1
EXHIBIT 10.10
LEASE
BY AND BETWEEN
SILICON VALLEY PROPERTIES, LLC,
A DELAWARE LIMITED LIABILITY COMPANY
AS LANDLORD
AND
SYNAPTICS, INC.
A CALIFORNIA CORPORATION
AS TENANT
FOR PREMISES LOCATED AT
0000 XXXXXX XXXXX, XXX XXXX, XXXXXXXXXX
2
TABLE OF CONTENTS
SUMMARY OF BASIC LEASE TERMS.................................................1
Article 1 DEFINITIONS.......................................................1
Article 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE..............................2
Article 3 RENT..............................................................3
Article 4 USE OF PREMISES...................................................4
Article 5 TRADE FIXTURES AND ALTERATIONS....................................5
Article 6 REPAIR AND MAINTENANCE............................................7
Article 7 WASTE DISPOSAL AND UTILITIES......................................8
Article 8 COMMON OPERATING EXPENSES.........................................9
Article 9 INSURANCE........................................................11
Article 10 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY.................13
Article 11 DAMAGE TO PREMISES...............................................13
Article 12 CONDEMNATION.....................................................14
Article 13 DEFAULT AND REMEDIES.............................................15
Article 14 ASSIGNMENT AND SUBLETTING........................................17
Article 15 GENERAL PROVISIONS...............................................19
3
SUMMARY OF BASIC LEASE TERMS
SECTION
(LEASE REFERENCE) TERMS
A. Lease Reference Date: September 17, 1999
(Introduction)
B. Landlord: SILICON VALLEY PROPERTIES, LLC
(Introduction) a Delaware limited liability company
C. Tenant: SYNAPTICS, INC.
(Introduction) a California corporation
D. Premises: That area consisting of approximately 34,660 square feet of
(Section 1.21) gross leasable area the address of which is 0000 Xxxxxx Xxxxx,
Xxx Xxxx, Xxxxxxxxxx, within the Building as shown on Exhibit A.
E. Project: The land and improvements shown on Exhibit A consisting of
(Section 1.22) multiple buildings the aggregate gross leasable area of which is
approximately 203,500 square feet.
F. Building: The building in which the Premises are located known as 2381
(Section 1.7) Bering Drive, San Jose, California, containing approximately
34,660 square feet of gross leasable area.
G. Tenant's Share: 100% of the Building (i.e., 34,660/34,660)
(Section 1.29) 17.03% of the Project (i.e., 34,660/203,500)
H. Tenant's Allocated Parking Stalls: Tenant shall be entitled to use Tenant's Share
(Section 4.5) the parking available to the Building.
I. Scheduled Commencement Date: December 1, 1999
(Section 1.26)
J. Lease Term: Sixty-four (64) calendar months, plus, if the Commencement Date is
other than the first day of a calendar month, the first month
shall include the remainder of the calendar month in which the
Commencement Date occurs plus the first full calendar month
thereafter; provided, however, that the inclusion of any partial
month in the first full calendar month shall not entitle Tenant to
any additional free rent. Any free rent shall be applied on a
daily basis (based on a 30 day month) so that Tenant does not
receive additional free rent if the first month includes a full
calendar month plus any partial month. Base Monthly Rent and
Additional Rent for any partial month shall be prorated on a daily
basis.
K. Base Monthly Rent:
(Section 3.1) Months (following the Commencement Date) Base Monthly Rent
1 - 4 (the "Free Rent Period") -0-
5 - 16 $53,723.00
17 - 28 $55,456.00
29 - 40 $57,189.00
41 - 52 $58,922.00
53 - 64 $60,655.00
During the Free Rent Period, no Base Monthly Rent shall be due and payable, but all
Additional Rent, including, without limitation, "Tenant's Share" of "Common
Operating Expenses" (as such terms are hereinafter defined) shall be due and
payable. If the Commencement Date is other than the first day of a calendar month,
then the Free Rent Period shall be calculated on the basis of a 30 day month and
applied on a daily basis.
L. Prepaid Rent: $53,723.00
(Section 3.3)
1
4
M. Security Deposit: $60,655.00
(Section 3.5)
N. Permitted Use: General office, sales, storage, distribution, and marketing of
(Section 4.1) computer related equipment and software. Any change in use shall be subject to the
reasonable consent of Landlord as provided in section 4.1 hereof.
O. Permitted Tenant's Alterations limit: $10,000.00
(Section 5.2)
P. Tenant's Liability Insurance Minimum: $3,000,000.00
(Section 9.1)
Q. Landlord's Address: c/o The Xxxxxx Group
(Section 1.3) 0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Attn: Property Manager
With a copy to: Divco West Group, LLC
000 Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxx, XX 00000
Attn.: Asset Manager
R. Tenant's Address: Prior to the Commencement Date:
(Section 1.3) Synaptics, Inc.
0000 Xxxxxxx xxxxxxx
Xxx Xxxx, XX 00000
Attn.: Xxxxxx Xxxxxx
After the Commencement Date:
Synaptics, Inc.
0000 Xxxxxx Xxxxx
Xxx Xxxx, XX
Attn.: Xxxxxx Xxxxxx
S. Retained Real Estate Brokers: Xxxxx Xxxxxx Associates representing Tenant and
(Section 15.13) Colliers Xxxxxxx International, Inc. representing Landlord.
T. Lease: This Lease includes the summary of the Basic Lease Terms, the Lease, and
(Section 1.17) the following exhibits and addenda which are attached hereto and
incorporate herein by this reference:
Exhibit A - Project Site Plan and Outline of the Premises
Exhibit B - Work Letter for Tenant Improvements
Exhibit C - Acceptance Agreement
The foregoing Summary is hereby incorporated into and made a part of
this Lease. Each reference in this Lease to any term of the Summary shall mean
the respective information set forth above and shall be construed to incorporate
all of the terms provided under the particular paragraph pertaining to such
information. In the event of any conflict between the Summary and the Lease, the
Summary shall control.
LANDLORD: TENANT:
SILICON VALLEY PROPERTIES, L.L.C. By: SYNAPTICS, INC.,
a Delaware limited liability company a California corporation
By: Divco West Group, LLC,
a Delaware limited liability company By: /s/ X. Xxxxxxxx
______________________
Its Agent Name: X. Xxxxxxxx
Title: Corp. Controller
By: /s/ Xxxxx Xxxxxxxx Dated: September 16, 1999
__________________________________
Name: Xxxxx Xxxxxxxx
Its: President
Dated: September __, 1999
2
5
LEASE
This Lease is dated as of the lease reference date specified in Section
A of the Summary and is made by and between the party identified as Landlord in
Section B of the Summary and the party identified as Tenant in Section C of the
Summary.
ARTICLE 1 DEFINITIONS
1.1 General: Any initially capitalized term that is given a special
meaning by this Article 1, the Summary, or by any other provision of this Lease
(including the exhibits attached hereto) shall have such meaning when used in
this Lease or any addendum or amendment hereto unless otherwise clearly
indicated by the context.
1.2 Additional Rent: The term "Additional Rent" is defined in paragraph
3.2.
1.3 Address for Notices: The term "Address for Notices" shall mean the
addresses set forth in Sections Q and R of the Summary; provided, however, that
after the Commencement Date, Tenant's Address for Notices shall be the address
of the Premises.
1.4 Agents: The term "Agents" shall mean the following: (i) with
respect to Landlord or Tenant, the agents, employees, contractors, and invitees
of such party; and (ii) in addition with respect to Tenant, Tenant's subtenants
and their respective agents, employees, contractors, and invitees.
1.5 Agreed Interest Rate: The term "Agreed Interest Rate" shall mean
that interest rate determined as of the time it is to be applied that is equal
to the lesser of (i) 4% in excess of the discount rate established by the
Federal Reserve Bank of San Francisco as it may be adjusted from time to time,
or (ii) the maximum interest rate permitted by Law.
1.6 Base Monthly Rent: The term "Base Monthly Rent" shall mean the
fixed monthly rent payable by Tenant pursuant to paragraph 3.1 which is
specified in Section K of the Summary.
1.7 Building: The term "Building" shall mean the building in which the
Premises are located which Building is identified in Section F of the Summary,
the gross leasable area of which is referred to herein as the "Building Gross
Leasable Area."
1.8 Commencement Date: The term "Commencement Date" is the date the
Lease Term commences, which term is defined in paragraph 2.2.
1.9 Common Area: The term "Common Area" shall mean all areas and
facilities within the Project that are not designated by Landlord for the
exclusive use of Tenant or any other lessee or other occupant of the Project,
including the parking areas, access and perimeter roads, pedestrian sidewalks,
landscaped areas, trash enclosures, recreation areas and the like.
1.10 Common Operating Expenses: The term "Common Operating Expenses" is
defined in paragraph 8.2.
1.11 Effective Date: The term "Effective Date" shall mean the date the
last signatory to this Lease whose execution is required to make it binding on
the parties hereto shall have executed this Lease.
1.12 Event of Tenant's Default: The term "Event of Tenant's Default" is
defined in paragraph 13.1.
1.13 Hazardous Materials: The terms "Hazardous Materials" and
"Hazardous Materials Laws" are defined in paragraph 7.2E.
1.14 Insured and Uninsured Peril: The terms "Insured Peril" and
"Uninsured Peril" are defined in paragraph 11.2E.
1.15 Law: The term "Law" shall mean any judicial decision, statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal or other government
agency or authority having jurisdiction over the parties to this Lease or the
Premises, or both, in effect either at the Effective Date or any time during the
Lease Term, including, without limitation, any Hazardous Material Law (as
defined in paragraph 7.2E) and the Americans with Disabilities Act, 42 U.S.C.
Sections 12101 et. seq. and any rules, regulations, restrictions,
guidelines, requirements or publications promulgated or published pursuant
thereto.
1.16 Lease: The term "Lease" shall mean the Summary and all elements of
this Lease identified in Section T of the Summary, all of which are attached
hereto and incorporated herein by this reference.
1.17 Lease Term: The term "Lease Term" shall mean the term of this
Lease which shall commence on the Commencement Date and continue for the period
specified in Section J of the Summary.
1
6
1.18 Lender: The term "Lender" shall mean any beneficiary, mortgagee,
secured party, lessor, or other holder of any Security Instrument.
1.19 Permitted Use: The term "Permitted Use" shall mean the use
specified in Section N of the Summary.
1.20 Premises: The term "Premises" shall mean that building area
described in Section D of the Summary that is within the Building.
1.21 Project: The term "Project" shall mean that real property and the
improvements thereon which are specified in Section E of the Summary, the
aggregate gross leasable area of which is referred to herein as the "Project
Gross Leasable Area."
1.22 Private Restrictions: The term "Private Restrictions" shall mean
all recorded covenants, conditions and restrictions, private agreements,
reciprocal easement agreements, and any other recorded instruments affecting the
use of the Premises which (i) exist as of the Effective Date, or (ii) are
recorded after the Effective Date and are approved by Tenant.
1.23 Real Property Taxes: The term "Real Property Taxes" is defined
in paragraph 8.3.
1.24 Scheduled Commencement Date: The term "Scheduled Commencement
Date" shall mean the date specified in Section I of the Summary.
1.25 Security Instrument: The term "Security Instrument" shall mean any
underlying lease, mortgage or deed of trust which now or hereafter affects the
Project, and any renewal, modification, consolidation, replacement or extension
thereof.
1.26 Summary: The term "Summary" shall mean the Summary of Basic Lease
Terms executed by Landlord and Tenant that is part of this Lease.
1.27 Tenant's Alterations: The term "Tenant's Alterations" shall mean
all improvements, additions, alterations, and fixtures installed in the Premises
by Tenant at its expense which are not Trade Fixtures.
1.28 Tenant's Share: The term "Tenant's Share" shall mean the
percentage obtained by dividing Tenant's Gross Leasable Area by the Building
Gross Leasable Area, which as of the Effective Date is the percentage identified
in Section G of the Summary.
1.29 Trade Fixtures: The term "Trade Fixtures" shall mean (i) Tenant's
inventory, furniture, signs, and business equipment, and (ii) anything affixed
to the Premises by Tenant at its expense for purposes of trade, manufacture,
ornament or domestic use (except replacement of similar work or material
originally installed by Landlord) which can be removed without material injury
to the Premises unless such thing has, by the manner in which it is affixed,
become an integral part of the Premises.
ARTICLE 2 DEMISE, CONSTRUCTION, AND ACCEPTANCE
2.1 Demise of Premises: Landlord hereby leases to Tenant, and Tenant
leases from Landlord, for the Lease Term upon the terms and conditions of this
Lease, the Premises for Tenant's own use in the conduct of Tenant's business
together with (i) the non-exclusive right to use the number of Tenant's
Allocated Parking Stalls within the Common Area (subject to the limitations set
forth in paragraph 4.5), and (ii) the non-exclusive right to use the Common Area
for ingress to and egress from the Premises. Landlord reserves the use of the
exterior walls, the roof and the area beneath and above the Premises, together
with the right to install, maintain, use, and replace ducts, wires, conduits and
pipes leading through the Premises in locations which will not materially
interfere with Tenant's use of the Premises.
2.2 Commencement Date: The Scheduled Commencement Date shall be only an
estimate of the actual Commencement Date, and the Term of this Lease shall begin
on the first to occur of the following, which shall be the "Commencement Date":
(i) the date Landlord delivers possession of the Premises to Tenant following
"Substantial Completion" of the "Tenant Improvements" (as such terms are defined
in Exhibit B attached hereto); or (ii) the date Tenant enters into occupancy of
the Premises for the purpose of conducting its business therein. To the extent
the Commencement Date is delayed due to "Tenant Delays" (as defined in Exhibit B
attached hereto), then the Commencement Date shall be deemed the date the
Commencement Date would have occurred but for any Tenant Delay,
2.3 Construction of Improvements: Prior to the Commencement Date,
Landlord shall construct the Tenant Improvements (as defined in Exhibit B
attached hereto) in accordance with the terms of Exhibit B.
2.4 Delivery and Acceptance of Possession: If Landlord is unable to
deliver possession of the Premises to Tenant on or before the Scheduled
Commencement Date for any reason whatsoever, this Lease shall not be void or
voidable for a period of 180 days thereafter, and Landlord shall not be liable
to Tenant for any loss or damage resulting therefrom, but the Free Rent Period
shall not commence until the Commencement Date and Tenant shall not be obligated
to pay Tenant's Share of Common Operating Expenses until the Commencement Date.
Tenant shall accept possession by the Commencement Date and shall enter into
good faith occupancy of the
2
7
entire Premises and commence the operation of its business therein within 30
days after the Commencement Date. Tenant acknowledges that it has had an
opportunity to conduct, and has conducted, such inspections of the Premises as
it deems necessary to evaluate its condition. Except as otherwise specifically
provided herein and in Exhibit B, Tenant agrees to accept possession of the
Premises in its then existing condition, "as-is", including all patent and
latent defects. Subject to the provisions of Exhibit B, Tenant's taking
possession of any part of the Premises shall be deemed to be an acceptance by
Tenant of any work of improvement done by Landlord in such part as complete and
in accordance with the terms of this Lease except for latent defects of which
Tenant has given Landlord written notice within the earlier of thirty (30) days
after the discovery thereof by Tenant or one (1) year after the Commencement
Date. At the time Landlord delivers possession of the Premises to Tenant,
Landlord and Tenant shall together execute an acceptance agreement in the form
attached as Exhibit C, appropriately completed. Tenant's failure to execute the
acceptance agreement shall not affect Tenant's obligation to pay Base Monthly
Rent and Additional Rent, which obligations shall not be excused or delayed
because of Tenant's failure to execute such acceptance agreement; but Tenant
shall have the right to object to any of Landlord's determinations set forth
therein within thirty (30) days after delivery of possession to Tenant, except
for latent defects for which notice must be given within the time period
specified above. Notwithstanding anything to the contrary contained in this
Lease, on the Commencement Date, the heating, ventilating and air conditioning
("HVAC") system, and the electrical, plumbing, sewer, and if applicable any life
safety and security systems (collectively, "Building Systems") serving the
Premises shall be in good working order and repair, and the Premises shall be in
compliance with all applicable law. If, during the first thirty (30) days of the
Term, any Building System is not in the condition required by the foregoing
sentence, Tenant shall notify Landlord of the need for repair, and the repair
shall be completed at no cost to Tenant.
2.5 Early Occupancy: Tenant shall have the right, for at least seven
(7) days prior to Substantial Completion of the Tenant Improvements, as
reasonably determined by Landlord and with notice thereof to Tenant in writing,
without any obligation to pay Base Monthly Rent or Tenant's Share of Common
Operating Expenses, but otherwise in compliance with the provisions of this
Lease, to enter the Premises for the purpose of installing its equipment, data,
telecommunications and cabling systems, furniture and trade fixtures; provided
Tenant does not unreasonably interfere with the construction of the Tenant
Improvements or present a hazardous or dangerous condition due to work being
constructed. Such early shall be at Tenant's own risk.
ARTICLE 3 RENT
3.1 Base Monthly Rent: Commencing on the Commencement Date, but subject
to the Free Rent Period (as defined in Section K of the Summary), and continuing
throughout the Lease Term, Tenant shall pay to Landlord the Base Monthly Rent
set forth in Section K of the Summary.
3.2 Additional Rent: Commencing on the Commencement Date and continuing
throughout the Lease Term, Tenant shall pay the following as additional rent
(the "Additional Rent"): (i) any late charges or interest due Landlord pursuant
to paragraph 3.4; (ii) Tenant's Share of Common Operating Expenses as provided
in paragraph 8.1; (iii) Landlord's share of any Subrent received by Tenant upon
certain assignments and sublettings as required by paragraph 14.1; (iv) any
legal fees and costs due Landlord pursuant to paragraph 15.9; and (v) any other
charges due Landlord pursuant to this Lease.
3.3 Payment of Rent: On the Effective Date, Tenant shall pay to
Landlord the amount set forth in Section L of the Summary as prepayment of Base
Monthly Rent for credit against the first installment(s) of Base Monthly Rent
after the expiration of the Free Rent Period. All rent required to be paid in
monthly installments shall be paid in advance on the first day of each calendar
month during the Lease Term. If Section K of the Summary provides that the Base
Monthly Rent is to be increased during the Lease Term and if the date of such
increase does not fall on the first day of a calendar month, such increase shall
become effective on the first day of the next calendar month. All rent shall be
paid in lawful money of the United States, without any abatement, deduction or
offset whatsoever (except as specifically provided in paragraph 11.4 and
paragraph 12.3), and without any prior demand therefor. Rent shall be paid to
Landlord at its address set forth in Section Q of the Summary, or at such other
place as Landlord may designate from time to time. Tenant's obligation to pay
Base Monthly Rent and Tenant's Share of Common Operating Expenses shall be
prorated at the commencement and expiration of the Lease Term.
3.4 Late Charge, Interest and Quarterly Payments:
(a) Late Charge. Tenant acknowledges that the late payment by
Tenant of any installment of rent, or any other sum of money required to be paid
by Tenant under this Lease, will cause Landlord to incur certain costs and
expenses not contemplated under this Lease, the exact amount of such costs being
extremely difficult and impractical to fix. Such costs and expenses will
include, without limitation, attorneys' fees, administrative and collection
costs, and processing and accounting expenses and other costs and expenses
necessary and incidental thereto. If any Base Monthly Rent or Additional Rent is
not received by Landlord from Tenant when due such payment is due, then Tenant
shall immediately pay to Landlord a late charge equal to 5% of such delinquent
rent as liquidated damages for Tenant's failure to make timely payment;
provided, however that for the first two times in any calendar year that Tenant
has failed to make any such payment when due, Tenant shall not be obligated to
pay the late charge unless it fails to make such payment within 5 days after
written notice from Landlord.. 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 rent or prevent Landlord from exercising any right or remedy
available to Landlord upon Tenant's failure to pay any rent due under this Lease
in a timely fashion, including any right to terminate this Lease pursuant to
paragraph 13.2B.
3
8
(b) Interest. If any rent remains delinquent for a period in
excess of five (5) days after receipt of written notice that such sum is due,
then, in addition to such late charge, Tenant shall pay to Landlord interest on
any rent that is not paid when due at the Agreed Interest Rate following the
date such amount became due until paid.
(c) Quarterly Payments. If Tenant during any calendar year
period shall be more than five (5) days delinquent in the payment of any rent or
other amount payable by Tenant hereunder on three (3) or more occasions, then,
notwithstanding anything herein to the contrary, Landlord may, by written notice
to Tenant, elect to require Tenant to pay all Base Monthly Rent and Additional
Rent quarterly in advance. Such right shall be in addition to and not in lieu of
any other right or remedy available to Landlord hereunder or at law on account
of Tenant's default hereunder
3.5 Security Deposit: On the Effective Date, Tenant shall deposit with
Landlord the amount set forth in Section M of the Summary as security for the
performance by Tenant of its obligations under this Lease, and not as prepayment
of rent (the "Security Deposit"). Landlord may from time to time apply such
portion of the Security Deposit as is reasonably necessary for the following
purposes: (i) to remedy any default by Tenant in the payment of rent; (ii) to
repair damage to the Premises caused by Tenant; (iii) to clean the Premises upon
termination of the Lease; and (iv) to remedy any other default of Tenant to the
extent permitted by Law and, in this regard, Tenant hereby waives any
restriction on the uses to which the Security Deposit may be put contained in
California Civil Code Section 1950.7. In the event the Security Deposit or any
portion thereof is so used, Tenant agrees to pay to Landlord within five (5)
days after receipt of demand an amount in cash sufficient to restore the
Security Deposit to the full original amount. Landlord shall not be deemed a
trustee of the Security Deposit, may use the Security Deposit in business, and
shall not be required to segregate it from its general accounts. Tenant shall
not be entitled to any interest on the Security Deposit. If Landlord transfers
the Premises during the Lease Term, Landlord shall pay the Security Deposit not
previously applied to any obligation of Tenant as provided above to any
transferee of Landlord's interest in conformity with the provisions of
California Civil Code Section 1950.7 and/or any successor statute, in the event
of which payment, the transferring Landlord will be released from all liability
for the return of the Security Deposit.
3.6 Electronic Payment. Landlord shall have the right, on not less than
thirty (30) days prior written notice to Tenant (the "Electronic Payment
Notice"), to require Tenant to make subsequent payments of Monthly Base Rent and
Additional Rent due pursuant to the terms of this Lease by means of a federal
funds wire transfer or such other method of electronic funds transfer as may be
required by Landlord in its sole and absolute discretion (the "Electronic
Payment"). The Electronic Payment Notice shall set forth the proper bank ABA
number, account number and designation of the account to which such Electronic
Payment shall be made. Tenant shall promptly notify Landlord in writing of any
additional information that will be required to establish and maintain
Electronic Payment from Tenant's bank or financial institution. Not more than
once each year, Landlord shall have the right, after at least ten (10) days
prior written notice to Tenant, to change the name of the depository for receipt
of any Electronic Payment and to discontinue payment of any sum by Electronic
Payment.
ARTICLE 4 USE OF PREMISES
4.1 Limitation on Use: Tenant shall use the Premises solely for the
Permitted Use specified in Section N of the Summary, and shall not change such
use without the prior written consent of Landlord which will not be unreasonably
withheld or delayed. Tenant shall not do anything in or about the Premises which
will (i) cause structural injury to the Building, or (ii) cause damage to any
part of the Building except to the extent reasonably necessary for the
installation of Tenant's Trade Fixtures and Tenant's Alterations, and then only
in a manner which has been first approved by Landlord in writing, which shall
not be unreasonably withheld or delayed, unless such work will affect the
structural portion of the Premises or Building or the Common Areas. Tenant shall
not operate any equipment within the Premises which will (i) materially damage
the Building or the Common Area, (ii) overload existing electrical systems or
other mechanical equipment servicing the Building, (iii) impair the efficient
operation of the sprinkler system or the heating, ventilating or air
conditioning ("HVAC") equipment within or servicing the Building, or (iv)
damage, overload or corrode the sanitary sewer system. Tenant shall not attach,
hang or suspend anything from the ceiling, roof, walls or columns of the
Building or set any load on the floor in excess of the load limits for which
such items are designed nor operate hard wheel forklifts within the Premises.
Any dust, fumes, or waste products generated by Tenant's use of the Premises
shall be contained and disposed so that they do not (i) create an unreasonable
fire or health hazard, (ii) damage the Premises, or (iii) result in the
violation of any Law. Except as reasonably approved by Landlord, Tenant shall
not change the exterior of the Building or install any equipment or antennas on
or make any penetrations of the exterior or roof of the Building. Tenant shall
not commit any waste in or about the Premises, and Tenant shall keep the
Premises in a neat, clean, attractive and orderly condition, free of any
nuisances. If Landlord designates a standard window covering for use throughout
the Building, Tenant shall use this standard window covering to cover all
windows in the Premises. Tenant shall not conduct on any portion of the Premises
or the Project any sale of any kind, including any public or private auction,
fire sale, going-out-of-business sale, distress sale or other liquidation sale.
4.2 Compliance with Regulations: Tenant shall not use the Premises in
any manner which violates any Laws or Private Restrictions which affect the
Premises. Subject to the provision so Section 5.4 below, Tenant shall abide by
and promptly observe and comply with all Laws and Private Restrictions;
provided, however, that Tenant shall not be obligated to make capital
improvements to the structural portions of the Premises (which for purposes
hereof shall mean the roof structure, foundation, floor slab, and load bearing
walls) in connection therewith, unless such work is required due to (i) any
Tenant's Alteration, (ii) any particular use of the Premises
4
9
by Tenant or the manner in which it conducts its business therein, or (iii) any
change in use by Tenant (any such activity under clauses (i), (ii) or (iii)
shall be referred to herein as a "Tenant Activity"). Any capital improvement to
the structural portion of Premises to comply with any Law or Private Restriction
that is not due to any Tenant Activity shall be completed by Landlord and Tenant
shall pay for the amortize cost thereof under section 5.4 hereof. Tenant shall
not use the Premises in any manner which will cause a cancellation of any
insurance policy covering Tenant's Alternations or any improvements installed by
Landlord at its expense or which poses an unreasonable risk of damage or injury
to the Premises. Tenant shall not sell, or permit to be kept, used, or sold in
or about the Premises any article which may be prohibited by the standard form
of fire insurance policy. Tenant shall comply with all reasonable requirements
of any insurance company, insurance underwriter, or Board of Fire Underwriters
which are necessary to maintain the insurance coverage carried by either
Landlord or Tenant pursuant to this Lease.
4.3 Outside Areas: No materials, supplies, tanks or containers,
equipment, finished products or semi-finished products, raw materials,
inoperable vehicles or articles of any nature shall be stored upon or permitted
to remain outside of the Premises except in fully fenced and screened areas
outside the Building which have been designed for such purpose and have been
approved in writing by Landlord for such use by Tenant.
4.4 Signs: Tenant shall not place on any portion of the Premises any
sign, placard, lettering in or on windows, banner, displays or other advertising
or communicative material which is visible from the exterior of the Building
without the prior written approval of Landlord, which shall not be unreasonably
withheld or delayed. All such approved signs shall strictly conform to all Laws,
Private Restrictions, and Landlord's sign criteria then in effect, and shall be
installed at the expense of Tenant. Tenant shall maintain such signs in good
condition and repair
4.5 Parking: Tenant is allocated and shall have the non-exclusive right
to use not more than the number of Tenant's Allocated Parking Stalls contained
within the Project described in Section H of the Summary for its use and the use
of Tenant's Agents, the location of which may be designated from time to time by
Landlord, but Landlord agrees not unreasonably designate areas for Tenant's
parking in a discriminatory manner. Tenant shall not at any time use more
parking spaces than the number so allocated to Tenant or park its vehicles or
the vehicles of others in any portion of the Project not designated by Landlord
as a non-exclusive parking area. Tenant shall not have the exclusive right to
use any specific parking space. If Landlord grants to any other tenant the
exclusive right to use any particular parking space(s), Tenant shall not use
such spaces; provided, however, that so long as no Event of Tenant's Default
exits and Tenant is in occupancy of the Premises, Landlord agrees to use its
good faith efforts not to unreasonably allocate or designate reserved parking
spaces in the row spaces immediately adjacent to the front of the Premises,
except as may be necessary to comply with applicable Law or to the extent
designated for Tenant or Tenant's visitors. Landlord reserves the right, after
having given Tenant reasonable notice, to have any vehicles owned by Tenant or
Tenant's Agents utilizing parking spaces in excess of the parking spaces allowed
for Tenant's use to be towed away at Tenant's cost. All trucks and delivery
vehicles shall be (i) parked at the rear of the Building, (ii) loaded and
unloaded in a manner which does not unreasonably interfere with the businesses
of other occupants of the Project, and (iii) permitted to remain on the Project
only so long as is reasonably necessary to complete loading and unloading. In
the event Landlord elects or is required by any Law to limit or control parking
in the Project, whether by validation of parking tickets or any other method of
assessment, Tenant agrees to participate in such validation or assessment
program under such reasonable rules and regulations as are from time to time
established by Landlord, at no cost to Tenant.
Landlord agrees to designate ten (10) parking spaces in an
area in front of the Building selected by Landlord for use by Tenant's visitors,
provided that (i) Tenant is in occupancy of the Premises and no Event of
Tenant's Default exists, (ii) Landlord reserves the right to relocate and
re-designate such spaces to another area adjacent to the Premises, and (iii)
Landlord reserves the right upon not less than 30 days prior written notice to
Landlord to discontinue all or any number of such designated parking spaces if
Landlord determines in its good faith discretion that other tenants in the
Project or prospective tenants for the Project are requesting designated parking
in the Project. The foregoing rights to designated parking for Tenant are
applicable to Synaptics, Inc. and its transferee under a Permitted Transfer (as
defined in Section 14.1F of this Lease), but may not be assigned, used or relied
upon by any assignee, sublessee or transferee under a Transfer. Tenant
acknowledges and agrees that Landlord shall not be obligated or responsible to
monitor the use of such designated parking space by others.
4.6 Rules and Regulations: Landlord may from time to time promulgate
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Project for the care and orderly management of the Project and
the safety of its tenants and invitees. Such rules and regulations shall be
binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant agrees
to abide by such rules and regulations, so long as the rules and regulations do
not materially increase Tenant's obligations or materially diminish Tenant's
rights under this Lease, or materially interfere with Tenant's parking rights..
If there is a conflict between the rules and regulations and any of the
provisions of this Lease, the provisions of this Lease shall prevail. Landlord
shall not be responsible for the violation by any other tenant of the Project of
any such rules and regulations.
ARTICLE 5 TRADE FIXTURES AND ALTERATIONS
5.1 Trade Fixtures: Throughout the Lease Term, Tenant may provide and
install, and shall maintain in good condition, any Trade Fixtures required in
the conduct of its business in the Premises. All Trade Fixtures shall remain
Tenant's property.
5
10
5.2 Tenant's Alterations: Construction by Tenant of Tenant's
Alterations shall be governed by the following:
A. Tenant shall not construct any Tenant's Alterations or
otherwise alter the Premises without Landlord's prior written approval, which
shall not be unreasonably withheld unless such work affects the structural
portion of the Premises or the Building. Tenant shall be entitled, without
Landlord's prior approval, to make Tenant's Alterations (i) which do not affect
the structural or exterior parts or water tight character of the Building, and
(ii) the reasonably estimated cost of which, plus the original cost of any part
of the Premises removed or materially altered in connection with such Tenant's
Alterations, together do not exceed the Permitted Tenant Alterations Limit
specified in Section O of the Summary per work of improvement. In the event
Landlord's approval for any Tenant's Alterations is required, Tenant shall not
construct the Leasehold Improvement until Landlord has approved in writing the
plans and specifications therefor, and such Tenant's Alterations shall be
constructed substantially in compliance with such approved plans and
specifications by a licensed contractor first reasonably approved by Landlord.
All Tenant's Alterations constructed by Tenant shall be constructed by a
licensed contractor in accordance with all Laws using new materials of good
quality.
B. Tenant shall not commence construction of any Tenant's
Alterations until (i) all required governmental approvals and permits have been
obtained, (ii) all requirements regarding insurance imposed by this Lease have
been satisfied, (iii) Tenant has given Landlord at least five days' prior
written notice of its intention to commence such construction, and (iv) if
reasonably requested by Landlord, Tenant has obtained contingent liability and
broad form builders' risk insurance in an amount reasonably satisfactory to
Landlord if there are any perils relating to the proposed construction not
covered by insurance carried pursuant to Article 9.
C. All Tenant's Alterations shall remain the property of
Tenant during the Lease Term but shall not be altered or removed from the
Premises. At the expiration or sooner termination of the Lease Term, all
Tenant's Alterations shall be surrendered to Landlord as part of the realty and
shall then become Landlord's property, and Landlord shall have no obligation to
reimburse Tenant for all or any portion of the value or cost thereof; provided,
however, that if Landlord requires Tenant to remove any Tenant's Alterations,
Tenant shall so remove such Tenant's Alterations not later than the expiration
or sooner termination of the Lease Term. Notwithstanding the foregoing, Tenant
shall not be obligated to remove any Tenant's Alterations with respect to which
the following is true: (i) Tenant was required, or elected, to obtain the
approval of Landlord to the installation of the Leasehold Improvement in
question; (ii) at the time Tenant requested Landlord's approval, Tenant
requested of Landlord in writing that Landlord inform Tenant of whether or not
Landlord would require Tenant to remove such Leasehold Improvement at the
expiration of the Lease Term; and (iii) at the time Landlord granted its
approval, it did not inform Tenant that it would require Tenant to remove such
Leasehold Improvement at the expiration of the Lease Term.
5.3 Alterations Required by Law: Tenant shall make any alteration,
addition or change of any sort to the Premises that is required by any Law
because of (i) Tenant's particular use or change of use of the Premises; (ii)
Tenant's application for any permit or governmental approval; or (iii) Tenant's
construction or installation of any Tenant's Alterations or Trade Fixtures. Any
other alteration, addition, or change required by Law which is not the
responsibility of Tenant pursuant to the foregoing shall be made by Landlord
(subject to Landlord's right to reimbursement from Tenant specified in paragraph
5.4).
5.4 Amortization of Certain Capital Improvements: Tenant shall pay
Additional Rent in the event Landlord reasonably elects or is required to make
any of the following kinds of capital improvements to the Project: (i) capital
improvements required to be constructed in order to comply with any Law
(excluding any Hazardous Materials Law which Tenant shall not be responsible for
unless caused by Tenant or any of Tenant's Agents) not in effect or applicable
to the Project as of the Effective Date; (ii) modification of existing or
construction of additional capital improvements or building service equipment
for the purpose of reducing the consumption of utility services or Common
Operating Expenses of the Project; (iii) replacement of capital improvements or
building service equipment existing as of the Effective Date when required
because of normal wear and tear, and (iv) restoration of any part of the Project
that has been damaged by any peril to the extent the cost thereof is not covered
by insurance proceeds actually recovered by Landlord up to a maximum amount per
occurrence of 10% of the then replacement cost of the Project. The amount of
Additional Rent Tenant is to pay with respect to each such capital improvement
shall be determined as follows:
A. All costs paid by Landlord to construct such improvements
(including financing costs) shall be amortized over the useful life of such
improvement (as reasonably determined by Landlord in accordance with generally
accepted accounting principles) with interest on the unamortized balance at the
then prevailing market rate Landlord would pay if it borrowed funds to construct
such improvements from an institutional lender, and Landlord shall inform Tenant
of the monthly amortization payment required to so amortize such costs, and
shall also provide Tenant with the information upon which such determination is
made.
B. As Additional Rent, Tenant shall pay at the same time the
Base Monthly Rent is due an amount equal to Tenant's Share of that portion of
such monthly amortization payment fairly allocable to the Building (as
reasonably determined by Landlord) for each month after such improvements are
completed until the first to occur of (i) the expiration of the Lease Term (as
it may be extended), or (ii) the end of the term over which such costs were
amortized.
5.5 Mechanic's Liens: Tenant shall keep the Project free from any liens
and shall pay when due all bills arising out of any work performed, materials
furnished, or obligations incurred by Tenant or Tenant's Agents
6
11
relating to the Project. If any claim of lien is recorded (except those caused
by Landlord or Landlord's Agents), Tenant shall bond against or discharge the
same within ten (10) business days after the date Tenant has received notice
that the same has been recorded against the Project. Should any lien be filed
against the Project or any action be commenced affecting title to the Project,
the party receiving notice of such lien or action shall immediately give the
other party written notice thereof.
5.6 Taxes on Tenant's Property: Tenant shall pay before delinquency any
and all taxes, assessments, license fees and public charges levied, assessed or
imposed against Tenant or Tenant's estate in this Lease or the property of
Tenant situated within the Premises which become due during the Lease Tenn. If
any tax or other charge is assessed by any governmental agency because of the
execution of this Lease, such tax shall be paid by Tenant. Within thirty (30)
days after receipt of demand from Landlord, Tenant shall furnish Landlord with
satisfactory evidence of these payments.
ARTICLE 6 REPAIR AND MAINTENANCE
6.1 Tenant's Obligation to Maintain: Except as otherwise provided in
paragraph 6.2, paragraph 11.1, and paragraph 12.3, Tenant shall be responsible
for the following during the Lease Term:
A. Tenant shall clean and maintain in good order, condition,
and repair and replace when necessary the Premises and every part thereof,
through regular inspections and servicing, including, but not limited to: (i)
all plumbing and sewage facilities (including all sinks, toilets, faucets and
drains), and all ducts, pipes, vents or other parts of the HVAC or plumbing
system serving only the Premises; (ii) all fixtures, interior walls, floors,
carpets and ceilings; (iii) all windows, doors, entrances, plate glass,
showcases and skylights (including cleaning both interior and exterior
surfaces); (iv) all electrical facilities and all equipment (including all
lighting fixtures, lamps, bulbs, tubes, fans, vents, exhaust equipment and
systems) serving only the Premises; and (v) any automatic fire extinguisher
equipment in the Premises.
B. With respect to utility facilities serving the Premises
(including electrical wiring and conduits, gas lines, water pipes, and plumbing
and sewage fixtures and pipes), Tenant shall be responsible for the maintenance
and repair of any such facilities which serve only the Premises, including all
such facilities that are within the walls or floor, or on the roof of the
Premises, and any part of such facility that is not within the Premises, but
only up to the point where such facilities join a main or other junction (e.g.,
sewer main or electrical transformer) from which such utility services are
distributed to other parts of the Project as well as to the Premises. Tenant
shall replace any damaged or broken glass in the Premises (including all
interior and exterior doors and windows) with glass of the same kind, size and
quality. Tenant shall repair any damage to the Premises (including exterior
doors and windows) caused by vandalism or any unauthorized entry.
C. Tenant shall (i) maintain, repair and replace when
necessary all HVAC equipment which services only the Premises, and shall keep
the same in good condition through regular inspection and servicing, and (ii)
maintain continuously throughout the Lease Term a service contract for the
maintenance of all such HVAC equipment with a licensed HVAC repair and
maintenance contractor approved by Landlord, which contract provides for the
periodic inspection and servicing of the HVAC equipment at least once every 60
days during the Lease Term. Notwithstanding the foregoing, Landlord may elect at
any time to assume responsibility for the maintenance, repair and replacement of
such HVAC equipment which serves only the Premises. Tenant shall maintain
continuously throughout the Lease Term a service contract for the washing of all
windows (both interior and exterior surfaces) in the Premises with a contractor
approved by Landlord, which contract provides for the periodic washing of all
such windows at least once every 60 days during the Lease Term. Tenant shall
furnish Landlord with copies of all such service contracts, which shall provide
that they may not be canceled or changed without at least 30 days' prior written
notice to Landlord.
D. All repairs and replacements required of Tenant shall be
promptly made with new materials of like kind and quality. If thc work affects
thc structural parts of the Building or if thc estimated cost of any item of
repair or replacement is in excess of the Permitted Tenant's Alterations Limit,
then Tenant shall first obtain Landlord's written approval of the scope of the
work, plans therefor, materials to be used, and the contractor, which approval
shall not be unreasonably withheld or delayed.
E. Tenant's obligation to repair shall not include any
obligation, and Tenant shall have no obligation to construct or pay the cost of
removing or remediating presence of hazardous materials, unless the same were
stored, used or disposed of by Tenant or any of Tenant's Agents.
F. Notwithstanding anything to the contrary in Section 6.1A
and Section 6.1C, Landlord agrees to perform the work for the replacement of the
HVAC unit(s) servicing the Premises as and when determined by Landlord in good
faith where such work is not due to any negligence or willful misconduct of
Tenant or any of Tenant's Agents or due to any Tenant's Alteration. However,
Tenant shall pay to Landlord the amortized portion of the cost for any such work
in accordance with Sections 5.4A and B of this Lease.
6.2 Landlord's Obligation to Maintain: Landlord shall repair, maintain,
repair and operate the Common Area and repair, maintain and replace the roof,
load bearing walls, exterior and structural parts (including the floor slabs but
not floor coverings) of the building(s) located on the Project (including the
Building) so that the same are kept in good order and repair. If there is
central HVAC or other building service equipment and/or utility facilities
serving portions of the Common Area and/or both the Premises and other parts of
the Building, Landlord shall maintain and operate (and replace when necessary)
such equipment. Landlord shall not
7
12
be responsible for repairs required by an accident, fire or other peril or for
damage caused to any part of the Project by any act or omission of Tenant or
Tenant's Agents except as otherwise required by Article 11. Landlord may engage
contractors of its choice to perform the obligations required of it by this
Article, and the necessity of any expenditure to perform such obligations shall
be at the sole discretion of Landlord.
6.3 Control of Common Area: Landlord shall at all times have exclusive
control of the Common Area. Landlord shall have the right, without the same
constituting an actual or constructive eviction and without entitling Tenant to
any abatement of rent, to: (i) close any part of the Common Area to whatever
extent required in the reasonable opinion of Landlord's counsel to prevent a
dedication thereof or the accrual of any prescriptive rights therein; (ii)
temporarily close the Common Area to perform maintenance or for any other
reasonable reason deemed sufficient by Landlord; (iii) change the shape, size,
location and extent of the Common Area; (iv) eliminate from or add to the
Project any land or improvement, including multi-deck parking structures; (v)
make changes to the Common Area including, without limitation, changes in the
location of driveways, entrances, passageways, doors and doorways, elevators,
stairs, restrooms, exits, parking spaces, parking areas, sidewalks or the
direction of the flow of traffic and the site of the Common Area; (vi) remove
unauthorized persons from the Project; and/or (vii) change the name or address
of the Building or Project. Tenant shall keep the Common Area clear of all
obstructions created or permitted by Tenant. If in the reasonable opinion of
Landlord unauthorized persons are using any of the Common Area by reason of the
presence of Tenant in the Building, Tenant, upon demand of Landlord, shall
restrain such unauthorized use by appropriate proceedings. In exercising any
such rights regarding the Common Area, (i) Landlord shall make a reasonable
effort to minimize any disruption to Tenant's business, and (ii) Landlord shall
not exercise its rights to control the Common Area in a manner that would
materially interfere with Tenant's use of the Premises without first obtaining
Tenant's consent. Landlord shall have no obligation to provide guard services or
other security measures for the benefit of the Project. Notwithstanding anything
to the contrary contained in the foregoing, Landlord's exercise of such rights
shall not materially increase Tenant's obligations or materially diminish
Tenant's rights under this Lease, or materially interfere with Tenant's parking
rights. Tenant assumes all responsibility for the protection of Tenant and
Tenant's Agents from acts of third parties; provided, however, that nothing
contained herein shall prevent Landlord, at its sole option, from providing
security measures for the Project.
ARTICLE 7 WASTE DISPOSAL AND UTILITIES
7.1 Waste Disposal: Tenant shall store its waste either inside the
Premises or within outside trash enclosures that are fully fenced and screened
in compliance with all Private Restrictions, and designed for such purpose. All
entrances to such outside trash enclosures shall be kept closed, and waste shall
be stored in such manner as not to be visible from the exterior of such outside
enclosures. Tenant shall cause all of its waste to be regularly removed from the
Premises at Tenant's sole cost. Tenant shall keep all fire corridors and
mechanical equipment rooms in the Premises free and clear of all obstructions at
all times.
7.2 Hazardous Materials: Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Project:
A. Any handling, transportation, storage, treatment, disposal
or use of Hazardous Materials by Tenant and Tenant's Agents after the earlier of
the Commencement Date or the date Tenant is provided early access as provided in
Section 2.5 hereof in or about the Project shall strictly comply with all
applicable Hazardous Materials Laws. Tenant shall indemnify, defend upon demand
with counsel reasonably acceptable to Landlord, and hold harmless Landlord from
and against any liabilities, losses, claims, damages, lost profits,
consequential damages, interest, penalties, fines, monetary sanctions,
attorneys' fees, experts' fees, court costs, remediation costs, investigation
costs, and other expenses which result from or arise in any manner whatsoever
out of the use, storage, treatment, transportation, release, or disposal of
Hazardous Materials on or about the Project by Tenant or Tenant's Agents after
the earlier of the Commencement Date or the date Tenant is provided early access
as provided in Section 2.5 hereof.
B. If the presence of Hazardous Materials on the Project
caused or permitted by Tenant or Tenant's Agents after the earlier of the
Commencement Date or the date Tenant is provided early access as provided in
Section 2.5 hereof results in contamination or deterioration of water or soil
resulting in a level of contamination greater than the levels established as
acceptable by any governmental agency having jurisdiction over such
contamination, then Tenant shall promptly take any and all action necessary to
investigate and remediate such contamination if required by Law or as a
condition to the issuance or continuing effectiveness of any governmental
approval which relates to the use of the Project or any part thereof. Tenant
shall further be solely responsible for, and shall defend, indemnify and hold
Landlord and its agents harmless from and against, all claims, costs and
liabilities, including reasonable attorneys' fees and costs, arising out of or
in connection with any investigation and remediation required hereunder to
return the Project to its condition existing prior to the appearance of such
Hazardous Materials used, stored, treated, transported, released or disposed by
Tenant or Tenant's Agents.
C. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication received from
any governmental authority concerning Hazardous Materials which relates to the
Project, and (ii) any contamination of the Project by Hazardous Materials which
constitutes a violation of any Hazardous Materials Law. Tenant may use small
quantities of household chemicals such as adhesives, lubricants, and cleaning
fluids in order to conduct its business at the Premises and such other Hazardous
Materials as are necessary for the operation of Tenant's business of which
Landlord receives notice prior to such Hazardous Materials being brought onto
the Premises and which Landlord consents in writing may
8
13
be brought onto the Premises. At any time during the Lease Term, Tenant shall,
within five days after receipt of written request therefor received from
Landlord, disclose in writing all Hazardous Materials that are being used by
Tenant on the Project, the nature of such use, and the manner of storage and
disposal.
D. Landlord may cause testing xxxxx to be installed on the
Project, and may cause the ground water to be tested to detect the presence of
Hazardous Material by the use of such tests as are then customarily used for
such purposes. If Tenant so requests, Landlord shall supply Tenant with copies
of such test results. The cost of such tests and of the installation,
maintenance, repair and replacement of such xxxxx shall be paid by Tenant if
such tests disclose the existence of facts which give rise to liability of
Tenant pursuant to its indemnity given in paragraph 7.2A and/or paragraph 7.2B.
E. As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material," includes, without limitation,
petroleum products, asbestos, PCB's, and any material or substance which is (i)
listed under Article 9 or defined as hazardous or extremely hazardous pursuant
to Article 11 of Title 22 of the California Administrative Code, Division 4,
Chapter 20, (ii) defined as a "hazardous waste" pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq. (42
U.S.C. 6903), or (iii) defined as a "hazardous substance" pursuant to Section
101 of the Comprehensive Environmental Response; Compensation and Liability Act,
42 U.S.C. 9601 et seq. (42 U.S.C. 9601). As used herein, the term "Hazardous
Material Law" shall mean any statute, law, ordinance, or regulation of any
governmental body or agency (including the U.S. Environmental Protection Agency,
the California Regional Water Quality Control Board, and the California
Department of Health Services) which regulates the use, storage, release or
disposal of any Hazardous Material.
F. Landlord represents and warrants to its actual knowledge,
without independent investigation or the imputation of knowledge from any other
party, that as of the date of the Lease, Landlord (i) is not in receipt of
notice of a violation nor is Landlord aware of any violation of any applicable
Hazardous Material Laws as of the date hereof with respect to the Premises or
Building, (ii) no action, proceeding or claim is pending or threatened regarding
the Premises, Building or Project concerning the presence of any Hazardous
Materials. Except to the extent that the Hazardous Material in question was
released, emitted, used, stored, manufactured, transported or discharged by
Tenant or any of Tenant's Agents, Tenant shall not be responsible for and Tenant
hereby is released from any claim, remediation obligation, monitoring
obligation, removal obligation, investigation obligation, liability, cause of
action, penalty, attorneys' fee, cost, expense or damage owing or alleged to be
owing to any third party with respect to any Hazardous Material present on or
about the Premises or the Project, or the soil, groundwater or surface water
thereof, without regard to whether the Hazardous Materials were present on the
Premises or the Project as of the Commencement Date or whether the presence of
the Hazardous Materials was caused by any person other than Landlord.
G. The obligations of Landlord and Tenant under this paragraph
7.2 shall survive the expiration or earlier termination of the Lease Term. The
rights and obligations of Landlord and Tenant with respect to issues relating to
Hazardous Materials are exclusively established by this paragraph 7.2. In the
event of any inconsistency between any other part of this Lease and this
paragraph 7.2, the terms of this paragraph 7.2 shall control.
7.3 Utilities: Tenant shall promptly pay, as the same become due, all
charges for water, gas, electricity, telephone, sewer service, waste pick-up and
any other utilities, materials or services furnished directly to or used by
Tenant on or about the Premises during the Lease Term, including, without
limitation, (i) meter, use and/or connection fees, hook-up fees, or standby fee
(excluding any connection fees or hook-up fees which relate to making the
existing electrical, gas, and water service available to the Premises as of the
Commencement Date), and (ii) penalties for discontinued or interrupted service.
If any utility service is not separately metered to the Premises, then Tenant
shall pay its pro rata share of the cost of such utility service with all others
served by the service not separately metered. However, if Landlord determines
that Tenant is using a disproportionate amount of any utility service not
separately metered, then Landlord at its election may (i) periodically charge
Tenant, as Additional Rent, a sum equal to Landlord's reasonable estimate of the
cost of Tenant's excess use of such utility service, or (ii) install a separate
meter (at Tenant's expense) to measure the utility service supplied to the
Premises.
7.4 Compliance with Governmental Regulations: Landlord and Tenant shall
comply with all rules, regulations and requirements promulgated by national,
state or local governmental agencies or utility suppliers concerning the use of
utility services, including any rationing, limitation or other control. Tenant
shall not be entitled to terminate this Lease nor to any abatement in rent by
reason of such compliance. Notwithstanding anything to the contrary contained in
this Lease, if Tenant is unable to conduct its business in the Premises due to a
cessation of utilities required to be provided to the Premises by Landlord as a
result of the active negligence or willful misconduct of Landlord, its agents,
employees or contractors and not due to any other third party or the utility
company providing the service, and the cessation of utilities and interference
with Tenant's use of the Premises persists for seven (7) consecutive calendar
days after Landlord's receipt of notice from Tenant of such cessation, then
Tenant shall be entitled to an equitable abatement of Rent and Tenant's Share of
Common Operating Expenses to the extent of the interference with Tenant's use of
the Premises occasioned thereby until service is restored.
ARTICLE 8 COMMON OPERATING EXPENSES
9
14
8.1 Tenant's Obligation to Reimburse: As Additional Rent, Tenant shall
pay Tenant's Share (specified in Section G of the Summary) of all Common
Operating Expenses; provided, however, if the Project contains more than one
building, then Tenant shall pay Tenant's Share of all Common Operating Expenses
fairly allocable to the Building, including (i) all Common Operating Expenses
paid with respect to the maintenance, repair, replacement and use of the
Building, and (ii) a proportionate share (based on the Building Gross Leasable
Area as a percentage of the Project Gross Leasable Area) of all Common Operating
Expenses which relate to the Project in general are not fairly allocable to any
one building that is part of the Project. Tenant shall pay such share of the
actual Common Operating Expenses incurred or paid by Landlord but not
theretofore billed to Tenant within 20 days after receipt of a written xxxx
therefor from Landlord, on such periodic basis as Landlord shall designate, but
in no event more frequently than once a month. Alternatively, Landlord may from
time to time require that Tenant pay Tenant's Share of Common Operating Expenses
in advance in estimated monthly installments, in accordance with the following:
(i) Landlord shall deliver to Tenant Landlord's reasonable estimate of the
Common Operating expenses it anticipates will be paid or incurred for the
Landlord's fiscal year in question; (ii) during such Landlord's fiscal year
Tenant shall pay such share of the estimated Common Operating Expenses in
advance in monthly installments as required by Landlord due with the
installments of Base Monthly Rent; and (iii) within 120 days after the end of
each Landlord's fiscal year, Landlord shall furnish to Tenant a statement in
reasonable detail of the actual Common Operating Expenses paid or incurred by
Landlord during the just ended Landlord's fiscal year and thereupon there shall
be an adjustment between Landlord and Tenant, with payment to Landlord or credit
by Landlord against the next installment of Base Monthly Rent, as the case may
require, within 20 days after delivery by Landlord to Tenant of said statement,
so that Landlord shall receive the entire amount of Tenant's Share of all Common
Operating Expenses for such Landlord's fiscal year and no more. Tenant shall
have the right at its expense, exercisable upon reasonable prior written notice
to Landlord, to inspect at Landlord's office during normal business hours
Landlord's books and records as they relate to Common Operating Expenses. Such
inspection must be within 60 days of Tenant's receipt of Landlord's annual
statement for the same, and shall be limited to verification of the charges
contained in such statement. Tenant may not withhold payment of such xxxx
pending completion of such inspection.
8.2 Common Operating Expenses Defined: The term "Common Operating
Expenses" shall mean the following:
A. All costs and expenses paid or incurred by Landlord in
doing the following (including payments to independent contractors providing
services related to the performance of the following): (i) maintaining,
cleaning, repairing and resurfacing the roof (including repair of leaks) and the
exterior surfaces (including painting) of all buildings located on the Project;
(ii) maintenance of the liability, fire, property damage, earthquake and other
insurance covering the Project carried by Landlord pursuant to paragraph 9.2
(including the prepayment of premiums for coverage of up to one year); (iii)
maintaining, repairing, operating and replacing when necessary HVAC equipment,
utility facilities and other building service equipment; (iv) providing
utilities to the Common Area (including lighting, trash removal and water for
landscaping irrigation); (v) complying with all applicable Laws and Private
Restrictions; (vi) operating, maintaining, repairing, cleaning, painting,
restriping and resurfacing the Common Area; (vii) replacement or installation of
lighting fixtures, directional or other signs and signals, irrigation systems,
trees, shrubs, ground cover and other plant materials, and all landscaping in
the Common Area; and (viii) providing security (provided, however, that Landlord
shall not be obligated to provide security and if it does, Landlord may
discontinue such service at any time and in any event Landlord shall not be
responsible for any act or omission of any security personnel); and (ix) capital
improvements as provided in paragraph 5.4 hereof;
B. The following costs: (i) Real Property Taxes as defined in
paragraph 8.3; (ii) the amount of any "deductible" paid by Landlord with respect
to damage caused by any Insured Peril; (iii) the cost to repair damage caused by
an Uninsured Peril up to a maximum amount in any 12 month period equal to 2% of
the replacement cost of the buildings or other improvements damaged; and (iv)
that portion of all compensation (including benefits and premiums for workers'
compensation and other insurance) paid to or on behalf of employees of Landlord
but only to the extent they are involved in the performance of the work
described by paragraph 8.2A that is fairly allocable to the Project;
C. Fees for management services rendered by either Landlord or
a third party manager engaged by Landlord (which may be a party affiliated with
Landlord), except that the total amount charged for management services and
included in Tenant's Share of Common Operating Expenses shall not exceed the
monthly rate of 3% of the Base Monthly Rent.
D. All additional costs and expenses incurred by Landlord with
respect to the operation, protection, maintenance, repair and replacement of the
Project which would be considered a current expense (and not a capital
expenditure) pursuant to generally accepted accounting principles; provided,
however, that Common Operating Expenses shall not include any of the following:
(i) payments on any loans or ground leases affecting the Project; (ii)
depreciation of any buildings or any major systems of building service equipment
within the Project; (iii) leasing commissions; (iv) the cost of tenant
improvements installed for the exclusive use of other tenants of the Project;
and (v) any cost incurred in complying with Hazardous Materials Laws, which
subject is governed exclusively by paragraph 7.2.
E. In addition, Common Area Costs shall not include any of the
following for repairs, maintenance, improvements, replacements, premiums,
claims, losses, fees, commissions, charges, disbursements, attorneys' fees,
experts' fees, costs and expenses (collectively, "Costs"): (i) Costs occasioned
by the act, omission or violation of law by Landlord, any other occupant of the
Project, or their respective agents, employees or
10
15
contractors, or Costs to correct any construction defect in the Premises; (ii)
Costs to the extent occasioned by fire, acts of God or other casualties, or by
the exercise of the power of eminent domain; (iii) Costs which would properly be
capitalized under generally accepted accounting principles and which relate to
repairs, alterations, improvements, replacements, equipment and tools except to
the extent that Tenant's share of such Costs is amortized over the useful life
of the capital improvement in question in accordance with generally accepted
accounting principles; (iv) Costs to the extent for which Tenant pays directly
to a third person or for which Landlord has a right of reimbursement from
others; (v) Costs (A) arising from the disproportionate use of any utility or
service supplied by Landlord to any other occupant of the Project; or (B)
associated with utilities and services of a type not provided, offered or
available to Tenant; (vi) Costs incurred in connection with negotiations or
disputes with other occupant(s) of the Project or third parties, and Costs
arising from the violation by Landlord or any occupant of the Project (other
than Tenant) of the terms and conditions of any lease or other agreement; or
(vii) expense reserves for expenses other than expenses anticipated to be
incurred in the applicable calendar year (or other twelve month fiscal period
selected by Landlord).
8.3 Real Property Taxes Defined: The term "Real Property Taxes" shall
mean all taxes, assessments, levies, and other charges of any kind or nature
whatsoever, general and special, foreseen and unforeseen (including all
installments of principal and interest required to pay any existing or future
general or special assessments for public improvements, services or benefits,
and any increases resulting from reassessments resulting from a change in
ownership, new construction, or any other cause), now or hereafter imposed by
any governmental or quasi-governmental authority or special district having the
direct or indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to the value, occupancy or use of all or any
portion of the Project (as now constructed or as may at any time hereafter be
constructed, altered, or otherwise changed) or Landlord's interest therein, the
fixtures, equipment and other property of Landlord, real or personal, that are
an integral part of and located on the Project, the gross receipts, income, or
rentals from the Project, or the use of parking areas, public utilities, or
energy within the Project, or Landlord's business of leasing the Project. If at
any time during the Lease Term the method of taxation or assessment of the
Project prevailing as of the Effective Date shall be altered so that in lieu of
or in addition to any Real Property Tax described above there shall be levied,
assessed or imposed (whether by reason of a change in the method of taxation or
assessment, creation of a new tax or charge, or any other cause) an alternate or
additional tax or charge (i) on the value, use or occupancy of the Project or
Landlord's interest therein, or (ii) on or measured by the gross receipts,
income or rentals from the Project, on Landlord's business of leasing the
Project, or computed in any manner with respect to the operation of the Project,
then any such tax or charge, however designated, shall be included within the
meaning of the term "Real Property Taxes" for purposes of this Lease. If any
Real Property Tax is based upon property or rents unrelated to the Project, then
only that part of such Real Property Tax that is fairly allocable to the Project
shall be included within the meaning of the term "Real Property Taxes".
Notwithstanding the foregoing, the term "Real Property Taxes" shall not include
estate, inheritance, transfer, gift or franchise taxes of Landlord or the
federal or state net income tax imposed on Landlord's income from all sources.
In addition, Tenant shall not be required to pay any portion of any tax or
assessment expense in excess of the amount which would be payable if such tax or
assessment expense were paid in installments over the longest possible term
without the imposition of penalties.
ARTICLE 9 INSURANCE
9.1 Tenant's Insurance: Tenant shall maintain insurance complying with
all of the following:
A. Tenant shall procure, pay for and keep in full force and
effect the following:
(1) Commercial general liability insurance, including
property damage, against liability for personal injury, bodily injury, death and
damage to property occurring in or about, or resulting from an occurrence in or
about, the Premises with combined single limit coverage of not less than the
amount of Tenant's Liability Insurance Minimum specified in Section P of the
Summary, which insurance shall contain a "contractual liability" endorsement
insuring Tenant's performance of Tenant's obligation to indemnify Landlord
contained in paragraph 10.3;
(2) Fire and property damage insurance in so-called "all
risk" form insuring Tenant's Trade Fixtures and Tenant's Alterations for the
full actual replacement cost thereof;
(3) Business interruption insurance with limits of liability
representing at least approximately six months of income, business auto
liability covering owned, non-owned and hired vehicles with a limit of not less
than $1,000,000 per accident, insurance protecting against liability under
workers' compensation laws with limits at least as required by statute,
insurance for all plate glass in the Premises, and such other insurance that is
either (i) reasonably required by any Lender, or (ii) reasonably required by
Landlord and customarily carried by tenants of similar property in similar
businesses.
B. Where applicable and required by Landlord, each policy of
insurance required to be carried by Tenant pursuant to this paragraph 9.1: (i)
shall name Landlord and such other parties in interest as Landlord reasonably
designates as additional insured; (ii) shall be primary insurance which provides
that the insurer shall be liable for the full amount of the loss up to and
including the total amount of liability set forth in the declarations without
the right of contribution from any other insurance coverage of Landlord; (iii)
shall be in a form reasonably satisfactory to Landlord; (iv) shall be carded
with companies reasonably acceptable to Landlord; (v) shall provide that such
policy shall not be subject to cancellation, lapse or change except after at
least 30 days prior written notice to Landlord so long as such provision of 30
days notice is reasonably obtainable, but in any event not less
11
16
than 10 days prior written notice; (vi) shall not have a "deductible" in excess
of such amount as is approved by Landlord, except that for the original party
signing this Lease as Tenant, the deductible may be in an amount normally and
customary maintained by such Tenant for similar leased premises in the vicinity
of the Premises or if such other premises are not present, then in an amount
reasonably determined by such Tenant; (vii) shall contain a cross liability
endorsement; and (viii) shall contain a "severability" clause. If Tenant has in
full force and effect a blanket policy of liability insurance with the same
coverage for the Premises as described above, as well as other coverage of other
premises and properties of Tenant, or in which Tenant has some interest, such
blanket insurance shall satisfy the requirements of this paragraph 9.1.
C. A certificate of the insurer, certifying that such policy
has been issued, providing the coverage required by this paragraph 9.1, and
containing the provisions specified herein, shall be delivered to Landlord prior
to the time Tenant or any of its Agents enters the Premises and upon renewal of
such policies, but not less than 5 days prior to the expiration of the term of
such coverage. Landlord may, at any time, and from time to time, inspect and/or
copy any and all insurance policies required to be procured by Tenant pursuant
to this paragraph 9.1 not more frequently than once each calendar year, unless
there is a claim or loss. If any Lender or insurance advisor reasonably
determines at any time that the amount of coverage required for any policy of
insurance Tenant is to obtain pursuant to this paragraph 9.1 is not adequate,
then Tenant shall increase such coverage for such insurance to such amount as
such Lender or insurance advisor reasonably deems adequate, not to exceed the
level of coverage for such insurance commonly carried by comparable businesses
similarly situated, and in any event nor more than once each calendar year.
9.2 Landlord's Insurance: Landlord shall have the following obligations
and options regarding insurance:
A. Landlord shall maintain a policy or policies of fire and
property damage insurance in so-called "all risk" form insuring Landlord (and
such others as Landlord may designate) against loss of rents for a period of not
less than 12 months and from physical damage to the Project, including the
Building and the Tenant Improvements (to the extent the Tenant Improvements are
affixed to the Premises and are owned by Landlord) with coverage of not less
than the full replacement cost thereof. Landlord may so insure the Project
separately, or may insure the Project with other property owned by Landlord
which Landlord elects to insure together under the same policy or policies.
Landlord shall have the right, but not the obligation, in its sole and absolute
discretion, to obtain insurance for such additional perils that Landlord deems
appropriate, including, without limitation, coverage for damage by earthquake
and/or flood. All such coverage shall contain "deductibles" which Landlord deems
reasonably appropriate, which in the case of earthquake and flood insurance, may
be up to 10% of the replacement value of the property insured or such higher
amount as is then commercially reasonable. Landlord shall not be required to
cause such insurance to cover any Trade Fixtures or Tenant's Alterations of
Tenant. Notwithstanding anything to the contrary in this Lease, Tenant's
obligation for payment of any deductible under any earthquake or flood insurance
shall not exceed $25,000.00 per claim.
B. Landlord shall maintain a policy or policies of commercial
general liability insurance insuring Landlord (and such others as are designated
by Landlord) against liability for personal injury, bodily injury, death and
damage to property occurring or resulting from an occurrence in, on or about the
Project, with combined single limit coverage in such amount as Landlord from
time to time determines is reasonably necessary for its protection.
C. Tenant's Obligation to Reimburse: If Landlord's insurance
rates for the Building are increased at any time during the Lease Term as a
result of the nature of Tenant's use of the Premises, Tenant shall reimburse
Landlord for the full amount of such increase within twenty (20) days after
receipt of a xxxx from Landlord therefor.
9.4 Release and Waiver of Subrogation: The parties hereto release each
other, and their respective agents and employees, from any liability for injury
to any person or damage to property that is caused by or results from any risk
insured against under any valid and collectible insurance policy carried by
either of the parties which contains a waiver of subrogation by the insurer and
is in force at the time of such injury or damage; subject to the following
limitations: (i) the foregoing provision shall not apply to the commercial
general liability insurance described by subparagraphs paragraph 9.1A and
paragraph 9.2B; (ii) such release shall apply to liability resulting from any
risk insured against or covered by self-insurance maintained or provided by
Tenant to satisfy the requirements of paragraph 9.1 to the extent permitted by
this Lease; and (iii) Landlord and Tenant shall not be released from any such
liability to the extent any damages resulting from such injury or damage are not
covered by the recovery obtained by Tenant or Landlord from such insurance (or
would have been recovered if Landlord or Tenant carried the insurance required
of it under this Lease), but only if the insurance in question permits such
partial release in connection with obtaining a waiver of subrogation from the
insurer. This release shall be in effect only so long as the applicable
insurance policy contains a clause to the effect that this release shall not
affect the right of the insured to recover under such policy. Each party shall
use reasonable efforts to cause each insurance policy obtained by it to provide
that the insurer waives all right of recovery by way of subrogation against the
other party and its agents and employees in connection with any injury or damage
covered by such policy. However, if any insurance policy cannot be obtained with
such a waiver of subrogation, or if such waiver of subrogation is only available
at additional cost and the party for whose benefit the waiver is to be obtained
does not pay such additional cost, then the party obtaining such insurance shall
notify the other party of that fact and thereupon shall be relieved of the
obligation to obtain such waiver of subrogation rights from the insurer with
respect to the particular insurance involved.
12
17
ARTICLE 10 LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
10.1 Limitation on Landlord's Liability: Landlord shall not be liable
to Tenant, nor shall Tenant be entitled to terminate this Lease or to any
abatement of rent (except as expressly provided otherwise herein), for any
injury to Tenant or Tenant's Agents, damage to the property of Tenant or
Tenant's Agents, or loss to Tenant's business resulting from any cause,
including without limitation any: (i) failure, interruption or installation of
any HVAC or other utility system or service; (ii) failure to furnish or delay in
furnishing any utilities or services when such failure or delay is caused by
fire or other peril, the elements, labor disturbances of any character, or any
other accidents or other conditions beyond the reasonable control of Landlord;
(iii) limitation, curtailment, rationing or restriction on the use of water or
electricity, gas or any other form of energy or any services or utility serving
the Project; (iv) vandalism or forcible entry by unauthorized persons or the
criminal act of any person; or (v) penetration of water into or onto any portion
of the Premises or the Building through roof leaks or otherwise. Notwithstanding
the foregoing but subject to paragraph 9.4, Landlord shall be liable for any
such injury, damage or loss which is proximately caused by the willful
misconduct or active negligence of Landlord or its agents, employees or
contractors.
10.2 Limitation on Tenant's Recourse: If Landlord is a corporation,
trust, partnership, joint venture, unincorporated association or other form of
business entity: (i) the obligations of Landlord shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals or representatives of such
business entity; and (ii) Tenant shall not have recourse to the assets of such
officers, directors, trustees, partners, joint venturers, members, owners,
stockholders, principals or representatives except to the extent of their
interest in the Project. Tenant shall have recourse only to the interest of
Landlord in the Project, including the rental stream or sales proceeds
therefrom, for the satisfaction of the obligations of Landlord and shall not
have recourse to any other assets of Landlord for the satisfaction of such
obligations.
10.3 Indemnification of Landlord: Subject to the provisions of
paragraph 9.4 hereof, Tenant shall hold harmless, indemnify and defend Landlord,
and its employees, agents and contractors, with competent counsel reasonably
satisfactory to Landlord (and Landlord agrees to accept counsel that any insurer
requires be used), from all liability, penalties, losses, damages, costs,
expenses, causes of action, claims and/or judgments arising by reason of any
death, bodily injury, personal injury or property damage resulting from (i) any
cause or causes whatsoever (except to the extent caused by the willful
misconduct or active negligence of Landlord, or that of Landlord's agents,
employees or contractors, but which Landlord has failed to cure) occurring in or
about or resulting from an occurrence in or about the Premises during the Lease
Term, (ii) the negligence or willful misconduct of Tenant or its agents,
employees and contractors, wherever the same may occur, within the Project, or
(iii) an Event of Tenant's Default. The provisions of this paragraph 10.3 shall
survive the expiration or sooner termination of this Lease.
10.4 Indemnification of Tenant: Subject to the provisions of paragraph
9.4 hereof, Landlord shall not be indemnified for and shall indemnify, defend,
protect and hold harmless Tenant against all actions, claims, judgments,
attorneys fees, demands, damages, liabilities, losses, penalties, costs or
expenses suffered by Tenant by reason of injury to any person to the extent
caused by the willful misconduct or active negligence of Landlord or its agents,
employees or contractors. The provisions of this paragraph 10.4 shall survive
the expiration or sooner termination of this Lease.
ARTICLE 11 DAMAGE TO PREMISES
11.1 Landlord's Duty to Restore: If the Premises are damaged by any
peril after the Effective Date, Landlord shall restore the Premises unless the
Lease is terminated by Landlord pursuant to paragraph 11.2 or by Tenant pursuant
to paragraph 11.3. All insurance proceeds available from the fire and property
damage insurance carried by Landlord pursuant to paragraph 9.2 shall be paid to
and become the property of Landlord. If this Lease is terminated pursuant to
either paragraph 11.2 or paragraph 11.3, then all insurance proceeds available
from insurance carried by Tenant which covers loss to property that is
Landlord's property or would become Landlord's property on termination of this
Lease shall be paid to and become the property of Landlord. If this Lease is not
so terminated, then upon receipt of the insurance proceeds (if the loss is
covered by insurance) and the issuance of all necessary governmental permits,
Landlord shall commence and diligently prosecute to completion the restoration
of the Premises, to the extent then allowed by Law, to substantially the same
condition in which the Premises were immediately prior to such damage.
Landlord's obligation to restore shall be limited to the Premises and interior
improvements constructed by Landlord as they existed as of the Commencement
Date, excluding any Tenant's Alterations, Trade Fixtures and/or personal
property constructed or installed by Tenant in the Premises. Tenant shall
forthwith replace or fully repair all Tenant's Alterations and Trade Fixtures
installed by Tenant and existing at the time of such damage or destruction, and
all insurance proceeds received by Tenant from the insurance carried by it
pursuant to paragraph 9.1A(2) shall be used for such purpose.
11.2 Landlord's Right to Terminate: Landlord shall have the right to
terminate this Lease in the event any of the following occurs, which right may
be exercised only by delivery to Tenant of a written notice of election to
terminate within 30 days after the date of such damage:
A. Either the Project or the Building is damaged by an Insured
Peril to such an extent that the estimated cost to restore exceeds 33% of the
then actual replacement cost thereof;
13
18
B. Either the Project or the Building is damaged by an
Uninsured Peril to such an extent that the estimated cost to restore exceeds 2%
of the then actual replacement cost thereof; provided, however, that Landlord
may not terminate this Lease pursuant to this paragraph 11.2B if one or more
tenants of the Project agree in writing to pay the amount by which the cost to
restore the damage exceeds such amount and subsequently deposit such amount with
Landlord within 30 days after Landlord has notified Tenant of its election to
terminate this Lease;
C. The Premises are damaged by any peril within 12 months of
the last day of the Lease Term to such an extent that the estimated cost to
restore equals or exceeds an amount equal to six times the Base Monthly Rent
then due; provided, however, that Landlord may not terminate this Lease pursuant
to this paragraph 11.2C if Tenant, at the time of such damage, has a then valid
express written option to extend the Lease Term and Tenant exercises such option
to extend the Lease Term within 15 days following the date of such damage; or
D. Either the Project or the Building is damaged by any peril
and, because of the Laws then in force, (i) cannot be restored at reasonable
cost to substantially the same condition in which it was prior to such damage,
or (ii) cannot be used for the same use being made thereof before such damage if
restored as required by this Article.
E. As used herein, the following terms shall have the
following meanings: (i) the term "Insured Peril" shall mean a peril actually
insured against for which the insurance proceeds actually received by Landlord
are sufficient (except for any "deductible" amount specified by such insurance)
to restore the Project under then existing building codes to the condition
existing immediately prior to the damage; and (ii) the term "Uninsured Peril"
shall mean any peril which is not an Insured Peril. Notwithstanding the
foregoing, if the "deductible" for earthquake or flood insurance exceeds 2% of
the replacement cost of the improvements insured, such peril shall be deemed an
"Uninsured Peril".
11.3 Tenant's Right to Terminate: If the Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled to
terminate this Lease pursuant to paragraph 11.2, then as soon as reasonably
practicable, Landlord shall furnish Tenant with the written opinion of
Landlord's architect or construction consultant as to when the restoration work
required of Landlord may be completed. Tenant shall have the right to terminate
this Lease in the event any of the following occurs, which right may be
exercised only by delivery to Landlord of a written notice of election to
terminate within 10 business days after Tenant receives from Landlord the
estimate of the time needed to complete such restoration.
A. The Premises are damaged by any peril and, in the
reasonable opinion of Landlord's architect or construction consultant, the
restoration of the Premises cannot be substantially completed within 270 days
after the date of such damage; or
B. The Premises are damaged by any peril within 12 months of
the last day of the Lease Term and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Premises cannot be
substantially completed within 90 days after the date of such damage and such
damage renders unusable more than 30% of the Premises.
C. If Landlord commences the repair of the damage or
destruction, and the repairs are not completed within two hundred seventy (270)
days after commencement of the repairs, unless the delay is caused by Tenant or
unless Landlord previously notified Tenant of a delay and within ten (10) days
after receipt of such notice, Tenant does not provide written notice of
termination to Landlord.
11.4 Abatement of Rent: In the event of damage to the Premises which
does not result in the termination of this Lease, the Base Monthly Rent and the
Additional Rent shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Premises is impaired by
such damage. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of Tenant's business or property or for any inconvenience or
annoyance caused by such damage or restoration. Tenant hereby waives the
provisions of California Civil Code Sections 1932(2) and 1933(4) and the
provisions of any similar law hereinafter enacted.
ARTICLE 12 CONDEMNATION
12.1 Landlord's Termination Right: Landlord shall have the right to
terminate this Lease if, as a result of a taking by means of the exercise of the
power of eminent domain (including a voluntary sale or transfer by Landlord to a
condemnor under threat of condemnation), (i) 33% or more of the Premises is so
taken, (ii) more than 10% of the Building Leasable Area is so taken, or (iii)
more than 50% of the Common Area is so taken. Any such right to terminate by
Landlord must be exercised within a reasonable period of time, to be effective
as of the date possession is taken by the condemnor.
12.2 Tenant's Termination Right: Tenant shall have the right to
terminate this Lease if, as a result of any taking by means of the exercise of
the power of eminent domain (including any voluntary sale or transfer by
Landlord to any condemnor under threat of condemnation), (i) 10% or more of the
Premises is so taken and that part of the Premises that remains cannot be
restored within a reasonable period of time and thereby made reasonably suitable
for the continued operation of the Tenant's business, or (ii) there is a taking
affecting the Common Area and, as a result of such taking, Landlord cannot
provide parking spaces within reasonable walking distance of the Premises equal
in number to at least 80% of the number of spaces allocated to Tenant by
paragraph 2.1,
14
19
whether by rearrangement of the remaining parking areas in the Common Area
(including construction of multi-deck parking structures or restriping for
compact cars where permitted by Law) or by alternative parking facilities on
other land. Tenant must exercise such right within a reasonable period of time,
to be effective on the date that possession of that portion of the Premises or
Common Area that is condemned is taken by the condemnor.
12.3 Restoration and Abatement of Rent: If any part of the Premises or
the Common Area is taken by condemnation and this Lease is not terminated, then
Landlord shall restore the remaining portion of the Premises and Common Area and
interior improvements constructed by Landlord as they existed as of the
Commencement Date, excluding any Tenant's Alterations, Trade Fixtures and/or
personal property constructed or installed by Tenant. Thereafter, except in the
case of a temporary taking, as of the date possession is taken the Base Monthly
Rent and Additional Rent shall be reduced in the same proportion that the floor
area of that part of the Premises so taken (less any addition thereto by reason
of any reconstruction) bears to the original floor area of the Premises.
12.4 Temporary Taking: If any portion of the Premises is temporarily
taken for one year or less, this Lease shall remain in effect. If any portion of
the Premises is temporarily taken by condemnation for a period which exceeds one
year or which extends beyond the natural expiration of the Lease Term, and such
taking materially and adversely affects Tenant's ability to use the Premises for
the Permitted Use, then Tenant shall have the right to terminate this Lease,
effective on the date possession is taken by the condemnor.
12.5 Division of Condemnation Award: Any award made as a result of any
condemnation of the Premises or the Common Area shall belong to and be paid to
Landlord, and Tenant hereby assigns to Landlord all of its right, title and
interest in any such award; provided, however, that Tenant shall be entitled to
receive any condemnation award that is made directly to Tenant for the following
so long as the award made to Landlord is not thereby reduced: (i) for the taking
of personal property or Trade Fixtures belonging to Tenant or for the
unamortized cost of Tenant's Alterations installed and paid for by Tenant and
which Tenant is obligated to remove under this Lease, (ii) for the interruption
of Tenant's business or its moving and relocation costs, (iii) for loss of
Tenant's goodwill; or (iv) for any temporary taking where this Lease is not
terminated as a result of such taking. The rights of Landlord and Tenant
regarding any condemnation shall be determined as provided in this Article, and
each party hereby waives the provisions of California Code of Civil Procedure
Section 1265.130 and the provisions of any similar law hereinafter enacted
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises.
ARTICLE 13 DEFAULT AND REMEDIES
13.1 Events of Tenant's Default: Tenant shall be in default of its
obligations under this Lease if any of the following events occurs (an "Event of
Tenant's Default"):
A. Tenant shall have failed to pay Base Monthly Rent or
Additional Rent when due, and such failure is not cured within 3 days after
delivery of written notice from Landlord specifying such failure to pay; or
B. Tenant shall have failed to perform any term, covenant, or
condition of this Lease except those requiring the payment of Base Monthly Rent
or Additional Rent, and Tenant shall have failed to cure such breach within 30
days after written notice from Landlord specifying the nature of such breach
where such breach could reasonably be cured within said 30 day period, or if
such breach could not be reasonably cured within said 30 day period, Tenant
shall have failed to commence such cure within said 30 day period and thereafter
continue with due diligence to prosecute such cure to completion within such
time period as is reasonably needed but not to exceed 90 days from the date of
Landlord's notice; or
C. Tenant shall have sublet the Premises or assigned its
interest in the Lease in violation of the provisions contained in Article 14; or
D. Tenant shall have abandoned the Premises or left the
Premises substantially vacant when combined with Tenant's failure to pay the
Rent due hereunder;, or
E. The occurrence of the following: (i) the making by Tenant
of any general arrangements or assignments for the benefit of creditors; (ii)
Tenant becomes a "debtor" as defined in 11 USC Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Tenant, the
same is dismissed within 60 days); (iii) the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within 60 days; or (iv) the attachment, execution or other
judicial seizure of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not discharged
within 60 days; provided, however, in the event that any provision of this
Section 13.1E is contrary to any applicable Law, such provision shall be of no
force or effect; or
F. Tenant shall have failed to deliver documents required of
it pursuant to paragraph 15.4 or paragraph 15.6 within the time periods
specified therein; or
G. Any three (3) failures by Tenant to observe and perform any
monetary provision of this Lease during any calendar year shall constitute, at
the option of Landlord, a separate and noncurable default.
15
20
Any written notice of default sent by Landlord to Tenant shall be in
lieu of, and not in addition to, any termination notice required under
applicable statutory or regulatory provisions (and no further notice shall be
required should Landlord elect to terminate this Lease as set forth below).
13.2 Landlord's Remedies: If an Event of Tenant's Default occurs,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by any Law or otherwise provided in this Lease, to which
Landlord may resort cumulatively or in the alternative:
A. Landlord may keep this Lease in effect and enforce by an
action at law or in equity all of its rights and remedies under this Lease,
including (i) the right to recover the rent and other sums as they become due by
appropriate legal action, (ii) the right to make payments required of Tenant or
perform Tenant's obligations and be reimbursed by Tenant for the cost thereof
with interest at the Agreed Interest Rate from the date the sum is paid by
Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of
injunctive relief and specific performance to compel Tenant to perform its
obligations under this Lease. Notwithstanding anything contained in this Lease,
in the event of a breach of an obligation by Tenant which results in a condition
which poses an imminent danger to safety of persons or damage to property, an
unsightly condition visible from the exterior of the Building, or a threat to
insurance coverage, then if Tenant does not cure such breach within 3 days after
delivery to it of written notice from Landlord identifying the breach, Landlord
may cure the breach of Tenant and be reimbursed by Tenant for the cost thereof
with interest at the Agreed Interest Rate from the date the sum is paid by
Landlord until Landlord is reimbursed by Tenant.
B. Landlord may enter the Premises and release them to third
parties for Tenant's account for any period, whether shorter or longer than the
remaining Lease Term. Tenant shall be liable immediately to Landlord for all
costs Landlord incurs in releasing the Premises, including brokers' commissions,
expenses of altering and preparing the Premises for the permitted use required
by the releasing. Tenant shall pay to Landlord the rent and other sums due under
this Lease on the date the rent is due, less the rent and other sums Landlord
received from any releasing. No act by Landlord allowed by this subparagraph
shall terminate this Lease unless Landlord notifies Tenant in writing that
Landlord elects to terminate this Lease. Notwithstanding any releasing without
termination, Landlord may later elect to terminate this Lease because of the
default by Tenant.
C. Landlord may terminate this Lease by giving Tenant written
notice of termination, in which event this Lease shall terminate on the date set
forth for termination in such notice. Any termination under this paragraph 13.2C
shall not relieve Tenant from its obligation to pay sums then due Landlord or
from any claim against Tenant for damages or rent previously accrued or then
accruing. In no event shall any one or more of the following actions by
Landlord, in the absence of a written election by Landlord to terminate this
Lease, constitute a termination of this Lease: (i) appointment of a receiver or
keeper in order to protect Landlord's interest hereunder, (ii) consent to any
subletting of the Premises or assignment of this Lease by Tenant, whether
pursuant to the provisions hereof or otherwise; or (iii) any other action by
Landlord or Landlord's Agents intended to mitigate the adverse effects of any
breach of this Lease by Tenant, including without limitation any action taken to
maintain and preserve the Premises or any action taken to relet the Premises or
any portions thereof to the extent such actions do not affect a termination of
Tenant's right to possession of the Premises.
D. In the event Tenant breaches this Lease and abandons the
Premises, this Lease shall not terminate unless Landlord gives Tenant written
notice of its election to so terminate this Lease. No act by or on behalf of
Landlord intended to mitigate the adverse effect of such breach, including those
described by paragraph 13.C, shall constitute a termination of Tenant's right to
possession unless Landlord gives Tenant written notice of termination. Should
Landlord not terminate this Lease by giving Tenant written notice, Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover the rent as it becomes due under the Lease as provided in California
Civil Code Section 1951.4.
E. In the event Landlord terminates this Lease, Landlord shall
be entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2 as in effect on the Effective Date. For
purposes of computing damages pursuant to California Civil Code Section 1951.2,
(i) an interest rate equal to the Agreed Interest Rate shall be used where
permitted, and (ii) the term "rent" includes Base Monthly Rent and Additional
Rent. Such damages shall include:
(1) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided,
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%); and
(2) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would be
likely to result therefrom, including the following: (i) expenses for cleaning,
repairing or restoring the Premises; (ii) expenses for altering, remodeling or
otherwise improving the Premises for the purpose of reletting for the permitted
use, including installation of leasehold improvements (whether such installation
be funded by a reduction of rent, direct payment or allowance to a new tenant,
or otherwise); (iii) broker's fees, advertising costs and other expenses of
reletting the Premises; (iv) costs of carrying the Premises, such as taxes,
insurance premiums, utilities and security precautions; (v) expenses in retaking
possession of the Premises; and (vi) reasonable attorneys' fees and court costs
incurred by Landlord in retaking possession of the Premises and in releasing the
Premises or otherwise incurred as a result of Tenant's default.
16
21
F. Nothing in this paragraph 13.2 shall limit Landlord's right
to indemnification from Tenant as provided in paragraph 7.2 and paragraph 10.3.
Any notice given by Landlord in order to satisfy the requirements of' paragraph
13.1A or paragraph 13.1B above shall also satisfy the notice requirements of
California Code of Civil Procedure Section 1161 regarding unlawful detainer
proceedings.
13.3 Waiver: One party's consent to or approval of any act by the other
party requiring the first party's consent or approval shall not be deemed to
waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. The receipt by Landlord of any rent
or payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach unless such waiver is in writing
and signed by Landlord. No delay or omission in the exercise of any right or
remedy accruing to either party upon any breach by the other party under this
Lease shall impair such right or remedy or be construed as a waiver of any such
breach theretofore or thereafter occurring. The waiver by either party of any
breach of any provision of this Lease shall not be deemed to be a waiver of any
subsequent breach of the same or of any other provisions herein contained.
13.4 Limitation On Exercise of Rights: At any time that an Event of
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval requested
of it by Tenant which Landlord would otherwise be obligated to give, unless
Tenant cures the Event of Tenant's Default at the time it requests Landlord's
consent to the Transfer, and (ii) Tenant may not exercise any option to extend,
right to terminate this Lease, or other right granted to it by this Lease which
would otherwise be available to it.
13.5 Waiver by Tenant of Certain Remedies: Tenant waives the provisions
of Sections 1932(1), 1941 and 1942 of the California Civil Code and any similar
or successor law regarding Tenant's right to terminate this Lease or to make
repairs and deduct the expenses of such repairs from the rent due under this
Lease. Tenant hereby waives any right of redemption or relief from forfeiture
under the laws of the State of California, or under any other present or future
law, including the provisions of Sections 1174 and 1179 of the California Code
of Civil Procedure.
ARTICLE 14 ASSIGNMENT AND SUBLETTING
14.1 Transfer By Tenant: The following provisions shall apply to any
assignment, subletting or other transfer by Tenant or any subtenant or assignee
or other successor in interest of the original Tenant (collectively referred to
in this paragraph 14.1 as "Tenant"):
A. Tenant shall not do any of the following (collectively
referred to herein as a "Transfer"), whether voluntarily, involuntarily or by
operation of law, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed: (i) sublet all or any part of the
Premises or allow it to be sublet, occupied or used by any person or entity
other than Tenant; (ii) assign its interest in this Lease; (iii) mortgage or
encumber the Lease (or otherwise use the Lease as a security device) in any
manner; or (iv) materially amend or modify an assignment, sublease or other
transfer that has been previously approved by Landlord. Tenant shall reimburse
Landlord for all reasonable costs and attorneys' fees incurred by Landlord in
connection with the evaluation, processing, and/or documentation of any
requested Transfer, whether or not Landlord's consent is granted, not to exceed
one Thousand Dollars ($1,000.00) per request for Transfer, unless Tenant or its
transferee request changes to the form of consent or this Lease. Landlord's
reasonable costs shall include the cost of any review or investigation performed
by Landlord or consultant acting on Landlord's behalf of (i) Hazardous Materials
(as defined in Section 7.2E of this Lease) used, stored, released, or disposed
of by the potential Subtenant or Assignee, and/or (ii) violations of Hazardous
Materials Law (as defined in Section 7.2E of this lease) by the Tenant or the
proposed Subtenant or Assignee. Any Transfer so approved by Landlord shall not
be effective until Tenant has delivered to Landlord an executed counterpart of
the document evidencing the Transfer which (i) is in a form reasonably approved
by Landlord, (ii) contains the same terms and conditions as stated in Tenant's
notice given to Landlord pursuant to paragraph 14.1B, and (iii) in the case of
an assignment of the Lease, contains the agreement of the proposed transferee to
assume all obligations of Tenant under this Lease arising after the effective
date of such Transfer and to remain jointly and severally liable therefor with
Tenant. Any attempted Transfer without Landlord's consent shall constitute an
Event of Tenant's Default and shall be voidable at Landlord's option. Landlord's
consent to any one Transfer shall not constitute a waiver of the provisions of
this paragraph 14.1 as to any subsequent Transfer or a consent to any subsequent
Transfer. No Transfer, even with the consent of Landlord, shall relieve Tenant
of its personal and primary obligation to pay the rent and to perform all of the
other obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any person shall not be deemed to be a waiver by Landlord of any
provision of this Lease nor to be a consent to any Transfer.
B. At least 30 days before a proposed Transfer is to become
effective, Tenant shall give Landlord written notice of the proposed terms of
such Transfer and request Landlord's approval, which notice shall include the
following: (i) the name and legal composition of the proposed transferee; (ii) a
current financial statement of the transferee, financial statements of the
transferee covering the preceding three years if the same exist, and (if
available) an audited financial statement of the transferee for a period ending
not more than one year prior to the proposed effective date of the Transfer, all
of which statements are prepared in accordance with generally accepted
accounting principles; (iii) the nature of the proposed transferee's business to
be carried on in the Premises; (iv) all consideration to be given on account of
the Transfer, (v) a current financial statement of Tenant; and (vi) an
accurately filled out response to Landlord's standard Hazardous Materials
Questionnaire. Tenant shall provide to Landlord such other information as may be
reasonably requested by Landlord within seven days after Landlord's receipt of
such notice from Tenant. Landlord shall respond in writing to Tenant's request
for
17
22
Landlord's consent to a Transfer within the later of (i) 20 days of receipt of
such request together with the required accompanying documentation, or (ii) 15
days after Landlord's receipt of all information which Landlord reasonably
requests within seven days after it receives Tenant's first notice regarding the
Transfer in question. If Landlord fails to respond in writing within said
period, then Tenant shall provide a second written notice to Landlord requesting
such consent and if Landlord falls to respond within 5 days after receipt of
such second notice, then Landlord will be deemed to have consented to such
Transfer. Tenant shall immediately notify Landlord of any modification to the
proposed terms of such Transfer, which shall also be subject Landlord's consent
in accordance with the same process for obtaining Landlord's initial consent to
such Transfer.
C. In the event that Tenant seeks to make any Transfer,
Landlord shall have the right to terminate this Lease or, in the case of a
sublease of less than all of the Premises, terminate this Lease as to that part
of the Premises proposed to be so sublet (except as provided below), either (i)
on the condition that the proposed transferee immediately enter into a direct
lease of the Premises with Landlord (or, in the case of a partial sublease, a
lease for the portion proposed to be so sublet) on the same terms and conditions
contained in Tenant's notice, or (ii) so that Landlord is thereafter free to
lease the Premises (or, in the case of a partial sublease, the portion proposed
to be so sublet) to whomever it pleases on whatever terms are acceptable to
Landlord. In the event Landlord elects to so terminate this Lease, then (i) if
such termination is conditioned upon the execution of a lease between Landlord
and the proposed transferee, Tenant's obligations under this Lease shall not be
terminated until such transferee executes a new lease with Landlord, enters into
possession and commences the payment of rent, and (ii) if Landlord elects simply
to terminate this Lease (or, in the case of a partial sublease, terminate this
Lease as to the portion to be so sublet), the Lease shall so terminate in its
entirety (or as to the space to be so sublet) thirty (30) days after Landlord
has notified Tenant in writing of such election. Upon such termination, Tenant
shall be released from any further obligation under this Lease if it is
terminated in its entirety, or shall be released from any further obligation
under the Lease with respect to the space proposed to be sublet in the case of a
proposed partial sublease. In the case of a partial termination of the Lease,
the Base Monthly Rent and Tenant's Share shall be reduced to an amount which
bears the same relationship to the original amount thereof as the area of that
part of the Premises which remains subject to the Lease bears to the original
area of the Premises. Landlord and Tenant shall execute a cancellation and
release with respect to the Lease to effect such termination. Notwithstanding
anything to the contrary contained in this paragraph, if Landlord elects to
terminate this Lease with respect to all or the portion of the Premises that is
the subject of the Transfer, Tenant shall have the right, within five (5) days
after receipt of notice of Landlord's election, to rescind its request for
consent, in which case this Lease shall continue in full force and effect.
Notwithstanding the foregoing, Landlord shall not have the
right to recapture any portion Premises in connection with a sublease that (i)
is for less than 40% of the square footage of the Premises, and (ii) is for a
term expiring not later than 20 months after the Commencement Date. While such
sublease shall not be subject to Landlord's right to recapture, it shall be
subject to all of the other provisions of Article 14 of this Lease.
D. If Landlord consents to a Transfer proposed by Tenant,
Tenant may enter into such Transfer, and if Tenant does so, the following shall
apply:
(1) Tenant shall not be released of its liability for the
performance of all of its obligations under the Lease.
(2) If Tenant assigns its interest in this Lease, then
Tenant shall pay to Landlord 80% of all Subrent (as defined in paragraph
14.1D(5)) received by Tenant over and above (i) the assignee's agreement to
assume the obligations of Tenant under this Lease, and (ii) all Permitted
Transfer Costs related to such assignment. In the case of assignment, the amount
of Subrent owed to Landlord shall be paid to Landlord on the same basis, whether
periodic or in lump sum, that such Subrent is paid to Tenant by the assignee.
All Permitted Transfer Costs shall be amortized on a straight line basis over
the term of such sublease (including any extension options) for purposes of
calculating the amount due Landlord hereunder.
(3) If Tenant sublets any part of the Premises, then with
respect to the space so subleased, Tenant shall pay to Landlord 80% of the
positive difference, if any, between (i) all Subrent paid by the subtenant to
Tenant, less (ii) the sum of all Base Monthly Rent and Additional Rent allocable
to the space sublet and all Permitted Transfer Costs related to such sublease.
Such amount shall be paid to Landlord on the same basis, whether periodic or in
lump sum, that such Subrent is paid to Tenant by its subtenant.
(4) Tenant's obligations under this paragraph 14.1D shall
survive any Transfer, and Tenant's failure to perform its obligations hereunder
shall be an Event of Tenant's Default. At the time Tenant makes any payment to
Landlord required by this paragraph 14.1D, Tenant shall deliver an itemized
statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the
right at reasonable intervals to inspect Tenant's books and records relating to
the payments due hereunder. Upon request therefor, Tenant shall deliver to
Landlord copies of all bills, invoices or other documents upon which its
calculations are based. Landlord may condition its approval of any Transfer upon
obtaining a certification from both Tenant and the proposed transferee of all
Subrent and other amounts that are to be paid to Tenant in connection with such
Transfer.
(5) As used in this paragraph 14.1D, the term "Subrent"
shall mean any consideration of any kind received, or to be received, by Tenant
as a result of the Transfer, if such sums are related to Tenant's interest in
this Lease or in the Premises, excluding payments from or on behalf of the
transferee for Tenant's assets,
18
23
fixtures, inventory, accounts, goodwill, equipment, furniture, and general
intangibles. As used in this paragraph 14.1D, the term "Permitted Transfer
Costs" shall mean (i) all reasonable leasing commissions paid to third parties
not affiliated with Tenant in order to obtain the Transfer in question, and (ii)
all reasonable attorneys' fees incurred by Tenant with respect to the Transfer
in question.
E. If Tenant is a corporation, the following shall be deemed a
voluntary assignment of Tenant's interest in this Lease: (i) any dissolution,
merger, consolidation, or other reorganization of or affecting Tenant, whether
or not Tenant is the surviving corporation; and (ii) if the capital stock of
Tenant is not publicly traded, the sale or transfer to one person or entity (or
to any group of related persons or entities) stock possessing more than 50% of
the total combined voting power of all classes of Tenant's capital stock issued,
outstanding and entitled to vote for the election of directors. If Tenant is a
partnership, limited liability company or other entity any withdrawal or
substitution (whether voluntary, involuntary or by operation of law, and whether
occurring at one time or over a period of time) of any partner, member or other
party owning 25% or more (cumulatively) of any interest in the capital or
profits of the partnership, limited liability company or other entity or the
dissolution of the partnership, limited liability company or other entity, shall
be deemed a voluntary assignment of Tenant's interest in this Lease.
F. Notwithstanding anything contained in paragraph 14.1, so
long as Tenant otherwise complies with the provisions of paragraph 14.1 Tenant
may enter into any of the following transfers (a "Permitted Transfer") without
Landlord's prior written consent, and Landlord shall not be entitled to
terminate the Lease pursuant to paragraph 00.xX or to receive any part of any
Subrent resulting therefrom that would otherwise be due it pursuant to paragraph
14.1D:
(1) Tenant may sublease all or part of the Premises or
assign its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with the original Tenant to this Lease
by means of an ownership interest of more than 50%;
(2) Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other reorganization
in which Tenant is not the surviving corporation, so long as the surviving
corporation has a net worth at the time of such assignment that is equal to or
greater than the net worth of Tenant at the time Tenant entered into this Lease;
and
(3) Tenant may assign this Lease to a corporation which
purchases or otherwise acquires all or substantially all of the assets of
Tenant, so long as such acquiring corporation has a net worth at the time of
such assignment that is equal to or greater than the net worth of Tenant at the
time Tenant entered into this Lease.
14.2 Transfer By Landlord: Landlord and its successors in interest shah
have the right to transfer their interest in this Lease and the Project at any
time and to any person or entity. In the event of any such transfer, the
Landlord originally named herein (and, in the case of any subsequent transfer,
the transferor) from the date of such transfer, shall be automatically relieved,
without any further act by any person or entity, of all liability for the
performance of the obligations of the Landlord hereunder which may accrue after
the date of such transfer. After the date of any such transfer, the term
"Landlord" as used herein shall mean the transferee of such interest in the
Premises. Notwithstanding anything to the contrary contained in this Lease,
Landlord shall not be relieved of its obligations under this Lease unless and
until any assignee of or the successor in interest to Landlord's interest in
this Lease assumes in writing the obligations of Landlord occurring on and after
the effective date of the transfer.
ARTICLE 15 GENERAL PROVISIONS
15.1 Landlord's Right to Enter: Landlord and its agents may enter the
Premises at any reasonable time after giving at least 24 hours' prior notice to
Tenant (and immediately in the case of emergency) for the purpose of: (i)
inspecting the same; (ii) posting notices of non-responsibility; (iii) supplying
any service to be provided by Landlord to Tenant; (iv) during the last 12 months
of the Lease Term showing the Premises to prospective purchasers, mortgagees or
tenants; (v) making necessary alterations, additions or repairs; (vi) performing
Tenant's obligations when Tenant has failed to do so after written notice from
Landlord; (vii) placing upon the Premises ordinary "for lease" signs during the
last 12 months of the Lease Term or "for sale" signs; and (viii) responding to
an emergency. Landlord shall have the right to use any and all lawful means
Landlord may deem necessary and proper to enter the Premises in an emergency.
Any entry into the Premises obtained by Landlord in accordance with this
paragraph 15.1 shall not be a forcible or unlawful entry into, or a detainer of,
the Premises, or an eviction, actual or constructive, of Tenant from the
Premises.
15.2 Surrender of the Premises: Upon the expiration or sooner
termination of this Lease, Tenant shall vacate and surrender the Premises to
Landlord in the same condition as existed at the Commencement Date, except for
(i) reasonable wear and tear, (ii) damage caused by any peril or condemnation,
(iii) contamination by Hazardous Materials for which Tenant is not responsible
pursuant to paragraph 7.2A or paragraph 7.2B, (iv) acts of God, and (v) Tenant's
Alterations with respect to which Landlord has not reserved the right to require
removal. In this regard, normal wear and tear shall be construed to mean wear
and tear caused to the Premises by the natural aging process which occurs in
spite of prudent application of commercial reasonable standards for maintenance,
repair and janitorial practices, and does not include items of neglected or
deferred maintenance. In any event, Tenant shall cause the following to be done
prior to the expiration or the sooner termination of this Lease: (i) all
interior walls shall be cleaned so that they appear freshly painted, or if
necessary, painted; (ii) all tiled floors shall be cleaned and waxed; (iii) all
carpets shall be cleaned and shampooed; (iv) all broken, marred, stained or
nonconforming
19
24
acoustical ceiling tiles shall be replaced; (v) all windows shall be washed;
(vi) the HVAC system shall be serviced by a reputable and licensed service firm
and left in good operating condition and repair as so certified by such firm;
and (vii) the plumbing and electrical systems and lighting shall be placed in
good order and repair (including replacement of any burned out, discolored or
broken light bulbs, ballasts, or lenses). If Landlord so requests, Tenant shall,
not later than the expiration or sooner termination of this Lease, remove any
Tenant's Alterations which Tenant is required to remove pursuant to paragraph
5.2 and repair and restore all damage caused by such removal. If the Premises
are not so surrendered at the termination of this Lease, Tenant shall be liable
to Landlord for all costs incurred by Landlord in returning the Premises to the
required condition, plus interest on all costs incurred at the Agreed Interest
Rate. Tenant shall indemnify Landlord against loss 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.
15.3 Holding Over: This Lease shall terminate without further notice at
the expiration of the Lease Term. Any holding over by Tenant after expiration of
the Lease Term shall not constitute a renewal or extension of the Lease or give
Tenant any rights in or to the Premises except as expressly provided in this
Lease. Any holding over after such expiration with the written consent of
Landlord shall be construed to be a tenancy from month to month on the same
terms and conditions herein specified insofar as applicable except that Base
Monthly Rent shall be increased to an amount equal to 150% of the greater of (a)
the Base Monthly Rent payable during the last full calendar month of the Lease
Term, or (b) the then prevailing fair market rent.
15.4 Subordination: The following provisions shall govern the
relationship of this Lease to any Security Instrument:
A. The Lease is subject and subordinate to all Security
Instruments existing as of the Effective Date. However, if any Lender so
requires, this Lease shall become prior and superior to any such Security
Instrument.
B. At Landlord's election, this Lease shall become subject and
subordinate to any Security Instrument created after the Effective Date.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed so long as Tenant is not in default beyond any
applicable cure period and performs all of its obligations under this Lease.
C. Tenant shall upon request execute any commercially
reasonable document or instrument required by any Lender to make this Lease
either prior or subordinate to a Security Instrument, which may include such
other matters as the Lender customarily and reasonably requires in connection
with such agreements, including provisions that the Lender not be liable for (i)
the return of any security deposit unless the Lender receives it from Landlord,
and (ii) any defaults on the part of Landlord occurring prior to the time the
Lender takes possession of the Project in connection with the enforcement of its
Security Instrument. Tenant's failure to execute any such document or instrument
within 10 business days after written demand therefor shall constitute an Event
of Tenant's Default.
15.5 Mortgagee Protection and Attornment: In the event of any default
on the part of the Landlord, Tenant will use reasonable efforts to give notice
by registered mail to any Lender whose name has been provided to Tenant and
shall offer such Lender a reasonable opportunity to cure the default, including
time to obtain possession of the Premises by power of sale or judicial
foreclosure or other appropriate legal proceedings, if such should prove
necessary to effect a cure. Tenant shall attorn to any purchaser of the Premises
at any foreclosure sale or private sale conducted pursuant to any Security
Instrument encumbering the Premises, or to any grantee or transferee designated
in any deed given in lieu of foreclosure.
15.6 Estoppel Certificates and Financial Statements: At all times
during the Lease Term, each party agrees, following any request by the other
party, promptly to execute and deliver to the requesting party within 15 days
following delivery of such request an estoppel certificate: (i) certifying that
this Lease is unmodified and in full force and effect or, if modified, stating
the nature of such modification and certifying that this Lease, as so modified,
is in full force and effect, (ii) stating the date to which the rent and other
charges are paid in advance, if any, (iii) acknowledging that there are not, to
the certifying party's knowledge, any uncured defaults on the part of any party
hereunder or, if there are uncured defaults, specifying the nature of such
defaults, and (iv) certifying such other information about the Lease as may be
reasonably required by the requesting party. A failure to deliver an estoppel
certificate within 15 days after delivery of a request therefor shall be a
conclusive admission that, as of the date of the request for such statement: (i)
this Lease is unmodified except as may be represented by the requesting party in
said request and is in full force and effect, (ii) there are no uncured defaults
in the requesting party's performance, and (iii) no rent has been paid more than
30 days in advance. At any time during the Lease Term, but not more than once
each calendar year, Tenant shall, upon 15 days' prior written notice from
Landlord, provide Tenant's most recent financial statement and financial
statements covering the 24 month period prior to the date of such most recent
financial statement to any existing Lender or to any potential Lender or buyer
of the Premises. Such statements shall be prepared in accordance with generally
accepted accounting principles and, if such is the normal practice of Tenant,
shall be audited by an independent certified public accountant.
15.7 Intentionally Deleted.
15.8 Notices: Any notice required or desired to be given regarding this
Lease shall be in writing and may be given by personal delivery, by facsimile,
by courier service, or by mail. A notice shall be deemed to have been given (i)
on the third business day after mailing if such notice was deposited in the
United States mail,
20
25
certified or registered, postage prepaid, addressed to the party to be served at
its Address for Notices specified in Section Q or Section R of the Summary (as
applicable), (ii) when delivered if given by personal delivery, and (iii) in all
other eases when actually received at the party's Address for Notices. Either
party may change its address by giving notice of the same in accordance with
this paragraph 15.8, provided, however, that any address to which notices may be
sent must be a California address.
15.9 Attorneys' Fees: In the event either Landlord or Tenant shall
bring any action or legal proceeding for an alleged breach of any provision of
this Lease, to recover rent, to terminate this Lease or otherwise to enforce,
protect or establish any term or covenant of this Lease, the prevailing party
shall be entitled to recover as a part of such action or proceeding, or in a
separate action brought for that purpose, reasonable attorneys' fees, court
costs, and experts' fees as may be fixed by the court.
15.10 Corporate Authority: If Tenant is a corporation (or partnership),
each individual executing this Lease on behalf of Tenant represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of such
corporation in accordance with the by-laws of such corporation (or partnership
in accordance with the partnership agreement of such partnership) and that this
Lease is binding upon such corporation (or partnership) in accordance with its
terms. Each of the persons executing this Lease on behalf of a corporation does
hereby covenant and warrant that the party for whom it is executing this Lease
is a duly authorized and existing corporation, that it is qualified to do
business in California, and that the corporation has full right and authority to
enter into this Lease.
15.11 Miscellaneous: Should any provision of this Lease prove to be
invalid or illegal, such invalidity or illegality shall in no way affect, impair
or invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. The captions used in this Lease are for convenience only and shall not
be considered in the construction or interpretation of any provision hereof. Any
executed copy of this Lease shall be deemed an original for all purposes. This
Lease shall, subject to the provisions regarding assignment, apply to and bind
the respective heirs, successors, executors, administrators and assigns of
Landlord and Tenant. "Party" shall mean Landlord or Tenant, as the context
implies. If Tenant consists of more than one person or entity, then all members
of Tenant shall be jointly and severally liable hereunder. This Lease shall be
construed and enforced in accordance with the laws of the State of California.
The language in all parts of this Lease shall in all cases be construed as a
whole according to its fair meaning, and not strictly for or against either
Landlord or Tenant. When the context of this Lease requires, the neuter gender
includes the masculine, the feminine, a partnership or corporation or joint
venture, and the singular includes the plural. The terms "shall", "will" and
"agree" are mandatory. The term "may" is permissive. When a party is required to
do something by this Lease, it shall do so at its sole cost and expense without
right of reimbursement from the other party unless a provision of this Lease
expressly requires reimbursement. Landlord and Tenant agree that (i) the gross
leasable area of the Premises includes any atriums, depressed loading docks,
covered entrances or egresses, and covered loading areas, (ii) each has had an
opportunity to determine to its satisfaction the actual area of the Project and
the Premises, (iii) all measurements of area contained in this Lease are
conclusively agreed to be correct and binding upon the parties, even if a
subsequent measurement of any one of these areas determines that it is more or
less than the amount of area reflected in this Lease, and (iv) any such
subsequent determination that the area is more or less than shown in this Lease
shall not result in a change in any of the computations of rent, improvement
allowances, or other matters described in this Lease where area is a factor.
Where a party hereto is obligated not to perform any act, such party is also
obligated to restrain any others within its control from performing said act,
including the Agents of such party. Landlord shall not become or be deemed a
partner or a joint venturer with Tenant by reason of the provisions of this
Lease.
15.12 Termination by Exercise of Right: If this Lease is terminated
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this Lease shall
terminate 30 days after the date the right to terminate is properly exercised
(unless another date is specified in that part of the Lease creating the right,
in which event the date so specified for termination shall prevail), the rent
and all other charges due hereunder shall be prorated as of the date of
termination, and neither Landlord nor Tenant shall have any further rights or
obligations under this Lease except for those that have accrued prior to the
date of termination or those obligations which this Lease specifically provides
are to survive termination. This paragraph 15.12 does not apply to a termination
of this Lease by Landlord as a result of an Event of Tenant's Default.
15.13 Brokerage Commissions: Each party hereto (i) represents and
warrants to the other that it has not had any dealings with any real estate
brokers, leasing agents or salesmen, or incurred any obligations for the payment
of real estate brokerage commissions or finder's fees which would be earned or
due and payable by reason of the execution of this Lease, other than to the
Retained Real Estate Brokers described in Section S of the Summary, and (ii)
agrees to indemnify, defend, and hold harmless the other party from any claim
for any such commission or fees which result from the actions of the
indemnifying party. Landlord shall be responsible for the payment of any
commission owed to the Retained Real Estate Brokers if there is a separate
written commission agreement between Landlord and the Retained Real Estate
Brokers for the payment of a commission as a result of the execution of this
Lease.
15.14 Force Majeure: Any prevention, delay or stoppage due to strikes,
lock-outs, inclement weather, labor disputes, inability to obtain labor,
materials, fuels or reasonable substitutes therefor, governmental restrictions,
regulations, controls, action or inaction, civil commotion, fire or other acts
of God, and other causes beyond the reasonable control of Landlord or Tenant
(except financial inability) shall excuse the performance by Landlord or Tenant,
for a period equal to the period of any said prevention, delay or stoppage, of
any obligation
21
26
hereunder. The party claiming a delay hereunder shall notify the other party of
the event constituting such force majeure delay hereunder promptly after such
force majeure event occurs.
15.15 Entire Agreement: This Lease constitutes the entire agreement
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein. Tenant acknowledges that neither
Landlord nor Landlord's Agents has made any legally binding representation or
warranty as to any matter except those expressly set forth herein, including any
warranty as to (i) whether the Premises may be used for Tenant's intended use
under existing Law, (ii) the suitability of the Premises or the Project for the
conduct of Tenant's business, or (iii) except as set forth in this Lease, the
condition of any improvements. There are no oral agreements between Landlord and
Tenant affecting this Lease, and this Lease supersedes and cancels any and all
previous negotiations, arrangements, brochures, agreements and understandings,
if any, between Landlord and Tenant or displayed by Landlord to Tenant with
respect to the subject matter of this Lease. This instrument shall not be
legally binding until it is executed by both Landlord and Tenant. No subsequent
change or addition to this Lease shall be binding unless in writing and signed
by Landlord and Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with
the intent to be legally bound thereby, to be effective as of the Effective
Date.
LANDLORD: TENANT:
By: SILICON VALLEY PROPERTIES, L.L.C. By: SYNAPTICS, INC.,
a Delaware limited liability company a California corporation
By: Divco West Group, LLC,
a Delaware limited liability company By: /s/ X. Xxxxxxxx
Its Agent ____________________________
Name: X. Xxxxxxxx
Title: Corporate Controller
By: /s/ Xxxxx Xxxxxxxx Dated: September 16, 1999
__________________________________
Name: Xxxxx Xxxxxxxx
Its: President
Dated: September __, 1999
22
