EXHIBIT 10(a)
STANDARD FORM LEASE
PARTIES: This Lease, executed in duplicate at Cupertino, California, on
August 18, 1995, by and between ▇▇▇▇ & ▇▇▇▇ Developers, a California General
Partnership, and EIP Microwave, Inc., a Delaware Corporation, hereinafter
called respectively Lessor and Lessee, without regard to number or gender.
USE: WITNESSETH: That Lessor hereby Leases to Lessee, and Lessee hires from
Lessor, for the purpose of conducting therein office, research and
development, light manufacturing, and warehouse activities, and any other
legal activity, and for no other purpose without obtaining the prior written
consent of Lessor.
PREMISES: The real property with appurtenances as shown on Exhibit A.1 (the
"Premises") situated in the City of Milpitas, County of Santa ▇▇▇▇▇, State of
California, and more particularly described as follows:
Lessee's portion of the Premises is 20,331 square feet of building,
including all improvements thereto, as shown on Exhibit A.2, including
the right to use up to 71 unreserved parking spaces. The address for
the leased portion of the Premises is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇. The pro-rata share of the building is 56.90%.
TERM: The term shall be for thirty-six (36) months unless extended pursuant
to Section 35 of this Lease (the "Lease Term"), commencing on the 1st day of
November, 1995 (the "Commencement Date"), and ending on the 31st day of
October, 1998.
RENT: Base rent shall be payable in monthly installments as follows:
Base rent Estimated CAC Total
--------- ------------- -----
Months 1 to 36 $14,842 $3,995* $18,837
* Subject to adjustment per Common Area Charges Section below.
Base rent as scheduled above shall be payable in advance on or before the
first day of each calendar month during the Lease Term. The term "Rent," as
used herein, shall be deemed to be and to mean the base monthly rent and all
other sums required to be paid by Lessee pursuant to the terms of this Lease.
Rent shall be paid in lawful money of the United States of America, without
offset or deduction, and shall be paid to Lessor at such place or places as
may be designated from time to time by Lessor. Rent for any period less than
a calendar month shall be a pro rata portion of the monthly installment. Upon
execution of this Lease, Lessee shall deposit with Lessor the first month's
rent.
COMMON AREA CHARGES: Lessee shall pay to Lessor, as additional Rent, an
amount equal to 5.9% of the total common area charges of the Project and
56.90% of the total common area charges for the Premises as defined below
(the common area charges for the Project and the common area charges for the
Premises collectively referred to herein as ("CAC")). Lessee shall pay to
Lessor as Rent, on or before the first day of the term of this Lease and on
or before the first day of each calendar month thereafter during the term
hereof, subject to adjustment and reconciliation as provided hereinbelow, the
sum of Three Thousand Nine Hundred Ninety-Five Dollars ($3,995), said sum
representing Lessee's estimated monthly payment of Lessee's percentage share of
CAC It is understood and agreed that Lessee's obligation under this paragraph
will be prorated to reflect the Commencement Date and the end of the Lease
Term. Upon execution of this Lease, Lessee shall deposit with Lessor the
first month's estimated CAC. Lessee's CAC shall be computed as follows
Lessee's estimated monthly payment of CAC payable by Lessee during the
calendar year in which the Lease commences is set forth above. At or prior
to the commencement of each succeeding calendar year term (or as soon as
practical thereafter), Lessor shall provide Lessee with Lessee's estimated
monthly payment for CAC which Lessee shall pay as Rent. Within 120 days of
the end of the calendar year and of the termination of this Lease, Lessor
shall provide Lessee a statement of actual CAC incurred for the preceding
year or other applicable period in the case of a termination year. If such
statement shows that Lessee has paid less than its actual percentage, then
Lessee shall on demand pay to Lessor the amount of such deficiency. If such
statement shows that Lessee has paid more than its actual percentage, then
Lessor shall, at its option, promptly refund such excess to Lessee or credit
the amount thereof to the Rent next becoming due from Lessee. Lessor reserves
the right to revise any estimate of CAC if the actual or projected CAC show
an increase or decrease in excess of 10% from an earlier estimate for the
same period. In such event, Lessor shall provide a revised estimate to
Lessee, together with an explanation of the reasons therefor, and Lessee
shall revise its monthly CAC payments accordingly. Lessor's and Lessee's
obligation with respect to adjustments at the end of the Lease Term or
earlier termination of this Lease shall survive such termination or
expiration.
As used in this Lease, CAC shall include but are not limited to, (i) all
items identified in Paragraphs 5(b), 6, 9, 16 and 31; (ii) utility costs
related to the common areas of the ▇▇▇▇▇▇▇▇▇▇ Technology Park (the "Project"
as shown on Exhibit A.3) (iii) all costs and expenses including but not
limited to supplies, materials, equipment and tools used or required in
connection with the operation and maintenance of the Project; (iv) licenses,
permits and inspection fees; (v) all other costs incurred by Lessor in
maintaining and operating the Project; and (vi) an amount equal to five
percent (5%) of the actual expenditures for the aggregate of all CAC, as
compensation for Lessor's accounting and processing services. Lessee shall
have the right to audit or review the CAC applicable to this Lease annually.
SECURITY DEPOSIT: Lessee shall deposit with Lessor the sum of Fourteen
Thousand Eight Hundred Forty-Two Dollars ($14,842) (the "Security Deposit").
The Security Deposit shall be held by Lessor as security for the faithful
performance by Lessee of all of the terms, covenants, and conditions of this
Lease applicable to Lessee. If Lessee commits a default as provided for
herein, including but not limited to a default with respect to the provisions
contained herein relating to the condition of the Premises, Lessor may (but
shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any amount which Lessor may spend by
reason of default by Lessee. If any portion of the Security Deposit is so
used or applied, Lessee shall, within ten days after written demand therefor,
deposit cash with Lessor in an amount sufficient to restore the Security
Deposit to its original amount. Lessee's failure to do so shall be a default
by Lessee. Any attempt by Lessee to transfer or encumber its interest in the
Security Deposit shall be null and void. Upon execution of this Lease, Lessee
shall deposit with Lessor the Security Deposit.
LATE CHARGES: Lessee hereby acknowledges that a late payment made by Lessee
to Lessor of Rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited
to, processing and accounting charges, and late charges, which may be imposed
on Lessor according to the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Rent or any other sum due from
Lessee is not received by Lessor or Lessor's designee within ten (10) days
after such amount is due, Lessee shall pay to Lessor a late charge equal to
five (5%) percent of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Lessor
will incur by reason of late payments made by Lessee. Acceptance of such late
charges by Lessor shall in no event constitute a waiver of Lessee's default
with respect to such overdue amount, nor shall it prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
QUIET ENJOYMENT: Lessor covenants and agrees with Lessee that upon Lessee
paying Rent and performing its covenants and conditions under this Lease,
Lessee shall and may peaceably and quietly have, hold and enjoy the Premises
for the Lease Term, subject, however, to the rights reserved by Lessor
hereunder.
LESSEE EXPANSION: Lessor shall agree to cancel this Lease at any time during
the Lease Term upon Lessee signing a new lease with Lessor on terms and
conditions acceptable to Lessor, for an amount of space exceeding 40,000
square feet in a building that Lessor owns or builds that is available for
lease by Lessor, at the then existing fair market Rent.
IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. POSSESSION: Possession will be tendered and Rent shall commence on the
Commencement Date.
2. LESSEE'S IMPROVEMENTS: As a material inducement to the execution and
delivery of this Lease by Lessor, Lessee is leasing the portion of the
Premises in an "AS IS" physical condition and in an "AS IS" state of repair.
2.1 ACCEPTANCE OF PREMISES AND COVENANTS TO SURRENDER: Lessor represents that
the Premises are in good order and repair, and complies with all requirements
for occupancy as of the Commencement Date. Lessee agrees on the last day of
the Lease Term, or on the sooner termination of this Lease, to surrender the
Premises to Lessor in good condition and repair. Good condition and repair
shall not mean original condition, but shall mean that the Premises are in a
commercially acceptable condition suitable for occupancy by a reasonable
lessee. The interior walls of all office and warehouse areas, the floors of
all office and warehouse areas, all suspended ceilings and any carpeting are
to be cleaned and in good repair. Lessee also agrees to surrender unto Lessor
all alterations, additions, and improvements which may have been made in, to,
or on the Premises by Lessee, except that Lessee shall ascertain from Lessor,
within (30) days before the end of the Lease Term or earlier termination of
this Lease, whether Lessor desires to have the Premises or any part or parts
thereof restored to their condition as of the
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Commencement Date of this Lease; if Lessor shall so desire, then Lessee shall
restore said Premises or such part or parts thereof before the end of the
Lease Term or earlier termination of this Lease at Lessee's sole cost and
expense. Lessee, on or before the end of the Lease Term or sooner termination
of this Lease, shall remove all its personal property and trade fixtures from
the Premises, and all such property not so removed shall be deemed to be
abandoned by Lessee. Lessee shall reimburse Lessor for all disposition costs
incurred by Lessor relative to Lessee's abandoned property. If the Premises
are not surrendered at the end of the Lease Term or earlier termination of
this Lease, Lessee shall indemnify Lessor against loss or liability resulting
from any delay caused by Lessee in surrendering the Premises including,
without limitation, any claims made by any succeeding Lessee founded on such
delay.
3. USES PROHIBITED: Lessee shall not commit, or suffer to be committed, any
waste upon the Premises, or any nuisance, or other act or thing which may
disturb the quiet enjoyment of any other tenant in or around the buildings in
which the subject Premises are located or allow any sale by auction upon the
Premises, or allow the Premises to be used for any improper, immoral,
unlawful or objectionable purpose, or place any loads upon the floor, walls,
or ceiling which may endanger the structure, or use any machinery or
apparatus which will in any manner vibrate or shake the Premises or the
building of which it is a part, or place any harmful liquids in the drainage
system of the building. No waste materials or refuse shall be dumped upon or
permitted to remain upon any part of the Premises outside of the building
proper. No materials, supplies, equipment, finished products or semi-finished
products, raw materials or articles of any nature shall be stored upon or
permitted to remain on any portion of the Premises outside of the building
structure, unless approved by the local, state federal or other applicable
governing authority. Lessor consents to Lessee's use of materials which are
incidental to the normal, day-to-day operations of any office user, such as
copier fluids, cleaning materials, etc., but this does not relieve Lessee of
any of its obligations not to contaminate the Premises or related real
property or violated any hazardous materials laws.
4. ALTERATIONS AND ADDITIONS: Lessee shall not make, or suffer to be made,
any alteration or addition to said Premises, or any part thereof, without the
express, advance written consent of Lessor, any addition or alteration to
said Premises, except movable furniture and trade fixtures, shall become at
once a part of the realty and belong to Lessor at the end of the Lease Term
or earlier termination of this Lease Alterations and additions which are not
deemed as trade fixtures shall include HVAC systems, lighting systems,
electrical systems, partitioning, carpeting, or any other installation which
has become an integral part of the Premises. Lessee agrees that it will not
proceed to make such alterations or additions until all required government
permits have been obtained and after having obtained consent from Lessor to
do so, until five (5) days from the receipt of such consent, so that Lessor
may post appropriate notices to avoid any liability to contractors or
material suppliers for payment for Lessee's improvements. Lessee shall at all
times permit such notices to be posted and to remain posted until the
completion of work. At the end of the Lease Term or earlier termination of
this Lease, Lessee shall remove and shall be required to remove its special
tenant improvements and all related equipment installed by Lessee at or
during the Lease Term. Notwithstanding the above, Lessor agrees to allow any
reasonable alterations and improvements and will use its best efforts to
notify Lessee at the time of approval if such improvements or alterations are
to be removed at Lease Expiration or earlier termination of this Lease.
5. MAINTENANCE OF PREMISES:
(a) Lessee shall at its sole cost and expense keep and maintain the
interior of Lessee's portion of the Premises, including, but not limited
to, all lighting systems, temperature control systems and plumbing
systems, in good and sanitary order, condition and repair, including any
required replacements. Lessee shall maintain all wall surfaces and floor
coverings in good condition and repair, free of holes, gouges, or
defacements.
(b) Lessor shall keep and maintain in good condition and repair
including replacements, at Lessee's expense, based on a pro-rata share
of cost based on square footage or costs directly related to Lessee's
use of the Premises the following, which shall be included in the
monthly CAC:
1. The exterior of the building, any appurtenances and every part
thereof, including but not limited to, glazing, sidewalks, parking
areas, electrical systems, HVAC systems, roof membrane, and painting
of exterior walls.
2. The HVAC by a service contract with a licensed air conditioning and
heating contractor which contract shall provide for a minimum of
bi-monthly maintenance of all air conditioning and heating equipment
at the Leased Premises including HVAC repairs or replacements which
are either excluded from such service contract or any existing
equipment warranties.
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3. The landscaping by a landscape contractor to water, maintain, trim
and replace, when necessary, any shrubbery and landscaping at the
Premises.
4. The roof membrane by a service contract with a licensed reputable
roofing contractor which contract shall provide for a minimum of
semi-annual maintenance and repair of the roof at the Leased Premises,
including cleaning storm gutters and drains and removing debris and
trimming overhanging trees.
5. Extermination services.
6. Fire monitoring services.
(c) Lessee hereby waives any and all rights to make repairs at the
expense of Lessor as provided in Section 1942 of the Civil Code of the
State of California, and all rights provided for by Section 1941 of said
Civil Code.
(d) Lessor shall be responsible for and pay for the repair any
structural defects in the Premises including the roof structure (not
membrane), exterior walls and foundation during the Lease Term. Lessor
agrees that all such repairs will be done as expeditiously as possible
considering all building permits and any governmental requirements.
6. HAZARD INSURANCE: Lessee shall not use, or permit said Premises, or any
part thereof, to be used, for any purpose other than that for which said
Premises are hereby leased; and no use shall be made or permitted to be made
of the Premises, nor acts done, which may cause a cancellation of any
standard form insurance policy covering said building, or any part thereof,
nor shall Lessee sell or permit to be kept, used or sold, in or about said
Premises, any article which may be prohibited by a standard form fire
insurance policy. Lessee shall, at its sole cost and expense, comply with any
and all reasonable requirements, pertaining to said Premises, of any
insurance organization or company, necessary for the maintenance of
reasonable fire and general liability insurance, covering said building and
appurtenances. Lessor agrees to purchase and keep in force fire and extended
coverage insurance covering loss or damage to the Premises in amounts not to
exceed the full replacement cost of said Premises as determined by Lessor,
with proceeds payable to Lessor. Lessee acknowledges that the insurance
referenced above does not include coverage for Lessee's personal property. In
the event of a loss per the insurance provisions of this paragraph, Lessee
shall be responsible for deductibles up to a maximum of $5,000 per
occurrence. The Lessee agrees to pay to the Lessor as additional Rent, on
demand, the full cost of said insurance as evidenced by insurance ▇▇▇▇▇▇▇▇ to
the Lessor which shall be included in Lessee's monthly CAC. If said insurance
▇▇▇▇▇▇▇▇ cover the Premises, and Lessee does not occupy the entire Premises,
the insurance premiums and deductibles shall be allocated to the portion of
the Premises occupied by Lessee on a pro-rata square footage or other
equitable basis, as determined by Lessor. It is understood and agreed that
Lessee's obligation under this paragraph will be prorated to reflect the
Commencement Date and the end of the Lease Term.
Lessor and Lessee hereby waive any rights each may have against the other
related to any loss or damage caused to Lessor or Lessee as the case may be,
or to the Premises or its contents, and which may arise from any risk
generally covered by fire and extended coverage insurance. The parties shall
provide that their respective insurance policies insuring the property or the
personal property include a waiver of any right of subrogation which said
insurance company may have against Lessor or Lessee, as the case may be.
Lessor shall maintain in full force and effect, a policy of rental loss
insurance, in an amount equal to the amount of Rent payable by Lessee
commencing on the date of loss during the next ensuing one (1) year, as
reasonably determined by Lessor with proceeds payable to Lessor ("Loss of
Rents Insurance"). Lessee shall reimburse Lessor for the full cost of said
rental loss insurance coverage.
7. ABANDONMENT: Lessee shall not vacate or abandon the Premises at any time
during the Lease Term, and if Lessee shall abandon, vacate or surrender said
Premises, or be dispossessed by process of law, or otherwise, any personal
property belonging to Lessee and left on the Premises shall be deemed to be
abandoned, at the option of Lessor. Notwithstanding the above, the Premises
shall not be considered vacated or abandoned if Lessee maintains the Premises
in good condition, provides security and is not in default.
8. FREE FROM LIENS: Lessee shall keep the subject Premises and the property
in which the subject Premises are situated, free from any and all liens
including but not limited to liens arising out of any work performed,
materials furnished, or obligations incurred by Lessee. However, the Lessor
shall allow Lessee to contest a lien claim, so long as the claim is
discharged prior to any foreclosure proceeding being initiated against the
property and provided Lessee provides Lessor a bond if the lien exceeds
$5,000.
PAGE 4
9. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Lessee shall, at its sole cost
and expense, comply with all of the requirements of all local, municipal,
state and federal authorities now in force, or which may hereafter be in
force, pertaining to Lessee's use and occupancy of the said Premises, and
shall faithfully observe in the use of the Premises all local and municipal
ordinances and state and federal statutes now in force or which may hereafter
be in force.
10. LESSEE'S INSURANCE: Lessee, as a material part of the consideration to be
rendered to Lessor, hereby waives all claims against Lessor and Lessor's
Agents for damages to goods, wares and merchandise, and all other personal
property in, upon or about said Premises, and for injuries to persons in,
upon or about said Premises, from any cause arising at any time, and Lessee
will hold Lessor and Lessor's Agents exempt and harmless from any damage or
injury to any person, or to the goods, wares and merchandise and all other
personal property of any person, arising from the use or occupancy of the
Premises by Lessee, or from the failure of Lessee to keep the Premises in
good condition and repair, as herein provided. Lessee shall secure and keep in
force a standard policy of commercial general liability insurance and
property damage policy covering the Premises, including parking areas,
insuring the Lessee. A certificate of said policy naming Lessor as an
additional insured shall be delivered to Lessor and will have a combined
single limit for both bodily injury, death and property damage in an amount
not less than two million dollars ($2,000,000.00). The limits of said
insurance shall not, however, limit the liability of Lessee hereunder. Lessee
shall obtain a written obligation on the part of the insurer to notify Lessor
30 days in advance in writing before any cancellation thereof. Lessee shall
obtain, at Lessee's sole cost and expense, a policy of fire and extended
coverage insurance including coverage for direct physical loss special form,
and a sprinkler leakage endorsement, if applicable, insuring the personal
property of Lessee. The proceeds from any property damage policy shall be
payable to Lessee. Lessee shall, at its sole cost and expense, comply with all
of the insurance requirements of all local, municipal, state and federal
authorities now in force, or which may hereafter be in force, pertaining to
Lessee's use and occupancy of the said Premises.
11. ADVERTISEMENTS AND SIGNS: Lessee shall not place or permit to be placed,
in, upon or about the Premises any unusual or extraordinary signs, or any
signs not approved by the city, local, state, federal or other applicable
governing authority. Lessee shall not place, or permit to be placed upon the
Premises, any signs, advertisements or notices without the written consent of
the Lessor, and such consent shall not be unreasonably withheld. A sign so
placed on the Premises shall be so placed upon the understanding and
agreement that Lessee will remove same at the end of the Lease Term or
earlier termination of this Lease and repair any damage or injury to the
Premises caused thereby, and if not so removed by Lessee, then Lessor may
have the same removed at Lessee's expense.
12. UTILITIES: Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities supplied to the Premises. Any charges for sewer
usage or related fees shall be the obligation of Lessee and paid for by
Lessee. If any such services are not separately metered to Lessee, Lessee
shall pay a reasonable proportion of all charges which are jointly metered,
the determination to be made by Lessor acting reasonably and on any equitable
basis.
13. ATTORNEY'S FEES: In case suit should be brought for the possession of the
Premises, for the recovery of any sum due hereunder, or because of the breach
of any other covenant herein, the losing party shall pay to the prevailing
party reasonable attorney's fee which shall be deemed to have accrued on the
commencement of such action and shall be enforceable whether or not such
action is prosecuted to judgment.
14.1 DEFAULT: The occurrence of any of the following shall constitute a
default and breach of this Lease by Lessee: a) Any failure by Lessee to pay
Rent or to make any other payment required to be made by Lessee hereunder
when due if not cured within ten (10) days after written notice thereof by
Lessor to Lessee; b) The abandonment or vacation of the Premises by Lessee
except as provided in Section 7; c) A failure by Lessee to observe and
perform any other provision of this Lease to be observed or performed by
Lessee, where such failure continues for thirty days after written notice
thereof by Lessor to Lessee; provided, however, that if the nature of such
default is such that the same cannot be reasonably cured within such thirty
(30) day period, Lessee shall not be deemed to be in default if Lessee shall,
within such period, commence such cure and thereafter diligently prosecute
the same to completion; d) The making by Lessee of any general assignment for
the benefit of creditors, the filing by or against Lessee of a petition to
have Lessee adjudged a bankrupt or of a petition for reorganization or
arrangement under any law relating to bankruptcy, e) the appointment of a
trustee or receiver to take possession of substantially all of Lessee's
assets or Lessee's interest in this Lease, or the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease.
PAGE 5
14.2 SURRENDER OF LEASE: In the event of any such default by Lessee, then in
addition to any other remedies available to Lessor at law or in equity,
Lessor shall have the immediate option to terminate this Lease before the end
of the Lease Term and all rights of Lessee hereunder, by giving written
notice of such intention to terminate. In the event that Lessor terminates
this Lease due to a default of Lessee, then Lessor may recover from Lessee:
a) the worth at the time of award of any unpaid Rent which had been earned at
the time of such termination; plus b) the worth at the time of award of
unpaid Rent which would have been earned after termination until the time of
award exceeding the amount of such rental loss; plus c) the worth at the time
of award of the amount by which the unpaid Rent for the balance of the Lease
Tenn after the time of award exceeds the amount of such rental loss; plus d)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by Lessee's failure to perform his obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom; and e) at Lessor's election, such other amounts in addition to or
in lieu or the foregoing as may be permitted from time to time by applicable
California law. As used in (a), (b) and (c) above, the "worth at the time of
award" is computed by allowing interest at the rate of ▇▇▇▇▇ Fargo's prime
rate plus two (2%) percent per annum.
14.3 RIGHT OF ENTRY AND REMOVAL: In the event of any such default by Lessee,
Lessor shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere
at the cost of and for the account of Lessee.
14.4 ABANDONMENT: In the event of the vacation or abandonment, except as
provided in Section 7, of the Premises by Lessee or in the event that Lessor
shall elect to re-enter as provided in paragraph 14.3 above or shall take
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, and Lessor does not elect to terminate this Lease as
provided in paragraph 14.2 above, then Lessor may from time to time, without
terminating this Lease, either recover all Rent as it becomes due or relet
the Premises or any part thereof for such term or terms and at such rental
rates and upon such other terms and conditions as Lessor, in its sole
discretion, may deem advisable with the right to make alterations and repairs
to the Premises. In the event that Lessor elects to relet the Premises, then
Rent received by Lessor from such reletting shall be applied; first, to the
payment of any indebtedness other than Rent due hereunder from Lessee to
Lessor; second, to the payment of any cost of such reletting; third, to the
payment of the cost of any alterations and repairs to the Premises; fourth,
to the payment of Rent due and unpaid hereunder, and the residue, if any,
shall be held by Lessor and applied to the payment of future Rent as the same
may become due and payable hereunder. Should that portion of such Rent
received from such reletting during any month, which is applied by the
payment of Rent hereunder according to the application procedure outlined
above, be less than the Rent payable during that month by Lessee hereunder,
then Lessee shall pay such deficiency to Lessor immediately upon demand
therefor by Lessor. Such deficiency shall be calculated and paid monthly.
Lessee shall also pay to Lessor, as soon as ascertained, any costs and
expenses incurred by Lessor in such reletting or in making such alterations
and repairs not covered by the rentals received from such reletting.
14.5 NO IMPLIED TERMINATION: No re-entry or taking possession of the Premises
by Lessor pursuant to 14.3 or 14.4 of this Article 14 shall be construed as
an election to terminate this Lease unless a written notice of such intention
is given to Lessee or unless the termination thereof is decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination by
Lessor because of any default by Lessee, Lessor may at any time after such
reletting elect to terminate this Lease for any such default.
15. SURRENDER OF LEASE: The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work a merger, and shall,
at the option of Lessor, terminate all or any existing subleases or sub
tenancies, or may, at the option of Lessor, operate as an assignment to him
of any or all such subleases or sub tenancies.
16. TAXES: Lessee shall pay and discharge punctually and when the same shall
become due and payable without penalty, all real estate taxes, personal
property taxes, taxes based on vehicles utilizing parking areas in the
Premises, taxes computed or based on rental income (other than federal,
state and municipal net income taxes), environmental surcharges, privilege
taxes, excise taxes, business and occupation taxes, school fees or
surcharges, gross receipts taxes, sales and/or use taxes, employee taxes,
occupational license taxes, water and sewer taxes, assessments (including,
but not limited to, assessments for public improvements or benefit);
assessments for local improvement districts, and all other governmental
impositions and charges of every kind and nature whatsoever, regardless of
whether now customary or within the contemplation of the parties hereto and
regardless of whether resulting from increased rate and/or valuation, or
whether extraordinary or ordinary, general or special,
PAGE 6
unforeseen or foreseen, or similar or dissimilar to any of the foregoing (all
of the foregoing being hereinafter collectively called "Tax" or "Taxes")
which, at any time during the Lease Term, shall be applicable or against the
Premises, or shall become due and payable and a lien or charge upon the
Premises under or by virtue of any present or future laws, statutes,
ordinances, regulations, or other requirements of any governmental authority
whatsoever. The term "Environmental Surcharge" shall include any and all
expenses, taxes, charges or penalties imposed by the Federal Department of
Energy, Federal Environmental Protection Agency, the Federal Clean Air Act,
or any regulations promulgated thereunder, or any other local, state or
federal governmental agency or entity now or hereafter vested with the power
to impose taxes, assessments or other types of surcharges as a means of
controlling or abating environmental pollution or the use of energy in regard
to the use, operation or occupancy of the premises. The term "Tax" shall
include, without limitation, all taxes, assessments, levies, fees,
impositions or charges levied, imposed, assessed, measured, or based in any
manner whatsoever (i) in whole or in part on the Rent payable by Lessee under
this Lease, (ii) upon or with respect to the use, possession, occupancy,
leasing, operation or management of the Premises, (iii) upon this transaction
or any document to which Lessee is a party creating or transferring an
interest or an estate in the Premises, (iv) upon Lessee's business operations
conducted at the Premises, (v) upon, measured by or reasonably attributable
to the cost or value of Lessee's equipment, furniture, fixtures and other
personal property located on the Premises or the cost or value of any
leasehold improvements made in or to the Premises by or for Lessee,
regardless of whether title to such improvements shall be in Lessor or
Lessee, or (vi) in lieu of or equivalent to any Tax set forth in this Section
16. In the event any such Taxes are payable by Lessor and it shall not be
lawful for Lessee to reimburse Lessor for such Taxes, then the Rent payable
thereunder shall be increased to net Lessor the same net rent after
imposition of any such Tax upon Lessor as would have been payable to Lessor
prior to the imposition of any such Tax. It is the intention of the parties
that Lessor shall be free from all such Taxes and all other governmental
impositions and charges of every kind and nature whatsoever. However, nothing
contained in this Section 16 shall require Lessee to pay any Federal or State
income, franchise, estate, inheritance, succession, transfer or excess
profits tax imposed upon Lessor. If any general or special assessment is
levied and assessed against the Premises, Lessor agrees to use its best
reasonable efforts to cause the assessment to become a lien on the Premises
securing repayment of a bond sold to finance the improvements to which the
assessment relates which is payable in installments of principal and interest
over the maximum term allowed by law. It is understood and agreed that
Lessee's obligation under this paragraph will be prorated to reflect the
Commencement Date and the end of the Lease Term. It is further understood
that if Taxes cover the Premises and Lessee does not occupy the entire
Premises, the Taxes will be allocated to the portion of the Premises occupied
by Lessee based on a pro-rata square footage or other equitable basis. Taxes
billed by Lessor to Lessee shall be included in the monthly CAC.
Subject to any limitations or restrictions imposed by any deeds of trust or
mortgages now or hereafter covering or affecting the Premises, Lessee shall
have the right to contest or review the amount or validity of any Tax by
appropriate legal proceedings but which is not to be deemed or construed in
any way as relieving, modifying or extending Lessee's covenant to pay such
Tax at the time and in the manner as provided in this Section 16. However,
as a condition of Lessee's right to contest, if such contested Tax is not paid
before such contest and if the legal proceedings shall not operate to prevent
or stay the collection of the Tax so contested, Lessee shall, before
instituting any such proceeding, protect the Premises and the interest of
Lessor and of the beneficiary of a deed of trust or the mortgagee of a
mortgage affecting the Premises against any lien upon the Premises by a
surety bond, issued by an insurance company acceptable to Lessor and in an
amount equal to one and one-half (1 1/2) times the amount contested or, at
Lessor's option, the amount of the contested Tax and the interest and
penalties in connection therewith. Any contest as to the validity or amount
of any Tax, whether before or after payment, shall be made by Lessee in
Lessee's own name, or if required by law, in the name of Lessor or both Lessor
and Lessee. Lessee shall defend, indemnify and hold harmless Lessor from and
against any and all costs or expenses, including attorneys' fees, in
connection with any such proceedings brought by Lessee, whether in its own
name or not Lessee shall be entitled to retain any refund of any such
contested Tax and penalties or interest thereon which have been paid by
Lessee. Nothing contained herein shall be construed as affecting or limiting
Lessor's right to contest any Tax at Lessor's expense.
17. NOTICES: Unless otherwise provided for in this Lease, any and all written
notices or other communication (the "Communication") to be given in
connection with this Lease shall be given in writing and shall be given by
personal delivery, facsimile transmission or by mailing by registered or
certified mail with postage thereon or recognized overnight courier, fully
prepaid, in a sealed envelope addressed to the intended recipient as follows:
(a) to the Lessor at: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
PAGE 7
Attention: ▇▇▇▇ ▇. ▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
(b) to the Lessee at: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax No:
or such other addresses, facsimile number or individual as may be designated
by a Communication given by a party to the other parties as aforesaid. Any
Communication given by personal delivery shall be conclusively deemed to have
been given and received on a date it is so delivered at such address provided
that such date is a business day, otherwise on the first business day
following its receipt, and if given by registered or certified mail, on the
day on which delivery is made or refused or if given by recognized overnight
courier, on the first business day following deposit with such overnight
courier and if given by facsimile transmission, on the day on which it was
transmitted provided such day is a business day, failing which, on the next
business day thereafter.
18. ENTRY BY LESSOR: Lessee shall permit Lessor and its agents to enter into
and upon said Premises at all reasonable times using the minimum amount of
interference and inconvenience to Lessee and Lessee's business, subject to
any security regulations of Lessee, for the purpose of inspecting the same or
for the purpose of maintaining the building in which said Premises are
situated, or for the purpose of making repairs, alterations or additions to
any other portion of said building, including the erection and maintenance of
such scaffolding, canopies, fences and props as may be required, without any
rebate of Rent and without any liability to Lessee for any loss of occupation
or quiet enjoyment of the Premises; and shall permit Lessor and his agents,
at any time within ninety (90) days prior to the end of the Lease Term, to
place upon said Premises any usual or ordinary "For Sale" or "For Lease"
signs and exhibit the Premises to prospective tenants at reasonable hours.
19. DESTRUCTION OF PREMISES: In the event of a partial destruction of the
said Premises during the Lease Term from any cause which is covered by
Lessor's property insurance, Lessor shall forthwith repair the same, provided
such repairs can be made within ninety (90) days under the laws and
regulations of State, Federal, County, or Municipal authorities, but such
partial destruction shall in no way annul or void this Lease, except that
Lessee shall be entitled to a proportionate reduction of Rent while such
repairs are being made to the extent of payments received by Lessor under
Lessor's insurance coverage. With respect to any partial destruction which
Lessor is obligated to repair or may elect to repair under the terms of this
paragraph, the provision of Section 1932, Subdivision 2, and of Section 1933,
Subdivision 4, of the Civil Code of the State of California are waived by
Lessee. In the event that the building in which the subject Premises may be
situated is destroyed to an extent greater than thirty-three and one-third
(33 1/3%) of the replacement cost thereof, Lessor or lessee may, at its sole
option, elect to terminate this Lease, whether the subject Premises are
injured or not. A total destruction of the building in which the subject
Premises are situated shall terminate this Lease. Notwithstanding the above,
Lessor is only obligated to repair or rebuild to the extent of available
insurance proceeds including any deductible amount. Should Lessor determine
that insufficient or no insurance proceeds are available for repair or
reconstruction of Premises, Lessor, at its sole option, may terminate the
Lease. Lessee shall have the option of continuing this Lease by agreeing to
pay all repair costs to the subject Premises.
20. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease, or any
interest therein, and shall not sublet the said Premises or any part thereof,
or any right or privilege appurtenant thereto, or cause any other person or
entity (a bona fide subsidiary or affiliate of Lessee excepted) to occupy or
use the Premises, or any portion thereof, without the advance written consent
of Lessor. Any such assignment or subletting without such consent shall be
void, and shall, at the option of the Lessor, terminate this Lease. This Lease
shall not, or shall any interest therein, be assignable, as to the interest
of Lessee, by operation of law, without the written consent of Lessor. If
Lessee desires to assign its rights under this Lease or to sublet, all or a
portion of the subject Premises to a party other than a bona fide subsidiary
or affiliate of Lessee, Lessee shall first notify Lessor of the proposed
terms and conditions of such assignment or subletting. Lessor shall have the
right of first refusal to enter into a direct Lessor-lessee relationship with
such party under such proposed terms and conditions, in which event Lessee
shall be relieved of its obligations hereunder to the extent of the
Lessor-lessee relationship entered into between Lessor and such third party.
Notwithstanding the foregoing, Lessee may assign this Lease to a successor in
interest, whether by merger or acquisition, provided there is no substantial
reduction in the net worth of the resulting entity.
PAGE 8
21. CONDEMNATION: If any part of the Premises shall be taken for any public
or quasi-public use, under any statute or by right of eminent domain or
private purchase in lieu thereof, and a part thereof remains which is
susceptible of occupation hereunder, this Lease shall as to the part so
taken, terminate as of the date title vests in the condemnor or purchaser,
and the Rent payable hereunder shall be adjusted so that the Lessee shall be
required to pay for the remainder of the Lease Term only that portion of
Rent as the value of the part remaining. The rental adjustment resulting will
be computed at the same Rental rate for the remaining part not taken;
however, Lessor shall have the option to terminate this Lease as of the date
when title to the part so taken vests in the condemnor or purchaser. If all
of the Premises, or such part thereof be taken so that there does not remain
a portion susceptible for occupation hereunder, this Lease shall thereupon
terminate. If a part or all of the Premises be taken, all compensation awarded
upon such taking shall be payable to the Lessor.
22. EFFECTS OF CONVEYANCE: The term "Lessor" as used in this Lease, means
only the owner for the time being of the land and building constituting the
Premises, so that, in the event of any sale of said land or building, or in
the event of a Lease of said building, Lessor shall be and hereby is entirely
freed and relieved of all covenants and obligations of Lessor hereunder, and
it shall be deemed and construed, without further agreement between the
parties and the purchaser of any such sale, or the Lessor of the building,
that the purchaser or Lessee of the building has assumed and agreed to carry
out any and all covenants and obligations of the Lessor hereunder. If any
security is given by Lessee to secure the faithful performance of all or any
of the covenants of this Lease on the part of Lessee, Lessor may transfer and
deliver the security, as such, to the purchaser at any such sale of the
building, and thereupon the Lessor shall be discharged from any further
liability.
23. SUBORDINATION: This Lease, in the event Lessor notifies Lessee in
writing, shall be subordinate to any ground lease, deed of trust, or other
hypothecation for security now or hereafter placed upon the real property at
which the Premises are a part and to any and all advances made on the
security thereof and to renewals, modifications, replacements and extensions
thereof. Lessee agrees to promptly execute any documents which may be
required to effectuate such subordination.
24. WAIVER: The waiver by Lessor of any breach of any term, covenant or
condition, herein contained shall not be construed to be a waiver of such
term, covenant or condition or any subsequent breach of the same or any other
term, covenant or condition therein contained. The subsequent acceptance of
Rent hereunder by Lessor shall not be deemed to be a waiver of Lessee's
breach of any term, covenant, or condition of the Lease.
25. HOLDING OVER: Any holding over after the end of the Lease Term shall be
construed to be a hold over tenancy from month to month. In addition to the
liabilities and obligations provided for herein, including but not limited to
in Section 2.1, Lessee shall pay to Lessor monthly base rent equal to one and
one-half (1.5) times the monthly base rent installment due in the last month
of the Lease Term and all other additional rent and all other terms and
conditions of the Lease shall apply, so far as applicable. No holding over
shall be deemed or construed to exercise any option to extend or renew this
Lease in lieu of full and timely exercise of any such option as required
hereunder.
26. SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained
shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of all of the
parties hereto, and all of the parties hereto shall be jointly and severally
liable hereunder.
27. ESTOPPEL CERTIFICATES: Lessee shall at any time during the Lease Term,
upon not less than ten (10) days prior written notice from Lessor, execute
and deliver to Lessor a statement in writing certifying that, this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification) and the dates to which the Rent and other charges have
been paid in advance, if any, and acknowledging that there are not, to
Lessee's knowledge, any uncured defaults on the part of Lessor hereunder or
specifying such defaults if they are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Lessee's failure to deliver such a statement within such time shall
be conclusive upon the Lessee that (a) this Lease is in full force and
effect, without modification except as may be represented by Lessor, (b)
there are no uncured defaults in Lessor's performance.
28. TIME: Time is of the essence of the Lease.
29. CAPTIONS: The headings on titles to the paragraphs of this Lease are not
a part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof. This instrument contains all of the
agreements and conditions made
PAGE 9
between the parties hereto and may not be modified orally or in any other
manner than by an agreement in writing signed by all of the parties hereto or
their respective successors in interest.
30. PARTY NAMES: Landlord and Tenant may be used in various places in this
Lease as a substitute for Lessor and Lessee respectively.
31. EARTHQUAKE INSURANCE: As a condition of Lessor agreeing to waive the
requirement for earthquake insurance, Lessee agrees that it will pay, as
additional Rent, which shall be included in the monthly CAC, an amount not to
exceed seven thousand five hundred dollars ($7,500) per year for earthquake
insurance if Lessor desires to obtain some form of earthquake insurance in
the future, if and when available, on terms acceptable to Lessor.
32. HABITUAL DEFAULT: Notwithstanding anything to the contrary contained in
Section 14 herein, Lessor and Lessee agree that if Lessee shall have
defaulted in the payment of Rent for three or more times during any twelve
month period during the Lease Term, then such conduct shall, at the option of
the Lessor, represent a separate event of default which cannot be cured by
Lessee. Lessee acknowledges that the purpose of this provision is to prevent
repetitive defaults by the Lessee under the Lease, which constitute a
hardship to the Lessor and deprive the Lessor of the timely performance by
the Lessee hereunder.
33. HAZARDOUS MATERIALS
33.1 DEFINITIONS: As used herein, the following terms shall have the
following meaning:
a. The term "Hazardous Materials" shall mean (i) polychlorinated
biphenyls; (ii) radioactive materials and (iii) any chemical, material
or substance now or hereafter defined as or included in the definitions
of "hazardous substance" "hazardous water", "hazardous material",
"extremely hazardous waste", "restricted hazardous waste" under Section
25115, 25117 or 15122.7, or listed pursuant to Section 25140 of the
California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous
Waste Control Law), (ii) defined as "hazardous substance" under Section
25316 of the California Health and Safety Code, Division 20, Chapter 6.8
(▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substances Account Act), (iii)
defined as "hazardous material", "hazardous substance", or "hazardous
waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Materials Release, Response, Plans
and Inventory), (iv) defined as a "hazardous substance" under Section
25181 of the California Health and Safety Code, Division 201, Chapter
6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi)
asbestos, (vii) listed under Article 9 or defined as "hazardous" or
"extremely hazardous" pursuant to Article II of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (viii) designed
as "hazardous substance" pursuant to Section 311 of the Federal Water
Pollution Control Act, 33 U.S.C 1251 et seq. or listed pursuant to
Section 1004 of the Federal Water Pollution Control Act (33 U.S.C 1317),
(ix) defined as a "hazardous waste", pursuant to Section 1004 of the
Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et seq.,
(x) defined as "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Responsibility Compensations, and Liability
Act, 42 U.S.C. 9601 et seq., or (xi) regulated under the Toxic Substances
Control Act, 156 U.S.C. 2601 et seq.
b. The term "Hazardous Materials Laws" shall mean any local, state
and federal laws, rules, regulations, or ordinances relating to the use,
generation, transportation, analysis, manufacture, installation,
release, discharge, storage or disposal of Hazardous Material.
c. The term "Lessor's Agents" as used herein shall mean Lessor's
agents, representatives, employees, contractors, subcontractors,
directors, officers and partners.
d. The term "Lessee's Agents" as used herein shall mean Lessee's
agents, representatives, employees, contractors, subcontractors,
directors, officers, partners, invitees or any other person in or about
the Premises.
33.2 LESSEE'S RIGHT TO INVESTIGATE: Lessee shall be entitled to cause such
inspection, soils and ground water tests, and other evaluations to be made of
the Premises as Lessee deems necessary regarding (i) the presence and use
of Hazardous Materials in or about the Premises, and (ii) the potential for
exposure to Lessee's employees and other persons to any Hazardous Materials
used and stored by previous occupants in or about the Premises. Lessee shall
provide Lessor with copies of all inspections, tests and evaluations. Lessee
shall indemnify, defend and hold Lessor harmless from any cost, claim or
expense arising from such entry by Lessee or from the performance of any such
investigation by such Lessee.
33.3 LESSOR'S REPRESENTATIONS: Lessor hereby represents and warrants to the
best of Lessor's knowledge that the Premises
PAGE 10
are, as of the date of this Lease, and have been at all times in the past, in
compliance with all Hazardous Material Laws.
33.4 LESSEE'S OBLIGATION TO INDEMNIFY: Lessee, at its sole cost and expense,
shall idemnify, defend, protect and hold Lessor and Lessor's Agents
harmless from and against any and all cost or expenses, including those
described under subparagraphs i, ii and iii herein below set forth, arising
from or caused in whole or in part, directly or indirectly by:
a. Lessee's or Lessee's Agents' use, analysis, storage,
transportation, disposal, release, threatened release, discharge or
generation of Hazardous Material to, in, on, under, about or from the
Premises; or
b. Lessee's or Lessee's Agents failure to comply with Hazardous Material
laws, or
c. Any release of Hazardous Material to, in, on, under, about,
from or onto the Premises caused by Lessee or Lessee's Agents, except
ground water contamination from other parcels where the source is from
off the Premises not arising from or caused by Lessee or Lessee's Agents.
The cost and expenses indemnified against include, but are not limited to the
following:
i. Any and all claims, actions, suits, proceedings, losses, damages,
liabilities, deficiencies, forfeitures, penalties, fines, punitive
damages, cost or expenses;
ii. Any claim, action, suit or proceeding for personal injury (including
sickness, disease, or death), tangible or intangible property damage,
compensation for lost wages, business income, profits or other economic
loss, damage to the natural resources of the environment, nuisance,
pollution, contamination, leaks, spills, release or other adverse
effects on the environment;
iii. The cost of any repair, clean-up, treatment or detoxification of the
Premises necessary to bring the Premises into compliance with all
Hazardous Material Laws, including the preparation and implementation of
any closure, disposal, remedial action, or other actions with regard to
the Premises, and expenses (including, without limitation, reasonable
attorney's fees and consultants fees, investigation and laboratory fees,
court cost and litigation expenses).
33.5 LESSEE'S OBLIGATION TO REMEDIATE CONTAMINATION: Lessee shall, at its sole
cost and expense, promptly take any and all action necessary to remediate
contamination of the Premises by Hazardous Materials as herein defined to the
extent caused by the acts or omissions specifically referred to in clauses
(a) through (c) of Paragraph 33.4.
33.6 OBLIGATION TO NOTIFY: Lessor and Lessee shall each give written notice
to the other as soon as reasonably practical of (i) any communication
received from any governmental authority concerning Hazardous Material
which related to the Premises and (ii) any contamination of the Premises by
Hazardous Materials which constitutes a violation of any Hazardous Material
Laws.
33.7 SURVIVAL: The obligations of Lessee under this Section 33 shall survive
the Lease Term or earlier termination of this Lease.
33.8 CERTIFICATION AND CLOSURE: On or before the end of the Lease Term or
earlier termination of this Lease, Lessee shall deliver to Lessor a
certification executed by Lessee stating that, to the best of Lessee's
knowledge, there exists no violation of Hazardous Material Laws resulting
from Lessee's obligation in Paragraph 33. If pursuant to local ordinance, state
or federal law, Lessee is required, at the expiration of the Lease Term, to
submit a closure plan for the Premises to a local, state or federal agency,
then Lessee shall furnish to Lessor a copy of such plan.
33.9 PRIOR HAZARDOUS MATERIALS: Lessee shall have no obligation to clean up
or to hold Lessor or Lessor's Agents harmless with respect to, any Hazardous
Material or wastes discovered on the Premises which were not introduced
into, in, on, about, from or under the Premises during the Lease Term or
ground water contamination from other parcels where the source is from off
the Premises not arising from or caused by Lessee or Lessee's Agents.
34. BROKERS: Lessor and Lessee represent that they have not utilized or
contacted a real estate broker or finder with respect to this Lease other
than ▇▇▇▇▇ ▇▇▇▇▇▇ Associates ("WM") and Lessee agrees to indemnify and hold
Lessor harmless against any claim, cost, liability or cause of action
asserted by any broker or finder claiming through Lessee other than WM.
Lessor shall at its sole cost and expense pay the brokerage commission per
Lessor's standard commission schedule to WM in connection with this
transaction. Lessor represents and warrants that it has not utilized or
contacted a real estate broker or finder with respect to this Lease other
than WM and Lessor agrees to indemnity and hold Lessee harmless against any
claim, cost, liability or cause of action asserted by any broker or finder
claiming through Lessor.
PAGE 11
35. OPTION TO EXTEND
A OPTION: Lessor hereby grants to Lessee one (1) option to extend the Lease
Term, with the extended term to be for a period of three (3) years, on the
following terms and conditions, which shall apply separately to each option
to extend:
(i) Lessee shall give Lessor written notice of its exercise of its
options to extend no earlier than twenty-four (24) calendar months, nor
later than six (6) calendar months before the Lease Term would end but
for said exercise. Time is of the essence.
(ii) Lessee may not extend the Lease Term pursuant to any option
granted by this section 35 if Lessee is in default as of the date of the
exercise of one of its options. If Lessee has committed a default by
Lessee as defined in Section 14 or 32 that has not been cured or waived
by Lessor in writing by the date that any extended term is to commence,
then Lessor may elect not to allow the Lease Term to be extended,
notwithstanding any notice given by Lessee of an exercise of this option
to extend.
(iii) All terms and conditions of this Lease shall apply during the
extended term, except that the Rent and rental increases for each
extended term shall be determined as provided in Section 35 (B) below.
(iv) Once Lessee delivers a notice of exercise of one of its options to
extend the Lease Term, Lessee may not withdraw such exercise and
Subject to the provisions of this Section 35, such notice shall operate
to extend the Lease Term. Upon any extension of the Lease Term pursuant
to this Section 35, the term "Lease Term" as used in this Lease shall
thereafter include the then extended term.
(v) The option rights of EIP Microwave, Inc. granted under this Section
35 are granted for EIP Microwave, Inc.'s personal benefit and may not be
assigned or transferred by EIP Microwave, Inc. or exercised if EIP
Microwave, Inc. is not occupying the Premises at the time of exercise.
B. EXTENDED TERM RENT -- OPTION PERIOD: The monthly Rent for the Premises
during the extended term shall equal ninety-five percent (95%) of the fair
market monthly Rent for the Premises as of the commencement date of the
extended term, but in no case, less than the Rent during the last month of
the prior Lease term. Promptly upon Lessee's exercise of the option to
extend, Lessee and Lessor shall meet and attempt to agree on the fair market
monthly Rent for the Premises as of the commencement date of the extended
term. In the event the parties fail to agree upon the amount of the monthly
Rent for the extended term prior to commencement thereof, the monthly Rent
for the extended term shall be determined by appraisal in the manner
hereafter set forth, provided, however, that in no event shall the monthly
Rent for the extended term be less than in the immediate preceding period.
Annual base rent increases during the extended term shall be a minimum of
three percent (3%) per year. In the event it becomes necessary under this
paragraph to determine the fair market monthly Rent of the Premises by
appraisal, Lessor and Lessee each shall appoint a real estate appraiser who
shall be a member of the American Institute of Real Estate Appraiser
("AIREA") and such appraisers shall each determine the fair market monthly
Rent for the Premises taking into account the value of the Premises and the
amenities provided by the Outside Areas, the Common Areas, and the Building,
and prevailing comparable Rentals in the area. Such appraisers shall, within
twenty (20) business days after their appointment, complete their appraisals
and submit their appraisal reports to Lessor and Lessee. If the fair market
monthly Rent of the Premises established in the two (2) appraisals varies by
five percent (5%) or less of the higher Rent, the average of the two shall be
controlling. If said fair market monthly Rent varies by more than five
percent (5%) of the higher Rental, said appraisers, within ten (10) days
after submission of the last appraisal, shall appoint a third appraiser who
shall be a member of the AIREA and who shall also be experienced in the
appraisal of Rent values and adjustment practices for commercial properties
in the vicinity of the Premises. Such third appraiser shall, within twenty
(20) business days after his appointment, determine by appraisal the fair
market monthly Rent of the Premises taking into account the same factors
referred to above, and submit his appraisal report to Lessor and Lessee. The
fair market monthly Rent determined by the third appraiser for the Premises
shall be controlling, unless it is less than that set forth in the lower
appraisal previously obtained, in which case the value set forth in said
lower appraisal shall be controlling, or unless it is greater than that set
forth in the higher appraisal previously obtained in which case the Rent set
for in said higher appraisal shall be controlling. If either Lessor or Lessee
fails to appoint an appraiser, or if an appraiser appointed by either of them
fails, after his appointment to submit his appraisal within the required
period in accordance with the foregoing, the appraisal submitted by the
appraiser properly appointed and
PAGE 12
timely submitting his appraisal shall be controlling. If the two appraisers
appointed by Lessor and Lessee are unable to agree upon a third appraiser
within the required period in accordance with the foregoing, application
shall be made within twenty (20) days thereafter by either Lessor or Lessee
to AIREA, which shall appoint a member of said institute willing to serve as
appraiser. The cost of all appraisals under this subparagraph shall be borne
equally be Lessor and Lessee.
36. APPROVALS: Whenever in this Lease the Lessor's or Lessee's consent is
required, such consent shall not be unreasonably or arbitrarily withheld or
delayed. In the event that the Lessor or Lessee does not respond to a request
for any consents which may be required of it in this Lease within ten
business days of the request of such consent in writing by the Lessee or
Lessor, such consent shall be deemed to have been given by the Lessor or
Lessee.
37. AUTHORITY: Each party executing this Lease represents and warrants that
he or she is duly authorized to execute and deliver the Lease. If executed on
behalf of a corporation, that the Lease is executed in accordance with the
by-laws of said corporation (or a partnership that the Lease is executed in
accordance with the partnership agreement of such partnership), that no other
party's approval or consent to such execution and delivery is required, and
that the Lease is binding upon said individual, corporation (or partnership)
as the case may be in accordance with its terms.
38. INDEMNIFICATION OF LESSOR: Except to the extent caused by the sole
negligence or willful misconduct of Lessor or Lessor's Agents, Lessee shall
defend, indemnify and hold Lessor harmless from and against any and all
obligations, losses, costs, expenses, claims, demands, attorney's fees,
investigation costs or liabilities on account of, or arising out of the use,
condition or occupancy of the Premises or any act or omission to act of
Lessee or Lessee's Agents or any occurrence in, upon, about or at the
Premises, including, without limitation, any of the foregoing provisions
arising out of the use, generation, manufacture, installation, release,
discharge, storage, or disposal of Hazardous Materials by Lessee or Lessee's
Agents subject to the limitations of Paragraph 33. It is understood that
Lessee is and shall be in control and possession of the Premises and that
Lessor shall in no event be responsible or liable for any injury or damage or
injury to any person whatsoever, happening on, in, about, or in connection
with the Premises, or for any injury or damage to the Premises or any part
thereof. This Lease is entered into on the express condition that Lessor
shall not be liable for, or suffer loss by reason of injury to person or
property, from whatever cause, which in any way may be connected with the
use, condition or occupancy of the Premises or personal property located
herein. The provisions of this Lease permitting Lessor to enter and inspect
the Premises are for the purpose of enabling Lessor to become informed as the
whether Lessee is complying with the terms of this Lease and Lessor shall be
under no duty to enter, inspect or to perform any of Lessee's covenants set
forth in this Lease. Lessee shall further indemnify, defend and hold harmless
Lessor from and against any and all claims arising from any breach or default
in the performance of any obligation to Lessee's part to be performed under
the terms of this Lease. The provisions of Section 38 shall survive the Lease
Term or earlier termination of this Lease with respect to any damage, injury
or death occurring during the Lease Term.
39. LESSOR'S LIABILITY: If Lessee should recover a money judgment against
Lessor arising, in connection with this Lease, the judgment shall be satisfied
only out of the Lessor's interest in the Premises and neither Lessor or any
of its partners shall be liable personally for any deficiency.
40. MISCELLANEOUS PROVISIONS: All rights and remedies hereunder are
cumulative and not alternative to the extent permitted by law and are in
addition to all other rights or remedies in law and in equity.
41. CHOICE OF LAW: This Lease shall be construed and enforced in accordance
with the substantive laws of the State of California. The language of all
parts of this lease shall in all cases be construed as a whole according to
its fair meaning and not strictly for or against either Lessor or Lessee.
42. ENTIRE AGREEMENT: This Lease is the entire agreement between the parties,
and there are no agreements or representations between the parties except as
expressed herein. Except as otherwise provided for herein, no subsequent
change or addition to this Lease shall be binding unless in writing and
signed by the parties hereto.
PAGE 13
IN WITNESS WHEREOF, Lessor and Lessee leave executed these presents, the day
and year first above written.
LESSOR LESSEE
▇▇▇▇ & ▇▇▇▇ DEVELOPERS EIP MICROWAVE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------- -----------------------------------
signature of authorized representative signature of authorized representative
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------- -----------------------------------
printed name printed name
G.P. CFO
----------------------------------- -----------------------------------
title title
August 18, 1995 August 18, 1995
----------------------------------- -----------------------------------
date date
PAGE 14
[SITE PLAN]
EXHIBIT A.1
[SITE PLAN]
EXHIBIT A.2
[SITE PLAN]
EXHIBIT A.3
August 15, 1995
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
EIP Microwave, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
re: Agreement for Early Occupancy
Dear ▇▇ ▇▇▇▇▇▇▇▇▇:
The purpose of this letter is to advise you that upon execution of the
attached lease and the deposit of the sum of $33,679 with ▇▇▇▇ & ▇▇▇▇
Developers, consisting of the first month's rent, the first month's estimated
CAC charge, and the security deposit per the referenced lease, EIP Microwave,
Inc. may move into ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ October 15, 1995.
EIP Microwave, Inc. shall not be responsible for base rent or pro-rata
maintenance costs incurred until November 1, 1995 as provided for in the
lease, but EIP Microwave, Inc. shall be responsible effective on the earlier
of occupancy or October 15, 1995 for all utility charges. EIP Microwave,
Inc. shall be responsible for all other terms and conditions contained in the
referenced lease except for the items specified in this paragraph effective
on the earlier of occupancy or October 15, 1995.
Sincerely,
/s/ ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
for ▇▇▇▇ & ▇▇▇▇ Developers
Accepted and Agreed
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
EIP Microwave, Inc.
8/17/95 Lease Attachment __________
NEW EIP FACILITY
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Summary Of EIP-Provided Tenant Improvement Cost For ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇:
DESCRIPTION ESTIMATED COST
-------------------------------------------------------------------------------
Electrical 23,000.
-------------------------------------------------------------------------------
HVAC -0-
-------------------------------------------------------------------------------
Hazardous Waste Pad (12' x 12') concrete 9,291.
-------------------------------------------------------------------------------
One Drain 3,600.
-------------------------------------------------------------------------------
Pad for Compressor See Haz. Waste Pad Above
-------------------------------------------------------------------------------
Compressed Air Lines 15,600.
-------------------------------------------------------------------------------
Ducting (for wire solder, surface mount machine,
ovens, flammable storage, CNC machine.) 5,000.
-------------------------------------------------------------------------------
Computer Wiring and Installation -
(VAX and Ethernet) 20,000.
-------------------------------------------------------------------------------
Telephone Wiring and Installation See computer wiring above
-------------------------------------------------------------------------------
Door for CNC 1,000.
-------------------------------------------------------------------------------
Security 4,000.
-------------------------------------------------------------------------------
Other
-------------------------------------------------------------------------------
TOTAL ESTIMATED COST: 81,491.
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
[LOGO] EIP MICROWAVE, INC. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
August 18, 1995
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇ Enterprises
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Lease
---------------------------
Dear ▇▇▇▇:
Attached are two execution copies of the Lease, as signed and initialed by
EIP Microwave, Inc. We have made one change to the Lease which ▇▇▇▇ ▇▇▇▇▇▇▇▇
may have mentioned to you. Paragraph 19 has been modified, and initialed, to
permit either the lessor or the lessee to terminate the Lease if a partial
destruction (greater than one-third of replacement cost) occurs.
We also note that several points we discussed and which were agreed by you
are not reflected in the Lease. This letter will also confirm our mutual
agreement on the following points:
1. Although we are leasing a portion of the premises in an "AS IS"
physical condition and state of repair, we are doing so in reliance on your
representation that the premises, including the HVAC, electrical, plumbing,
roof, etc., will be in good order and repair on the commencement date.
2. As discussed, we use certain hazardous materials in the ordinary
course of our business. So long as our use is in accordance with law, this
will not be a violation of the Lease.
3. The proposed alterations which we plan to make at our cost (a list
of the material alterations is attached) are approved by you. You will
provide us a completely demised space (which includes secure separation
between our portion of the building and the remainder) before the
commencement date at your cost.
4. Taxes for which we are responsible do not include taxes unrelated
to the building (e.g., a lien on the building relating to unpaid property
taxes on other buildings).
Finally, as ▇▇▇▇ ▇▇▇▇▇▇▇ discussed with you, the word "Premises" is defined
as the entire building even though we are only leasing a portion of it. This
term is used in some places when the correct reference should be to that
portion of the Premises which we are leasing. Rather than making changes
throughout the document to reflect this, the Lease will be interpreted in a
common sense fashion so that "Premises" refers to the entire building or to
our portion of the building, as appropriate.
We would appreciate your verbal acceptance of the Lease by end of business
day today, and a fully executed document returned to us by Monday, August 21,
1995.
Very truly yours,
EIP MICROWAVE, INC.
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President-Finance & CFO
TELEPHONE: (▇▇▇) ▇▇▇-▇▇▇▇ TOLL FREE: (▇▇▇) ▇▇▇-▇▇▇▇ FAX: (▇▇▇) ▇▇▇-▇▇▇▇