EXHIBIT 10.44
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("Sublease") made this 9th day of June 2000 between
Amylin Pharmaceuticals, Inc. ("Subtenant") having a place of business located at
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ST
Microelectronics, Inc. (formerly named SGS ▇▇▇▇▇▇▇▇ Microelectronics, Inc.)
("Tenant") located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇.
WHEREAS, Tenant entered into that certain lease (the "Master Lease") between
University Center LLC, ("Landlord") and SGS ▇▇▇▇▇▇▇▇ Microelectronics, Inc., as
Tenant dated April 27, 1998 for certain real estate which consists of
approximately 50,000 square feet in the building commonly described as being
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. (the "Master Premises").
Tenant warrants that a true and complete copy of the Master Lease is included
herein as Exhibit B.
WHEREAS, Tenant now desires to sublet a portion of the Master Premises equal to
approximately 17,328 rentable square feet to Subtenant on the terms and
conditions set forth herein.
W I T N E S S E T H:
NOW, THEREFORE, in consideration of the mutual promises and the covenants
hereinafter contained, Tenant and Subtenant hereby agree as follows:
1. Tenant hereby subleases to Subtenant, and Subtenant hereby subleases
from Tenant, a portion of the Master Premises containing
approximately 17,328 rentable square feet and as more particularly
identified in Exhibit A (the "Premises"). The term of the Sublease
shall commence (the "Commencement Date") as of the earlier of August
15, 2000 or the date of substantial completion which is defined as
issuance of a Certificate of Occupancy from the appropriate
municipality. Tenant agrees to deliver the Premises to Subtenant for
initiation of the Tenant Improvements on the date of the last to
occur of: (i) a of signing of this Sublease by Subtenant and Tenant;
(ii) written consent of the Landlord to the Sublease; and (iii)
delivery of the Security Deposit by Subtenant to Tenant. This
Sublease Agreement is expressly contingent upon Landlord's written
consent to Sublease.
2. Subtenant shall pay to Tenant at its place of business as rent
("Rent") the sum of $26,685.12 per month for the first 12 months of
the sublease. Beginning with the 13th month of the sublease,
Subtenant shall pay to Tenant the sum of $27,485.67 per month,
Beginning with the 25th month of the sublease, Subtenant shall pay
to Tenant the sum of $28,310.24 per month. Beginning with the 37th
month of the sublease, Subtenant shall pay to Tenant the sum of
$29,159.55 until the termination of this Sublease. Rent shall be
payable on the 1st day of each month during the Term, in advance,
without prior notice and without any deduction, abatement or set off
for any reason whatsoever. Rent payments shall commence
on the Commencement Date. If the Commencement Date occurs on other
than the first day of the month, rent shall be pro rated
accordingly. Subtenant shall make rental payments directly to
Tenant.
3. Subtenant shall pay to Tenant upon execution of this Sublease the
sum of $55,820.29 as security ("Security Deposit") for its
obligations hereunder.
4. In addition to Rent, Subtenant shall pay its proportionate share of
Operating Expenses (as defined in Section 7.1 of the Master Lease).
Subtenant shall make payments directly to Tenant. Notwithstanding
the foregoing, in the event any amounts payable by Tenant to Master
Landlord are (i) due to Tenant's breach of any provision of the
Master Lease (ii) due to Tenant's gross negligence or willful
misconduct, or (iii) are for the sole benefit of Tenant, such
amounts shall not be pro rated between Tenant and Subtenant and
shall be the sole responsibility of Tenant.
5. The Premises shall be built out at the sole cost and expense of
Subtenant and in accordance with Exhibit C ("Work Letter Agreement")
which is incorporated by reference herein, or as mutually agreed to
between Subtenant, Tenant, and Landlord (the "Tenant Improvements").
The total cost of the Tenant Improvements shall equal the actual
cost to Subtenant of constructing the Tenant Improvements including
without limitation the cost of all work, labor materials, supplies,
site supervision, architectural, engineering and design fees
(including but not limited to preliminary and final space plans,
mechanical, electrical and plumbing drawings, plans and
specifications, and construction documents); general conditions,
permits and any other costs, fees or expenses incurred by Subtenant
in connection with the construction of the Tenant Improvements.
Tenant shall reimburse Subtenant for Tenant Improvements in an
amount up to Three Hundred Thousand Dollars ($300,000.00) (the
"Tenant Improvement Allowance"). Any amount over and above the
Tenant Improvement Allowance is to be the sole responsibility of
Subtenant. Tenant shall reimburse Subtenant the Tenant Improvement
Allowance within 14 days of Subtenant's notice to Tenant of issuance
of a Certificate of Occupancy from the appropriate municipality.
Non-payment of the Tenant Improvement Allowance shall be considered
an event of default. Any reasonable, out-of-pocket costs incurred by
Landlord or Tenant for the construction of the Tenant Improvements
will be reimbursed by Subtenant within 21 days of date of invoice.
Tenant shall have the right to approve such construction contract in
accordance with the provisions of Exhibit C, provided such approval
shall not be unreasonably withheld or delayed. All Tenant
Improvements shall be completed with due diligence, in a good and
workmanlike manner and in compliance with all laws, codes and
ordinances applicable to the Premises.
6. Subtenant shall use the Premises only as general office space in
accordance with the Master Lease. Notwithstanding anything to the
contrary in this Sublease,
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Subtenant's repair obligations hereunder shall not include the
making of any capital repairs or improvements to the Premises
unless, and to the extent, required due to Sublessee's negligence or
willful misconduct.
7. Subtenant shall have the right to sell, hypothecate, assign or
transfer this Sublease or sub-sublet ("Sub-Sublet") the Premises, or
any part thereof, subject to the terms and conditions of Section 25
of the Master Lease as incorporated herein, including without
limitation obtaining the prior written consent of Tenant and
Landlord, which consent shall not be unreasonably withheld or
delayed. Said right of Subtenant shall be subject to the following
additional conditions:
a) minimum size of a portion of Premises to be Sub-Sublet is
3,500 rentable square feet;
b) maximum number of sub-subtenants in Premises to be Sub-Sublet
is 2; and
c) upon submission by Subtenant. To Tenant for approval a
sub-sublease agreement to Sub-Sublet a portion of the Premises
after eighteen months from the date of this Sublease, Tenant
may elect to reacquire such portion of the Premises.
8. Subject to the modifications set forth in this Sublease, and except
for the payment of Rent or to the extent inconsistent with the
agreements and provisions herein set forth, the terms, covenants and
conditions of this Sublease shall be the same as the terms,
covenants and conditions contained in the Master Lease, all of
which, as modified hereby, (i) are incorporated herein by reference
(ii) are, as to those to be performed or complied with by the
Subtenant named herein, hereby assumed by Subtenant, as they pertain
to the Premises, and (iii) shall have the same force and effect as
though herein set forth at length and as though Tenant and Subtenant
were respectively Landlord (or University Center LLC) and Tenant
named therein. All acts to be done by Tenant and all obligations of
Subtenant shall be done or performed by Subtenant, as lessee, to
Tenant, except as otherwise provided in this Sublease. Subtenant
shall indemnify and hold Tenant harmless from all claims, damages,
costs and expenses (including, but not limited to, reasonable legal
fees and disbursements) in respect of the nonperformance or
nonobservance of any such obligations to the extent related to the
Premises. Subtenant shall not do, nor permit to be done, any act or
thing which would result in an increase of Tenant's rent or any
other obligation or liability of Tenant under the Master Lease.
9. Notwithstanding the foregoing, the following sections of the Master
Lease are not incorporated herein: 1, 2, 3, 4, 5, 6, 11, 40 and
41.8; and Exhibits A and B; and First Amendment to Lease and Second
Amendment to Lease. Additionally, notwithstanding the incorporation
of Section 7 of the Master Lease, Subtenant shall only be
responsible for its proportionate share of Operating Expenses
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incurred by the Landlord under the Master Lease and charged through
to Tenant, and under no circumstances shall Subtenant be liable for
any Operating Expenses incurred directly by Tenant. Additionally,
references to landlord in the following sections shall be deemed to
refer only to the Landlord: 31, 32 and 35.
10. This Sublease shall terminate on July 18, 2004. Subtenant shall have
no right to terminate this Sublease in the event of a casualty or
condemnation or taking by eminent domain except under termination of
the Master Lease.
11. Except as otherwise herein provided, the provisions hereof shall
bind and benefit respectively the parties hereto, their legal
representatives, successors and permitted assigns.
12. Subtenant acknowledges that this Sublease is subordinate to the
Master Lease. In the event of a conflict between the terms and
conditions of this Sublease and the Master Lease, the terms and
conditions of this Sublease shall control, provided, however, that
in the event enforcement of same would nullify or constitute a
breach of the terms in the Master Lease then the terms and
conditions of the Master Lease shall be deemed controlling to the
extent necessary to avoid such nullification or breach.
Notwithstanding the foregoing, any provisions of the Master Lease
which by their terms are not applicable to or effective with respect
to the Sublease are not applicable to and shall not be effective
with respect to this Sublease.
13. This Sublease, including all exhibits hereto and the Master Lease,
represents the total understanding between the Tenant and Subtenant
regarding its subject matter and shall only be modified by a written
agreement signed by both parties.
14. All notices, demands, consents, approvals, requests and instruments
or documents required by this Sublease shall be in writing, and
shall be deemed sufficiently given if sent by overnight mail or
facsimile at the addresses shown on page one of this Sublease.
15. Subtenant and Tenant acknowledge, however, that nothing contained in
this Sublease shall modify or diminish Tenant's obligations to the
Landlord under the Master Lease, and the consent of the Landlord and
Tenant to this Sublease shall not be deemed to be a waiver or
release by the Landlord under the Master Lease or Tenant under the
Sublease. In addition, the consent of the Landlord and Tenant shall
not obligate Landlord or Tenant to consent to any further sublease
of the Premises or to any assignment of the Master Lease or
Sublease.
16. A total of 50 parking spaces, 27 of which are covered and
unreserved, are allocated to Subtenant and are included as a part of
the Sublease for the duration of the Term.
17. Tenant represents and warrants to Subtenant as follows:
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a) It has all requisite authority to execute and perform the
terms of this Sublease; the Sublease is the valid and binding
obligation of Subtenant, enforceable in accordance with its
terms; and the terms of this Sublease do not violate any
contract term or governmental order applicable to Tenant, or
by which it or any of its property is bound.
b) The Master Lease is in full force and effect, has not been
amended except to the extent specifically disclosed herein,
and neither Landlord nor Tenant is or has been in default
under the Master Lease.
c) It will not amend or modify the Master Lease in such a manner
as to materially adversely affect Subtenant's use of the
Premises or increase the obligations or decrease the rights of
Subtenant hereunder, without the prior written consent of
Subtenant, which shall not be withheld unreasonably.
18. Tenant grants Subtenant an option to renew this Sublease under the
following conditions:
a) Tenant exercises its option to renew the Master Lease pursuant
to the provisions of the Master Lease; and
b) Tenant elects not to utilize or occupy the sublet space for
its own use.
19. ▇▇▇ & Associates and ▇▇▇▇▇▇ International are the sole real estate
brokers responsible for arranging the transaction and any commission
fees to be paid are the responsibility of the Tenant. Subtenant
agrees to indemnify and hold Tenant harmless against all claims by
any other real estate brokers.
[Balance of page intentionally left blank]
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20. Choice of Law/Consent to Jurisdiction -- This Sublease shall be
deemed to have been made in California and shall be governed by,
construed and enforced in accordance with the laws of the State of
California without regard to its conflict of laws provisions. The
parties agree that any dispute arising out of or related to this
Sublease shall be brought in the state or federal courts located in
California.
IN WITNESS WHEREOF, the parties hereof have executed this Sublease as of
the day and year first above written.
TENANT: ST MICROELECTRONICS. INC.
By: __________________________________ By: __________________________________
Print Name: __________________________ Print Name: __________________________
Title: _______________________________ Title: _______________________________
Date: ________________________________ Date: ________________________________
SUBTENANT: AMYLIN PHARMACEUTICALS, INC.
By: __________________________________ By: __________________________________
Print Name: __________________________ Print Name: __________________________
Title: _______________________________ Title: _______________________________
Date: ________________________________ Date: ________________________________
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LEASE
UNIVERSITY CENTER LLC
"Landlord"
AND
SGS-THOMSON MICROELECTRONICS, INC.
"Tenant"
UNIVERSITY CENTER
SAN DIEGO, CALIFORNIA
LEASE
TABLE OF CONTENTS
Page
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1. Lease Premises.................................................... 1
2. Basic Lease Provisions............................................ 1
3. Term.............................................................. 2
4. Construction, Possession, Rental Rate and Commencement Date....... 3
5. Rent.............................................................. 4
6. Rental Adjustments................................................ 5
7. Operating Expenses................................................ 5
8. Rentable Area..................................................... 8
9. [Intentionally Left Blank]........................................ 9
10. Use............................................................... 9
11. Brokers........................................................... 10
12. Holding Over...................................................... 10
13. Taxes and Assessments............................................. 11
14. Condition of Premises............................................. 13
15. Parking Facilities................................................ 13
16. Utilities and Services............................................ 13
17. Alterations....................................................... 14
18. Repairs and Maintenance........................................... 15
19. Liens............................................................. 15
20. Indemnification and Exculpation................................... 16
21. Insurance--Waiver of Subrogation.................................. 17
22. Damage or Destruction............................................. 20
23. Eminent Domain.................................................... 21
24. Defaults and Remedies............................................. 22
25. Assignment of Subletting.......................................... 26
26. Attorney's Fees................................................... 27
27. Bankruptcy........................................................ 28
28. Definition of Landlord............................................ 28
29. Estoppel Certificate.............................................. 29
30. Removal of Property............................................... 29
31. Limitation of Landlord's Liability................................ 30
32. Control by Landlord............................................... 31
33. Quiet Enjoyment................................................... 31
34. Quitclaim Deed.................................................... 31
35. Subordination and Attornment...................................... 31
36. Surrender......................................................... 32
37. Waiver and Modification........................................... 32
38. Waiver of Jury Trial and Counterclaims............................ 32
39. Hazardous Materials............................................... 32
40. Option to Extend.................................................. 36
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Page
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41. Miscellaneous..................................................... 37
41.1 Terms and Headings........................................... 37
41.2 Examination of Lease......................................... 37
41.3 Time......................................................... 37
41.4 Covenants and Conditions..................................... 37
41.5 Consents..................................................... 38
41.6 Entire Agreement............................................. 38
41.7 Severability................................................. 38
41.8 Recording.................................................... 38
41.9 Impartial Construction....................................... 38
41.10 Inurement................................................... 38
41.11 Force Majeure............................................... 38
41.12 Notices..................................................... 38
41.13 Authority to Execute Lease.................................. 39
EXHIBIT "A" -- Work Letter
EXHIBIT "B" -- Form of Acknowledgement of Term Commencement Date
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LEASE
THIS LEASE ("Lease") is made as of April_1998, by and between UNIVERSITY
CENTER LLC, a California limited liability company ("Landlord"), and SGS-THOMSON
MICROELECTRONICS, INC., a Delaware corporation ("Tenant").
1. LEASE PREMISES.
1.1 Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, those certain premises ("Premises") consisting of (i) that certain
real property ("Land") legally described as Parcel 1 of Parcel Map 16309, in the
City of San Diego, County of San Diego, State of California, according to Map
thereof filed in the Office of the County Recorder of San Diego County, November
29, 1990, (ii) the entirety of the building (the "Building") to be constructed
on the Land, and (iii) all landscaping, drainage, irrigation, lighting, parking
facilities, walkways, driveways and other improvements and appurtenances related
thereto (the "Land Improvements").
2. BASIC LEASE PROVISIONS.
2.1 For convenience of the parties, certain basic provisions of
this Lease are set forth herein. The provisions set forth herein are subject to
the remaining terms and conditions of this Lease and are to be interpreted in
light of such remaining terms and conditions.
2.1.1 Rentable Area of Building: Approximately 50,000 square
feet
2.1.2 Basic Annual Rent: $888,000 ($1.48 per month per square
foot of Rentable Area), subject to adjustment pursuant
to Sections 4.1, 6.1 and 8.2
2.1.3 Monthly Installment of Basic Annual Rent: $74,000 ($1.48
per month per square foot of Rentable Area), subject to
adjustment pursuant to Sections 4.1, 6.1 and 8.2
2.1.4 (a) Estimated Term Commencement Date: Twelve (12)
months after issuance of building permit for
Building Shell
(b) Term Expiration Date: Five (5) years from the Term
Commencement Date
2.1.6 Guarantor: None
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2.1.6 Permitted Use: Uses permitted in Section 10.1
2.1.7 Address for Rent Payment and Notices to Landlord:
University Center LLC
c/o Nexus Properties, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices to Tenant:
SGS-THOMSON Microelectronics, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
1310 Electronics Drive, M.S. 2346
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
With Copy of all Notices to Tenant Prior to Occupancy:
Metaflow Technologies Incorporated
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
With Copy of all Notices to Tenant After Occupancy:
Metaflow Technologies Incorporated
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Street Address of the Premises
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
2.2 Capitalized terms not otherwise defined in this Lease shall
have the meaning set forth in the Work Letter attached hereto as Exhibit "A"
("Work Letter").
3. TERM.
3.1 This Lease shall take effect upon the date of execution hereof
by each of the parties hereto, and each of the provisions hereof shall be
binding upon and inure to the benefit of Landlord and Tenant from the date of
execution hereof by each of the parties hereto.
3.2 The approximate term of this Lease is as set forth in Section
2.1.4. The actual term of this Lease will be that period from the Term
Commencement Date through the Term Expiration Date, subject to earlier
termination of this Lease or extension of the term of this Lease as provided
herein.
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4. CONSTRUCTION, POSSESSION, RENTAL RATE AND COMMENCEMENT DATE.
4.1 Landlord shall construct the Building Shell, Tenant
Improvements and Land Improvements (the "Project Work") in accordance with the
provisions of the Work Letter. Landlord shall be responsible for construction of
the Tenant Improvements at a cost to Landlord not to exceed $34.16 per square
foot of Rentable Area (the budget for which includes a five percent (5%)
contingency for construction of Tenant Improvements, and the actual cost of
which shall exclude extended overhead resulting from Force-Majeure and
Landlord-Caused Delays). If the cost of the Tenant Improvements is more or less
than $34.16 per square foot of Rentable Area (excluding extended overhead
resulting from Force-Majeure and Landlord-Caused Delays, and after applying any
"value engineering" savings described in the Work Letter and achieved for the
Tenant Improvements), Basic Annual Rent as set forth in Sections 2.1.2 and 2.1.3
shall be adjusted upward or downward, as the case may be, in the amount of $.01
per square foot of Rentable Area per month for each $1.00 of such difference.
4.2 Landlord shall use good faith, diligent efforts to tender
possession of the Premises, with the Project Work Substantially Completed, to
Tenant on the estimated Term Commencement Date as set forth in Section 2.1.4(a).
Tenant agrees that in the event Landlord fails to tender possession of the
Premises with the Project Work Substantially Completed on or before the
estimated Term Commencement Date, this Lease shall not be void or voidable and
Landlord shall not be liable to Tenant for any loss or damage resulting
therefrom, and Tenant expressly waives any right to terminate this Lease because
of delays in completion of construction of the Project Work, except as expressly
provided below. In no event shall Tenant's obligation to pay Basic Annual Rent,
Operating Expenses, and any other amounts under this Lease commence until the
actual Term Commencement Date, except as set forth in Section 4.5.
4.2.1 In the event Landlord fails to tender possession of the
Premises with the Project Work Substantially Completed within 60 days following
the Estimated Term Commencement Date as set forth in Section 2.1.4(a), as such
60-day period is extended by the number of days of Tenant-Caused Delays and
Force-Majeure Delays, Landlord and Tenant agree that Tenant will suffer damages
which would be difficult to ascertain but a reasonable estimate of which would
be $2,000 per day for each day of delay thereafter. Therefore, in the event of
such delay, Landlord agrees to pay Tenant liquidated damages Of $2,000 per day
commencing 60 days following the Estimated Term Commencement Date, as such
60-day period is extended by the number of days of Tenant-Caused Delays and
Force-Majeure Delays, until possession of the Premises with the Project Work
Substantially Completed is tendered to Tenant or the Lease is terminated
pursuant to Section 4.2.2 below.
4.2.2 In the event Landlord fails to tender possession of the
Premises with the Project Work Substantially Completed within 120 days after the
Estimated Term Commencement Date, as such 120-day period is extended by the
number of days of Tenant-Caused Delays and Force-Majeure Delays, Tenant may
terminate this Lease and recover damages from Landlord caused by Landlord's
nonperformance hereunder.
4.3 The actual Term Commencement Date shall be that date which is
30 days after the date Landlord tenders possession of the Premises to Tenant
with all the Project Work
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Substantially Completed. Landlord and Tenant shall execute a written
acknowledgment of the Term Commencement Date and the Term Expiration Date when
such is established in substantially the form attached hereto as Exhibit "B" and
attach it to this Lease as Exhibit "B-1"; however, failure to execute and
deliver such acknowledgement shall not affect Tenant's liability hereunder.
4.4 As used in Section 4.2 above and elsewhere in this Lease and
the Work Letter, the terms "Substantially Complete", "Substantially Completed",
and "Substantial Completion" shall mean the date construction of the Project is
substantially complete in accordance with the Work Letter and this Lease and is
evidenced by receipt of an interim or final right to occupy from the City of San
Diego (or check-off of line 61, "approved to occupy," of the inspection card, or
comparable line if the card is modified), or such later date as the conditions
to the issuance of a final certificate of occupancy have been satisfied and the
only steps which must be taken by the appropriate governmental agency to issue
the final certificate of occupancy are purely ministerial in nature.
"Substantial Completion" is not dependent upon completion of punch-list items
described in the Work Letter or receipt of a formal certificate of occupancy. In
no event shall "Substantial Completion" be later than the date Tenant actually
commences the conduct of its business on the Premises.
4.5 Prior to entry by Tenant onto the Premises before the Term
Commencement Date, for installing fixtures, placement of personal property, or
any other purpose, Tenant shall furnish to Landlord evidence satisfactory to
Landlord that insurance coverages required of Tenant under the provisions of
Article 21 are in effect. Entry by Tenant onto the Premises prior to the Term
Commencement Date for such purposes shall be subject to all of the terms and
conditions of this Lease other than the payment of Basic Annual Rent and
Operating Expenses, shall not interfere with the performance by Landlord or the
Project Contractor with the Project Work, shall be limited to the last thirty
(30) days prior to the estimated Substantial Completion of the Premises, and
shall be made only with the advance written consent of Landlord, which consent
shall not be unreasonably withheld. In the event of entry by Tenant or its
agents onto the Premises prior to the Term Commencement Date, Tenant agrees to
indemnify, protect, defend and hold Landlord harmless from any and all loss or
damage to property, completed work, fixtures, equipment, materials or
merchandise, or from liability for death of or injury to any person arising from
Tenant's entry onto the Premises, except to the extent caused by the active
negligence of Landlord or its agents.
4.6 Landlord guarantees lien-free completion of the Project Work
pursuant to the provisions of this Lease and the Work Letter unless prevented
from doing so by Tenant's failure to perform its obligations under this Lease or
the Work Letter.
5. RENT.
5.1 Tenant agrees to pay Landlord as Basic Annual Rent for the
Premises the sum set forth in Section 2.1.2, subject to the rental adjustments
provided in Sections 4.1, 6.1 and 8.2 hereof. Basic Annual Rent shall be paid in
the equal monthly installments set forth in Section 2.1.3, subject to the rental
adjustments provided in Sections 4.1, 6.1 and 8.2 hereof, each in advance on the
first day of each and every calendar month during the term of this Lease.
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5.2 In addition to Basic Annual Rent, Tenant agrees to pay to
Landlord as additional rent ("Additional Rent"), at the times hereinafter
specified in this Lease, Operating Expense" as provided in Section 7.1 and all
other amounts that Tenant assumes or agrees to pay under the provisions of this
Lease, including but not limited to any and all other sums that may become due
by reason of (i) any default of' Tenant or failure on Tenant's part to comply
with the agreements, terms, covenants and conditions of this Lease to be
performed by Tenant, and (ii) Landlord's performance of any obligations of
Tenant under this Lease.
5.3 Basic Annual Rent and Additional Rent shall together be
denominated "Rent." Except as expressly set forth in this Lease, Rent shall be
paid to Landlord, without notice, demand, abatement, suspension, deduction, or
setoff, in lawful money of the United States of America, at the office of
Landlord as set forth in Section 2.1.7 or to such other person or at such other
place as Landlord may from time to time designate in writing. Landlord shall
submit to Tenant an invoice for Rent once each calendar month.
5.4 In the event the term of this Lease commences or ends on a day
other than the first day of a calendar month, then the Rent for such fraction of
a month shall be prorated for such period on the basis of a thirty (30) day
month and shall be paid at the then current rate for such fractional month prior
to the commencement of the partial month.
5.5 This is an absolutely net lease to Landlord. It is the intent
of the parties that the Basic Annual Rent payable under this Lease shall be an
absolutely net return to Landlord and that Tenant shall pay all costs and
expenses relating to the Premises unless otherwise expressly provided in this
Lease. Any amount or obligation herein relating to the Premises which is not
expressly declared to be that of Landlord shall be deemed to be an obligation of
Tenant to be performed by Tenant at Tenant's expense.
6. RENTAL ADJUSTMENTS.
6.1 The Basic Annual Rent then in effect (and as previously
increased pursuant to this Section 6.1) shall be increased each year of the term
and any extended term by three percent (3%). The first such increase shall
become effective commencing with that monthly rental installment which is first
due on or after the first (1st) anniversary of the Term Commencement Date and
subsequent increases shall become effective on the same day of each calendar
year thereafter for so long as this Lease continues in effect.
7. OPERATING EXPENSES.
7.1 As used herein, the term "Operating Expenses" shall include:
(a) Government impositions (collectively, "Taxes")
including, without limitation, property tax costs consisting of real and
personal property taxes and assessments including amounts due under any
improvement bond upon the Premises or any part thereof or assessments levied in
lieu thereof imposed by any governmental authority or agency; any tax on or
measured by gross rentals received from the rental of space in the Building, or
tax based on the square footage of the Building or the entire Premises as well
as any parking charges, utilities
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surcharges, or any other costs levied, assessed or imposed by, or at the
direction of, or resulting from statues or regulations, or interpretations
thereof, promulgated by any federal, state, regional, municipal or local
government authority in connection with the use or occupancy of the Building or
the parking facilities serving the Building; any tax on this transaction or any
document to which Tenant is a party creating or transferring an interest in the
Premises; any fee for a business license to operate the Building; and any
expenses, including the cost of attorneys or experts, reasonably incurred by
Landlord in seeking reduction by the taxing authority of the applicable taxes,
less tax refunds obtained as a result of an application for review thereof.
Operating Expenses shall not include any net income, franchise, capital stock,
estate or inheritance taxes due from Landlord or taxes which are the personal
obligation of Tenant, or taxes which are paid by Tenant.
(b) All other costs of any kind incurred in connection with
the operation, maintenance, repairs, replacements and management of the
Premises, including, by way of examples and not as a limitation upon the
generality of the foregoing, (i) costs of maintenance, repairs and replacements
to improvements, fixtures and personal property within the Premises as
appropriate to maintain the Premises in commercially reasonable condition,
including the roof and all capital and structural improvements except structural
components of footings, foundation, ground floor slab, and load bearing walls;
(ii) costs of maintenance, repairs and replacements of equipment utilized for
operation and maintenance of the Premises if dedicated for use solely at the
Premises; (iii) costs of new improvements and fixtures added to the Premises
after Substantial Completion; (iv) costs of trash collection; (v) costs of
cleaning; (vi) costs of maintenance, repairs and replacements of heating,
ventilation, air conditioning, plumbing, electrical and other systems; (vii)
costs of maintenance of landscape, grounds, drives and parking areas, including
periodic resurfacing and re-striping; (viii) costs of security services and
devices; (ix) insurance premiums and portions of insured losses paid by Landlord
as part of deductible portion of loss by reason of insurance policy terms; (x)
costs of building supplies; (xi) costs of service contracts and services of
independent contractors retained to do work of a nature before referenced; (xii)
costs .of compensation (including employment taxes and fringe benefits) of all
persons who perform regular and recurring duties connected with the day-to-day
operation and maintenance of the Premises, its equipment, the adjacent walks,
landscaped areas, drives, and parking areas, including without limitation,
janitors, floorwaxers, window-washers, watchmen, gardeners, sweepers, and
handymen; and (xii) costs of compliance with applicable governmental laws,
ordinances, regulations and requirements after Substantial Completion.
(c) Costs of management services in an amount equal to two
and one half percent (2.5%) of the monthly installment of Basic Annual Rent then
due from Tenant, whether or not Landlord incurs fees payable to any third party
to provide such services and without regard to the actual costs incurred by
Landlord for such services (in no event, however, shall any fees for management
services payable to a third party be included in Operating Expenses in addition
to the amount set forth in this subsection 7.1(c)).
(d) Landlord acknowledges and agrees that the foregoing is
not intended to result in Landlord realizing a profit from Landlord's collection
of Operating Expenses.
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7.2 Notwithstanding the foregoing, Operating Expenses shall not
include, and Tenant shall not be responsible for the payment of, the following
costs and expenses:
(a) costs incurred for the initial construction of the
Premises, except for excess Tenant Improvements pursuant to Section 4.1 and any
other costs which are the responsibility Tenant under any other provisions of
this Lease or the Work Letter;
(b) costs incurred for the repair, maintenance or
replacement of the structural components of the footings, foundation, ground
floor slab, and load bearing walls of the Premises (but excluding painting and
ordinary maintenance and repair of exterior surfaces);
(c) costs incurred to correct any defects in design,
materials or construction of the Building and Land Improvements to the extent of
Landlord's warranties in Section 14.2;
(d) costs, expenses and penalties (including without
limitation attorneys fees) incurred as a result of the use, storage, removal or
remediation of any toxic or hazardous substances or other environmental
contamination not caused by Tenant or its employees, contractors, agents,
representatives, or invitees;
(e) interest, principal, points and other fees on debt or
amortization of any debt secured in whole or part by all or any portion of the
Premises;
(f) costs incurred in connection with the financing, sale or
acquisition of the Premises or any portion thereof;
(g) costs, expenses, and penalties (including without
limitation attorneys' fees) incurred due to the violation by Landlord of any
underlying deed of trust or mortgage affecting the Premises or any portion
thereof;
(h) depreciation on the Premises or any portion thereof, or
any equipment or machinery owned by Landlord;
(i) any costs incurred as a result of Landlord's violation
of any statute, ordinance or other source of applicable law, or breach of
contract or tort liability to any other party, including without limitation, any
unrelated third party, or Landlord's employees, contractors, agents or
representatives;
(j) leasing commissions, attorneys' fees and other costs and
expenses incurred in connection with the leasing of the Premises;
(k) advertising, marketing, media and promotional
expenditures regarding the Premises and costs of signs in or on the Building
identifying the owner, lender or any contractor thereof;
(l) any fees or salaries of the principals of Landlord;
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(m) any rentals and related expenses incurred in leasing
equipment which may be classified as capital expenditure" under generally
accepted accounting principles;
(n) to the extent the useful life of replacements of major
components of the roof, mechanical, electrical or elevator systems, or of major
replacements of asphalt parking areas (but not routine repairs and re-striping,
or seal-coating after the first five (5) years of years of the term), exceeds
the remainder of the term of the Lease (as such useful life is determined under
generally accepted accounting principals), the pro rata portion of the cost
thereof attributable to the period following the expiration of the term;
provided, however, if Tenant thereafter extends the term of the Lease, Landlord
may recover the portion of the cost not previously recovered to the extent it
falls within the period of the extended term; and
(o) the amounts of any payments to Landlord or to
subsidiaries or affiliates of Landlord for goods or services in the Building in
excess of the cost of such goods or services if they were provided by
unaffiliated third parties on a competitive basis.
7.3 Subject to the provisions of Article 13, Tenant shall pay to
Landlord on the first day of each calendar month of the term of this lease, as
Additional Rent, Landlord's estimate of Operating Expenses with respect to the
Premises for such month. Within ninety (90) days after the conclusion of each
calendar year, Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual Operating Expenses for the previous calendar year.
Any additional sum due from Tenant to Landlord shall be immediately due and
payable. If the amounts paid by Tenant exceeds the Operating Expenses for the
previous calendar year, the difference shall be credited by Landlord against the
Rent next due and owing from Tenant; provided that, if the Lease term has
expired, Landlord shall accompany said statement with payment for the amount of
such difference. Any amount due for any period which is less than a full month
shall be prorated (based on a 30-day month) for such fractional month.
7.4 Tenant shall have the right, at Tenant's expense, upon
reasonable notice during reasonable business hours, to inspect the portion of
Landlord's books and records that are relevant to preparation of the statement
delivered pursuant to Section 7.3 provided any request for such review shall be
furnished within sixty (60) days of Tenant's receipt of such statement as to the
prior year's Operating Expenses.
7.5 Tenant shall not be responsible for Operating Expenses
attributable to the time period prior to the Term Commencement Date. The
responsibility of Tenant for Operating Expenses attributable to the Premises
shall continue to the latest of (i) the date of termination of the Lease, or
(ii) the date Tenant has fully vacated the Premises.
7.6 Operating Expenses for the calendar year in which Tenant's
obligation to pay them commences and in the calendar year in which such
obligation ceases shall be prorated. Expenses such as taxes, assessments and
insurance premiums which are incurred for an extended time period shall be
prorated based upon time periods to which applicable so that the amounts
attributed to the Premises relate in a reasonable manner to the time period
wherein Tenant has an obligation to pay Operating Expenses.
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8. RENTABLE AREA.
8.1 The Rentable Area of the Premises as set forth in Section
2.1.1 is determined by making separate calculations of the Rentable Area of each
floor within the Building and totaling the Rentable Area of all floors within
the Building, but excluding any parking areas. The Rentable Area of a floor is
calculated by measuring to the outside finished surface of each permanent outer
Building wall where it intersects the floor. The full area calculated as set
forth above is included as Rentable Area of the Premises without deduction for
(i) columns or projections, (ii) vertical penetrations such as stairs, elevator
shafts, flues, pipe shafts, vertical ducts, and the like, and their enclosing
walls, (iii) corridors, equipment rooms, rest rooms, entrance ways, elevator
lobbies, and the like, and their enclosing walls, (iv) recessed entryway, and
(v) any other unusable area of any nature.
8.2 The Rentable Area as set forth in Section 2.1.1 is an estimate
of the area which will upon completion of the Building constitute the Rentable
Area of the Premises, which shall be adjusted upon Substantial Completion of the
Building in accordance with a certification of the Rentable Area from the
Project Architect. If either party disputes the certification of the Project
Architect, upon Substantial Completion of the Building the Rentable Area shall
be field measured and confirmed by a mutually agreeable architect or civil
engineer, which measurement shall be conclusive and binding on Landlord and
Tenant. If the Rentable Area as determined hereunder is more or less than the
Rentable Area set forth in Section 2.1.1, Basic Annual Rent and the monthly
installments of Basic Annual Rent shall be adjusted upward or downward, as the
case may be, based on the actual Rentable Area of the Premises. Notwithstanding
the foregoing, the Rentable Area as determined hereunder shall not be adjusted
upward by more than 1.200 square feet.
9. [INTENTIONALLY LEFT BLANK].
10. USE.
10.1 Tenant may use the Premises for any of those purposes, and
only those purposes, allowed by (i) the City of San Diego Scientific Research
Zone Ordinance in effect from time to time and as applicable to the Premises,
(ii) any other applicable laws, regulations, ordinances, requirements, permits
and approvals applicable to the Premises, and (iii) all covenants, conditions
and restrictions recorded against the Land, and shall not use the Premises, or
permit or suffer the Premises to be used, for any other purpose without the
prior written consent of Landlord. Tenant may change the use of the Premises
from time to time, as long as such changed use is authorized by this Section
10.1 or may otherwise be legally permissible, with the consent of Landlord,
which consent shall not be unreasonably withheld.
10.2 Tenant shall conduct its business operations and use the
Premises in compliance with all federal, state, and local laws, regulations,
ordinances, requirements, permits and approvals applicable to the Premises.
Tenant shall not use or occupy the Premises in violation of any law or
regulation or the certificate of occupancy issued for the Building, and shall,
upon five (5) days' written notice from Landlord, discontinue any use of the
Premises which is declared by any governmental authority having jurisdiction to
be a violation of law or
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the certificate of occupancy. Subject to Landlord's warranties set forth in
Section 14.2, Tenant shall comply with any direction of any governmental
authority having jurisdiction which shall, by reason of the nature of Tenant's
use or occupancy of the Premises, impose any duty upon Tenant or Landlord with
respect to the Premises or with respect to the use or occupation thereof,
including any duty to make structural or capital improvements, alterations,
repairs and replacements to the Premises.
10.3 Tenant shall not do or permit to be done anything which will
invalidate or increase the cost (unless Tenant agrees to pay such increased
cost) of any fire, extended coverage or any other insurance policy covering the
Premises, or which will make such insurance coverage unavailable on commercially
reasonable terms and conditions, and shall comply with all rules, orders,
regulations and requirements of the insurers of the Premises.
10.4 Tenant shall comply with the Americans with Disabilities Act
of 1990 ("ADA"), and the regulations promulgated thereunder, as amended from
time to time. Subject .to Landlord's warranties set forth in Section 14.2, all
responsibility for compliance with the ADA relating to the Premises and the
activities conducted by Tenant within the Premises shall be exclusively that of
Tenant and not of Landlord, including any duty to make structural or capital
improvements, alterations, repairs and replacements to the Premises. Any
alterations to the Premises made by Tenant for the purpose of complying with the
ADA or which otherwise require compliance with the ADA shall be done in
accordance with Article 17; provided, that Landlord's consent to such
alterations shall not constitute either Landlord's assumption, in whole or in
part, of Tenant's responsibility for compliance with the ADA, or representation
or confirmation by Landlord that such alterations comply with the provisions of
the ADA. However, nothing in this Lease shall be construed to require Tenant to
make structural or capital improvements, alterations, repairs or replacements to
comply with ADA unless and until required to do so by order of any government
entity or court of law exercising proper jurisdiction with regard thereto,
subject to any right to appeal or otherwise contest any such order.
10.5 Tenant may require Landlord to install signage on and about
the Premises as part of the construction of the Tenant Improvements to the
extent permitted by, and in conformity with, applicable provisions of the City
of San Diego Sign Ordinance. Tenant acknowledges it is familiar with the
restrictions of the City of San Diego Sign Ordinance, and is not relying on any
representations or warranty of Landlord regarding the number, size or location
of any signage. The expense of design, permits, purchase and installation of any
signs shall be included in the cost of Tenant Improvements.
10.6 No equipment shall be placed at a location within the Building
other than a location designed to carry the load of the equipment. Equipment
weighing in excess of floor loading capacity shall not be placed in the
Building.
10.7 Tenant shall not use or allow the Premises to be used for any
unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance or
waste in, on, or about the Premises.
11. BROKERS.
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11.1 Landlord and Tenant represent and warrant one to the other
that there have been no dealings with any real estate broker or agent in
connection with the negotiation of this Lease other than CB Commercial Real
Estate Group, Inc. (which represented Landlord) and ▇.▇. ▇▇▇▇▇▇▇▇ and Company
(which represented Tenant), whose commissions shall be paid by Landlord. Each
shall indemnify, defend, protect, and hold harmless the other from any claim of
any other broker as a result of any act or agreement of the indemnitor.
11.2 Tenant represents and warrants that no broker or agent has
made any representation or warranty relied upon by Tenant in Tenant's decision
to enter into this Lease other than as contained in this Lease.
12. HOLDING OVER.
12.l If, with Landlord's consent, Tenant holds possession of all or
any part of the Premises after the expiration or earlier termination of this
Lease, Tenant shall become a tenant from month to month upon the date of such
expiration or earlier termination, and in such case Tenant shall continue to pay
in accordance with Article 5 the Basic Annual Rent as adjusted from the Term
Commencement Date in accordance with Section 6.1, together with Operating
Expenses in accordance with Article 7 and other Additional Rent as may be
payable by Tenant, and such month-to-month tenancy shall be subject to every
other term, covenant and condition contained herein.
12.2 If Tenant remains in possession of all or any portion of the
Premises after the expiration or earlier termination of the term hereof without
the express written consent of Landlord, Tenant shall become a tenant at
sufferance upon the terms of this Lease except that monthly rental shall be
equal to one hundred twenty five percent (125%) of the Basic Annual Rent in
effect during the last month of the Lease term.
12.3 Acceptance by Landlord of Rent after such expiration or
earlier termination shall not result in a renewal or reinstatement of this
Lease.
12.4 The foregoing provisions of this Article 12 are in addition to
and do not affect Landlord's right to re-entry or any other rights of Landlord
under Article 24 or elsewhere in this Lease or as otherwise provided by law.
13. TAXES AND ASSESSMENTS.
13.1 Landlord shall pay and discharge all Taxes (as defined in
Section 7.1(a)) as they become due, promptly and before delinquency, subject to
reimbursement by Tenant as Operating Expenses under Section 7.1, saving and
excepting only those taxes in Section 7.1 specifically excepted.
13.2 If the right is given to pay either in one sum or in
installments, Landlord or Tenant may elect to pay in installments, and its
election shall be binding on the other. If by making an election to pay in
installments, any of the installments shall be payable after the
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termination of this Lease or any extended term thereof, the unpaid installments
shall be prorated as of the date of termination, and amounts payable after said
date shall be paid by Landlord. All other taxes and charges payable under this
Article 13 shall be prorated as of and payable at the commencement and
expiration of the term of this Lease, as the case may be. Landlord shall not
during the term of this Lease undertake any action to place any special
assessments, levies or charges on the Premises without first obtaining the prior
written approval of Tenant, other than those due to new construction and those
imposed by the City of San Diego or other government entity over which Landlord
has no control. If Landlord does undertake such action without Tenant's
approval, Landlord, and not Tenant, shall pay any special assessments, levies or
charges sought by such action.
13.3 Any and all rebates on account of taxes, rates, levies,
charges or assessments required to be paid and paid by Landlord and reimbursed
as Operating Expenses by Tenant under the provisions of this Lease shall belong
to Tenant, and Landlord will, on the request of Tenant, execute any receipts,
assignments, or other acquittances that may be necessary in order to secure the
recovery of the rebates, and will pay over to Tenant any rebates that may be
received by Landlord.
13.4 Tenant shall pay not less than ten (10) days before
delinquency taxes levied against any improvements, fixtures, equipment and
personal property of Tenant in or about the Premises.
13.5 If Tenant shall in good faith desire to contest the validity
or amount of any tax, assessment, levy, or other governmental charge herein
agreed to be paid by Tenant, Tenant shall be permitted to do so, and Landlord
shall defer the payment of said tax or charge, the validity or amount of which
Tenant is so contesting, until final determination of the contest, upon Tenant
giving to Landlord written notice thereof prior to the commencement of any
contest, which shall be at least fifteen (15) days prior to delinquency, and by
protecting Landlord on demand by a good and sufficient surety bond (or cash
deposit to the Tax Account described in Section 13.7 in lieu thereof) against
any tax, levy, assessment, rate or governmental charge, and from any costs,
penalties, interest, liability, or damage arising out of a contest. Landlord
shall not be required to join in any proceeding or contest brought by Tenant
unless the provisions of any law require that the proceeding or contest be
brought by or in the name of Landlord. In that case, Landlord shall join in the
contest or permit it to be brought in Landlord's name so long as Landlord is not
required to bear any costs. Tenant, on final determination of the contest, shall
immediately pay or discharge any decision or judgment rendered, together with
all costs, charges, interest and penalties incidental to the decision or
judgment.
13.6 Landlord may, and at Tenant's request shall, no more often
than once every two years, apply for a re-determination of the assessed value of
the Premises for property tax purposes, in which event Landlord shall engage the
services of a commercial firm in the business of seeking re-determinations of
assessed values, and shall agree to compensate such firm for its services
contingent upon the success achieved. If after prosecuting any such application
the resulting property tax is less than it otherwise would have been, Tenant
shall reimburse Landlord for all expenses incurred in such protest, including
reasonable attorney's fees and experts' fees, up to an amount equal to but not
to exceed the property tax savings during
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the remainder of the Lease term. Tenant agrees to pay all such sums to Landlord
within ten (10) days following notice to Tenant from Landlord stating the amount
due.
13.7 Within two (2) business days following receipt from Tenant,
Landlord shall deposit property taxes paid by Tenant as part of Operating
Expenses into a separate, segregated, insured, interest-bearing bank account
labeled "SGS-THOMSON Microelectronics, Inc. Tax Account" ("Tax Account"), and
shall hold such taxes in the Tax Account in trust for Tenant until they are due
and paid to the tax collector. All interest earned on the Tax Account shall be
paid periodically to Tenant. In the event that any mortgage encumbering the
property requires property taxes to be impounded with the mortgagee,
notwithstanding the foregoing Landlord may deliver the property tax deposits to
such mortgagee rather than deposit them into the Tax Account. Once each calendar
month Landlord shall provide a copy of the statement of the Tax Account to
Tenant.
14. CONDITION OF PREMISES.
14.1 Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty, express or implied, with
respect to the condition of the Premises, or to Landlord's Work or the Tenant
Improvements, except as set forth in this Lease and the Work Letter, or with
respect to their suitability for the conduct of Tenant's business.
14.2 Landlord warrants to Tenant that the Project Work will be, on
Substantial Completion, built in a good and workmanlike manner and in
substantial compliance with the Project plans and all applicable building code
requirements, laws, rules. orders, ordinances, directions, regulations, permits,
approvals, and requirements of all governmental agencies, offices, departments,
bureaus and boards having jurisdiction, and with the rules, orders, directions,
regulations, and requirements of any applicable fire rating bureau, and will be
free of patent and latent defects in design, materials and construction. The
four-year statute of limitations for patent defects set forth in Section 337.1
of the California Code of Civil Procedure, and the ten-year statute of
limitations for latent defects set forth in Section 337.15 of the California
Code of Civil Procedure, shall apply to the warranties set forth herein.
Landlord represents to Tenant that it is the sole owner of the Land, and neither
Landlord nor any successor Landlord under this Lease will maintain less than a
fee estate in the Land during the term of the Lease (for instance, Landlord will
not convey the fee estate and retain only a leasehold estate in the Land).
15. PARKING FACILITIES.
15.1 Landlord shall provide parking for the Premises, as part of
the Land Improvements, in a ratio of not less than three (3) spaces for each
1,000 square feet of Rentable Area.
15.2 Tenant acknowledges that interior and exterior areas used for
Tenant's equipment, Hazardous Material enclosures, trash enclosures, mechanical
systems, and the like will reduce available parking.
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15.3 Tenant shall not place any equipment, storage containers or
any other property on the surface parking area except in accordance with the
Project Plans or as otherwise approved by Landlord, which approval shall not be
unreasonably withheld.
16. UTILITIES AND SERVICES.
16.1 To the extent not paid by Landlord as Operating Expenses,
Tenant shall pay directly to the provider prior to delinquency, for all water,
gas, electricity, telephone, cable television, and other utilities which may be
furnished to the Premises during the term of this Lease, together with any taxes
thereon.
16.2 Landlord shall not be liable for, nor shall any eviction of
Tenant result from, any failure of any such utility or service, provided such
failure is not due to the gross negligence or willful misconduct of Landlord.
Notwithstanding the foregoing, Tenant shall be entitled to abatement of Rent
proportional to the interference with its business if such failure materially
interferes with. Tenant's business and persists for more than two (2) business
days. Tenant waives any right to terminate this Lease on account of any such
failure unless such failure persists for an unreasonable period of time and
prevents Tenant from substantially conducting its business from the Premises.
17. ALTERATIONS.
17.1 Tenant shall make no alterations, additions or improvements
(hereinafter in this section, "improvements") in or to the Premises without
Landlord's prior written consent, which shall not be unreasonably withheld.
Tenant shall deliver to Landlord final plans and specifications and working
drawings for the improvements, and Landlord shall have fifteen (15) days
thereafter to grant or withhold its consent. If Landlord does not notify Tenant
of its decision within the fifteen (15) days, Landlord shall be deemed to have
given its approval.
17.2 If a permit is required to construct the improvements, Tenant
shall deliver a completed, signed-off inspection card to Landlord within ten
(10) days of completion of the improvements, and shall promptly thereafter
obtain and record a notice of completion and deliver a copy thereof to Landlord.
17.3 The improvements shall be constructed only by licensed
contractors approved by Landlord, which approval shall not be unreasonably
withheld. Any such contractor must have in force a general liability insurance
policy of not less than $2,000,000 or such higher limits as Landlord may
reasonably require, which policy of insurance shall name Landlord as an
additional insured. Tenant shall provide Landlord with a copy of the contract
with the contractor prior to the commencement of construction.
17.4 Tenant agrees that any work by Tenant shall be accomplished in
such a manner as to permit any fire sprinkler system and fire water supply lines
to remain fully operable at all times except when minimally necessary for
building reconfiguration work.
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17.5 Tenant covenants and agrees that all work done by Tenant shall
be performed in full compliance with all laws, rules, orders, ordinances,
directions, regulations, permits, approvals, and requirements of all
governmental agencies, offices, departments, bureaus and boards having
jurisdiction, and in full compliance with the rules, orders, directions,
regulations, and requirements of any applicable fire rating bureau. Tenant shall
provide Landlord with "as-built" plans showing any change in the Premises within
thirty (30) days after completion.
17.6 Before commencing any work (other than interior non-structural
alterations additions or improvements), Tenant shall give Landlord at least five
(5) days' prior written notice of the proposed commencement of such work and,
for any such work which exceeds $25,000.00 in cost, if required by Landlord,
secure at Tenant's own cost and expenses a completion and lien indemnity bond
approved by Landlord, which approval will not be unreasonably withheld.
18. REPAIRS AND MAINTENANCE.
18.1 Landlord shall, throughout the term of this Lease, at its own
cost and expense, and without any cost or expense to Tenant, keep and maintain
in good condition and repair the structural components of the footings,
foundation, bottom floor slab, and load bearing walls of the Premises, subject
to wear and tear consistent with commercially reasonable maintenance and repair
standards applicable to comparable buildings. In addition, Landlord shall, at
its own cost and expense, and without any cost or expense to Tenant, promptly
repair any patent or latent defects in the design, materials or construction of
the work required of Landlord under the Work Letter to the extent of Landlord's
warranties in Section 14.2.
18.2 Except as otherwise set forth in Section 18.1, Landlord shall,
throughout the term of this Lease, subject to reimbursement by Tenant as
Operating Expenses under Section 7.1, and without any cost or expense to
Landlord, keep and maintain in good, sanitary and neat order, condition, and
repair, the Premises and every part thereof (subject to wear and tear consistent
with commercially reasonable maintenance and repair standards applicable to
comparable buildings), including structural and capital improvements, all
improvements, fixtures, equipment and personal property built or installed in
the Premises, and all appurtenances thereto, including but not limited to
sidewalks, parking areas, curbs, roads, driveways, lighting standards,
landscaping, sewers, water, gas and electrical distribution systems and
facilities, drainage facilities, and all signs, both illuminated and
non-illuminated that are now or hereafter on the Premises. Without in any way
limiting the foregoing, Landlord shall maintain the lines designating the
parking spaces in good condition and paint the same as often as may be
necessary, so that they are easily discernable at all times; resurface the
parking areas as necessary to maintain it in good condition; paint any exterior
portions of the Building as necessary to maintain them in good condition; and
maintain the roof in good condition.
18.2 Tenant shall maintain sightly screens, barricades or
enclosures around any waste or storage areas.
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18.3 Tenant hereby waives Civil Code Sections 1941 and 1942
relating to a landlord's duty to maintain the Premises in a tenantable
condition, and under said sections or under any law, statute or ordinance now or
hereafter in effect to make repairs at Landlord's expense.
19. LIENS.
19.1 Tenant shall keep the Premises and every part thereof free
from any liens arising out of work performed, materials furnished or obligations
incurred by Tenant. Tenant further covenants and agrees that any mechanic's lien
filed against the Premises for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant, will be discharged by Tenant, by bond
or otherwise, within thirty (30) days after the filing thereof (or within ten
(10) days after the filing thereof if requested by Landlord as necessary to
facilitate a pending sale or refinancing), at the cost and expense of Tenant.
19.2 Should Tenant fail to discharge any lien of the nature
described in Section 19.1, Landlord may at Landlord's election pay such claim or
post a bond or otherwise provide security to eliminate the lien as a claim
against title and the cost thereof shall be immediately due from Tenant as
Additional Rent.
19.3 In the event Tenant shall lease or finance the acquisition of
office equipment, furnishings, or other personal property utilized by Tenant in
the operation of Tenant's business, Tenant warrants that any Uniform Commercial
Code financing statement executed by Tenant will upon its face or by exhibit
thereto indicate that such financing statement is applicable only to personal
property of Tenant specifically described in the financing statement, and that
such property is subject to removal on the expiration or earlier termination of
this Lease. In no event shall the address of the Building be furnished on the
financing statement without qualifying language as to applicability of the lien
only to personal property of Tenant described in the financing statement. Should
any holder of a security agreement executed by Tenant record or place of record
a financing statement which appears to constitute a lien against any interest of
Landlord, Tenant shall within ten (10) days after the filing of such financing
statement cause (i) copies of the security agreement or other documents to which
the financing statement pertains to be furnished to Landlord to facilitate
Landlord's being in a position to show such lien is not applicable to any
interest of Landlord, and (ii) the holder of the security interest to amend
documents of record so as to clarify that such lien is not applicable to any
interest of Landlord in the Premises.
20. INDEMNIFICATION AND EXCULPATION.
20.1 Except to the extent of the responsibility of Landlord
pursuant to Section 20.2 hereof, Tenant agrees to indemnify Landlord, and its
partners, members and affiliates, and their respective shareholders, directors,
officers, agents, contractors and employees (collectively, "Landlord's Agents"),
against, and to protect, defend, and save them harmless from, all demands,
claims, causes of action, liabilities, losses and judgments, and all reasonable
expenses incurred in investigating or resisting the same (including reasonable
attorneys' fees), for death of or injury to
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person or damage to property arising out of (i) any occurrence in, upon or about
the Premises during the term of this Lease, (ii) Tenant's use, occupancy,
repairs, maintenance, and improvements of the Premises and all improvements,
fixtures, equipment and personal property thereon, and (iii) any act or omission
of Tenant, its shareholders, directors, officers, agents, employees, servants,
contractors, invitees and subtenants. Tenant's obligation under this Section
20.1 shall survive the expiration or earlier termination of the term of this
Lease.
20.2 Landlord agrees to indemnify Tenant and Tenant's shareholders,
directors, officers, agents and employees (collectively "Tenant's Agents")
against and save them harmless from all demands, claims, causes of action and
judgments, and all reasonable expenses incurred in investigating or resisting
the same (including reasonable attorneys' fees), for death of or injury to, any
person or damage to property arising from or out of any occurrence in, upon or
about the Premises prior to the term of this Lease, or during the term of this
Lease if caused by the negligence or other tortious conduct of Landlord or
Landlord's directors, officers, agents, employees, servants, contractors,
invitees and subtenants, but only to the extent not caused by the negligence or
other tortious conduct of Tenant or Tenant's Agents. Landlord's obligations
under this Section 20.2 shall survive the expiration or earlier termination of
the term of this Lease.
20.3 Notwithstanding any provision of Sections 20.1 and 20.2 to the
contrary, Landlord shall not be liable to Tenant and Tenant assumes all risk of
damage to any fixtures, goods, inventory, merchandise, equipment, records,
research, experiments, animals and other living organisms, computer hardware and
software, leasehold improvements, and other personal property of any nature
whatsoever, and Landlord shall not be liable for injury to Tenant's business or
any loss of income therefrom relative to such damage, unless caused by
Landlord's or Landlord's Agents' willful misconduct or gross negligence.
20.4 The indemnity obligations of both Landlord and Tenant under
this Section 20 shall be satisfied to the extent of proceeds of applicable
insurance maintained by Tenant to the extent thereof, and thereafter to proceeds
of any applicable insurance maintained by Landlord; Landlord and Tenant shall be
required to satisfy any such obligation only to the extent it is not satisfied
by proceeds of applicable insurance as set forth above.
20.5 Security devices and services, if any, while intended to deter
crime may not in given instances prevent theft or other criminal acts and it is
agreed that Landlord shall not be liable for injuries or losses caused by
criminal acts of third parties and the risk that any security device or service
may malfunction or otherwise be circumvented by a criminal is assumed by Tenant.
Tenant shall at Tenant's cost obtain insurance coverages to the extent Tenant
desires protection against such criminal acts.
21. INSURANCE - WAIVER OF SUBROGATION.
21.1 Commencing prior to Tenant's first entry onto the Premises for
purposes of installing any improvements, fixtures or personal property, but no
later than the Term Commencement Date, and continuing at all times during the
term of this Lease, Tenant shall maintain, at Tenant's expense, commercial
general liability insurance, on an "occurrence" basis (or on a "claims made"
basis if "occurrence" basis insurance is not available on commercially
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reasonable terms), insuring Tenant and Tenant's agents, employees and
independent contractors against all bodily injury, property damage, personal
injury and other covered loss arising out of the use, occupancy, improvement and
maintenance of the Premises and the business operated by Tenant, or any other
occupant on the Premises. Such insurance shall have a minimum combined single
limit of liability per occurrence of not less than $2,000,000.00 and a general
aggregate limit of $4,000,000.00. Such insurance shall: (i) name Landlord, and
Landlord's lenders if required by such lenders, and any management company
retained to manage the Premises if requested by Landlord, as additional
insureds: (ii) include a broad form contractual liability endorsement insuring
Tenant's indemnity obligations under Section 20.1; (iii) include a products
liability coverage endorsement (with limits of $2,000,000.00 on a "claims made"
basis), a boiler and machinery liability endorsement, and a products completed
operations coverage endorsement; (iv) provide that it is primary coverage and
noncontributing with any insurance maintained by Landlord or Landlord's lenders.
which shall be excess insurance with respect only to losses arising out of
Tenant's negligence; (v) provide for severability of interests or include a
cross- liability endorsement, such that an act or omission of an insured shall
not reduce or avoid coverage of other insureds; and (vi) provide for a
deductible of not more than $100,000.00 per claim.
21.2 At all times during the term of this Lease, Landlord shall
maintain, subject to reimbursement by Tenant as Operating Expenses under Section
7.1, "all risk" insurance, including, but not limited to, coverage against loss
or damage by fire, vandalism, and malicious mischief covering the Building
(exclusive of excavations, foundations and footings), the Tenant Improvements,
and all other improvements and fixtures that may be constructed or installed on
the Premises by Landlord, in an amount equal to one hundred percent (100%) of
the full replacement value thereof. If any boilers or other pressure vessels or
systems are installed on the Premises, Landlord shall maintain, subject to
reimbursement by Tenant as an Operating Expense, boiler and machinery insurance
in an amount equal to one hundred percent (100%) of the full replacement value
thereof. After Substantial Completion, at all times during the course of any
major demolition or construction permitted hereunder, or any restoration
pursuant to Articles 22 or 23, Landlord shall maintain, subject to reimbursement
by Tenant as Operating Expenses, "all risk" builder's risk insurance, including,
but not limited to, coverage against loss or damage by fire, vandalism and
malicious mischief, covering improvements in place and all material and
equipment at the job site furnished under contract, in an amount equal to one
hundred percent (100%) of the full replacement value thereof. The insurance
described in this Section 21.2 shall: (i) insure Landlord, and Landlord's
lenders if required by such lenders, as their interests may appear; (ii) contain
a Lender's Loss Payable Form (Form 438 BFU or equivalent) in favor of Landlord's
lenders and name Landlord, or Landlord's lender if required by such lender, as
the loss payee; (iii) provide for severability of interests or include a
cross-liability endorsement, such that an act or omission of an insured shall
not reduce or avoid coverage of other insureds; (iv) include a building
ordinance endorsement, an agreed amount endorsement and an inflation
endorsement; (v) provide that it is primary coverage and noncontributing with
any other insurance maintained by Landlord or Landlord's lenders, which shall be
excess insurance; and (vi) provide for deductibles of not more than $100,000.00
per claim. The full replacement value of the Building, the Tenant Improvements
and other improvements and fixtures insured thereunder shall, for the purpose of
establishing insurance limits and premiums only, be determined by the company
issuing the insurance policy and shall be redetermined by said
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company within six (6) months after completion of any material alterations or
improvements to the Premises and otherwise at intervals of not more than three
(3) years. Landlord shall promptly increase the amount of the insurance carried
pursuant to this Section 21.2 to the amount so redetermined. Landlord warrants
that the proceeds of the insurance described in this Section shall be used for
the repair, replacement and restoration of the Premises and the Tenant
Improvements and other improvements and fixture insured thereunder, as further
provided in Article 22; provided, however, if this Lease is terminated after
damage or destruction, the insurance policy or policies, all rights thereunder
and all insurance proceeds shall be assigned to Landlord.
21.3 At all times during the term of this Lease, Tenant shall
maintain, at Tenant's expense, business interruption insurance in order to
insure that the Basic Annual Rent and Operating Expenses provided for hereunder
will be paid for a period of up to one (1) year after any casualty insured
against by all risk policy of insurance described in Section 21.2 above or any
restriction of access to the Premises as a result of such casualty.
21.4 At all times during the term of this Lease, Tenant shall
maintain, at Tenant's expense, "all risk" insurance against all other personal
property, including trade fixtures, equipment and merchandise, of Tenant in an
amount equal to the full replacement value thereof. Any subtenant of Tenant that
may be occupying the Premises, or any portion thereof, from time to time, shall
be required to maintain similar insurance in an amount equal to the full
replacement value thereof.
21.5 At all times during the term of this Lease, Tenant shall
maintain workers' compensation insurance in accordance with California law, and
employers' liability insurance with limits typical for companies similar to
Tenant.
21.6 All of the policies of insurance referred to in this Article
21 shall be written by companies authorized to do business in California and
rated A or better in Best's Insurance Guide. Each insurer referred to in this
Article 21 shall agree, by endorsement on the applicable policy or by
independent instrument furnished to Landlord, that it will give Landlord, and
Landlord's lenders if required by such lenders, at least ten (10) days' prior
written notice by registered mail before the applicable policy shall be
cancelled for non-payment of premium, and thirty (30) days' prior written notice
by registered mail before the applicable policy shall be cancelled or altered in
coverage, scope, amount or other material term for any other reason.
21.7 Landlord may provide the property insurance required under
this Article 21 pursuant to a so-called blanket policy or policies of property
insurance maintained by Landlord; provided, however, that the amount and type of
coverage shall not be reduced or adversely affected from that which would exist
under a separate policy or policies meeting all of the requirements of this
Lease by reason of the use of a blanket policy of property insurance, and
provided further that the requirements of this Article 21 are otherwise
satisfied.
21.9 Landlord and Tenant each hereby waive any and all rights of
recovery against the other or against the officers, directors, partners,
employees, agents, and representatives of the other, on account of loss or
damage to such waiving party's property or the property of others under its
control, to the extent that such loss or damage is caused by or results
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from risks insured against under any insurance policy which insures such waiving
party's property at the time of such loss or damage, which waiver shall continue
in effect as long as the parties' respective insurers permit such waiver under
the terms of their respective insurance policies or otherwise in writing. Any
termination of such waiver shall be by written notice as hereinafter set forth.
Prior to obtaining policies of insurance required or permitted under this Lease,
Landlord and Tenant shall give notice to the insurers that the foregoing mutual
waiver is contained in this Lease, and each party shall use its best efforts to
cause such insurer to approve such waiver in writing and to cause each insurance
policy obtained by it to provide that the insurer waives all right of recovery
by way of subrogation against the other party. If such written approval of such
waiver of subrogation cannot be obtained from any insurer or is obtainable only
upon payment of an additional premium which the party seeking to obtain the
policy reasonably determines to be commercially unreasonable, the party seeking
to obtain such policy shall notify the other thereof, and the latter shall have
twenty (20) days thereafter to either: (i) identify other insurance companies
reasonably satisfactory to the other party that will provide the written
approval and waiver of subrogation; or (ii) agree to pay such additional
premium. If neither (i) nor (ii) are done, the mutual waiver set forth above
shall not be operative, and the party seeking to obtain the policy shall be
relieved of the obligation to obtain the insurer's written approval and waiver
of subrogation with respect to such policy during such time as such policy is
not obtainable or is obtainable only upon payment of a commercially unreasonable
additional premium as described above. If such policies shall at any subsequent
time be obtainable or obtainable upon payment of a commercially reasonable
additional premium, neither party shall be subsequently liable for failure to
obtain such insurance until a reasonable time after notification thereof by the
other party. If the release of either Landlord or Tenant, as set forth in the
first sentence of this Section 21.9, shall contravene any law with respect to
exculpatory agreements, the liability of the party in question shall be deemed
not released but shall be secondary to the other's insurer.
21.10 To the extent not set forth above, all policies of insurance
required under this Section 21 may provide for deductibles of not more than
$100,000.00 per claim.
22. DAMAGE OR DESTRUCTION.
22.1 Tenant shall give written notice to Landlord immediately upon
any damages to or destruction of the Premises if the loss sustained exceeds
$10,000. In the event of damage to or destruction of all or any portion of the
Premises or the improvements and fixtures thereon (collectively, "improvements")
arising from a risk covered by the insurance described in Section 21.2, Landlord
shall within a reasonable time commence and proceed diligently to repair,
reconstruct and restore (collectively, "restore") such improvements to
substantially the same condition as they were in immediately prior to the
casualty, whether or not the insurance proceeds are sufficient to cover the
actual cost of restoration. Except as expressly set forth below, this Lease
shall continue in full force and effect, notwithstanding such damage or
destruction. One half (1/2) of any cost (but not to exceed $25,000) of
restoration in excess of the insurance proceeds shall be paid by Tenant as
Operating Expenses pursuant to Section 7.1.
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22.2 In the event of any damage to or destruction of all or any
portion of the improvements arising from a risk which is not fully covered by
the insurance described in Section 21.2, Landlord may elect to (1) terminate the
Lease if the cost of repair or restoration is estimated to exceed $500,000, or
(2) at its expense commence and proceed diligently to restore the improvements
to substantially the same condition as they were in immediately prior to the
casualty, in which case this Lease shall continue in full force and effect. In
satisfying its obligations under this Article 22, Landlord shall not be required
to restore the Premises with improvements identical to those which were damaged
or destroyed; rather, with the consent of Tenant, which consent will not be
unreasonably withheld, Landlord may restore the damage or destruction with
improvements reasonably equivalent to those damaged or destroyed. Nothing in
this subsection, however, shall be construed to relieve Tenant of any other
obligations under this Lease, including the obligation to pay Rent.
Notwithstanding anything to the contrary contained in this Article, in the event
of any damage to or destruction of all or any portion of the improvements
arising from a risk which is not fully covered by the insurance described in
Section 21.2. Tenant may elect to terminate the Lease if the Premises cannot
reasonably be expected to be restored within six months following the date of
the damage or destruction.
22.3 In the event of damage, destruction and/or restoration as
herein provided, if the Lease is not terminated pursuant to Section 22.2 there
shall be no abatement of Rent, and Tenant shall not be entitled to any
compensation or damages occasioned by any such damage, destruction or
restoration.
22.4 Notwithstanding anything to the contrary contained in this
Article, should Landlord be delayed or prevented from completing the restoration
of the improvements after the occurrence of such damage or destruction by reason
of acts of God, war, government restrictions, inability to procure the necessary
labor or materials, strikes, or other causes beyond the control of Tenant (but
excluding economic conditions or financial inability to perform), the time for
Landlord to commence or complete restoration shall be extended for the time
reasonably required as a result of such event.
22.5 If restoration is required pursuant to this Article, Landlord
shall prepare final plans and specifications and working drawings for the work
in compliance with all applicable laws. The plans and specifications and working
drawings shall be subject to the approval of Tenant, which approval shall not be
unreasonably withheld, within thirty (30) days after receipt and the approval of
Landlord's lenders if required by such lenders. Landlord shall submit the plans
and specifications as soon as reasonably practicable, but in no event later than
one hundred twenty (120) days after the casualty. Landlord shall commence the
restoration .within thirty (30) days after issuance of all necessary. permits
and approvals and shall continue the work diligently to completion thereafter.
22.6 Tenant waives the provisions of Civil Code Section 1932(2) and
1933(4) or any similar statute now existing or hereafter adopted governing
destruction of the Premises, so that the parties' rights and obligations in the
event of damage or destruction shall be governed by the provisions of this
Lease.
23. EMINENT DOMAIN.
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23.1 In the event the whole of the Premises shall be taken for any
public or quasi-public purpose by any lawful power or authority by exercise of
the right of appropriation, condemnation or eminent domain, or sold to prevent
such taking, Tenant or Landlord may terminate this Lease effective as of the
date possession is required to be surrendered to said authority.
23.2 In the event of a partial taking of the Premises for any
public or quasi-public purpose by any lawful power or authority by exercise of
right of appropriation, condemnation, or eminent domain, or sold to prevent such
taking, then Landlord may elect to terminate this Lease if such taking is of a
material nature such as to make it uneconomical to continue use of the
unappropriated portions for the purposes for which they were intended, and
Tenant may elect to terminate this Lease if such taking is of material detriment
to, and substantially interferes with, Tenant's use and occupancy of the
Premises. In no event shall this Lease be terminated when such a partial taking
does not have a material adverse effect upon Landlord or Tenant or both.
Termination by either party pursuant to this section shall be effective as of
the date possession is required to be surrendered to said authority.
23.3 If upon any taking of the nature described in this Article 23
this Lease continues in effect, then Landlord shall promptly proceed to restore
the remaining portion of the Premises to substantially their same condition
prior to such partial taking; provided, however, Landlord's obligation hereunder
shall be limited to the amount of the condemnation proceeds. Basic Annual Rent
shall be abated proportionately on the basis of the rental value of the Premises
as restored after such taking compared to the rental value of the Premises prior
to such taking.
23.4 If restoration is required pursuant to this Article, Landlord,
using proceeds of the award, shall prepare final plans and specifications and
working drawings for the work in compliance with all applicable laws. The plans
and specifications and working drawings shall be subject to the approval of
Tenant within thirty (30) days after receipt, which approval shall not be
unreasonably withheld. Landlord shall submit the plans and specifications as
soon as reasonably practicable, but in no event later than one hundred twenty
(120) days after the taking, unless due to delays beyond Landlord's control.
Subject to unavoidable delays, Landlord shall commence the restoration within
thirty (30) days after issuance of all necessary permits and approvals and shall
continue the work diligently to completion thereafter.
23.6 If upon any taking of the nature described in this Article 23
this Lease does not continue in effect, any award shall be distributed to
Landlord and Tenant pro rata according to their interests taken.
24. DEFAULTS AND REMEDIES.
24.1 Late payment by Tenant to Landlord of Rent and other sums due
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult and impracticable to ascertain. Such
costs include, but are not limited to, processing and accounting charges and
late charges which may be imposed on Landlord by the
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terms of any mortgage or trust deed covering the Premises. Therefore, if any
installment of Rent due from Tenant is not received by Landlord within ten (10)
days of the date such payment is due, Tenant shall pay to Landlord an additional
sum of five percent (5%) of the overdue rent as a late charge. The parties agree
that this late charge represents a fair and reasonable estimate of the costs
that Landlord will incur by reason of late payment by Tenant. In addition to the
late charge, Rent not paid within thirty (30) days of the date such payment is
due shall bear interest from thirty (30) days after the date due until paid at
the lesser of (i) ten percent (10%) per annum or (ii) the maximum rate permitted
by law.
24.2 No payment by Tenant or receipt by Landlord of a lesser amount
than the rent payment herein stipulated shall be deemed to be other than on
account of the rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
provided. If at any time a dispute shall arise as to any amount or sum of money
to be paid by Tenant to Landlord, Tenant shall have the right to make payment
"under protest" and such payment shall not be regarded as a voluntary payment,
and there shall survive the right on the part of Tenant to institute suit for
recovery of the payment paid under protest.
24.3 If Tenant fails to pay any sum of money (other than Basic
Annual Rent) required to be paid by it hereunder, or shall fail to perform any
other act on its part to be performed hereunder, Landlord may, without waiving
or releasing Tenant from any obligations of Tenant, but shall not be obligated
to, make such payment or perform such act; provided, that such failure by Tenant
continued for ten (10) days after written notice from Landlord demanding
performance by Tenant was delivered to Tenant, or that such failure by Tenant
unreasonably interfered with the use or efficient operation of the Premises, or
resulted or could have resulted in a violation of law or the cancellation of an
insurance policy maintained by Landlord. All sums so paid or incurred by
Landlord, together with interest thereon, from the date such sums were paid or
incurred, at the annual rate equal to ten percent (10%) per annum or highest
rate permitted by law, whichever is less, shall be payable to Landlord on demand
as Additional Rent.
24.4 The occurrence of any one or more of the following events
shall constitute a default hereunder by Tenant:
(a) The failure by Tenant to make any payment of Rent, as
and when due, where such failure shall continue for a period of five (5) days
after written notice thereof from Landlord to Tenant. Such notice shall be in
lieu of, and not in addition to, any notice required under California Code of
Civil procedure Section 1161;
(b) The failure by Tenant to observe or perform any
obligation other than described in Section 24.4(a) to be performed by Tenant,
where such failure shall continue for a period of thirty (30) days after written
notice thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's default is such that more than thirty (30) days are reasonably required
to cure the default, then Tenant shall not be deemed to be in default if Tenant
shall commence such cure within said thirty (30) day period and thereafter
diligently
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prosecute the same to completion. Such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure
Section 1161;
(c) Tenant makes an assignment for the benefit of creditors
generally;
(d) A receiver, trustee or custodian is appointed to, or
does, take title, possession or control of all, or substantially all, of
Tenant's assets;
(e) An order for relief is entered against Tenant pursuant
to a voluntary or involuntary proceeding commenced under any chapter of the
Bankruptcy Code;
(f) Any involuntary petition is filed against the Tenant
under any chapter of the Bankruptcy Code and is not dismissed within ninety (90)
days; or
(g) Tenant's interest in this Lease is attached, executed
upon, or otherwise judicially seized and such action is not released within
ninety (90) days of the action.
Notices given under this Section shall specify the alleged
default and shall demand that Tenant perform the provisions of this Lease or pay
the Rent that is in arrears, as the case may be, within the applicable period of
time, or quit the Premises. No such notice shall be deemed a forfeiture or a
termination of this Lease unless Landlord elects otherwise in such notice, and
in no event shall a forfeiture or termination occur without such written notice.
24.5 In the event of a default by Tenant, and at any time
thereafter, and without limiting Landlord in the exercise of any right or remedy
which Landlord may have, Landlord shall be entitled to terminate Tenant's right
to possession of the Premises by any lawful means, in which case this Lease
shall terminate and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event Landlord shall have the immediate right to
re-enter and remove all persons and property, and such property may be removed
and stored in a public warehouse or elsewhere at the cost of, and for the
account of Tenant, all without service of notice and without being deemed guilty
of trespass, or becoming liable for any loss or damage which may be occasioned
thereby. In the event that Landlord shall elect to so terminate this Lease, then
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including:
(a) The worth at the time of award of any unpaid Rent which
had been earned at the time of such termination; plus
(b) The worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss which Tenant proves could have been
reasonably avoided;. plus
(c) 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 which Tenant proves could have been reasonably
avoided; plus
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(d) Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligation under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, the cost of restoring
the Premises to the condition required under the terms of this Lease; plus
(e) At Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in Subsections (a), (b) and (c), the "time of award"
shall mean the date upon which the judgment in any action brought by Landlord
against Tenant by reason of such default is entered or such earlier date as the
court may determined. As used in Subsections (a) and (b), the "worth at the time
of award" shall be computed by allowing interest at the rate specified in
Section 24.1. As used in Subsection (c) above, the "worth at the time of award"
shall be computed by taking the present value of such amount using the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percentage point.
24.6 In the event of a default by Tenant, and if Landlord does not
elect to terminate this Lease as provided in Section 24.5 or otherwise terminate
Tenant's right to possession of the Premises, Landlord shall have the remedy
described in Section 1951.4 of the Civil Code, which provides that Landlord may
continue the Lease in effect after Tenant's breach and abandonment and recover
Rent as it becomes due if Tenant has the right to sublet the Premises or assign
the Lease subject only to reasonable limitations. Landlord may continue this
Lease in effect for so long as Landlord does not terminate Tenant's right to
possession of the Premises, and may enforce all of its rights and remedies under
the Lease, including the right from time to time to recover Rent as it becomes
due under the Lease. At any time thereafter, Landlord may elect to terminate
this Lease and to recover damages to which Landlord is entitled.
24.7 Notwithstanding anything herein to the contrary, Landlord's
reentry to perform acts of maintenance or preservation of, or in connection with
efforts to relet, the Premises, or any portion thereof, or the appointment of a
receiver upon Landlord's initiative to protect Landlord's interest under this
Lease, shall not terminate Tenant's right to possession of the Premises or any
portion thereof and, until Landlord does elect to terminate this Lease, this
Lease shall continue in full force and Landlord may pursue all its remedies
hereunder, including, without limitation, the right to recover from Tenant as
they become due hereunder all Rent and other charges required to be paid by
Tenant under the terms of this Lease.
24.8 All rights, options, and remedies of Landlord contained in
this Lease shall be construed and held to be nonexclusive and cumulative.
Landlord shall have the right to pursue any one or all of such remedies or any
other remedy or relief which may be provided by law, whether or not stated in
this Lease. No waiver of any default of Tenant hereunder shall be implied from
any acceptance by Landlord of any rent or other payments due hereunder or by any
omission by Landlord to take any action on account of such default if such
default persists or is repeated, and no express waiver shall affect defaults
other than as specified in said waiver.
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24.9 Termination of this Lease or Tenant's right to possession by
Landlord shall not relieve Tenant from any liability to Landlord which has
theretofore accrued or shall arise based upon events which occurred prior to the
last to occur of (i) the date of Lease termination or (ii) the date possession
of Premises is surrendered.
24.10 Landlord shall not be in default unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in no
event later than thirty (30) days after written notice by Tenant specifying
wherein Landlord has failed to perform such obligation; provided, however, that
if the nature of Landlord's obligation is such that more than thirty (30) days
are required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
24.11 Tenant will give notice of any failure by Landlord to perform
its obligations under this Lease to any beneficiary of a deed or trust or
mortgagee of a mortgagee covering the Premises whose address shall have been
furnished to Tenant by Landlord by sending a copy of any notice provided to
Landlord pursuant to Section 24.10 by registered or certified mail. Such
beneficiary and/or mortgagee shall have a reasonable opportunity to cure the
default concurrently with the time periods allowed Landlord as set forth above.
25. ASSIGNMENT OR SUBLETTING.
25.1 Except as hereinafter provided, Tenant shall not, either
voluntarily or by operation of law, sell, hypothecate or transfer this Lease, or
sublet the Premises or any part thereof, or permit or suffer the Premises or any
part thereof to be used or occupied as work space, storage space, concession or
otherwise by anyone other than Tenant or Tenant's employees, without the prior
written consent of Landlord in each instance, which consent shall not be
unreasonably withheld or delayed.
25.2 If Tenant desires to assign this Lease to any entity into
which Tenant is merged with which Tenant is consolidated, which acquires all or
substantially all of the assets of Tenant, or which is an affiliate of Tenant,
including Metaflow Technologies Incorporated, or if Tenant desires to sublet not
less than the entirety of the Premises to an affiliate of Tenant, including
Metaflow Technologies Incorporated, provided that the assignee or subtenant
first executes, acknowledges and delivers to Landlord an agreement whereby the
assignee or subtenant agrees to be bound by all of the covenants and agreements
in this Lease arising after the effective date of the transfer, then Landlord
upon receipt of proof of foregoing, will consent. to the assignment or sublease.
If Tenant desires to sublet only a portion of the Premises to an affiliate of
Tenant, including Metaflow Technologies Incorporated, upon delivery of a copy of
the sublease, Landlord will consent to the sublease.
25.3 In the event Tenant desires to assign, sublease, hypothecate
or otherwise transfer this Lease or sublet the Premises to an assignee or
subtenant other than one set forth in Section 25.2, then at least ten (10) days,
but not more than one hundred eighty (180) days, prior to the date when Tenant
desires the assignment or sublease to be effective (the "Assignment Date"),
Tenant shall give Landlord a notice (the "Assignment Notice") which shall set
forth the
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name, address and business of the proposed assignee or sublessee, information
(including references and financial statements) concerning the reputation and
financial ability of the proposed assignee or sublessee, the Assignment Date,
any ownership or commercial relationship between Tenant and the proposed
assignee or sublessee, and the consideration and all other material terms and
conditions of the proposed assignment or sublease, all in such detail as
Landlord shall reasonably require.
25.4 Landlord in making its determination as to whether consent
should be given to a proposed assignment or sublease, may give consideration to
the reputation of a proposed successor, the financial strength of such successor
(notwithstanding the assignor remaining liable for Tenant's performance), and
any use which such successor proposes to make of the Premises. If Landlord fails
to deliver written notice of its determination to Tenant within twenty (20) days
following receipt of the Assignment Notice and the information required under
Section 25.3, Landlord shall be deemed to have approved the request. As a
condition to any assignment or sublease of the entire Premises to which Landlord
has given consent, any such assignee or sublessee must execute, acknowledge and
deliver to Landlord an agreement whereby the assignee or sublessee agrees to be
bound by all of the covenants and agreements in this Lease.
25.5 Any sale, assignment, hypothecation or transfer of this Lease
or subletting of Premises that is not in compliance with the provisions of this
Article 25 shall be void and shall, at the option of Landlord, terminate this
Lease.
25.6 The consent by Landlord to an assignment or subletting shall
not relieve Tenant or any assignee of this Lease or sublessee of the Premises
from obtaining the consent of Landlord to any further assignment or subletting
or as releasing Tenant or any assignee or sublessee of Tenant from full and
primary liability.
25.7 If Tenant shall sublet the Premises or any part thereof Tenant
hereby immediately and irrevocably assigns to Landlord, as security for Tenant's
obligations under this Lease, all rent from any subletting of all or a part of
the Premises, and Landlord as assignee of Tenant, or a receiver for Tenant
appointed on Landlord's application, may collect such rent and apply it toward
Tenant's obligations under this Lease; except that, until the occurrence of an
act of default by Tenant, Tenant shall have the right to collect, enjoy and
dispose of such rent.
25.8 Notwithstanding any subletting or assignment Tenant shall
remain fully and primarily liable for the payment of all Rent and other sums
due, or to become due hereunder, and for the full performance of all other
terms, conditions, and covenants to be kept and performed by Tenant. The
acceptance of rent or any other sum due hereunder, or the acceptance of
performance of any other term, covenant, or condition hereof, from any other
person or entity shall not be deemed to be a waiver of any of the provisions of
this Lease or a consent to any subletting or assignment of the Premises.
Landlord shall not withhold consent to an assignment back to the original Tenant
hereunder from a subsequent assignee.
25.9 Any sublease of the Premises shall be subject and subordinate
to the provisions of this Lease, shall not extend beyond the term of this Lease,
and shall provide that
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the sublessee shall attorn to Landlord, at Landlord's sole option, in the event
of the termination of this Lease. Landlord and any lender shall upon Tenant's
request provide any subtenant of the entirety of the Premises with a recognition
and no disturbance agreement in the form set forth in Article 35 hereof on the
condition that the sublessee agrees to attorn to Landlord on exactly the same
terms and conditions as this Lease.
26. ATTORNEY'S FEES.
26.1 If either party becomes a party to any action or proceeding
concerning this Lease or the Premises, or any part thereof, by reason of any act
or omission of the other party or its authorized representatives, and not by any
act or omission of the party that becomes a party to that litigation or any act
or omission of its authorized representatives, the party that causes the other
party to become involved in the litigation shall be liable to that party for
reasonable attorneys' fees, expert witness fees, and court costs incurred by it
in the litigation.
26.2 If either party commences an action or proceeding against the
other party arising out of or in connection with this Lease, the prevailing
party shall be entitled to have and recover from the other party reasonable
attorneys' fees, expert witness fees and costs of suit.
27. BANKRUPTCY.
27.l In the event a debtor or trustee under the Bankruptcy Code, or
other person with similar rights,-duties and powers under any other law,
proposes to cure any default under this Lease or to assume or assign this Lease,
and is obliged to provide adequate assurance to Landlord that (i) a default will
be cured, (ii) Landlord will be compensated for its damages arising from any
breach of this Lease, or (iii) future performance under this Lease will occur,
then adequate assurance shall include any or all of the following, as determined
by the Bankruptcy Court: (a) those acts specified in the Bankruptcy Code or
other law as included within the meaning of adequate assurance; (b) a cash
payment to compensate Landlord for any monetary defaults or damages arising from
a breach of this Lease; (c) the credit worthiness and desirability, as a tenant,
of the person assuming this Lease or receiving an assignment of this Lease, at
least equal to Landlord's customary and usual credit worthiness requirements and
desirability standards in effect at the time of the assumption or assignment, as
determined by the Bankruptcy Court; and (d) the assumption or assignment of all
of Tenant's interest and obligations under this Lease.
28. DEFINITION OF LANDLORD.
28.1 The term "Landlord" as used in this Lease, so far as covenants
or obligations on the part of Landlord are concerned, shall be limited to mean
and include only Landlord or the successor-in-interest of Landlord under this
Lease at the time in question. In the event of any transfer, assignment or
conveyance of Landlord's title, the Landlord herein named (and in case of any
subsequent transfers or conveyances, the then grantor and any prior grantors)
shall be automatically freed and relieved from and after the date of such
transfer, assignment or conveyance of all liability for the performance of any
covenants or obligations contained in this Lease thereafter to be performed by
Landlord and, without further agreement, the transferee of
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such title or leasehold shall be deemed to have assumed and agreed to observe
and perform any and all obligations of Landlord hereunder, during its ownership
of the Premises. Landlord may transfer its interest in the Premises or this
Lease without the consent of Tenant and such transfer or subsequent transfer
shall not be deemed a violation on the part of Landlord or the then grantor of
any of the terms or conditions of this Lease.
28.2 Notwithstanding anything foregoing to the contrary, even if
its interest in the Premises is assigned or otherwise conveyed to a successor (a
"Transfer"), except by full and complete performance or upon the execution and
delivery by Tenant to University Center LLC of an express written waiver or
release of a specific warranty, representation, covenant, liability or
obligation, University Center LLC shall not be relieved or released from the
following (although nothing in this Section 28.2 or elsewhere in this Lease
shall be deemed to extend any applicable period of limitations):
(a) any warranty given or representation made by Landlord in
this Lease and the Work Letter, including but not limited to the responsibility
for construction of the Project Work including punch-list items referred to in
Section 6.4 of the Work Letter, and the warranties given by University Center
LLC regarding that construction, and those relating to environmental matters;
(b) any covenant or obligation which Landlord is obligated
to perform, and any liability which arises out of or results from the acts or
omissions, of University Center LLC, at any time prior to a Transfer;
(c) payment to the proper government authority of such sums
as University Center LLC may have collected from Tenant for the payment of real
estate taxes, if any; or
(d) any obligation of Landlord expressly stated in the Lease
to survive the expiration or termination of the Lease.
29. ESTOPPEL CERTIFICATE.
29.1 Each party shall, within fifteen (15) days of written notice
from the other party, execute, acknowledge and deliver to the other party a
statement in writing on a form reasonably requested by a proposed lender,
purchaser, assignee or subtenant (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease as so modified is in full force and
effect) and the dates to which the rental and other charges are paid in advance,
if any, (ii) acknowledging that there are not, to each party's knowledge, any
uncured defaults or failures to perform on the part of Landlord or Tenant
hereunder (or specifying such defaults or failures to perform if any are
claimed) and (iii) setting forth such further information with respect to this
Lease or the Premises as may be reasonably requested thereon. Any such statement
may be relied upon by any prospective lender, purchaser, assignee or subtenant
of all or any portion of the Premises.
30. REMOVAL OF PROPERTY.
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30.1 Except as provided below, all fixtures and personal property
owned by Tenant shall be and remain the property of Tenant, and may be removed
by Tenant at any time, but not later than the expiration or earlier termination
of the term of this Lease.
30.2 The Building and Land Improvements, and all fixtures and
personal property owned by Landlord, shall be and remain the property of
Landlord, and shall, upon the expiration or earlier termination of this Lease,
remain upon and be surrendered with the Premises as a part thereof.
30.3 Notwithstanding Sections 30.1, Tenant may not remove any
property if such removal would cause material damage to the Premises, unless
such damages can be and is repaired by Tenant. Furthermore, Tenant shall repair
any damage to the Premises caused by Tenant's removal of any such property, and
shall, prior to the expiration or earlier termination of this Lease, restore and
return the Premises to the condition they were in when first occupied by Tenant,
reasonable wear and tear excepted. At a minimum, even if they are determined to
be fixtures or personal property owned by Tenant, Tenant shall leave in place
and repair any damage to the interior floors, walls, doors and ceilings of the
Building, and the heating, ventilation, air conditioning, plumbing, and
electrical systems; all such property shall become the property of Landlord upon
the expiration or earlier termination of this Lease, and shall remain upon and
be surrendered with the Premises as a part thereof. The provisions of Article 17
shall apply to any restoration work under this Article as if the restoration was
an alteration, addition or improvement thereunder. Should Tenant require any
period beyond the expiration or earlier termination of the Lease to complete
such restoration, Tenant shall be a tenant at sufferance subject to the
provisions of Section 12.2 hereof.
30.4 If Tenant shall fail to remove any fixtures or personal
property which it is entitled to remove under this Article 30 from the Premises
prior to termination of this Lease, then Landlord may dispose of the property
under the provisions of Section 1980 et seq. of the California Civil Code, as
such provisions may be modified from time to time, or under any other applicable
provisions of California law.
31. LIMITATION OF LANDLORD'S LIABILITY.
31.1 If Landlord is in default of this Lease, and as a consequence,
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the judgment
and levy against the right, title, and interest of Landlord in the Premises, and
out of rent or other income from the Premises receivable by Landlord or out of
the consideration received by Landlord from the sale or other disposition of all
or any part of Landlord's right, title, and interest in the Premises.
31.2 Neither Landlord nor Landlord's Agents shall be personally
liable for any deficiency except to the extent liability is based upon willful
and intentional misconduct. If Landlord is a partnership or joint venture, the
partners of such partnership shall not be personally liable and no partner of
Landlord shall be sued or named as a party in any suit or action, or service of
process be made against any partner of Landlord, except as may be necessary to
secure jurisdiction of the partnership or joint venture or to the extent
liability is caused by willful and intentional misconduct. If Landlord is a
corporation, the shareholders, directors, officers, employees, and/or agents of
such corporation shall not be personally liable and no shareholder, director,
officer, employee, or agent of Landlord shall be sued or named as a party in any
suit or action, or service of process be made against any shareholder, director,
officer, employee, or agent of Landlord, except as may be necessary to secure
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jurisdiction of the corporation. If Landlord is a limited liability company, the
members, managers, officers, employees, and/or agents of such limited liability
company shall not be personally liable and no member, manager, officer,
employee, or agent of Landlord shall be sued or named as a party in any suit or
action, or service of process be made against any member, manager, officer,
employee, or agent of Landlord, except as may be necessary to secure
jurisdiction of the corporation. No partner, shareholder, director, member,
manager, employee, or agent of Landlord shall be required to answer or otherwise
plead to any service of process and no judgment will be taken or writ of
execution levied against any partner, shareholder, director, member, manager,
employee, or agent of Landlord.
31.3 Each of the covenants and agreements of this Article 31 shall
be applicable to any covenant or agreement either expressly contained in this
Lease or imposed by statute or by common law.
31.4 Notwithstanding the foregoing, University Center LLC shall
remain liable for the in matters set forth in Section 28.2.
32. CONTROL BY LANDLORD.
32.1 Landlord reserves full control over the Premises to the extent
not inconsistent with Tenant's quiet enjoyment and use of Premises. This
reservation includes the right to maintain or establish ownership of the
Building or portions thereof separate from fee title to the Land.
32.2 Tenant shall, should Landlord so request, promptly join with
Landlord in execution of such documents as may be appropriate to assist Landlord
to implement any such action provided Tenant need not execute any document which
is of a nature wherein liability is created in Tenant or if by reason of the
terms of such document Tenant will be deprived of the quiet enjoyment and use of
the Premises as granted by this Lease.
33. QUIET ENJOYMENT.
33.1 So long as Tenant is not in default, Landlord covenants that
Landlord or anyone acting through or under Landlord will not disturb Tenant's
occupancy of the Premises except as permitted by the provisions of this Lease.
34. QUITCLAIM DEED.
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34.1 On the condition that Landlord prepares and delivers such a
document to Tenant, Tenant shall execute and thereafter deliver to Landlord on
the expiration or termination of this Lease, immediately on Landlord's request,
a quitclaim deed to the Premises or other document in recordable form suitable
to evidence of record termination of this Lease and the option contained at
Section 40 herein.
35. SUBORDINATION AND ATTORNMENT.
35.1 Unless the mortgagee or beneficiary elects otherwise at any
time prior to or following a default by Tenant, this Lease shall be subject to
and subordinate to the lien of any mortgage or deed of trust now or hereafter in
force against the Premises or any portion thereof, and to all advances made or
hereafter to be made thereunder upon the security thereof without the necessity
of the execution and delivery of any further instruments on the part of Tenant
to effectuate such subordination. provided that the lienholder, beneficiary, or
mortgagee has previously executed and delivered to Tenant a non-disturbance.
attornment, and subordination agreement in such form as the lienholder,
beneficiary, or mortgagee may request and as the Tenant may approve, which
approval will not be unreasonably withheld, setting forth that so long as Tenant
is not in default hereunder, Landlord's and Tenant's rights and obligations
hereunder shall remain in force and Tenant's right to possession shall be upheld
against a subsequent purchaser, even after foreclosure or exercise of any power
of sale.
35.2 Tenant shall execute and deliver upon demand such further
instrument or instruments evidencing such subordination of this Lease to the
lien of any such mortgage or deed of trust as may be requested by Landlord and
in a form reasonably satisfactory to Tenant, provided that the lienholder,
beneficiary, or mortgagee has previously executed and delivered to Tenant
non-disturbance agreement in recordable form consistent with the provisions of
Section 35.1. However, if any such mortgagee or beneficiary so elects at any
time prior to or following a default by Tenant, this Lease shall be deemed prior
in lien to any such mortgage or deed of trust regardless of date and Tenant will
execute a statement in writing to such effect at Landlord's request in a form
reasonably satisfactory to Tenant.
35.3 In the event any proceedings are brought for foreclosure, or
in the event of the exercise of the power of sale under any mortgage or deed of
trust made by the Landlord covering the Premises, the Tenant shall attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
Landlord under this Lease in accordance with the terms of the non-disturbance
Agreement.
36. SURRENDER.
36.1 No surrender of possession of any part of the Premises shall
release Tenant from any of its obligations hereunder unless accepted by
Landlord.
36.2 The voluntary or other surrender of this Lease by Tenant shall
not work a merger, unless Landlord consents, and shall, at the option of
Landlord, operate as an assignment to it of any or all subleases or
subtenancies.
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37. WAIVER AND MODIFICATION.
37.1 No provision of this Lease may be modified, amended or added
to except by an agreement in writing. The waiver of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition herein
contained.
38. WAIVER OF JURY TRIAL AND COUNTERCLAIMS.
38.1 The parties hereto shall and they hereby do waive trial by
jury in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on any matters whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant Tenant's use
or occupancy of the Premises, and/or any claim of injury or damage.
39. HAZARDOUS MATERIAL.
39.1 During the term, Tenant, at its sole cost, shall comply with
all federal, state and local laws, statutes, ordinances, codes, regulations and
orders relating to the receiving, handling, use, storage, accumulation,
transportation, generation, spillage, migration, discharge, release and disposal
of Hazardous Material (as hereinafter defined in Section 39.12 hereof) in or
about the Premises. Tenant shall not cause or permit any Hazardous Material to
be brought upon, kept or used in or about the Premises by Tenant, its agents,
employees, contractors, invitees or subtenants, in a manner or for a purpose
prohibited by any federal, state or local agency or authority. The accumulation
of Hazardous Material shall be in approved containers and removed from the
Premises by duly licensed carriers.
39.2 Tenant shall immediately provide Landlord with telephonic
notice, which shall promptly be confirmed by written notice, of any and all
spillage, discharge, release and disposal of Hazardous Material onto or within
the Premises, including the soils and subsurface waters thereof, which by law
must be reported to any federal, state or local agency, and any injuries or
damages resulting directly or indirectly therefrom. Further, Tenant shall
deliver to Landlord each and every notice or order, when said order or notice
identifies a violation which may have the potential to adversely impact the
Premises, received from any federal, state or local agency concerning Hazardous
Material and the possession, use and/or accumulation thereof promptly upon
receipt of each such notice or order by Tenant. Landlord shall have the right,
upon reasonable notice, to inspect and copy each and every notice or order
received from any federal, state or local agency concerning Hazardous Material
and the possession, use and/or accumulation thereof.
39.3 Tenant shall be responsible for and shall indemnify, protect,
defend and hold harmless Landlord and Landlord's Agents from any and all
liability, damages, injuries, causes of action, claims, judgments, costs,
penalties, fines, losses, and expenses which arise during or after the term of
this Lease and which result from Tenant's (or from Tenant's Agents, subtenants,
employees, agents, contractors, licensees, or invitees) receiving, handling,
use,
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storage, accumulation, transportation, generation, spillage, migration,
discharge, release or disposal of Hazardous Material in, upon or about the
Premises, including without limitation (i) diminution in value of the Premises,
(ii) damages for the loss or restriction on use of any portion or amenity of the
Premises, (iii) damages arising from any adverse impact on marketing of space in
the Building, (iv) damages and the costs of remedial work to other property in
the vicinity of the Premises owned by Landlord or an affiliate of Landlord, and
(v) consultant fees, expert fees, and attorneys' fees. Landlord shall be
responsible for and shall indemnify, protect, defend and hold harmless Tenant on
the same basis as above for any claims which result from Landlord's or from
Landlord's Agents receiving, handling, use. storage, accumulation,
transportation, generation, spillage, migration, discharge, release or disposal
of Hazardous Material in, upon or about the Premises.
39.4 The indemnification of Landlord and Landlord's Agents by
Tenant pursuant to the preceding Section 39.3 includes without limiting the
generality of Section 39.3, reasonable costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in the soil,
subsoil, ground water, or elsewhere on, under or about the Premises, or on,
under or about any other property in the vicinity of the Premises owned by
Landlord or an affiliate of Landlord. Without limiting the foregoing, if the
presence of any Hazardous Material on the Premises caused or permitted by Tenant
results in any contamination of the Premises, or underlying soil or groundwater,
Tenant shall promptly take all actions at its sole expense as are necessary to
return the Premises to that condition required by applicable law, provided that
Landlord's approval of such action shall first be obtained, which approval shall
not be unreasonably withheld, except that Tenant shall not be required to obtain
Landlord's prior approval of any action of an emergency nature reasonably
required or any action mandated by a governmental authority, but Tenant shall
give Landlord prompt notice thereof.
39.5 Landlord acknowledges that it is not the intent of this
Article 39 to prohibit Tenant from operating its business as described in
Article 10 or to unreasonably interfere with the operation of Tenant's business.
Tenant may operate its business according to the custom of the industry so long
as the use or presence of Hazardous Material is strictly and properly monitored
according to all applicable governmental requirements.
39.6 Notwithstanding other provisions of this Article 39, it shall
be a default under this Lease, and Landlord shall have the right to terminate
the Lease and/or pursue its other remedies under Article 24, in the event that
(i) Tenant's use of the Premises for the generation, storage, use, treatment or
disposal of Hazardous Material is in a manner or for a purpose prohibited by
applicable law unless Tenant is diligently pursuing compliance with such law,
(ii) Tenant has been required by any governmental authority to take remedial
action in connection with Hazardous Material contaminating the Premises if the
contamination resulted from Tenant's 'action or use of the Premises, unless
Tenant is diligently pursuing compliance with such requirement, or (iii) Tenant
is subject to an enforcement order issued by any governmental authority in
connection with Tenant's use, disposal or storage of a Hazardous Material on the
Premises, unless Tenant is diligently seeking compliance with such enforcement
order.
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39.7 Notwithstanding the provisions of Article 25, if (i) any
anticipated use of the Premises by a proposed assignee or subtenant involves the
generation or storage, use, treatment or disposal of Hazardous Material in any
manner or for a purpose prohibited by any applicable law, (ii) the proposed
assignee or sublessee has been required by any governmental authority to take
remedial action in connection with Hazardous Material contaminating a property
if the contamination resulted from such party's action or use of the property in
question and has failed to take such action, or (iii) the proposed assignee or
sublessee is subject to a final, unappealable enforcement order issued by any
governmental authority in connection with such party's use, disposal or storage
of Hazardous Material of a type such proposed assignee or sublessee intends to
use in the Premises and shall have failed to comply with such order, it shall
not he unreasonable for Landlord to withhold its consent to an assignment or
subletting to such proposed assignee or sublessee.
39.8 Landlord represents that, to the best of its knowledge as of
the date of this Lease, there is no Hazardous Material on the Premises. Landlord
shall provide Tenant with a Phase I Environmental Site Assessment, and any Phase
II Environmental Site Assessment recommended therein, as of the Term
Commencement Date. Should the environmental site assessment(s) disclose the
presence of Hazardous Material beyond legally permissible levels. Landlord shall
correct the deficiencies to Tenant's reasonable satisfaction and shall cause
updates to the environmental site assessment(s) to be issued reflecting the
remedy. The environmental site assessment(s) and all updates thereto are
hereinafter referred to as the "Base Line Report," and shall be deemed
conclusive as to the condition of the Premises, unless, within ninety (90) days
of receipt, Tenant causes an inspection of its own to be conducted, which
inspection discloses the presence of Hazardous Material materially different
from that disclosed in the Base Line Report.
39.9 At any time prior to the expiration or earlier termination of
the term of the Lease, Landlord shall have the right to enter upon the Premises
at all reasonable times and at reasonable intervals in order to conduct
appropriate tests regarding the presence, use and storage of Hazardous Material,
and to inspect Tenant's records with regard thereto. Tenant will pay the
reasonable costs of any such test which demonstrates that contamination in
excess of permissible levels has occurred and such contamination was caused by
Tenant's use of the Premises during the term of the Lease. Tenant shall correct
any deficiencies identified in any such tests in accordance with its obligations
under this Article 39 to the extent the result of Tenant's use of the Premises
during the term of this Lease.
39.10 Landlord may at its own expense cause an environmental site
assessment of the Premises to be conducted and a report thereof delivered to
Tenant upon the expiration or earlier termination of the Lease, such report to
be as complete and broad in scope as the Base Line Report as is necessary to
identify any impact on the Premises Tenant's operations might have had
(hereinafter referred to as the "Exit Report"). Tenant shall correct any
deficiencies identified in such report in accordance with its obligations under
this Article 39 prior to the expiration or earlier termination of this Lease.
This Article 39 is the exclusive provision in this Lease regarding liability,
loss, cost, damage, expense, defense, clean-up, repairs or maintenance arising
from receiving, handling, use, storage, accumulation, transportation,
generation, spillage,
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migration, discharge, release or disposal of Hazardous Material in, upon, to,
from or about the Premises, and the provisions of Articles 7, 10, 18, and 20
shall not apply thereto.
39.11 Tenant's obligations under this Article 39 shall survive the
termination of the Lease.
39.12 As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material" includes, without limitation, any
material or substance which is (i) defined as a "hazardous waste," "extremely
hazardous waste" or "restricted hazardous waste" under Sections 25515, 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), (ii)
defined as a "hazardous substance" under Section 25316 of the California Health
and Safety Code, Division 2, Chapter 6.8 (▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous
Substance Account Act), (iii) 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 Substances), (v) petroleum,
(vi) asbestos, (vii) listed under Article 9 and defined as hazardous or
extremely hazardous pursuant to Article 11 of Title "2 of the California
Administrative Code, Division 4, Chapter 20, (viii) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. Section 1317), (iv) defined as a "hazardous waste" pursuant to
Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et. seq. (42 U.S.C. Section 6903), or (x) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C; Section 9601 et. seq. (42 U.S.C.
Section 9601).
40. OPTION TO EXTEND.
40.1 Landlord grants to Tenant the right to extend the term of this
Lease for one (1) period of five (5) years under the same terms and conditions
existing in the original Lease except as set forth in this Article 40. Tenant
shall exercise such right to extend the term of this Lease by written notice to
Landlord no later than twelve (12) months prior to the end of the original term.
40.2 Basic Annual Rent shall be adjusted on the first day of the
extension term to an amount equal to the fair market rental value of the
Premises as of the commencement of the extension term, but in no event less than
one hundred three percent (103%) of the Basic Annual Rent payable during the
last year of the original term.
40.3 Landlord shall obtain at its expense and deliver to Tenant an
independent appraisal of the fair market rental value of the Premises as of the
commencement of the extension term. Following its receipt of Landlord's
appraisal, Tenant may elect to obtain at its expense and deliver to Landlord a
second independent appraisal of the fair market rental value of the Premises as
of the commencement of the extension term. If Tenant elects not to obtain a
second appraisal, Landlord's appraisal shall be conclusive. If Tenant's
appraisal is no more than five percent (5%) less than Landlord's appraisal, the
fair market rental value of the Premises
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shall be the arithmetic average of the two appraisals. If Tenant's appraisal is
more than five percent (5%) less than Landlord's appraisal, the two appraisers
shall appoint a third appraiser to appraise the fair market rental value of the
Premises as of the commencement of the extension term, and the fair market
rental value of the Premises shall be the arithmetic average of the two
appraisals closest in their determination of fair market rental value, but in no
event less than one hundred three percent (103%) of the Basic Annual Rent
payable during the last year of the original term. Landlord and Tenant shall
bear equally the expense of the third appraiser.
40.4 All appraisers appointed hereunder shall have at least ten
(10) years' experience in the appraisal of commercial and industrial real
property in the UTC/▇▇▇▇▇▇ ▇▇▇▇▇/Sorrento Valley areas of San Diego, and shall
be members of professional organizations such as the American Appraisal
Institute with a designation of MAI or equivalent.
40.5 As used herein, the term "fair market rental value of the
Premises" shall mean the base rent that a ready and willing tenant would pay for
the Premises, as of the commencement of the extension term, to a ready and
willing landlord, for a term of five (5) years on the terms and conditions of
the Lease, determined as if the Premise were exposed for lease on the open
market for a reasonable period of time and taking into account all of the
purposes for which such property may be used. Any appraiser appointed hereunder
to determine the "fair market rental value of the Premises' shall take into
account all of the other terms and conditions of this Lease, including, without
limitation, that this Lease provides for the Basic Annual Rent to increase
annually by three percent (3% ) during the extension term.
40.6 Any increase in Basic Annual Rent under this Article 40 which
is not determined until after the effective date of the increase shall
nevertheless be retroactive to the effective date, and Tenant shall pay any such
retroactive increase with the installment of Rent next due.
40.7 Basic Annual Rent as of the commencement of the extension term
as determined under this Article 40 (and as previously increased each year of
the extension term pursuant to this Section 40.7) shall be increased each year
of the extension term by three percent (3%). The first such increase shall
become effective commencing with that monthly rental installment which is first
due on or after the sixth (6th) anniversary of the Term Commencement Date and
subsequent increases shall become effective on the same day of each calendar
year thereafter for so long as this Lease continues in effect.
40.8 Tenant shall not have the right to exercise the option to
extend the term, notwithstanding anything set forth above to the contrary: (a)
During the time commencing from the date Landlord gives to Tenant a written
notice that Tenant is in default under any provision of this Lease and
continuing until the default alleged in said notice is cured; (b) During the
period of time commencing on the day after a monetary obligation to Landlord is
due from Tenant and unpaid without any necessity for notice thereof to Tenant
and continuing until the obligation is paid; or (c) After the expiration or
earlier termination of this Lease. The period of time within which the option to
extend may be exercised shall not be extended or enlarged by reason of the
Tenant's inability to exercise the option because of the foregoing provisions.
At the election of Landlord, all rights of Tenant under the provisions of this
Article 40 shall terminate
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and be of no further force or effect even after Tenant's due and timely exercise
of an option to extend if, after such exercise, but prior to the commencement of
the extension term, (1) Tenant fails to pay to Landlord a monetary obligation of
Tenant for a period of sixty (60) days after such obligation becomes due
(without necessity of Landlord to give notice to Tenant), or (2) Tenant fails to
commence to cure a non-monetary default within thirty (30) days after the date
Landlord gives notice to Tenant of such default.
41. MISCELLANEOUS.
41.1 TERMS AND HEADINGS. Where applicable in this Lease. the
singular includes the plural and the masculine or neuter includes the masculine,
feminine and neuter. The section headings of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part hereof.
41.2 EXAMINATION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
41.3 TIME. Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.
41.4 COVENANTS AND CONDITIONS. Each provision of this Lease
performable by Landlord and by Tenant shall be deemed both a covenant and a
condition.
41.5 CONSENTS. Whenever consent or approval of either party is
required, that party shall not unreasonably withhold or delay such consent or
approval, except as may be expressly set forth to the contrary.
41.6 ENTIRE AGREEMENT. The terms of this Lease and the Work Letter
are intended by the parties as a final expression of their agreement with
respect to the terms as are included in the this Lease and the Work Letter, and
may not be contradicted by evidence of any prior or contemporaneous agreement.
41.7 SEVERABILITY. Any provision of this Lease which shall prove to
be invalid, void, or illegal in no way affects, impairs or invalidates any other
provision hereof, and such other provisions shall remain in full force and
effect.
41.8 RECORDING. Within ten (10) days from the execution of this
Lease, Landlord and Tenant shall record a short form memorandum hereof, which
includes a reference to the option to extend set forth in Section 40, subject to
the requirement to execute and deliver a quitclaim deed pursuant to the
provisions of Section 34.1 hereof.
41.9 IMPARTIAL CONSTRUCTION. The language in all parts of this
Lease shall be in all cases construed as a whole according to its fair meaning
and not strictly for or against either Landlord or Tenant.
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41.10 INUREMENT. Each of the covenants, conditions, and agreements
herein contained shall inure to the benefit of and shall apply to and be binding
upon the parties hereto and their respective heirs, legatees, devisees,
executors, administrators, successors, assigns, sublessees, or any person who
may come into possession of said Premises or any part thereof in any manner
whatsoever. Nothing in this Section 41.10 shall in any way alter the provisions
conditioning assignment or subletting in this Lease.
41.11 FORCE MAJEURE. If either party cannot perform any of its
obligations (other than Tenant's obligation to pay Rent), or is delayed in such
performance (other than Tenant's obligation to pay Rent), due to events beyond
such party's control, the time provided for performing such obligations shall be
extended by a period of time equal to the delay attributable to such events.
Events beyond a party's control include, but are not limited to, acts of God
(including earthquake), war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortage of labor or material, government regulation or
restriction and weather conditions, but do not include financial inability to
perform.
41.12 NOTICES. Any notice, consent, demand, ▇▇▇▇, statement, or
other communication required or permitted to be given hereunder must be in
writing and may be given by personal delivery, by facsimile transmission, or by
mail, and if given by personal delivery or facsimile transmission shall be
deemed given on the date of delivery or transmission, and if given by mail shall
be deemed sufficiently given five (5) days after time when deposited in United
States Mail if sent by registered or certified mail, addressed to Tenant at the
Premises, or to Tenant or Landlord at the addresses shown in Section 2.1.7
hereof. Either party may, by notice to the other given pursuant to this Section,
specify additional or different addresses for notice purposes.
41.13 AUTHORITY TO EXECUTE LEASE. Landlord and Tenant each
acknowledge that it has all necessary right, title and authority to enter into
and perform its obligations under this Lease, that this Lease is a binding
obligation of such party and has been authorized by all requisite action under
the party's governing instruments, that the individuals executing this Lease on
behalf of such party are duly authorized and designated to do so, and that no
other signatories are required to bind such party.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date first above written.
LANDLORD:
UNIVERSITY CENTER LLC
A California limited liability company
By Nexus Properties, Inc.
A California corporation
Its Manager
By: __________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Chief Executive Officer
By: __________________________________
Its: _____________________________
TENANT:
SGS-THOMSON MICROELECTRONICS, INC.
A Delaware corporation
By: __________________________________
Its: Vice President -- Finance and
Chief Financial Officer
By: __________________________________
Its: _____________________________
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