Exhibit 10.16
INDUSTRIAL SPACE LEASE
THIS LEASE, dated September 2, 2001 for reference purposes only, if
made by and between RENCO EQUITIES IV, a California partnership ("Landlord") and
▇▇▇ Research Corporation, a Delaware corporation ("Tenant"), to be effective and
binding upon the parties as of the date the last of the designated signatories
to this Lease shall have executed this Lease (the "Effective Date of this
Lease").
ARTICLE 1
REFERENCE
1.1 Reference. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:
A. Tenant's Address for Notices: ▇▇▇ Research Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
B. Tenant's Representative: ▇▇. ▇▇ ▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
C. Landlord's Address for Notices: RENCO EQUITIES IV
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
D. Landlord's Representative: ▇▇. ▇▇▇▇▇▇▇ ▇. Neidlg
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
E. Intended Commencement Date: May 18, 2002
F. Intended Term: Five (5) Years and 14 Days
G. Lease Expiration Date: May 31, 2007
H. Tenant's Punchlist Period: N/A
I. First Month's Prepaid Rent: $211,530.00, Payable May 18, 2002
J. Last Month's Prepaid Rent: N/A
K. Tenant's Security Deposit: $211,530.00, Payable May 18, 2002
L. Late Charge Amount: Five Percent (5%) of the
Delinquent Amount
M. Tenant's Required Liability Coverage: $3,000,000.00 Combined Single Limit
N. Tenant's Number of Parking Spaces: 400
O. Brokers: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, EQUIS
P. Project or Property. That certain real property situated in the City of
Fremont, County of Alameda, State of California, as presently improved with one
(1) building, which real properly is shown on the Site Plan attached hereto as
Exhibit "A" and is commonly known as Renco 38 or otherwise described as follows:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Q. Building. That certain Building within the Project in which the Leased
Premises are located, which Building is shown outlined in red on Exhibit "A"
hereto.
R. Common Areas. The "Common Areas" shall mean those areas within the
Project, which are located outside the buildings and which are provided and
designated by Landlord from time to time for general use by tenants of the
Project, including driveways, pedestrian walkways, parking spaces, landscaped
areas and enclosed trash disposal areas.
S. Leased Premises. That certain space which is shown outlined in red on
the Floor Plan attached as Exhibit "B" consisting of approximately 100,728
square feet of gross leasable area and, for purposes of this Lease, agreed to
contain said number of square feet. The Leased Premises are commonly known as or
otherwise described as follows:
Renco 38
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
T. Base Monthly Rent. The term "Base Monthly Rent" shall mean the
following:
Period Base Monthly Rent
----------------- -----------------
05/18/02-05/31/03 $211,530.00
06/01/03-05/31/04 $218,932.00
06/01/04-05/31/05 $226,595.00
06/01/05-05/31/06 $234,528.00
06/01/06-05/31/07 $242,734.00
U. Permitted Use. The term "Permitted Use" shall mean the following:
Research and development, office, light manufacturing, storage of Tenant's
products.
V. Exhibits. The term "Exhibits" shall mean the Exhibits to this Lease
which are described as follows:
Exhibit "A" Site Plan showing the
Project and delineating the
Building in which the Leased
Premises are located.
Exhibit "B" Floor Plan outlining the Leased Premises.
Exhibit "D" Acceptance Agreement
W. Addenda. The term "Addenda" shall mean the Addendum (or Addenda) to this
Lease, which is (or are) described as follows:
ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION
2.1 Demise of Leased Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord for the Lease Term and upon the terms and subject to
the conditions of this Lease that certain interior space described in Article
1(s) as the Leased Premises, reserving Tenant's lease of the Leased Premises,
together with the appurtenant right to use the Common Areas as described in
Article 2.2 below, shall be conditioned upon and be subject to the continuing
compliance by Tenant with (i) all the terms and conditions of the Lease, (ii)
all Laws governing the use of the Leased Premises and the Project, (iii) all
Private Restrictions, easements and other matters now of public record
respecting the use of the Leased Premises and the Project, and (iv) all
reasonable rule and regulations from time to time established by Landlord.
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2.2 Right to Use Common Areas. As an appurtenant right to Tenant's right to
the use of the Leased Premises. Tenant shall have the non-exclusive right to use
the Common Areas in conjunction with other tenants of the Project and their
invitees, subject to the limitations of such use as set forth in Article 4 and
solely for the purposes for which they were designated and intended. Tenant's
right to use the Common Areas shall terminate concurrently with any termination
of this Lease.
2.3 Lease Commencement Date and Lease Term. The term of this Lease shall
begin, and the Lease Commencement Date shall be deemed to have occurred, on the
Intended Commencement Date (as set forth in Article 1) unless either (i)
Landlord is unable to deliver possession of the Leased Premises to Tenant on the
Intended Commencement Date, in which case the Lease Commencement Date shall be
as determined pursuant to Article 2.4 below. The term of the Lease shall end on
the Lease Expiration Date (as set forth in Article 1), irrespective of whatever
date the Lease Commencement Date is determined to be pursuant to the foregoing
sentence. The Lease Term shall be that period of time commencing on the Lease
Commencement Date and ending on the Lease Expiration Date (the "Lease Term").
2.4 Delivery of Possession. By execution of this Lease, Tenant accepts
possession of the Leased Premises in the presently existing condition.
2.5 Acceptance of Possession. Tenant acknowledges that it has inspected the
Leased Premises and accepts them in their existing condition.
2.6 Surrender of Possession. Immediately prior to the expiration or upon
the sooner termination of this Lease, Tenant shall remove all of Tenant's signs
from the exterior of the Building and shall remove all of Tenant's equipment,
trade fixtures, furniture, supplies, wall decorations and other personal
property from the Leased Premises and shall vacate and surrender the Leased
Premises to Landlord in the same condition, broom clean, as existed at the Lease
Commencement Date(s). Tenant shall repair all damage to the Leased Premises
caused by Tenant's removal of Tenant's property and all damage in the exterior
of the Building caused by Tenant's removal of Tenant's signs. Tenant shall patch
and refinish, to Landlord's reasonable satisfaction, all penetrations made by
Tenant or its employees to the floor, walls or ceiling of the Leased Premises,
whether such penetrations were made with Landlord's approval or not. Tenant
shall clean, repair or replace all stained or damaged ceiling tile, wall
coverings, except for damage caused by Landlord or Landlord's agents, and clean
or replace as may be required floor coverings to the reasonable satisfaction of
Landlord. Tenant shall replace all burned out light bulbs and damaged light
lenses, and repair and repaint all damaged walls. Landlord shall retain a
mechanical contractor at Tenant's expense to service all heating, ventilating
and air conditioning equipment, and Tenant shall pay the reasonable cost for the
service and the cost to restore (or replace as required) said equipment to good
working order. Tenant shall pay the costs of restoring or replacing all trees,
shrubs, plants, lawn and ground cover, and repair (or replace as required) all
paved surfaces of the Property, and otherwise satisfy all requirements to repair
any damage or excessive wear to the Leased Premises, Building, Outside Areas
and/or Property [reasonable wear and tear excepted and except for those
improvements or alterations installed by Tenant which Tenant has a right to
remove and those improvements Landlord has notified Tenant that it shall not be
required to remove]. Tenant shall repair all damage caused by Tenant to the
exterior surface of the Building and the paved surfaces of the outside areas
adjoining the Leased Premises and, where necessary, replace or resurface same
[reasonable wear and tear excepted and except for those improvements or
alterations installed by Tenant which Tenant has a right to remove and those
improvements Landlord has notified Tenant that it shall not be required to
remove]. Additionally, Tenant shall, prior to the expiration or sooner
termination of this Lease, remove any improvements constructed or installed by
Tenant which Landlord requests be so removed by Tenant and repair all damage
caused by such removal. If the Leased Premises are not surrendered to Landlord
in the condition required by this Article at the expiration or sooner
termination of this Lease. Landlord may, at Tenant's expense, [after giving
notice and time to perform], so remove Tenant's signs, property and/or
improvements not so removed and make such repairs and replacements not so made
or hire, at Tenant's expense, independent contractors to perform such work.
Tenant shall be liable to Landlord for all reasonable costs incurred by Landlord
in returning the Leased Premises to the required condition, plus interest on all
costs incurred from the date paid by Landlord at the then maximum rate of
interest not prohibited by Law until paid, payable by Tenant to Landlord within
ten days after receipt of a statement therefore from Landlord, and Tenant shall
be deemed to have impermissibly held over until such time as such required and
material work is completed [Landlord shall complete any work it performs in a
reasonable time period], and Tenant shall pay Base Monthly Rent and Additional
Rent in accordance with the terms of Section 13.2 ("Holding Over") until such
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work is completed. Tenant shall indemnify Landlord against loss or liability to
the extent such liability or _______ results from delay by Tenant in so
surrendering the Leased Premises, including, without limitation, any claims made
by any succeeding tenant or any losses to Landlord due to lost opportunities
lease to succeeding tenants.
2.7 Early Occupancy. If Tenant enters into possession of the Leased
Premises prior to the Intended Commencement Date (or permits its contractors to
enter the Leased Premises prior to the Intended Commencement Date), unless
otherwise agreed in writing by Landlord, the Lease Commencement Date shall be
deemed to have occurred on such sooner date, and Tenant shall be obligated to
perform all its obligations under this Lease, including the obligation to pay
rent, from that sooner date.
ARTICLE 3
RENT, LATE CHARGES AND SECURITY DEPOSITS
3.1 Base Monthly Rent. Commencing on the Lease Commencement Date (as
determined pursuant to Article 2.3 above) and continuing throughout the Lease
Term, Tenant shall pay to Landlord without prior demand therefor, in advance on
the first day of each calendar month, as base monthly rent, the amount set forth
as "Base Monthly Rent" in Article 1 ("Base Monthly Rent").
3.2 Additional Rent. Commencing on the Lease Commencement Date (as
determined pursuant to Article 2.3 above) and continuing throughout the Lease
Term, in addition to the Base Monthly Rent, Tenant shall pay to Landlord as
additional rent (the "Additional Rent") the following amounts:
A. An amount equal to all Property Operating Expenses (as defined in
Article 13) incurred by Landlord. Payments shall be made by whichever of
the following methods (or combination of methods) is (are) from time to
time designed by Landlord:
(1) Landlord may ▇▇▇▇ to Tenant, on a periodic basis not more
frequently than monthly, the amount of such expenses (or group of
expenses) as paid or incurred by Landlord, and Tenant shall pay to
Landlord the amount of such expenses within ten days after receipt of
a written ▇▇▇▇ therefore from Landlord; and/or
(2) Landlord may deliver to Tenant Landlord's reasonable estimate
of any given expense (such as Landlord's Insurance Costs or Real
Property Taxes), or group of expenses, which it anticipates will be
paid or incurred for the ensuing calendar or fiscal year, as Landlord
may determine, and Tenant shall pay to Landlord an amount equal to the
estimated amount of such expenses for such year in equal monthly,
installments during such year with the installments or Base Monthly
Rent.
(3) Landlord reserves the right to change from time to time the
methods of billing Tenant for any given expense or group of expenses
or the period basis on which such expenses are billed.
B. Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7.
C. Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and
D. Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease other than late charges and interest on
a defaulted rent.
3.3 Year-End Adjustments. If Landlord shall have elected to ▇▇▇▇ Tenant for
the Property Operating Expenses (or any group of such expenses) on an estimated
basis in accordance with the provisions of Article 3.2A(2) above, Landlord shall
furnish to Tenant within three months following the end of the applicable
calendar or fiscal year, as the case may be, a statement setting forth (i) the
amount of such expenses paid or incurred during the just ended calendar or
fiscal year, as appropriate, and (ii) the amount that Tenant has paid to
Landlord for credit against such expenses for such period. If Tenant shall have
paid more than its obligation for such expenses for the stated
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period. Landlord shall, at its election, either (i) credit the amount of such
overpayment toward the next ensuing payment or payments of Additional Rent that
would otherwise be due or (ii) refund in cash to Tenant the amount of such
overpayment. If such year-end statement shall show that Tenant did not pay its
obligation for such expenses in full, then Tenant shall pay to Landlord the
amount of such underpayment within ten days from Landlord's billing of same to
Tenant. The provisions of this Article shall survive the expiration or sooner
termination of this Lease.
3.4 Late Charge and Interest on Rent in Default. Tenant acknowledges that
the late payment by Tenant of any monthly installment of Base Monthly Rent or
any Additional Rent will cause Landlord to incur certain costs and expense not
contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include, without
limitation, administration and collection costs and processing and accounting
expenses. Therefore, if any installment of Base Monthly Rent is not received by
Landlord from Tenant within six calendar days after Tenant's receipt of written
notice from Landlord that the same becomes due, Tenant shall immediately pay to
Landlord a late charge in an amount equal to the amount set forth in Article 1
as the "Late Charge Amount," and if any Additional Rent is not received by
Landlord within ten calendar days after same Tenant's receipt of written notice
from Landlord that becomes due. Tenant shall immediately pay to Landlord a late
charge in an amount equal to five percent of the Additional Rent not so paid.
Landlord and Tenant agree that this late charge represents a reasonable estimate
of such costs and expenses and is fair compensation to Landlord for the
anticipated loss Landlord would suffer by reason of Tenant's failure to make
timely payment. In no event shall this provision for a late charge be deemed to
grant to Tenant a grace period or extension of time within to pay any rental
installment or prevent Landlord from exercising any right or remedy available to
Landlord upon Tenant's failure to pay each rental installment due under this
Lease when due, including the right to terminate this Lease. If any rent remains
delinquent for a period in excess of twenty calendar days, then, in addition to
such late charge, Tenant shall pay to Landlord interest on any rent that is not
so paid from said twentieth day at the then maximum rate of interest not
prohibited or made usurious by Law until paid.
3.5 Payment of Rent. All rent shall be paid in lawful money of the United
States, without any abatement, reduction or offset for any reason whatsoever, to
Landlord at such address as Landlord may designate from time to time. Tenant's
obligation to pay Base Monthly Rent and all Additional Rent shall be
appropriately prorated at the commencement and expiration of the Lease Term. The
failure by Tenant to pay any Additional Rent as required pursuant to this Lease
when due shall be treated the same as a failure by Tenant to pay Base Monthly
Rent when due, and Landlord shall have the same rights and remedies against
Tenant as Landlord would have if Tenant failed to pay the Base Monthly Rent when
due.
3.6 Prepaid Rent. Concurrent with the execution of this Lease, Tenant shall
pay to Landlord the amount set forth in Article 1 as "First Month's Prepaid
Rent" as prepayment of rent or credit against the first installment(s) of Base
Monthly Rent due hereunder. Additionally, Tenant has paid to Landlord the amount
set forth in Article 1 as "Last Month's Prepaid Rent" as prepayment of rent for
credit against the last installment(s) of Base Monthly Rent due hereunder,
subject, however, to the provisions of Article 3.7 below.
3.7 Security Deposit. Concurrent with the execution of this Lease, Tenant
shall deposit with Landlord the amount set forth in Article 1 as the "Security
Deposit" as security for the performance by Tenant of the terms of this Lease to
be performed by Tenant, and not as prepayment of rent, Landlord may apply such
portion or portions of the Security Deposit as are reasonably necessary for the
following purposes: (i) to remedy any default by Tenant, in the payment of Base
Monthly Rent or Additional Rent or a late charge or interest on defaulted rent;
(ii) to repair damage to the Leased Premises, the Building or the Outside Areas
caused by Tenant; (iii) to clean and repair the Leased Premises, the Building or
the Outside Areas following their surrender to Landlord if not surrendered in
the condition required pursuant to the provisions of Article 2; and (iv) to
remedy any other default of Tenant to the extent permitted by Law, including,
without limitation, paying in full on Tenant's behalf any sums claimed by
materialmen or contractors of Tenant to be owing to them by Tenant for work done
or improvements made at Tenant's request to the Leased Premises. In this regard,
Tenant hereby waives any restriction on the uses to which the Security Deposit
may be applied as contained in Section 1950.7(c) of the California Civil Code
and/or any successor statute. In the event the Security Deposit or any portion
thereof is so used, Tenant shall pay to Landlord, promptly upon demand, an
amount in cash sufficient to restore the Security Deposit to the full original
sum. If Tenant fails to promptly restore the Security Deposit and if Tenant
shall have paid to Landlord any sums as "Last Month's Prepaid Rent," Landlord
may, in addition to any other remedy Landlord may have under this Lease, reduce
the amount of Tenant's Last Month's Prepaid Rent by transferring all or portions
of such Last Month's Prepaid Rent
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to Tenant's Security Deposit until such Security Deposit is restored to the
amount set forth in Article 1. Landlord shall not be deemed a trustee of the
Security Deposit. Landlord may use the Security Deposit in Landlord's ordinary
business and shall not be required to segregate it from its general accounts.
Tenant shall not be entitled to any interest on the Security Deposit. If
Landlord transfers the Building or the Property during the Lease Term, Landlord
may pay the Security Deposit to any subsequent owner in conformity with the
provisions of Section 1950.7 of the California Civil Code and/or any successor
statute, in which event the transferring landlord shall be released from all
liability for the return of the Security Deposit. Tenant specifically grants to
Landlord (and Tenant hereby waives the provisions of California Civil Code
Section 1950.7 to the contrary) a period of sixty days following a surrender of
the Leased Premises by Tenant to Landlord within which to return the Security
Deposit (less permitted deductions) to Tenant, it being agreed between Landlord
and Tenant that sixty days is a reasonable period of time within which to
inspect the Leased Premises, make required repairs, receive and verify workmen's
▇▇▇▇▇▇▇▇ therefor, and prepare a final accounting with respect to such deposit.
In no event shall the Security Deposit, or any portion thereof, be considered
prepaid rent.
ARTICLE 4
USE OF LEASED PREMISES AND OUTSIDE AREA
4.1 Permitted Use. Tenant shall be entitled to use the Leased Premises
solely for the "Permitted Use" as set forth in Article 1 and for no other
purpose whatsoever. Tenant shall leave the right to use the Outside Areas in
conjunction with its Permitted Use of the Leased Premises solely for the
purposes for which they were designed and intended and for no other purpose
whatsoever.
4.2 General Limitations on Use. Tenant shall not do anything to in or about
the Leased Premises, the Building, the Outside Areas or the Property which does
or could (i) unreasonably jeopardize the structural integrity of the Building or
(ii) cause damage to any part of the Leased Premises, the Building, the Outside
Areas or the Property. Tenant shall not operate any equipment within the Leased
Premises which does or could (i) except with Landlord's prior written consent,
injure, vibrate, or shake the Leased Premises or the Building, (ii) damage,
overload, corrode, or impair the efficient operation of any electrical,
plumbing, sewer, heating, ventilating or air conditioning systems within or
servicing the Leased Premises or the Building, or (iii) damage or impair the
efficient operation of the sprinkler system (if any) within or servicing the
Leased Premises or the Building. Tenant shall not install any equipment or
antennas on or make any penetrations of the exterior walls or roof of the
Building. Tenant shall not affix any equipment to or make any penetrations or
cuts in the floor, roof or exterior walls of the Leased Premises. Tenant shall
not place any loads upon the floors, walls, ceiling or roof systems which could
endanger the structural integrity of the Building or damage its floors,
foundations or supporting structural components. Tenant shall not place any
explosive, flammable or Hazardous Materials in the drainage systems of the
Leased Premises, the Building, the Outside Areas or the Property. Tenant shall
not drain or discharge any fluids in the landscaped areas or across the paved
areas of the Property. Tenant shall not use any of the Outside Areas for the
storage of its materials, supplies, inventory or equipment, and all such
materials, supplied, inventory or equipment shall at all times be stored within
the Leased Premises. Tenant shall not commit nor permit to be committed any
waste in or about the Leased Premises, the Building, the Outside Areas or the
Property.
4.3 Noise and Emissions. All noise generated by Tenant in its use of the
Leased Premises shall be confined or muffled so that it does not interfere with
the businesses of or annoy the occupants and/or users of adjacent properties.
All dust, fumes, odors and other emissions generated by Tenant's use of the
Leased Premises shall be sufficiently dissipated in accordance with sound
environmental practices and exhausted from the Leased Premises in such a manner
so as not to interfere with the businesses of or annoy the occupants and/or
users of adjacent properties, or cause any damage to the Leased Premises, the
Building, the Outside Areas or the Property or any component part thereof or the
property of adjacent property owners.
4.4 Trash Disposal. Tenant shall provide trash bins (or other adequate
garbage disposal facilities) within the trash enclosure areas provided or
permitted by Landlord outside the Leased Premises sufficient for the interim
disposal of all of its trash, garbage and waste. All such trash, garbage and
waste temporarily stored in such areas shall be stored in such a manner so that
it is not visible from outside of such areas, and Tenant shall cause such trash,
garbage and waste to be regularly removed from the Property at Tenant's sole
cost. Tenant shall at all times keep the Leased Premises, the Building, the
Outside Areas and the Property in a clean, safe and neat condition free and
clear of all trash, garbage, waste and/or boxes, pallets and containers
containing same at all times.
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4.5 Signs. Other than one business identification sign which is first
approved by Landlord in accordance with this Article, Tenant shall not place or
install on or within any portion of the Leased Premises, the exterior of the
Building, the Outside Areas or the Property any sign, advertisement, banner,
placard, or picture which is visible from the exterior of the Leased Premises.
Tenant shall not place or install on or within any portion of the Lease
Premises, the exterior of the Building, the Outside Areas of the Property any
business identification-identification sign which is visible from the exterior
of the Leased Premises until Landlord shall have first approved in writing the
location, size, content, design, method of attachment and material to be used in
the making of such sign. Any sign, once approved by Landlord, shall be installed
only in strict compliance with Landlord's approval, at Tenant's expense, using a
person first approved by Landlord to install same. Landlord shall not
unreasonably withhold its approval of Tenant's signs. Landlord may remove any
signs (which have not been first approved in writing by Landlord),
advertisements, banners, placards or pictures so placed by Tenant on or within
the Leased Premises, the exterior of the Building, the Outside Areas or the
Property and charge to Tenant the cost of such removal, together with any costs
incurred by Landlord to repair any damage caused thereby, including any cost
incurred to restore the surface upon which such sign was so affixed to its
original condition. Tenant shall remove all of Tenant's signs, repair any damage
caused thereby, and restore the surface upon which the sign was affixed to its
original condition, all to Landlord's reasonable satisfaction, upon the
termination of this Lease.
4.6 Compliance with Laws and Private Restrictions. Tenant shall abide by
and shall promptly observe and comply with, at its sole cost and expense, all
Laws and Private Restrictions respecting the use and occupancy of the Leased
Premises, the Building, the Outside Areas or the Property, including, without
limitation, all Laws governing the use and/or disposal of hazardous materials.
4.7 Compliance with Insurance Requirements. With respect to any insurance
policies required or permitted to be carried by Landlord in accordance with the
provisions of this Lease, Tenant shall not conduct (or permit any other person
to conduct) any activities nor keep, store or use (or allow any other person to
keep, store or use) any item or thing within the Leased Premises, the Building,
the Outside Areas or the Property which (i) is prohibited under the terms of any
of such policies, (ii) could result in the termination of the coverage afforded
under any of such policies, (iii) could give to the insurance carrier the right
to cancel any of such policies, or (iv) could cause an increase in the rates
(over standard rates) charged for the coverage afforded under any of such
policies. Tenant shall comply with all requirements of any insurance company,
insurance underwriter, or Board of Fire Underwriters which are necessary to
maintain, at standard rates, the insurance coverages carried by either Landlord
or Tenant pursuant to this Lease.
4.8 Landlord's Right to Enter. Landlord and its agents shall have the right
to enter the Leased Premises during normal business hours after giving Tenant 24
hour notice except in an emergency and subject to Tenant's reasonable security
measures for the purpose of (i) inspecting the same; (ii) showing the Leased
Premises to prospective purchasers, mortgagees or tenants; (iii) making
necessary alterations, additions or repairs; (iv) performing any of Tenant's
obligations which Tenant has failed to do so. After expiration of all notice and
cure periods, Landlord shall have the right to enter the Leased Premises during
normal business hours (or as otherwise agreed) subject to Tenant's reasonable
security measures, for purposes of supplying any maintenance or services agreed
to be supplied by Landlord. Landlord shall have the right to enter the Outside
Areas during the normal business hours for purposes of (i) inspecting the
exterior of the Building and the Outside Areas, (ii) posting notices of
non-responsibility, or "For Lease" of signs and showing the space to prospective
tenants in last 6 months of Lease, and (iii) supplying any services to be
provided by Landlord. Any entry into the Leased Premises or the Outside Areas
obtained by Landlord in accordance with this Article shall not under any
circumstances be construed or deemed to be a forcible or unlawful entry into, or
a detainer of, the Lease Premises, or an eviction, actual or constructive or
Tenant from the Leased Premises or any portion thereof.
4.9 Use of Outside Areas. Tenant, in its use of the Outside Areas, shall at
all times keep the Outside Areas in a safe condition free and clear of all
materials, equipment, debris, trash (except within existing enclosed trash
areas), inoperable vehicles, and other items which are not specifically
permitted by Landlord to be stored or located thereon by Tenant. If, in the
opinion of Landlord, unauthorized persons are using any of the Outside Areas by
reason of, or under claim of, the express or implied authority or consent of
Tenant, then Tenant, upon demand of Landlord, shall take reasonable action to
restrain such unauthorized use, and shall initiate such appropriate proceedings
as may be required to so restrain such use.
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4.10 Rules and Regulations. Landlord shall have the right from time to time
to establish reasonable rules and regulations and/or amendments or additions
thereto resulting the use of the Leased Premises and the Outside Areas for the
care and orderly management of the Property. Upon delivery to Tenant of a copy
of such rules and regulations or any amendments or addition thereto, Tenant
shall comply with such rules and regulations. A violation by Tenant of any such
rules and regulations 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. Landlord shall not be
responsible or liable to Tenant for the violation of such rules and regulations
by any other tenant of the Property.
4.11 Outside Areas. No materials, pallets, supplies, tanks or containers
whether above or below ground level, equipment, finished products or
semi-finished products, raw materials, inoperable vehicles or articles of any
nature shall be stored upon or permitted to remain outside of the Leased
Premises except in fully fenced and screened areas outside the Building which
have been designed for such purposes and have been approved in writing by
Landlord for such use by Tenant. Tenant may ▇▇▇▇ parking spaces on the Property
for its exclusive use.
4.12 Hazardous Materials. Landlord and Tenant agree as follows with respect
to the existence or use of Hazardous Materials on the Property:
A. Any handling, transportation, storage, treatment, disposal or use
of Hazardous Materials by Tenant, Tenant's Agents, or any other party after
the Effective Date of this Lease in or about the Property shall strictly
comply with all applicable Hazardous Materials Laws. Tenant shall
indemnify, defend upon demand with counsel reasonably acceptable to
Landlord, and hold harmless Landlord from and against any and all
liabilities, losses, claims, damages, lost profits, consequential damages,
interest, penalties, fines, court costs, remediation costs, investigation
costs, and other expenses which result from or arise in any manner
whatsoever out of the use, storage, treatment, transportation, release, or
disposal of Hazardous Materials on or about the Property by Tenant,
Tenant's Agents, Permittees, or Invitees after the Effective Date and
throughout the term of this Lease.
B. If the presence of Hazardous Materials on the Property caused or
permitted by Tenant, Tenant's Agents, Permittees or Invitees after the
Effective Date of this Lease results in contamination or deterioration of
water or soil or any other party of the Property, then Tenant shall
promptly take any and all action necessary to investigate and remediate
such contamination. Tenant shall further be solely responsible for, and
shall defend, indemnify and hold Landlord and its agents harmless from and
against all claims, costs and liabilities, including attorneys' fees and
costs, arising out of or in connection with Tenant's use of Hazardous
Materials on the Property.
C. Landlord and Tenant shall each give written notice to the other as
soon as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials which relates to the
Property, and (ii) any contamination of the Property by Hazardous Materials
which constitutes a violation of any Hazardous Materials Law. Tenant may
use small quantities of household chemicals, such as adhesives, lubricants
and cleaning fluids in order to conduct its business at the Premises and
such other Hazardous Materials as are necessary to the operation of
Tenant's business of which Landlord receives notice prior to such Hazardous
Materials being brought onto the Property by Tenant (or any portion
thereof) and which Landlord consents in writing may be brought onto the
Property. In granting Landlord's consent, Landlord may specify the location
and manner or use, storage or handling of any Hazardous Material.
Landlord's consent shall in no way relieve Tenant from any of its
obligations as contained herein. Tenant shall notify Landlord in writing at
least ten (10) days prior to Tenant bringing any Hazardous Material on the
Leased Premises, Building, Common Areas, Outside Areas and/or Property.
Tenant shall provide Landlord with a list of all Hazardous Materials and
the quantities of each Hazardous Material to be stored on any portion of
the Property, and upon Landlord's request, Tenant shall provide Landlord
with copies of any and all Hazardous Materials Management Plans, Material
Safety Data Sheets, Hazardous Waste Manifests and other documentation
maintained or received by Tenant pertaining to the Hazardous Materials
used, stored or transported, or to be used, stored or transported, on any
portion of the Property. At any time during the Lease Term, Tenant shall,
within five days after written request therefor received from Landlord,
disclose in writing all Hazardous Materials that are being used by Tenant
on the Property (or have been used on the Property), the nature of such use
and the manner of storage and disposal.
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D. Landlord may cause testing ▇▇▇▇▇ to be installed on the Property,
and may cause the ground water to be tested to detect the presence of
Hazardous Materials by the use of such tests as are then customarily used
for such purposes. If Tenant so requests, Landlord or Tenant shall supply
Tenant or Landlord with copies of such test results. The cost of such tests
and of the installation, maintenance, repair and replacement of such ▇▇▇▇▇
shall be paid by Tenant or Landlord if such tests disclose the existence of
Hazardous Materials deposited by Landlord or Tenant as appropriate. In the
event the tests do not disclose the presence of Hazardous Materials, or
disclose Hazardous Materials not deposited by the other party, then the
costs of the tests shall be paid by the party who conducted said tests.
Landlord may retain consultants to inspect the Property, conduct periodic
environmental audits, and review any information provided by Tenant. Tenant
shall pay the reasonable cost of fees charged by Landlord and/or Landlord's
consultants as a Property Maintenance Cost.
E. Upon the expiration or earlier termination of the Lease, Tenant, at
its sole cost, shall remove all Hazardous Materials from the Property
caused by Tenant, Tenant's Agents, Permittees or Invitees. If Tenant fails
to so surrender the Property, Tenant shall indemnify and hold Landlord
harmless from all damages resulting from Tenant's failure to surrender the
Property required by this Subsection, including, without limitation, any
claims or damages in connection with the condition of the Property,
including, without limitation, damages occasioned by the inability to
release the Property (or any portion thereof) or a reduction in the fair
market and/or rental value of the Property, Building, Common Areas, Outside
Areas and/or Property by reason of the existence of any Hazardous Materials
in or around the Leased Premises, Building, Common Areas, Outside Areas
and/or Property caused by Tenant, Tenant's Agents, Permittees or Invitees.
If any action is required to be taken by a governmental authority to test,
monitor and/or clean up Hazardous Materials from the Leased Premises,
Building, Common Areas, Outside Areas and/or Property and such action is
not completed prior to the expiration or earlier termination of the Lease.
Landlord shall be entitled to all damages directly or indirectly incurred
in connection, as a result of any release of Hazardous Materials caused or
permitted by Tenant, Tenant's Agents, Permittees or Invitees, including,
without limitation, damages occasioned by the inability to release the
Property or a reduction of the fair market and/or rental value of the
Leased Premises, Building, Common Areas, Outside Areas and/or Property.
F. As used herein, the term "Hazardous Material(s)" means any
hazardous or toxic substance, material or waste, which is or becomes
regulated by any federal, state, regional or local governmental authority
because it is in any way hazardous, toxic, carcinogenic, mutagenic or
otherwise adversely affects any part of the environment or creates risks of
any such hazards or effects, including, but not limited to, petroleum,
asbestos and polychlorinated biphenyls and any material, substance or waste
(a) defined as a "hazardous waste," "extremely hazardous waste" or
"restricted hazardous waste" under Sections 25115, 25117 or 25122.7 or
listed pursuant to Section 25140 of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law); (b) defined as a
"hazardous substance" under Section 25316 of the California Health and
Safety Code, Division 20, Chapter 6.8 (▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Hazardous
Substance Account Act); (c) 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); (d) defined as a "hazardous
substance" under Section 25281 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (e)
defined as a "hazardous substance" pursuant to Section 311 of the Clean
▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code Sections 125, et seq. (33 U.S.C. 1321) or
listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. 1317); (f)
defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code Sections 6901, et seq.
(42 U.S.C. 6903); (g) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 United States Code Section 9601, et seq. (42 U.S.C.
9601), (h) defined as a "hazardous substance" pursuant to Section 311 of
the Federal Water Pollution Control Act (33 U.S.C. 1251, et seq.) or (i)
listed pursuant to Section 307 of the Federal Water Pollution Control Act
(33 U.S.C. 1317); (j) regulated under the Toxic Substances Control Act (15
U.S.C. 2601, et seq.); (k) defined as a "hazardous material" under Section
66680 or 66084 of Title 22 of the California Code of Regulations
(Administrative Code); (l) listed in the United States Department of
Transportation Hazardous Materials Table (49 C.F.R. 172.101); or (m) listed
by the Environmental Protection Agency as "hazardous substances" (40 C.F.R.
Part 302) and amendments thereto. The term "Hazardous Material Laws" shall
mean (i) all of the foregoing laws as amended from time to time and (ii)
any other federal, state or local law, ordinance, regulation or order
regulating Hazardous Materials.
G. Tenant's failure to comply with any of the requirements of this
Section regarding the storage, use, disposal or transportation of Hazardous
Materials on the Leased Premises, Building, Common Areas,
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Outside Areas and/or the Property without Landlord's consent shall, after
the expiration of all notice and cure periods, be an Event of Default as
defined in this Lease. The obligations of Landlord and Tenant under this
Section shall survive the expiration or earlier termination of the Lease
Term. The rights and obligations of Landlord and Tenant within respect to
issues relating to Hazardous Materials are exclusively established by this
section. In the event of any inconsistency between any other part of this
Lease and this Section, the terms of this Section shall control.
ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
5.1 Repair and Maintenance. Except in the case of damage to or destruction
of the Leased Premises, the Building, the Outside Areas or the Property caused
by an Act of God or other peril, in which case the provisions of Article 10
shall control, the parties shall have the following obligations and
responsibilities with respect to the repair and maintenance of the Leased
Premises, the Building and the Outside Areas.
A. Tenant's Obligation. Tenant shall, at all times during the Lease
Term and at its sole cost and expense, regularly clean and continuously
keep and maintain in good order, condition and repair the Leased Premises
and every non-structural part thereof, including, without limiting the
generality of the foregoing, (i) all interior walls, floors and ceilings,
(ii) all windows, doors and skylights, (iii) all electrical wiring,
conduits, connectors and fixtures, (iv) all plumbing, pipes, sinks,
toilets, faucets and drains, (v) all lighting fixtures, bulbs and lamps,
(vi) all heating, ventilating and air conditioning equipment, and (vii) all
entranceways to the Leased Premises. Tenant, if requested to do so by
Landlord, shall have, at Tenant's sole cost and expense, a licensed
heating, ventilating and air conditioning contractor to regularly and
periodically (not less frequently than every three months) inspect and
perform required maintenance on the heating, ventilating and air
conditioning equipment and systems serving the Leased Premises, or
alternatively, Landlord may, at its election, contract in its own name for
such regular and periodic inspections of and maintenance on such heating,
ventilating and air conditioning equipment and systems, and charge to
Tenant, as Additional Rent, the reasonable cost thereof. Tenant shall, at
all times during the Lease Term, keep in a clean and orderly condition the
Outside Areas. Tenant shall regularly and periodically sweep and clean the
driveways and parking areas. Tenant shall, at its sole cost and expense,
repair all damage to the Leased Premises, the Building, the Outside Areas
or the Property caused by the activities of Tenant, its employees, invitees
or contractors promptly following written notice from Landlord to so repair
such damage (to the extent not covered by insurance required to be
maintained hereunder). If Tenant shall fail to perform the required
maintenance or fail to make repairs required of it pursuant to this Article
within a reasonable period of time following notice from Landlord to do so,
then Landlord may, at its election and without waiving any other remedy it
may otherwise have under this Lease or at Law, perform such maintenance or
make such repairs and charge to Tenant, as Additional Rent, the costs so
incurred by Landlord for same. All glass within or a part of the Leased
Premises, both interior and exterior, is at the sole risk of Tenant and any
broken glass shall promptly be replaced by Tenant, at Tenant's expense,
with glass of the same kind, size and quality.
B. Landlord's Obligation. Landlord shall, at all times during the
Lease Term, maintain in good condition and repair (i) the exterior and
structural parts of the Building (including the foundation, subflooring,
loadbearing and exterior walls and roof; and (ii) the landscaped areas
located outside the Building. The provisions of this Subarticle B shall in
no way limit the right of Landlord to charge to Tenant, as Additional Rent
pursuant to Article 3 (to the extent permitted pursuant to Article 3), the
costs incurred by Landlord in performing such maintenance and/or making
such repairs.
5.2 Utilities. Tenant shall arrange, at its sole cost and expense and in
its own name, for the supply of gas and electricity to the Leased Premises.
Landlord shall maintain the water meter(s) in its own name; provided, however,
that if at the time during the Lease Term Landlord shall require Tenant to put
the water service in Tenant's name, Tenant shall do so at Tenant's sole cost.
Tenant shall be responsible for determining if the local supplier of water, gas
and electricity can supply the needs of Tenant and whether or not the existing
water, gas and electricity distribution systems within the Building and the
Leased Premises are adequate for Tenant's needs. Tenant shall be responsible for
determining if the existing sanitary and storm sewer systems now servicing the
Leased Premises and the Property are adequate for Tenant's needs. Tenant shall
pay all charges for water, gas, electricity and storm and sanitary sewer
services as so supplied to the Leased Premises during the Lease Term. Landlord
shall not interfere with delivery of utility service to the Property
irrespective of whether or not the services are maintained in Landlord's or
Tenant's name.
10
5.3 Security. Tenant acknowledges that Landlord has not undertaken any duty
whatsoever to provide security for the Leased Premises, the Building, the
Outside Areas or the Property and, accordingly, Landlord is not responsible for
the security of same or the protection of Tenant's property or Tenant's
employees, invitees or contractors. To the extent Tenant determines that such
security or protection services are advisable or necessary, Tenant shall arrange
for and pay the costs of providing same.
5.4 Energy and Resource Consumption. Landlord may cooperate in a reasonable
manner with the mandatory efforts of governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the Property.
Tenant shall not be entitled to terminate this Lease or to any reduction in, or
abatement of, rent by reason of such compliance or cooperation. Tenant agrees at
all times to cooperate fully with Landlord and to abide by all reasonable rules
established by Landlord (i) in order to maximize the efficient operation of the
electrical, heating, ventilating and air conditioning systems and all other
energy or other resource consumption systems within the Property and/or (ii) in
order to comply with the requirements and recommendations of utility suppliers
and governmental agencies regulating the consumption of energy and/or other
resources.
5.5 Limitation of Landlord's Liability. Except for injury, damage or loss
which arises from the negligence, willful misconduct or breach of this Lease by
Landlord's agents, employees or contractors, Landlord shall not be liable to
Tenant for injury to Tenant, its employees, agents, invitees or contractors,
damage to Tenant's property or loss of Tenant's business or profits, nor shall
Tenant be entitled to terminate this Lease or to any reduction in or abatement
of rent by reason of (i) Landlord's failure to provide security services or
systems within the Property for the protection of the Leased Premises, the
Building or the Outside Areas, or the protection of Tenant's property or
Tenant's employees, invitees, agents or contractors, (ii) Landlord's failure to
perform any maintenance or repairs to the Leased Premises, the Building, the
Outside Areas or the Property until Tenant shall have first notified Landlord,
in writing, of the need for such maintenance or repairs, and then only after
Landlord shall have had a reasonable period of time following its receipt of
such notice within which to perform such maintenance or repairs, (iii) any
failure, interruption, rationing or other curtailment in the supply of water,
electric current, gas or other utility service to the Leased Premises, the
Building, the Outside Areas or the Property from whatever cause (other than
Landlord's sole active negligence or willful misconduct), or (iv) the
unauthorized intrusion or entry into the Leased Premises by third parties (other
than Landlord).
ARTICLE 6
ALTERATIONS AND IMPROVEMENTS
6.1 Tenant. Tenant shall not make any alterations to or modifications of
the Leased Premises or construct any improvements within the Leased Premises
until Landlord shall have first approved, in writing, the plans and
specifications therefore, which approvals shall not be unreasonably withheld or
delayed. Landlord's consent shall not be required for non-structural interior
improvements costing less than $10,000 in any calendar year. Plans are required.
All such modifications, alterations or improvements, once so approved, shall be
made, constructed or installed by Tenant at Tenant's expense (including all
permit fees and governmental charges related thereto), using a licensed
contractor first approved by Landlord, in substantial compliance with the
Landlord approved plans and specifications therefore. All work undertaken by
Tenant shall be done in accordance with all Laws and in a good and workmanlike
manner using new materials of good quality. Tenant shall not commence the making
of any such modifications or alterations or the construction of any such
improvements until (i) all required governmental approvals and permits shall
have been obtained, (ii) all requirements regarding insurance imposed by this
Lease have been satisfied, (iii) Tenant shall have given Landlord at least five
business days prior written notice of its intention to commence such work so
that Landlord may post and file notices of non-responsibility, and (iv) if
requested by Landlord, Tenant shall have obtained contingent liability and broad
form builder's risk insurance in an amount reasonably satisfactory to Landlord
to cover any perils relating to the proposed work not covered by insurance
carried by Tenant pursuant to Article 9. In no event shall Tenant make any
modifications, alterations or improvements whatsoever to the Outside Areas or
the exterior or structural components of the Building including, without
limitation, any cuts or penetrations in the floor, roof or exterior walls of the
Leased Premises without Landlord's approval which shall not be unreasonably
withheld. As used in this Article, the term "modifications, alterations and/or
improvements" shall include, without limitation, the installation of additional
electrical outlets, overhead lighting fixtures, drains, sinks, partitions,
doorways, or the like.
11
6.2 Ownership of Improvements. All modifications, alterations or
improvements made or added to the Leased Premises by Tenant (other than Tenant's
inventory, equipment, movable furniture, wall decorations and trade fixtures)
shall be deemed real property and a part of the Leased Premises, but shall
remain the property of Tenant during the Lease Term. Any such modifications,
alterations or improvements, once completed, shall not be altered or removed
from the Leased Premises during the Lease Term without Landlord's written
approval first obtained in accordance with the provisions of Article 6.1 above.
At the expiration or sooner termination of this Lease, all such modifications,
alterations and improvements (other than Tenant's inventory, personal property,
equipment, movable furniture, wall decorations and trade fixtures) shall
automatically become the property of Landlord and shall be surrendered to
Landlord as a part of the Leased Premises as required pursuant to Article 2,
unless Landlord shall require Tenant to remove any of such modifications,
alterations or improvements in accordance with the provisions of Article 2, in
which case Tenant shall so remove same. Landlord shall have no obligation to
reimburse to Tenant all or any portion of the cost or value of any such
modifications, alterations or improvements so surrendered to Landlord. All
modifications, alterations or improvements which are installed or constructed on
or attached to the Leased Premises by Landlord at Landlord's expense shall be
deemed real property and a part of the Leased Premises and shall be the property
of Landlord. All lighting, plumbing, electrical, heating, ventilating and air
conditioning fixtures, partitioning, window coverings, wall coverings and floor
coverings installed by Tenant shall be deemed improvements to the Leased
Premises and not trade fixtures of Tenant.
6.3 Alterations. Tenant shall, at its sole cost make all modifications,
alterations and improvements to the Leased Premises that are required by any Law
because of (i) Tenant's use or occupancy of the Leased Premises, the Building,
the Outside Areas, or the Property, (ii) Tenant's application for any permit or
governmental approval, or (iii) Tenant's making of any modifications,
alterations or improvements to or within the Leased Premises. If Landlord shall,
at any time during the Lease Term, (i) be required by any governmental authority
to make any modifications, alterations or improvements to the Building or the
Project, the cost incurred by Landlord in making such modifications, alterations
or improvements, including an eighteen percent per annum cost of money factor,
shall be amortized by landlord over the useful life of such modifications,
alterations or improvements, as determined in accordance with generally accepted
accounting standards, and the monthly amortized cost of such modifications,
alterations and improvements as so amortized shall be considered a Property
Maintenance Cost.
6.4 Liens. Tenant shall keep the Property and every part thereof free from
any liens and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors relating to the Property. If any such claim of lien is recorded
against Tenant's interest in this Lease, the Property or any part thereof,
Tenant shall bond against discharge or otherwise cause such lien to be entirely
released within 15 days after the same has been so recorded. Tenant's failure to
do so shall be conclusively deemed a material default under the terms of this
Lease.
ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT
7.1 By Tenant. Tenant shall not sublet the Leased Premises (or any portion
thereof) or assign or encumber its interest in this Lease, whether voluntarily
or by operation of Law, without Landlord's prior written consent which shall not
be unreasonably withheld or delayed first obtained in accordance with the
provisions of this Article 7. Any attempted subletting, assignment or
encumbrance without Landlord's prior written consent, at Landlord's election,
shall constitute a default by Tenant under the terms of the Lease. The
acceptance of rent by Landlord from any person or entity other than Tenant, or
the acceptance of rent by Landlord from Tenant with knowledge of a violation of
the provisions of this Article, shall not be deemed to be a waiver by Landlord
of any provision of this Article or this Lease or to be a consent to any
subletting by Tenant or any assignment or encumbrance of Tenant's interest in
this Lease.
7.2 Merger or Reorganization.
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7.3 Landlord's Election. If Tenant shall desire to assign its interest
under this Lease or to sublet the Leased Premises, Tenant must first notify
Landlord, in writing, of its intent to so assign or sublet, at least 20 days in
advance of the date it intends to so assign its interest in this Lease or sublet
the Leased Premises but not sooner than one hundred eighty days in advance of
such date, specifying in detail the terms of such proposed assignment or
subletting, including the name of the proposed assignee or subleasee, the
proposed assignee's or subleasee's intended use of the Leased Premises, a
current financial statement of such proposed assignee or subleasee and the form
of documents to be used in effectuating such assignment or subletting. Landlord
shall have a period of 10 days following receipt of such notice within which to
do one of the following: (i) consent to such requested assignment or subletting
subject to Tenant's compliance with the conditions set forth in Article 7.4
below or (ii) refuse to so consent to such requested assignment or subletting,
provided that such consent shall not be unreasonably refused. It shall not be
unreasonable for Landlord to withhold its consent to any proposed assignment or
subletting if (i) the proposed assignee's or subtenant's anticipated use of the
Premises involves the storage, use or disposal of a Hazardous Material; (ii) if
the proposed assignee or subtenant has been required by any prior landlord,
lender or governmental authority to clean up Hazardous Materials unlawfully
discharged by the proposed assignee or subtenant; or (iii) if the proposed
assignee or subtenant is subject to investigation or enforcement order or
proceeding by any governmental authority in connection with the unlawful use,
disposal or storage of a Hazardous Material. During said fifteen day period,
Tenant covenants and agrees to supply to Landlord, upon request, all necessary
or relevant information which Landlord may reasonably request respecting such
proposed assignment or subletting and/or the proposed assignee or subleasee.
7.4 Conditions to Landlord's Consent. If Landlord elects to consent, or
shall have been ordered to so consent by a court of competent jurisdiction, to
such requested assignment, subletting or encumbrance, such consent shall be
expressly conditioned upon the occurrence of each of the conditions below set
forth and any purported assignment, subletting or encumbrance made or ordered
prior to the full and complete satisfaction of each of the following conditions
shall be void and, at the election of Landlord, which election may be exercised
at any time following such a purported assignment, subletting or encumbrance but
prior to the satisfaction of each of the stated conditions, shall constitute a
material default by Tenant under this Lease until cured by satisfying in full
each such condition by the assignee, subleases or encumbrances. The conditions
are as follows.
A. Landlord having approved in form and substance the assignment or
sublease agreement (or the encumbrance agreement), which approval shall not
be unreasonably withheld by Landlord if the requirements of this Article 7
are otherwise complied with.
B. Each such subleasee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord,
to assume, to be bound by, and to perform the obligations of this Lease to
be performed by Tenant (or, in the case of an encumbrance, each such
encumbrancer having similarly agreed to assume, be bound by and to perform
Tenant's obligations upon a foreclosure or transfer in lieu thereof).
C. Tenant having fully and completely performed all of its obligations
under the terms of this Lease as of the date of such assignment or
subletting.
D. Tenant having reimbursed to Landlord all reasonable costs and
atorneys' fees incurred by Landlord in conjunction with the processing and
documentation of any such requested subletting assignment or encumbrance.
E. Tenant having delivered to Landlord a complete and fully-executed
duplicate original of such sublease agreement, assignment agreement or
encumbrance (as applicable) and all related agreements.
F. Tenant having paid, or having agreed in writing to pay as to future
payments, to Landlord 50 percent of all assignment consideration or excess
rentals to be paid to Tenant or to any other on Tenant's behalf or for
Tenant's benefit for such assignment or subletting as follows:
(1) If Tenant assigns its interest under this Lease and if all or
a portion of the consideration for such assignment is to be paid by
the assignee at the time of the assignment, that Tenant shall have
paid to Landlord and Landlord shall have received an amount equal to
50 percent of the assignment consideration so paid or to be paid
(whichever is the greater) at the time of the assignment by the
assignee; or
13
(2) If Tenant assigns its interest under this Lease and if Tenant
is to receive all or a portion of the consideration for such
assignment in future installments, that Tenant and Tenant's assignee
shall have entered into a written agreement with and for the benefit
of Landlord satisfactory to Landlord and its counsel whereby Tenant
and Tenant's assignee jointly agree to pay to Landlord an amount equal
to 50 percent of all such future assignment consideration installments
to be paid by such assignee as and when such assignment consideration
is so paid.
(3) If Tenant subleases the Leased Premises, that Tenant and
Tenant's subleasee shall have entered into a written agreement with
and for the benefit of Landlord satisfactory to Landlord and its
counsel whereby Tenant and Tenant's subleasee jointly agree to pay to
Landlord 50 percent of all excess rentals to be paid by such subleases
as and when such excess rentals are so paid.
7.5 Assignment Consideration and Excess Rentals Defined. For purposes of
the Article, the term "assignment consideration" shall mean all consideration to
be paid by the assignee to Tenant or to any other on Tenant's behalf or for
Tenant's benefit as consideration for such assignment, less any commissions paid
by Tenant to a licensed real estate broker for arranging such assignment (not to
exceed then standard rates), and the term "excess rentals" shall mean all
consideration to be paid by the subleases to Tenant or to any other on Tenant's
behalf or for Tenant's benefit for the sublease of the Leased Premises in excess
of the rent due to Landlord under the terms of this Lease for the same period,
less any commissions paid by Tenant to a licensed real estate broker for
arranging such sublease (not to exceed then standard rates) and the cost of
improvements made to the subleased premises by Tenant at its expense for the
purpose of subleasing. Tenant agrees that the portion of any assignment
consideration and/or excess rentals arising from any assignment or subletting by
Tenant which is to be paid to Landlord pursuant to this Article now is and shall
then be the property of Landlord and not the property of Tenant.
7.6 Payments. All payments required by this Article to be made to Landlord
shall be made in cash in full as and when they become due. At the time Tenant,
Tenant's assignee or subleases makes each such payment to Landlord, Tenant or
Tenant's assignee or subleases, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the party making such payment as
true and correct.
7.7 Good Faith. The rights granted to Tenant by this Article are granted in
consideration of Tenant's express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's personal property which may be conveyed or leased generally
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith.
7.8 Effect of Landlord's Consent. No subletting, assignment or encumbrance,
even with the consent of Landlord, shall relieve Tenant of its personal and
primary obligation to pay rent and to perform all of the obligations to be
performed by Tenant hereunder. Consent by Landlord to one or more assignments or
encumbrances of Tenant's interest in this Lease or to one or more sublettings of
the Leased Premises shall not be deemed to be a consent to any subsequent
assignment, encumbrance or subletting. If Landlord shall have been ordered by a
court of competent jurisdiction to consent to a requested assignment or
subletting, or such an assignment or subletting shall have been ordered over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or subleases) and Landlord until such time as all
conditions set forth in Article 7.3 above have been fully satisfied (to the
extent not then satisfied) by the assignee or subleases, including, without
limitation, the payment to Landlord of all agreed assignment consideration
and/or excess rentals then due Landlord.
ARTICLE 8
LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
8.1 Limitation on Landlord's Liability and Release. Landlord shall not be
liable to Tenant for, and Tenant hereby releases Landlord and its partners,
principals, officers, agents and employees from, any and all liability, whether
in contract, tort or on any other basis, for any injury to or any damage
sustained by Tenant, Tenant's agents, employees, contractors or invitees; any
damage to Tenant's property; or any loss to Tenant's business, loss of Tenant's
profits or other financial loss of Tenant resulting from or attributable to the
condition of,
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the management of, the repair or maintenance of, the protection of, the supply
of services or utilities to, the damage to or destruction of the Leased
Premises, the Building, the Project or the Common Areas, including without
limitation (i) the failure, interruption, rationing or other curtailment or
cessation in the supply of electricity, water, gas or other utility service to
the Project, the Building or the Leased Premises; (ii) the vandalism or forcible
entry into the Building or the Leased Premises; (iii) the penetration of water
into or onto any portion of the Leased Premises through roof leaks or otherwise;
(iv) the failure to provide security and/or adequate lighting in or about the
Project, the Building or the Leased Premises; (v) the existence of any design or
construction defects within the Project, the Building or the Leased Premises;
(vi) the failure of any mechanical systems to function properly (such as the
HVAC systems); or (vii) the blockage of access to any portion of the Project,
the Building or the Leased Premises, except that Tenant does not so release
Landlord from such liability to the extent such damage was proximately caused by
Landlord's sole negligence, willful misconduct, or Landlord's failure to perform
an obligation expressly undertaken pursuant to this Lease after a reasonable
period of time shall have lapsed following receipt of written notice from Tenant
to so perform such obligation.
8.2 Tenant's Indemnification of Landlord. Tenant shall defend with
competent counsel reasonably satisfactory to Landlord any claims made or legal
actions filed or threatened against Landlord with respect to the violation of
any law, or the death, bodily injury, personal injury, property damage, or
interference with contractual or property rights suffered by any third party
(including other tenants within the Project) occurring within the Leased
Premises to the extent arising from or as a result of Tenant's negligence or
resulting from Tenant's use of occupancy of the Leased Premises, the Building or
the Outside Areas, or resulting from Tenant's activities in or about the Leased
Premises, the Building, the Outside Areas or the Property, and Tenant shall
indemnify and hold Landlord, Landlord's principals, employees, agents and
contractors harmless from any loss, liability, penalties, or expense whatsoever
(including any loss attributable to vacant space which otherwise would have been
leased, but for such activities) resulting therefrom, except to the extent
proximately caused by the sole negligent acts or omissions or willful misconduct
of Landlord or arising as a result of Landlord's breach of the terms of this
Lease. This indemnity agreement shall survive until the latter to occur of (i)
the date of the expiration, or sooner termination, of this Lease, or (ii) the
date Tenant actually vacates the Leased Premises.
ARTICLE 9
INSURANCE
9.1 Tenant's Insurance. Tenant shall maintain insurance complying with all
of the following:
A. Tenant shall procure, pay for and keep in full force and effect, at
all times during the Lease Term, the following;
(1) Commercial General Liability insurance insuring Tenant
against liability for bodily injury, death, property damage and
personal injury occurring at the Leased Premises, or resulting from
Tenant's use or occupancy of the Leased Premises or the Building,
Outside Areas, Property, or Common Areas or resulting from Tenant's
activities in or about the Leased Premises. Such insurance shall be on
an occurrence basis with a combined single limit of liability of not
less than the amount of Tenant's Required Liability Coverage (as set
forth in Article 1). The policy or policies shall be endorsed to name
Landlord and such others as are designated by Landlord as additional
insureds in the form equivalent to CG20111185 or successor and shall
contain the following additional endorsement: "The insurance afforded
to the additional insureds is primarily insurance. If the additional
insureds have other insurance which is applicable to the loss on a
contributing, excess or contingent basis, the amount of this insurance
company's liability under this policy shall not be reduced by the
existence of such other insurance. Any insurance carried by the
additional insureds shall be excess and non contributing with the
insurance provided by the tenant." The policy shall not be canceled or
reduced without at least 30 days written notice to additional
insureds. If the policy insures more than one location, it shall be
endorsed to show that the limits and aggregate apply per location
using endorsement CG25041185 or successor. Tenant's policy shall also
contain the severability of interest and cross-liability endorsement
or clauses.
(2) Fire and property damage insurance in so-called Special Form
insuring Tenant against loss from physical damage to Tenant's property
and improvements within the Leased Premises with coverage for the full
actual replacement cost thereof;
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(3) Boiler and machinery insurance, if applicable;
(4) including without limitation Liquor Liability insurance for
liability arising out of the distribution, sale, or consumption of
food and/or beverages including alcoholic beverages at the Leased
Premises for not less than the Tenant's Required Liability Coverage as
set forth in Article 1.
(5) Workers' compensation insurance. Tenant may self insure for
workers' compensation insurance.
(6) With respect to making of alterations or the construction of
improvements or the like undertaken by Tenant, contingent liability
and builder's risk insurance, in an amount and with coverage
satisfactory to Landlord; and
(7) Business Income Insurance at a minimum of 50% coinsurance
including coverage for loss of business income due to damage to
equipment from perils covered under the so-called Special Form.
B. Each policy of liability insurance required to be carried by Tenant
pursuant to this Article or actually carried by Tenant with respect to the
Leased Premises or the Property (i) shall be in a form reasonably satisfactory
to Landlord, (ii) Shall be provided by carriers licensed to do business in the
state of California, with a Best rating of "A/Vi" or better and/or reasonably
acceptable to Landlord. Property insurance shall contain a waiver and/or a
permission to waive by the insurer any right of subrogation against Landlord,
its principal, employees, agents and contractors which might arise by reason of
any payment under such policy or by reason of any act or omission of Landlord,
its principals, employees, agents or contractors.
C. Prior to the time Tenant or any of its contractors enters the Leased
Premises, Tenant shall deliver to the Landlord with respect to each policy of
insurance required to be carried by Tenant pursuant to this article, a
certificate of the insurer certifying, in a form reasonably satisfactory to the
Landlord, that the policy has been issued and premium paid providing the
coverage required by this Article and containing the provisions herein. Attached
to such a certificate shall be endorsements naming Landlord as additional
insured, and including the wording under primary insurance above. With respect
to each renewal or replacement of any such insurance, the requirements of this
Article must be complied with not less than 30 days prior to the expiration or
cancellation of the policy being renewed or replaced. Landlord may at any time
and from time-to-time inspect and/or copy any and all insurance policies
required to be carried by Tenant pursuant to this article. See Addendum.
D. The Commercial General Liability insurance carried by Tenant shall
specifically insure the performance by Tenant of the Indemnification provisions
set forth in Article 8.2 of this Lease provided, however, nothing contained in
this Article 9 shall be construed to limit the liability of Tenant under the
Indemnification provisions set forth in said Article 8.2.
9.2 Landlord's Insurance. With respect to insurance maintained by Landlord:
A. Landlord shall maintain, as the minimum coverage required of it by
this Lease, property insurance in so-called "Special" form insuring
Landlord (and such others as Landlord may designate) against loss from
physical damage to the Building with coverage of not less than one hundred
percent of the full actual replacement cost thereof and against loss of
rents for a period of not less than twelve months. Such property damage
insurance, at Landlord's election but without any requirement on Landlord's
behalf to do so, (i) may be written in so-called Special Form, excluding
only those perils commonly excluded from such coverage by Landlord's then
property damage insurer, (ii) may provide coverage for physical damage to
the improvements so insured for up to the entire full actual replacement
cost thereof; (iii) may be endorsed to include or separate policies may be
carried to cover loss or damage caused by any additional perils against
which Landlord may elect to insure, including earthquake and/or flood; (iv)
may provide coverage for loss of rents for a period of up to twelve months;
and/or (v) may contain "deductibles" per occurrence in an amount reasonably
acceptable to Landlord. Landlord shall not be required to cause such
insurance to cover any of Tenant's personal property, inventory and trade
fixtures, or any modifications, alterations or improvements made or
constructed by Tenant to or within the Leased Premises.
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B. Landlord shall maintain Commercial General Liability insurance
insuring Landlord (and such others as are designated by Landlord) against
liability for personal injury, bodily injury, death, and damage to property
occurring in, on or about, or resulting from the use or occupancy of the
Property, or any portion thereof, with combined single limit coverage of at
least Two Million Dollars. Landlord may carry such greater coverage as
Landlord or Landlord's Lender, insurance broker or advisor or counsel may
from time to time determine is reasonably necessary for the adequate
protection of Landlord and the Property.
9.3 Mutual Waiver of Subrogation. Landlord hereby releases Tenant, and
Tenant hereby releases Landlord and its respective principals, officers, agents,
employees and servants, from any and all liability for loss, damage or injury to
the property of the other in or about the Leased Premises or the Property which
is caused by or results from a peril or event or happening which would be
covered by insurance required to be carried by the party sustaining such loss
under the terms of this Lease, or is covered by insurance actually carried and
in force at the time of the loss, by the party sustaining such loss; provided,
however, that such waiver shall be effective only to the extent permitted by the
insurance covering such loss and to the extent such insurance is not prejudiced
thereby.
ARTICLE 10
DAMAGE TO LEASED PREMISES
10.1 Landlord's Duty to Restore. If the Leased Premises, the Building or
the Outside Areas are damaged by any peril after the Effective Date of this
Lease, Landlord shall restore the same, as and when required by this Article,
unless this Lease is terminated by Landlord pursuant to Article 10.3 or by
Tenant pursuant to Article 10.4. If this Lease is not so terminated and the
issuance of all necessary governmental permits, Landlord shall commence and
diligently prosecute to completion the restoration of the Leased Premises, the
Building or the Outside Areas, as the case may be, to the extent then allowed by
Law, to substantially the same condition in which it existed as of the Lease
Commencement Date. Landlord's obligation to restore shall be limited to the
improvements constructed by Landlord. Landlord shall have no obligation to
restore any improvements made by Tenant to the Leased Premises or any of
Tenant's personal property, inventory or trade fixtures.
10.2 Insurance Proceeds. All insurance proceeds available from the fire and
property damage insurance carried by Landlord shall be paid to and become the
property of Landlord. If this Lease is terminated pursuant to either Article
10.3 or 10.4, all insurance proceeds available from insurance carried by Tenant
which cover loss of property that is Landlord's property or would become
Landlord's property on termination of this Lease shall be paid to and become the
property of Landlord but only in an amount equal to the amortized portion of
said improvement, and the remainder of such proceeds shall be paid to and become
the property of Tenant.
10.3 Landlord's Right to Terminate. Landlord shall have the option to
terminate this Lease in the event any of the following occurs, which option may
be exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:
A. The Building is damaged by any peril which Landlord was required to
insure against at the time of such damage or destruction (an "insured
peril") to such an extent that the estimated cost to restore the Building
exceeds seventy-five percent of the then actual replacement cost thereof;
B. The Building is damaged by an uninsured peril, which peril Landlord
was not required to insure against pursuant to the provisions of Article 9
of this Lease, to any extent;
C. The Building is damaged by any peril and, because of the Laws then
in force, the Building (i) cannot be restored at reasonable cost or (ii) if
restored, cannot be used for the same use being made thereof before such
damage.
10.4 Tenant's Right to Terminate. If the Leased Premises, the Building or
the Outside Areas are damage by any peril and Landlord does not elect to
terminate this Lease or is not entitled to terminate this Lease pursuant to this
Article, then as soon as reasonably practicable, Landlord shall furnish Tenant
with the written opinion of Landlord's architect or construction consultant as
to when the restoration work required of Landlord may be complete. Tenant shall
have the option to terminate this Lease in the event any of the following
occurs, which
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option may be exercised in the case of A or B below only by delivery to Landlord
of a written notice of election to terminate within seven days after Tenant
receives from Landlord the estimate of the time needed to complete such
restoration:
A. The Leased Premises are damaged by any peril and, in the reasonable
opinion of Landlord's architect or construction consultant, the restoration
of the Leased Premises cannot be substantially completed within nine months
after the date of such notice from Landlord; or
B. The Leased Premises are damaged by any peril within nine months of
the last day of the Lease Term and, in the reasonable opinion of Landlord's
architect or constructive consultant, the restoration of the Leased
Premises cannot be substantially completed within ninety days after the
date such restoration is commenced.
10.5 Tenant's Waiver. Landlord and Tenant agree that the provisions of
Article 10.4 above, captioned "Tenant's Right to Terminate," are intended to
supersede and replace the provisions contained in California Civil Code, Section
1932, Subdivision 2, and California Civil Code, Section 1934, and accordingly,
Tenant hereby waives the provisions of said Civil Code Sections and the
provisions of any successor Code Sections or similar laws hereinafter enacted.
10.6 Abatement of Rent. In the event of damage to the Leased Premises which
does not result in the termination of this Lease, the Base Monthly Rent (and any
Additional Rent) shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Leased Premises is
impaired by such damage.
ARTICLE 11
CONDEMNATION
11.1 Tenant's Right to Terminate. Except as otherwise provided in Article
11.4 below regarding temporary takings, Tenant shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, (ii) 25 percent or more of the Leased Premises is taken and
the part of the Leased Premises that remains cannot, within a reasonable period
of time, be made reasonably suitable for the continued operation of Tenant's
business, or (iii) there is a taking of a portion of the Outside Areas and, as a
result of such taking, Landlord cannot provide parking spaces within the
Property (or within a reasonable distance therefrom) equal in number to at least
sixty-six and two-thirds percent of the number of parking spaces existing within
the Outside Areas immediately prior to such taking, whether by rearrangement of
the remaining parking areas in the Outside Areas (including, if Landlord elects,
construction of multi-deck parking structures or respiring for compact cars
where permitted by Law). Tenant must exercise such option within a reasonable
period of time, to be effective on the later to occur of (i) the date that
possession of that portion of the Leased Premises or the Outside Areas that is
condemned is taken by the condemnor or (ii) the date Tenant vacated the Leased
Premises.
11.2 Landlord's Right to Terminate. Except as otherwise provided in Article
11.4 below regarding temporary takings, Landlord shall have the option to
terminate this Lease if, as a result of any taking (i) all or a substantial part
of the Leased Premises is taken, (ii) more than thirty-three and one-third
percent of the Outside Areas is taken, or (iii) because of the Laws then in
force, the Leased Premises may not be used for the same use being made thereof
before such taking, whether or not restored as required by Article 11.3 below.
Any, such option to terminate by Landlord must be exercisable within a
reasonable period of time, to be effective as of the date possession is taken by
the condemnor.
11.3 Restoration. If any part of the Leased Premises, the Building or the
Outside Area is taken and this Lease is not terminated, then Landlord shall
repair any damage occasioned thereby to the remainder thereof to a condition
reasonably suitable for Tenant's continued operations and otherwise, to the
extent practicable, in the manner and to the extent provided in Article 10.1.
11.4 Temporary Taking. If any portion of the Leased Premises is temporarily
taken for a period of 9 months of less and such period does not extend beyond
the Lease Expiration Date, this Lease shall remain in effect. If any portion of
the Leased Premises which portion causes a material disruption of Tenant's
business is temporarily taken for a period which either exceeds 9 months or
which extends beyond the Lease Expiration Date, then Landlord and Tenant shall
each independently have the option to terminate this Lease, effective on the
date possession is taken by the condemnor.
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11.5 Division of Condemnation Award. Any award made for any taking of the
Property, the Building, the Outside Areas or the Leased Premises, or any portion
thereof, shall belong to and be paid to Landlord, and Tenant hereby assigns to
Landlord all of its right, title and interest in any such award; provided,
however, that Tenant shall be entitled to receive any portion of the award that
is made specifically (i) for the taking of personal property, inventory or trade
fixtures belong to Tenant, (ii) for the interruption of Tenant's business or its
moving costs, (iii) for loss of Tenant's goodwill, or (iv) for any temporary
taking where this Lease is not terminated as a result of such taking. The rights
of Landlord and Tenant regarding any condemnation shall be determined as
provided in this Article, and each party hereby waives the provisions of Section
1265.130 of the California Code of Civil Procedure, and the provisions of any
similar law hereinafter enacted, allowing either party to petition the Superior
Court to terminate this Lease and/or otherwise allocate condemnation awards
between Landlord and Tenant in the event of a taking of the Leased Premises.
11.6 Abatement of Rent. In the event of a taking of the Leased Premises
which does not result in a termination of this Lease, then, as of the date
possession is taken by the condemning authority, the Base Monthly Rent shall be
reduced in the same proportion that the area of that part of the Leased Premises
so taken (less any addition to the area of the Leased Premises by reason of any
reconstruction) bears to the area of the Leased Premises immediately prior to
such taking.
11.7 Taking Defined. The term "taking" or "taken" as used in this Article
11 shall mean any transfer or conveyance of all or any portion of the Property
in a public or quasi-public agency or other entity have the power of eminent
domain pursuant to or as a result of the exercise of such power by such an
agency, including any inverse condemnation and/or any sale or transfer by
Landlord of all or any portion of the Property to such an agency under threat of
condemnation or the exercise of such power.
ARTICLE 12
DEFAULT AND REMEDIES
12.1 Events of Tenant's Default. Tenant shall be in default of its
obligations under this Lease if any of the following events occur within 10 days
following receipt of written notice:
A. Tenant shall have failed to pay Base Monthly Rent or any Additional
Rent when due; or
B. Tenant shall have done or permitted to have done any act, use or
thing in its use, occupancy or possession of the Leased Premises or the
Building or the Outside Areas which is prohibited by the terms of this
Lease; or
C. Tenant shall have failed to perform any term, covenant or condition
of this Lease, except those requiring the payment of Base Monthly Rent or
Additional Rent, within 30-days after written notice from Landlord to
Tenant specifying the nature of such failure and requesting Tenant to
perform same.
D. Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease in violation of the provisions
contained in Article 7, whether voluntarily or by operation of Law; or
E. Tenant shall have abandoned the premises; or
F. Tenant or any Guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the
appointment of a custodian or receiver with respect to, all or any
substantial part of the property or assets of Tenant (or such Guarantor) or
any property or asset essential to the conduct of Tenant's (or such
Guarantors) business, and Tenant (or such Guarantor) shall have failed to
obtain a return or release of the same within thirty days thereafter, or
prior to sale pursuant to such sequestration, attachment or levy, whichever
is earlier; or
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G. Tenant or any Guarantor of this Lease shall have made in general
assignment of all or a substantial part of its assets for the benefit of
its creditors; or
H. Tenant or any Guarantor of this Lease shall have allowed (or
sought) to have entered against it a decree or order which: (i) grants or
constitutes an order for relief, appointment of a trustee, or confirmation
or a reorganization plan under the bankruptcy laws of the United States;
(ii) approves as properly filed a petition seeking liquidation or
reorganization under said bankruptcy laws or any other debtor's relief law
or similar statute of the United States or any state thereof; or (iii)
otherwise directs the winding up or liquidation of Tenant; provided,
however, if any decree or order was entered without Tenant's consent or
over Tenant's objection, Landlord may not terminate this Lease pursuant to
this Subarticle if such decree or order is rescinded or reversed within
thirty days after its original entry.
I. Tenant or any Guarantor of this Lease shall have availed itself of
the protection of any debtor's relief law, moratorium law or other similar
Law which does not require the prior entry of a decree or order.
12.2 Landlord's Remedies. In the event of any default by Tenant, and
without limiting Landlord's right to indemnification as provided in Article 8.2,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by Law or otherwise provided in this Lease, to which Landlord
may resort cumulatively, or in the alternative:
A. Landlord may, at Landlord's election, keep this Lease in effect and
enforce, by an action at law or in equity, all of its rights and remedies
under this Lease including, without limitation, (i) the right to recover
the rent and other sums as they become due by appropriate legal action,
(ii) the right to make payments required by Tenant, or perform Tenant's
obligations and be reimbursed by Tenant for the cost thereof with interest
at the then maximum rate of interest not prohibited by Law from the date
the sum is paid by Landlord until Landlord is reimbursed by Tenant, and
(iii) the remedies or injunctive relief and specific performance to prevent
Tenant from violating the terms of this Lease and/or to compel Tenant to
perform its obligations under this Lease, as the case may be.
B. Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease
shall terminate on the date set forth for termination in such notice. Any
termination under this Subarticle shall not relieve Tenant from its
obligation to pay to Landlord all Base Monthly Rent and Additional Rent
then or thereafter due, or any other sums due or thereafter accruing to
Landlord, or from any claim against Tenant for damages previously accrued
or then or thereafter accruing. In no event shall any one or more of the
following actions by Landlord, in the absence of a written election by
Landlord to terminate the Lease, constitute a termination of the Lease:
(1) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;
(2) Consent to any subletting of the Leased Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions
hereof or otherwise; or
(3) Any other action by Landlord or Landlord's agents intended to
mitigate the adverse effects of any breach of this Lease by Tenant,
including, without limitation, any action taken to maintain and
preserve the Leased Premises or any action taken to relet the Leased
Premises, or any portion thereof, for the account of Tenant and in the
name of Tenant.
C. In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not
terminate unless Landlord gives Tenant written notice of termination. If
Landlord does not terminate this Lease by giving written notice of
termination, Landlord may enforce all its rights and remedies under this
Lease, including the right to recover rent as it becomes due under this
Lease as provided in California Civil Code Section 1951.4, as in effect on
the Effective Date of this Lease.
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D. In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2, as in effect on the Effective Date of
this Lease. For purposes of computing damages pursuant to Section 1951.2,
an interest rate equal to the maximum rate of interest then not prohibited
by Law shall be used where permitted. Such damages shall include, without
limitation:
(1) The worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided, computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco, at the
time of award plus one percent; and
(2) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of
things would be likely to result therefrom, including without
limitation, the following: (i) reasonable expenses for cleaning,
repairing or restoring the Leased Premises; (ii) reasonable expenses
for altering, remodeling or otherwise improving the Leased Premises
for the purpose of reletting, including removal of existing leasehold
improvements and/or installation of additional leasehold improvements
(regardless of how the same is funded, including reduction of rent, a
direct payment or allowance to a new tenant, or otherwise); (iii)
reasonable broker's fees, advertising costs and other expenses of
reletting the Leased Premises; (iv) reasonable costs of carrying and
maintaining the Leased Premises which costs would have been billed to
Tenant as Additional Rent had Tenant not defaulted and which include
but are not limited to taxes, insurance premiums, utility charges,
landscape maintenance costs, costs of maintaining electrical, plumbing
and HVAC equipment and costs for providing security; (v) reasonable
expenses incurred in removing, disposing of and/or storing any of
Tenant's personal property, inventory or trade fixtures remaining
therein; (vi) reasonable attorneys' fees, expert witness fees, court
costs and other reasonable expenses incurred by Landlord but not
limited to taxable costs) in retaking possession of the Leased
Premises, establishing damages hereunder, and releasing the Leased
Premises; and (vii) any other expenses, costs or damages otherwise
incurred or suffered as a result of Tenant's default.
12.3 Landlord's Default and Tenant's Remedies. In the event Landlords fails
to perform any of its obligations under this Lease, Landlord shall nevertheless
not be in default under the terms of this Lease until such time as Tenant shall
have first given Landlord written notice specifying the nature of such failure
to perform its obligations, and then only after Landlord shall have had a
reasonable period of time followings its receipt of such notice within which to
perform such obligations. In the event of Landlord's default as above set forth,
then, and only then, Tenant shall have the following remedies only:
A. Tenant may then proceed in equity or at law to compel Landlord to
perform its obligations and/or to recover damages proximately caused by
such failure to perform (except as and to the extent Tenant has waived its
right to damages as provided in this Lease).
B. Tenant, at its option, may then cure any default of Landlord at
Landlord's cost. If, pursuant to this Subarticle, Tenant reasonably pays
any sum to any third party or does any act that requires the payment of any
sum to any third party at any time by reason of Landlord's default, the sum
paid by, Tenant shall be immediately due from Landlord to Tenant at the
time Tenant supplies Landlord with an invoice therefor (provided such
invoice sets forth and is accompanied by a written statement of Tenant
setting forth in reasonable detail the amount paid, the party to whom it
was paid, the date it was paid, and the reasons giving rise to such
payment), together with interest at twelve percent per annum from the date
of such invoice until Tenant is reimbursed by Landlord. Tenant may not
offset such sums against any installment of rent due Landlord under the
terms of this Lease.
12.4 Limitation on Tenant's Recourse. If Landlord is a corporation, trust,
partnership, joint venture, unincorporated association, or other form of
business entity, Tenant agrees that (i) the obligations of Landlord under this
Lease shall not constitute personal obligations of the officers, directors,
trustees, partners, joint venturers, members, owners, stockholders, or other
principals of such business entity and (ii) Tenant shall have recourse only to
the assets of such business entity for the satisfaction of such obligations and
not against the assets of such officers, directors, trustees, partners, joint
venturers, members, owners, stockholders or principals (other than to the extent
of their interest in the assets owned by such business entity). Additionally, if
Landlord is a partnership, then Tenant covenants and agrees:
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A. No partner of Landlord shall be sued or named as a party in any
suit or action brought by Tenant with result to any alleged breach of this
Lease (except to the extent necessary to secure jurisdiction over the
partnership and then only for that sole purpose);
B. No service of process shall be made against any partner of Landlord
except for the sole purpose of securing jurisdiction of the partnership;
and
C. No writ of execution will ever be levied against the assets of any
partner of Landlord other than to the extent of his interest in the assets
of the partnership.
Tenant further agrees that each of the foregoing covenants and agreements shall
be enforceable by Landlord and by any partner of Landlord and shall be
applicable to any actual or alleged misrepresentation or nondisclosure made
respecting this Lease or the Leased Premises or any factual or alleged failure,
default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statue or at common law.
12.5 Tenant's Waiver. Landlord and Tenant agree that the provisions of
Article 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(l), 1941 and 1942, and accordingly, Tenant
hereby waives the provisions of California Civil Code Sections 1932(l), 1941 and
1942 and/or any similar or successor Law regarding Tenant's right to terminate
this Lease or to make repairs and deduct the expenses of such repairs from the
rent due under this Lease.
ARTICLE 13
GENERAL PROVISIONS
13.1 Taxes on Tenant's Property. Tenant shall pay before delinquency any
and all taxes, assessments, license fees, use fees, permit fees and public
charges of whatever nature or description levied, assessed or imposed against
Tenant or Landlord by a governmental agency arising out of, cause by reason of
or based upon Tenant's estate in this Lease, Tenant's ownership of property,
improvements made by Tenant to the Leased Premises or the Outside Areas,
improvements made by Landlord for Tenant's use within the Leased Premises or the
Outside Areas, Tenant's use (or estimated use) of public facilities or services
or Tenant's consumption (or estimated consumption) of public utilities, energy,
water or other resources. Upon demand by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of these payments. If any such taxes, assessments,
fees or public charges are levied against Landlord, Landlord's property, the
Building or the Property, or if the assessed value of the Building or the
Property is increased by the inclusion therein of a value placed upon same, then
Landlord, after giving written notice to Tenant, shall have the right to pay
such taxes, assessment, fee or public charge and ▇▇▇▇ Tenant, as Additional
Rent, the amount of such taxes, assessment, fee or public charge so paid on
Tenant's behalf. Tenant shall, within ten days from the date it receives an
Invoice from Landlord setting forth the amount of such taxes, assessment, fee or
public charge so levied, pay to Landlord, as Additional Rent, the amount set
forth in said invoice. Failure by Tenant to pay the amount so invoiced within
said ten day period shall be conclusively deemed a default by Tenant under this
Lease. Tenant shall have the right, and the Landlord's full cooperation to bring
suit in any court of competent jurisdiction to recover from the taxing authority
the amount of any such taxes, assessment, fee or public charge so paid.
13.2 Holding Over. This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased Premises
except as expressly provided in this Article. Any such holding over shall be
deemed an unlawful detainer of the Leased Premises unless Landlord has consented
to same. Any such holding over to which Landlord has consented shall be
construed to be a tenancy from month to month, on the same terms and conditions
herein specified insofar as applicable, except that the Base Monthly Rent shall
be increased to an amount equal to one hundred fifty percent of the Base Monthly
Rent payable during the last full month immediately preceding such holding over.
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13.3 Subordination to Mortgages. Subject to Tenant's receiving a
Nondisturbance agreement reasonably acceptable to Tenant, this Lease is subject
to and subordinate to all underlying ground leases, mortgages and deeds of trust
which affect the Building or the Property and which are of public record as of
the Effective Date of this Lease, and to all renewals, modifications,
consolidations, replacements and extensions thereof. However, if the lessor
under any such ground lease or any lender holding any such mortgage or deed of
trust shall advise Landlord that it desires or requires this Lease to be made
prior and superior thereto, then, upon written request of Landlord to Tenant,
Tenant shall promptly execute, acknowledge and deliver any and all documents or
instruments which Landlord and such lessor or lender deem necessary or desirable
to make this Lease prior thereto. Tenant hereby consents to Landlord's ground
leasing the land underlying the Building or the Property and/or encumbering the
Building or the Property as security for future loans on such terms as Landlord
shall desire, all of which future ground leases, mortgages or deeds of trust
shall be subject to and subordinate to this Lease. However, if any lessor under
any such future ground lease or any lender holding such future mortgage or deed
of trust shall desire or require that this Lease be made subject to and
subordinate to such future ground lease, mortgage or deed of trust, then Tenant
agrees, within ten days after Landlord's written request therefor, to execute,
acknowledge and deliver to Landlord any and all documents or instruments
reasonably requested by Landlord or by such lessor or lender as may be necessary
or proper to assure the subordination of this Lease to such future ground lease,
mortgage or deed of trust, but only if such lessor or lender delivers a non
disturbance agreement to Tenant in a form reasonably acceptable to Tenant,
agrees to recognize Tenant's rights under this Lease and agrees not to disturb
Tenant's quiet possession of the Leased Premises so long as Tenant is not in
default under this Lease.
13.4 Tenant's Attornment Upon Foreclosure. Tenant shall, upon request,
attorn (i) to any purchaser of the Building or the Property at any foreclosure
sale or private sale conducted pursuant to any security instrument encumbering
the Building of the Property, (ii) to any grantee or transferee designated in
any deed given in lieu of foreclosure of any security interest encumbering the
Building or the Property, or (iii) to the lessor under any underlying ground
lease of the land underlying the Building or the Property, should such ground
lease be terminated, provided that such purchaser, grantee or lessor recognizes
Tenant's rights under this Lease.
13.5 Mortgagee Protection. In the event of any default on the part of
Landlord, Tenant will give notice by registered mail to any Lender or lessor
under any underlying ground lease who shall have requested, in writing, to
Tenant that it be provided with such notice, and Tenant shall offer such Lender
or lessor a reasonable opportunity to cure the default, including time to obtain
possession of the Leased Premises by power of sale or judicial foreclosure or
other appropriate legal proceedings if reasonably necessary to effect a cure.
13.6 Estoppel Certificates. Tenant will, following any request by Landlord,
promptly execute and deliver to Landlord an estoppel certificate (i) certifying
that this Lease is unmodified and in full force and effect, or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect, (ii) stating the date to which the rent
and other charges are paid in advance, if any, (iii) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if any are claimed, and (iv) certifying
such other information about this Lease as may be reasonably requested by
Landlord, its Lender or prospective lenders, investor or purchaser of the
Building or the Property. Tenant's failure to execute and deliver such estoppel
certificate within ten days after Landlord's request therefore shall be a
material default by Tenant under this Lease, and Landlord shall have all of the
rights and remedies available to Landlord as Landlord would otherwise have in
the case of any other material default by Tenant, including the right to
terminate this Lease and ▇▇▇ for damages proximately caused thereby, it being
agreed and understood by Tenant that Tenant's failure to so deliver such
estoppel certificate in a timely manner could result in Landlord being unable to
perform committed obligations to other third parties which were made by Landlord
in reliance upon this covenant of Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Article may be relied upon by any Lender or
purchaser or prospective Lender or purchaser of the Building, the Property, or
any interest herein.
13.7 Tenant's Financial Information. Tenant shall, within five business
days after Landlord's request therefore deliver to Landlord a copy of a current
financial statement including an income statement for the most recent twelve
month period and a balance sheet and any such other information reasonably
requested by Landlord regarding Tenant's financial condition. Tenant
acknowledges that Landlord is relying upon the financial information provided to
Landlord by Tenant prior to entering into this lease and the information to be
provided to Landlord by Tenant during the term of this Lease. Landlord shall be
entitled to disclose such financial statements or
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other information to its Lender, to any present or prospective principal of or
investor in Landlord, or to any prospective Lender or purchaser of the Building,
the Property or any portion thereof or interest therein. Any such financial
statement or other information which is marked "confidential" or "company
secrets" (or is otherwise similarly marked by Tenant) shall be confidential and
shall not be disclosed by Landlord to any third party except as specifically
provided in this Article, unless the same becomes a part of the public domain
without the fault of Landlord.
13.8 Transfer by Landlord. Landlord and its successor in interest shall
have the right to transfer their interest in the Building, the Property, or any
portion thereof at any time and to any person or entity. In the event of any
such transfer provided that the transferee recognizes all rights of Tenant and
assumes all obligations of Landlord under the Lease, the Landlord originally
named herein (and in the case of any subsequent transfer, the transferor), from
the date of such transfer, (i) shall be automatically relieved, without any
further act by any person or entity, of all liability for the performance of the
obligations of the Landlord hereunder which may accrue after the date of such
transfer and (ii) shall be relieved of all liability for the performance of the
obligations of the Landlord hereunder which have accrued before the date of
transfer if its transferee agrees to assume and perform all such prior
obligations of the Landlord hereunder. Tenant shall attorn to any such
transferee provided the transferee recognizes all rights of Tenant and assumes
obligations of Landlord under this Lease. After the date of any such transfer,
the term "Landlord" as used herein shall mean the transferee of such interest in
the Building or the Property.
13.9 Force Majeure. The obligations of each of the parties under this Lease
(other than the obligations to pay money) shall be temporarily excused if such
party is prevented or delayed in performing such obligation by reason of any
strikes, lockouts or labor disputes; inability to obtain labor, materials, fuels
or reasonable substitutes therefore; governmental restrictions, regulations,
controls, action or inaction; civil commotion; inclement weather, fire or other
acts of God; or other causes (except financial inability) beyond the reasonable
control of the party obligated to perform (including acts or omissions of the
other party) for a period equal to the period of any such prevention, delay or
stoppage.
13.10 Notices. Any notice required to desired to be given by a party
regarding this Lease shall be in writing and shall be personally served, or in
lieu of personal service may be given by (i) delivery by Federal Express, United
Parcel Service or similar commercial carrier, (ii) electronic fax transmission,
or (iii) depositing such notice in the United States mail, postage prepaid,
addressed to the other party as follows:
A. If addressed to Landlord, to Landlord at its Address for Notices
(as set forth in Article 1).
B. If addressed to Tenant, to Tenant at its Address for Notices (as
set forth in Article 1). Any notice given by registered mail shall be
deemed to have been given on the third business day after its deposit in
the United States mail.
Any notice given by registered mail shall be deemed given on the date receipt
was acknowledged to the postal authorities. Any notice given by mail other than
registered or certified mail shall be deemed given only if received by other
party, and then on the date of receipt. Any notice delivered by commercial
carrier or by fax shall be deemed given on the date of confirmation of delivery
by the carrier or by electronic confirmation. Each party may, by written notice
to the other in the manner aforesaid, change the address to which notices
addressed to it shall thereafter by mailed.
13.11 Attorneys' Fees. In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorneys' fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party.
13.12 Definitions. Any term that is given a special meaning by any
provision in this Lease shall, unless otherwise specifically stated, have such
meaning whenever used in this Lease or in any Addenda or amendment hereto. In
addition to the terms defined in Article 1, the following terms shall have the
following meanings:
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A. Real Property Taxes. The term "Real Property Tax" or "Real Property
Taxes" shall each mean (i) all taxes, assessments, levies and other charges
of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required
to pay any general or special assessments for public improvements and any
increases resulting from reassessments caused by any change in ownership or
new construction), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or
indirect power or tax or levy assessments, which are levied or assessed for
whatever reason against the Project or any portion thereof, of Landlord's
interest herein, or the fixtures, equipment and other property of Landlord
that is an integral part of the Project and located thereon, or Landlord's
business of owning, leasing or managing the Project or the gross receipts,
income or rentals from the Project; (ii) all charges, levies or fees
imposed by any governmental authority against Landlord by reason of or
based upon the use of or number of parking spaces within the Project, the
amount of public services or public utilities used or consumed (e.g.,
water, gas, electricity, sewage or surface water disposal) at the Project,
the number of persons employed by tenants of the Project, the size (whether
measured in area, volume, number of tenants or whatever) or the value of
the Project, or the type of use or uses conducted within the Project; and
(iii) all costs and fees (including attorneys' fees) incurred by Landlord
in contesting any Real Property Tax and in negotiating with public
authorities as to any Real Property Tax but only to the extent of any such
savings. If, at any time during the Lease Term, the taxation or assessment
of the Project prevailing as of the Effective Date of this Lease shall be
altered so that in lieu of or in addition to any Real Property Tax
described above there shall be levied, or imposed (whether by reason of a
change in the method of taxation of assessment, creation of a new tax or
charge, or any other cause) an alternate, substitute, or additional tax or
charge (i) on the value, size, use or occupancy of the Project or
Landlord's interest therein or (ii) on or measured by the gross receipts,
income or rentals from the Project, or on Landlord's business of owning,
leasing or managing the Project or (iii) computed in any manner with
respect to the operation of the Project, then any such tax or charge,
however designated, shall be included within the meaning of the terms "Real
Property Tax" or "Real Property Taxes" for purposes of this Lease. If any
Real Property Tax is partly based upon property or rents unrelated to the
Project, then only that part of such Real Property Tax that is fairly
allocable to the Project shall be included within the meaning of the terms
"Real Property Tax" or "Real Property Taxes." Notwithstanding the
foregoing, the terms "Real Property Tax" or "Real Property Taxes" shall not
include estate, inheritance, transfer, gift or franchise taxes of Landlord
or the federal or state income tax imposed on Landlord's income from all
sources.
B. Landlord's Insurance Costs. The term "Landlord's Insurance Costs"
shall mean the costs to Landlord to carry and maintain the policies of fire
and property damage insurance including earthquake and flood for the
Building and the Property and general liability insurance required, or
permitted, to be carried by Landlord pursuant to Article 9, together with
any deductible amounts paid by Landlord upon the occurrence of any insured
casualty or loss.
C. Property Maintenance Costs. The term "Property Maintenance Costs"
shall mean all costs and expenses (except Landlord's Insurance Costs and
Real Property Taxes) paid or incurred by Landlord in protecting, operating,
maintaining, repairing and preserving the Property and all parts thereof,
including without limitation, (i) professional management fees (equal to
three percent of the annualized Base Monthly Rent), (ii) the amortizing
portion of any costs incurred by Landlord in the making of any
modifications, alterations or improvements as set forth in Article 6, which
are so amortized during the Leave Term, (iii) costs of complying with
governmental regulations governing Tenant's use of Hazardous Materials, and
Landlord's costs of monitoring Tenant's use of Hazardous Materials
including fees charged by Landlord's consultants to periodically inspect
the Premises and the Property, and (iv) such other costs may be paid or
incurred with respect to operating, maintaining and preserving the
Property, such as repairing, replacing, and resurfacing the exterior
surfaces of the buildings (including roofs), repairing replacing, and
resurfacing paved areas, cleaning, maintaining, restoring and/or replacing
the interior of the Leased Premises both during the term of the Lease and
upon its termination, and maintaining, repairing or replacing, when
necessary electrical, plumbing, sewer, drainage, heating, ventilating and
air conditioning systems serving the buildings, providing utilities to the
common areas, maintenance, repair, replacement or installation of lighting
fixtures, directional or other signs and signals, irrigation or drainage
systems, trees, shrubs, materials, maintenance of all landscaped areas, and
depreciation and financing costs on maintenance and operating machinery and
equipment (if owned) and rental paid for such machinery and equipment (if
leased).
D. Ready for Occupancy. The term "Ready for Occupancy" shall mean the
date upon which (i) the Leased Premises are available for Tenant's
occupancy in a broom clean condition and (ii) the improvements, if any, to
be made to the Leased Premises by Landlord as a condition to Tenant's
obligation to accept possession of
25
the Leased Premises have been substantially completed and the appropriate
governmental building department (i.e., the City building department, if
the Property is located within a City, or otherwise the County building
department) shall have approved the construction of such improvements as
substantially complete or is willing to so approve the construction of the
improvements as substantially complete subject only to compliance with
specified conditions which are the responsibility of Tenant to satisfy or
is willing to allow Tenant to occupy subject to its receiving assurances
that specified work will be completed.
E. Property Operating Expenses. The term "Property Operating Expenses"
shall mean and include the all Real Property Taxes, plus all Landlord's
Insurance Costs, plus the all Property Maintenance Costs.
F. Law. The term "Law" shall mean any judicial decision and any
statute, constitution, ordinance, resolution, regulation, rule,
administrative order, or other requirement of any municipal, county, state,
federal, or other governmental agency or authority having jurisdiction over
the parties to this Lease, the Leased Premises, the Building or the
Property, or any of them in effect either at the Effective Date of this
Lease or at any time during the Lease Term, including, without limitation,
any regulation, order, or policy of any quasi-official entity or body
(e.g., a board of fire examiners or a public utility or special district).
G. Lender. The term "Lender" shall mean the holder of any Note or
other evidence of indebtedness secured by the Property or any portion
thereof.
H. Private Restrictions. The term "Private Restrictions" shall mean
all recorded covenants, conditions and restrictions, private agreements,
easements, and any other recorded instruments affecting the use of the
Property, as they may exist as of the date of this Lease.
I. Rent. The term "rent" shall mean collectively Base Monthly Rent and
all Additional Rent.
13.13 General Waivers. One party's consent to or approval of any net by the
other party requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof or
any breach of any provision hereof shall be effective unless in writing and
signed by the waiving party. The receipt by Landlord of any rent or payment with
or without knowledge of the breach of any other provision hereof shall not be
deemed a waiver of any such breach. No waiver of any provision of this Lease
shall be deemed a continuing waiver unless such waiver specifically states so in
writing and is signed by both Landlord and Tenant. No delay or omission in the
exercise of any right or remedy occurring to either party upon any breach by the
other party under this Lease shall impair such right or remedy or be construed
as a waiver of any such breach theretofore or thereafter occurring. The waiver
by either party of any breach of any provision of this Lease shall not be deemed
to be a waiver of any subsequent breach of the same or any other provisions
herein contained.
13.14 Miscellaneous. Should any provision of this Lease prove to be invalid
or illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the parties shall be deemed
an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term "party"
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity then all members of Tenant shall be jointly and
severally liable hereunder. This Lease shall be construed and enforced in
accordance with the Laws of the State in which the Leased premises are located.
The language in all parts of this Lease shall in all cases be construed as a
whole according to its fair meaning, and not strictly for or against either
Landlord or Tenant. The captions used in this Lease are for convenience only and
shall not be considered in the construction or interpretation of any provision
hereof. When the context of this Lease requires, the neuter gender includes the
masculine, the feminine, a partnership or corporation or joint venture, and the
singular includes the plural. The terms "must," "shall," "will" and "agree" are
mandatory. Term "may is permissive. When a party is required to do something by
this Lease, it shall so in its sole cost and expense without right of
reimbursement from the other party unless specific provision is made therefore.
Where Tenant is obligated not to perform any act or is not permitted to perform
any act, Tenant is also obligated to make reasonable efforts to restrain any
others reasonably within its control, including agents, invitees, contractors,
subcontractors and employees, from performing said act. Landlord shall not
become or be deemed a partner or a joint venturer with Tenant by reason of any
of the provisions of this Lease.
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ARTICLE 14
CORPORATE AUTHORITY
BROKERS AND ENTIRE AGREEMENT
14.1 Brokerage Commissions. Tenant warrants that it has not had any
dealings with any real estate broker(s), leasing agent(s), finder(s) or
salesmen, other than those persons or entities named in Article 1 as the
"Brokers" with respect to the lease by it of the Leased Premises pursuant to
this Lease, and that it will indemnify, defend with competent counsel, and hold
Landlord harmless from any liabilities for the payment of any real estate
brokerage commissions, leasing commissions or finder's fees claimed by any other
real estate broker(s), leasing agent(s), finder(s) or salesmen to be earned or
due and payable by reason of Tenant's agreement or promise (implied or
otherwise) to pay (or have Landlord pay) such a commission or finder's fee by
reason of its leasing the Leased Premises pursuant to this Lease. The provisions
of this section 14.2 shall be mutual between Landlord and Tenant.
14.2 Entire Agreement. This Lease, the Exhibits (as described in Article 1)
and the Addenda (as described in Article 1), which Exhibits and Addenda are by
this reference incorporated herein, constitute the entire agreement between the
parties, and there are no other agreements, understandings or representations
between the parties relating to the Lease by Landlord of the Leased Premises to
Tenant, except as expressed herein. No subsequent changes, modifications or
additions to this Lease shall be binding upon the parties unless in writing and
signed by both Landlord and Tenant.
14.3 Landlord's Representations. Tenant acknowledges that neither Landlord
nor any of its agents made any representations or warranties respecting the
Project, the Building or the Leased Premises, upon which Tenant relied in
entering into this Lease, which are not expressly set forth in this Lease.
Tenant further acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for Tenant's
intended use under existing law, or (ii) the suitability of the Leased Premises
for the conduct of Tenant's business, or (iii) the exact square footage of the
Leased Premises, and that Tenant relied solely upon its own investigations
respecting said matters. Tenant expressly waives any and all claims for damage
by reason of any statement, representation, warranty, promise or other agreement
of Landlord or Landlord's agent(s), if any, not contained in this Lease or in
any Addenda hereto.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
respective dates below set forth with the intent to be legally bound thereby as
of the Effective Date of this Lease.
AS LANDLORD: AS TENANT:
Renco Equities IV, ▇▇▇ Research Corporation,
a California partnership a Delaware corporation
▇▇▇▇▇▇▇ ▇. Neidlg, Trustee
By: __________________________________ By: _______________________________
Title: _______________________________ Title: ____________________________
By: __________________________________ By: _______________________________
Title: _______________________________ Title: ____________________________
Dated: _______________________________ Dated: ____________________________
If Tenant is a CORPORATION, the authorized officers must sign on behalf of
the corporation and indicate the capacity in which they are signing. This Lease
must be executed by the chairman of the board, president or vice president, and
the secretary, assistant secretary, the chief financial officer or assistant
treasurer, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event a certified copy of the bylaws or a certified
copy of the resolution, as the case may be, must be attached to this Lease.
27
FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE ("Addendum") is made to that Industrial Space
Lease dated as of September 12, 2001, (the "Lease") by and between Renco
Equities IV, a California partnership (as "Landlord"), and La Research
Corporation, a Delaware corporation (as "Tenant"), for the lease of space
located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in Fremont California (the "Leased Premises").
The parties hereto agree that the Lease is amended, changed and modified by the
following provisions, which are hereby added to the Lease:
Unless otherwise expressly provided herein, all terms which are given a
special definition by the Lease that are used herein are intended to be used
with the definition given to them by the Lease. The provisions of the Lease
shall remain in full force and effect except as specifically amended hereby. In
the event of any inconsistency between the Lease and this Addendum, the terms of
this Addendum shall prevail.
General Provision Regarding Additional Rent:
Tenant acknowledges that Landlord has used this lease form with Tenant's
consent, the form having been used for other single tenant buildings occupied by
Tenant. Tenant shall pay one hundred percent (100%) of all Property Operating
Expenses incurred by Tenant, all Property Operating Expenses performed on the
Building occupied by Tenant, and all Property Operating Expenses required as a
result of any action or neglect by Tenant.
Section 2.6
Sixty (60) days prior to the Lease expiration date Landlord and Tenant
shall inspect the Property and prepare a list of work which is readily
discoverable to be performed in connection with Tenant's obligations hereunder.
Tenant shall be obligated to pay the cost or perform the work themselves to
return the Building to general purpose research and development use
substantially in accordance with an architectural drawing identified as sheets
A-2 and A-3 prepared by LRS Associates dated February 4, 1992, as described
below. Tenant's obligation shall be to pay the cost to or perform the work
themselves to: (1) restore the exterior of the Building and all Common Areas or
Outside Areas to the condition existing as of November 1, 1994, which includes
removing all structures constructed or modified by Tenant at any time subsequent
to November 1, 1994, and restoring the area to its original paved or landscaped
condition, and (2) convert the interior of the building from its condition as of
the expiration of the Lease to the condition described below. In this regard,
Tenant's obligation shall be to pay the cost to or perform the work themselves
to prepare the following described areas for the indicated uses:
Building second floor, all office use with a set of men's and women's
restrooms, each with five toilets and two sinks in vanity tops; board room, and
supporting areas. The second floor should be suitable for executive office use
to the same standard used in 1992.
Building first floor, entry lobby, two sets of men's and women's restrooms,
(each restroom with five toilets, one pair with three sinks in vanity tops, the
other pair with two sinks in vanity tops, and one pair with two showers, each),
one lunchroom approximately 2,200 square feet in size, outside patio area,
employee lobbies and interior corridors as required, and supporting spaces,
office use in the rectangle defined as from column line 1 to column line 3 and
column B to column line H, office use in the rectangle defined as column line 3
to column line 5 and column line B to column line D, office use in the rectangle
defined as column line 5 to column line 10 and column line A to column line C,
laboratory use in the rectangle defined as from column line 5 to column line 10
and column line C to column line H, laboratory use in the rectangle defined as
column line 3 to column line 5, and column line D to column line H, and storage
use in the rectangle defined as from column line 1 to column line 10 and column
line H to column line K.
All "office use" areas shall have a dropped ceiling, carpet on the floor
and finishes comparable or better in quality to those used by Landlord in 1992.
All "laboratory use" areas shall have a dropped ceiling with a vinyl tile floor
or equivalent and finishes comparable or better in quality to those used by
Landlord in 1992. All "storage use" areas shall have concrete floors, no dropped
ceiling required and finishes comparable or better in quality to those used by
Landlord in 1992. Throughout the Building the lighting system shall be
appropriate for use in the ceiling area specified. Throughout the Building the
plumbing, electrical, and HVAC systems shall be comparable or better to those
Landlord provided in 1992.
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Tenant shall pay the cost to remove or convert to general purpose ▇▇▇ all
of Tenant's specialized improvements including clean room type ceilings, tiles,
and, light fixtures, and filling or removing any trenching and below grad
conduits or piping, removing above ground specialized wiring, piping, and
conduits, etc. and restoring the areas to the uses specified above.
Tenant shall not be required to repair or replace items or systems that are
properly functioning or otherwise in good working order as of the expiration
date of the Lease. Upon Lease termination Tenant's obligation to repair or
replace mechanical systems shall be limited to repairing or replacing the
individual components of said systems rather than to replace an entire system
unless the cost to replace the entire system is less than the cost to replace
the required components of the system.
Tenant may either perform said work itself or require Landlord to perform
said work. In the event that Landlord performs the work Landlord shall do so in
the shortest reasonable time period and, Tenant shall pay the reasonable cost of
said work including paying Base Monthly Rent and Additional Rent until the work
is completed.
Section 4.7
Notwithstanding anything to the contrary contained herein, Tenant shall not
be required to make or pay for (through Property Operating Expenses or
otherwise) (i) structural alterations to the building or (ii) other changes
which would materially interfere with Tenant's use and enjoyment of the Leased
Premises and the conduct of Tenant's business in order to comply with any of the
foregoing Laws and Private Restrictions. Landlord represents and warrants to the
best of its knowledge that as of the Lease Commencement Date the Leased
Premises, the Building, the Outside Areas and the Property comply with all
Private Restrictions, laws, ordinances, orders, rules and regulations
promulgated by any state, federal, municipality or other agency or body having
or claiming jurisdiction thereof and Landlord shall pay for all costs (if any)
required to bring the Property into compliance with all Private Restrictions,
laws, ordinances, orders, rules and regulations promulgated by any state,
federal, or local authorities in effect as of the Commencement Date of this
Lease. This representation and warranty, and Landlord's obligations hereunder
are limited to improvements constructed by Landlord, its affiliates, or
contractors. Landlord hereby represents to Tenant that Landlord has received no
notice from any public agency regarding any violation of any Private
Restrictions, laws, ordinances, orders, rules and regulations promulgated by any
state, federal, municipality or other agency or body having or claiming
jurisdiction thereof and is unaware of any such violation.
Section 4.8
Landlord represents and warrants to the best of its knowledge, that as of
the Lease Commencement Date, the Leased Premises, Building and Property and all
existing tenant improvements therein complied with the building codes of the
governing authorities and with the regulations of Landlord's insurance carrier
as of the date of construction was completed. This representation and warranty
is limited to the improvements constructed by Landlord and its contractors. In
the event that this warranty is not correct, Landlord shall correct any defect
at its sole cost.
Section 5.1
Landlord shall, at Landlord's cost during the term of this Lease, repair
the structural portions of the building which include the footings, concrete
floor, concrete walls, columns, and roof (other than routine maintenance and
repair costs and other than maintenance of the waterproof membrane which are
Tenant's responsibility pursuant to Section 13.12.C) (provided however that
Tenant shall pay the cost to repair any damage caused by Tenant, and normal
maintenance expenses such as painting). In addition, Landlord at its expense
shall be obligated to repair damage attributable to "Latent Defects." A "Latent
Defect" shall mean a defect in construction or operation that impairs the
utility of the defective system or portion of the Building, Leased Premises,
Outside Area,
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or Property for the purpose that it was constructed, provided however, that a
Latent Defect shall not include a defect which has not caused substantial and
material damage to the Building, Leased Premises, Outside Area, or Property
unless Tenant has notified Landlord in writing of said defect within two (2)
years from the Lease Commencement Date. Tenant hereby acknowledges that it is
unaware of any "latent defects" and that tenant has occupied the property since
November 21, 1994 pursuant to a sublease with SEEQ Technology/LSI Logic.
Notwithstanding anything to the contrary contained herein, Tenant's
obligation to repair (or pay the costs thereof) shall not extent to (1) damage
and repairs due to casualty which Landlord is required to insure against
provided that Tenant shall pay any insurance deductible amounts as required
pursuant to the terms of this Lease, (2) damage caused in whole or in part by
the negligence or willful misconduct of Landlord or Landlord's agents,
contractors, or employees (but only to the extent of said negligence or
misconduct), (3) repairs for which Tenant has already paid as Property
Maintenance Costs or repairs or costs expressly excluded from Tenant's
responsibility under Section 13.12.C; (4) damage arising from Landlord's failure
to comply with the provisions of this Lease including, without limitation,
Landlord's repair obligations pursuant to this section; and repairs covered by
valid warranties.
Section 6.1
Notwithstanding anything to the contrary in this Lease, Tenant shall be
permitted to construct improvements to the interior of the space without
obtaining Landlord's prior written consent provided however, that such
improvements shall: (i) not exceed a cost of twenty five thousand dollars
($25,000) in any calendar year, (ii) shall be interior only; (iii) shall not
affect the structure of the Building, (iv) shall not involve demolition to work
constructed by Landlord, and (v) Tenant shall advise Landlord of the work to be
constructed and with each such improvement will provide to Landlord reproducible
drawings showing the improvements to be constructed by Tenant and existing
adjacent improvements.
Section 7.2
Notwithstanding anything to the contrary herein above, Tenant may assign
this Lease or sublet any portion thereof to any of the following: (i) any
corporation or other entity which controls, is controlled by, or is under common
control with Tenant; (ii) any corporation or other entity resulting from the
merger or consolidation of Tenant, and (iii) any corporation, partnership, other
entity or person which acquires a controlling interest in the corporate stock of
Tenant or acquires substantially all of the assets of Tenant as a going concern
of the business that is being conducted on the Leased premises, provided,
however, that no such assignment shall reduce or alter Tenant's liability under
the terms of this Lease.
Section 8.2
Landlord's Indemnification of Tenant. Subject to Tenant's obligations under
the terms of this Lease, Landlord shall defend, indemnify, and hold Tenant
harmless from and against any and all losses, costs, expenses, liabilities,
claims causes of action and damages of all kinds that may result to Tenant,
including reasonable attorneys' fees and disbursements incurred by Tenant,
arising from (i) the disturbance of Tenant's quiet possession by Landlord, by
persons deriving title from Landlord, because of liens or encumbrances incurred
or suffered by Landlord: (iv) because of title paramount to Landlord's; (ii)
because of any defect in Landlord's power or authority to executed and undertake
Landlord's obligations under this lease; or (iii) because of any failure by
Landlord to perform any of its obligations under this Lease. Landlord's duty to
indemnify Tenant under this Section 8.2 shall survive the expiration or earlier
termination of this Lease.
Landlord covenants with Tenant that, subject to Tenant's compliance with
the terms of this Lease, Tenant shall and may peaceably and quietly have, hold,
and enjoy the Leased Premises for the Term of this Lease, and any renewals, or
extensions thereof, and that neither Landlord, nor any party claiming under or
through Landlord, shall disturb the use or occupancy of the Leased Premises by
Tenant and Landlord shall defend Tenant's right to such use and occupancy.
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Section 9.1
In the event that Landlord desires to inspect Tenant's insurance policies,
Tenant may require that Landlord or its agents agree in writing not to disclose
the exact wording or form of any proprietary information to a third party.
So long as Tenant maintains commercial liability insurance with an amount
not less than ten million dollars ($10,000,000) and otherwise complies with the
provisions of section 9.1 of the Lease (including the obligation to name
Landlord as an additional insured), Tenant shall not be required to provide an
endorsement specifically stating that the limits of insurance and the aggregate
apply to the Premises.
Tenant's insurance required pursuant to section 9.1 A. (2) shall only apply
to tenant improvements that would become Landlord's property upon the expiration
of the term of the Lease.
Tenant's insurance required pursuant to section 9.1 A. (5) shall not apply
so long as Tenant prohibits consumption of alcoholic beverages at the Premises.
Section 9.1 C
If Landlord's lender, insurance broker, advisor or counsel reasonably
determines at any time that the form or amount of any coverages set forth in
Section 9.1 (A) violates this Lease, Landlord shall provide Tenant with written
notice specifying the basis for Landlord's determination. Tenant shall have
fifteen (15) days to bring its insurance into compliance or object to Landlord's
interpretation. In the event that Tenant objects to Landlord's determination,
the parties agree to submit to binding arbitration before the American
Arbitration Association. The prevailing party shall be reimbursed for the
reasonable costs for the arbitration.
Section 11.5
(v) the unamortized value of Tenant's leasehold interest in the Leased
Premises, (vi) Tenant's improvements to the extent paid for by Tenant, (vii) any
expense of Tenant reasonably attributable to said Condemnation, and (viii) any
compensation payable to Tenant by reason of the payment by Tenant of rent in
excess of the rent payable by Tenant under this Lease in order to obtain
alternate space.
Section 13.12A
Notwithstanding anything to the contrary contained herein, Tenant shall not
be obligated to pay (a) interest on Real Property Taxes or penalties resulting
from Landlord's failure to pay Real Property Taxes provide that Tenant shall
have paid said amount to Landlord prior to the delinquency date for said
payments; (b) any increases in Real Property Taxes attributable to additional
improvements to the Building and/or Property unless such improvements are
constructed for Tenant's sole benefit.
Section 13.12-C
All Property Maintenance Costs that Tenant is obligated to pay pursuant to
the terms of this Lease shall be reasonable and shall be directly related to
operation of the Building and/or the Property. Notwithstanding anything to the
contrary contained herein, Property Maintenance Costs shall not include the
following: (a) advertising costs, legal fees or brokerage commissions incurred
in connection with leasing except required to compensate Landlord following a
default by Tenant; (b) repairs, alterations, additions, improvements or
replacements made to rectify or correct any Latent Defect as defined in Section
5.1 of this Lease or which are otherwise Landlord's responsibility pursuant to
Section 5.1 of this Lease; (c) omitted per original lease, (d) damage and
repairs attributable to condemnation, fire or other casualty except for
insurance deductibles which Tenant is obligated to pay which shall be Property
Maintenance Expenses; (e) damage and repairs covered under any insurance policy
carried by Landlord in connection with the Building and/or Property; (f) damage
and repairs necessitated by the negligence or willful misconduct of Landlord or
Landlord's employees, contractors or agents; (g) executive salaries or salaries
of service personnel to the extent that such service personnel perform services
other than in connection with the management,
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operation, repair or maintenance of the Property; (h) Landlord's general
overhead expenses not related to the Property; (i) payments of principal or
interest on any mortgage or other encumbrance; (j) depreciation; (k) legal fees,
accountants' fees and other expenses incurred in connection with disputes with
the enforcement of any defense of Landlord's title to or interest in the
Building or Property or any part thereof; (l) omitted per original lease; (m)
costs or fines arising from Landlord's violation of any governmental rule or
authority; (n) omitted per original lease; (o) the cost of any service provided
to Tenant for which Landlord is entitled to be reimbursed from a third party;
(p) costs exceeding those Tenant proves are obtainable through reasonably
competitive bidding procedures consistent with the scope of work performed; and
(q) costs covered by warranty payments from subcontractors or material suppliers
or attributable to items warranties by Landlord pursuant to Section 5.1 of this
Lease.
At Tenant's request, Landlord shall provide a statement of Property
Maintenance Costs which shall be itemized, signed and certified to be correct by
Landlord.
Landlord shall keep at its office for a period of at least twelve (12)
months after the expiration of each calendar year, full and accurate books,
records and supporting documents in connection with Landlord's statement. Tenant
or Tenant's agent shall have the right at all reasonable times within said
twelve (12) month period to inspect such books, records and supporting
documents, to challenge the accuracy of any Property Maintenance Costs and to
procure an audit. In the event an audit of the records results in a
determination that the Property Maintenance costs charged to Tenant were in
excess of 5% more than the actual Property Maintenance Costs, Landlord shall pay
for the reasonable cost of such audit.
For the Property located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ known as ▇▇▇ Building 10,
Renco 38, and for no other property (should this lease form be used for other
property), during the first eighteen (18) months of the Lease Term, and for no
other time period, the "professional management fees" shall be equal to two and
one half percent (2.5%) of the annualized Base Monthly Rent, after which time
the professional management fees shall be equal to three percent (3%) of the
annualized Base Monthly Rent.
Section 14.5
Landlord's Interest Rate: Throughout the Lease where Tenant is obligated to
pay interest to Landlord, Tenant shall so pay interest at an annual interest
rate equal to the ▇▇▇▇▇ Fargo National Bank Prime Lending Interest Rate, as
determined from time to time by ▇▇▇▇▇ Fargo National Bank, plus three percent
(3%). In the event that such interest rate is not available. Landlord in its
reasonably opinion shall select another major regional national bank which
publishes a prime lending rate of interest to use as a reference rate to which
three percent (3%) shall be added.
Section 15
Option to Renew: Landlord hereby grants to Tenant Two (2) consecutive
options to renew the Lease, each option period to be for an additional five (5)
years (the first Renewal Term and the Second Renewal Term). Each of the renewal
terms shall commence upon the expiration of the preceding lease term such that
there shall not be a gap in the time between the Lease Term, and First Renewal
Term and the Second Renewal Term. The Option to Renew is not transferable.
1. The lease of the Leased Premises for either of the Renewal Terms
shall be on the same terms and conditions as set forth in the Lease,
except:
A. That the rental for the Leased Premises during each of the
Renewal Terms shall be as set forth below in Paragraph 3, and
B. That the Security Deposit shall be increased to the rental
amount determined in Paragraph 3 (the "Increased Security Deposit
Amount").
2. Tenant shall notify Landlord of Tenant's exercise of its right to
renew the Lease for each of the Renewal Terms only by giving to Landlord
written notice no more than nine (9) months prior to the Renewal
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Commencement Date nor fewer than eight (8) months prior to the Renewal
Commencement Date (time is expressly of the essence to Landlord). Any
attempted exercise of this Option made other than within the time period
stated or in the manner stated shall be void and of no force or effect. In
the event that Tenant does not or is not entitled to exercise its option
Tenant shall have no further rights hereunder.
3. If Tenant shall have properly and timely exercised its right to
extend the term of the Lease, the term of the Lease shall be so extended
for the Renewal Terms on the same terms and conditions contained in the
lease; provided, however, the Base Monthly Rent for each month of each of
the Renewal Terms shall be calculated as follows: The new Base Monthly Rent
for each of the Renewal Terms shall be the greater of: (i) the Base Monthly
Rent being paid by Tenant to Landlord during the final full month of the
final year of the time period prior to the commencement of the appropriate
Renewal Term, or (ii) the Then Market Rental Rate for the Lease Premises.
4. The term "Then Monthly Market Rental Rate" shall be determined by
mutual agreement between Landlord and Tenant or, in the event such
agreement cannot be made within ten (10) days from the date Tenant shall
have exercised this option, Landlord and Tenant shall each appoint a real
estate appraiser with at least five (5) years full-time
commercial/industrial appraisal experience in Alameda County to appraise
and determine the fair market monthly rental rate of the Leased Premises,
in its then existing condition for the use specified in the Lease could be
leased for, on the same terms and conditions set forth in the Lease, to a
qualified tenant ready, willing and able to lease the Leased Premises for a
term equal to the Renewal Term. If either party does not appoint an
appraiser within ten (10) days after the other party has given notice of
the name of its appraiser, the other party can then apply to the President
of the Alameda County Real Estate Board or the presiding Judge of the
Superior Court of that County for the selection of a second appraiser who
meets the qualifications stated above. The failing party shall bear the
cost of appointing the second appraiser and of paying the second
appraiser's fees. The two appraisers shall attempt to establish the Then
Monthly Market Rental Rate for the Leased Premises. If the two appraisers
are unable to agree on the Then Monthly Market Rental Rate for the Leased
Premises within ten (10) days after the second appraiser has been selected
or appointed, then the two appraisers shall attempt to select a third
appraiser meeting the qualifications stated above. If they fail to agree on
a third appraiser, either party can follow the above procedure for having
an appraiser appointed by the Real Estate Board or a judiciary. Each of the
parties shall bear one-half (1/2) of the cost of appointing the third
appraiser and of paying the third appraiser's fee. Unless the three
appraisers are able to agree on the Then Monthly Market Rental Rate for the
Leased Premises within ten (10) days after the selection or appointment of
the third appraiser, the two appraisal amounts being calculated most
closely together, after having discarded the appraisal amount which most
greatly varies from the other two appraisal amounts, shall be added
together then divided by two (2). The resulting rental amount shall be
defined as the Then Monthly Market Rental Rate for the Leased Premises. It
is acknowledged that the Then Monthly Market Rental Rate may increase over
time based upon the agreement of the parties or the decision of the
arbitration (i.e., rent escalators) and/or the Then Monthly Market Rental
Rate may contain a period of reduced or no Base Monthly Rent based upon the
agreement of the parties or the decision of the arbitration. In no event,
however, shall the resulting Then Monthly Market Rental Rate for each of
the Renewal Terms be less than the Base Monthly Rent paid during the final
full month of the initial Lease Term or the Prior Renewal Term as
appropriate.
Section 16
The Premises are hereby leased to Tenant in and "as in" condition.
Section 17
Cross Default: Any default by Tenant in the payment of Base Monthly Rent
and/or Additional Rent in a total amount of two hundred fifty thousand dollars
($250,000.00) or greater shall be considered to be a default by Tenant under any
lease entered into by and between Tenant and Landlord or by and between Tenant
and any of the following affiliates of Landlord: Renco Equities IV, a California
partnership, Renco Investment company, a California partnership, Renco Bayside
Investors, a California limited partnership (including any successor entities).
This cross default provision shall apply to lease entered into by Tenant prior
to, concurrently with, or following the date of this Lease. Further, any default
by Tenant in the payment of Base Monthly Rent and/or Additional Rent in a total
amount of two hundred fifty thousand dollars ($250,000.00) or greater under any
other lease entered into with the above referenced entities (or their successor
entities) shall be considered to be a default by Tenant under the terms of this
Lease. In the event of any such default by Tenant in the payment of Base Monthly
Rent and/or
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Additional Rent in a total amount of two hundred fifty thousand
dollars ($250,000.00) or greater, Landlord (and/or Landlord's affiliates
identified above) may pursue the remedies permitted by law or pursuant to the
terms of any such documents as if Tenant had defaulted under each of such
documents.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Addendum
To Lease with the intent to be legally bound thereby, to be effective as of the
date the second party signs this First Addendum To Lease.
AS LANDLORD: AS TENANT:
Renco Equities IV, ▇▇▇ Research Corporation,
a California partnership a Delaware corporation
By: __________________________________ By: _______________________________
Title: _______________________________ Title: ____________________________
By: __________________________________ By: _______________________________
Title: _______________________________ Title: ____________________________
Dated: _______________________________ Dated: ____________________________