to
the Demised Premises and such damage was not the result of negligence or willful
misconduct of Lessee or Lessee's employees or invitees, the rent payable by
Lessee shall be abated while the repairs are being made by the extent to which
the Demised Premises are unusable by Lessee in the normal conduct of Lessee's
business. If the repairs cannot, in Lessor's opinion, be completed within
ninety (90) days, Lessor may, at Lessor's option, make the repairs and this
Lease shall continue in full force and effect, subject to abatement of rental as
hereinabove in this Section provided. In the event Lessor does not elect to
make the repairs which cannot be completed within ninety (90) days, and provided
the damage affects the Demised Premises or common areas necessary to Lessee's
use, Lessor shall give written notice of such fact to Lessee within thirty (30)
days after the date on which the damage occurred and either Lessor or Lessee
may, within thirty (30) days after the giving of such notice, terminate this
Lease. Lessee shall have the right to make improvements and continue the lease,
subject to abatement of rental as provided in this section, if Lessor does not
elect to make the repairs which cannot be completed within ninety (90) days.
2.02 Notwithstanding the provisions of Section 12.01 above, Lessor shall
have the option of terminating this Lease in any of the following circumstances:
(a) Where the damage or destruction arises from a casualty or cause
not covered by Lessor's insurance then in force.
(b) Where the building in which the Demised Premises are located is
damaged or destroyed to the extent of 33-1/3 percent or more of the replacement
cost thereof, whether the Demised Premises be insured or not.
(c) Where the repairs cannot be made by reason of any statute,
ordinance, rule or regulation of any governmental authority.
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12.03 If Lessor is obligated or elects to repair any damage pursuant to this
Article, Lessor shall not be required to repair or replace any improvements
installed in the Demised Premises by Lessee, other than building standard tenant
improvements made by Lessor, and Lessee shall, at Lessee's own expense, repair
and restore Lessee's portion of such improvements.
12.04 A total destruction of the entire building in which the Demised
Premises are located shall automatically terminate this Lease.
12.05 Except as otherwise expressly provided in this Article, Lessee hereby
waives the provisions of California Civil Code Sections 1932(2) and 1933(4).
ARTICLE 13. CONDEMNATION
13.01 If all of the Demised Premises or so much thereof is taken by right of
eminent domain, or purchase in lieu thereof, such that the Demised Premises are
no longer reasonably suitable for Lessee's use, this Lease shall terminate as of
the date that possession of the Demised Premises or part thereof is taken.
13.02 If any part of the Demised Premises is taken and the remaining part
thereof (after reconstruction of the then existing building) is reasonably
suitable for Lessee's use, this Lease shall, as to the part so taken, terminate
as of the date that possession of such part is taken and the rent payable
hereunder shall be reduced in the same proportion that the floor area of the
portion of the Demised Premises so taken (less any addition thereto by reason
of any reconstruction) bears to the original floor area of the Demised Premises
immediately prior to the taking. Lessor shall, at Lessor's expense, make all
necessary repairs or alterations to restore the remaining Demised Premises to a
complete architectural unit.
13.03 No award for any partial or entire taking shall be apportioned and
Lessee hereby assigns to Lessor all of Lessee's interest therein, except that
Lessee shall be entitled to any portion of the award specifically designated as
compensation for the taking of personal property belonging to Lessee, for the
interruption of Lessee's business, for Lessee's moving costs or loss of goodwill
suffered by Lessee and for the cost of improvements to the premises paid by
Lessee. No temporary taking of the Demised Premises shall terminate this Lease
or give Lessee any right to abatement of rent hereunder; any award recovered by
Lessee for such temporary taking shall belong entirely to Lessee and Lessor
shall have no interest therein. Each party agrees to execute and deliver to the
other all instruments and documents that may be required to implement the
provisions of this Section.
ARTICLE 14. ASSIGNMENT AND SUBLETTING
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14.01 Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage, sublet, pledge, hypothecate or encumber all or any part of Lessee's
interest in this Lease or in the Demised Premises or any part thereof, without
Lessor's prior written consent and any attempt to do so without such consent
being first had and obtained shall be wholly void and shall constitute a breach
of this Lease. If Lessee is a corporation, or partnership any transfer of a
controlling ownership interest in the stock of Lessee shall constitute an
assignment hereunder.
14.02 If Lessee complies with the following conditions, Lessor shall not
unreasonably withhold Lessor's consent to the assignment of this Lease or the
subletting of the Demised Premises or any portion thereof. Lessee shall submit
in writing to Lessor:
(a) The name and legal composition of the proposed Assignee or
Sublessee;
(b) The terms and provisions of the proposed Assignment or Sublease;
and
(c) Such financial information as Lessor may reasonably request
concerning the proposed Assignee or Sublessee.
14.03 No consent by Lessor to any assignment or subletting by Lessee shall
relieve Lessee of any obligation to be performed by Lessee under this Lease,
whether occurring before or after such consent, assignment or subletting. The
consent by Lessor to any assignment or subletting shall not relieve Lessee from
the obligation to obtain Lessor's express written consent to any other
assignment or subletting. The acceptance of rent by Lessor from any other
person shall not be deemed to be a waiver by Lessor of any provisions of this
Lease or to be a consent to any assignment, subletting or other transfer.
Consent to one assignment, subletting or other transfer shall not be deemed to
constitute consent to any subsequent assignment, subletting or other transfer.
ARTICLE 15. TRANSFER OF LESSOR'S INTEREST
15.01 Lessor shall have the right at any time to sell, transfer, assign,
pledge, hypothecate or otherwise dispose of Lessor's interest in the Demised
Premises and in this Lease. In the event of any such sale, transfer,
assignment, pledge, hypothecation or other disposition, all obligations of
Lessor hereunder shall devolve upon the transferee and Lessor shall be released
and discharged from all further obligation or liability hereunder; provided,
that Lessor shall be responsible for any funds in the hands of Lessor in which
Lessee has an interest
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until such funds have been delivered to the transferee. Lessee agrees to attorn
to the transferee provided all of Lessor's obligations hereunder are assumed by
the transferee in writing for the benefit of Lessee.
ARTICLE 16. MECHANICS' LIENS
16.01 Lessee shall keep the Demised Premises free and clear of all
mechanics' liens resulting from any construction work done by or for Lessee.
Lessee shall have the right to contest the correctness or validity of any such
lien if, immediately on demand by Lessor, Lessee 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 or other security satisfactory to Lessor. If used, the bond
shall meet the requirements of Section 3143 of the California Civil Code and
shall provide for the payment of any sum that the claimant may recover on the
claim, together with costs of suit. Should Lessee fail to discharge any such
lien or cause the same to be released within sixty (60) days from the date the
lien is filed, Lessor may, without inquiring into the validity thereof, cause
the same to be discharged and all amounts so expended by Lessor, together with
reasonable attorney's fees and expenses, shall be paid by Lessee to Lessor as
additional rent hereunder, together with interest thereon at the rate of
fifteen percent (15%) per annum. Lessee shall give ten (10) days prior
written notice to Lessor of the date on which any construction work will be
commenced so as to afford Lessor the opportunity to post a notice of
nonresponsibility.
ARTICLE 17. ENTRY BY LESSOR
17.01 Lessor and Lessor's authorized representatives shall have the right to
enter the Demised Premises with 24 hour prior verbal notice unless in cases of
emergency at reasonable hours for any of the following purposes:
(a) To examine and inspect the Demised Premises;
(b) To supply any service to be provided by Lessor to Lessee
hereunder;
(c) To perform any necessary maintenance or repairs that Lessor is
required or permitted to perform hereunder;
(d) To serve, post or keep posted any notices required or allowed
under the provisions of this Lease;
(e) To post "for sale" signs at any time during the term, to post
"for rent" or "for lease" signs during the last one hundred
twenty (120) days of
13
the Lease term, or during any period while Lessee is in default;
(f) To show the Demised Premises to prospective tenants, buyers,
lenders or other persons at any time during the Lease term;
(g) To do any other act or thing necessary for the safety or
preservation of the Demised Premises or the Industrial Center.
17.02 Lessor shall at all times have and retain a key with which to unlock
all of the doors in, on or about the Demised Premises (excluding Lessee's
vaults, safes and other secured areas designated in writing by Lessee in
advance); and Lessor shall have the right to use any and all means which Lessor
may deem proper to open said doors in an emergency in order to obtain entry to
the Demised Premises, and any entry to the Demised Premises obtained by Lessor
by any of said means, or otherwise, shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into or a detainer of the
Demised Premises, or an eviction, actual or constructive, of Lessee from the
Demised Premises, or any portion thereof.
ARTICLE 18. DEFAULT BY LESSEE
18.01 The occurrence of any one or more of the following events ("Events of
Default") shall constitute a material default and breach of this Lease by
Lessee:
(a) Unless cured within ten day period following due date, any
failure by Lessee to pay any rental or any other sum required to
be paid by Lessee hereunder, as and when the same becomes due and
payable.
(b) Any 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 ten (10) days after written notice thereof
by Lessor to Lessee; provided, however, that if the nature of
such default is such that it cannot reasonably be cured within
such ten (10) 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.
(c) The making by Lessee of any general assignment or general
arrangement for the benefit of creditors; the filing by or
against Lessee of a petition to have Lessee adjudged a bankrupt
or a petition for
14
reorganization or arrangement under any law relating to
bankruptcy (unless, in the case of a petition filed against
Lessee, the same is dismissed within ninety (90) days); the
appointment of a trustee or receiver to take possession of
substantially all of Lessee's interest in this Lease, where
possession is not restored to Lessee within sixty (60) days; or
the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Demised
Premises or of Lessee's interest in this Lease, where such
seizure is not discharged within forty-five (45) days.
18.02 Any notice given under this Article shall specify the Event of Default
and the applicable lease provisions, and shall demand that Lessee perform the
provisions of this Lease, within the applicable period of time. No such notice
shall be deemed a forfeiture or a termination of this Lease provided Lessee
cures the default within the applicable period of time.
ARTICLE 19. LESSOR'S REMEDIES UPON DEFAULT
19.01 Lessor shall have the following remedies upon the occurrence of an
Event of Default, such remedies being cumulative and not exclusive and in
addition to any other remedies available to Lessor as now or hereafter provided
by law:
(a) Lessor can continue this Lease in full force and effect, and the
Lease will continue in effect as long as Lessor does not
terminate Lessee's right to possession, and Lessor shall have the
right to collect rent when due, irrespective of whether Lessee
shall have abandoned the Demised Premises. During the period
Lessee is in default, Lessor can enter the Demised Premises and
relet them, or any part of them, to third parties for Lessee's
account. Lessee shall be liable immediately to Lessor for all
costs Lessor incurs in such reletting, including, without
limitation, broker's commissions and like costs. Reletting can
be for a period shorter or longer than the remaining term of this
Lease. Lessee shall pay to Lessor the rent specified in this
Lease on the dates when the same becomes due, less the rent
Lessor receives from any reletting. No act by Lessor allowed by
this paragraph shall terminate this Lease unless Lessor notifies
Lessee that Lessor elects to terminate this Lease. After
Lessee's default and for as long as Lessor does not terminate
Lessee's right to possession of the Demised Premises, Lessee
shall have the right to assign or sublet Lessee's interest in
this Lease pursuant to Article 14, but Lessor's consent may be
conditioned upon all
15
defaults by Lessee being fully cured at the time of assignment or
subletting.
(b) Lessor can terminate Lessee's right to possession of the Demised
Premises at any time during Lessee's default. No act by Lessor
other than giving written notice to Lessee shall terminate this
Lease. Acts of maintenance, efforts to relet the Demised
Premises, or the appointment of a receiver on Lessor's initiative
to protect Lessor's interest under this Lease shall not
constitute a termination of Lessee's right to possession. On
termination, Lessor has the right to recover from Lessee:
(1) The worth, at the time of the award, of the unpaid rent that
has been earned at the time of termination of this Lease;
plus
(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 Lessee proves could have
been reasonably avoided; plus
(3) The worth, at the time of the award, of the amount by which
the unpaid rent for the balance of the term after the time
of award exceeds the amount of the loss of rent that Lessee
proves could have been reasonably avoided; and
(4) Any other amount, and court costs, necessary to compensate
Lessor for all detriment proximately caused by Lessee's
default.
"The worth, at the time of the award," as used in (1) and (2)
above, is to be computed by allowing interest at the rate of ten percent (10%)
per annum from the date of default. "The worth, at the time of the award" as
used in (3) above 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%). The term "rent," as used in this Article shall be deemed to
include all monetary sums required to be paid by Lessee pursuant to the terms of
this Lease.
ARTICLE 20. LESSOR'S RIGHT TO CURE DEFAULTS
20.01 If Lessee shall fail to pay any sum of money, other than rent,
required to be paid by Lessee hereunder, or shall fail to perform any other act
on Lessee's part to be performed hereunder, and such failure shall continue for
ten (10) days after notice
16
thereof by Lessor, Lessor may, but shall not be obligated to do so, and without
waiving or releasing Lessee from any obligations of Lessee, make such payment or
perform any such other act on Lessee's part to be made or performed hereunder.
All sums expended by Lessor, including necessary incidental costs, shall be
deemed additional rent hereunder and shall be payable to Lessor immediately upon
demand, together with interest thereon at the rate of fifteen percent (15%) per
annum from the date of expenditure to the date of reimbursement.
ARTICLE 21. COSTS OF SUIT
21.01 In the event legal action between Lessor and Lessee shall become
necessary in order to enforce or interpret this Lease, or any provision
contained herein, the prevailing party shall be entitled to recover all costs
and expenses as may be incurred in connection therewith, including reasonable
attorney's fees.
21.02 Should Lessor, without fault on Lessor's part, be made a party to any
litigation instituted by Lessee or by any third party against Lessee, or by or
against any person holding under or using the Demised Premises by license of
Lessee, or for the foreclosure of any lien for labor or materials furnished to
or for Lessee or any such other person or otherwise arising out of or resulting
from any act or transaction of Lessee or of any such other person, Lessee
covenants to save and hold Lessor harmless from any judgment rendered against
Lessor or the Demised Premises or any part thereof, and all costs and expenses,
including reasonable attorney's fees, incurred by Lessor in connection with such
litigation.
ARTICLE 22. SUBORDINATION
22.01 In the event the holder of any deed of trust hereafter to be placed
against the Demised Premises requires that this Lease be subordinate to any such
encumbrance, this Lease shall be subordinate to that encumbrance if Lessor first
obtains from the holder of the deed of trust a written agreement providing that
for so long as Lessee shall perform all of Lessee's duties and obligations
hereunder, no foreclosure, deed given in lieu of foreclosure or sale under such
deed of trust shall affect Lessee's rights under this Lease. Lessee shall
attorn to any purchaser at any foreclosure sale, or to any grantee or transferee
designated in any deed given in lieu of foreclosure. Lessee shall execute the
written agreement and any other documents required by the holder of the deed of
trust to accomplish the purposes of this Article, and upon Lessee's failure or
refusal to do so within five (5) days after demand, Lessee hereby appoints
Lessor as Lessee's attorney-in-fact to execute such agreement or other documents
for and on behalf of Lessee. The power of attorney granted herein shall be
deemed to be coupled with an interest and to be irrevocable.
17
ARTICLE 23. ESTOPPEL CERTIFICATE
23.01 Each party, within ten (10) days after notice from the other, shall
execute and deliver to the other, in recordable form, a certificate provided by
Lessor at no cost to Lessee stating that this Lease is unmodified and in full
force and effect, or in full force and effect as modified stating the
modifications. The certificate also shall state the amount of monthly rent, the
dates to which the rent has been paid in advance, the amount of any security
deposit or prepaid rent, and shall further certify that there is no incurred
default by the other party under the Lease, or specify such default, if any is
claimed. Failure to deliver the certificate within the ten (10) 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,
that there are no incurred defaults by the party requesting the certificate and
that not more than one (1) month's rent has been paid in advance.
ARTICLE 24. HOLDING OVER
24.01 If Lessee remains in possession of all or any part of the Demised
Premises after the expiration of the term hereof, with the express or implied
consent of Lessor, such tenancy shall be from month to month only, and not a
renewal hereof or an extension for any further term and in such case rent and
other monetary sums due hereunder shall be the amount payable at the expiration
of the term of this Lease and such month to month tenancy shall be subject to
every other term, covenant and agreement contained herein.
ARTICLE 25. SURRENDER
25.01 Upon the expiration or earlier termination of this Lease, Lessee shall
surrender the Demised Premises in the same condition as received, ordinary wear
and tear and damage by fire, earthquake, act of God or the elements alone
excepted. Lessee shall remove all of Lessee's personal property and trade
fixtures and shall repair, at Lessee's expense, any damage to the Demised
Premises or the Industrial Center caused by such removal, including, without
limitation, repair of floors and patching and repainting of walls where
required, all to Lessor's reasonable satisfaction. Any personal property or
trade fixtures not removed at the expiration or earlier termination of this
Lease shall be deemed abandoned by Lessee. If Lessor so elects, Lessee shall
also remove any alterations or improvements installed by or for Lessee which
would otherwise remain as part of the Demised
18
Premises and Lessee shall restore the Demised Premises to their condition prior
to such installation.
25.02 Should Lessee fail to remove any personal property or trade fixtures,
or fail to remove any alterations or improvements as requested by Lessor, Lessee
shall be liable to Lessor for any and all removal costs, transportation and
storage expenses, and the cost of restoring the Demised Premises as required
herein. Lessee shall indemnify Lessor against any loss, damage or liability
resulting from delay by Lessee in so surrendering the Demised Premises,
including, without limitation, any claims made by any succeeding tenants founded
on such delay.
ARTICLE 26. WAIVER
26.01 No covenant, term or condition or the breach thereof shall be deemed
waived, except by written consent of the party against whom the waiver is
claimed, and any waiver of any covenant, term or condition shall not be deemed
to be a waiver of any preceding or succeeding breach of the same or any other
covenant, term or condition. Acceptance by Lessor of any performance by Lessee
after the time the same shall have become due shall not constitute a waiver by
Lessor of the breach or default of any covenant, term or condition unless
otherwise expressly agreed to by Lessor in writing. The receipt and acceptance
by Lessor of delinquent rent shall constitute only a waiver of timely payment
for the particular rent payment involved.
ARTICLE 27. QUIET ENJOYMENT
Lessor hereby covenants with Lessee that upon payment by Lessee of the
rent as aforesaid and upon observance and performance of the terms of this Lease
by Lessee, Lessee shall peaceably hold and enjoy the Demised Premises for the
term hereby demised without hindrance or interruption by Lessor or any person or
persons lawfully or equitably claiming by, through or under Lessor.
ARTICLE 28. NOTICES
28.01 All notices or demands required or permitted to be given hereunder
shall be in writing and shall be either personally served or mailed by certified
mail, return receipt requested, to the other party at the following addresses:
To Lessor: To Lessee:
XXXX XXXXXX LATHING COMPANY CATAPULT COMMUNICATIONS
000 Xxx Xxxxxxx Xxxxxx, #000 000 X. Xxxxxxx Xxxx Xxxxxx X&X
Xxxxxxxx Xxxx, XX 00000 Xxxxxxxx Xxxx, XX 00000
19
8.02 Either party may change the foregoing address by giving notice to the
other in the manner provided herein. Any notice sent by mail shall be deemed
received on the second business day following deposit of the notice in the
United States Mail, with proper postage prepaid thereon.
ARTICLE 29. MISCELLANEOUS PROVISIONS
29.01 CAPTIONS. The captions used in this Lease are for convenience only
and shall not be deemed to be relevant in resolving any question of
interpretation or construction of any provision contained herein.
29.02 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes and cancels any prior agreements or
understandings, whether written or oral. This Agreement can only be modified by
a written amendment hereto executed by both parties.
29.03 SEVERABILITY. If any term or provision of this Lease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Lease shall not be affected thereby, and
each term and provision of this Lease shall be valid and enforceable to the
fullest extent permitted by law.
29.04 TIME. Time is hereby declared to be of the essence of this Lease and
each and every provision hereof.
29.05 CORPORATE AUTHORITY. If Lessee is a corporation, each of the persons
executing this Lease on behalf of Lessee does hereby represent and warrant that
Lessee currently is in good standing in the state of its incorporation, that
Lessee is qualified to do business in California, that the corporation has full
right and authority to enter into this Lease, and that each person executing
this Lease on behalf of the corporation is duly authorized and empowered to do
so.
29.06 CALENDAR DAYS. All references herein to any acts or obligations to be
performed within a certain number of days shall mean calendar days, unless
otherwise specified.
29.07 EFFECTIVE DATE. Submission of this instrument for examination or
signature by Lessee does not constitute a reservation of or option for lease,
and this instrument is not effective as a lease or otherwise until execution and
delivery by both Lessor and Lessee, in which event this Lease shall become
effective on the date of execution or such other date as may be specified in
writing signed by Lessor and Lessee.
20
29.08 CHOICE OF LAW. This Lease shall be governed by and interpreted in
accordance with the laws of the State of California.
29.09 MEMORANDUM OF LEASE. This Lease Agreement shall not be recorded but
the parties may agree to execute and record a Memorandum of Lease, in form
satisfactory to Lessor and Lessee.
29.10 SUCCESSORS AND ASSIGNS. Subject to the restrictions against
assignment and subletting by Lessee, this Lease shall be binding upon and inure
to the benefit of the respective heirs, executors, administrators, personal
representatives, successors and assigns of the parties hereto.
ARTICLE 30. LESSEE IMPROVEMENTS
30.01 Lessor, at Lessor's sole cost and expense shall provide the following
tenant improvement modifications:
(a) Paint newly constructed areas.
(b) Repaint area within existing 8,000 sq. ft. premises as required for
delivery of a fresh clean Premises.
(c) Assure that all existing electrical and mechanical is in good
condition with a useful life remaining of at least five (5) years. Assure
that the building exterior paint including building exterior doors, roof,
foundation and general building condition is good with no responsibility
for Lessee to bear costs of replacing such.
(d) Provide space planning service to modify existing plan and to
establish electrical requirements for lab and open office areas for
purposes of refining the bid and architectural fees associated with
Lessee's improvements, permitting, etc., not to exceed $ 6000.00
(e) Repairing, recurbing and restriping as required by city of Mt. View
during permitting process for ADA compliance Lessor shall also be
responsible for costs associated with ADA compliance of existing restrooms
and entry, exit doors required by city during Permitting process.
Lessee at Lessee's sole cost shall pay for improvements to be undertaken as
outlined on exhibit B. Except as noted above.
ARTICLE 31. CAP ON UTILITIES, TAXES, INSURANCE, COMMON AREA MAINTENANCE
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31.01 Lessee's obligation to pay charges as described in paragraphs 7.02,
8.03, 9.01, 9.02, and 10.01 shall not exceed 7 cents per square foot per month
over the term of the base Lease.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Lease the day and year
first above written.
LESSOR:
XXXX XXXXXX LATHING COMPANY, LLC
By /s/ [ILLEGIBLE]
---------------------------------
LESSEE:
CATAPULT COMMUNICATIONS, a
California Corporation
By /s/ Xxxxxxx X. Xxxx
---------------------------------
22
EXHIBIT "A"
CATAPULT COMMUNICATIONS
[FLOORPLAN]
EXHIBIT "B"
CATAPULT COMMUNICATIONS
TENANT IMPROVEMENTS
[FLOORPLAN]
