Exhibit 10.28
SUNNYVALE INDUSTRIALS NET LEASE AGREEMENT
(Single Tenant)
For and in consideration of the rentals, covenants, and conditions
hereinafter set forth, Landlord hereby leases to Tenant, and Tenant hereby rents
from Landlord, the herein described Premises for the term, at the rental and
subject to and upon all of the terms, covenants and agreements set forth in this
Net Lease Agreement ("Lease"):
1. SUMMARY OF LEASE PROVISIONS.
1.1 Tenant: SILICON STORAGE TECHNOLOGY, INC., A
CALIFORNIA CORPORATION ("Tenant").
1.2 Landlord: SUNNYVALE INDUSTRIALS, A CALIFORNIA GENERAL
PARTNERSHIP ("Landlord").
1.3 Date of Lease, for reference purposes only: June ___,
2000.
1.4 Premises: That certain real property and building of
approximately 92,079 square feet situated thereon located in the City of
Sunnyvale, County of Santa Xxxxx, State of California, shown cross-hatched on
the site plan attached hereto as Exhibit "A", and commonly referred to as 0000
Xxxxx Xxxx.
1.5 Term: Approximately 111 months (Paragraph 3)
1.6 Commencement Date: January 1, 2001, subject to the
provisions of Paragraph 3 below. (Paragraph 3)
1.7 Ending Date: April 5, 2010, subject to the
provisions of Paragraph 3 below. (Paragraph 3)
1.8 Base Rent: The triple net rental rate ("Base Rent")
is $1.90 per gross rentable square foot, with an annual adjustment of an
increase of three (3%) per year, effective each annual anniversary. (Paragraph
4)
Receipt of one month's Rent in the sum of $174,950 is hereby acknowledged by
Landlord.
1.9 Use of Premises: General office, research and
development, marketing, sales, manufacturing, distribution, warehouse and all
other legal uses, subject to the provisions of Paragraph 6 below. (Paragraph 6)
1.10 Security Deposit: $174,950. (Paragraph 5)
1.11 Addresses for Notices:
To Landlord:
Sunnyvale Industrials
Attention: Xxxxxx Xxxxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxx, XX 00000
With a copy to:
Xxx X. Xxxxxx
Xxxxxx Law Firm LLP
0000 Xx Xxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000
To Tenant: After the Commencement Date to the Premises:
Silicon Storage Technology, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Prior to the Commencement Date to the
Premises:
Silicon Storage Technology, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
1.12 SUMMARY PROVISIONS IN GENERAL. Parenthetical
references in this Paragraph 1 to other paragraphs in this Lease are for
convenience of reference, and designate some of the other Lease paragraphs where
applicable provisions are set forth. All of the terms and conditions of each
such referenced paragraph shall be construed to be incorporated within and are
made a part of each of the above referring Summary of Lease Provisions. In the
event of any conflict between any Summary of Lease Provision as set forth above
and the balance of the Lease, the latter shall control.
1.13 CONDITION PRECEDENT. This lease is conditioned upon
Landlord receiving, within thirty (30) days of the execution of this Lease, a
release of the Premises and Landlord in a form and under terms acceptable to
Landlord in its sole discretion.
2. PROPERTY LEASED.
2.1 PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, upon the terms and conditions herein set forth,
that certain real property and
building ("Premises") referred to in Paragraph 1.4 above, shown cross-hatched on
the site plan attached hereto as Exhibit "A". In addition to the site plan, the
survey shall also be attached as Exhibit "A". Tenant shall have the exclusive
right to use all parking spaces on the Premises except as to the fenced-in area
previously described as "Landscape Contractor Trailers" as shown on the site
plan in Exhibit "A" ("Landlord's Retained Area").
2.2. DELIVERY. The Premises are currently leased and
occupied by National Semiconductor, Inc. pursuant to a lease (the "National
Lease") expiring on March 31, 2002. National Semiconductor has agreed to vacate
the Premises on or before December 31, 2000 and Landlord will deliver possession
to Tenant promptly upon National's vacating the Premises. Landlord will give
Tenant ten (10) days advance written notice of Landlord's delivery of possession
of the Premises to Tenant, the tenth (10th) day after such notice being the
"Delivery Date". Landlord will exert reasonably diligent efforts to cause such
timely removal but Landlord does not warrant that such removal will so occur nor
will Landlord be liable for any delay in delivering possession including delay
caused, directly or indirectly, by National Semiconductor, Inc.
2.3 CONDITION AND ACCEPTANCE OF PREMISES ON "AS-IS"
BASIS. It is hereby agreed that the Premises leased hereunder is leased strictly
on an "as-is" basis and in its present condition without representation or
warranty of any kind or nature whatsoever as to the condition and repair of the
Premises or any part or system therein, including but not limited to the
electrical, mechanical, HVAC, plumbing, sewer and other systems serving the
Premises and the roof of the Building. Except as specifically noted in this
Lease, it is specifically agreed between the parties that Landlord shall not be
required to make, nor be responsible for any cost, in connection with any
repair, restoration and/or improvement to the Premises in order for this Lease
to commence, or thereafter, throughout the Term of this Lease, excepting
Landlord shall be responsible for costs incurred to maintain in reasonably good
order and repair the building foundation, the structural portion of the exterior
walls and the structural portion of the roof. Tenant acknowledges that neither
Landlord nor Landlord's agents have made any representation or warranty as to
the suitability of the Premises for the conduct of Tenant's business, or the use
or occupancy which may be made thereof, and Tenant has independently
investigated and is satisfied that the Premises are suitable for Tenant's
intended use and that the Premises meets all governmental requirements for such
intended use. By taking possession of the Premises, Tenant shall be deemed to
have accepted the Premises, subject to all applicable laws, covenants,
conditions, restrictions, easements and other matters of public record and the
rules and regulations from time to time promulgated by Landlord governing the
use of the Premises.
3. TERM.
3.1 COMMENCEMENT DATE. The term of this Lease ("Lease
Term") shall be for the period specified in Paragraph 1.5 above, commencing on
the Delivery Date which is the day immediately following vacation of the
Premises by National Semiconductor and which is expected to be not later than
January 1, 2001. In the event the Commencement Date occurs on any date other
than January 1, 2001, the Ending Date shall be April 5, 2010, however Rent
adjustment dates and similar dates shall be otherwise adjusted to reflect the
actual Commencement Date.
3.2 DELAY OF COMMENCEMENT DATE. Landlord shall not be
liable for any damage or loss incurred by Tenant for Landlord's failure, for
whatever cause, to deliver possession of the Premises, provided that if the
Delivery Date does not occur by February 28, 2001, Tenant shall have the right
to terminate this Lease by written notice delivered to Landlord within five (5)
days thereafter, Landlord and Tenant shall be relieved of their respective
obligations hereunder and Landlord shall return to Tenant the Security Deposit
and the first month's Rent paid by Tenant.
3.3 EARLY OCCUPANCY. If Tenant takes possession of the
Premises at any time prior to the Commencement Date, Tenant shall do so subject
to all of the terms and conditions hereof and shall pay the Rent and Additional
Rent provided for herein.
3.4 TENANT TO PHYSICALLY OCCUPY PREMISES. Tenant shall,
no later than one hundred eighty (180) days after the Commencement Date, go into
actual physical occupancy of the Premises; provided, however, the date of
Tenant's physical occupancy of the Premises shall in no event extend the
Commencement Date, the Lease Termination date or the date the payment of Rentals
hereunder commences. Time is of the essence.
4. RENT.
4.1 RENT. Tenant shall pay to Landlord as rent for the
Premises ("Rent"), in advance, on the first day of each calendar month,
commencing on the date specified in Paragraph 1.6 and continuing throughout the
Lease Term, the Rent set forth in Paragraph 1.8 above. Rent shall be prorated,
based on three hundred and sixty five (365) days per year, for any partial month
during the Lease Term. Rent shall be payable without deduction, offset, prior
notice or demand in lawful money of the United States to Landlord at the address
herein specified for purposes of notice or to such other persons or such other
places as Landlord may designate in writing. Tenant has paid the Rent for the
first one (1) month of the Term concurrent with Tenant's execution of this
Lease.
4.2 LATE CHARGE. Tenant hereby acknowledges that late
payment by Tenant to Landlord 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 on Landlord by the
terms of any mortgage or deed of trust covering the Premises. Accordingly,
Tenant shall pay to Landlord, as Additional Rent (as defined in Paragraph 4.3
below), without the necessity of prior notice or demand, a late charge equal to
five percent ( 5%) of any installment of Rent which is not received by Landlord
within five (5) days of the due date for such installment. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of late payment by Tenant. In no event shall
this provision for a late charge be deemed to grant to Tenant a grace period or
extension of time within which to pay any installment of Rent or prevent
Landlord from exercising any right or remedy available
to Landlord upon Tenant's failure to pay such installment of Rent when due,
including without limitation the right to terminate this Lease. In the event any
installment of Rent is not received by Landlord by the due date for such
installment, such installment shall bear interest at the annual rate set forth
in Paragraph 34 below, commencing on the first (1st) day after the due date for
such installment and continuing until such installment is paid in full.
4.3 ADDITIONAL RENT. All taxes, charges, costs and
expenses and other sums which Tenant is required to pay hereunder (together with
all interest and charges that may accrue thereon in the event of Tenant's
failure to pay the same), and all damages, costs and expenses which Landlord may
incur by reason of any Default by Tenant shall be deemed to be additional rent
hereunder ("Additional Rent"). Additional Rent shall accrue commencing on the
Commencement Date. In the event of nonpayment by Tenant of any Additional Rent,
Landlord shall have each and every right and remedy with respect thereto as
Landlord has for the nonpayment or late payment of Rent. The term "Rentals" as
used in this Lease shall mean Rent and Additional Rent.
5. SECURITY DEPOSIT.
5.1 Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord a security deposit ("Security
Deposit") in the amount set forth in Paragraph 1.10 above. The Security
Deposit shall be held by Landlord as security for the faithful performance by
Tenant of each and every term, covenant and condition of this Lease
applicable to Tenant; and not as prepayment of Rent. If Tenant shall at any
time fail to keep or perform any term, covenant or condition of this Lease
applicable to Tenant, including, without limitation, the payment of Rentals
or interest thereon, or those provisions requiring Tenant to repair damage to
the Premises caused by Tenant or to surrender the Premises in the condition
required pursuant to Paragraph 34 below, Landlord may, but shall not be
obligated to, and without waiving or releasing Tenant from any obligation
under this Lease, use, apply or retain the whole or any part of the Security
Deposit reasonably necessary for the payment of any amount which Landlord may
spend by reason of Tenant's default or as necessary to compensate Landlord
for any loss or damage which Landlord may suffer by reason, directly or
indirectly, of Tenant's default. In the event Landlord uses or applies any
portion of the Security Deposit, Tenant shall, within five (5) days after
written demand by Landlord, remit to Landlord sufficient funds to restore the
Security Deposit to its original sum. Failure by Tenant to so remit funds
shall be a Default by Tenant. Should Tenant comply with all of the terms,
covenants and conditions of this Lease applicable to Tenant, the balance of
the Security Deposit shall be returned to Tenant within thirty (30) days
after Lease Termination and surrender of the Premises by Tenant; provided,
however, if any portion of the Security Deposit is to be applied to repair
damages to the Premises caused by Tenant or Tenant's agents, to clean the
Premises, or to remove alterations and restore the Premises pursuant to
Paragraph 13.2 below, then the balance of the Security Deposit shall be
returned to Tenant no later than thirty (30) days after the date Landlord
completes such cleaning, removal and/or restoration.
5.2 While Tenant is taking the Premises in their "as-is"
condition, Tenant and its "Experts" have had the opportunity to negotiate the
turnover condition with the existing
tenant (National Semiconductor). Accordingly, Tenant shall be responsible for,
subject to the limitations set forth in the various provisions of Paragraph 6,
any failure by existing tenant to remove, repair, replace or restore any item or
items of whatever kind or nature, and Tenant shall become fully responsible for
such removal, repair or restoration as if it created such condition. In this
regard, Landlord shall obtain from existing tenant a list of additions,
alterations and other items, of whatever kind or nature, placed on, under or
about the Premises by National, which shall become the responsibility of Tenant,
at Landlord's election, to remove at Lease Termination. Said list shall be
attached hereto as Exhibit "B" and incorporated herein by reference.
Notwithstanding the above, Tenant is aware that current tenant has placed a
large diesel tank on the subject Premises and Tenant shall either: (a) be fully
responsible for removal of same in conformance with all applicable laws at any
time during the Lease Term, as well as any repairs or any restoration of the
Premises as a direct or indirect consequence of its placement by current tenant
on the Premises, or (b) notify Landlord within thirty (30) days of execution of
this Lease of its election to have such tank removed by current tenant and
Landlord shall have current tenant remove same. Further, and notwithstanding the
above, Tenant is aware that current tenant has utilized a portion of the
Premises, and placed thereon, numerous industrial "batteries" for use as an
electrical and/or power backup and Tenant hereby acknowledges it shall be
responsible for removal of same in conformance with all applicable laws at
commencement of, or, at its election, during the Lease Term, as well as any
repairs or any restoration of the Premises as a direct or indirect consequence
of its placement by current tenant on the Premises.
6. USE OF PREMISES.
6.1 PERMITTED USES. Tenant shall use the Premises only in
conformance with applicable Laws for the purposes set forth in Paragraph 1.9
above, and for no other purpose without the prior written consent of Landlord.
Any change in use of the Premises without the prior written consent of Landlord
shall be a Default by Tenant. Notwithstanding the above, Tenant and Tenant's
agents shall fully comply with the provisions of any Declaration of Covenants,
Conditions, and Restrictions affecting the Premises, and shall comply with all
zoning restrictions and limitations imposed by the City of Sunnyvale or any
subsequent zoning designation.
6.2 TENANT TO COMPLY WITH LEGAL REQUIREMENTS. Tenant
shall, at its sole cost, promptly comply with any rule, regulation, order, law,
statute, ordinance or any other requirement of any governmental or
quasi-governmental authority now or hereafter in effect (collectively, "Laws")
relating to or affecting the use, occupational safety, occupancy or condition of
the Premises now in force, or which may hereafter be in force, including without
limitation those relating to utility usage and load or number of permissible
occupants or users of the Premises, whether or not the same are now contemplated
by the parties; with the provisions of all recorded documents affecting the
Premises insofar as the same relate to or affect the use, occupational safety,
occupancy, or condition of the Premises; with requirements of the Americans with
Disabilities Act; and with the requirements of any board of fire underwriters
(or similar body now or hereafter constituted) relating to or affecting the use,
occupational safety, occupancy or condition of the Premises. Tenant's
obligations pursuant to this Paragraph 6.2 shall include without limitation
maintaining or restoring the Premises and making structural and
non-structural alterations and additions in compliance and conformity with all
Laws and recorded documents relating to the use, occupational safety, occupancy
or condition of the Premises during the Lease Term, excepting those Laws and
recorded documents requiring a change, alteration, or improvement of the
Premises as directly related to the building foundation, the structural portion
of the exterior walls and the structural portion of the roof. Landlord shall not
be required to make any alteration or addition required to bring the Premises
into compliance with legal requirements in effect on the Delivery Date or
thereafter. At Landlord's option, Landlord may make the alteration, addition or
change required of Tenant, and Tenant shall pay the cost thereof as Additional
Rent. Tenant shall obtain prior to taking possession of the Premises any
permits, licenses or other authorizations required for the lawful operation of
its business at the Premises. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action or proceeding against
Tenant, regardless of whether Landlord is a party thereto, that Tenant has
violated such Law or recorded document relating to the use, occupational safety,
occupancy or condition of the Premises shall be conclusive of the fact of such
violation by Tenant. Any alterations or additions undertaken by Tenant pursuant
to this Paragraph 6.2 shall be subject to the requirements of Paragraph 13.1
below.
6.3 PROHIBITED USES. Tenant and Tenant's agents shall not
commit or suffer to be committed any waste upon the Premises. Tenant and
Tenant's agents shall not do or permit anything to be done in or about the
Premises which will unreasonably obstruct or interfere with the rights of any
occupants of neighboring property, or injure or annoy them. Tenant shall not
conduct or permit any auction or sale open to the public to be held or conducted
on or about the Premises. Tenant and Tenant's agents shall not use or allow the
Premises to be used for any unlawful purpose or any purpose not permitted by
this Lease, nor shall Tenant or Tenant's agents cause, maintain, or permit any
nuisance in, on or about the Premises. Tenant and Tenant's agents shall not do
or permit anything to be done in or about the Premises nor bring or keep
anything in the Premises which will cause a cancellation of any insurance policy
covering the Premises or any part thereof or any of its contents, nor shall
Tenant or Tenant's agents keep, use or sell or permit to be kept, used or sold
in or about the Premises any articles which may be prohibited by a standard form
policy of fire insurance. In the event the rate of any insurance upon the
Premises or any part thereof or any of its contents is increased because of the
acts or omissions, direct or indirect, of Tenant or Tenant's agents, Tenant
shall pay, as Additional Rent, the full cost of such increase; provided however
this provision shall in no event be deemed to constitute a waiver of Landlord's
right to any other rights or remedies of Landlord in connection with such
increase. Tenant and Tenant's agents shall not place any loads upon the floor,
walls or ceiling of the Premises which would endanger the Premises or the
structural elements thereof, nor place any harmful liquids in the drainage
system of the Premises. No waste materials or refuse shall be dumped upon or
permitted to remain upon any part of the Premises except in enclosed trash
containers.
Tenant shall not allow any activity which in the reasonable opinion of
Landlord is detrimental to the operation of other buildings located upon real
property owned by Landlord adjacent to the Premises, including but not limited
to any picketing, work stoppage, or other concerted activity. Landlord shall
have the right to require Tenant, at Tenant's own expense and within a
reasonable period of time, to use Tenant's best efforts to terminate or control
any such
picketing, work stoppage or other concerted activity to the extent necessary to
eliminate any interference with the operation or such tenants. Failure by Tenant
to use its best efforts to do so shall be a Default by Tenant. Nothing contained
in this paragraph shall be construed as placing Landlord in an employer-employee
relationship with any of Tenant's employees or with any other employees who may
be involved in such activity.
6.4 HAZARDOUS MATERIALS. Neither Tenant nor Tenant's
agents shall permit the introduction, placement, use, storage, manufacture,
transportation, release or disposition (collectively "Release") of any Hazardous
Material(s) (defined below) on or about any portion of the Premises in violation
of Laws. Tenant may use de minimis quantities of the types of materials which
are technically classified as Hazardous Materials but commonly used in domestic
or office use to the extent not in an amount, which, either individually or
cumulatively, would be a "reportable quantity" under any applicable Law. Tenant
covenants that, at its sole cost and expense, Tenant will comply with all
applicable Laws with respect to the use of such permitted Hazardous Materials.
Any use beyond the scope allowed in this paragraph shall be subject to
Landlord's prior consent, which may be withheld in Landlord's sole and absolute
discretion. Tenant shall indemnify, defend and hold Landlord and Landlord's
agents harmless from and against any and all claims, losses, damages,
liabilities, or expenses arising in connection with the Release of Hazardous
Materials by Tenant, Tenant's agents, employees, contractors, subcontractors, or
invitees. Tenant's obligation to defend, hold harmless and indemnify pursuant to
this Paragraph 6.4 shall survive Lease Termination.
As used in this Lease, the term "Hazardous Materials" means any
chemical, substance, waste or material which has been or is hereafter determined
by any federal, state or local governmental authority to be capable of posing
risk of injury to the environment, including without limitation, those
substances included within the definitions of "hazardous substances," "hazardous
materials," "toxic substances," or "solid waste" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, the Resource
Conservation and Recovery Act of 1976, and the Hazardous Materials
Transportation Act, as amended, and in the regulations promulgated pursuant to
said laws; those substances defined as "hazardous wastes" in section 25117 of
the California Health & Safety Code, or as "hazardous substances" in section
25316 of the California Health & Safety Code, as amended, and in the regulations
promulgated pursuant to said laws; those substances listed in the United States
Department of Transportation Table (49 CFR 172.101 and amendments thereto) or
designated by the Environmental Protection Agency (or any successor agency) as
hazardous substances (SEE, E.G., 40 CFR Part 302 and amendments thereto); such
other substances, materials and wastes which are or become regulated or become
classified as hazardous or toxic under any Laws, including without limitation
the California Health & Safety Code, Division 20, and Title 26 of the California
Code of Regulations; and any material, waste or substance which is (i)
petroleum, (ii) asbestos, (iii) polychlorinated biphenyls, (iv) designated as a
"hazardous substance" pursuant to section 311 of the Clean Water Act of 1977, 33
U.S.C. sections 1251 ET SEQ. (33 U.S.C. ` 1321) or listed pursuant to section
307 of the Clean Water Act of 1977 (33 U.S.C. ` 1317), as amended; (v) flammable
explosives; (vi) radioactive materials; or (vii) radon gas.
6.5 TENANT'S REPRESENTATION. Tenant hereby represents it
has completed, or shall complete prior to the Commencement Date, all necessary
due diligence regarding any and all environmental information and/or Hazardous
Materials associated with, on or about the Premises and Tenant is aware of the
underground storage which is part of the Premises.
6.6 TENANT'S INDEMNITY. Landlord and Tenant hereby agree
as follows with respect to the existence or use of Hazardous Materials and/or
environmental conditions on, in, under or about the Premises and real property
located beneath said Premises:
As consideration for Landlord's consent to the terms, conditions and
covenants of this Lease, Tenant does hereby understand and agree to defend (with
legal counsel acceptable to Landlord, whose consent shall not unreasonably be
withheld), indemnify and hold harmless Landlord, its employees, assigns,
successors, successors-in-interest, agents and representatives from and against
any and all claims (including but not limited to third party claims from a
private party or a government or quasi-government authority), liabilities,
obligations, losses, causes of action, demands, governmental proceedings or
directives, fines, penalties, expenses, costs (including but not limited to
reasonable attorneys', consultants' and other experts' fees and costs), and
damages, which arise from or relate to: (i) any and all Hazardous Materials
and/or environmental contamination associated with, on or about the Premises or
real property located beneath said Premises, caused to be placed, directly or
indirectly, on or about the Premises or real property located beneath said
Premises following the Commencement Date, and whether or not Tenant actually
contributed to such Hazardous Materials and/or environmental contamination
(hereafter, "Tenant's Environmental Indemnification") and (ii) any and all
Hazardous Materials and/or environmental contamination associated with, on or
about the Premises or real property located beneath said Premises, caused to be
placed, directly or indirectly, on or about the Premises or real property
located beneath said Premises, upon removal by Tenant of either the large diesel
tank or the industrial "batteries" as described in Paragraph 5.2.
[Notwithstanding the above, Tenant acknowledges and has read the environmental
reports attached hereto as Exhibit "C" and both Landlord and Tenant agree said
reports are dispositive of the state and degree of Hazardous Materials and/or
environmental contamination of, on or about the portion of said Premises or real
property located beneath said Premises to which they address as of the date
indicated thereon. Accordingly, and in conformance with other provisions of this
Lease, Tenant does hereby understand and agree to defend (with legal counsel
acceptable to Landlord, whose consent shall not unreasonably be withheld),
indemnify and hold harmless Landlord, its employees, assigns, successors,
successors-in-interest, agents and representatives from and against any and all
claims (including but not limited to third party claims from a private party or
a government or quasi-government authority), liabilities, obligations, losses,
causes of action, demands, governmental proceedings or directives, fines,
penalties, expenses, costs (including but not limited to reasonable attorneys',
consultants' and other experts' fees and costs), and damages, above and beyond
the state and degree of Hazardous Materials and/or environmental contamination
stated in the reports attached hereto as Exhibit "C" where caused, directly or
indirectly, by Tenant]. Tenant's Environmental Indemnification shall include but
is not limited to the obligation to promptly and fully reimburse Landlord for
losses in or reductions to rental income, and diminution in fair market value of
the Premises. Tenant's Environmental Indemnification shall further include but
is not limited to the obligation to diligently and properly implement to
completion, at tenant's expense, any and all environmental investigation,
removal, remediation, monitoring, reporting, closure activities, or other
environmental response action. Tenant shall promptly provide landlord with
copies of any claims, notices, work plans, data and reports prepared, received
or submitted in connection with any response action. It is further hereby agreed
that Tenant's Environmental Indemnification and the responsibilities and
obligations thereto will survive the expiration or termination of this Lease and
that Landlord, in addition to any other remedy it may have in law, may obtain
specific performance of Tenant's responsibilities under this Paragraph 6.6.
7. TAXES.
7.1 PERSONAL PROPERTY TAXES. Tenant shall cause Tenant's
trade fixtures, equipment, furnishings, furniture, merchandise, inventory,
machinery, appliances and other personal property installed or located on the
Premises (collectively the "personal property") to be assessed and billed
separately from the Premises. Tenant shall pay before delinquency any and all
taxes, assessments and public charges levied, assessed or imposed upon or
against Tenant's personal property. If any of Tenant's personal property shall
be assessed with the real property comprising the Premises, Tenant shall pay to
Landlord, as Additional Rent, the amounts attributable to Tenant's personal
property within ten (10) days after receipt of a written statement from Landlord
setting forth the amount of such taxes, assessments and public charges
attributable to Tenant's personal property. Tenant shall comply with the
provisions of any Law which requires Tenant to file a report of Tenant's
personal property located on the Premises.
7.2 OTHER TAXES PAYABLE SEPARATELY BY TENANT. Tenant
shall pay (or reimburse Landlord, as Additional Rent, if Landlord is assessed),
ten (10) days prior to delinquency, any and all taxes, levies, assessments or
surcharges payable by Landlord or Tenant (other than Landlord's net income,
succession, transfer, gift, franchise, estate or inheritance taxes, and Taxes,
as that term is defined in Paragraph 7.3(a) below, payable as an Operating
Expense), whether or not now customary or within the contemplation of the
parties hereto, whether or not now in force or which may hereafter become
effective, including but not limited to taxes:
(a) Upon, allocable to, or measured by the area of the
Premises or the Rentals payable hereunder, including without limitation any
gross income, gross receipts, excise, or other tax levied by the state, any
political subdivision thereof, city or federal government with respect to the
receipt of such Rentals;
(b) Upon this transaction or any document to which Tenant
is a party creating or transferring an interest or an estate in the Premises; or
(c) Imposed as a means of controlling or abating the use
of energy or any natural resource (including without limitation gas, electricity
or water), including, without limitation, any parking taxes, levies or charges
or vehicular regulations imposed by any governmental agency. Tenant shall also
pay, prior to delinquency, all privilege, sales, excise,
use, business, occupation, or other taxes, assessments, license fees or charges
levied, assessed or imposed upon Tenant's business operations conducted at the
Premises.
In the event any such taxes are payable by Landlord and it shall not be
lawful for Tenant to reimburse Landlord for such taxes, then the Rentals payable
hereunder shall be increased to net Landlord the same net Rental after
imposition of any such tax upon Landlord as would have been payable to Landlord
prior to the imposition of any such tax.
7.3 COMMON TAXES.
(a) DEFINITION OF TAXES. The term "Taxes" as used in this
Lease shall collectively mean (to the extent any of the following are not paid
by Tenant pursuant to Paragraphs 7.1 and 7.2 above) all real estate taxes and
general and special assessments (including, but not limited to, assessments for
public improvements or benefit); personal property taxes; taxes based on
vehicles utilizing parking areas on the Premises; taxes computed or based on
rental income or on the square footage of the Premises (including without
limitation any municipal business tax but excluding federal, state and municipal
net income taxes); environmental surcharges; excise taxes; gross receipts taxes;
water and sewer taxes, levies, assessments and other charges in the nature of
taxes or assessments (including, but not limited to, assessments for public
improvements or benefit); and all other governmental, quasi-governmental or
special district impositions of any kind and nature whatsoever; regardless of
whether any of the foregoing are now customary or within the contemplation of
the parties hereto and regardless of whether resulting from increased rate
and/or valuation, or whether extraordinary or ordinary, general or special,
unforeseen or foreseen, or similar or dissimilar to any of the foregoing and
which during the Lease Term are laid, levied, assessed or imposed upon Landlord
and/or become a lien upon or chargeable against the Premises under or by virtue
of any present or future laws, statutes, ordinances, regulations, or other
requirements of any governmental, quasi-governmental or special district
authority whatsoever. The term "environmental surcharges" shall include any and
all expenses, taxes, charges or penalties imposed by the Federal Department of
Energy, Federal Environmental Protection Agency, the Federal Clean Air Act, or
any regulations promulgated thereunder, or imposed by any other local, state or
federal governmental agency or entity now or hereafter vested with the power to
impose taxes, assessments or other types of surcharges as a means of controlling
or abating environmental pollution or the use of energy or any natural resource
in regard to the use, operation or occupancy of the Premises. The term "Taxes"
shall include (to the extent the same are not paid by Tenant pursuant to
Paragraphs 7.1 and 7.2 above), without limitation, all taxes, assessments,
levies, fees, impositions or charges levied, imposed, assessed in lieu of or
equivalent to any Taxes set forth in this Paragraph 7.3(a). In the event any
such Taxes are payable by Landlord and it shall not be lawful for Tenant to
reimburse Landlord for such Taxes, then the Rentals payable hereunder shall be
increased to net Landlord the same net Rental after imposition of any such Tax
upon Landlord as would have been payable to Landlord prior to the imposition of
any such Tax.
(b) OPERATING EXPENSES. All Taxes which are levied or
assessed or which become a lien upon the Premises or which become due or accrue
during the Lease Term shall be
an Operating Expense, and Tenant shall pay as Additional Rent bi-annually during
the Lease Term 1/2 of such Taxes, based on Landlord's estimate thereof, and
within ten (10 days) of written notification by Landlord, pursuant to Paragraph
12 below. Taxes during any partial tax fiscal year(s) within the Lease Term
shall be prorated according to the ratio which the number of days during the
Lease Term or of actual occupancy of the Premises by Tenant, whichever is
greater, during such year bears to 365.
8. INSURANCE; INDEMNITY; WAIVER.
8.1 INSURANCE BY LANDLORD.
(a) Landlord shall, during the Lease Term, procure and
keep in force the following insurance, the cost of which shall be an Operating
Expense, payable in full by Tenant:
(i) PROPERTY INSURANCE. "All risk" property
insurance, including, without limitation, coverage for earthquake and flood;
boiler and machinery (if applicable); sprinkler damage; vandalism; malicious
mischief; full coverage plate glass insurance; and demolition, increased cost of
construction and contingent liability from change in building laws on the
Premises, including any improvements or fixtures constructed or installed on the
Premises by Landlord or by Tenant. Such insurance shall be in the full amount of
the replacement cost of the foregoing and shall include building ordinance
protection, with reasonable deductible amounts, which deductible amounts shall
be an Operating Expense, payable in full by Tenant. Such insurance shall also
include rental income insurance, insuring that one hundred percent (100%) of the
Rentals (as the same may be adjusted hereunder) will be paid to Landlord for a
period of up to twelve (12) months if the Premises are destroyed or damaged.
Such insurance shall not cover any other leasehold improvements installed in the
Premises by Tenant at its expense, or Tenant's equipment, trade fixtures
inventory, fixtures or personal property located on or in the Premises;
(ii) LIABILITY INSURANCE. Comprehensive general
liability (lessor's risk) insurance against any and all claims for personal
injury, death or property damage occurring in or about the Premises. Such
insurance shall have a combined single limit of not less than Three Million
Dollars ($3,000,000) per occurrence and Five Million Dollars ($5,000,000)
aggregate. It is further agreed that Landlord shall indemnify Tenant for any
actions or claims against Tenant arising from Landlord's, or other tenant's use
of the fenced-in area previously described as "Landscape Contractor Trailers" as
shown in Exhibit "A" ("Landlord's Retained Area").
8.2 INSURANCE BY TENANT. Tenant shall, during the Lease
Term, at Tenant's sole cost and expense, procure and keep in force the following
insurance:
(a) PERSONAL PROPERTY INSURANCE. "All risk" property
insurance, including, without limitation; boiler and machinery (if applicable);
sprinkler leakage, including leakage due to an earthquake or other act of God;
vandalism; malicious mischief; and demolition, increased cost of construction
and contingent liability from changes in building laws on all
leasehold improvements installed in the Premises by Tenant at its expense and on
all equipment, trade fixtures, inventory, fixtures and personal property located
on or in the Premises, including improvements or fixtures hereinafter
constructed or installed on the Premises. Such insurance shall be in an amount
equal to the full replacement cost of the aggregate of the foregoing and shall
provide coverage comparable to the coverage in the standard ISO all risk form,
when such form is supplemented with the coverages required above.
(b) LIABILITY INSURANCE. Commercial general liability
insurance against any and all claims for personal injury, death or property
damage occurring in or about the Premises, or arising out of Tenant's or
Tenant's agents' use or occupancy of the Premises or Tenant's operations on the
Premises. Such insurance shall have a combined single limit of not less than
Five Million Dollars ($5,000,000) per occurrence and Five Million Dollars
($5,000,000) aggregate. Such insurance shall contain a cross-liability
(severability of interests) clause and an extended ("broad form") liability
endorsement, including blanket contractual coverage. Such liability insurance
shall be primary and not contributing to any insurance available to Landlord,
and Landlord's insurance (if any) shall be in excess thereto. Such insurance
shall specifically insure Tenant's performance of the indemnity, defense and
hold harmless agreements contained in Paragraph 8.4, although Tenant's
obligations pursuant to Paragraph 8.3 shall not be limited to the amount of any
insurance required of or carried by Tenant under this Paragraph 8.2(b). Tenant
shall be responsible for insuring that the amount of insurance maintained by
Tenant is sufficient for Tenant's purposes.
(c) LIABILITY INSURANCE. Commercial general liability
(lessor's risk) insurance naming Landlord as an insured against any and all
claims for personal injury, death or property damage occurring in or about the
Premises. Such insurance shall have a combined single limit of not less than
Five Million Dollars ($5,000,000) per occurrence and Ten Million Dollars
($10,000,000) aggregate;
(d) OTHER. Such other insurance as required by law,
including, without limitation, workers' compensation insurance.
(e) FORM OF THE POLICIES. The policies required to be
maintained by Tenant pursuant to Paragraphs 8.2 above shall be with companies,
and on forms, satisfactory to Landlord in its sole discretion, shall include
Landlord and the beneficiary or mortgagee of any deed of trust or mortgage
encumbering the Premises as additional insureds, and shall provide that such
parties may, although additional insureds, recover for any loss suffered by
Tenant's negligence. Certified copies of policies or certificates of insurance
shall be delivered to Landlord prior to the Commencement Date or the Early
Occupancy Date, if any; a new policy or certificate shall be delivered to
Landlord at least thirty (30) days prior to the expiration date of the old
policy or Tenant shall be in Default under this Lease. Tenant shall have the
right to provide insurance coverage which it is obligated to carry pursuant to
the terms hereof in a blanket policy, provided such blanket policy expressly
affords coverage to the Premises and to Tenant and Landlord as required by this
Lease. Tenant shall obtain a written obligation on the part of Tenant's
insurer(s) to notify Landlord and any beneficiary or mortgagee of a deed of
trust or mortgage encumbering the Premises and/or the real property in writing
of any
delinquency in premium payments and at least thirty (30) days prior to any
cancellation or modification of any policy. Tenant's policies shall provide
coverage on an occurrence basis and not on a claims made basis. In no event
shall the limits of any policies maintained by Tenant be considered as limiting
the liability of Tenant under this Lease.
8.3 FAILURE BY TENANT TO OBTAIN INSURANCE. If Tenant does
not take out the insurance required pursuant to Paragraph 8.2 or keep the same
in full force and effect, Landlord may, after notice to Tenant and the failure
of Tenant to obtain the same within ten (10) days of said notice, but shall not
be obligated to, take out the necessary insurance and pay the premium therefor,
and Tenant shall repay to Landlord, as Additional Rent, the amount so paid
promptly upon demand. In addition, Landlord may recover from Tenant and Tenant
agrees to pay, as Additional Rent, any and all reasonable expenses (including
attorneys' fees) and damages which Landlord may sustain by reason of the failure
of Tenant to obtain and maintain such insurance, it being expressly declared
that the expenses and damages of Landlord shall not be limited to the amount of
the premiums thereon.
8.4 INDEMNIFICATION Tenant shall indemnify, hold
harmless, and defend Landlord (except for Landlord's or its Agents gross
negligence or willful misconduct) against all claims, losses, damages, expenses
or liabilities for injury or death to any person or for damage to or loss of use
of any property arising out of any occurrence in, on or about the Premises, to
the extent caused or contributed to by Tenant or Tenant's agents, or arising out
of any occurrence in, upon or at the Premises or on account of the use,
condition, occupational safety or occupancy of the Premises by Tenant or
Tenant's agents, employees, contractors, subcontractors or invitees. Tenant's
indemnification, defense and hold harmless obligations under this Lease shall
include and apply to attorneys' fees, investigation costs, and other costs
actually incurred by Landlord. Tenant shall further indemnify, defend and hold
harmless Landlord from and against any and all claims, losses, damages,
liabilities or expenses arising from any breach or default in the performance of
any obligation on Tenant's part to be performed under the terms of this Lease.
The provisions of this Paragraph 8.4 shall survive Lease Termination with
respect to any damage, injury, death, breach or default occurring prior to such
termination. Tenant shall defend with and pay Landlord for services of legal
counsel customarily used by Landlord.
8.5 CLAIMS BY TENANT. Landlord shall not be liable to
Tenant, and Tenant waives all claims against Landlord, for injury or death to
any person, damage to any property, or loss of use of any property in the
Premises by and from all causes, including without limitation, any defect in the
Premises and/or any damage or injury resulting from fire, steam, electricity,
gas, water or rain, which may leak or flow from or into any part of the
Premises, or from breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
whether the damage or injury results from conditions arising upon the Premises
or from other sources. Tenant or Tenant's agents shall immediately notify
Landlord in writing of any known defect in the Premises. The provisions of this
Paragraph 8.5 shall not apply to any damage or injury caused by Landlord's
willful misconduct, active negligence or intentional breach of this Lease.
8.6 RELEASE AND INTENTIONAL WAIVER OF SUBROGATION.
Notwithstanding anything in this Lease to the contrary, Tenant hereby releases
Landlord, and Landlord hereby releases Tenant, and their respective officers,
agents, employees and servants, from any and all claims or demands of damages,
loss, expense or injury to the Premises, or to the furnishings, fixtures,
equipment, inventory or other property of either Landlord or Tenant in, about or
upon the Premises, which is caused by or results from perils, events or
happenings which are the subject of insurance required to be carried by the
Tenant or Landlord pursuant to this Paragraph 8.2 or 8.1 or in force at the time
of any such loss, whether due to the active negligence of the Landlord or Tenant
or their agents and regardless of cause or origin.
8.7 WAIVER OF SECTION 1542. Tenant acknowledge that it
has been advised by legal counsel and is familiar with the provisions of
California Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.
Tenant, being aware of said code section, hereby expressly waives any
rights it may have thereunder, as well as under any other statute or common law
principles of similar effect.
9. UTILITIES. Tenant shall pay during the Lease Term and
prior to delinquency all charges for water, gas, light, heat, power,
electricity, telephone or other communication service, janitorial service, trash
pick-up, sewer and all other services supplied to or consumed on the Premises
(collectively the "Services") and all taxes, levies, fees or surcharges
therefor. Tenant shall arrange for Services to be supplied to the Premises and
shall contract for all of the Services in Tenant's name prior to the
Commencement Date. The Commencement Date shall not be delayed by reason of any
failure by Tenant to so contract for Services. In the event that any of the
Services cannot be separately billed or metered to the Premises, or if any of
the Services are not separately metered as of the Commencement Date, the cost of
such Services shall be an Operating Expense and Tenant shall pay such cost to
Landlord, as Additional Rent, as provided in Paragraph 12 below, except that
Tenant's proportionate share of such Services shall be the percentage obtained
by dividing the gross leasable square footage contained in the Premises by the
total gross leasable square footage located in all buildings utilizing such
Services. The lack or shortage of any Services due to any cause whatsoever shall
not affect any obligation of Tenant hereunder, and Tenant shall faithfully keep
and observe all the terms, conditions and covenants of this Lease and pay all
Rentals due hereunder, all without diminution, credit or deduction.
10. REPAIRS AND MAINTENANCE.
10.1 LANDLORD'S RESPONSIBILITIES.
Subject to the provisions of Paragraph 15 below, Landlord's sole
obligation shall be to maintain in reasonably good order and repair, and at
Landlord's cost and expense: (a) the building foundation, (b) the structural
portion of the exterior walls and (c) the structural portion of the roof at its
cost and expense and (d) as Operating Expense, the exterior landscaping and
parking areas of the Premises. In addition, Landlord may elect, at any time, at
its option, to maintain the heating and air conditioning systems of the
Premises. Tenant shall give prompt written notice to Landlord of any known
maintenance work required to be made by Landlord pursuant to this Paragraph
10.1. The costs of repairs and maintenance which are the obligation of Landlord
hereunder or which Landlord elects to perform hereunder shall be an Operating
Expense and Tenant shall pay such costs to Landlord as Additional Rent, as
provided in Paragraph 12 below.
To the extent any labor dispute in which Tenant is involved or of which
Tenant is the object interferes with the performance of Landlord's duties
hereunder, Landlord shall be excused from the performance of such duties and
Tenant hereby waives any and all claims against Landlord for damages or losses
in regard to such duties. In no event will Landlord be obligated to expend more
than $25,000 cumulative over the Lease Term and all Extensions for repairs and
maintenance; any excess shall be the sole obligation of Tenant.
10.2 TENANT'S RESPONSIBILITIES. Except as expressly
provided in Paragraph 10.1 above, Tenant shall, at its sole cost, maintain the
entire Premises and every part thereof, including without limitation, windows,
skylights, window frames, plate glass, roof surface, freight docks, doors and
related hardware, interior walls and partitions, non-structural portions of the
exterior walls, non-structural portions of the roof, and the electrical,
plumbing, lighting, heating and air conditioning systems (unless Landlord has
elected to keep and maintain the heating and air conditioning systems pursuant
to Paragraph 10.1 above) in good order, condition and repair. Tenant shall
deliver to Landlord, every six (6) months during the Lease Term, a certificate
of maintenance or its equivalent, signed by a licensed HVAC repair and
maintenance contractor and stating that the heating and air conditioning systems
servicing the Premises have been inspected, serviced and are in good order,
condition and repair. Tenant's failure to deliver said certificate or its
equivalent shall be a Default by Tenant. If Tenant fails to make repairs or
perform maintenance work required of Tenant hereunder within thirty (30) days
after notice from Landlord, in its sole discretion, specifying the need for such
repairs or maintenance work, Landlord or Landlord's agents may, in addition to
all other rights and remedies available hereunder or by law and without waiving
any alternative remedies, enter into the Premises and make such repairs and/or
perform such maintenance work. If Landlord makes such repairs and/or performs
such maintenance work, Tenant shall reimburse Landlord upon demand and as
Additional Rent, one hundred and ten (110%) percent of the cost of such repairs
and/or maintenance work. Landlord shall have no liability to Tenant for any
damage, inconvenience or interference with the use of the Premises by Tenant or
Tenant's agents as a result of Landlord performing any such repairs or
maintenance. Tenant shall reimburse Landlord, on demand and as Additional Rent,
for the cost of damage to the Premises caused by Tenant or Tenant's agents.
Tenant expressly waives the benefits of any statute now or hereafter in effect
(including without limitation the provisions of subsection 1 of Section 1932,
Section 1941 and Section 1942 of the California Civil Code and any similar law,
statute or ordinance now or hereafter in effect) which
would otherwise afford Tenant the right to make repairs at Landlord's expense
(or to deduct the cost of such repairs from Rentals due hereunder) or to
terminate this Lease because of Landlord's failure to keep the Premises in good
and sanitary order.
11. EXTERIOR AREA.
11.1 IN GENERAL. Subject to the terms and conditions of
this Lease and such rules and regulations as Landlord may from time to time
prescribe, Tenant and Tenant's agents shall have the exclusive right to use
during the Lease Term the access roads, sidewalks, parking and landscaped areas
of the Premise excluding the fenced in area described in paragraph 2.1 hereof
(Xxxxxxxx'x Xxxxxxxx Xxxx) and provided that access roads shall be non-exclusive
as to Landlord's Retained Area or for use by any adjacent or nearby property
owned or lease by Landlord. Neither Tenant nor Tenant's agents shall at any time
park or permit the parking of their vehicles in any portion of the Premises not
designated as a parking area.
Landlord reserves the right to promulgate such reasonable rules and
regulations relating to the use of all or any portion of the Premises and to
amend such rules and regulations from time to time, with or without advance
notice, as Landlord may deem appropriate. Any amendments to the rules and
regulations shall be effective as to Tenant, and binding on Tenant, upon
delivery of a copy of such rules and regulations to Tenant. Tenant and Tenant's
agents shall observe such rules and regulations and any failure by Tenant or
Tenant's agents to observe and comply with the rules and regulations shall be a
Default by Tenant.
12. OPERATING EXPENSES.
12.1 DEFINITION. "Operating Expense" or "Operating
Expenses" as used in this Lease shall mean and include all items identified in
other paragraphs of this Lease as an Operating Expense and the total cost paid
or incurred by Landlord for the operation, maintenance, repair, and management
of the Premises, which costs shall include, without limitation: the cost of
Services and utilities supplied to the Premises (to the extent the same are not
separately charged or metered to Tenant); water; sewage; fuel; electricity;
lighting systems; Landlord management fee (four percent (4%) of the total Rent
paid by Tenant); fire protection systems; storm drainage and sanitary sewer
systems; HVAC including air conditioning (to the extent the heating and air
conditioning systems in the Premises are not maintained by Tenant at Tenant's
sole cost and expense); property and liability insurance covering the Premises
to the extent not maintained by Tenant or provided in addition to Tenant's
provided insurance, and any other insurance carried by Landlord; cleaning,
sweeping, striping, resurfacing of parking and driveway areas; cleaning the
parking area following storms or other severe weather; cleaning and repairing of
sidewalks, curbs, stairways, fences and patios; costs related to repair,
maintenance and replacement of irrigation systems; the cost of complying with
Laws, including, without limitation, maintenance, alterations and repairs
required in connection therewith; costs related to landscape maintenance,
repairs and replacement; signage costs; audit fees; inspection fees; costs
related to pest control; ; and the cost of contesting the validity or
applicability of any governmental enactments which may affect Operating
Expenses. The specific examples of Operating Expenses stated in this Paragraph
12.1 are in no way intended to and shall not limit
the costs comprising Operating Expenses, nor shall such examples be deemed to
obligate Landlord to incur such costs or to provide such services or to take
such actions except as Landlord may be expressly required in other portions of
this Lease, or except as Landlord, in its sole discretion, may elect.
12.2 PAYMENT OF OPERATING EXPENSES BY TENANT. Tenant shall
pay the Operating Expenses to Landlord as Additional Rent and without deduction
or offset. Payment of Operating Expenses by Tenant shall be made by whichever of
the following methods is from time to time designated by Landlord, and Landlord
may change the method of payment at any time. Operating Expenses actually
incurred or paid by Landlord but not theretofore billed to Tenant, as invoiced
by Landlord, shall be payable by Tenant within thirty (30) days after receipt of
Landlord's invoice, but not more often than once each calendar month.
Alternatively, Tenant's payment of Operating Expenses shall be based upon
Landlord's estimate of Operating Expenses and shall be payable in equal monthly
installments in advance on the first day of each calendar month commencing with
the month following receipt of Landlord's estimate (and subject to Landlord's
right to change the method of payment). Within ninety (90) days after the end of
each calendar year (or at Lease Termination) Landlord shall furnish Tenant a
statement showing the actual Operating Expenses for the period to which
Landlord's estimate pertains and shall concurrently either xxxx Tenant for the
balance due (payable upon demand by Landlord) or credit Tenant's account for the
excess previously paid.
13. ALTERATIONS.
13.1 IN GENERAL. Except for any initial tenant
improvements, which said improvements shall be agreed upon by Landlord and
Tenant prior to Lease Commencement, and the nature of which and the manner
whereby said improvements shall be implemented shall be attached hereto as
Exhibit "D" once approved by Landlord, Tenant shall not make, or permit to be
made, any alterations, changes, enlargements, improvements or additions
(collectively "Alterations") in, on, about or to the Premises, or any part
thereof with a cost in excess of $50,000 without the prior written consent of
Landlord and without acquiring and complying with the conditions of all permits
required for such Alterations by any applicable governmental authority. The term
"Alterations" as used in this Paragraph 13 shall also include all heating,
lighting, electrical (including all wiring, conduit, outlets, drops, xxxx ducts,
main and subpanels), air conditioning, fixed wall partitioning in the Premises
made by Tenant, regardless of how affixed to the Premises and all previous
alterations made by National Semiconductor. As a condition to the giving of its
consent, Landlord may impose such requirements as Landlord may reasonably deem
necessary, including without limitation, the manner in which the work is done; a
right of approval of the contractor by whom the work is to be performed; the
requirement that Tenant post a completion bond in an amount and form
satisfactory to Landlord; and the requirement that Tenant reimburse Landlord, as
Additional Rent, for Landlord's actual costs incurred in reviewing any proposed
Alteration, whether or not Landlord's consent is granted. Additionally, with
respect to any proposed Alteration by Tenant pursuant to this Paragraph, Tenant
shall provide Landlord with any and all relevant plans and documents regarding
the proposed Alteration and manner of implementation, as well as any applicable
permits or approvals (or status of same), and Landlord shall have five (5) days
to give its consent and any
conditions thereon, or reasons for disapproval. In the event Landlord consents
to the making of any Alterations by Tenant, the same shall be made by Tenant at
Tenant's sole cost and expense, in accordance with the plans and specifications
approved by Landlord. Tenant shall give written notice to Landlord five (5) days
prior to employing any laborer or contractor to perform services related to, or
receiving materials for use upon the Premises, and prior to the commencement of
any work of improvement on the Premises. Any Alterations to the Premises made by
Tenant shall be made in accordance with applicable Laws and in a first-class
workmanlike manner. In making any such Alterations, Tenant shall, at Tenant's
sole cost and expense, file for and secure and comply with any and all permits
or approvals required by any governmental departments or authorities having
jurisdiction thereof and any utility company having an interest therein. In no
event shall Tenant make any structural changes to the Premises or make any
changes to the Premises which would weaken or impair the structural integrity of
the Premises.
13.2 LANDLORD'S IMPROVEMENTS. All fixtures, improvements
or equipment which are installed, constructed on or attached to the Premises by
Landlord or prior tenants shall be a part of the realty and belong to Landlord.
13.3 ADDITIONAL SYSTEMS. Subject to the prior approval of
Landlord, which approval will not be unreasonably withheld, Tenant may, at
Tenant's cost and expense and in compliance with all the provisions of this
Lease, install supplemental HVAC units and water tanks in or on the Premises and
a back-up generator. However, on termination of the Lease, Tenant shall, if
requested by Landlord, remove such installed equipment and repair and restore
the Premises of any damage resulting from such installation, use, and/or
removal.
14. DEFAULT AND REMEDIES.
14.1 EVENTS OF DEFAULT. The term "Default by Tenant" or
"Default" as used in this Lease shall mean the occurrence of any of the
following events:
(a) Tenant's failure to pay when due any Rentals;
(b) Tenant's abandonment of the Premises;
(c) Commencement and continuation for at least thirty
(30) days of any case, action or proceeding by, against or concerning Tenant
under any federal or state bankruptcy, insolvency or other debtor's relief law,
including without limitation, (i) a case under Title 11 of the United States
Code concerning Tenant, whether under Chapter 7, 11, or 13 of such Title or
under any other Chapter, or (ii) a case, action or proceeding seeking Tenant's
financial reorganization or an arrangement with any of Tenant's creditors;
(d) Voluntary or involuntary appointment of a receiver,
trustee, keeper, or other person who takes possession for more than thirty (30)
days of substantially all of Tenant's assets regardless of whether such
appointment is as a result of insolvency or any other cause;
(e) Execution of an assignment for the benefit of
creditors of substantially all assets of Tenant available by law for the
satisfaction of judgment creditors;
(f) Commencement of proceedings for winding up or
dissolving (whether voluntary or involuntary) the entity of Tenant, if Tenant is
a corporation or a partnership;
(g) Levy of a writ of attachment or execution on Tenant's
interest under this Lease, if such writ continues for a period of thirty (30)
days;
(h) Transfer or attempted Transfer of this Lease or the
Premises by Tenant contrary to the provisions of Paragraph 24 below; or
(i) Breach by Tenant of any term, covenant, condition,
warranty, or other provision contained in this Lease or of any other obligation
owing or due to Landlord.
14.2 REMEDIES. Upon any Default by Tenant, Landlord shall
have the following remedies, in addition to all other rights and remedies
provided by law, to which Landlord may resort cumulatively, or in the
alternative:
14.2.1 TERMINATION. Upon any Default by Tenant,
Landlord shall have the right (but not the obligation) to give written notice to
Tenant of such default and terminate this Lease and Tenant's right to possession
of the Premises if (i) such default is in the payment of Rentals and is not
cured within three (3) days after any such notice, or, (ii) with respect to the
defaults referred to in subparagraphs 14.1(b), (e), (f), (h) and (i), such
default is not cured within thirty (30) days after any such notice (or if a
default under subparagraphs 14.1(b) or (i) cannot be reasonably cured within
thirty (30) days, if Tenant does not commence to cure the default within the
thirty (30) day period or does not diligently and in good faith prosecute the
cure to completion), or, (iii) with respect to the defaults specified in
subparagraphs 14.1(c) (d) and (g), such default is not cured within the
respective time periods specified in those subparagraphs. Upon termination of
this Lease and Tenant's right to possession of the Premises, Landlord shall have
the right to recover from Tenant:
(a) The worth at the time of award of
the unpaid Rentals which had been earned at the time of termination;
(b) The worth at the time of award of
the amount by which the Rentals which would have been earned after termination
until the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided;
(c) The worth at the time of award
(computed by discounting at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent) of the amount by which the
Rentals for the balance of the Lease Term after the time of award exceed the
amount of such rental loss that Tenant proves could be reasonably avoided;
(d) Any other amounts necessary to
compensate Landlord for all detriment proximately caused by the Default by
Tenant or which in the ordinary course of events would likely result, including
without limitation the following:
(i) Expenses in retaking
possession of the Premises;
(ii) Expenses for cleaning,
repairing or restoring the Premises;
(iii) Any unamortized real
estate brokerage commission paid in connection with this Lease;
(iv) Expenses for removing,
transporting, and storing any of Tenant's property left at the Premises
(although Landlord shall have no obligation to remove, transport, or store any
such property);
(v) Expenses of reletting the
Premises, including without limitation, brokerage commissions allocable to the
remainder of the Lease Term and attorneys' fees;
(vi) Attorneys' fees and court
costs; and
(vii) Costs of carrying the
Premises such as repairs, maintenance, taxes and insurance premiums, utilities
and security precautions (if any).
(c) The "worth at the time of award" of
the amounts referred to in subparagraphs (a) and (b) of this Paragraph 14.2.1 is
computed by allowing interest at an annual rate equal to the greater of: ten
percent (10%); or five percent (5%) plus the rate established by the Federal
Reserve Bank of San Francisco, as of the twenty-fifth (25th) day of the month
immediately preceding the Default by Tenant, on advances to member banks under
Sections 13 and 13(a) of the Federal Reserve Act, as now in effect or hereafter
from time to time amended, not to exceed the maximum rate allowable by law.
14.2.2 CONTINUANCE OF LEASE. Upon any Default by
Tenant and unless and until Landlord elects to terminate this Lease pursuant to
Paragraph 14.2.1 above, this Lease shall continue in effect after the Default by
Tenant and Landlord may enforce all its rights and remedies under this Lease,
including without limitation, the right to recover payment of Rentals as they
become due. Neither efforts by Landlord to mitigate damages caused by a Default
by Tenant nor the acceptance of any Rentals shall constitute a waiver by
Landlord of any of Landlord's rights or remedies, including the rights and
remedies specified in Paragraph 14.2.1 above.
15. DAMAGE OR DESTRUCTION.
15.1 DEFINITION OF TERMS. For the purposes of this Lease,
the term: (a) "Insured Casualty" means damage to or destruction of the Premises
from a cause required to be or actually insured against, for which the insurance
proceeds are paid or will be made available to Landlord are sufficient to
rebuild or restore the Premises under then-existing building codes to the
condition existing immediately prior to the damage or destruction; and (b)
"Uninsured Casualty" means damage to or destruction of the Premises from a cause
not required to be or actually insured against, or from a cause required to be
or actually insured against but for which the insurance proceeds are not paid or
will not be made available to Landlord.
15.2 INSURED CASUALTY.
15.2.1 REBUILDING REQUIRED. In the event of an
Insured Casualty where the extent of damage or destruction is less than fifty
percent (50%) of the then full replacement cost of the Premises, Landlord shall
rebuild or restore the Premises to the condition existing immediately prior to
the damage or destruction, provided that there exists no governmental codes or
regulations that would preclude Landlord's ability to so rebuild or restore.
15.2.2 LANDLORD'S ELECTION. In the event of an
Insured Casualty where the extent of damage or destruction is equal to or
greater than fifty percent (50%) of the then full replacement cost of the
Premises, Landlord may, at its option and at its sole discretion, rebuild or
restore the Premises to the condition existing immediately prior to the damage
or destruction, or terminate this Lease. Landlord shall notify Tenant in writing
within sixty (60) days after the event of damage or destruction of Landlord's
election to either rebuild or restore the Premises or terminate this Lease.
15.2.3 CONTINUANCE OF LEASE. If Landlord is
required to rebuild or restore the Premises pursuant to Paragraph 15.2.1 or if
Landlord elects to rebuild or restore the Premises pursuant to Paragraph 15.2.2,
this Lease shall remain in effect and Tenant shall have a claim against Landlord
for compensation for rent abatement, inconvenience or loss of business during
any period of repair or restoration to the extent that Landlord is reimbursed
for same under applicable insurance proceeds.
15.3 UNINSURED CASUALTY.
15.3.1 LANDLORD'S ELECTION. In the event of an
Uninsured Casualty, Landlord may, at its option and at its sole discretion (i)
rebuild or restore the Premises as soon as reasonably possible at Landlord's
expense in which event this Lease shall continue in full force and effect or
(ii) terminate this Lease, in which event Landlord shall give written notice to
Tenant within sixty (60) days after the event of damage or destruction of
Landlord's election to terminate this Lease as of the date of the event of
damage or destruction.
15.3.2 TENANT'S ABILITY TO CONTINUE LEASE. If
Landlord elects to terminate this Lease and if there exists no governmental
codes or regulations that would preclude Landlord's ability to so repair or
restore, then Tenant may nevertheless cause the Lease to continue in effect by
(i) notifying Landlord in writing within thirty (30) days after Landlord's
notice of termination of Tenant's agreement to pay all costs of rebuilding or
restoring not covered by insurance, and (ii) providing Landlord with reasonable
security for or assurance of such payment. Tenant shall pay to Landlord in cash
no later than thirty (30) days prior to the date of commencement of construction
the reasonable estimated cost of rebuilding or restoring. In the event Tenant
fails to pay such cost to Landlord by the date specified, Landlord may
immediately terminate the Lease and recover from Tenant all costs incurred by
Landlord in preparation for construction. If the actual cost of rebuilding or
restoring exceeds the estimated cost of such work, Tenant shall pay the
difference to Landlord in cash upon notification by Landlord of the final cost.
If the cost of rebuilding or restoring is less than the estimated cost of such
work, Tenant shall be entitled to a refund of the difference upon completion of
the rebuilding or restoring and determination of final cost.
15.4 TENANT'S ELECTION. Notwithstanding anything to the
contrary contained in this Paragraph 15, Tenant may elect to terminate this
Lease in the event the Premises are damaged or destroyed and, in the reasonable
opinion of Landlord's architect or construction consultants, the restoration of
the Premises cannot be substantially completed within one hundred eighty (180)
days after the event of damage or destruction. Tenant's election shall be made
by written notice to Landlord within thirty (30) days after Tenant receives from
Landlord the estimate of the time needed to complete repair or restoration of
the Premises. If Tenant does not deliver said notice within said thirty (30) day
period, Tenant may not later terminate this Lease even if substantial completion
of the rebuilding or restoration occurs subsequent to said one hundred eighty
(180) day period. If Tenant delivers said notice within said thirty (30) day
period, this Lease shall terminate as of the date of the event of damage or
destruction.
15.5 DAMAGE OR DESTRUCTION NEAR END OF LEASE TERM.
Notwithstanding anything to the contrary contained in this Paragraph 15, in the
event the Premises are damaged or destroyed in whole or in part (regardless of
the extent of damage) from any cause during the last twelve (12) months of the
Lease Term and cannot be restored within ninety (90) days of the occurrence,
Landlord may, at Landlord's option, terminate this Lease as of the date of the
event of damage or destruction by giving written notice to Tenant of Landlord's
election to do so within thirty (30) days after the event of such damage or
destruction. For purposes of this Paragraph 15.5, if Tenant has been granted an
option to extend or renew the Lease Term, then the damage or destruction shall
be deemed to have occurred during the last twelve (12) months of the Lease Term
if Tenant fails to exercise its option to extend or renew within twenty (20)
days after the event of damage or destruction.
15.6 TERMINATION OF LEASE. If the Lease is terminated
pursuant to this Paragraph 15, the unused balance of the Security Deposit shall
be refunded to Tenant. The current Rent shall be proportionately reduced during
the period following the event of damage or destruction until the date on which
Tenant surrenders the Premises, based upon the extent to which the damage or
destruction interferes with Tenant's business conducted in the Premises. All
other Rentals due hereunder shall continue unaffected during such period. Should
this Lease be terminated prior to full payment by Tenant to Landlord, and
subsequent cancellation by Landlord, on the promissory note held by Landlord
("Note"), a copy of which is attached hereto as Exhibit "E", and to the extent
Landlord is reimbursed by applicable insurance
proceeds, the Note shall be cancelled in full or the promised amount reduced
commensurate with the insurance proceeds Landlord receives.
15.7 ABATEMENT OF RENTALS. If the Premises are to be
rebuilt or restored pursuant to this Paragraph 15, the then current Rentals
shall continue to be due and payable without abatement to the extent that
Landlord is reimbursed for same under applicable insurance proceeds.
15.8 LIABILITY FOR PERSONAL PROPERTY. In no event shall
Landlord have any liability for, nor shall it be required to repair or restore,
any injury or damage to any Alterations to the Premises made by Tenant, trade
fixtures, equipment, merchandise, furniture, or any other property installed by
Tenant or at the expense of Tenant. If Landlord or Tenant do not elect to
terminate this Lease pursuant to this Paragraph 15, Tenant shall be obligated to
promptly rebuild or restore the Alterations to the condition existing
immediately prior to the damage or destruction in accordance with the provisions
of Paragraph 13.1.
15.9 WAIVER OF CIVIL CODE REMEDIES. Landlord and Tenant
acknowledge that the rights and obligations of the parties upon damage or
destruction of the Premises are as set forth herein; therefore Tenant hereby
expressly waives any rights to terminate this Lease upon damage or destruction
of the Premises, except as specifically provided by this Lease, including
without limitation any rights pursuant to the provisions of subdivision 2 of
Section 1932 and subdivision 4 of Section 1933 of the California Civil Code, as
amended from time to time, and the provisions of any similar law hereinafter
enacted, which provisions relate to the termination of the hiring of a thing
upon its substantial damage or destruction.
16. CONDEMNATION.
16.1 DEFINITION OF TERMS. For the purposes of this Lease,
the term: (a) "Taking" means a taking of the Premises or damage related to the
exercise of the power of eminent domain and includes, without limitation, a
voluntary conveyance, in lieu of court proceedings, to any agency, authority,
public utility, person or corporate entity empowered to condemn property; (b)
"Total Taking" means the Taking of the entire Premises or so much of the
Premises as to prevent or substantially impair the use thereof by Tenant for the
uses herein specified; (c) "Partial Taking" means the Taking of only a portion
of the Premises which does not constitute a Total Taking; (d) "Date of Taking"
means the date upon which the title to the Premises or a portion thereof, passes
to and vests in the condemnor or the effective date of any order for possession
if issued prior to the date title vests in the condemnor; (e) "Award" means the
amount of any award made, consideration paid, or damages ordered as a result of
a Taking.
16.2 RIGHTS. The parties agree that in the event of a
Taking all rights between them or in and to an Award shall be as set forth
herein.
16.3 TOTAL TAKING. In the event of a Total Taking during
the Lease Term: (a) the rights of Tenant under this Lease and the leasehold
estate of Tenant in and to the Premises shall cease and terminate as of the Date
of Taking; (b) Landlord shall refund to Tenant any
prepaid Rent and the unused balance of the Security Deposit; (c) Tenant shall
pay Landlord any Rentals due Landlord under the Lease, prorated as of the Date
of Taking; (d) Tenant shall receive from the Award those portions of the Award
attributable to trade fixtures of Tenant; (e) the remainder of the Award shall
be paid to and be the property of Landlord.
16.4 PARTIAL TAKING. In the event of a Partial Taking
during the Lease Term: (a) the rights of Tenant under the Lease and the
leasehold estate of Tenant in and to the portion of the Premises taken shall
cease and terminate as of the Date of Taking; (b) from and after the Date of
Taking the Rent shall be an amount equal to the product obtained by multiplying
the then current Rent by the quotient obtained by dividing the fair market value
of the Premises immediately after the Taking by the fair market value of the
Premises immediately prior to the Taking; (c) Tenant shall receive from the
Award the portions of the Award attributable to trade fixtures of Tenant; and
(d) the remainder of the Award shall be paid to and be the property of Landlord.
Each party waives the provisions of California Code of Civil Procedure Section
1265.130 allowing either party to petition the Superior Court to terminate this
Lease in the event of a Partial Taking.
Notwithstanding the above, should this Lease be terminated under
condemnation proceedings prior to full payment by Tenant to Landlord, and
subsequent cancellation by Landlord on the Note, subject to the above Paragraph
16 provisions, the Note shall be cancelled in full or reduced in part
commensurate with the portion of the Award attributable to the Note.
17. LIENS.
17.1 PREMISES TO BE FREE OF LIENS. Tenant shall pay for
all labor and services performed for, and all materials used by or furnished to
Tenant, Tenant's agents, or any contractor employed by Tenant with respect to
the Premises. Tenant shall indemnify, defend and hold Landlord harmless from and
keep the Premises free from any liens, claims, demands, encumbrances, or
judgments, including all costs, liabilities and attorneys' fees with respect
thereto, created or suffered by reason of any labor or services performed for,
or materials used by or furnished to Tenant or Tenant's agents or any contractor
employed by Tenant with respect to the Premises. Landlord shall have the right,
at all times, to post and keep posted on the Premises any notices permitted or
required by law, or which Landlord shall deem proper, for the protection of
Landlord and the Premises, and any other party having an interest therein, from
mechanics' and materialmen's liens, including without limitation a notice of
nonresponsibility. In the event Tenant is required to post an improvement bond
with a public agency in connection with any work performed by Tenant on or to
the Premises, Tenant shall include Landlord as an additional obligee.
17.2 NOTICE OF LIEN, BOND. Should any claims of lien be
filed against, or any action be commenced affecting, the Premises, or Tenant's
interest in the Premises, Tenant shall give Landlord notice of such lien or
action within ten (10) days after Tenant receives notice of the filing of the
lien or the commencement of the action. In the event that Tenant shall not,
within thirty (30) days following the imposition of any such lien, cause such
lien to be released
of record by payment or posting of a proper bond, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as Landlord shall
deem proper, including payment of the claim giving rise to such lien or posting
of a proper bond. All such sums paid by Landlord and all expenses incurred by
Landlord in connection therewith, including attorneys' fees and costs, shall be
payable to Landlord by Tenant as Additional Rent on demand.
18. LANDLORD'S RIGHT OF ACCESS TO PREMISES. Landlord
reserves and shall have the right and Tenant and Tenant's agents shall permit
Landlord and Landlord's agents to enter the Premises at any reasonable time and
upon reasonable advance notice to Tenant (and subject to the right of Tenant to
escort Landlord and/or Landlord's agents during such entry) for the purpose of
(i) inspecting the Premises, (ii) performing Landlord's maintenance and repair
responsibilities set forth herein, (iii) posting notices of non-responsibility,
(iv) placing upon the Premises at any time "For Sale" signs, (v) placing on the
Premises ordinary "For Lease" signs at any time within ninety (90) days prior to
Lease Termination, or at any time Tenant is in Default hereunder, or at such
other times as agreed to by Landlord and Tenant, (vi) protecting the Premises in
the event of an emergency, and (vii) exhibiting the Premises to prospective
purchasers, lenders or tenants. In the event of an emergency, Landlord shall
have the right to use any and all reasonable means which Landlord may deem
proper to gain access to the Premises. Any entry to the Premises by Landlord or
Landlord's agents in accordance with this Paragraph 18 or any other provision of
this Lease shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of the Premises, or an eviction
of Tenant from the Premises or any portion thereof nor give Tenant the right to
xxxxx the Rentals payable under this Lease. Tenant hereby waives any claims for
damages for any injury or inconvenience to or interference with Tenant's
business, any loss of occupancy or quiet enjoyment of the Premises, and any
other loss occasioned by Landlord's or Landlord's agents' entry into the
Premises as permitted by this Paragraph 18 or any other provision of this Lease.
19. LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS.
Except as otherwise expressly provided herein, if Tenant shall at any time fail
to make any payment or perform any other act required to be made or performed by
Tenant under this Lease, Landlord may upon twenty (20) days written notice to
Tenant, but shall not be obligated to and without waiving or releasing Tenant
from any obligation under this Lease, make such payment or perform such other
act to the extent that Landlord may deem desirable, and in connection therewith,
pay expenses and employ counsel. All sums so paid by Landlord and all penalties,
interest and costs in connection therewith shall be due and payable by Tenant as
Additional Rent upon demand.
20. LENDER REQUIREMENTS.
20.1 SUBORDINATION. This Lease, at Landlord's option,
shall be subject and subordinate to the lien of any mortgages or deeds of trust
(including all advances thereunder, renewals, replacements, modifications,
supplements, consolidations, and extensions thereof) in any amount(s) whatsoever
now or hereafter placed on or against or affecting the Premises or Landlord's
interest or estate therein, without the necessity of the execution and delivery
of any
further instruments on the part of Tenant to effectuate such subordination. If
any mortgagee or beneficiary shall elect to have this Lease prior to the lien of
its mortgage or deed of trust, and shall give written notice thereof to Tenant,
this Lease shall be deemed prior to such mortgage or deed of trust, whether this
Lease is dated prior or subsequent to the date of such mortgage or deed of trust
or the date of the recording thereof. Notwithstanding the above, where a
mortgage or deed of trust exists on the Premises, and no corresponding
non-disturbance agreement (as defined below) exists, upon foreclosure of the
deed of trust, the Note shall be cancelled in full.
20.2 SUBORDINATION AGREEMENTS. Tenant shall execute and
deliver without charge therefore, such further reasonable instruments evidencing
subordination of this Lease to the lien of any mortgages or deeds of trust
affecting the Premises as may be required by Landlord within ten (10) business
days following Landlord's request therefore; provided that such mortgagee or
beneficiary under such mortgage or deed of trust agrees in writing
("Non-Disturbance Agreement") that this Lease shall not be terminated in the
event of any foreclosure if Tenant is not in default under this Lease. Failure
of Tenant to execute such instruments evidencing subordination of this Lease
shall constitute a Default by Tenant hereunder. Landlord shall use reasonable
efforts to obtain and deliver to Tenant prior to the Commencement Date a
Non-Disturbance Agreement from the beneficiary of the deed of trust currently
encumbering the Premises, but the failure of Landlord to obtain and deliver such
Non-Disturbance Agreement shall not delay the Commencement Date or excuse Tenant
from the obligations of the Lease.
20.3 ATTORNMENT. In the event of foreclosure or the
exercise of the power of sale under any mortgage or deed of trust made by
Landlord and covering the Premises, Tenant shall attorn to the purchaser upon
any such foreclosure or sale and recognize such purchaser as the Landlord under
this Lease, provided such purchaser expressly agrees in writing to be bound by
the terms of the Lease, including, but not limited to, the quiet enjoyment
provisions of Paragraph 39.
20.4 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS.
(a) DELIVERY BY TENANT. Tenant shall, within ten (10)
business days following request by Landlord therefore and without charge,
execute and deliver to Landlord estoppel certificates and current financial
statements of Tenant requested by Landlordin connection with the sale or
financing of the Premises, or requested by any lender making a loan affecting
the Premises and/or real property. Notwithstanding the above, the aforementioned
requests shall conform with laws applicable to Tenant if a publicly traded
company. Landlord may require that Tenant in any estoppel certificate shall (i)
certify that this Lease is unmodified and in full force and effect (or, if
modified, state the nature of such modification and certify that this Lease, as
so modified, is in full force and effect) and has not been assigned, (ii)
certify the date to which Rentals are paid in advance, if any, (iii) acknowledge
that there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, or specify such defaults if claimed, (iv) evidence the
status of this Lease as may be required either by a lender making a loan to
Landlord to be secured by a deed of trust or mortgage covering the Premises
and/or real property or a purchaser of the Premises from Landlord, (v) warrant
that in the event any beneficiary of any security instrument encumbering the
Premises and/or real property forecloses
on the security instrument or sells the Premises pursuant to any power of sale
contained in such security instrument, such beneficiary shall not be liable for
the Security Deposit unless received by such beneficiary, (vi) certify the date
Tenant entered into occupancy of the Premises and that Tenant is conducting
business at the Premises, (vii) certify that all improvements to be constructed
on the Premises by Landlord have been substantially completed except for punch
list items which do not prevent Tenant from using the Premises for its intended
use, and (viii) certify such other matters relating to the Lease and/or Premises
as may be reasonably requested by a lender making a loan to Landlord or a
purchaser of the Premises from Landlord. Any such estoppel certificate may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Any financial statements of Tenant shall include an opinion of a
certified public accountant (if available) and a balance sheet and profit and
loss statement for the most recent fiscal year, all prepared in accordance with
generally accepted accounting principles consistently applied. All such
financial statements shall be kept confidential.
(b) NONDELIVERY BY TENANT. Tenant's failure to deliver an
estoppel certificate as required pursuant to Paragraph 20.5(a) above shall be
conclusive upon Tenant that (i) this Lease is in full force and effect, without
modification except as may be represented by Landlord and has not been assigned,
(ii) there are now no uncured defaults in Landlord's performance, (iii) no
Rentals have been paid in advance except those that are set forth in this Lease,
(iv) no beneficiary of any security instrument encumbering the Premises shall be
liable for the Security Deposit in the event of a foreclosure or sale under such
security instrument unless received by such beneficiary, (v) the improvements to
be constructed on the Premises by Landlord have been substantially completed
except for punch list items which do not prevent Tenant from using the Premises
for its intended use, and (vi) Tenant has entered into occupancy of the Premises
on such date as may be represented by Landlord and is open and conducting
business at the Premises. Tenant's failure to deliver any financial statements,
estoppel certificates or other documents as required pursuant to Paragraph
20.5(a) above shall be a Default by Tenant.
21. HOLDING OVER. This Lease shall terminate without further
notice at the expiration of the Lease Term. It is the desire of Landlord either
to enter into a new lease with Tenant for the Premises prior to the expiration
of the Lease Term, or to have Tenant vacate the Premises pursuant to Paragraph
35 below. Therefore, any holding over by Tenant after Lease Termination shall
not constitute a renewal or extension of the Lease Term, nor give Tenant any
rights in or to the Premises except as expressly provided in this Lease. Any
holding over after Lease Termination with the consent of Landlord shall be
construed to be a tenancy from month to month, at one hundred and fifty percent
(150%) of the monthly Rent for the month preceding Lease Termination in addition
to all Additional Rent payable hereunder, and shall otherwise be on the terms
and conditions herein specified insofar as applicable. If Tenant remains in
possession of the Premises after Lease Termination without Landlord's consent
Tenant shall indemnify, defend and hold Landlord harmless from and against any
loss, damage, expense, claim or liability resulting from Tenant's failure to
surrender the Premises, including without limitation, any claims made by any
succeeding tenant based on delay in the availability of the Premises.
22. NOTICES. Any notice required or desired to be given under this
Lease shall be in writing, and all notices shall be given by personal delivery,
mailing, or by national overnight private courier. All notices personally given
on Tenant may be delivered to any corporate officer of Tenant if Tenant is a
corporation, or on any one signatory party if more than one party signs this
Lease on behalf of Tenant; any notice so given shall be binding upon all
signatory parties as if served upon each such party personally. Any notice given
pursuant to this Paragraph 22 shall be deemed to have been given: when
personally delivered; or if mailed, when seventy-two (72) hours have elapsed
from the time when such notice was deposited in the United States mail,
certified or registered mail and postage prepaid, addressed to the party at the
last address given for purposes of notice pursuant to the provisions of this
Paragraph 22; or if by national overnight private courier, the day following
delivery to the courier and addressed as aforesaid. At the date of execution of
this Lease, the addresses of Landlord and Tenant are set forth in Paragraph 1.11
above.
23. ATTORNEYS' FEES. In the event either party hereto shall bring
any action or legal proceeding for damages for an alleged breach of any
provision of this Lease, to recover Rentals, to enforce an indemnity defense or
hold harmless obligation, to terminate the tenancy of the Premises, or to
enforce, protect, interpret, or establish any term, condition, or covenant of
this Lease or right or remedy of either party, the prevailing party shall be
entitled to recover, as a part of such action or proceeding, reasonable
attorneys' fees and court costs, including attorneys' fees and costs for appeal,
as may be fixed by the court or jury.
24. ASSIGNMENT, SUBLETTING AND HYPOTHECATION.
24.1 IN GENERAL. Tenant shall not voluntarily sell, assign
or transfer all or any part of Tenant's interest in this Lease or in the
Premises or any part thereof, sublease all or any part of the Premises, or
permit all or any part of the Premises to be used by any person or entity other
than Tenant or Tenant's employees, except as specifically provided in this
Paragraph 24.
24.2 PERMITTED ASSIGNMENTS. Tenant may, without Landlord's
prior written consent but with notice to Landlord, without giving rise to any
right of Landlord to terminate the Lease as to any of the Premises, and without
payment of any amount to Landlord, sublet the Premises or assign the Lease to
(a) a subsidiary, affiliate, division or corporation controlling, controlled by
or under common control with Tenant (control meaning over 50% ownership), (b) a
successor corporation related to Tenant by merger, consolidation, nonbankruptcy
reorganization, or government action, and formed for a valid business purpose
and not for the purpose of obtaining the right of lease assignment or (c) a
purchaser of substantially all (i.e., at least ninety (90) percent of Tenant's
assets, provided said entity agrees to accept the Lease in its then current
condition. Neither the sale or transfer of Tenant's capital stock, including,
without limitation, a transfer in connection with the merger, consolidation or
nonbankruptcy reorganization of Tenant and any sale through any private or
public offering, nor the pledge of or grant of a security interest in any of the
Tenant's capital stock, nor the reincorporation of Tenant, shall be deemed an
assignment, subletting or other transfer of the Lease or the Premises.
24.3 NOTICE TO LANDLORD. Except for an assignment pursuant
to 24.2 above, Tenant shall, by written notice, advise Landlord of Tenant's
desire on a stated date (which date shall not be less than twenty (20) days nor
more than ninety (90) days after the date of Tenant's notice) to assign this
Lease or to sublet all or any part of the Premises for any part of the Lease
Term. Tenant's notice shall state the name, legal composition and address of the
proposed assignee or subtenant, and Tenant shall provide the following
information to Landlord with said notice: a true and complete copy of the
proposed assignment agreement or sublease; a financial statement of the proposed
assignee or subtenant prepared in accordance with generally accepted accounting
principles within one year prior to the proposed effective date of the
assignment or sublease; the nature of the proposed assignee's or subtenant's
business to be carried on in the Premises; the payments to be made or other
consideration to be given on account of the assignment or sublease; a current
financial statement of Tenant; and such other pertinent information as may be
reasonably requested by Landlord, all in sufficient detail to enable Landlord to
evaluate the proposed assignment or sublease and the prospective assignee or
subtenant. Tenant's notice shall not be deemed to have been served or given
until such time as Tenant has provided Landlord with all information reasonably
requested by Landlord pursuant to this Paragraph 24.2. Tenant shall immediately
notify Landlord of any modification to the proposed terms of such assignment or
sublease. Tenant may withdraw its notice at any time.
24.4 LANDLORD'S CONSENT. Within twenty (20) days after
receipt of Tenant's notice, Landlord shall not unreasonably withhold its consent
to the proposed assignment or subletting, on the terms and conditions specified
in said notice. Without otherwise limiting the criteria upon which Landlord may
withhold its consent to any proposed assignment or sublease, Landlord may
withhold its consent where Tenant is in Default at the time of the giving of
Tenant's notice or at any time thereafter, or where the net worth of the
proposed assignee or subtenant (according to generally accepted accounting
principles) is in Landlord's sole discretion, insufficient to meet obligations
under the Lease. Fifty (50%) percent of any rent in excess of the Rentals to be
paid under this Lease shall be paid directly to Landlord, as Additional Rent, at
the time and place specified in this Lease. For the purposes of this Paragraph
24, the term "rent" shall include any consideration of any kind received, or to
be received, by Tenant from an assignee or subtenant, if such sums are related
to Tenant's interest in this Lease or in the Premises, including, but not
limited to key money, bonus money, and payments (in excess of the fair market
value thereof) for Tenant's assets, fixtures, trade fixtures, inventory,
accounts, goodwill, equipment, furniture, general intangibles, and any capital
stock or other equity ownership interest of Tenant. Any assignment or subletting
without Landlord's consent shall be voidable at Landlord's option, and shall
constitute a Default by Tenant. Landlord's consent to any one assignment or
sublease shall not constitute a waiver of the provisions of this Paragraph 24 as
to any subsequent assignment or sublease nor a consent to any subsequent
assignment or sublease; further, Landlord's consent to an assignment or sublease
shall not release Tenant from Tenant's obligations under this Lease, and Tenant
shall remain jointly and severally liable with the assignee or subtenant.
24.5 ASSUMPTION OF OBLIGATIONS. In the event Landlord
consents to any assignment, such consent shall be conditioned upon the assignee
expressly assuming and agreeing to be bound by each of Tenant's covenants,
agreements and obligations contained in
this Lease, pursuant to a written assignment and assumption agreement in a form
approved by Landlord. Landlord's consent to any assignment or sublease shall be
evidenced by Landlord's signature on said assignment and assumption agreement or
on said sublease or by a separate written consent. In the event Landlord
consents to a proposed assignment or sublease, such assignment or sublease shall
be valid and the assignee or subtenant shall have the right to take possession
of the Premises only if an executed original of the assignment or sublease is
delivered to Landlord, and such document contains the same terms and conditions
as stated in Tenant's notice to Landlord given pursuant to Paragraph 24.3 above,
except for any such modifications to which Landlord has consented in writing.
24.6 COLLECTION OF RENT. Tenant hereby irrevocably gives
to and confers upon Landlord, as security for Tenant's obligations under this
Lease, the right, power and authority to collect all rents from any assignee or
subtenant of all or any part of the Premises as permitted by this Paragraph 24,
or otherwise, and Landlord, as assignee of Tenant, or a receiver for Tenant
appointed on Landlord's application, may collect such rent and apply it toward
Tenant's obligations under this Lease; provided, however, that so long as no
Default by Tenant exists or except as provided by the provisions of Paragraph
24.2 above, Tenant shall have the right to collect such rent. During the period
of any Default by Tenant, Landlord may at any time without notice in Landlord's
own name xxx for or otherwise collect such rent, including rent past due and
unpaid, and apply the same, less costs and expenses of operation and collection,
including reasonable attorneys' fees, toward Tenant's obligations under this
Lease. Landlord's collection of such rents shall not constitute an acceptance by
Landlord of attornment by such subtenants; in the event of a Default by Tenant,
Landlord shall have all rights provided by this Lease and by law, and Landlord
may, upon re-entry and taking possession of the Premises, eject all parties in
possession or eject some and not others, or eject none, as Landlord shall
determine in Landlord's sole discretion.
24.7 CORPORATIONS AND PARTNERSHIPS. Any dissolution or
reorganization in bankruptcy of Tenant shall be deemed an assignment of this
Lease requiring the prior written consent of Landlord. The foregoing
notwithstanding, the sale or transfer of any or all of the capital stock of a
corporation, the capital stock of which is now or hereafter becomes publicly
traded, shall not be deemed an assignment of this Lease, provide the purchaser
or transferee agrees to accept the Lease in its then current condition.
24.8 REASONABLE PROVISIONS. Tenant expressly agrees that
the provisions of this Paragraph 24 are not unreasonable standards or conditions
for purposes of Section 1951.4(b)(2) of the California Civil Code, as amended
from time to time, under bankruptcy laws, or for any other purpose.
24.9 ATTORNEY'S FEES. Tenant shall pay, as Additional
Rent, Landlord's actual and reasonable attorneys' fees for reviewing,
investigating, processing and/or documenting any requested assignment or
sublease, whether or not Landlord's consent is granted. Tenant shall pay
Landlord at execution of this Lease, one half (1/2) percent of one of the first
year's base rent to compensate Landlord for attorneys' fees and expense for
reviewing, preparing and negotiating this Lease.
24.10 INVOLUNTARY TRANSFER. No interest of Tenant in this
Lease shall be assignable, involuntarily or 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:
(a) If Tenant is or becomes bankrupt or insolvent, makes
an assignment for the benefit of creditors, or a proceeding under any bankruptcy
law is instituted in which Tenant is the bankrupt; or, if Tenant is a
partnership or consists of more than one 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;
(b) Levy of a writ of attachment or execution on this
Lease;
(c) Appointment of a receiver with authority to take
possession of the Premises in any proceeding or action to which Tenant is a
party; or
(d) Foreclosure of any lien affecting Tenant's interest
in the Premises, which lien was not consented to by Landlord pursuant to
Paragraph 24.9. An involuntary assignment shall constitute a Default by Tenant
and Landlord shall have the right to terminate this Lease, in which case this
Lease shall not be treated as an asset of Tenant. In the event the Lease is not
terminated, the provisions of Paragraph 24.2(c) regarding rents paid by an
assignee or subtenant and Paragraph 24.4 shall apply. If a writ of attachment or
execution is levied on this Lease, or if any involuntary proceeding in
bankruptcy is brought against Tenant or a receiver is appointed, Tenant shall
have sixty (60) days in which to cause the attachment or execution to be
removed, the involuntary proceeding dismissed, or the receiver removed.
24.11 HYPOTHECATION. Tenant shall not hypothecate, mortgage
or encumber Tenant's interest in this Lease or in the Premises or otherwise use
this Lease as a security device in any manner without the consent of Landlord,
which consent Landlord may withhold in its sole and absolute discretion. Consent
by Landlord to any such hypothecation or creation of a lien or mortgage shall
not constitute consent to an assignment or other transfer of this Lease
following foreclosure of any permitted lien or mortgage.
24.12 BINDING ON SUCCESSORS. The provisions of this
Paragraph 24 expressly apply to all heirs, successors, sublessees, assignees and
transferees of Tenant.
25. SUCCESSORS. Subject to the provisions of Paragraph 24 above
and Paragraph 30.2(a) below, the covenants, conditions, and agreements
contained in this Lease shall be binding on the parties hereto and on their
respective heirs, successors and assigns.
26. LANDLORD DEFAULT; MORTGAGE PROTECTION. Landlord shall not
be in default under this Lease unless Tenant shall have given Landlord
written notice of the breach and, within thirty (30) days after notice,
Landlord has not cured the breach or, if the breach is such that it cannot
reasonably be cured under the circumstances within thirty (30) days, has not
commenced
and thereafter diligently prosecuted the cure to completion. Any money judgment
obtained by Tenant based upon Landlord's breach of this Lease shall be satisfied
only out of the proceeds of the sale or disposition of Landlord's interest in
the Premises (whether by Landlord or by execution of judgment). In the event of
any default on the part of Landlord under this Lease, Tenant shall give notice
by registered or certified mail to any beneficiary of a deed of trust or any
mortgagee of a mortgage affecting the Premises whose address shall have been
furnished to Tenant, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default, including time to obtain possession of the
Premises by receivership if such should prove necessary to effect a cure.
27. EXHIBITS. All exhibits attached to this Lease shall be
deemed to be incorporated herein by the individual reference to each such
exhibit, and all such exhibits shall be deemed to be a part of this Lease as
though set forth in full in the body of the Lease.
28. SURRENDER OF LEASE NOT MERGER. The voluntary or other
surrender of this Lease by Tenant, or a mutual cancellation thereof, shall
not work a merger and shall, at the option of Landlord, terminate all or any
existing subleases or subtenants, or may, at the option of Landlord, operate
as an assignment to Landlord of any or all such subleases or subtenants.
29. WAIVER. The waiver by either party of any breach of any
term, covenant or condition herein contained (or the acceptance by either
party of any performance after the time the same shall become due) shall not
be deemed to be a waiver of such term, covenant or condition or any
subsequent breach thereof or of any other term, covenant or condition herein
contained, unless otherwise expressly agreed to in writing. The acceptance by
Landlord of any sum less than that which is required to be paid by Tenant
shall be deemed to have been received only on account of the obligation for
which it is paid (or for which it is allocated by Landlord, in Landlord's
absolute discretion, if Tenant does not designate the obligation as to which
the payment should be credited), and shall not be deemed an accord and
satisfaction notwithstanding any provisions to the contrary written on any
check or contained in any letter of transmittal. The acceptance by Landlord
of any sum tendered by a purported assignee or transferee of Tenant shall not
be deemed a consent by Landlord to any assignment or transfer of Tenant's
interest herein. No custom or practice which may arise between the parties
hereto in the administration of the terms of this Lease shall be construed as
a waiver or diminution of either party's right to demand performance in
strict accordance with the terms of this Lease.
30. GENERAL.
30.1 CAPTIONS AND HEADINGS. The captions and paragraph
headings used in this Lease are for convenience of reference only. They shall
not be construed to limit or extend the meaning of any part of this Lease,
and shall not be deemed relevant in resolving any question of interpretation
or construction of any paragraph of this Lease.
30.2 DEFINITIONS.
(a) LANDLORD. The term Landlord as used in this Lease, so
far as the covenants or obligations on the part of Landlord are concerned, shall
be limited to mean and include only the owner at the time in question of the fee
title to the Premises. In the event of any transfer(s) of such interest, the
Landlord herein named (and in case of any subsequent transfers or conveyances,
the then grantor) shall have no further liability under this Lease to Tenant
except as to matters of liability which have accrued and are unsatisfied as of
the date of such transfer, it being intended that the covenants and obligations
contained in this Lease on the part of Landlord shall be binding on Landlord and
its successors and assigns only during and in respect of their respective
periods of ownership of the fee; provided that any funds in the possession of
Landlord or the then grantor and as to which Tenant has an interest, less any
deductions permitted by law or this Lease, shall be turned over to the grantee.
The covenants and obligations contained in this Lease on the part of Landlord
shall, subject to the provisions of this Paragraph 30.2(a), be binding upon each
Landlord and such Landlord's heirs, personal representatives, successors and
assigns only during its respective period of ownership. Except as provided in
this Paragraph 30.2(a), this Lease shall not be affected by any transfer of
Landlord's interest in the Premises, and Tenant shall attorn to any transferee
of Landlord provided that all of Landlord's obligations hereunder are assumed in
writing by such transferee.
(b) AGENTS. For purposes of this Lease and without
otherwise affecting the definition of the word "agent" or the meaning of an
"agency", the term "agents" shall be deemed to include the agents, employees,
officers, directors, servants, invitees, contractors, successors,
representatives subcontractors, guests, customers, suppliers, partners,
affiliated companies, and any other person or entity related in any way to the
respective party, Tenant or Landlord.
(c) INTERPRETATION OF TERMS. The words "Landlord" and
"Tenant" as used herein shall include the plural as well as the singular. Words
in the neuter gender include the masculine and feminine and words in the
masculine or feminine gender include the neuter.
30.3 COPIES. Any executed copy of this Lease shall be
deemed an original for all purposes.
30.4 TIME OF ESSENCE. Time is of the essence as to each
and every provision in this Lease requiring performance within a specified time,
except as to the conditions relating to the delivery of possession of the
Premises to Tenant.
30.5 SEVERABILITY. In case any one or more of the
provisions contained herein shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Lease, but this Lease shall be
construed as if such invalid, illegal or unenforceable provision had not been
contained herein.
30.6 GOVERNING LAW. This Lease shall be construed and
enforced in accordance with the laws of the State of California.
30.7 JOINT AND SEVERAL LIABILITY. If Tenant is more than
one person or entity, each such person or entity shall be jointly and severally
liable for the obligations of Tenant hereunder. If Tenant is a husband and wife,
the obligations hereunder shall extend to their sole and separate property as
well as community property.
30.8 CONSTRUCTION OF LEASE PROVISIONS. Although printed
provisions of this Lease were originally provided by Tenant's Agent, this Lease
shall not be construed either for or against Tenant or Landlord, but shall be
construed in accordance with the general tenor of the language to reach a fair
and equitable result.
30.9 TENANT'S FINANCIAL STATEMENTS. Tenant hereby warrants
that all financial statements delivered by Tenant to Landlord are true, correct,
and complete, and prepared in accordance with generally accepted accounting
principles. Tenant acknowledges and agrees that Landlord is relying on such
financial statements in accepting this Lease, and that a breach of Tenant's
warranty as to such financial statements shall constitute a Default by Tenant.
31. SIGNS. Tenant may place signage on the exterior of the
Premises. All signs placed on the Premises by Tenant shall comply with all
recorded documents affecting the Premises, including but not limited to any
Declaration of Conditions, Covenants and Restrictions; and applicable statutes,
ordinances, rules and regulations of governmental agencies having jurisdiction
thereof including the City of Sunnyvale. At Landlord's option, Tenant shall at
Lease Termination remove any sign which it has placed on the Premises, and
shall, at its sole cost, repair any damage caused by the installation or removal
of such sign.
32. LANDLORD NOT A TRUSTEE. Landlord shall not be deemed to be a
trustee of any funds paid to Landlord by Tenant (or held by Landlord for Tenant)
pursuant to this Lease, including without limitation the Security Deposit.
Landlord shall not be required to keep any such funds separate from Landlord's
general funds. Any funds held by Landlord pursuant to this Lease shall not bear
interest.
33. INTEREST. Any payment due from Tenant to Landlord, except for
Rent received by Landlord within thirty (30) days after the same is due, shall
bear interest from the date due until paid at an annual rate equal to the prime
rate established by the Federal Reserve Bank of San Francisco as of the
twenty-fifth (25th) day of the month immediately preceding the due date, on
advances to member banks under Sections 13 and 13(a) of the Federal Reserve Act,
as now in effect or hereafter from time to time amended, plus one basis point
(1). In addition, Tenant shall pay all costs and attorneys' fees incurred by
Landlord in the collection of such amounts.
34. SURRENDER OF PREMISES. On the last day of the Lease Term or
upon the sooner termination of this Lease, Tenant shall, to the reasonable
satisfaction of Landlord, surrender the Premises to Landlord in good condition
("reasonable wear and tear" excepted and defined below) with all originally
painted interior walls washed, or re-painted if marked or damaged and other
interior walls cleaned and repaired or replaced, all carpets cleaned and in good
condition, the air conditioning, ventilating and heating equipment inspected,
serviced and repaired by a reputable and licensed service firm (unless Landlord
has elected to maintain heating and air
conditioning systems pursuant to Paragraph 10.1 above), and all floors cleaned
and waxed. Tenant shall remove all of Tenant's personal property and trade
fixtures from the Premises, and all property not so removed shall be deemed
abandoned by Tenant. Furthermore, Tenant shall immediately repair all damage to
the Premises caused by any such removal. If the Premises are not so surrendered
at Lease Termination, Tenant shall indemnify, defend and hold Landlord harmless
from and against any loss, damage, expense, claim or liability resulting from
delay by Tenant in so surrendering the Premises including, without limitation,
any claims made by any succeeding tenant or losses to Landlord due to lost
opportunities to lease to succeeding tenants.
For purposes of this Paragraph 34 the phrase "reasonable wear and tear"
means wear which manifest itself solely through the passage of time. For the
purpose of this Lease, items which are not deemed "reasonable wear and tear"
shall include, but not be limited to, the following items, which items shall be
Tenant's obligations to repair, maintain, correct, clean or replace upon
surrender or Lease termination:
(a) Damage or deterioration that would have been
prevented by Tenant performing all its maintenance and repair obligations in
accordance with this Lease;
(b) Damage to or defacement of portions of any walls,
partitions, wall coverings, woodwork, doors, ceilings or any other portion of
the Premises from any cause (including, without limitation, from nails, screws
or other attachment devices). All interior walls and partitions are to be
repaired and repainted if marked or damaged;
(c) Damage to floors and floor coverings (including
stains, marks, soiling and excessive wear to carpeting from Tenant's failure to
use carpet protectors under desk chairs);
(d) Any disrepair, damage or non-functioning improvements
in the Premises that are capable of being repaired or replaced and which is the
Tenant's obligation to repair, including without limitation any systems on the
Premises, light fixtures, devices, doors, windows, glass, operable hardware,
ceiling panels and grills, interior walls, floor coverings, window coverings,
fixtures and appurtenances;
(e) Damage to the Premises from any cause except insured
casualty or other elements not directly caused by Tenant or its employees,
agents or invitees
35. NO PARTNERSHIP OR JOINT VENTURE. Nothing in this Lease shall
be construed as creating a partnership or joint venture between Landlord,
Tenant, or any other party.
36. ENTIRE AGREEMENT. Any agreements, warranties, or
representations not expressly contained herein shall in no way bind either
Landlord or Tenant, and Landlord and Tenant expressly waive all claims for
damages by reason of any statement, representation, warranty, promise or
agreement, if any, not contained in this Lease. This Lease supersedes and
cancels any and all previous negotiations, arrangements, brochures, agreements
and understandings, whether written or oral, between Landlord and its agents and
Tenant and its agents with respect to the Premises, or this Lease. This Lease,
including the Addendum of even date, constitutes the
entire agreement between the parties hereto and no addition to, or modification
of, any term or provision of this Lease shall be effective until and unless set
forth in a written instrument signed by both Landlord and Tenant.
37. SUBMISSION OF LEASE. Submission of this instrument for
Tenant's examination or execution does not constitute a reservation of space nor
an option to lease. This instrument shall not be effective until executed by
both Landlord and Tenant. Execution of this Lease by Tenant shall constitute an
offer by Tenant to lease the Premises, which offer shall be deemed accepted by
Landlord when this Lease is executed by Landlord and delivered to Tenant. This
Lease shall not be effective unless, within five (5) days following execution,
Tenant's President and a majority of Landlord's general partners approve the
Lease. This Lease will not be effective if National Semiconductor fails to
terminate its Lease in the time frame as described in this Lease or if National
Semiconductor elects not to execute the Agreement Terminating Leasehold Interest
between Landlord and National, in form acceptable to Landlord in its sole
discretion. In no event will Landlord be liable for any of National
Semiconductor's acts, omissions, delays or holdover. In that regard, Tenant has
reviewed and is aware of the Agreement Terminating Leasehold Interest between
Landlord and National and Tenant agrees it shall have no claim or action for any
cost or damage of whatever kind or nature as a result of any breach of any
provisions therein by any party to same.
38. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant
that so long as Tenant is not in Default under this Lease, Tenant shall and may
peaceably and quietly have, hold and enjoy the Premises for the Lease Term,
subject, however, to the terms of this Lease and of any mortgages or deeds of
trust affecting the Premises and/or the real property, and the rights reserved
by Landlord hereunder. Any purchaser upon any foreclosure or exercise of the
power of sale under any mortgage or deed of trust made by Landlord and covering
the Premises to whom Tenant attorns pursuant to Paragraph 20.4 above shall be
bound by the terms of this Paragraph 38.
39. AUTHORITY The undersigned parties hereby warrant that they
have proper authority and are empowered to execute this Lease on behalf of the
Landlord and Tenant, respectively. Tenant represents that each individual
executing this Lease on behalf of said corporation is duly authorized to execute
and deliver this Lease on behalf of said corporation in accordance with a duly
adopted resolution of the Board of Directors of said corporation or in
accordance with the by-laws of said corporation, and that this Lease is binding
upon said corporation in accordance with its terms. Tenant shall upon execution
of this Lease, deliver to Landlord a certified copy of the resolution of the
Board of Directors of said corporation authorizing or ratifying the execution of
this Lease. In the event Tenant should fail to deliver such resolution to
Landlord upon execution of this Lease, Landlord shall not be deemed to have
waived its right to require delivery of such resolution, and at any time during
the Lease Term Landlord may request Tenant to deliver the same, and Tenant
agrees it shall thereafter promptly deliver such resolution to Landlord. Tenant
warrants that:
(a) Tenant is a valid and existing corporation;
(b) Tenant is qualified to do business in California; and
(c) The signers of this Lease are properly authorized to
execute this Lease.
40. OPTION TO EXTEND LEASE TERM.
40.1 GRANT OF OPTION. Landlord hereby grants to Tenant two
options (the "Option") to extend the initial Term of the Lease ("Initial Term")
for an additional five (5) years each (generally the "Option Term" and "First
Option Term" for the first five (5) year option and the "Second Option Term" for
the second five (5) year option upon and subject to the terms and conditions set
forth in this Lease. Tenant shall have no right to extend the Term except as
provided herein. The Options shall be exercised, if at all, by Tenant's delivery
of written notice of exercise to Landlord no later than six (6) months nor
earlier than twelve (12) months prior to the expiration date of the then current
Lease Term. If Tenant does not exercise the First Option Term it shall not be
eligible for the Second Option Term. The Rent to be paid during that Option Term
shall be the Prevailing Market Rental, as hereinafter defined. As used herein,
the term "Prevailing Market Rental" shall mean the rental and all other monetary
payments and escalations that Landlord could obtain from a third party tenant
which might desire to lease the Premises for the relevant Option Term, for the
Premises best and highest uses, taking into account the size of the Premises,
the type and quality of tenant improvements, the location of the Premises, the
quality of construction of the Premises, the services provided under the terms
of the Lease; provided, in no event shall the Prevailing Market Rental be less
than the Rent payable by Tenant to Landlord at the expiration of the Initial
Term. If Tenant is in Default under any of the terms, covenants, or conditions
of this Lease either at the time Tenant exercises the relevant Option or at
anytime thereafter prior to the commencement date of the Option Term (the
"Option Commencement Date"), then in such case, Tenant's exercise of the Option
shall be of no force and effect and Tenant shall have no rights hereunder to
extend the Initial Term. The rights granted pursuant to this Article 41 are
personal to Tenant and are not assignable to any other person except in
conjunction with an assignment made pursuant to Paragraph 24.2 of this Lease.
Landlord shall have no brokerage commission obligations in the event of exercise
of such options.
40.2 DETERMINATION OF PREVAILING MARKET RENTAL. On or
before five (5) days after Tenant provides Landlord with notice of Tenant's
exercise of the relevant Option, Landlord and Tenant shall commence negotiations
to agree upon the Prevailing Market Rental applicable thereto. If Landlord and
Tenant are unable to reach agreement on the Prevailing Market Rental within ten
(10) days after the date negotiations commence, then the Prevailing Market
Rental shall be determined as follows:
(a) If Landlord and Tenant are unable to agree on the
Prevailing Market Rental within said ten (10) day period, then, within fifteen
(15) days thereafter, Landlord and Tenant shall each simultaneously submit to
the other in a sealed envelope its good faith estimate of the Prevailing Market
Rental. If the higher of such estimates is not more than one hundred five
percent (105%) of the lower of such estimates, then the Prevailing Market Rental
shall be the average of the two estimates; provided, however, in no event shall
the Prevailing Market
Rental be less than the Rent payable by Tenant to Landlord at the expiration of
the Initial Term or First Option Term, as applicable.
(b) If the matter is not resolved by the exchange of
estimates as provided in subparagraph (a) above, then either Landlord or Tenant
may, by written notice to the other on or before five (5) days after the
exchange of such estimates, require that the disagreement be resolved by
arbitration. Within seven (7) days after such notice, the parties shall select
as an arbitrator a mutually acceptable MAI appraiser with experience in real
estate activities, including at least ten (10) years' experience in appraising
office space in the County of Santa Clara, California. If the parties cannot
agree on an appraiser, then, within a second period of seven (7) days, each
party shall select an independent MAI appraiser meeting the aforementioned
criteria and, within a third period of seven (7) days, the two appointed
appraisers shall select a third appraiser meeting the aforementioned criteria.
If one party shall fail to make such appointment within said second seven (7)
day period, then the appraiser chosen by the other party shall be the sole
arbitrator.
(c) Once the arbitrator has been selected as provided for
in subparagraph (b) above, then, as soon as practicable but in any case within
fourteen (14) days thereafter, the arbitrator shall select one of the two
estimates of the Prevailing Market Rental submitted by Landlord and Tenant,
which estimate shall be the one that is closer to the Prevailing Market Rental
as determined by the arbitrator; provided, however, in no event shall the
Prevailing Market Rental be less than the Basic Rental payable by Tenant to
Landlord at the expiration of the Initial Term. The arbitrator's selection shall
be rendered in writing to both Landlord and Tenant and shall be final and
binding upon them and shall not be subject to appeal. If the arbitrator believes
that expert advice would materially assist such arbitrator, then the arbitrator
may retain one or more qualified persons, including, but not limited to, legal
counsel, brokers, architects or engineers, to provide such expert advice. The
party whose estimate is not chosen by the arbitrator shall pay the costs of the
arbitrator and of any experts retained by the arbitrator; provided, however,
that any fees of any counsel or expert engaged directly by Landlord or Tenant
shall be borne by the party retaining such counsel or expert.
41. EXPANSION NOTICE. If Landlord, during the Initial Term of this
Lease, intends to offer to lease either 0000 Xxxxx Xxxx or 0000 Xxxxx Xxxx,
Xxxxxxxxx, to any party other than an existing tenant or affiliate of an
existing tenant, then Landlord shall endeavor to provide Tenant with a thirty
(30) day notice of its intentions to do so; during such thirty day period,
Tenant may elect to negotiate with Landlord for such space. If Tenant and
Landlord do not agree on rental terms and conditions within the thirty (30) day
period, which negotiation terms shall be at each party's discretion, Landlord
shall be free to market and rent the other Xxxxx Road property on terms and
conditions Landlord shall set at its sole discretion.
42. COUNTERPARTS. This Lease may be executed in multiple
non-contemporaneous counterparts, and any executed counterpart shall be deemed
an original for all purposes.
43. CONVERSION OF SUNNYVALE INDUSTRIALS TO A LIMITED LIABILITY
COMPANY ("LLC"). In the event Sunnyvale Industrials elects to convert to an LLC,
Tenant shall look solely to the LLC
for performance of all Lease obligations and shall release each general partner
of Landlord from any and all liabilities and obligations, provided such
successor LLC agrees to be bound by all the terms and conditions of this Lease.
44. CROSS DEFAULT: LOAN, CONTRACT OR OTHER LEASE. If Tenant
defaults in any loan, contract or other lease with Landlord, it shall constitute
a Default under this Lease.
45. BROKERS. Colliers International is the sole broker in this
Lease and represents Tenant and shall be paid pursuant to a separate agreement
with Landlord. Tenant shall indemnify, defend and hold Landlord harmless from
any brokerage claim by any other broker or agent Tenant has had any contact
with.
46. APPROVAL OF FINANCIAL CONDITION. This Lease is contingent upon
Landlord's approval of Tenant's financial condition pursuant to Tenant's 10K and
10Q. Tenant shall submit the relevant financial data to Landlord ten (10) days
prior to Lease execution. Landlord shall review and give notice of its approval
or disapprove within nine (9) days thereafter.
47. REMOVAL UPON LEASE TERMINATION. Upon Termination of this
Lease, Tenant shall request from Landlord, in writing, as to whether Landlord
will require Tenant, at Tenant's sole cost and expense, to remove any
Alterations and restore the Premises to their prior condition at Lease
Commencement. Also, in the event Tenant fails to earlier obtain Landlord's
written decision as to whether Tenant will be required to remove any Alteration,
then no less than one hundred and eighty (180) nor more than two hundred and
seventy (270) days prior to the expiration of the Lease Term, Tenant, again by
written notice to Landlord, shall request Landlord to inform Tenant whether or
not Landlord desires to have Alterations made to the Premises by Tenant removed
at Lease Termination. Following receipt of such notice, Landlord may elect to
have all or a portion of Tenant's Alterations removed from the Premises at Lease
Termination, and Tenant shall, at its sole cost and expense, remove at Lease
Termination such Alterations (including alterations made by National
Semiconductor) designated by Landlord for removal and repair all damage to the
Premises arising from such removal. In the event Tenant fails to so request
Landlord's decision or fails to remove any Alterations designated by Landlord
for removal, Landlord may remove any Alterations made to the Premises by Tenant
and repair all damage to the Premises arising from such removal, and may recover
from Tenant all costs and expenses incurred thereby. Tenant's obligation to pay
such costs and expenses to Landlord shall survive Lease Termination. Unless
Landlord elects to have Tenant remove (or, upon Tenant's failure to obtain
Landlord's decision, Landlord removes) any such Alterations, all such
Alterations, except for moveable furniture and trade fixtures of Tenant not
affixed to the Premises, shall become the property of Landlord upon Lease
Termination (without any payment therefor) and remain upon and be surrendered
with the Premises at Lease Termination.
IN WITNESS WHEREOF, the parties have executed this Lease effective as
of the date set forth below.
LANDLORD: TENANT:
Sunnyvale Industrials, Silicon Storage Technology, Inc.
A California General Partnership /s/ Bing Yeh
-----------------------------------
By: BING YEH
--------------------------------
By: /s/ Xxxxxx Xxxxxxx Title: President & CEO
Xxxxxx Xxxxxxx -----------------------------
Title: Managing General Partner By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Title: Vice President & CFO
DATE: 6-26-2000 -----------------------------
-------------------------------- DATE: June 26, 2000
------------------------------
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
