INDUSTRIAL SPACE LEASE
(SINGLE TENANT NET)
THIS LEASE, DATED MARCH 6, 1992, for reference purposes only, is made by
and between RENCO EQUITIES IV, A GENERAL PARTNERSHIP ("Landlord"), and ZYCAD
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
REFERENCES
1.1 REFERENCES: 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: Zycad Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
B. Tenant's Representative: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone Number: ▇▇▇-▇▇▇-▇▇▇▇
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C. Landlord's Address for Notices: Renco Equities IV
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
D. Landlord's Representative: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
E. Intended Commencement Date: August 1, 1992
F. Intended Term: Seven (7) Years
G. Lease Expiration Date: July 31, 1999
H. Tenant's Punchlist Period: 30 days
I. Fifth Month's Prepaid Rent: $48,426
J. Late Month's Prepaid Rent: 0
K. Tenant's Security Deposit: $46,090
L. Late Charge Amount: 3% of late amount
M. Tenant's Required Liability Coverage: 3 million dollar single limit
N. Brokers: ▇▇▇▇▇ ▇▇▇▇▇▇ Associates
O. Property or Project: That certain real property, situated in the
City of FREMONT, COUNTY of ALAMEDA, State of California, is presently
improved with one building, which real proper is shown on the Site Plan
attached hereto as Exhibit "A" and is commonly known as or otherwise
described as follows:
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
P. Building: That certain Building within the Property in which the
Leased Premises are located, which Building is shown outlined in red on
Exhibit "A" hereto.
Q. Outside Areas: The "Outside Areas" shall mean all areas within the
Property which are located outside the buildings, such as pedestrian
walkways, parking areas, landscaped areas, open areas and enclosed trash
disposal areas.
R. Leased Premises: All tile interior space within the Building,
consisting of approximately 61,454 square feet 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:
Assessor's Parcel Number ▇▇▇-▇▇▇▇-▇▇
S. Base Monthly Rent: The term "Base Monthly Rent" shall mean the
following:
No Base Monthly Rent during he first four (4) months of the Lease Term.
A Base Monthly Rent of Forty Eight Thousand Four Hundred Twenty Six ($48,426)
Dollars for each month of the final eighty months of the Lease Term as
modified by the terms of Article #2 of the Exhibit C "Tenant Improvement
Agreement".
T. Permitted Use: The term "Permitted Use" shall mean the following:
Light manufacturing, office, distribution, sales and related functions,
and research and development.
U. Exhibits: The term "Exhibits" shall mean the Exhibits to this Lease
which are described as follows:
Exhibit "A"-Site Plan showing the Property and delineating the
Building in which the Leased Premises are located.
Exhibit "B"-Floor Plan outlining the Leased Premise
Exhibit "C"-Tenant Improvement Agreement
Exhibit "D"-Acceptance Agreement
V. Addenda: The term "Addenda" shall mean the Addendum (of 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 Tenant's own use in the conduct Of
Tenant's business and not for purposes of speculating in real estate, for the
Lease Term and upon the terms and subject to the conditions of this Lease,
that certain interior space described in Article I as the Leased Premises,
reserving and excepting to Landlord the exclusive right to all profits to be
derived from any assignments or sublettings by Tenant during the Lease Term
by reason of the appreciation in the fair market rental value of the Leased
Premises. Tenant's lease
of the Leased Premises, together with the appurtenant right to use the
Outside Areas as described in Article 2.2 below, shall be conditioned upon
and be subject to the continuing compliance by Tenant with (i) all die terms
and conditions of this Lease, (ii) all Laws governing the use of the Leased
Premises and the Property, (iii) all Private Restrictions, casements and
other matters now of public record respecting the use of the Leased Premises
and the Property, and (iv) all reasonable rules and regulations from time to
time established by Landlord.
2.2 RIGHT TO USE OUTSIDE AREAS: As an appurtenant right to Tenant's
right to the use and occupancy of the Leased Premises, Tenant shall have the
exclusive right to use the Outside Areas in conjunction with its use of the
Leased Premises solely for the purposes for which they were designed and
intended and for no other purposes whatsoever. Tenant's right to so use the
Outside Areas shall be subject to the limitations on such use as set forth in
Article 4 and 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 or
(ii) Tenant enters into possession of the Leased Premises prior to the
Intended Commencement Date, except as provided elsewhere herein in which case
the Lease Commencement Date shall be as determined pursuant to Article 2.7
below (the "Lease Commencement Date"). The term of the Lease shall end on
the Lease Expiration Date (as set forth in Article I), 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: Landlord shall deliver to Tenant
possession of the Leased Premises on or before the Intended Commencement Date
(as set forth in Article 1) in their presently existing condition, broom
clean, unless Landlord shall have agreed, as a condition to Tenant's
obligation to accept possession of the Leased Premises pursuant to a written
Exhibit or Addenda attached to and made a part of this Lease, to modify
existing interior improvements or to make, construct and/or install
additional specified improvements within the Leased Premises or to the
Outside Areas, in which case Landlord shall deliver to
Tenant possession of the Leased Premises on or before the Intended
Commencement Date as so modified and/or improved. If Landlord is unable to so
deliver possession of the Leased Premises to Tenant in the agreed condition
on or before the Intended Commencement Date, for whatever reason, Landlord
shall not be in default under this Lease, nor shall this Lease be void,
voidable or cancellable by Tenant until the lapse of sixty (60) days after
the Intended Commencement Date (the "delivery grace period"); however, the
Lease Commencement Date shall not be deemed to have occurred until such date
as Landlord notifies Tenant that the Leased Premises are in the agreed
condition and are Ready for Occupancy. Additionally, the delivery grace
period above set forth shall be extended for thirty (30) additional days as
Landlord may be delayed in making the agreed improvements and/or delivering
possession of the Leased Premises to Tenant by reason of Force Majerue or the
actions of Tenant. If Landlord is unable to deliver possession of the Leased
Premises in the agreed condition to Tenant within the described delivery
grace period (including any extensions thereof by reason of Force Majeure or
the actions of Tenant), then Tenant's sole remedy shall be to cancel and
terminate this Lease and in no event shall Landlord be liable in damages to
Tenant for such delay. Tenant may not cancel this Lease at any time after the
date Landlord notifies Tenant that the Leased Premises have been put into the
agreed condition and are Ready for Occupancy.
2.5 ACCEPTANCE OF POSSESSION: Tenant acknowledges that it has
inspected the Leased Premises and is willing to accept them in their existing
condition, broom clean, unless Landlord shall have agreed as a condition to
Tenant's obligation to accept possession of the Leased Premises pursuant to a
written Exhibit or Addenda attached to and made a part of the Lease, to
modify existing interior improvements or to make, construct an/or install
specified improvements within the Leased Premises, in which case Tenant
agrees to accept possession of the Leased Premises when Landlord has
substantially completed such modification or improvements and the Leased
Premises are Ready for Occupancy with final inspection and approval having
been completed. If Landlord shall have so modified existing improvements or
constructed additional improvements within the Leased Premises for Tenant,
Tenant shall, within Tenant's Punchlist Period (as set froth in Article I)
which shall commence on the date that Landlord notifies Tenant that the
agreed improvements have been completed and the Leased Premises are Ready for
occupancy, submit to landlord a signed copy of the Acceptance Agreement
attached hereto as Exhibit "D" together with a punchlist of all incomplete
an/or improper work performed by Landlord. Upon the expiration of Tenant's
Pucnhlist Period, Tenant shall be conclusively deemed to have accepted
the Leased Premises in their then-exitisting condition as so delivered by
Landlord to Tenant, except as to those items reasonably set forth in the
punchlist submitted to Landlord prior to the expiration of said period.
Landlord agrees to correct all items reasonably set forth in Tenant's
punchlist, provided that such punchlist was submitted to Landlord within
Tenant's Punchlist Period. Additionally, Landlord agrees to place in good
working order all existing plumbing, lighting, heating, ventilating and air
conditioning systems and elevator systems within the Leased Premises and all
man doors and roll-up truck doors serving the Leased Premises to the extent
that such systems an/or items are not in good operating condition as of the
date Tenant accepts possession of the Leased Premises; provided that, and
only if, Tenant notifies Landlord in writing of such failures or deficiencies
within thirty (30) business days from the date Tenant so accepts possession
of the Leased Premises.
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. Return of Premises to Landlord
shall be subject to normal wear and tear, except that all systems shall be in
good operating condition. Tenant shall repair all damage to the Leased
Premises caused by Tenant's removal of Tenant's property and all damage to
the exterior of the Building caused by Tenant's removal of Tenant's removal
of Tenant's property and all damage to 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 tiles, wall coverings
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 clean and all painted walls. Tenant at its sole
cost shall retain a mechanical contractor acceptable to Landlord to service
all heating, ventilating, and air-conditioning equipment and restore (or
replace as required) said equipment to good working order. Tenant shall pay
the cost 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. 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. 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, 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
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 die then maximum rate of interest not prohibited by Law unfit 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 work is completed, and Tenant
shall pay Base Monthly Rent and Additional Rent in accordance with the terms
of Section 13,2 (Holding Over) until such work is completed. Tenant shall
indemnify Landlord against loss or liability resulting 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 to lease to succeeding tenants.
2.7 EARLY OCCUPANCY: If Tenant enters into possession of the Lease
Premises prior to the Intended Commencement Date (or permits its contractors
to enter the Leased Premise 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, except as otherwise provided herein.
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 therefore, advance on
the first day of each calendar month, as base monthly rent, the amount set forth
as "Base Monthly Rent" in Article 1 (the "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:
An amount equal to all Property Operating Expenses (as defined in
article 13) incurred by Landlord. Payment shall be made by whichever of the
following methods (or combination of methods) is (are) from time to time
designated by Landlord:
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 fifteen (15) days after receipt of a written ▇▇▇▇
therefore form Landlord; and/or
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, a Landlord may determine, and Tenant
shall pay to Landlord an amount of equal to the estimated amount of such
expenses for such year in equal monthly, installments during such year with
the installments of Base Monthly Rent.
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
periodic basis on which such expenses are billed, subject to generally
accepted accounting practices.
Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7;
Any reasonable legal fees and costs that Tenant is obligated
to pay or reimburse to Landlord pursuant to Article 13; and
Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease other than late charges and interest on
defaulted rent. Tenant shall not be required to pay more than one (1) month
in advance for any expense except for insurance and taxes.
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
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 it's obligation for such expenses in full, then Tenant shall pay to
Landlord the amount of such under payment within fifteen (15) days from
Landlord's billing (Tenant shall have the right to audit all billed expenses)
of same to Tenant. The provisions of this Article shall survive the
expiration 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 form Tenant within six calendar days
after 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
fifteen (15) calendar days after same becomes due, Tenant shall immediately
pay to Landlord a late charge in an amount equal to three (3%) 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 six 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 sixth day at the then maximum rate of interest not prohibited or
made usurious by Law until paid, not to exceed twelve percent (12%).
3.5 PAYMENT 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 I as Fifth "Month's
Prepaid Rent" as prepayment of rent for credit against the fifth
installment(s) of Base Monthly Rent due hereunder. Additionally, Tenant has
paid to Landlord the amount set forth in Article as prepayment of rent for
credit against the fifth 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 I 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 limitations 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 Tenants Last Month's Prepaid Rent by transferring all or
portions of such Last Month's Prepaid Rent 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 shall 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 ▇▇▇▇▇▇▇▇ therefore, 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 continuously and without interruption use
the leased Premises for such purpose for the entire Lease Term. Any
discontinuance of such use for a period of thirty, except in the case of a
Landlord approved Sublease, consecutive calendar days shall be, at Landlord's
election, a default
by, Tenant under the terms of this Lease. Tenant shall have 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 purposes whatsoever.
4.2 GENERAL LIMITAITONS ON USE: Tenant shall not do or permit anything
to be done in or about the Leased Premises, the Building, the Outside Areas
or the Property which does or could (i) 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) 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
without Landlord's approval. Tenant shall not affix any equipment to or make
any penetrations or cuts in the floor, ceiling or walls of the Leased
Premises without Landlord's approval. 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, foundation or
supporting structural components. Tenant shall not place any explosive,
flammable or harmful fluids or other waste materials including 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, supplies, inventory
or equipment shall at all times be stored within the Leased Premises. Tenant
shall not commit nor permit to committed any waste in or about the Leased
Premises, the Building, the Outside Areas or the Property.
4.3 NOISE AND EMMISSIONS: 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 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.
4.5 PARKING: Tenant shall not, any time park or permit to be parked
any recreational vehicles, inoperative vehicles or equipment in the Outside
Areas or on any portion of the Property. Tenant agrees to assume
responsibility for compliance by its employees and invitees with the parking
provisions contained herein. If Tenant or its employees park any vehicle
within the Property in violation of these provisions, then Landlord may, in
addition to any other remedies Landlord may have under his Lease, charge
Tenant, as Additional Rent, and Tenant agrees to pay, as Additional Rent,
Fifty Dollars per day for each day or partial day that each such vehicle is
so parked within the Property. Landlord shall ▇▇▇▇ twenty (20) visitor spaces
near the front of the Leased Premises.
4.6 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 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 without consent of Landlord. 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 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 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.
4.7 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, and shall defend with competent counsel, indemnify and
hold Landlord harmless from any claims, damages or liability resulting from
Tenant's failure to do so. The indemnity provision of
this Article shall survive the expiration or sooner termination of this
Lease, with respect to any activities of Tenant occurring on or about the
Property while Tenant was in possession of the Leased Premises.
4.8 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.
4.9 LANDLORD'S RIGHT TO ENTER: Landlord and its agent shall have the
right to enter the Leased Premises during normal business hours after giving
Tenant reasonable notice 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 when Tenant has failed to do so. 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 normal
business hours for purposes of (i) inspecting the exterior of the Building
and the Outside Areas, (ii) posting notices of non-responsibility, for "For
Lease" (one hundred twenty (120) days from Lease expiration date) of "For
Sale" signs, and (iii) supplying any services to be provided by landlord. Any
entry into the Leased Premises or the Outside Area 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
Leased Premises, or an eviction, actual or constructive of Tenant from the
Leased Premises or any portion thereof.
4.10 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 material, 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 or consent of Tenant, then Tenant, upon
demand of Landlord shall restrain, to the fullest extent then allowed by Law,
such unauthorized use, and shall initiate such appropriate proceedings as may
be required to so restrain such use.
4.11 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 additions
thereto, Tenant shall comply with such rules and regulations. A violation by
Tenant of any of 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.
4.12 ENVIORNMENTAL PROTECTION: Landlord may voluntarily cooperate in a
reasonable manner with the efforts of all governmental agencies in reducing
actual or potential environmental damage. 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 rules and regulations and requirements
which Landlord may reasonably prescribe in order to comply with the
requirements and recommendations of governmental agencies regulating, or
otherwise involved in, the protection of the environment.
4.13 OUTSIDE AREAS: No materials, pallets, supplies, tanks or
containers whether above or below ground level, equipment, finished products
or semifinished 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 purpose and have been approved in writing by
Landlord for such use by Tenant.
4.14 HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Property:
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 Invites after
the Effective Date.
B. If the presence of Hazardous Materials on the Property caused
or permitted by Tenant, Tenant's Agents, Permittees, or Invites after the
Effective Date of this Lease results in a contamination or deterioration of
water or soil or any other part 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 attorney's fees and costs, arising
out of or in connection with any investigation and remediation (including
investigative analysis removal, cleanup, and/or restoration work) required
hereunder to return the Leased Premises, Building, Common Areas, Outside
Areas, and/or Property and any other property of whatever nature to their
condition existing prior to the appearance of such Hazardous Materials.
C. Landlord and Tenant shall each give written notice to the other
as soon as reasonable 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 Material Law. Tenant
acknowledges that Landlord, as the owner of the Property, at the Landlord's
election, shall have the sole right at Tenant's expense to negotiate, defend,
approve, and/or appeal any action taken or order issued with regard to
Hazardous Materials by any applicable governmental authority. 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 (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 the first
appearance of 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 the 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
therefore received from Landlord, disclose in writing all Hazardous Materials
that are being used by Tenant on the Property (or have been used n the
Property), the nature of such use and the manner of storage and disposal.
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 Material by the use of such tests as are then customarily used
for such purposes. If Tenant so requests, Landlord shall supply Tenant with
copies of such test results. The cost of such tests and of the installation,
maintenance, repair and replacement of such ▇▇▇▇▇ shall be paid by Tenant if
such tests disclose the existence of facts which gibe rise to liability of
Tenant pursuant to its indemnity given in A and or B above. 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 for fees
charged by landlord an/or Landlord's consultant's 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 and shall provide a certificate to landlord from a registered
consultant satisfactory to Landlord certifying that Tenant has caused no
contamination of building (s), soil or groundwater in or about the Leased
Premises, Building, Common Areas, or Property. If Tenant fails to so
surrender the Property, Tenant shall indemnify and hold Landlord harmless
from all damages resulting form Tenant's failure to surrender the Property as
required by this Subsection, 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. 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, Tenant shall pay Base
Monthly Rent and Additional Rent in accordance with the terns of Section 13.2
(Holding Over). In addition, Landlord shall be entitled to all damages
directly or indirectly incurred in connection with such holding over,
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 bipheyls 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 a "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 1251 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 substance"
pursuant to Section 1004 of the Resource Conservation and ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Code Sections 6901 et seq. (42 U.S.C. 6903); or (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) or (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) or (j) regulated
under the Toxic Substances Control Act (15 U.S.C. 2601 et seq.) or (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 Material 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, or the, appearance of any Hazardous Materials on the Leased
Premises, Building, Common Area, Outside Area, and/or the Property without
Landlord's consent shall 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 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 healing, ventilating and air
conditioning equipment, and (vii) all entranceways to the Leased Premises.
Tenant, if requested to do so by Landlord shall hire, 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 cost thereof. Tenant shall, at all times during the Lease Term, keep in a
clean and safe 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. 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,
load-bearing and exterior walls, and roof); and (ii) the landscaped areas
located outside the Building and any common areas. 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. In the event that such services are not separately metered, Tenant
shall, at its sole expense, cause such meters to be installed. Landlord shall
maintain the water meter(s) in its own name; provided, however, that if at
any 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 electrical 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,
irrespective of whether or not the services are maintained in Landlord's or
Tenant's name.
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 voluntarily
cooperate in a reasonable manner with the efforts of governmental agencies
and/or utility suppliers in reducing energy or other resource consumption
within the Property, so long as such action does not materially interfere
with Tenant's business. 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: 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,
or (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, or (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 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 BY 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 approval shall not be unreasonably
withheld. 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 ranking 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 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 Landord's consent. 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.
6.2 OWNERSHIP OF IMPROVEMENT'S: 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, 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 ire 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,
(ii) modify the existing (or construct additional) capital improvements or
provide building service equipment for the purpose of reducing the
consumption of utility services or project maintenance costs for the
property, the cost incurred by Landlord in making such modifications,
alterations or improvements, including a one and one-half percent (1-1/2%)
over Wall Street Journal Prime rate 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 therefore
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 ten 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
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: If Tenant is a corporation, any
dissolution, merger, consolidation or other reorganization of Tenant, or the
sale or other transfer in the aggregate over the Lease Term of a controlling
percentage of the capital stock of Tenant, shall be deemed a voluntary
assignment of Tenant's interest in this Lease. The phrase "controlling
percentage" means the ownership of and the right to vote stock possessing
more than fifty percent of the total combined voting power of all classes of
Tenant's capital stock issued, outstanding and entitled to vote for the
election of
directors. If Tenant is a partnership, a withdrawal or change, whether
voluntary, involuntary or by operation of Law, of any general partner, or the
dissolution of the partnership, shall be deemed a voluntary assignment of
Tenant's interest in this Lease.
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 thirty
(30) 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
subleases, 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 seven (7) days
following receipt of such notice within which to do one of the following: (a)
terminate this Lease or, in the case of a sublease of less than all of the
Leased Premises, terminate this Lease as to that part of the Leased Premises
proposed to be so sublet, either (i) on the condition that the proposed
Transferee immediately enter into a direct lease of the Leased Premises with
Landlord (or, in the case of a partial sublease, a lease for the portion
proposed to be so sublet) on the same terms and conditions contained in
Tenant's notice, or (ii) so that Landlord is thereafter free to lease the
Leased Premises (or, in the case of a partial sublease, the portion proposed
to be so sublet) to whomever it pleases on whatever terms are acceptable to
Landlord. In the event Landlord elects to so terminate this Lease, then (i)
if such termination is conditioned upon the execution of a lease between
Landlord and the proposed Transferee, Tenant's obligations under this Lease
shall not be terminated until such Transferee executes a new lease with
Landlord, enters into possession, and commences the payment of rent, and (ii)
if Landlord elects simply to terminate this Lease (or, in the case of a
partial sublease, terminate this Lease as to the portion to be so sublet),
the Lease shall so terminate in its entirety (or as to the space to be so
sublet) fifteen (15) days after Landlord has notified Tenant in writing of
such election. In the case of a partial termination of the Lease, the Base
Monthly Rent and Tenant's proportionate share shall be reduced to an amount
which bears the same relationship to the original amount thereof as the area
of that part of the Leased Premises which remains subject to the Lease bears
to the original are of the Leased Premises. Landlord and Tenant shall execute
a cancellation agreement with respect to the Lease to effect such termination
or partial termination, or (b) if Landlord shall not have elected to cancel
and terminate this Lease, to either (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 en-
forcement order or proceeding by any governmental authority in connection
with the use, disposal or storage of a Hazardous Material. During said seven
(7) 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 encumbrancer, The conditions are as follows:
Landlord having approval 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 sublease 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 encumbrance
having similarly agreed to assume, be bound by and to perform Tenant's
obligation 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 through and including the date of
such assignment or subletting.
D. Tenant having reimbursed to Landlord all reasonable costs and
attorneys' fees incurred by Landlord in conjunction with the processing and
documentation of any such requested, assignment or encimbrance.
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 one hundred 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:
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 one hundred
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
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 one hundred 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 subleases 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 subleases jointly agree to pay Landlord fifty (50)
percent of all excess rentals to be paid by such subleases as and when such
excess rentals are to be 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 any unamortized cost of Tenant's costs for
interior improvements. 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. If Tenant shall
breach this Covenant of Good Faith, Landlord may immediately declare Tenant
to be in default under the terms of this Lease and terminate this Lease
and/or exercise any other rights and remedies Landlord would have under the
terms of this Lease in the case of a material default by Tenant under this
Lease.
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 subletting 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 unfit such time as all conditions set forth in Article 7.4 above
have been fully satisfied (to the extent not then satisfied) by tile assignee
or subleases, including, without limitation, the payment to Landlord of all
agreed assignment considerations and/or excess rentals then due Landlord.
ARTICLE 8:
LIMITATIION 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 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 negligence, willful misconduct, or Landlord's failure to
perform an obligation expressly undertaken pursuant to this Lease (after a
reasonable period) of time not to exceed forty-five (45) days shall have
lapsed following receipt of written notice from Tenant to so perform such
obligation. In this regard, Tenant acknowledges that it is fully apprised of
the provisions of Law relating to releases, and particularly to those
provisions contained in Section 1542 of the California Civil Code which reads
as follows:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must
have materially affected his settlement with the debtor.
Notwithstanding such statutory provision, and for the purpose of
implementing a full and complete release and discharge, Tenant hereby (i)
waives the benefit of such statutory provision and (ii) acknowledges that,
subject to the exceptions specifically set forth herein, the release and
discharge set forth in this Article is a full and complete settlement and
release and discharge of all claims and is intended to include in its effect,
without limitation, all claims and is intended to include in its effect,
without limitation, al claims which Tenant, as of the date hereof, does not
know of or suspect to exist in its favor.
8.2 TENANT'S INDEMNIFACTION OF LANDLORD: Tenant shall defend with
competent counsel satisfactory to Landlord any claims made or legal actions
filed or threatened against Landlord based upon negligence or willful
misconduct 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 or resulting from Tenant's
use or occupancy of the Leased Premises, the Building or the Outside Areas,
or resulting from Tenant's negligent activities based upon negligence or
willful misconduct 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 negligence or willful misconduct of Landlord. 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:
Tenant shall procure, pay for and keep in full force and effect. At
all times during the Lease Term, the following:
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
Area 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 re 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 primary 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
noncontributing with the insurance provided by the tenant." The policy shall
not be cancelled or reduced without at least 30 days written notice to
additional insureds. If the policy insures more than once 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.
Fire and property damage insurance in so-called Special
Form plus earth quake and flood insuring Tenant against loss from physical
damage to Tenant's personal property, inventory, stock, trade fixtures and
improvements within the Leased Premises with coverage for the full actual
replacement cost thereof;
Plate-glass insurance, at actual replacement cost;
Boiler and machinery insurance, if applicable;
(5) Product Liability insurance (including without
limitation Liquor Liability insurance for liability arising out of the
distribution, sale, or consumption of food an/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;
(6) Worker's compensation insurance and any other employee
benefit insurance sufficient to comply with all Laws which policy shall be
endorsed to provide thirty (30) days written notice of cancellation to
Landlord;
(7) With respect to making of alterations to 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;
(8) 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 plus perils of
earth quake and flood; and
(9) Comprehensive Auto Liability insurance with a combined
single limit coverage of not less than the amount of Tenant's Required
Liability Coverage (as set forth in Article I) for bodily injury and/or
property damage liability for: a) Owned autos b) Hired or Borrowed autos c)
Non-owned autos d) Auto blanket contractual form CA0029. The policy shall be
endorsed to provide 30 days written notice of cancellation to Landlord.
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 satisfactory to
Landlord, (ii) Shall be provided by carriers admitted to do business in the
state of California, with a Best rating of "A/VI" or better and/or acceptable
to Landlord. Property insurance shall contain a waiver an/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.
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
satisfactory to the Landlord, that the policy has been issued and premium
paid providing the coverage required by this Article an containing the
provisions herein. Attached to such 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 no less
that 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. If Landlord's lender, insurance broker or advisor
or counsel reasonably determines at any time that the form or amount of
coverage set forth in Article 9.1. (A) for any policy of insurance Tenant is
required to carry pursuant to this Article is not adequate, then Tenant shall
increase the amount of coverage for such insurance to such greater amount or
change the form as Landlord's lender, insurance broker or advisor or counsel
reasonably deems adequate (provided however such increase level of coverage
may not exceed the level of coverage for such insurance commonly carried by
comparable businesses similarly situated and operating under similar
circumstances).
The Commercial General Liability insurance carried by Tenant
shall specifically insure performance by Tenant of the Indemnification
provisions set forth in Article 8.2 except as revised herein 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: Landlord shall maintain, as the minimum coverage required of it by
this Lease, property insurance in 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/ore flood; (iv) may provide coverage for loss of
rents for a period of up to twelve month; and/or (v) may contain "deductible"
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.
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.
Landlord may maintain any other insurance which in the opinion of its
insurance broker or advisor or legal counsel is prudent to carry under the
given circumstances.
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 except
for retentions or deductibles 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,
then upon availability, of the insurance proceeds to landlord (if the loss is
covered by insurance) and the issuance of all necessary governmental permits,
landlord shall commence and diligently prosecute to completion the
restoration of the 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 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 except as caused by Landlord's negligence or
willful misconduct. Upon completion of the restoration by Landlord, Tenant
shall forthwith replace or fully repair substantially all of Tenant's
personal property, inventory, trade fixtures and other improvements
constructed by Tenant to like or similar condition as existed at the time of
such damage or destruction.
10.2 INSURANE 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, and remainder of such proceeds shall be paid
to and become the property of Tenant. If this Lease is not terminated
pursuant to either Article 10.3 or 10.4, all insurance proceeds available
from insurance carried by Tenant which cover loss to property that is
Landlord's property shall be paid to and become the property of Landlord, and
all proceeds available from such insurance which cover loss to property which
would only become the property of Landlord upon the termination of this Lease
shall be paid to and remain the property of Tenant.
10.3 LANDLORD'S RIGHT TO TERMINATE: Landlord shall have the option to
terminate this Lease in the event 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:
The Building is damaged by any peril covered by valid and
collectible insurance actually carried by landlord and in force at the time
of such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the
insurance proceeds available from insurance actually carried by Landlord, or
(ii) seventy five percent of the then actual replacement cost thereof;
The Building is damaged by an uninsured peril, which peril landlord
was required to insure against pursuant to the provisions of Article 9 of
this Lease, to such an extent that the estimated cost to restore the Building
exceeds the lesser of (i) the insurance proceeds which would have been
available had Landlord carried such required insurance, or (ii) seventy-five
percent of the then actual replacement thereof;
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.
The Building is damaged by any peril and, because of the Laws then
in force, the Building (i) can not be restored at reasonable cost or (ii) if
restored, can not 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 damaged 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 no to exceed thirty (30)
days 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 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 form
Landlord the estimate of the time needed to complete such restoration:
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 six (6)
months after the date of such notice from Landlord; or
The Leased Premises are damaged by any peril within twelve (12)
months of the last day of the Lease Term and, in the reasonable opinion of
Landlord's architect or construction consultant, the restoration of the
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) twenty-five (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 walking
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 restriping 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 Areas 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 thirty (30) days or 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 is temporarily taken for a
period which either exceeds thirty (30) days 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.
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, and fifty percent (50%) of premium rent award, so long as Lender's
security is not adversely affected thereby. 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 provision 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 (other than a
temporary taking), then, as of the date possession is taken by the
condemnation 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 to a public or quasi-public agency, or any other entity having 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:
Tenant shall have failed to pay Base Monthly Rent or any
Additional Rent when due; or
Tenant shall have done or permitted to have been 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
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 thirty (30) days after written notice from
Landlord to Tenant specifying the nature of such failure and requesting
Tenant to perform same.
Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease on violation of the provisions
contained in Article 7, whether voluntarily or by operation of Law; or
Tenant shall have failed to continuously occupy the Leased
Premises for a period of thirty
(30) consecutive days; or excluding and sublease approved by the Landlord.
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
Tenant of any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or
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 or 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 ninety (90) days so long as
payment of rent is uninterrupted after its original entry.
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:
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 of
injunctive relief and specific performance to prevent Tenant form violating
the terms of this Lease and/or to compel Tenant to perform its obligations
under this Lease, as the case may be.
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 form 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:
Appointment of a receiver or keeper in order to protect Landlord's
interest hereunder;
Consent to any subletting of the Leased Premises or assignment of
this Lease by Tenant, whether pursuant to the provisions hereof or otherwise;
or
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.
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 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.
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 not to exceed twelve percent (12%) rate of interest then
not prohibited by Law shall be used where permitted. Such damages shall
include, without limitation:
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; less any offset due
to rental received during the period of default; and
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) expenses for cleaning, repairing or restoring the Leased Premises; (ii)
expenses for altering, remodeling or otherwise improving the Leased Premises
for the purposes 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) broker's fees,
advertising costs and other expenses of reletting the Leased Premises; (iv)
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) expenses incurred in
removing, disposing of and/or storing any of Tenant's personal property,
inventory or trade fixtures remaining therein; (vi) 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 re-leasing the
Leased Premises; and (vii) any other expenses, costs or damages other wise
incurred or suffered as a result of Tenant's default.
12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES: In the event Landlord
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 t perform its obligations, and then only after
Landlord shall have had a reasonable period of thirty (30) days, unless cure
is started within said thirty (30) day period and is therefore diligently
prosecuted to a conclusion reasonably following 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:
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).
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 part 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 therefore (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 if 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 obligation of the officers,
directors, trustees, partners, joint ventures, 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 ventures, members, owners, stockholders or other
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:
No partner of the 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);
No service of process shall be made against any partner of
Landlord except for the sole purpose of securing jurisdiction over the
partnership; and
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 statute or at common law.
12.5 TENANT'S WAIVER: Landlord and Tenant agree that the provision of
Article 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(1), 1941 and 1942, and accordingly,
Tenant hereby waives the provisions of California Civil Code Sections
1932(1), 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. Tenant hereby waives any
right of redemption or relief from forfeiture under the Laws of the State of
California, or under any other present or future Law, in the event Tenant is
evicted or Landlord takes possession of the Leased Premises by reason of any
default by Tenant.
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, caused 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, 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, regardless of the validity thereof, 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 fifteen (15) 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 fifteen (15) day period shall be conclusively deemed a default by
Tenant under this Lease. Tenant shall have the right, and the Landlord's full
cooperation if Tenant is not then in default under the terms of this Lease,
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.
13.3 SUBORDINATION TO MORTGAGES: 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
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 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 or 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 MORTGAGE 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 his 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 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 do so deliver such estoppel
certificate in a timely manner could result in Landlord being unable to
perform committed obligation to other third parities 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 ten 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.
Landlord shall be entitled to disclose such financial statements or other
information to its Lender, to any present or prospective principal of
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 successors 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, 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. 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,
material, 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 or 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 depositing such notice in the
United States mail, registered or certified, postage prepaid, addressed to
the other party as follows:
If addressed to Landlord, to Landlord at its Address for Notices
(as set forth in Article 1).
If addressed to Tenant, to Tenant at its Address for Notices (as
set froth 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 certified 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 the other party, and then on the date of receipt. Each party may,
by written notice to the other in the manner aforesaid, change the address to
which notices addressed to it shall thereafter be mailed.
13.11 ATTORNEY'S 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. In the event that Landlord shall be required to retain
counsel to enforce any provision of this Lease, and if Tenant shall
thereafter cure (or desire to cure) such default, Landlord shall be
conclusively deemed the prevailing party and Tenant shall pay to Landlord all
attorney's fees, expert witness fees, court costs and other reasonable
expenses so incurred by Landlord promptly upon demand. Landlord may enforce
this provision by either (i) requiring Tenant to pay such fees and costs as a
condition to curing its default or (ii) bringing a separate action to enforce
such payment, it being agreed by and between Landlord and Tenant that
Tenant's failure to pay such fees and costs upon demand shall constitute a
breech of this Lease in the same manner as a failure by Tenant to pay the
Base Monthly Rent, giving Landlord the same rights and remedies as if Tenant
failed to pay the Base Monthly Rent.
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:
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
increase 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, or 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 or based upon the use 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 ten ants 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. 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 or 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 owing, 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 earth quake 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 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 Property's scheduled gross rental income), (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 Lease 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 as may be paid or incurred with respect to operating, maintaining and
preserving the Property, such as repairing and resurfacing the exterior
surfaces of the buildings (including roofs), repairing, replacing, and
resurfacing paved areas, repairing structural parts of the buildings, 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 OCCUPANCEY: 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 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.
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, plus an accounting
fee equal to five percent of all such costs.
LAW: The term "Law" shall mean any judicial decision and any statue,
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).
LENDER: The term "Lender" shall mean the holder of any Note or other
evidence of indebtedness secured by the Property or any portion thereof.
PRIVATE RESTRICIONS: 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 from time to time.
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 act
by the other party
requiring the first party's consent or approval shall not be deemed to waive
or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. 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 an Tenant.
No delay omission in the exercise of any right or remedy accruing to either
party upon any breach by the other party under this Lease shall impair such
right or remedy or be construed as a waiver of any such breach theretofore or
thereafter occurring. The waiver by either party of any breach of any
provision of this Lease shall not be deemed to be a waiver of any subsequent
breach of the same or 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 meant Landlord or Tenant as the
context implies. If Tenant consists of more that 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 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. The term "may" is permissive. When a party is required to do
something by this Lease, it shall do so at its sole cost and expense without
right of reimbursement from the other party unless 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 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 join venturer with Tenant by reason of any
of the provisions of this Lease.
ARTICLE 14
CORPORATE AUTHORITY,
BROKERS AND ENTIRE AGREEMENT
14.1 CORPORATE AUTHORITY: If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants
that Tenant is validly formed and duly authorized and existing, that Tenant
is qualified to do business in the State in which the Leased premises are
locate, that Tenant has the full right and legal authority to enter into this
Lease, that he or she is duly authorized to execute and deliver this Lease on
behalf of Tenant in accordance with the bylaws and/or a board of directors'
resolution of Tenant, and that this Lease is binding upon Tenant in
accordance with its terms. Tenant shall, within thirty days after execution
of this Lease, deliver to Landlord a certified copy of the resolution of its
board of directors authorizing or ratifying the execution of this Lease, and
if Tenant fails to do so. Landlord at its sole election may elect to (i)
extend the Intended Commencement Date by such number of days that Tenant
shall have delayed in so delivering such corporate resolution to Landlord or
(ii) terminate this Lease.
14.2 BROKERAGE COMMISSIONS: Tenant warrants that it has not had any
dealings with any real estate broker(s), leasing agent(s), finder(s) or
salesman, other than the Brokers (as named in Article I) 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
liability 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 to
have Landlord pay) such a commission or finder's fee by reason of its leasing
the Leased Premises pursuant to this Lease.
14.3 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.
14.4 LANDLORD'S REPRESENTATIONS: Tenant acknowledges that neither
Landlord nor any of its agents made any representation 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 state-management,
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 first above set forth.
AS LANDLORD: AS TENANT:
RENCO EQUITIES IV ZYCAD CORPORATION
A general partnership a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. Vermeil By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: General Partner Title: President and CEO
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By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: General Partner Title: Executive VP and CFO
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Dated: March 20, 1996 Date: March 20, 1996
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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 my be, must
be attached to this Lease.