MONTAGUE OAKS ASSOCIATES PHASE III,
a California limited partnership
Landlord
and
INTEGRATED SENSOR SOLUTIONS, INC.,
a California corporation
Tenant
LEASE
TABLE OF CONTENTS
PAGE
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1. Use.................................................................. 1
2. Term................................................................. 1
3. Possession........................................................... 2
4. Monthly Rent......................................................... 2
(a) Basic Rent...................................................... 2
(b) Common Area Charges............................................. 2
(c) Manner and Place of Payment..................................... 2
(d) Second Month's Rent............................................. 3
(e) Security Deposit................................................ 3
5. Adjustment of Basic Rent............................................. 3
6. Restriction on Use................................................... 4
7. Compliance with Laws................................................. 4
8. Alterations.......................................................... 5
9. Repair and Maintenance............................................... 6
10. Liens................................................................ 6
11. Insurance............................................................ 7
12. Utilities and Service................................................ 9
13. Taxes and Other Charges.............................................. 9
14. Entry by Landlord....................................................10
15. Common Area; Parking.................................................10
16. Common Area Charges..................................................11
17. Damage By Fire; Casualty.............................................12
18. Indemnification......................................................14
19. Assignment and Subletting............................................14
20. Default..............................................................17
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TABLE OF CONTENTS
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21. Landlord's Right to Cure Tenant's Default............................18
22. Eminent Domain.......................................................19
23. Notice and Covenant to Surrender.....................................19
24. Tenant's Quitclaim...................................................20
25. Holding Over.........................................................20
26. Subordination........................................................21
27. Certificate of Estoppel..............................................21
28. Sale by Landlord.....................................................21
29. Attornment to Lender or Third Party..................................21
30. Default by Landlord..................................................22
31. Construction Changes.................................................22
32. Measurement of Premises..............................................22
33. Attorney Fees........................................................22
34. Surrender............................................................23
35. Waiver...............................................................23
36. Easements; Airspace Rights...........................................23
37. Rules and Regulations................................................23
38. Notices..............................................................24
39. Name.................................................................24
40. Governing Law; Severability..........................................24
41. Definitions..........................................................24
42. Time.................................................................25
43. Interest on Past Due Obligations; Late Charges.......................25
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TABLE OF CONTENTS
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44. Entire Agreement.....................................................25
45. Corporate Authority..................................................26
46. Recording............................................................26
47. Real Estate Brokers..................................................26
48. Exhibits and Attachments.............................................26
49. Environmental Matters................................................26
(a) Tenant's Covenants Regarding Hazardous Materials................26
(i) Hazardous Materials Handling..............................26
(ii) Notices...................................................27
(b) Indemnification of Landlord.....................................27
(c) Survival........................................................28
50. Signage..............................................................28
51. Submission of Lease..................................................28
52. Tenant Improvements..................................................29
53. Additional Rent......................................................29
54. Option to Extend Term................................................29
55. Right of First Negotiation...........................................30
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LEASE
THIS LEASE is made this 2nd day of June, 1994, by and between MONTAGUE OAKS
ASSOCIATES PHASE III, a California limited partnership ("Landlord") and
INTEGRATED SENSOR SOLUTIONS, INC., a California corporation ("Tenant").
WITNESSETH:
Landlord leases to Tenant and Tenant leases from Landlord those certain
premises outlined in red on Exhibit A (the "Premises") commonly known as ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, which Landlord and Tenant hereby
agree consists of approximately seventeen thousand four hundred seventy
(17,470) square feet in the Project. As used herein the term "Project" shall
mean and include all of the land described in Exhibit B and all the
buildings, improvements, fixtures and equipment now or hereafter situated on
said land.
Tenant covenants, as a material part of the consideration of this lease,
to perform and observe each and all of the terms, covenants and conditions
set forth below, and this lease is made upon the condition of such
performance and observance.
1. USE. Subject to the restrictions contained in paragraph 6 hereof,
Tenant shall use the Premises for general office, research and development
and final assembly and test of components and shall not use or permit the
Premises to be used for any other purpose.
2. TERM.
(a) The term shall be for five (5) years (unless sooner terminated as
hereinafter provided) and, subject to paragraphs 2 (b) and 3, shall commence
on July 1, 1994 and end on June 30, 1999.
(b) Possession of the Premises shall not be deemed tendered and the
term shall not commence until the first to occur of the following:
(i) One day after a final building permit acknowledging completion
and permitting occupancy is granted by the proper governmental agency;
(ii) Upon the occupancy of the Premises by any of Tenant's operating
personnel; or
(iii) Upon substantial completion of all work to be done by Landlord
pursuant to Exhibit C to this lease, exclusive of telephones or other
communication systems and punchlist items, or, if Landlord is prevented from
or delayed in completing its work under Exhibit C to this lease due to the
acts or omissions of Tenant, then upon the date by which such work would have
been substantially completed but for such acts or omissions by Tenant.
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3. POSSESSION.
(a) If Landlord for any reason cannot deliver possession of the
Premises to Tenant by the scheduled commencement date set forth in paragraph
2 (a), this lease shall not be void or voidable, Landlord shall not be liable
to Tenant for any loss or damage on account thereof and, unless Landlord's
failure to deliver possession of the Premises to Tenant by the scheduled
commencement date set forth in paragraph 2 (a) is caused by Tenant caused
delays as defined in Exhibit C to this lease, Tenant shall not be liable for
rent until the commencement of the term is determined in accordance with
paragraph 2 (b). If the term commences on a date other than the date
specified in paragraph 2 (a) above, then the parties shall immediately
execute an amendment to this lease stating the actual date of commencement
and the revised expiration date. The expiration date of the term shall be
extended by the same number of days that Tenant's possession of the Premises
was delayed from that set forth in paragraph 2 (a).
(b) Tenant's inability or failure to take possession of the Premises
when delivery is tendered by Landlord (with the improvements to be done
pursuant to Exhibit C to this lease substantially completed) shall not delay
the commencement of the term of this lease or Tenant's obligation to pay
rent. Tenant acknowledges that Landlord shall incur significant expenses
upon the execution of this lease, even if Tenant never takes possession of
the Premises, including without limitation brokerage commissions and fees,
reasonable legal and other reasonable professional fees, the costs of space
planning and the costs of construction of improvements in the Premises.
Tenant acknowledges that all of said expenses shall be included in measuring
Landlord's damages should Tenant breach the terms of this lease.
4. MONTHLY RENT.
(a) BASIC RENT. Tenant shall pay to Landlord, in advance, as basic
rent for the Premises and subject to adjustment as provided in paragraph 5,
the sum of Eight Thousand Three Hundred Eighty-five Dollars and Sixty Cents
($8,385.60) on or before the first day of the first full calendar month of
the term and on or before the first day of each and every successive calendar
month, except that no basic rent shall be due for the first and twelfth
months of the lease. Basic rent for any partial month shall be payable in
advance and shall be prorated at the rate of 1/30th of the monthly basic rent
per day.
(b) COMMON AREA CHARGES. In addition to the above basic rent and as
additional rent, Tenant shall pay to Landlord, subject to adjustments and
reconciliation as provided in paragraph 16 of this lease, the sum of Two
Thousand Five Hundred Fifty Dollars and Sixty-Two Cents ($2,550.62) on or
before the first day of the first full calendar month of the term and on the
first day of each and every successive calendar month, said sum representing
Tenant's estimated payment of its percentage share of common area charges as
provided for in paragraph 16 of this lease. Payment of common area charges
for any partial month shall be payable in advance and shall be prorated at
the rate of 1/30th of the monthly payment of common area charges per day.
2
(c) MANNER AND PLACE OF PAYMENT. All payments of basic rent and common
area charges shall be paid to Landlord, without deduction or offset, in
lawful money of the United States of America, at the office of Landlord at
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or to such
other person or place as Landlord may from time to time designate in writing.
(d) SECOND MONTH'S RENT. Concurrently with Tenant's execution of this
lease, Tenant shall deposit with Landlord the sum of Ten Thousand Nine
Hundred Thirty-six Dollars and Twenty-two Cents ($10,936.22) to be applied
against the basic rent and common area charges for the second lease month of
the term.
(e) SECURITY DEPOSIT. Concurrently with Tenant's execution of this
lease, Tenant shall deposit with Landlord the sum of Eleven Thousand One
Hundred Eighty-one Dollars ($11,181), which sum shall be held by Landlord as
a security deposit for the faithful performance by Tenant of all of the
terms, covenants and conditions of this lease to be kept and performed by
Tenant. If Tenant defaults with respect to any provision of this lease,
including but not limited to, the provisions relating to the payment of basic
rent and common area charges, Landlord may (but shall not be required to)
use, apply, or retain all or any part of this security deposit for the
payment of any amount which Landlord may spend by reason of Tenant's default
or to compensate Landlord for any other loss or damage which Landlord may
suffer by reason of default. If any portion of said deposit is so used,
Tenant shall, within ten (10) days after written demand therefor, deposit
cash with Landlord in the amount sufficient to restore the security deposit
to the original amount thereof; Tenant's failure to do so shall be a material
breach of this lease. Landlord shall not be required to keep this security
deposit separate from its general funds and Tenant shall not be entitled to
interest on such deposit. If Tenant is not in default at the expiration or
termination of this lease, the security deposit or any balance thereof shall
be returned to Tenant after Tenant has vacated the Premises. In the event of
termination of Landlord's interest in this lease, Landlord shall transfer
said deposit to Landlord's successor in interest, and Tenant agrees that
Landlord shall thereupon be released from liability for the return of such
deposit or any accounting therefor.
5. ADJUSTMENT OF BASIC RENT. The basic rent provided for in paragraph 4
(a) shall be adjusted periodically and the monthly basic rent for each period
shall be as set forth below:
Year 1
------
Lease Months 1 - 12 $8,385.60 per month
Year 2
------
Lease Months 13 - 24 $10,482.00 per month
Year 3
------
Lease Months 25 - 36 $11,704.90 per month
Year 4
------
Lease Months 37 - 48 $13,102.50 per month
Year 5
------
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Lease Months 49 - 60 $13,626.60 per month
6. RESTRICTION ON USE. Tenant shall not do or permit to be done in or
about the Premises or the Project, nor bring or keep or permit to be brought
or kept in or about the Premises or Project, anything which is prohibited by
or will in any way increase the existing rate of, or otherwise affect, fire
or any other insurance covering the Project or any part thereof, or any of
its contents, or will cause a cancellation of any insurance covering the
Project or any part thereof, or any of its contents. Tenant shall not do or
permit to be done anything in or about the Premises or the Project which will
constitute waste or which will in any way obstruct or interfere with the
rights of other tenants or occupants of the Project or injure or annoy them,
or use or allow the Premises to be used for any unlawful purpose, nor shall
Tenant cause, maintain or permit any nuisance in or about the Premises or the
Project. No loudspeaker or other device, system or apparatus which can be
heard outside the Premises shall be used in or at the Premises without the
prior written consent of Landlord. Tenant shall not use the Premises in any
manner that will cause or emit any objectionable odor, noise or light into
the adjoining premises or Common Area. Tenant shall not do anything on the
Premises that will cause damage to the Project and Tenant shall not overload
the floor capacity of the Premises or the Project. No machinery, apparatus
or other appliance shall be used or operated in or on the Premises that will
in any manner injure, vibrate or shake the Premises. Landlord shall be the
sole judge, of whether such odor, noise, light or vibration is such as to
violate the provisions of this paragraph. No waste materials or refuse shall
be dumped upon or permitted to remain upon any part of the Premises or the
Project except in trash containers placed inside exterior enclosures
designated for that purpose by Landlord, or where otherwise designated by
Landlord; and no toxic or hazardous materials shall be disposed of through
the plumbing or sewage system. No materials, supplies, equipment, finished
products or semi-finished products, raw materials or articles of any nature
shall be stored or permitted to remain outside of the building proper. No
retail sales shall be made on the Premises. Tenant shall comply with any
covenant, condition or restriction ("C.C. & R.'s") now or hereafter affecting
the Premises.
7. COMPLIANCE WITH LAWS. Tenant shall, in connection with its use and
occupation of the Premises, at its sole cost and expense, promptly observe
and comply with (i) all laws, statutes, ordinances and governmental rules,
regulations and requirements of federal, state, county, municipal and other
governmental authorities, now or hereafter in effect, which shall impose any
duty upon Landlord or Tenant with respect to the use, occupancy or alteration
of the Premises, (ii) with the requirements of any board of fire underwriters
or other similar body now or hereafter constituted and (iii) with any
direction or occupancy certificate issued pursuant to law by any public
authority; provided, however, that no such failure shall be deemed a breach
of these provisions if Tenant, immediately upon notification, commences to
remedy or rectify said failure. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant (whether
or not Landlord is a party thereto) that Tenant has violated any such law,
statute, ordinance or governmental rule, regulation, requirement, direction
or provision, shall be conclusive of that fact as between Landlord and
Tenant. This lease shall remain in full force and effect notwithstanding any
loss of use or other effect on Tenant's enjoyment of the Premises by reason
of any governmental laws, statutes, ordinances, rules, regulations and
requirements now or hereafter in effect.
4
8. ALTERATIONS. Tenant shall not make or suffer to be made any
alteration, addition or improvement to or of the Premises or any part thereof
(collectively referred to herein as "alterations") without (i) the prior
written consent of Landlord, (ii) a valid building permit issued by the
appropriate governmental authority and (iii) otherwise complying with all
applicable laws, regulations and requirements of governmental agencies having
jurisdiction and with the rules, regulations and requirements of any board of
fire underwriters or similar body. Notwithstanding the foregoing, Tenant may
make alterations to the Premises costing in the aggregate less than Five
Thousand Dollars ($5,000.00) per year without the prior written consent of
Landlord; provided, however, that (i) no such alterations shall be made to
the structural elements or building systems in the Premises, (ii) Tenant
shall give Landlord at least one (1) day written notice of its intent to
commence such alterations, and (iii) Tenant shall comply with all other
provisions of this paragraph 8 with respect to such alterations, other than
the obligation to obtain Landlord's prior written consent thereto.
Landlord's consent to any requested alteration or agreement to permit
alterations without Landlord's consent shall not create on the part of
Landlord or cause Landlord to incur any responsibility or liability for such
alteration's compliance with all laws, rules and regulations of federal,
state, county, municipal and other governmental authorities. Any alteration
made by Tenant (excluding moveable furniture and trade fixtures not attached
to the Premises) shall at once become a part of the Premises and belong to
Landlord. Without limiting the foregoing, all heating, lighting, electrical
(including all wiring, conduit, outlets, drops, ▇▇▇▇ ducts, main and
subpanels) , air conditioning, partitioning, drapery and carpet installations
made by Tenant, regardless of how attached to the Premises, together with all
other alterations that have become an integral part of the Project in which
the Premises are a part, shall be and become part of the Premises and belong
to Landlord upon installation and shall not be deemed trade fixtures, and
shall remain upon and be surrendered with the Premises at the termination of
the lease.
Any alterations made by Tenant shall be made by Tenant at its sole risk,
cost and expense and only after Landlord's written approval of any contractor
or person selected by Tenant for that purpose, and the same shall be made at
such time and in such manner as Landlord may from time to time designate.
Tenant shall, if required by Landlord, secure at Tenant's cost a completion
and lien indemnity bond for such work. Upon the expiration or sooner
termination of the term, Landlord may, at its sole option, require Tenant, at
Tenant's sole cost and expense, to promptly both remove any such alteration
made by Tenant and designated by Landlord to be removed and repair any damage
to the Premises caused by such removal, and restore the Premises to the
condition that existed prior to such alteration in accordance with all
applicable laws, statutes, building codes and regulations in effect as of the
date of such restoration. Tenant improvements originally provided by
Landlord shall not be alterations for purposes of this lease. Any moveable
furniture and equipment or trade fixtures remaining on the Premises at the
expiration or other termination of the term shall become the property of the
Landlord unless promptly removed by Tenant.
If during the term any alteration, addition or change of the Premises is
required by law, regulation, ordinance or order of any public authority due
to Tenant's specific use, occupancy, or alteration to the Premises, Tenant,
at its sole cost and expense, shall promptly make the same. If during the
term any alterations, additions or changes to the Common Area or to the
Project in
5
which the Premises is located is required by law, regulation, ordinance or
order of any public or quasi-public authority, and it is impractical in
Landlord's judgment for the affected tenants to individually make such
alterations, additions or changes, Landlord shall make such alterations,
additions or changes and the cost thereof shall be a common area charge and
Tenant shall pay its percentage share of such cost to Landlord as provided in
paragraph 16.
9. REPAIR AND MAINTENANCE. By entry hereunder, Tenant accepts the
Premises as being in good and sanitary order, condition and repair (excepting
only "punch list items"). Except as expressly provided below, Tenant shall
at its sole cost keep and maintain the entire Premises and every part thereof
including, without limitation, the windows, window frames, plate glass,
glazing, truck doors, doors and all door hardware, the interior walls and
partitions, lighting and the electrical, mechanical, and plumbing systems.
Tenant shall also repair and maintain the heating and air conditioning
systems (unless Landlord has elected to keep and maintain the heating and air
conditioning systems as provided below) which shall include, without
limitation, a periodic maintenance agreement with a reputable and licensed
heating and air conditioning service company. If Tenant's use of the heating
and air conditioning systems is limited to normal business hours (8:00 a.m.
to 6:00 p.m.) such agreement shall provide for service at least as often as
every 90 days; if Tenant's use of the heating or air conditioning systems
extends beyond such normal business hours this service shall be as often as
may be required by Landlord and in any event such service shall meet all
warranty enforcement requirements of such equipment and comply with all
manufacturer recommended maintenance. Landlord may elect, at its option, to
keep and maintain the heating and air conditioning systems of the Premises
and in such event, Tenant shall pay to Landlord upon demand the full cost of
such maintenance. Notwithstanding the foregoing, prior to the commencement
of the term of the lease, Landlord shall make such repairs, if any, necessary
to cause the existing heating, ventilating, and air conditioning units
serving the Premises to operate in accordance with the specifications for
such systems based upon twelve (12) hours per day, five (5) days per week.
If major repairs or replacements (other than routine maintenance and repair)
to the heating, ventilating, and air conditioning units serving the Premises
become necessary during the first ninety (90) days commencing with the
commencement of the term of the lease, then Landlord shall make such major
repairs and replacements at its sole cost and expense.
Subject to the provisions of paragraph 17, Landlord shall keep and
maintain the roof, structural elements, building foundations, and exterior
walls of the buildings constituting the Project and Common Area in good order
and repair. Tenant waives all rights under and benefits of California Civil
Code Sections 1932(1), 1941, and 1942 and under any similar law, statute or
ordinance now or hereafter in effect. The cost of the repairs and
maintenance which are the obligation of Landlord hereunder, including without
limitation, maintenance contracts and supplies, materials, equipment and
tools used in such repairs and maintenance shall be a common area charge and
Tenant shall pay its percentage share of such costs to Landlord as provided
in paragraph 16; provided, however, that if any repairs or maintenance is
required because of an act or omission of Tenant, or its agents, employees or
invitees, Tenant shall pay to Landlord upon demand the full cost of such
repairs or maintenance.
6
10. LIENS. Tenant shall keep the Premises and the Project free from any
liens arising out of any work performed, materials furnished or obligations
incurred by Tenant, its agents, employees or contractors. Upon Tenant's
receipt of a preliminary twenty (20) day notice filed by a claimant pursuant
to California Civil Code Section 3097, Tenant shall immediately provide
Landlord with a copy of such notice. Should any lien be recorded against the
Project, Tenant shall give immediate notice of such lien to Landlord. In the
event that Tenant shall not, within ten (10) days following the imposition of
such lien, cause the same to be released of record, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All sums
paid by Landlord for such purpose, and all expenses (including attorneys'
fees) incurred by it in connection therewith, shall be payable to Landlord by
Tenant on demand with interest at the rate of twelve percent (12%) per annum
or the maximum rate permitted by law, whichever is less. Landlord shall have
the right at all times to post and keep posted on the Premises any notices
permitted or required by law, or which Landlord shall deem proper for the
protection of Landlord, the Premises and the Project and any other party
having an interest therein, from mechanics' and materialmen's liens and like
liens. Tenant shall give Landlord at least fifteen (15) days prior notice of
the date of commencement of any construction on the Premises in order to
permit the posting of such notices. In the event Tenant is required to post
an improvement bond with a public agency in connection with any work
performed by Tenant on or to the Premises, Tenant shall include Landlord as
an additional obligee.
11. INSURANCE. Tenant, at its sole cost and expense, shall keep in force
during the term (i) commercial general liability and property damage
insurance with a combined single limit of at least $2,000,000 per occurrence
insuring against personal or bodily injury to or death of persons occurring
in, on or about the Premises or Project and any and all liability of the
insureds with respect to the Premises or arising out of Tenant's maintenance,
use or occupancy of the Premises and all areas appurtenant thereto, (ii)
direct physical loss-special insurance covering the leasehold improvements in
the Premises and all of Tenant's equipment, trade fixtures, appliances,
furniture, furnishings, and personal property from time to time located in,
on or about the Premises, with coverage in the amount of the full replacement
cost thereof, and (iii) Worker's Compensation Insurance as required by law,
together with employer's liability coverage with a limit of not less than
$1,000,000 for bodily injury for each accident and for bodily injury by
disease for each employee. Tenant's commercial general liability and
property damage insurance and Tenant's Workers Compensation Insurance shall
be endorsed to provide that said insurance shall not be canceled or reduced
except upon at least thirty (30) days prior written notice to Landlord.
Further, Tenant's commercial general liability and property damage insurance
shall be primary and shall be endorsed to provide that Landlord and
▇▇▇▇▇▇▇▇▇▇ Management Corporation, and their respective partners, officers,
directors and employees and such other persons or entities as directed from
time to time by Landlord shall be named as additional insureds for all
liability using ISO Bureau Form CG20111185 (or a successor form) or such
other endorsement form reasonably acceptable to Landlord; shall contain a
severability of interest clause and a cross-liability endorsement; shall be
endorsed to provide that the limits and aggregates apply per location using
ISO Bureau Form CG25041185 (or a successor form) or such other endorsement
form reasonably acceptable to Landlord; and shall be issued by an
7
insurance company admitted to transact business in the State of California
and rated A+VIII or better in Best's Insurance Reports (or a successor
report). The deductibles for all insurance required to be maintained by
Tenant hereunder shall be satisfactory to Landlord. The commercial general
liability insurance carried by Tenant shall specifically insure the
performance by Tenant of the indemnification provisions set forth in
paragraph 18 of this lease provided, however, nothing contained in this
paragraph 11 shall be construed to limit the liability of Tenant under the
indemnification provisions set forth in said paragraph 18. If Landlord or
any of the additional insureds named on any of Tenant's insurance, have other
insurance which is applicable to the covered loss on a contributing, excess
or contingent basis, the amount of the Tenant's insurance company's liability
under the policy of insurance maintained by Tenant shall not be reduced by
the existence of such other insurance. Any insurance carried by Landlord or
any of the additional insureds named on Tenant's insurance policies shall be
excess and non-contributing with the insurance so provided by Tenant.
Tenant shall, prior to the commencement of the term and at least thirty
(30) days prior to any renewal date of any insurance policy required to be
maintained by Tenant pursuant to this paragraph, provide Landlord with a
completed Certificate of Insurance, using a form acceptable in Landlord's
reasonable judgment, attaching thereto copies of all endorsements required to
be provided by Tenant under this lease. Tenant agrees to increase the
coverage or otherwise comply with changes in connection with said commercial
general liability, property damage, direct physical loss and Worker's
Compensation Insurance as Landlord or Landlord's lender may from time to time
require.
Landlord shall obtain and keep in force a policy or policies of insurance
covering loss or damage to the Premises and Project, in the amount of the
full replacement value thereof, providing protection against those perils
included within the classification of "all risk" insurance, with increased
cost of reconstruction and contingent liability (including demolition), plus
a policy of rental income insurance in the amount of one hundred percent
(100%) of twelve (12) months' rent (including sums paid as additional rent)
and such other insurance as Landlord or Landlord's lender may from time to
time require. Landlord may, but shall not be obligated to, obtain flood
and/or earthquake insurance. Landlord shall have no liability to Tenant if
Landlord elects not to obtain flood and/or earthquake insurance. The cost of
all such insurance purchased by Landlord, plus any charges for deferred
payment of premiums and the amount of any deductible incurred upon any
covered loss within the Project, shall be common area charges and Tenant
shall pay to Landlord its percentage share of such costs as provided in
paragraph 16. If the cost of insurance is increased due to Tenant's use of
the Premises, then Tenant shall pay to Landlord upon demand the full cost of
such increase.
Landlord and Tenant hereby mutually waive any and all rights of recovery
against one another for real or personal property loss or damage occurring to
the Premises or the Project, or any part thereof, or to any personal property
therein, from perils insured against under fire and extended insurance and
any other property insurance policies existing for the benefit of the
respective parties so long as such insurance permits waiver of liability and
contains a waiver of subrogation without additional premiums.
8
If Tenant does not take out and maintain insurance as required pursuant to
this paragraph 11, Landlord may, but shall not be obligated to, take out the
necessary insurance and pay the premium therefor, and Tenant shall repay to
Landlord promptly on demand, as additional rent, the amount so paid. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all reasonable expenses (including attorney fees)
and damages which Landlord may sustain by reason of the failure of Tenant to
obtain and maintain such insurance, it being expressly declared that the
expenses and damages of Landlord shall not be limited to the amount of the
premiums thereon.
12. UTILITIES AND SERVICE. Tenant shall pay for all water, gas, light,
heat, power, electricity, telephone, trash pickup, sewer charges and all
other services supplied to or consumed on the Premises. In the event that
any service is not separately metered or billed to the Premises, the cost of
such utility service or other service shall be a common area charge and
Tenant shall pay its percentage share of such cost to Landlord as provided in
paragraph 16. In addition, the cost of all utilities and services furnished
by Landlord to the Common Area shall be a common area charge and Tenant shall
pay its percentage share of such cost to Landlord as provided in paragraph 16.
If Tenant's use of any such utility or service is materially in excess of
the average furnished to the other tenants of the Project, and such utility
or service is not separately metered, then Tenant shall pay to Landlord upon
demand, as additional rent, the full cost of such excess use, or Landlord may
cause such utility or service to be separately metered, in which case Tenant
shall pay the full cost of such utility or service and reimburse Landlord
upon demand for the cost of installing the separate meter.
Landlord shall not be liable for, and Tenant shall not be entitled to any
abatement or reduction of rent by reason of, the failure of any person or
entity to furnish any of the foregoing services when such failure is caused
by accident, breakage, repairs, strikes, lockouts or other labor disturbances
or labor disputes of any character, governmental moratoriums, regulations or
other governmental actions, or by any other cause, similar or dissimilar,
beyond the reasonable control of Landlord. In addition, Tenant shall not be
relieved from the performance of any covenant or agreement in this lease
because of any such failure, and no eviction of Tenant shall result from such
failure.
13. TAXES AND OTHER CHARGES. All real estate taxes and assessments and
other taxes, fees and charges of every kind or nature, foreseen or
unforeseen, which are levied, assessed or imposed upon Landlord and/or
against the Premises, building, Common Area or Project, or any part thereof
by any federal, state, county, regional, municipal or other governmental or
quasi-public authority, together with any increases therein for any reason,
shall be a common area charge and Tenant shall pay its percentage share of
such costs to Landlord as provided in paragraph 16. By way of illustration
and not limitation, "other taxes, fees and charges" as used herein include
any and all taxes payable by Landlord (other than state and federal personal
or corporate income taxes measured by the net income of Landlord from all
sources, and premium taxes) , whether or not now customary or within the
contemplation of the parties hereto, (i) upon, allocable to, or measured by
the rent payable hereunder, including, without limitation, any gross
9
income or excise tax levied by the local, state or federal government with
respect to the receipt of such rent, (ii) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises or any part thereof, (iii) upon or
measured by the value of Tenant's personal property or leasehold improvements
located in the Premises, (iv) upon this transaction or any document to which
Tenant is a party creating or transferring an interest or estate in the
Premises, (v) upon or with respect to vehicles, parking or the number of
persons employed in or about the Project, and (vi) any tax, license,
franchise fee or other imposition upon Landlord which is otherwise measured
by or based in whole or in part upon the Project or any portion thereof. If
Landlord contests any such tax, fee or charge, the reasonable cost and
expense incurred by Landlord thereby (including, but not limited to,
reasonable costs of attorneys and experts) shall also be common area charges
and Tenant shall pay its percentage share of such costs to Landlord as
provided in paragraph 16. In the event the Premises and any improvements
installed therein by Tenant or Landlord are valued by the assessor
disproportionately higher than those of other tenants in the building or
Project or in the event alterations or improvements are made to the Premises,
Tenant's percentage share of such taxes, assessments, fees and/or charges
shall be readjusted upward accordingly and Tenant agrees to pay such
readjusted share. Such determination shall be made by Landlord from the
respective valuations assigned in the assessor's work sheet or such other
information as may be reasonably available and Landlord's determination
thereof shall be conclusive.
Tenant agrees to pay, before delinquency, any and all taxes levied or
assessed during the term hereof upon Tenant's equipment, furniture, fixtures
and other personal property located in the Premises, including carpeting and
other property installed by Tenant notwithstanding that such carpeting or
other property has become a part of the Premises. If any of Tenant's
personal property shall be assessed with the Project, Tenant shall pay to
Landlord, as additional rent, the amount attributable to Tenant's personal
property within thirty (30) days after receipt of a written statement from
Landlord setting forth the amount of such taxes, assessments and public
charges attributable to Tenant's personal property.
14. ENTRY BY LANDLORD. Landlord reserves, and shall at all reasonable
times have the right, upon reasonable prior notice to Tenant, except in an
emergency, to enter the Premises (i) to inspect the Premises, (ii) to supply
services to be provided by Landlord hereunder, (iii) to show the Premises to
prospective purchasers, lenders or tenants and to put 'for sale' or 'for
lease' signs thereon, (iv) to post notices required or allowed by this lease
or by law, (v) to alter, improve or repair the Premises and any portion of
the Project, and (vi) to erect scaffolding and other necessary structures in
or through the Premises or the Project where reasonably required by the
character of the work to be performed. During Landlord's entry into the
Premises for any of the foregoing purposes, Landlord shall not unreasonably
interfere with Tenant's use of the Premises; provided, however, Landlord
shall not be liable in any manner for any inconvenience, disturbance, loss of
business, nuisance or other damage arising from Landlord's entry and acts
pursuant to this paragraph and Tenant shall not be entitled to an abatement
or reduction of rent if Landlord exercises any rights reserved in this
paragraph. For each of the foregoing purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, on and about
the Premises (excluding Tenant's vaults, safes and similar areas designated
in writing by Tenant in advance), and Landlord shall have the right to use
any and all means which Landlord
10
may deem proper to open said doors in an emergency in order to obtain entry
to the Premises. Any entry by Landlord to the Premises pursuant to this
paragraph shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into or a detainer of the Premises or an eviction,
actual or constructive, of Tenant from the Premises or any portion thereof.
15. COMMON AREA; PARKING. Subject to the terms and conditions of this
lease and such rules and regulations as Landlord may from time to time
prescribe, Tenant and Tenant's employees and invitees shall, in common with
other occupants of the Project, and their respective employees and invitees
and others entitled to the use thereof, have the nonexclusive right to use
the access roads, parking areas and facilities within the Project provided
and designated by Landlord for the general use and convenience of the
occupants of the Project which areas and facilities shall include, but not be
limited to, sidewalks, parking, refuse, landscape and plaza areas, roofs and
building exteriors, which areas and facilities are referred to herein as
"Common Area." This right shall terminate upon the termination of this lease.
Landlord reserves the right from time to time to make changes in the
shape, size, location, amount and extent of the Common Area. Landlord shall
also have the right at any time to change the name, number or designation by
which the Project is commonly known. Landlord further reserves the right to
promulgate such rules and regulations relating to the use of the Common Area,
and any part thereof, as Landlord may deem appropriate for the best interests
of the occupants of the Project. The rules and regulations shall be binding
upon Tenant upon delivery of a copy of them to Tenant and Tenant shall abide
by them and cooperate in their observance. Such rules and regulations may be
amended by Landlord from time to time, with or without advance notice.
Tenant shall have the nonexclusive use of sixty-nine (69) parking spaces
in the Common Area as designated from time to time by Landlord. During the
initial term of this lease, or any extension thereof, Landlord shall not
impose any charge on Tenant for the use of the parking spaces except for any
charges that are imposed by applicable governmental agencies having
jurisdiction for the use of such parking spaces. Landlord reserves the right
at its sole option to assign and label parking spaces, but it is specifically
agreed that Landlord is not responsible for policing any such parking spaces.
Tenant shall not at any time park or permit the parking of Tenant's trucks
or other vehicles, or the trucks or other vehicles of others, adjacent to
loading areas so as to interfere in any way with the use of such areas; nor
shall Tenant at any time park or permit the parking of Tenant's vehicles or
trucks, or the vehicles or trucks of Tenant's suppliers or others, in any
portion of the Common Area not designated by Landlord for such use by Tenant.
Tenant shall not park or permit any inoperative vehicle or equipment to be
parked on any portion of the Common Area.
Landlord shall operate, manage and maintain the Common Area. The manner
in which the Common Area shall be operated, managed and maintained and the
expenditures for such operation, management and maintenance shall be at the
sole discretion of Landlord. The reasonable cost of such maintenance,
operation and management of the Common Area, including but not limited to
landscaping, repair of paving, parking lots and sidewalks, security and
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exterminator services and salaries and employee benefits (including union
benefits) of on-site and accounting personnel engaged in such maintenance and
operations management, shall be a common area charge and Tenant shall pay to
Landlord its percentage share of such costs as provided in paragraph 16.
16. COMMON AREA CHARGES. Tenant shall pay to Landlord, as additional
rent, an amount equal to nineteen and seventy-five one hundredths percent
(19.75%) of the total common area charges as defined below. Tenant's
percentage share of common area charges is determined by the square footage
of the Premises (17,470 square feet) divided by the total square footage of
the Project (88,450 square feet). Tenant's percentage share of common area
charges shall be paid as follows:
Tenant's estimated monthly payment of common area charges payable by
Tenant during the calendar year in which the term commences is set forth in
paragraph 4 (b) of this lease. Prior to the commencement of each succeeding
calendar year of the term (or as soon as practicable thereafter), Landlord
shall deliver to Tenant a written estimate of Tenant's monthly payment of
common area charges. Tenant shall pay, as additional rent, on the first day
of each month during the term in accordance with paragraph 4 (b) of this
lease, its monthly share of common area charges as estimated by Landlord.
Within one hundred twenty (120) days of the end of each calendar year and of
the termination of this lease (or as soon as practicable thereafter) ,
Landlord shall deliver to Tenant a statement of actual common area charges
incurred for the preceding year. If such statement shows that Tenant has
paid less than its actual percentage then Tenant shall on demand pay to
Landlord the amount of such deficiency. If Tenant fails to pay such excess
amount due within ten (10) days after demand, Tenant shall pay an additional
ten percent (10%) of the amount due as a penalty. If such statement shows
that Tenant has paid more than its actual percentage share then Landlord
shall, at its option, promptly refund such excess to Tenant or credit the
amount thereof to the rent next becoming due from Tenant. Landlord reserves
the right to revise any estimate of common area charges if actual or
projected common area charges show an increase or decrease in excess of 10%
from any earlier estimate for the same period. In such event, Landlord shall
deliver the revised estimate to Tenant, together with an explanation of the
reasons therefor, and Tenant shall revise its payments accordingly.
Landlord's and Tenant's obligation with respect to adjustments at the end of
the term or earlier expiration of this lease shall survive such termination
or expiration.
"Common area charges," as used in this lease, shall include, but not be
limited to, (i) all items identified in paragraphs 8, 9, 11, 12, 13 and 15 as
being common area charges; (ii) amortization of such capital improvements
having a useful life greater than one year required to be made by Landlord to
the Common Area pursuant to this lease or that Landlord may have installed
for the purpose of reducing operating costs and/or to comply all laws, rules
and regulations of federal, state, county, municipal and other governmental
authorities now or hereinafter in effect (Tenant's share of any such capital
improvement shall equal Tenant's proportionate share of the fraction of the
cost of such capital improvement equal to the remaining term of the lease
over the useful life of such capital improvement and the determination of
what constitutes a capital improvement and the useful life thereof shall be
reasonably made by Landlord in accordance with generally accepted accounting
principles); (iii) salaries and
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employee benefits (including union benefits) of personnel engaged in the
operation and maintenance of the Project (or the building in which the
Premises are located) and payroll taxes applicable thereto; (iv) supplies,
materials, equipment and tools used or required in connection with the
operation and maintenance of the Project; (v) licenses, permits and
inspection fees; (vi) a reasonable reserve for repairs and replacement of
equipment used in the maintenance and operation of the Project; and (vii) all
other reasonable operating costs incurred by Landlord in maintaining and
operating the Project.
17. DAMAGE BY FIRE; CASUALTY. In the event the Premises are damaged by
any casualty which is covered under an insurance policy required to be
maintained by Landlord pursuant to paragraph 11, Landlord shall be entitled
to the use of all insurance proceeds and shall repair such damage as soon as
reasonably possible and this lease shall continue in full force and effect.
In the event the Premises are damaged by any casualty not covered under an
insurance policy required to be maintained pursuant to paragraph 11, Landlord
may, at Landlord's option, either (i) repair such damage, at Landlord's
expense, as soon as reasonably possible, in which event this lease shall
continue in full force and effect, or (ii) give written notice to Tenant
within thirty (30) days after the date of the occurrence of such damages of
Landlord's intention to cancel and terminate this lease as of the date of the
occurrence of the damages; provided, however, that if such damage is caused
by an act or omission of Tenant or its agent, servants or employees, then
Tenant shall repair such damage promptly at its sole cost and expense. In
the event Landlord elects to terminate this lease pursuant hereto, Tenant
shall have the right within ten (10) days after receipt of the required
notice to notify Landlord in writing of Tenant's intention to repair such
damage at Tenant's expense, without reimbursement from Landlord, in which
event this lease shall continue in full force and effect and Tenant shall
proceed to make such repairs as soon as reasonably possible. If Tenant does
not give such notice within the ten (10) day period, this lease shall be
cancelled and terminated as of the date of the occurrence of such damage.
Under no circumstances shall Landlord be required to repair any injury or
damage to (by fire or other cause), or to make any restoration or replacement
of, any of Tenant's personal property, trade fixtures or property leased from
third parties, whether or not the same is attached to the Premises.
If the Premises are totally destroyed during the term from any cause
(including any destruction required by any authorized public authority)
whether or not covered by the insurance required under paragraph 11, this
lease shall automatically terminate as of the date of such total destruction;
provided, however, that if the Premises can reasonably and lawfully be
repaired or restored within twelve (12) months of the date of destruction to
substantially the condition existing prior to such destruction and if the
proceeds of the insurance payable to the Landlord by reason of such
destruction are sufficient to pay the cost of such repair or restoration,
then the insurance proceeds shall be so applied, Landlord shall promptly
repair and restore the Premises and this lease shall continue, without
interruption, in full force and effect.
If Landlord is required or has elected to restore damage caused by a
casualty, regardless of whether or not such casualty is covered under an
insurance policy required to be maintained
13
by Landlord, Landlord shall give written notice to Tenant within thirty (30)
days of the date of the event of damage or destruction setting forth
Landlord's reasonable estimate of the period required to effect the repair.
If such period is in excess of one hundred eighty (180) days, then provided
Tenant is not in default hereunder and that the damage was not caused by
Tenant or its agents, invitees, or employees, Tenant shall have, within three
(3) days after the date of such notice, the right to terminate this lease by
written notice of such election delivered to Landlord within said three (3)
day period. Failure of Tenant to so notify Landlord within said three (3)
day period shall constitute Tenant's irrevocable election not to terminate
this lease. If Tenant gives written notice of termination within said three
(3) day period, then the lease shall automatically terminate as of the date
of such damage or destruction. If Tenant does not elect to terminate the
lease within said three (3) day period, the lease shall remain in full force
and effect, and Landlord shall repair the Premises in accordance with this
paragraph 17. If the Premises are totally destroyed during the last twelve
(12) months of the term, either party may cancel and terminate this lease as
of the date of occurrence of such damage by giving written notice to the
other party of such party's election to do so within thirty (30) days after
the occurrence of such damage.
If the Premises are partially or totally destroyed or damaged and Landlord
or Tenant repair them pursuant to this lease, the rent payable hereunder for
the period during which such damage and repair continues shall be abated only
in proportion to the square footage of the Premises rendered untenantable to
Tenant by such damage or destruction. Tenant shall have no claim against
Landlord for any damage, loss or expense suffered by reason of any such
damage, destruction, repair or restoration. The parties waive the provisions
of California Civil Code sections 1932(2) and 1933(4) (which provisions
permit the termination of a lease upon destruction of the leased premises),
and hereby agree that the provisions of this paragraph 17 shall govern in the
event of such destruction.
18. INDEMNIFICATION. Landlord shall not be liable to Tenant and Tenant
hereby waives all claims against Landlord for any injury to or death of any
person or damage to or destruction of property in or about the Premises or
the Project by or from any cause whatsoever except the failure of Landlord to
perform its obligations under this lease where such failure has persisted for
an unreasonable period of time after notice of such failure. Without
limiting the foregoing, Landlord shall not be liable to Tenant for any injury
to or death of any person or damages to or destruction of property by reason
of, or arising from, any latent defect in the Premises or Project or the act
or negligence of any other tenant of the Project. Tenant shall immediately
notify Landlord of any defect in the Premises or Project.
Except as to injury to persons or damage to property the principal cause
of which is the failure by Landlord to observe any of the terms and
conditions of this lease, Tenant shall hold Landlord harmless from and defend
Landlord against any claim, liability, loss, damage or expense (including
attorney fees) arising out of any injury to or death of any person or damage
to or destruction of property occurring in, on or about the Premises from any
cause whatsoever or on account of the use, condition, occupational safety or
occupancy of the Premises. Tenant shall further hold Landlord harmless from
and defend Landlord against any claim, liability, loss, damage or expense
(including reasonable attorney fees) arising (i) from Tenant's use of the
Premises or from the conduct of its business or from any activity or work
done, permitted or
14
suffered by Tenant or its agents or employees in or about the Premises or
Project, (ii) out of the failure of Tenant to observe or comply with Tenant's
obligation to observe and comply with laws or other requirements as set forth
in paragraph 7, (iii) by reason of Tenant's use, handling, storage, or
disposal of toxic or hazardous materials or waste, (iv) by reason of any
labor or service performed for, or materials used by or furnished to, Tenant
or any contractor engaged by Tenant with respect to the Premises, or (v) from
any other act, neglect, fault or omission of Tenant or its agents or
employees.
The provisions of this paragraph 18 shall survive the expiration or
earlier termination of this lease.
19. ASSIGNMENT AND SUBLETTING. Tenant shall not voluntarily assign,
encumber or otherwise transfer its interest in this lease or in the Premises,
or sublease all or any part of the Premises, or allow any other person or
entity to occupy or use all or any part of the Premises, without first
obtaining Landlord's written consent and otherwise complying with the
requirements of this paragraph 19. Any assignment, encumbrance or sublease
without Landlord's consent, shall constitute a default.
If Tenant desires to sublet or assign all or any portion of the Premises,
Tenant shall give Landlord written notice thereof, specifying the projected
commencement date of the proposed sublet or assignment (which date shall be
not less than thirty (30) days or more than ninety (90) days after the date
of such notice), the portions of the Premises proposed to be sublet or
assigned, and the identity of the proposed assignee or subtenant. Tenant
shall further provide Landlord with such other information concerning the
proposed assignee or subtenant as requested by Landlord. Any proposed
assignee or sublessee must agree to assume and agree to perform all the
covenants and conditions of Tenant under this lease, to the extent applicable
to the assigned or subleased premises. In the case of any proposed
assignment, or in the case of a proposed sublet of all of the Premises at a
time when Tenant has not occupied the Premises, or if the proposed sublet is
for the entire Premises for a sublet term ending within the last twelve (12)
months of the term of this lease, Landlord shall have the right, exercisable
by written notice to be delivered to Tenant within thirty (30) days of
receipt of Tenant's notice, to terminate this lease effective as of the date
specified in Tenant's notice as the proposed commencement date of the
assignment or sublease. If Landlord does not elect to terminate this lease
and if Landlord consents in writing to the proposed assignment or sublet,
Tenant shall be free to assign or sublet all or a portion of the Premises
subject to the following conditions: (i) any sublease shall be on the same
terms set forth in the notice given to Landlord; (ii) no sublease shall be
valid and no subtenant shall take possession of the sublet premises until an
executed counterpart of such sublease has been delivered to Landlord; (iii)
no subtenant shall have a further right to sublet; (iv) fifty percent (50%)
of any sums or other economic consideration received by Tenant as a result of
such assignment or sublet (except rental or other payments received which are
attributable to the amortization over the term of this lease of the cost of
leasehold improvements constructed for such assignees or subtenant, and
brokerage fees) whether denominated rentals or otherwise, which exceed, in
the aggregate, the total sums which Tenant is obligated to pay Landlord under
this lease (prorated to reflect obligations allocable to that portion of the
Premises subject to such sublease), shall be payable to Landlord as
additional rent under this lease without
15
affecting or reducing any other obligation of Tenant hereunder; and (v) no
sublet or assignment shall release Tenant of Tenant's obligation or alter the
primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. Tenant shall pay to
Landlord promptly upon demand as additional rent, Landlord's actual
attorneys' fees (not to exceed $500 if Tenant uses Landlord's standard form
of assignment, sublease, or consent) and other costs incurred for reviewing,
processing or documenting any requested assignment or sublease, whether or
not Landlord's consent is granted. Tenant shall not be entitled to assign
this lease or sublease all or any part of the Premises (and any attempt to do
so shall be voidable by Landlord) during any period in which Tenant is in
default under this lease.
If Tenant is a partnership, a withdrawal or change, voluntary or
involuntary or by operation of law, of any general partner or the dissolution
of the partnership shall be deemed an assignment of this lease subject to all
the conditions of this paragraph 19. If Tenant is a corporation, sale or
other transfer of a controlling percentage of the capital stock of Tenant
shall be an assignment of this lease subject to all the conditions of this
paragraph 19. The term "controlling percentage" means the ownership of, and
the right to vote, 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. This paragraph shall not apply if Tenant is a corporation
the stock of which is traded through an exchange. Notwithstanding anything
contained in this paragraph 19, Tenant may, without Landlord's prior written
consent and without triggering any recapture right on the part of Landlord,
sublet the Premises or assign the lease to a (i) subsidiary, affiliate,
division, or corporation controlled or under common control with Tenant, (ii)
a successor corporation related to Tenant by merger, consolidation, or other
reorganization, or (iii) a purchaser of all or substantially all of Tenant's
assets so long as Tenant provides evidence satisfactory to Landlord that
Tenant is the surviving entity, the net worth of the assignee or subtenant is
greater than or equal to the net worth of Tenant at the execution of this
lease, the use and occupancy of the Premises shall remain the same, and
Tenant remains fully liable under the lease.
The acceptance of rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or sublet shall not be deemed consent to any subsequent assignment
or sublet. In the event of default by any assignee of Tenant or any
successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting
remedies against such assignee or successor. Landlord may consent to
subsequent assignments or sublets of this lease or amendments or
modifications to this lease with assignees of Tenant, without notifying
Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under
this lease.
No interest of Tenant in this lease shall be assignable by operation of
law (including, without limitation, the transfer of this lease by testacy or
intestacy). Each of the following acts shall be considered an involuntary
assignment: (i) if Tenant is or becomes bankrupt or insolvent, makes an
assignment for the benefit of creditors or institutes a proceeding under the
Bankruptcy Act in which Tenant is the bankrupt; or, if Tenant is a
partnership or consists of more than one person or entity, if any partner of
the partnership or other person or entity is or becomes bankrupt
16
or insolvent, or makes an assignment for the benefit of creditors; (ii) if a
writ of attachment or execution is levied on this lease; or (iii) if, in any
proceeding or action to which Tenant is a party, a receiver is appointed with
authority to take possession of the Premises. An involuntary assignment
shall constitute a default by Tenant and Landlord shall have the right to
elect to terminate this lease, in which case this lease shall not be treated
as an asset of Tenant.
Tenant immediately and irrevocably assigns to Landlord, as security for
Tenant's obligations under this lease, all rent from any subletting of all or
a part of the Premises as permitted by this lease, and Landlord, as assignee
and as attorney-in-fact for Tenant, or a receiver of Tenant appointed on
Landlord's application, may collect such rent and apply it toward Tenant's
obligations under this lease; except that, until the occurrence of an act or
default by Tenant, Tenant shall have the right to collect such rent,, subject
to promptly forwarding to Landlord any portion thereof to which Landlord is
entitled pursuant to this paragraph 19.
20. DEFAULT. The occurrence of any of the following shall constitute a
default by Tenant: (i) failure of Tenant to pay any rent or other sum
payable hereunder within five (5) days of when due; (ii) abandonment of the
Premises (Tenant's failure to occupy and conduct business in the Premises for
fourteen (14) consecutive days shall be deemed an abandonment); or (iii)
failure of Tenant to perform any other term, covenant or condition of this
lease if the failure to perform is not cured within thirty (30) days after
notice thereof has been given to Tenant (provided that if such default cannot
reasonably be cured within thirty (30) days, Tenant shall not be in default
if Tenant commences to cure such failure to perform within the thirty (30)
day period and diligently and in good faith continues to cure the failure to
perform). The notice referred to in clause (iii) above shall specify the
failure to perform and the applicable lease provision and shall demand that
Tenant perform the provisions of this lease within the applicable period of
time. No notice shall be deemed a forfeiture or termination of this lease
unless Landlord so elects in the notice. No notice shall be required in the
event of abandonment or vacation of the Premises.
In addition to the above, the occurrence of any of the following events
shall also constitute a default by Tenant: (i) Tenant fails to pay its debts
as they become due or admits in writing its inability to pay its debts, or
makes a general assignment for the benefit of creditors (for purposes of
determining whether Tenant is not paying its debts as they become due, a debt
shall be deemed overdue upon the earliest to occur of the following: thirty
(30) days from the date a statement therefor has been rendered; the date on
which any action or proceeding therefor is commenced; or the date on which a
formal notice of default or demand has been sent); or (ii) any financial
statements given to Landlord by Tenant, any assignee of Tenant, subtenant of
Tenant, any guarantor of Tenant, or successor in interest of Tenant
(including, without limitation, any schedule of Tenant's aged accounts
payable) are materially false. At any time during the term of this lease
Landlord, at Landlord's option, shall have the right to receive from Tenant,
upon Landlord's request, a current annual balance sheet for Landlord's
review. If the balance sheet shows a negative net worth, Landlord may
terminate this lease by giving Tenant sixty (60) days prior written notice.
In the event of a default by Tenant, then Landlord, in addition to any
other rights and
17
remedies of Landlord at law or in equity, shall have the right either to
terminate Tenant's right to possession of the Premises (and thereby terminate
this lease) or, from time to time and without termination of this lease, to
relet the Premises or any part thereof for the account and in the name of
Tenant for such term and on such terms and conditions as Landlord in its sole
discretion may deem advisable, with the right to make alterations and repairs
to the Premises.
Should Landlord elect to keep this lease in full force and effect,
Landlord shall have the right to enforce all of Landlord's rights and
remedies under this lease, including but not limited to the right to recover
and to relet the Premises and such other rights and remedies as Landlord may
have under California Civil Code Section 1951.4 or successor Code section or
any other California statute. If Landlord relets the Premises, then Tenant
shall pay to Landlord, as soon as ascertained, the costs and expenses
incurred by Landlord in such reletting and in making alterations and repairs.
Rentals received by Landlord from such reletting shall be applied (i) to the
payment of any indebtedness due hereunder, other than basic rent and common
area charges, from Tenant to Landlord; (ii) to the payment of the cost of any
repairs necessary to return the Premises to good condition normal wear and
tear excepted, including the cost of alterations and the cost of storing any
of Tenant's property left on the Premises at the time of reletting; and (iii)
to the payment of basic rent or common area charges due and unpaid hereunder.
The residue, if any, shall be held by Landlord and applied in payment of
future rent or damages in the event of termination as the same may become due
and payable hereunder and the balance, if any at the end of the term of this
lease, shall be paid to Tenant. Should the basic rent and common area
charges received from time to time from such reletting during any month be
less than that agreed to be paid during that month by Tenant hereunder,
Tenant shall pay such deficiency to Landlord. Such deficiency shall be
calculated and paid monthly. No such reletting of the Premises by Landlord
shall be construed as an election on its part to terminate this lease unless
a notice of such intention is given to Tenant or unless the termination
hereof is decreed by a court of competent jurisdiction. Notwithstanding any
such reletting without termination, Landlord may at any time thereafter elect
to terminate this lease for such previous breach, provided it has not been
cured.
Should Landlord at any time terminate this lease for any breach, in
addition to any other remedy it may have, it shall have the immediate right
of entry and may remove all persons and property from the Premises and shall
have all the rights and remedies of a landlord provided. by California Civil
Code Section 1951.2 or any successor code section. Upon such termination, in
addition to all its other rights and remedies, Landlord shall be entitled to
recover from Tenant all damages it may incur by reason of such breach,
including the cost of recovering the Premises and including (i) the worth at
the time of award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant proves could have
been reasonably avoided; (iii) the worth at the time of the award of the
amount by which the unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; and (iv) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to
perform its obligations under this lease or which in the ordinary course of
events would be likely to result therefrom. The "worth at the time of award"
of the
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amounts referred to in (i) and (ii) above is computed by allowing interest at
the rate of twelve percent (12%) per annum. The "worth at the time of award"
of the amount referred to in (iii) above shall be 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%). Tenant waives the provisions of
Section 1179 of the California Code of Civil Procedure (which Section allows
Tenant to petition a court of competent jurisdiction for relief against
forfeiture of this lease). Property removed from the Premises may be stored
in a public or private warehouse or elsewhere at the sole cost and expense of
Tenant. In the event that Tenant shall not immediately pay the cost of
storage of such property after the same has been stored for a period of
thirty (30) days or more, Landlord may sell any or all thereof at a public or
private sale in such manner and at such times and places that Landlord, in
its sole discretion, may deem proper, without notice to or demand upon Tenant.
21. LANDLORD'S RIGHT TO CURE TENANT'S DEFAULT. Landlord, at any time
after Tenant commits a default, may, but shall not be obligated to, cure the
default at Tenant's cost. If Landlord at any time, by reason of Tenant's
default, pays any sum or does any act that requires the payment of any sum,
the sum paid by Landlord shall be due immediately from Tenant to Landlord and
shall bear interest at the rate of twelve percent (12%) per annum or the
maximum rate permitted by law, whichever is less, from the date the sum is
paid by Landlord until Landlord is reimbursed by Tenant. Amounts due
Landlord hereunder shall be additional rent.
22. EMINENT DOMAIN. If all or any part of the Premises shall be taken by
any public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this lease shall terminate as to any portion of
the Premises so taken or conveyed on the date when title vests in the
condemnor, and Landlord shall be entitled to any and all payments, income,
rent, award or any interest therein whatsoever which may be paid or made in
connection with such taking or conveyance. Tenant shall have no claim
against Landlord or otherwise for the value of any unexpired term of this
lease. Notwithstanding the foregoing, Tenant shall be entitled to any
compensation for depreciation to and cost of removal of Tenant's equipment
and fixtures and any compensation for its relocation expenses necessitated by
such taking, but in each case only to the extent the condemning authority
makes a separate award there for or specifically identifies a portion of the
award as being therefor. Each party waives the provisions of Section
1265.130 of the California code of Civil Procedure (which section allows
either party to petition the Superior Court to terminate this lease in the
event of a partial taking of the Premises).
If any action or proceeding is commenced for such taking of the Premises
or any portion thereof or of any other space in the Project, or if Landlord
is advised in writing by any entity or body having the right or power of
condemnation of its intention to condemn the Premises or any portion thereof
or of any other space in the Project, and Landlord shall decide to
discontinue the use and operation of the Project or decide to demolish, alter
or rebuild the Project, then Landlord shall have the right to terminate this
lease by giving Tenant written notice thereof within sixty (60) days of the
earlier of the date of Landlord's receipt of such notice of intention to
condemn or the commencement of said action or proceeding. Such termination
shall be effective as of the last day of the calendar month next following
the month in which such notice is given or the date on which title shall vest
in the condemnor, whichever occurs first.
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In the event of a partial taking, or conveyance in lieu thereof, of the
Premises and fifty percent (50%) or more of tie number of square feet in the
Premises are taken then Tenant may terminate this lease. Any election by
Tenant to so terminate shall be by written notice given to Landlord within
sixty (60) days from the date of such taking or conveyance and shall be
effective on the last day of the calendar month next following the month in
which such notice is given or the date on which title shall vest in the
condemnor, whichever occurs first.
If a portion of the Premises is taken by power of eminent domain or
conveyance in lieu thereof and neither Landlord nor Tenant terminates this
lease as provided above, then this lease shall continue in full force and
effect as to the part of the Premises not so taken or conveyed and all
payments of rent shall be apportioned as of the date of such taking or
conveyance so that thereafter the amounts to be paid by Tenant shall be in
the ratio that the area of the portion of the Premises not so taken bears to
the total area of the Premises prior to such taking.
23. NOTICE AND COVENANT TO SURRENDER. On the last day of the term or on
the effective date of any earlier termination, Tenant shall surrender to
Landlord the Premises and all of Tenant's improvements and alterations in
their condition existing as of the commencement of the term (normal wear and
tear excepted) with all originally painted interior walls washed or repainted
if marked or damaged, interior vinyl covered walls cleaned and repaired or
replaced if marked or damaged, all carpets shampooed and cleaned, the air
conditioning and heating system serviced and repaired by a reputable and
licensed service firm (unless Landlord has elected to maintain such system
pursuant to paragraph 9) and all floors cleaned and waxed; all to the
reasonable satisfaction of Landlord. On or prior to the last day of the term
or the effective date of any other earlier termination, Tenant shall remove
all of Tenant's personal property and trade fixtures, together with the
improvements or alterations that Tenant is obligated to remove pursuant to
the provisions of paragraph 8 (unless, prior to installation of such
alterations, Landlord has agreed in writing with Tenant that removal of such
alterations is not required pursuant to paragraph 8), from the Premises,
repair any damage caused by such removal, and restore such areas to the
condition that existed prior to the installation of such trade fixtures or
alterations in accordance with all applicable laws, statutes, building codes
and regulations in effect as of the date of such restoration. Any personal
property not removed shall be deemed abandoned. In addition, on or prior to
the expiration or earlier termination of this lease, Tenant shall remove, at
Tenant's sole cost and expense, all telephone, other communication, computer
and any other cabling and wiring of any sort installed in the space above the
suspended ceiling of the Premises or anywhere else in the Premises and shall
promptly repair any damage to the suspended ceiling, lights, light fixtures,
walls and any other part of the Premises resulting from such removal.
If the Premises are not surrendered as required in this paragraph, Tenant
shall indemnify Landlord against all loss, liability and expense (including
but not limited to, attorney fees) resulting from the failure by Tenant in so
surrendering the Premises, including, without limitation, any claims made by
any succeeding tenants. It is agreed between Landlord and Tenant that the
provisions of this paragraph shall survive termination of this lease.
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24. TENANT'S QUITCLAIM. At the expiration or earlier termination of this
lease, Tenant shall execute, acknowledge and deliver to Landlord, within ten
(10) days after written demand from Landlord to Tenant, any quitclaim deed or
other document required to remove the cloud or encumbrance created by this
lease from the real property of which the Premises are a part. This
obligation shall survive said expiration or termination.
25. HOLDING OVER. Any holding over after the expiration or termination of
this lease with the written consent of Landlord shall be construed to be a
tenancy from month to month at the monthly rent, as adjusted, in effect on
the date of such expiration or termination. All provisions of this lease,
except those pertaining to the term and any option to extend, shall apply to
the month to month tenancy. The provisions of this paragraph are in addition
to, and do not affect, Landlord's right of reentry or other rights hereunder
or provided by law.
If Tenant shall retain possession of the Premises or any part thereof
without Landlord's consent following the expiration or sooner termination of
this lease for any reason, then Tenant shall pay to Landlord for each day of
such retention one hundred twenty-five percent (125%) of the amount of the
daily rental in effect during the last month prior to the date of such
expiration or termination. Tenant shall also indemnify and hold Landlord
harmless from any loss, liability and expense (including, but not limited to,
attorneys fees) resulting from delay by Tenant in surrendering the Premises,
including without limitation any claims made by any succeeding tenant founded
on such delay. Acceptance of rent by Landlord following expiration or
termination shall not constitute a renewal of this lease, and nothing
contained in this paragraph shall waive Landlord's right of re-entry or any
other right. Tenant shall be only a tenant at sufferance, whether or not
Landlord accepts any rent from Tenant, while Tenant is holding over without
Landlord's written consent.
26. SUBORDINATION. In the event Landlord's title or leasehold interest is
now or hereafter encumbered in order to secure a loan to Landlord, Tenant
shall, at the request of Landlord or the lender, execute in writing an
agreement subordinating its rights under this lease to the lien of such
encumbrance, or, if so requested, agreeing that the lien of lender's
encumbrance shall be or remain subject and subordinate to the rights of
Tenant under this lease. Notwithstanding any such subordination, Tenant's
possession under this lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all amounts due hereunder and
otherwise observe and perform all provisions of this lease. In addition, if
in connection with any such loan the lender shall request reasonable
modifications of this lease as a condition to such financing, Tenant will not
unreasonably withhold, delay or defer its consent thereof, provided that such
modifications do not increase the obligations of Tenant hereunder or
materially adversely affect the leasehold interest hereby created or Tenant's
rights hereunder.
27. CERTIFICATE OF ESTOPPEL. Each party shall, within ten (10) calendar
days after request therefor, execute and deliver to the other party, in
recordable form, a certificate stating that the lease is unmodified and in
full force and effect, or in full force and effect as modified and stating
the modifications. The certificate shall also state the amount of the
monthly rent, the date to which monthly rent has been paid in advance, the
amount of the security deposit and/or prepaid monthly rent, and, if the
request is made by Landlord, shall include such other items as
21
Landlord or Landlord's lender may reasonably request. Failure to deliver
such certificate within such time shall constitute a conclusive
acknowledgment by the party failing to deliver the certificate that the lease
is in full force and effect and has not been modified except as may be
represented by the party requesting the certificate. Any such certificate
requested by Landlord may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Premises or Project. Further, within ten
(10) calendar days following written request made from time to time by
Landlord, Tenant shall furnish to Landlord current financial statements of
Tenant.
28. SALE BY LANDLORD. In the event the original Landlord hereunder, or
any successor owner of the Project or Premises, shall sell or convey the
Project or Premises, all liabilities and obligations on the part of the
original Landlord, or such successor owner, under this lease accruing
thereafter shall terminate, and thereupon all such liabilities and
obligations shall be binding upon the new owner. Tenant agrees to attorn to
such new owner and to look solely to such new owner for performance of any
and all such liabilities and obligations.
29. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest of
Landlord in the land and buildings in which the Premises are located (whether
such interest of Landlord is a fee title interest or a leasehold interest) is
encumbered by deed of trust and such interest is acquired by a lender or any
other third party through judicial foreclosure or by exercise of a power of
sale at private trustee's foreclosure sale, Tenant hereby agrees to release
Landlord of any obligation arising on or after any such foreclosure sale and
to attorn to the purchaser at any such foreclosure sale and to recognize such
purchaser as the Landlord under this lease.
30. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time,
but in no event earlier than thirty (30) days after written notice by Tenant
to Landlord and to the holder of any first mortgage or deed of trust covering
the Premises specifying wherein Landlord has failed to perform such
obligations; provided, however, that if the nature of Landlord's obligations
is such that more than thirty (30) days are required for performance, then
Landlord shall not be in default if Landlord commences performance within
such thirty (30) day period and thereafter diligently prosecutes the same to
completion.
If Landlord is in default of this lease, Tenant's sole remedy shall be to
institute suit against Landlord in a court of competent jurisdiction, and
Tenant shall have no right to offset any sums expended by Tenant as a result
of Landlord's default against future rent and other sums due and payable
pursuant to this lease. If Landlord is in default of this lease, and as a
consequence Tenant recovers a money judgment against Landlord, the judgment
shall be satisfied only out of the proceeds of sale received on execution of
the judgment and levy against the right, title and interest of Landlord in
the Project of which the Premises are a part, and out of rent or other income
from such real property receivable by Landlord or out of the consideration
received by Landlord from the sale or other disposition of all or any part of
Landlord's right, title and interest in the Project of which the Premises are
a part. Neither Landlord nor any of the partners comprising the partnership
designated as Landlord shall be personally liable for any deficiency.
22
31. CONSTRUCTION CHANGES. It is understood that the description of the
Premises and the location of ductwork, plumbing and other facilities therein
are subject to such changes as Landlord or Landlord's architect determines to
be desirable in the course of construction of the Premises and/or the
improvements constructed or being constructed therein, and no such changes or
any changes in plans for any other portions of the Project, shall affect this
lease or entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
32. MEASUREMENT OF PREMISES. Tenant understands and agrees that any
reference to square footage of the Premises is approximate only and includes
all interior partitions and columns, one-half of exterior walls, and one-half
of the partitions separating the Premises from the rest of the Project,
Tenant's proportionate share of the Common Area and, if applicable, covered
areas immediately outside the entry doors or loading docks. Tenant waives
any claim against Landlord regarding the accuracy of any such measurement and
agrees that there shall not be any adjustment in basic rent or common area
charges or other amounts payable hereunder by reason of inaccuracies in such
measurement.
33. ATTORNEY FEES. If either party commences an action against the other
party arising out of or in connection with this lease, the prevailing party
shall be entitled to have and recover from the losing party all expenses of
litigation, including, without limitation, travel expenses, attorney fees,
expert witness fees, trial and appellate court costs, and deposition and
transcript expenses. If either party becomes a party to any litigation
concerning this lease, or concerning the Premises or the Project, solely by
reason of any act or omission of the other party or its authorized
representatives, the party that causes the other party to become involved in
the litigation shall be liable to the other party for all expenses of
litigation, including, without limitation, travel expenses, attorney fees,
expert witness fees, trial and appellate court costs, and deposition and
transcript expenses.
34. SURRENDER. The voluntary or other surrender of this lease or the
Premises by Tenant, or a mutual cancellation of this lease, shall not work a
merger, and at the option of Landlord shall either terminate all or any
existing subleases or subtenancies or operate as an assignment to Landlord of
all or any such subleases or subtenancies.
35. WAIVER. No delay or omission in the exercise of any right or remedy
of Landlord on any default by Tenant shall impair such right or remedy or be
construed as a waiver. The receipt and acceptance by Landlord of delinquent
rent or other payments shall not constitute a waiver of any other default and
acceptance of partial payments shall not be construed as a waiver of the
balance of such payment due. No act or conduct of Landlord, including,
without limitation, the acceptance of keys to the Premises, shall constitute
an acceptance of the surrender of the Premises by Tenant before the
expiration of the term. Only a written notice from Landlord to Tenant shall
constitute acceptance of the surrender of the Premises and accomplish a
termination of this lease. Landlord's consent to or approval of any act by
Tenant requiring Landlord's consent or approval shall not be deemed to waive
or render unnecessary Landlord's consent to or approval of any subsequent act
by Tenant. Any waiver by Landlord of any default must be in writing and
shall not be a waiver of any other default concerning the same or any other
provision of this lease.
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36. EASEMENTS; AIRSPACE RIGHTS. Landlord reserves the right to alter the
boundaries of the Project and grant easements and dedicate for public use
portions of the Project without Tenant's consent, provided that no such grant
or dedication shall interfere with Tenant's use of the Premises or otherwise
cause Tenant to incur cost or expense. From time to time, and upon
Landlord's demand, Tenant shall execute, acknowledge and deliver to Landlord,
in accordance with Landlord's instructions, any and all documents,
instruments, maps or plats necessary to effectuate Tenant's covenants
hereunder.
This lease confers no rights either with regard to the subsurface of or
airspace above the land on which the Project is located or with regard to
airspace above the building of which the Premises are a part. Tenant agrees
that no diminution or shutting off of light or view by a structure which is
or may be erected (whether or not by Landlord) on property adjacent to the
building of which the Premises are a part or to property adjacent thereto,
shall in any way affect this lease, or entitle Tenant to any reduction of
rent, or result in any liability of Landlord to Tenant.
37. RULES AND REGULATIONS. Landlord shall have the right from time to
time to promulgate rules and regulations for the safety, care and cleanliness
of the Premises, the Project and the Common Area, or for the preservation of
good order. On delivery of a copy of such rules and regulations to Tenant,
Tenant shall comply with the rules and regulations, and a violation of any of
them shall constitute a default by Tenant under this lease. 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. Such rules and
regulations may be amended by Landlord from time to time with or without
advance notice.
38. NOTICES. All notices, demands, requests, consents and other
communications which may be given or are required to be given by either party
to the other shall be in writing and shall be sufficiently made and delivered
if personally served or if sent by United States first class mail, postage
prepaid. Prior to the commencement date, all such communications from
Landlord to Tenant shall be served or addressed to Tenant at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ on or after the commencement date all such
communications from Landlord to Tenant shall be addressed to Tenant at the
Premises. All such communications by Tenant to Landlord shall be sent to
Landlord at its offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. Either party may change its address by notifying the other
of such change. Each such communication shall be deemed received on the date
of the personal service or mailing thereof in the manner herein provided, as
the case may be.
39. NAME. Tenant shall not use the name of the Project for any purpose,
other than as the address of the business conducted by Tenant in the
Premises, without the prior written consent of Landlord.
40. GOVERNING LAW; SEVERABILITY. This lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this lease shall be held or rendered
invalid, unenforceable or ineffective for any reason whatsoever, all other
provisions hereof shall be and remain in full force and effect.
24
41. DEFINITIONS. As used in this lease, the following words and phrases
shall have the following meanings:
AUTHORIZED REPRESENTATIVE: any officer, agent, employee or
independent contractor retained or employed by either party, acting within
authority given him by that party.
ENCUMBRANCE: any deed of trust, mortgage or other written security
device or agreement affecting the Premises or the Project that constitutes
security for the payment of a debt or performance of an obligation, and the
note or obligation secured by such deed of trust, mortgage or other written
security device or agreement.
LEASE MONTH: the period of time determined by reference to the day of
the month in which the term commences and continuing to one day short of the
same numbered day in the next succeeding month; e.g., the tenth day of one
month to and including the ninth day in the next succeeding month.
LENDER: the beneficiary, mortgagee or other holder of an encumbrance,
as defined above.
LIEN: a charge imposed on the Premises by someone other than
Landlord, by which the Premises are made security-for the performance of an
act. Most of the liens referred to in this lease are mechanic's liens.
MAINTENANCE: repairs, replacement, repainting and cleaning.
MONTHLY RENT: the sum of the monthly payments of basic rent and
common area charges.
PERSON: one or more human beings, or legal entities or other
artificial persons, including, without limitation, partnerships,
corporations, trusts, estates, associations and any combination of human
being and legal entities.
PROVISION: any term, agreement, covenant, condition, clause,
qualification, restriction, reservation or other stipulation in the lease
that defines or otherwise controls, establishes or limits the performance
required or permitted by either party.
RENT: basic rent, common area charges, additional rent, and all other
amounts payable by Tenant to Landlord required by this lease or arising by
subsequent actions of the parties made pursuant to this lease. Words used in
any gender include other genders. If there be more than one Tenant, the
obligations of Tenant hereunder are joint and several. All provisions
whether covenants or conditions, on the part of Tenant shall be deemed to be
both covenants and conditions. The paragraph headings are for convenience of
reference only and shall have no effect upon the construction or
interpretation of any provision hereof.
42. TIME. Time is of the essence of this lease and of each and all of its
provisions.
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43. INTEREST ON PAST DUE OBLIGATIONS; LATE CHARGES. Any amount due from
Tenant to Landlord hereunder which is not paid when due shall bear interest
at the rate of ten percent (10%) per annum from when due until paid, unless
otherwise specifically provided herein, but the payment of such interest
shall not excuse or cure any default by Tenant under this lease. In
addition, Tenant acknowledges that late payment by Tenant to Landlord of
basic rent or common area charges or of any other amount due Landlord from
Tenant, will cause Landlord to incur costs not contemplated by this lease,
the exact amount of such costs being extremely difficult and impractical to
fix. Such costs include, without limitation, processing and accounting
charges, and late charges that may be imposed on Landlord, e.g., by the terms
of any encumbrance and note secured by any encumbrance covering the Premises.
Therefore, if any such payment due from Tenant is not received by Landlord
when due, Tenant shall pay to Landlord an additional sum of five percent (5%)
of the overdue payment as a late charge. The parties agree that this late
charge represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of late payment by Tenant. Acceptance of any late
charge shall not constitute a waiver of Tenant's default with respect to the
overdue amount, nor prevent Landlord from exercising any of the other rights
and remedies available to Landlord. No notice to Tenant of failure to pay
shall be required prior to the imposition of such interest and/or late
charge, and any notice period provided for in paragraph 20 shall not affect
the imposition of such interest and/or late charge. Any interest and late
charge imposed pursuant to this paragraph shall be and constitute additional
rent payable by Tenant to Landlord.
44. ENTIRE AGREEMENT. This lease, including any exhibits and attachments,
constitutes the entire agreement between Landlord and Tenant relative to the
Premises and this lease and the exhibits and attachments may be altered,
amended or revoked only by an instrument in writing signed by both Landlord
and Tenant. Landlord and Tenant agree hereby that all prior or
contemporaneous oral agreements between and among themselves or their agents
or representatives relative to the leasing of the Premises are merged in or
revoked by this lease.
45. CORPORATE AUTHORITY. If Tenant is a corporation, each individual
executing this lease on behalf of the corporation represents and warrants
that he is duly authorized to execute and deliver this lease on behalf of the
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation and that this lease is binding upon said
corporation in accordance with its terms. If Tenant is a corporation, Tenant
shall deliver to Landlord, within ten (10) days of the execution of this
lease, a copy of the resolution of the Board of Directors of Tenant
authorizing the execution of this lease and naming the officers that are
authorized to execute this lease on behalf of Tenant, which copy shall be
certified by Tenant's president or secretary as correct and in full force and
effect.
46. RECORDING. Neither Landlord nor Tenant shall record this lease or a
short form memorandum hereof without the consent of the other.
47. REAL ESTATE BROKERS. Each party represents and warrants to the other
party that it has not had dealings in any manner with any real estate broker,
finder or other person with respect to the Premises and the negotiation and
execution of this lease except ▇▇▇▇▇ & ▇▇▇▇▇ and CPS. Except as to
commissions and fees to be paid as provided in this paragraph, each party
26
shall indemnify and hold harmless the other party from all damage, loss,
liability and expense (including attorneys' fees and related costs) arising
out of or resulting from any claims for commissions or fees that may or have
been asserted against the other party by any broker, finder or other person
with whom Tenant or Landlord has or purportedly has dealt with in connection
with the Premises and the negotiation and execution of this lease. To the
extent agreed to between Landlord and ▇▇▇▇▇ & ▇▇▇▇▇ and CPS, Landlord shall
pay all broker leasing commissions to ▇▇▇▇▇ & ▇▇▇▇▇ and CPS incurred in
connection with the Premises and the negotiation and execution of this lease;
Landlord and Tenant agree that Landlord shall not be obligated to pay any
broker leasing commissions, consulting fees, finder fees or any other fees or
commissions arising out of or relating to any extended term of this lease or
to any expansion or relocation of the Premises at any time.
48. EXHIBITS AND ATTACHMENTS. All exhibits and attachments to this lease
are a part hereof.
49. ENVIRONMENTAL MATTERS.
(a) TENANT'S COVENANTS REGARDING HAZARDOUS MATERIALS.
(i) HAZARDOUS MATERIALS HANDLING. Tenant, its agents, invitees,
employees, contractors, sublessees, assigns and/or successors shall not use,
store, dispose, release or otherwise cause to be present or permit the use,
storage, disposal, release or presence of Hazardous Materials (as defined
below) on or about the Premises or Project. Notwithstanding the foregoing,
Tenant may use reasonable quantities of in connection with Tenant's
operations in the Premises; provided, however, that such Hazardous Materials
shall be used, stored, disposed, and transported in strict compliance with
all applicable Hazardous Materials Laws (as defined below). As used herein
"Hazardous Materials" shall mean any petroleum or petroleum by-products,
flammable explosives, asbestos, urea formaldehyde, radioactive materials or
waste and any "hazardous substance," "hazardous waste," "hazardous
materials," "toxic substance" or "toxic waste" as those terms are defined
under the provisions of the California Health and Safety Code and/or the
provisions of the Comprehensive Environmental Response, compensation and
Liability Act (42 U.S.C. Section 9601 ET SEQ.) as amended by the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C. Section 9601 ET SEQ.),
or any other hazardous or toxic substance, material or waste which is or
becomes regulated by any local governmental authority, the State of
California or any agency thereof, or the United States Government or any
agency thereof.
(ii) NOTICES. Tenant shall immediately notify Landlord in writing
of: (i) any enforcement, cleanup, removal or other governmental or regulatory
action instituted, completed or threatened pursuant to any law, regulation or
ordinance relating to the industrial hygiene, environmental protection or the
use, analysis, generation, manufacture, storage, presence, disposal or
transportation of any Hazardous Materials (collectively "Hazardous Materials
Laws"), (ii) any claim made or threatened by any person against Tenant, the
Premises, Project or buildings within the Project relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from or
claimed to result from any Hazardous Materials;
27
and (iii) any reports made to any environmental agency arising out of or in
connection with any Hazardous Materials in, on or removed from the Premises,
Project or buildings within the Project, including any complaints, notices,
warnings, reports or asserted violations in connection therewith. Tenant
shall also supply to Landlord as promptly as possible, and in any event
within five (5) business days after Tenant first receives or sends the same,
with copies of all claims, reports, complaints, notices, warnings or asserted
violations relating in any way to the Premises, Project or buildings within
the Project or Tenant's use thereof. Tenant shall promptly deliver to
Landlord copies of hazardous waste manifests reflecting the legal and proper
disposal of all Hazardous Materials removed from the Premises.
(b) INDEMNIFICATION OF LANDLORD. Tenant shall indemnify, defend (by
counsel acceptable to Landlord), protect, and hold Landlord, and each of
Landlord's partners, employees, agents, attorneys, successors and assigns,
free and harmless from and against any and all claims, liabilities,
penalties, forfeitures, losses or expenses (including attorneys' fees) for
death of or injury to any person or damage to any property whatsoever
(including water tables and atmosphere) arising from or caused in whole or in
part, directly or indirectly, by (i) the presence in, on, under or about the
Premises, Project or buildings within the Project or discharge in or from the
Premises, Project or buildings within the Project of any Hazardous Materials
to the extent such presence is due to the acts or omissions of Tenant or
Tenant's use, analysis, storage, transportation, disposal, release,
threatened release, discharge or generation of Hazardous Materials to, in,
on, under, about or from the Premises, Project or buildings within the
Project, or (ii) Tenant's failure to comply with any Hazardous Materials Laws
whether knowingly, unknowingly, intentionally or unintentionally. Tenant's
obligations hereunder shall include, without limitation, and whether
foreseeable or unforeseeable, all costs of any required or necessary repair,
cleanup or detoxification or decontamination of the Premises, Project or
buildings within the Project of Hazardous Materials to the extent such
actions are necessary due to the acts or omissions of Tenant, and the
preparation and implementation of any closure, remedial action or other
required plans in connection therewith. In addition, Tenant shall reimburse
Landlord for (i) losses in or reductions to rental income resulting from
Tenant's use, storage or disposal of Hazardous Materials, (ii) all costs of
refitting or other alterations to the Premises, Project or buildings within
the Project required as a result of Tenant's use, storage, or disposal of
Hazardous Materials including, without limitation, alterations required to
accommodate an alternate use of the Premises, Project or buildings within the
Project, and (iii) any diminution in the fair market value of the Premises,
Project or buildings within the Project caused by Tenant's use, storage, or
disposal of Hazardous Materials. For purposes of this paragraph 49, any acts
or omissions of Tenant, or by employees, agents, assignees, contractors or
subcontractors of Tenant or others acting for or on behalf of Tenant (whether
or not they are negligent, intentional, willful or unlawful) shall be
strictly attributable to Tenant.
(c) SURVIVAL. The provisions of this paragraph 49 shall survive the
expiration or earlier termination of the term of this lease.
50. SIGNAGE. Tenant shall not, without obtaining the prior written
consent of Landlord, install or attach any sign or advertising material on
any part of the outside of the
28
Premises, or on any part of the inside of the Premises which is visible from
the outside of the Premises, or in the halls, lobbies, windows or elevators
of the building in which the Premises are located or on or about any other
portion of the Common Area or Project. If Landlord consents to the
installation of any sign or other advertising material, the location, size,
design, color and other physical aspects thereof shall be subject to
Landlord's prior written approval and shall be in accordance with any sign
program applicable to the Project. In addition to any other requirements of
this paragraph 50, the installation of any sign or other advertising material
by or for Tenant must comply with all applicable laws, statutes,
requirements, rules, ordinances and any C.C. & R.'s or other similar
requirements. With respect to any permitted sign installed by or for Tenant,
Tenant shall maintain such sign or other advertising material in good
condition and repair and shall remove such sign or other advertising material
on the expiration or earlier termination of the term of this lease. The cost
of any permitted sign or advertising material and all costs associated with
the installation, maintenance and removal thereof shall be paid for solely by
Tenant. If Tenant fails to properly maintain or remove any permitted sign or
other advertising material, Landlord may do so at Tenant's expense. Any cost
incurred by Landlord in connection with such maintenance or removal shall be
deemed additional rent and shall be paid by Tenant to Landlord within ten
(10) days following notice from Landlord. Landlord may remove any
unpermitted sign or advertising material without notice to Tenant and the
cost of such removal shall be additional rent and shall be paid by Tenant
within ten (10) days following notice from Landlord. Landlord shall not be
liable to Tenant for any damage, loss or expense resulting from Landlord's
removal of any sign or advertising material in accordance with this paragraph
50. The provisions of this paragraph 50 shall survive the expiration or
earlier termination of this lease.
51. SUBMISSION OF LEASE. The submission of this lease to Tenant for
examination or signature by Tenant is not an offer to lease the Premises to
Tenant, nor an agreement by Landlord to reserve the Premises for Tenant.
Landlord will not be bound to Tenant until this lease has been duly executed
and delivered by both Landlord and Tenant.
52. TENANT IMPROVEMENTS. Improvements to the Premises shall be
constructed and installed in accordance with the plans and specifications,
and other terms and conditions, set forth in Exhibit C to this lease, the
contents of which is incorporated herein and made a part hereof by this
reference. The improvements shall be constructed and installed at the
expense of Landlord and/or Tenant as set forth in Exhibit C to this lease and
in each case, shall be performed in a diligent and workmanlike manner.
53. ADDITIONAL RENT. All costs, charges, fees, penalties, interest and
any other payments (including Tenant's reimbursement to Landlord of costs
incurred by Landlord) which Tenant is required to make to Landlord pursuant
to the terms and conditions of this lease and any amendments to this lease
shall be and constitute additional rent payable by Tenant to Landlord when
due as specified in this lease and any amendments hereto.
54. OPTION TO EXTEND TERM. Landlord grants to Tenant an option to extend
the term for a period of three (3) years (such extension is hereafter
referred to as the "Extended Term"). The Extended Term shall follow the
expiration of the initial term set forth in paragraph 2 (a) ("Initial Term").
All the provisions of this lease shall apply during the Extended Term except
for
29
the amount of the basic rent. The basic rent for the Extended Term shall be
adjusted to ninety-five percent (95%) of the market rate; provided that in no
event shall the basic rent for the Extended Term be less than the basic rent
in effect at the expiration of the Initial Term. The option is further
subject to the following terms and conditions:
(a) Tenant must deliver its irrevocable written notice of Tenant's
exercise of the option to Landlord not less than six (6) lease months, nor
more than twelve (12) lease months, prior to the expiration of the Initial
Term. Time is of the essence with respect to the time period during which
Tenant must deliver to Landlord its written notice of exercise and,
therefore, if Tenant fails to give Landlord its irrevocable written notice of
its exercise of the option within the applicable time period provided above,
then the option shall expire and be of no further force or effect.
(b) The parties shall have thirty (30) days from the date Landlord
receives Tenant's notice of exercise in which to agree on the amount
constituting the market rate. If Landlord and Tenant agree on the amount of
the market rate, they shall immediately execute an amendment to this lease
setting forth the expiration date of the Extended Term and the amount of the
basic rent to be paid by Tenant during the Extended Term. If Landlord and
Tenant are unable to agree on the amount of the market rate within such time
period, then the option shall be of no further effect and this lease shall
expire at the end of the Initial Term.
(c) As used herein, the "market rate" shall be the monthly rent (triple
net) then obtained for five (5) year fixed rate leases of comparable terms
for premises in the Project and in buildings and/or projects within the same
geographical area of similar types and identity, quality and location as the
Project.
(d) Common area charges shall continue to be determined and payable as
provided in paragraph 16 of this lease.
(e) Neither party shall have the right to have any court or other third
party determine the market rate or the basic rent. Tenant shall not assign
or otherwise transfer this option or any interest therein and any attempt to
do so shall render this option null and void. Tenant shall have no right to
extend the term beyond the Extended Term. If Tenant is in default under this
lease at the date of delivery of Tenant's notice of exercise to Landlord,
then such notice shall be of no effect and this lease shall expire at the and
of the Initial Term. If Tenant is in default under this lease on the last
day of the Initial Term, then Landlord may in its sole discretion elect to
have Tenant's exercise of the option be of no effect, in which case the lease
shall expire at the end of the Initial Term.
55. RIGHT OF FIRST NEGOTIATION. At such time, if any, during the term of
this lease as the premises located in the Project commonly known as ▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ consisting of approximately seventeen thousand four hundred
seventy (17,470) square feet becomes available for lease ("First Negotiation
Space"), Landlord shall give Tenant written notice of the terms and
conditions on which Landlord is willing to lease such space to Tenant
("Landlord's Notice"). Tenant shall have the right, within five (5) days
after the date of Landlord's Notice to give
30
Landlord written notice whether or not Tenant desires to lease the First
Negotiation Space on the terms and conditions set forth in Landlord's Notice.
Tenant's failure to give written notice of its desire to lease the First
Negotiation Space within said five (5) day period shall be deemed Tenant's
waiver of its right of first negotiation to lease the First Negotiation Space
on the terms and conditions set forth in Landlord's Notice. If Tenant gives
written notice that it desires to lease the First Negotiation Space on the
terms and conditions set forth in Landlord's Notice, then Landlord and Tenant
shall, within fifteen (15) days after Tenant delivers said notice, thereafter
execute an amendment to this lease that incorporates the First Negotiation
Space into the Premises and subjects the First Negotiation Space to the terms
and conditions of this lease. If Landlord and Tenant do not execute an
amendment to this lease within said fifteen (15) day period, then Tenant's
right of first negotiation with respect to the First Negotiation Space shall
be deemed terminated and Landlord shall have the right to market the First
Negotiation Space free and clear of any rights of Tenant hereunder. Tenant's
right of first negotiation with respect to the First Negotiation Space set
forth herein shall be subject to any and all existing rights of first
refusal, rights of first negotiation or other similar rights of other tenants
in the Project that exist as of the date of this lease.
31
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
lease on the date first above written.
LANDLORD:
Dated: MONTAGUE OAKS ASSOCIATES PHASE III,
a California limited partnership
By: 745 PROPERTY INVESTMENTS, a
Massachusetts voluntary trust,
a general partner
By: /s/ ▇▇▇▇▇▇ -------------
--------------------------------
Its: Property Manager
--------------------------------
By: ▇▇▇▇▇▇▇▇▇▇ GROUP (MONTAGUE), a
California general partnership,
a general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ as Trustee of the
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Inter Vivos Trust Agreement dated
February 17, 1982, a general partner
TENANT:
INTEGRATED SENSOR SOLUTIONS, a
California corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Its: VP Finance & Admin
--------------------------------
By:
--------------------------------
Its:
--------------------------------
32
EXHIBIT A
[Floor Plans]
Floor plans are representations only and may not be accurate in scale
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
33
EXHIBIT B
[Map]
34
EXHIBIT C
WORK LETTER AGREEMENT
This Work Letter Agreement (hereinafter "Exhibit C") is attached to and
forms a part of that certain lease ("Lease") by and between Montague Oaks
Associates Phase III, a California limited partnership ("Landlord"), and
Integrated Sensor Solutions, Inc., a California corporation ("Tenant"),
pursuant to which Landlord leases to Tenant those certain premises located at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and consisting of approximately
seventeen thousand four hundred seventy (17,470) square feet ("Premises").
All capitalized terms used herein shall have the meaning ascribed to them in
the Lease unless otherwise defined below. The Premises shall be improved in
accordance with the following:
1. EXISTING IMPROVEMENTS. Tenant accepts the Premises in their existing
condition and the improvements constructed therewith, and Tenant hereby
approves the same as installed, subject only to such changes as may
subsequently be agreed upon by Landlord and Tenant. Such improvements are
hereafter called "Existing Improvements."
2. TENANT IMPROVEMENTS. As used herein, "Tenant Improvements" shall
include those items and specifications shown on the Final construction
Drawings prepared in accordance with paragraph 3 below, including those
specifications (as appropriate) set forth and described in Exhibit C-1,
attached hereto, exclusive of Existing Improvements. Landlord shall
construct Tenant Improvements in accordance with the Final Construction
Drawings, Exhibit C-1 and the provisions of this Exhibit C. Unless otherwise
specifically agreed to by Landlord in writing, the installation, wiring,
maintenance and removal of furniture partition systems, telephone and other
communication systems, data cabling, alarm and/or security systems and any
other systems not specifically set forth on the Final Construction Drawings,
and all cost and expense associated therewith shall be the sole
responsibility of Tenant. In connection with the construction and
installation of the Tenant Improvements, Landlord or Landlord's general
contractor shall have no obligation to move any of Tenant's property located
in or about the Premises including, but not limited to, furniture, inventory
and trade fixtures, at the time of such construction and installation. If at
the time of construction and installation of the Tenant Improvements Tenant
has property located in or about the Premises that inhibits or prevents in
any way the construction and installation of the Tenant Improvements, Tenant
shall immediately, upon receipt of notification therefore from Landlord or
Landlord's general contractor, at Tenant's sole cost and expense, move such
property to another location within the Premises or, upon receipt of
Landlord's prior approval, to another location within the Project designated
by Landlord in Landlord's sole discretion; Tenant's failure to immediately
move such property upon receipt of notification herefore from Landlord or
Landlord's general contractor shall be deemed a Tenant caused delay subject
to the provisions of paragraph 6 of this Exhibit C. If at the time of
construction and installation of the Tenant Improvements Tenant has property
located in or about the Premises, Landlord and Landlord's general contractor
shall incur no liability to Tenant or any other party in the event such
property is damaged, destroyed or stolen during the construction and
installation of the Tenant Improvements.
35
3. TENANT IMPROVEMENT DESIGN SCHEDULE. The plans and specifications for
the Tenant Improvements and any other improvements shall be completed in
accordance with the following:
(a) Tenant shall approve preliminary floor plan layouts ("Preliminary
Floor Plans") prepared by Landlord by JUNE 8, 1994. The Preliminary Floor
Plans shall show all walls, doors, and other Tenant Improvements as desired
by Tenant in sufficient detail for Landlord's architect to prepare
architectural construction drawings and related documents ("Architectural
Construction Documents").
(b) Between JUNE 8, 1994 and JUNE 10, 1994, Landlord's architect and
Tenant's representative shall meet as needed to review and complete the final
details related to the Preliminary Floor Plans, so that on JUNE 10, 1994 the
Architectural Construction Documents are subject only to minor changes.
(c) No later than JUNE 10, 1994, Tenant shall have made the decisions
required and supplied to Landlord the information necessary for Landlord's
architect to complete the Architectural Construction Documents in enough
detail for Landlord's general contractor to bid the work, select
subcontractors and to proceed toward the design of electrical, mechanical and
any other requirements not included on the Architectural Construction
Documents. Upon Landlord's general contractor's selection of subcontractors,
Landlord's general contractor and subcontractors shall prepare design
specifications outlining in reasonable detail electrical, mechanical and any
other requirements not included on the Architectural Construction' Documents
("Electrical and Mechanical Drawings").
(d) Upon completion of the Architectural Construction Documents, Tenant
shall approve the same subject to changes, deletions or additions as provided
in paragraphs 4 and 5 of this Exhibit C.
(e) Tenant shall have decided upon carpet selection and all other color
and material specifications by JUNE 10, 1994.
(f) As used herein, "Final Construction Drawings" shall include the
City Ready Plans, as approved by the City, and any subsequent additions,
deletions or changes to the Tenant Improvements permitted or required
pursuant to paragraphs 4 and 5 of this Exhibit C.
4. TENANT IMPROVEMENT COST ESTIMATES. Within fourteen (14) days of
completion of the Electrical and Mechanical Drawings, Landlord shall prepare
and deliver to Tenant an improvement cost budget ("Improvement Cost Budget")
setting forth the Total Cost of Tenant's Improvements (as defined in
paragraph 5 (b) below). Within three (3) days after Tenant's receipt of the
Improvement Cost Budget, Tenant shall, in writing, approve or disapprove the
Improvement Cost Budget. If Tenant does not deliver to Landlord its written
approval or disapproval within the three (3) day period, Tenant will be
deemed to have approved the Improvement Cost Budget. If Tenant disapproves
of the Improvement Cost Budget and Landlord and Tenant are unable, within the
three (3) day period, to agree on mutually acceptable changes to the
Improvement Cost Budget, or if Tenant approves of the improvement Cost Budget
36
but does not deliver to Landlord, within three (3) days of its approval,
signed copies of the Improvement Cost Budget and Architectural Construction
Documents, then Landlord may terminate the Lease upon written notice to
Tenant. Upon Tenant's written approval of the Improvement Cost Budget (or in
the event Tenant is deemed to have approved the Improvement Cost Budget as
provided hereinabove) , the Total Cost of Tenant's Improvements set forth
therein shall be deemed a fixed price for the Tenant Improvements (said fixed
price shall be referred to herein as the "Tenant Improvement Fixed Cost").
The Tenant Improvement Fixed Cost shall be subject to adjustment for
increases in costs resulting from changes to the Tenant Improvements
requested or required pursuant to paragraphs 6 and 7 below. Landlord shall
not be obligated to commence construction of the Tenant Improvements until
the following has occurred: the Architectural Construction Documents and
Tenant Improvement Fixed Cost have been agreed to by Landlord and Tenant;
Tenant has indicated its approval of the Architectural Construction Documents
and Improvement Cost Budget by signing copies thereof; and Landlord has
executed a written authorization to proceed with construction with Landlord's
general contractor based on the agreed Architectural Construction Documents
and Tenant Improvement Fixed Cost.
5. TENANT IMPROVEMENT ALLOWANCE.
(a) Landlord agrees to grant to Tenant a Tenant Improvement Allowance
("Allowance") of Twenty-six Thousand Two Hundred Five Dollars ($26,205)
($1.50/SF x 17,470 SF) to be applied toward the "Total Cost of Tenant's
Improvements" (as defined below) to be installed in accordance with this
Exhibit C.
(b) As used herein, "Total Cost of Tenant's Improvements" shall
include: (i) the cost of Tenant Improvements and increases therein pursuant
to paragraphs 6 and 7 below, if any, and all demolition costs incurred in
connection with preparing the Premises for the installation of the Tenant
Improvements; (ii) the cost of overtime or special expenditures required to
obtain and install the Tenant Improvements by the proposed commencement date;
(iii) all costs related to change orders; (iv) all costs related to changes
required or requested by governmental authority; (v) permit fees and other
fees not previously paid by Landlord as part of shell costs; (vi) the cost of
consultants and engineers; (vii) an amount equal to the actual cost of
supervision, administration and on-site facilities and equipment necessary to
perform the work; (viii) an amount equal to 9% of the sum of items (i)
through (vii) above as and for the general contractor's overhead and profit;
and (ix) the cost of architects hired by Landlord.
(c) In the event that the Tenant Improvement Fixed Cost exceeds the
Allowance (the amount by which the Tenant Improvement Fixed Cost exceeds the
Allowance shall be referred to herein as the "Excess Cost") , Tenant shall
pay fifty percent (50%) of such Excess Cost to Landlord within five (5) days
of Tenant's approval of the Improvement Cost Budget and the remaining fifty
percent (50%) of the Excess Cost within. five (5) days of when Landlord
notifies Tenant that the Tenant Improvements are fifty percent (50%)
completed. Tenant's failure to make any payment of the Excess Cost when due,
or to make any payment with respect to change orders as set forth in
paragraph 6 of this Exhibit C, shall be deemed a default under the Lease and
the amount so delinquent shall be deemed additional rent and
37
Landlord may exercise all rights and remedies set forth in paragraph 20 of
the Lease; and in addition, Landlord may delay construction until such
payment is made and such delay shall be deemed a Tenant caused delay subject
to the provisions of paragraph 8 of this Exhibit C.
(d) In the event Tenant causes delays, or requests changes which cause
delays in construction of more then ninety (90) calendar days, then Landlord
shall not be obligated to grant to Tenant the Allowance, or any balance
remaining unused therein. In such case, Landlord shall thereafter have no
obligation to construct any Tenant Improvements for Tenant. Furthermore, the
cessation of Landlord's obligation to construct the Tenant Improvements as
permitted herein shall not affect Tenant's obligation to commence payments of
basic rent and common area charges or any other payments due Landlord under
the Lease. Tenant shall be entitled to no rent reduction or credit at any
time in the event that the Allowance or any portion thereof remains unused
for any reason whatsoever.
6. CHANGES BY TENANT. Tenant may request changes, deletions or additions
to the Tenant Improvements; provided, however, that the effectiveness of any
such requested change, deletion or addition shall be subject to written
approval by an authorized representative of Landlord and to obtaining any
required governmental permits or other approvals. If any such change,
deletion or addition increases the cost of construction and installation of
the Tenant improvements, Tenant shall immediately pay to Landlord the full
amount of such increase in the cost of construction and installation of the
Tenant Improvements. In no event shall work on any change, deletion or
addition requested pursuant to this paragraph 4 commence prior to (i)
Landlord and Tenant approving, in writing, such change, deletion or addition,
and (ii) Landlord's receipt from Tenant of payment of the full amount of the
increase in the cost of construction and installation of the Tenant
Improvements.
7. CHANGES BY AUTHORITY. Tenant agrees that if any change, deletion or
addition to any of the improvements proposed to be constructed or installed
is required by any governmental authority in connection with obtaining any
governmental permit or approval, or otherwise, then such change, deletion or
addition shall promptly be made at Tenant's expense and Tenant shall,
immediately upon receipt of Landlord's demand therefor, pay such expense to
Landlord. Failure to obtain any required governmental approval or permit for
the Tenant Improvements desired by Tenant shall in no way be cause for Tenant
to terminate the Lease.
8. DELAYS CAUSED BY TENANT. If the commencement of the term is delayed
due in any respect to Tenant's failure to meet the schedule set forth in
paragraph 3 above, or due to construction delays related to any changes
required by Tenant, or due to any other failures by Tenant to perform its
obligations under this Exhibit C or otherwise under the Lease, then any such
delays shall be deemed Tenant caused delays for purposes of determining the
commencement date and the term of the Lease.
9. PUNCH LIST. Within ten (10) business days after Tenant's occupancy of
the Premises, Landlord and Tenant shall conduct a walk-through inspection of
the Premises and shall jointly create a list of items ("Punch List") that
require completion or correction in order for the Premises to be acceptable.
Landlord shall commence to complete or correct the items as soon as
38
possible. If the parties do not conduct the walk-through and create the
Punch List within the ten (10) day period, Tenant shall be deemed to have
accepted the Premises and approved the construction. Nothing in this
paragraph 9 shall delay the commencement of the term or Tenant's obligation
to pay rent or to make other payments due Landlord under the Lease.
39
EXHIBIT D
HAZARDOUS LIQUIDS
Common Chem Amount Amount Where Disposal
Name Name Used in House Stored Procedure
-------------------------------------------------------------------------------
Acetone (CH)CO 10 gal/year 2 to 3 gal Assembly/ Evaporation
3 2 Test Area
lsopropyl- C H OH 10 gal/year 2 to 3 gal Assembly/
alcohol 3 7 Test Area
Methylethyl- 1 gal/year 1 gal Assembly/
ketone Test Area
Naphthelone C H 1 gal/year 1 gal Assembly/
10 8 Test Area
Toluene C H CH 1 gal/year 1 gal Assembly/
6 5 3 Test Area
Motor oil 4 gal/year 0 gal Assembly/
Test Area
All liquids are stored in the containers they are shipped and received in.
All containers are stored away from heat and/or open flame.
40
SUMMARY OF LEASE
1. DATE OF LEASE: June 2, 1994
2. LANDLORD: Montague Oaks Associates Phase III
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3. TENANT: Integrated Sensor Solutions, Inc.,
a California corporation
4. PREMISES: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇
5. SQUARE FEET: 17,470
6. PERMITTED USE: General office, research and
development and final assembly and
test of components
7. TERM: Five (5) years
(a) SCHEDULED COMMENCEMENT DATE: July 1, 1994
(b) SCHEDULED EXPIRATION DATE: June 30, 1999
8. RENT:
(a) BASIC RENT: Lease Months Basic Rent
------------ ----------
1 0
2 - 11 $8,385.60
12 0
13 - 24 $10,482.00
25 - 36 $11,704.90
37 - 48 $13,102.50
49 - 60 $13,626.60
(b) TENANT'S ESTIMATED SHARE OF COMMON AREA CHARGES: $2,550.62
9. SECURITY DEPOSIT: $11,181.00
10. PARKING SPACES PROVIDED: 69
11. OTHER IMPORTANT PROVISIONS: Advance Rent
Option to Extend
THIS SUMMARY OF LEASE IS INTENDED TO SUMMARIZE CERTAIN KEY PROVISIONS IN THE
ATTACHED LEASE. IN THE EVENT OF ANY CONFLICT OR
41
INCONSISTENCY BETWEEN THE PROVISIONS OF THIS SUMMARY AND THE LEASE, THE
PROVISIONS OF THE LEASE SHALL GOVERN.
42
FIRST AMENDMENT TO LEASE
This First Amendment to Lease ("First Amendment") is made and entered into
as of June 23, 1994, by and between MONTAGUE OAKS ASSOCIATES PHASE III, a
California limited partnership ("Landlord"), and INTEGRATED SENSOR SOLUTIONS,
INC., a California corporation ("Tenant").
RECITALS
A. Pursuant to that certain Lease dated June 2, 1994 ("Lease"), Tenant
leased from Landlord approximately seventeen thousand four hundred seventy
(17,470) square feet of space in that certain building commonly known as ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, more particularly described in the
Lease (the "Premises").
B. Landlord and Tenant desire to amend the Lease to provide for early
occupancy of the Premises by Tenant prior to Landlord's completion of
construction of the Tenant Improvements in the Premises and to establish the
date of commencement of the term of the Lease. Capitalized terms used in this
First Amendment shall have the meanings ascribed to such terms in the Lease,
unless otherwise defined herein.
NOW, THEREFORE, the parties agree as follows:
1. EARLY OCCUPANCY. Tenant may occupy the Premises prior to the
scheduled commencement date of July 1, 1994 ("Scheduled Commencement Date");
provided, however, Tenant may not occupy the Premises any earlier than June 24,
1994 (any such early occupancy prior to the Scheduled Commencement Date shall
hereafter be referred to as the "Early Occupancy Period"). If Tenant occupies
the Premises during the Early Occupancy Period, the term of the Lease shall not
commence nor shall basic rent or other items of additional rent commence to be
due or payable by Tenant to Landlord, but such early occupancy shall otherwise
be subject to all of the terms and conditions of this Lease.
2. FIXED COMMENCEMENT DATE. Notwithstanding anything contained in
Paragraphs 2 and 3 of the Lease, possession of the Premises shall be deemed to
have been tendered and the term of the Lease shall commence on July 1, 1994,
regardless of whether Landlord has completed Landlord's work as specified in
Exhibit C.
3. PERFORMANCE OF TENANT IMPROVEMENT WORK. Tenant acknowledges that
Landlord will continue to perform Landlord's work as specified in Exhibit C
during the Early Occupancy Period and after the commencement date of the term
and that Tenant's business and occupancy of the Premises may be disrupted by the
performance of such work. Landlord shall have no liability to Tenant for
interruption of Tenant's business or occupancy due to Landlord's performance of
the work specified in Exhibit C during the Early Occupancy Period or after the
commencement date of the term. Tenant hereby waives any and all claims against
Landlord for any loss or damage arising out of interruption of Tenant's business
or occupancy during the Early Occupancy Period or after the commencement date of
the term as a result of such work. During the Early
Occupancy Period and thereafter while Landlord is performing Landlord's work
pursuant to Exhibit C, Tenant shall conduct its operations in the Premises in
a manner that will not hinder or delay Landlord in completing its work.
4. INSURANCE CERTIFICATE. Prior to occupancy of the Premises during the
Early Occupancy Period, Tenant shall deliver to Landlord the certificate of
insurance required by Paragraph 11 of the Lease.
5. EFFECT OF AMENDMENT. Except as modified herein, the terms and
provisions of the Lease shall remain unmodified and continue in full force and
effect. In the event of any conflict between the terms and provisions of this
First Amendment and the terms and provisions of the Lease, the terms and
provisions of this First Amendment shall govern and control the intent and
agreement of the parties.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date first set forth above.
LANDLORD:
MONTAGUE OAKS ASSOCIATES PHASE III,
a California limited partnership
By: 745 PROPERTY INVESTMENTS,
a Massachusetts voluntary trust,
a general partner
By /s/ ▇▇▇▇▇▇ -------------
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Its
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By: ▇▇▇▇▇▇▇▇▇▇ GROUP (MONTAGUE),
a California general partnership,
a general partner
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ as
Trustee of the ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ Inter Vivos Trust
Agreement dated February 17,
1982, a general partner
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TENANT:
INTEGRATED SENSOR SOLUTIONS, INC.,
a California corporation
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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Its
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By
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Its
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