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EXHIBIT 10.34
LIGHT INDUSTRIAL LEASE
By and Between
TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA
("Lessor")
and
GASONICS, INC.
("Lessee")
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TABLE OF CONTENTS
ARTICLE PAGE N0.
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1 BASIC LEASE TERMS 1
2 PREMISES 2
3 TERM 2
4 RENT 3
5 TAXES 4
6 INSURANCE 5
7 MAINTENANCE 7
8 UTILITIES 10
9 USE OF PREMISES 10
10 DEFAULT PROVISIONS 11
11 EXPIRATION OR TERMINATION 12
12 CONDEMNATION OF PREMISES 13
13 ENTRY BY LESSOR 14
14 INDEMNIFICATION 15
15 ASSIGNMENT AND SUBLETTING 15
16 DAMAGE OR DESTRUCTION 16
17 PARKING 17
18 COVENANTS, CONDITIONS AND RESTRICTIONS 17
19 MISCELLANEOUS PROVISIONS 18
20 HAZARDOUS MATERIALS 20
21 RIGHT OF FIRST REFUSAL 22
TABLE OF EXHIBITS
Exhibit A Premises
Exhibit B Work Letter Agreement
(i)
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LIGHT INDUSTRIAL LEASE
This Light Industrial Lease ("Lease") is made and entered into this 25 day of
October, 1989, between Teachers Insurance and Annuity Association of America, a
New York corporation ("Lessor") and GaSonics, Inc., a California corporation
("Lessee").
ARTICLE 1
BASIC LEASE TERMS
1.1 Commencement of Lease. The Term of this Lease shall commence on
January 1, 1990 ("Commencement Date").
1.2 Lease Term. The Term of this Lease shall expire ten (10) years after
the Commencement Date.
1.3 Monthly Rent. The base monthly rental shall be as follows:
Rental Month of Term Base Monthly Rental
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1 through 3 $0.00
4 through 24 $30,233.50
25 through 60 $41,722.25
61 through 84 $47,768.95
85 through 120 $53,815.65
Notwithstanding anything to the contrary set forth above if Lessor terminates
this Lease because of Lessee's default, base monthly rental shall be deemed to
have been due and payable at the rate of Thirty Thousand Two Hundred
Thirty-Three and 50/100ths Dollars ($30,233.50) per month on the first day of
each calendar month of the Term (prorated for partial months as provided in
Section 4.1) commencing on the Commencement Date.
Upon execution of this Lease by Lessor and Lessee, Lessee shall immediately
deliver to Lessor the Security Deposit set forth in Paragraph 1.5 and Thirty
Thousand Two Hundred Thirty-Three and 50/100ths Dollars ($30,233.50) as
prepayment of base monthly rental for the fourth (4th) month of the Term.
As used in this paragraph, the first "rental month" shall mean the month
beginning on the Commencement Date and ending on the same day of the next
calendar month (the monthly "anniversary" of the Commencement Date), and each
succeeding rental month shall begin on the monthly "anniversary" of the
Commencement Date. If the Commencement Date does not fall on the first day of a
calendar month, then the rent payments payable for each partial calendar month
shall be prorated on a per diem basis, based on a 30 day month.
1.4 Lessee's Pro Rata Share. Lessee's pro rata share shall be sixty-six
and 84/100ths percent (66.84%), the square footage of the Premises divided by
the square footage of the Building. Lessee's pro rata share shall be adjusted
appropriately if the amount of space leased by Lessee in the Building increases
or if more than the existing ninety thousand four hundred sixty-seven (90,467)
square feet of leasable space is constructed on the Property.
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1.5 Security Deposit. Forty-Four Thousand and no/100ths Dollars
($44,000.00)
1.6 Use. light industrial/manufacturing.
ARTICLE 2
PREMISES
2.1 Description. Lessor hereby leases to Lessee the premises consisting
of approximately sixty thousand four hundred sixty-seven (60,467) square feet of
space ("Premises"), in Montague Business Park, in the building ("Building")
commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, together with the right to use the common areas of the parcel on
which the Premises are located. EXHIBIT A further describes the Premises being
leased hereby, and the parcel of which the Premises is a part ("Property").
2.2 Work of Improvement. The improvements to be constructed by Lessee
shall be constructed, and their manner of construction shall be performed, as
more fully set forth in EXHIBIT ▇. ▇▇▇▇▇▇ and Lessee shall expend all funds and
do all acts required of them respectively and Lessee shall have the work
performed in a workmanlike manner. So long as Lessee complies with the terms and
conditions set forth in EXHIBIT B, Lessor shall not interfere with Lessee's
construction of the improvements in any manner. Lessor shall at its sole expense
replace the tile floor in the manufacturing area of the Premises and patch and
repaint the interior walls of the Premises prior to the Commencement Date.
2.3 Possession. Lessor shall deliver occupancy of the Premises to Lessee
on the Commencement Date as hereinafter defined.
ARTICLE 3
TERM
3.1 Term. The Lease shall commence on the date determined pursuant to
Paragraph 1.1 (the "Commencement Date") and shall continue thereafter for the
term specified in Paragraph 1.2 unless sooner terminated pursuant to this Lease.
"Term" shall hereafter mean the term of this Lease.
3.2 Delay in Commencement. If for any reason Lessor cannot deliver
possession of the Premises to Lessee on the Commencement Date, such failure
shall not affect the validity of this Lease nor shall it extend the Term or
render Lessor liable to Lessee for any loss or damage resulting therefrom.
Notwithstanding any other provision of this Lease, if the Term of the Lease does
not commence on the scheduled Commencement Date because Lessor cannot deliver
possession of the Premises to Lessee, due to the fault of Lessor, the Term of
the Lease shall instead commence on the date on which Lessor tenders possession
of the Premises to Lessee, and the Lease shall terminate one (1) day prior to
the tenth (10th) anniversary of the date on which the Term of the Lease
commences. Delays caused by acts of God and other causes beyond Lessor's
reasonable control shall not be deemed delays due to the fault of Lessor.
3.3 Early Entry. Lessee shall be permitted to occupy the Premises prior
to the Commencement Date for the purpose of
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fixturing or any other purpose permitted by Lessor. Lessee shall have the right
to commence such early entry upon notice from Lessor that Lessor has completed
Lessor's improvement work as described in Paragraph 2.2. Such early entry shall
be at Lessee's sole risk and subject to all the terms and provisions of this
Lease (specifically including the obligation to pay any charges for any
utilities supplied to the Premises during Lessee's early occupancy), except for
the payment of base monthly rent, which shall commence on the first day of the
fourth (4th) month of the Term as provided in Paragraph 1.3, and the payment of
Lessee's pro rata share of expenses, which shall commence on the Commencement
Date. If at any time during Lessee's early occupancy of the Premises, Lessee
commences its business operations in the Premises, the Term of this Lease shall
commence on such date.
ARTICLE 4
RENT
4.1 Monthly Rent. Lessee shall pay to Lessor as rent for the Premises in
advance on the first day of each calendar month of the Term without deduction,
offset, prior notice or demand, in lawful money of the United States, the sum
specified in Paragraph 1.3. If the Commencement Date is not the first day of a
calendar month, the first monthly installment of such rent shall be applied on a
per diem basis against payment of the rent from the date rent is first payable
until the first day of the first succeeding calendar month. Any unused portion
of said amount shall be applied against payment of the rent for such first
succeeding calendar month, and the balance of the rent for that month shall be
due on the first day thereof. All additional amounts of rent or other charges
required to be paid by Lessee under this Lease shall be deemed additional rent.
4.2 Mode of Payment. Lessee shall pay all rent due Lessor at Lessor's
address set forth on the signature page hereof, or any such other place as
Lessor may designate from time to time in writing.
4.3 Triple Net Lease. This Lease is what is commonly called a "Net, Net,
Net Lease," it being understood that Lessor shall receive the rent set forth
herein free and clear of any and all other impositions, taxes, liens, charges or
expenses of any nature whatsoever in connection with the ownership and operation
of the Premises except as otherwise provided herein, excluding income taxes,
Lessor's mortgage payments, judgment liens, other liens filed against the
Property not related to Tenant's activities on or about the Premises, and other
similar items. All references herein to Lessee's pro rata share of any expense
shall mean the total expense of any such item multiplied by a fraction, the
numerator of which shall be the total floor area of the Premises and the
denominator of which shall be the total floor area of the Building. "Floor area"
shall be measured from the Building overhangs of all exterior walls and from the
center of all walls separating the Premises from adjacent premises. Lessee's pro
rata share has been calculated and is set forth in Paragraph 1.4. In the event
of non-payment of all or any portion of such charges, costs and expenses,
Lessor shall have the same rights and remedies as provided in this Lease for
failure of Lessee to pay rent. Lessee shall in no event be entitled to any
abatement or reduction of rent or other monetary sums payable hereunder, except
as expressly provided herein, notwithstanding any present or future law to the
contrary. Expenses common to Montague Business Park shall be allocated to the
various parcels thereof based on the square footage of the improvements on each
parcel. Notwithstanding the "free rent period" set forth in Paragraph 1.3,
Lessee shall be obligated to pay
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Lessee's pro rata share of expenses commencing with the first month of the term.
4.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor of rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on the Lessor by
the terms of any mortgage or trust deed covering the Premises. Accordingly, if
any installment of rent or any other sum due from Lessee shall not be received
by Lessor or Lessor's designee within five (5) business days after Lessee's
receipt of written notice of such default, Lessee shall pay to Lessor a late
charge equal to 5 percent (5%) of such overdue amount. The parties hereby agree
that such late charge represents a fair and reasonable estimate of the costs
Lessor will incur by reason of late payment by Lessee. Acceptance of such late
charge by Lessor shall in no event constitute a waiver of Lessee's default with
respect to such overdue amount, nor prevent Lessor from exercising any of the
other rights and remedies granted hereunder.
4.5 Security Deposit. Concurrent with Lessee's execution of this Lease,
Lessee shall deposit with Lessor a security deposit ("Deposit") in the amount
specified in Paragraph 1.5. The Deposit shall be held for the faithful
performance by Lessee of all the terms, covenants and conditions of this Lease
to be kept and performed by Lessee. If Lessee defaults with respect to any
provisions of this Lease, including but not limited to the provisions relating
to the payment of rent and any of the monetary amounts due hereunder, Lessor may
(but shall not be required to) use, apply or retain any part or all of the
Deposit for the payment of any amount which Lessor may spend or become obligated
to spend by reason of Lessee's default or to compensate Lessor for any loss or
damage which Lessor may suffer by reason of Lessee's default. If any portion of
the Deposit is so used or applied, Lessee shall, within ten (10) days after
written demand therefor, deposit cash with Lessor in an amount sufficient to
restore the Deposit to its original amount. Lessee's failure to do so shall be a
material breach of this lease. Lessor shall not be required to keep the Deposit
separate from its general funds, and Lessee shall not be entitled to any
interest on the Deposit. If Lessee fully and faithfully performs every provision
of this Lease to be performed by it, the Deposit, or balance thereof, shall be
returned to Lessee (or, at Lessor's option, to the last assignee of Lessee's
interest hereunder) at the expiration of the Term and after Lessee has vacated
the Premises. In the event of termination of Lessor's interest in this Lease,
Lessor shall transfer the Deposit to Lessor's successor in interest, whereupon
Lessee agrees to release Lessor from all liability for the return of such
deposit or the accounting therefor.
ARTICLE 5
TAXES
5.1 Real Property Taxes. Lessee shall pay all Real Property Taxes levied
against the Premises during the Term within fifteen (15) days after notice from
Lessor of the amount due. Lessee shall promptly furnish Lessor with satisfactory
evidence that such taxes have been paid. If Lessee fails to pay any such taxes,
Lessor shall have the right but not the obligation to pay same. In which case
Lessee shall repay such
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amount to Lessor with Lessee's next rent installment together with interest at
an annual rate equal to the floating commercial prime lending rate reported in
the Wall Street Journal most recently published before the date of expenditure,
but not to exceed any applicable usury limitations. If the Premises are not
separately assessed, Lessee agrees to pay to Lessor its pro rata share of all
Real Property Taxes levied against the Property. As used herein, "Real Property
Taxes" shall include any form of assessment, license, fee, levy, penalty or tax
imposed by any authority having the direct or indirect power to tax (excluding
Lessor's income taxes), including any improvement district, as against any legal
or equitable interest of Lessor in the Property or as against Lessor's business
of renting the Property; provided, however, that any so-called "rent tax" shall
only be paid by Lessee if such rent tax is levied in lieu of, and not in
addition to, ad valorem real property taxes currently levied against the
Property. Lessee's share of Real Property Taxes shall be equitably prorated to
cover only the period of time within the fiscal tax year during which this Lease
is in effect. With respect to any assessments which may be levied against or
upon the Premises, and which may be paid in annual installments, only the amount
of such annual installments (with appropriate proration for any partial year)
and interest due thereon shall be included within the compilation of the annual
Real Property Taxes.
Notwithstanding Paragraph 5.1 of the Lease, Lessee shall not be responsible for
paying any documentary transfer tax during the' term of the Lease.
5.2 Taxes on Tenant Improvements and Personal Property. Lessee shall pay
any increase in Real Property Taxes resulting from any and all alterations and
Tenant Improvements placed in, on or about the Premises for the benefit of, at
the request of or by Lessee. Lessee shall pay before delinquency all taxes
levied or assessed on Lessee's fixtures, improvements, furnishings, merchandise,
equipment and personal property in and on the Premises, whether or not affixed
to the real property.
ARTICLE 6
INSURANCE
6.1 Property Rental Insurance - Premises. During the Term, Lessor shall
keep the Property insured against loss or damage by fire and those risks
normally included in the term "all risk" including coverage for loss of rents,
boiler and machinery coverage (if the Lessor deems necessary), and at Lessor's
election, earthquake and/or flood coverage. The amount of such insurance shall
be not less than one hundred percent (100%) of the replacement value of the
Property. Any recovery received from said insurance policy shall be paid to
Lessor. Lessee, in addition to the rent and other charges provided herein,
agrees to pay to Lessor its pro rata share of the premiums for all such
insurance as part of the expenses of ownership or operation of the Premises in
accordance with Paragraph 4.3. Lessee acknowledges that Lessor's insurance
policy for the Property currently includes earthquake and flood coverage and
that Lessor's estimate of expenses for the Project attributable to the cost of
Lessor's insurance premiums includes the cost of earthquake and flood coverage.
In addition, Lessee shall pay the deductible for any' loss or damage caused by
the negligence or willful misconduct of
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Lessee, its employees or agents. Lessee shall pay, to Lessor any deductibles
owing within fifteen (15) days after receipt of notice from Lessor of the amount
owing.
6.2 Property Insurance - Fixtures and Inventory. During the Term, Lessee
shall, at its sole expense, maintain insurance with "all risk" coverage on any
fixtures, leasehold improvements, furnishings, merchandise, equipment or
personal property in or on the Premises, whether in place as of the date hereof
or installed hereafter, for the full replacement value thereof, and Lessee shall
also have sole responsibility and cost for maintaining any other types of
insurance as Lessee elects to carry. Any deductibles shall be paid by Lessee.
6.3 Lessor's Liability Insurance. During the Term, Lessor shall maintain
at its sole cost policy or policies of comprehensive general liability insurance
insuring Lessor (and such others as designated by Lessor) against liability for
bodily injury, death and property damage on or about the Property, with combined
single limit coverage of not less than Two Million Dollars ($2,000,000).
6.4 Lessee's Liability Insurance. During the Term, Lessee shall, at its
sole expense, maintain for the mutual benefit of Lessor and Lessee,
comprehensive general liability and property damage insurance against claims for
bodily injury, death or property damage occurring in or about the Premises or
arising out of the use or occupancy of the Premises, with combined single limit
coverage of not less than Two Million Dollars ($2,000,000). The limits of such
insurance shall not limit the liability, of Lessee. Lessee shall furnish to
Lessor prior to the Commencement Date, and at least thirty (30) days prior to
the expiration date of any policy, certificates indicating that the liability
insurance required of Lessee above is in full force and effect; that Lessor has
been named as an additional insured; and that all such policies will not be
cancelled unless thirty (30) days' prior written notice of the proposed
cancellation has been given to Lessor. The insurance shall be with insurers
reasonably approved by Lessor and with policies in form reasonably satisfactory
to Lessor. Said policies shall provide that Lessor, although an additional
insured, may recover for any loss suffered by Lessor by reason of Lessee's
negligence, and shall include a broad form liability endorsement. Lessee's
insurance shall be primary and non-contributing with any other insurance
available to Lessor.
6.5 Waiver of Subrogation. Lessor hereby releases Lessee, and Lessee
hereby releases Lessor, and their respective officers, agents, employees and
servants, from any and all claims or demands of damages, loss, expense or injury
to the Premises, or to the furnishings and fixtures and equipment, or inventory
or other property of either Lessor or Lessee in, about or upon the Premises,
which is caused by or results from perils, events or happenings which are the
subject of insurance carried by the respective parties and in force at the time
of any such loss; provided, however, that such waiver shall be effective only to
the extent permitted by the insurance covering such loss and to the extent such
insurance is not prejudiced thereby. Each party shall cause each insurance
policy obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either party in connection with any
damage covered by any policy.
6.6 Plate Glass Replacement. Lessee shall replace, at its sole expense,
any and all plate glass and other glass in
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and about the Premises which is damaged or broken by vandalism. If any plate
glass or other glass in and about the Premises is damaged or broken by causes
other than vandalism, then Lessee shall pay Lessor an amount equal to Lessor's
cost of replacement, provided that such amount shall not exceed the deductible
then in effect on Lessor's insurance policy, if any, covering the damaged glass.
Nothing herein shall be construed to require Lessor to carry plate glass
insurance.
6.7 Workers' Compensation Insurance. Lessee shall, at its sole expense,
maintain and keep in force during the term a policy or policies of Workers'
Compensation Insurance and any other employee benefit insurance sufficient to
comply with all applicable laws, statutes, ordinances and governmental rules,
regulations or requirements.
ARTICLE 7
MAINTENANCE
7.1 Maintenance - Premises. Throughout the Term, Lessee agrees to keep
and maintain all improvements and appurtenances upon the Premises, including all
sewer connections, plumbing, heating and cooling appliances, wiring and glass,
in good order and repair including the replacement of such improvements and
appurtenances when necessary, provided that Lessee shall not be responsible for
insured damages to the foregoing or damages to the foregoing caused by Lessor or
its agents or by other tenants. Lessee hereby expressly waives the provisions of
any law permitting repairs by a tenant at the expense of a landlord, including,
without limitation, all rights of Lessee under Section 1941 and 1942 of the
California Civil Code. Lessee agrees to keep the Premises clean and in sanitary
condition as required by the health, sanitary and police ordinances and
regulation of any political subdivision having jurisdiction. Lessee further
agrees to keep the interior of the Premises, such as the windows, floors, walls,
doors, showcases and fixtures clean and neat in appearance and to remove all
trash and debris which may be found in or around the Premises. If any repairs
and/or maintenance to be made by Lessee are necessary, Lessor shall have the
right to cause such repairs and/or maintenance to be made if Lessee fails to
cause such repairs, or commence to cause such repairs and diligently prosecute
same to completion, within fifteen (15) days after written notice from Lessor to
Lessee. Lessee agrees that upon demand, it shall pay to Lessor the cost of any
such repairs, together with accrued interest from the date of payment at the
highest rate allowable by law. Notwithstanding anything to the contrary above,
Lessor may elect to enter into one or more maintenance contracts with third
parties for the provision of all or a part of Lessee's maintenance obligations
as set forth in this paragraph, excluding janitorial services. Upon such
election, Lessee shall be relieved from its obligations to perform only those
maintenance obligations covered by such maintenance contracts, and Lessee shall
bear its pro rata share, as set forth in Paragraph 1.4, of the costs of any such
maintenance contracts covering the common areas and one hundred percent (100%)
of the costs of any such maintenance contracts which cover only the Premises.
All such costs shall be paid in advance on a monthly basis with Lessee's rent
payments.
7.2 Maintenance - Common Areas. Lessor shall maintain the common areas
of the Property, including landscaping, in reasonably good working order and
condition, except that damage occasioned by the act of Lessee and not covered by
the insurance described in Article 6 shall be
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repaired by Lessor at Lessee's expense. Lessor shall warrant the condition of
the roof membrane for a period of ninety (90) days from the Commencement Date,
and shall during such ninety (90) day period repair at Lessor's sole expense any
damage to the roof membrane, except that Lessee shall be liable for any damage
caused by the negligence or willful misconduct of Lessee, its employees or
agents. Lessee shall notify Lessor in writing of any repairs or maintenance to
the common areas which may be required and Lessor shall have a reasonable time
to make such repairs. Lessee shall bear its pro rata share, as set forth in
Paragraph 1.4, of the costs of maintaining the common areas including, but not
limited to, a management fee for the Property, which fee may be payable either
to Lessor or an affiliated or unaffiliated third party. Lessor shall pay the
cost of installing the initial landscaping of the common areas and the Premises,
if applicable.
The common areas of the Property shall be comprised of all non-leasable space
including, but not limited to, the Building shell (including the roof membrane,
but excluding the roof structure), sidewalks, parking areas, private roadways
within the Property, water amenities and landscaping. Lessee shall pay its pro
rata share, as set forth in Paragraph 1.4, monthly in advance with its rent
payments to Lessor, of Lessor's most recent estimate of monthly expenses for
maintaining and repairing the common areas. Lessor shall provide Lessee with an
accounting reconciliation on an annual basis, with any overpayments being
credited to the next month's estimated, maintenance expenses. Lessee shall have
the right to audit the books, records and supporting documents of Lessor to the
extent necessary to determine the accuracy of such accounting during normal
business hours, after giving Lessor at least two (2) days prior written notice.
Estimated maintenance expenses may be adjusted by Lessor at any time by notice
to Lessee.
Notwithstanding the provisions of Paragraph 7.2, and except for damage caused by
any negligent or intentional act or omission of Lessee, Lessee's employees,
suppliers, shippers, customers, or invitees, in which event Lessee shall repair
the damage, Lessor, at Lessor's expense, shall keep in good condition and repair
the foundations, exterior walls, the structural condition of interior bearing
walls, and the roof structure.
7.3 Alterations, Changes And Additions By Lessee. (The provisions of
this Paragraph 7.3 shall not apply to the Tenant Improvements constructed by
Lessee pursuant to the Work Letter Agreement attached as EXHIBIT B.) No changes,
alterations, or additions shall be made by Lessee to the Premises without the
prior written consent of Lessor which Lessor will not unreasonably withhold,
provided that Lessor shall have the right to withhold its consent to structural
or exterior changes at Lessor's sole and absolute discretion. As used herein,
alterations include utility installations such as ducting, power panels,
fluorescent fixtures, base heaters, conduit and wiring. As a condition to giving
such consent, Lessor may require that Lessee agree to remove any such
alterations, additions or improvements at the expiration of the term and to
restore the Premises to their prior condition and that Lessee provide Lessor a
payment and completion bond from a California surety company at Lessee's
expense. All changes, alterations or additions to be made to the Premises shall
be under the supervision of a competent architect and made in accordance with
plans and specifications which have been furnished to and approved by Lessor
prior to commencement of work. If the written consent of Lessor to any proposed
alterations by Lessee shall have been obtained, Lessee agrees to advise Lessor
in writing of the date upon which such alterations will commence in order to
permit Lessor to post a
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notice of nonresponsibility. All such alterations, changes and additions shall
be constructed in a good and workmanlike manner in accordance with all
ordinances and laws relating thereto. Lessor shall have the right to withhold,
at its sole and absolute discretion, its consent to any structural changes,
alterations, or additions.
With respect to any improvements which Lessee is entitled to make hereunder,
Lessee shall use only duly qualified, reputable and licensed contractors and
subcontractors for any work commenced after the Commencement Date. Lessee's
selection of contractors and subcontractors shall be subject to Lessor's prior
written approval, which shall not be unreasonably withheld. Notwithstanding the
foregoing, Lessee shall not be required to obtain Lessor's consent for
improvements to be made by Lessee to the Premises unless such costs exceed Five
Thousand and no/100ths Dollars ($5,000.00) per year, and which do not involve a
material change to the interior improvements then existing and which do not
affect the structural portions or exterior of the Property. However, whether or
not Lessor's consent is required, Lessee shall provide to Lessor copies of all
plans, specifications and drawings of all changes, alterations and additions
prior to the commencement of any work relating thereto. All leasehold
improvements made by Lessee shall remain the property of Lessee during the Term
and Lessee shall have the right to depreciate or amortize the cost of the same
and claim and collect investment tax credits and all other. tax benefits with
respect to such improvements. At the end of, the Term, Lessee shall remove all
leasehold improvements, installed by it (i) which did not require Lessor's
consent, or (ii) which were approved by Lessor and at that time Lessee indicated
its intention to remove such improvements or Lessor required that such
improvements be removed.
7.4 Plumbing. The expense of any breakage, stoppage or other damage
relating to the plumbing and resulting from the introduction by Lessee, its
agents, employees or invitees of foreign or harmful substances into the plumbing
facilities shall be borne by Lessee.
7.5 Liens. Lessee shall keep the Premises and the Building free from any
liens arising out of work performed, materials furnished or obligations incurred
by Lessee and shall indemnity, hold harmless and defend Lessor from any liens
and encumbrances arising out of any work performed or materials furnished by or
at the direction of Lessee. In the event that Lessee shall not, within twenty
(20) days following the imposition of any such lien, cause such lien to be
released of record by payment or posting of a proper bond, Lessor shall have, in
addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All such sums
paid by Lessor and all expenses incurred by it in connection therewith including
reasonable attorneys' fees and costs shall be payable to Lessor by Lessee on
demand with interest at the highest rate allowable by law. Lessor shall have the
right at all times to post and keep posted on the Premises any notices permitted
or required by law, or which are proper, for the protection of Lessor and the
Premises, and any other party having an interest herein, from mechanics' and
materialmen's liens, and Lessee shall give to Lessor at least five (5) business
days' prior written notice of the expected date of commencement of any work
relating to changes, alterations or additions to the Premises.
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ARTICLE 8
UTILITIES
Lessee shall pay prior to delinquency throughout the Term the cost of water,
gas, heating, cooling, sewer, telephone, electricity, garbage, air conditioning
and ventilating, janitorial services, landscape maintenance (except common area
landscape maintenance) and all other materials and utilities supplied to the
Premises. If any such services are not separately metered to Lessee, Lessee
shall pay a reasonable proportion of all charges which are jointly metered, the
determination to be made by lessor in good faith, and payment to be made by
Lessee within fifteen (15) days of receipt of the statement for such charges.
ARTICLE 9
USE OF PREMISES
9.1 Use. The Premises shall be used and occupied by Lessee for only the
purposes specified in Paragraph 1.6 and for no other purposes whatsoever with
obtaining the prior written consent of Lessor, which shall not be unreasonable
withheld.
9.2 Suitability. This Lease shall be subject to all applicable zoning
ordinances and to any municipal, county and state laws and regulations governing
and regulating the use of the Premises. Lessee acknowledges that neither Lessor
nor Lessor's agent has made any representation or warranty as to the suitability
of the Premises for the conduct of Lessee's business.
9.3 Uses Prohibited.
(a) Rate of insurance. Lessee shall not do or permit anything to
be done in or about the Premises which will cause an increase in the existing
rate of insurance upon the Premises (unless Lessee shall pay an increased
premium as a result of such use or acts) or cause the cancellation of any
insurance policy covering said Premises or any building of which the Premises
may be a part, nor shall Lessee sell or permit to be kept, used or sold in or
about such Premises any articles which may be prohibited by a standard form
policy of fire insurance.
(b) Interference With Other Tenants. Lessee shall not do or
permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of other tenants or occupants of any
building of which the Premises may be a part or injure or annoy them or use or
allow the Premises to be used for any unlawful purpose, nor shall Lessee cause,
maintain or permit any nuisance in, or about the Premises. Lessee shall not
commit or suffer to be committed any waste in or upon the Premises.
(c) Applicable Laws. Lessee shall not conduct any auctions on
the Premises or use the Premises or permit anything to be done in or about the
Premises which will in anyway conflict with any law, statute, zoning
restriction, ordinance, governmental rule, regulation or requirements of duly
constituted public authorities whether now in force or which may hereafter be
enacted or promulgated. Lessee shall at its sole cost and expense promptly
comply with all laws, statutes, ordinances and governmental rules, regulations
or requirements now in force or which may hereafter be in force and with the
requirements of any board of fire underwriters or
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other similar body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises. The judgment of any court of
competent jurisdiction or the admission of Lessee in any action against Lessee
whether Lessor be a party thereto or not, that Lessee has violated any law,
statute, ordinance or government rule, regulation or requirement, shall be
conclusive of that fact as between Lessor and Lessee.
(d) Signs. Lessee shall not place any sign upon the Premises or
in the common areas of the Building or the Property without Lessor's prior
written consent, which consent shall not be unreasonably withheld. Lessee shall
have the right to identification signage on the monument sign for the Property,
subject to Lessor's consent as to the exact location, size, style and color of
the sign, the CC&Rs and all applicable governmental regulations.
ARTICLE 10
DEFAULT PROVISIONS
10.1 Insolvency. If, during the Term, Lessee shall be declared insolvent
or bankrupt, or if any assignment of Lessee's property shall be made for the
benefit of creditors or otherwise, or if Lessee's leasehold interest herein
shall be levied upon under execution or seized by virtue of any writ of any
court of law, or a trustee in bankruptcy or a receiver be appointed for the
property of Lessee, any such occurrence shall be a material default of this
Lease, and entitle Lessor at its election to terminate the Lease.
10.2 Non-Payment, Default Or Vacating. If Lessee shall (a) default in
the payment of rent or any, charge owing hereunder and the default is not cured
within five (5) business days after receipt of written notice from Lessor or (b)
default in performing any non-monetary covenant, condition, agreement or
obligation of Lessee hereunder and the default is not cured within thirty (30)
calendar days after receipt of written notice from Lessor (unless the nature of
Lessee's obligation is such that more than thirty (30) calendar days is required
for performance and Lessee promptly commences performance within such 30 day
period and thereafter diligently prosecutes the same to completion) then the
Lease and all rights, title and interest of Lessee hereunder shall, at the
option of Lessor, terminate and Lessee will then quit and surrender the Premises
and improvements thereon to Lessor, or Lessor may pursue any other available
remedy. Any notice given pursuant to this Paragraph 10.2 shall be in lieu of,
and not in addition to, any notice required pursuant to California Code of Civil
Procedure Section 1161 regarding unlawful detainer actions. Lessee shall not be
in default if the Premises or any part thereof are left vacant so long as Lessee
is paying all the rent and other charges owing by it and performing all other
obligations under the Lease.
10.3 Lessor's Right to Relet. Upon recovery of possession of the
Premises after Lessee's breach of this Lease, Lessor may, at its option, at any
time and from time to time, remove any signs and property of Lessee therefrom
and relet the Premises or any part thereof at such rent and upon such terms and
conditions as Lessor in its discretion shall determine, and the term of such
reletting may be for a terms extending beyond the Term. Such reletting shall
neither void nor terminate this Lease. For the purpose of such reletting, Lessor
is authorized to make repairs or alterations in or to the Premises at the
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sole expense of Lessee as may be necessary or desirable for the purpose of such
reletting. The costs and expenses of such reletting, including repairs and
alterations and any reasonable real estate commissions associated with such
reletting shall be paid by Lessee. If the amount realized from such reletting is
less than the monthly rent payable hereunder plus all other monthly charges to
be paid by Lessee hereunder, less any amount of rental loss for the same period
which Lessee proves could be reasonably avoided by Lessor, Lessee will pay such
deficiency each month to Lessor. No re-entry, taking of possession or reletting
of the Premises by Lessor shall be construed as an election to terminate this
Lease unless written notice of such intention is given to Lessee or unless
termination thereof is decreed by a court of competent jurisdiction.
10.4 Right to Terminate. Lessor may at any time after the times
prescribed in Paragraph 10.2 elect to terminate the Lease by reason of such
uncured default. If Lessor shall at any time terminate this Lease by reason of
default of Lessee, then Lessor, in addition to any other remedy it may have, may
recover from Lessee any damages incurred by reason of such default including,
without limitation, the cost of recovering the Premises, and the amount by which
the rent then unpaid for the balance of the Term exceeds the amount of such
rental loss for the same period which the Lessee proves could be reasonable
avoided by Lessor. Lessee hereby waives all statutory rights inconsistent with
the provisions of this Paragraph.
10.5 Default by Lessor. Lessor will be in default if Lessor fails to
perform any obligation required of Lessor (other than a delay in delivery of
possession as provided for in Paragraph 3.2) within thirty (30) days after
written notice by Lessee, specifying wherein Lessor has failed to perform such
obligation; provided that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance, then Lessor shall not be in
default if Lessor promptly commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
ARTICLE 11
EXPIRATION OR TERMINATION
11.1 Surrender of Possession. Lessee agrees to deliver up and surrender
to Lessor possession of the Premises and all improvements thereon, subject to
the terms of Paragraph 7.3, in as good order and condition as when possession
was taken by Lessee, excepting only ordinary wear and tear and elements of age.
Upon termination of this Lease, Lessor may reenter the Premises and remove all
persons and property therefrom. If Lessee shall fail to remove any effects which
it is entitled to remove from the Premises upon the termination of this Lease,
for any cause whatsoever, Lessor, at its option, may remove the same and store
or dispose of them, and Lessee agrees to pay to Lessor on demand any and all
expenses incurred in such removal and in making the Premises free from all dirt,
litter, debris and obstruction, including all storage and insurance charges. If
the Premises are not surrendered at the end of the Term, Lessee shall defend,
indemnify and hold Lessor harmless from all loss or liability resulting from
delay by Lessee in so surrendering the Premises, including, without limitation,
any claims made by any succeeding lessee founded on such delay.
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11.2 Additional Remedies Of Lessor. In addition to the remedies granted
to Lessor pursuant to this Lease and pursuant to law, Lessor shall have the
rights provided under Section 1951.2 of the California Civil Code. Lessor may
also keep the Lease in effect and enforce by an action at law or in equity all
of its rights and remedies under the Lease, including (a) the right to recover
the rent and other sums as they become due by appropriate legal action, (b) the
remedies of injunctive relief and specific performance to compel Lessee to
perform its obligations under this Lease, and (c) the right to cause a receiver
to, be appointed to administer the Premises. Lessor may make any payment or
perform any obligation of Lessee if Lessee has not cured the default in question
within the applicable cure period. All sums paid by Lessor and all necessary
costs of such performance by Lessor with interest thereon shall be reimbursed to
Lessor by Lessee within fifteen (15) days after Lessee's receipt of a statement
therefor. Lessor shall have the same rights and remedies in the event of
nonpayment of such amounts by Lessee as in the case of failure by Lessee in the
payment of rent. Interest shall be at an annual rate equal to the floating
commercial prime lending rate reported in The Wall Street Journal most recently
published before the date of expenditure, but not to exceed any applicable usury
limitations. No act by or on behalf of Lessor intended to mitigate the adverse
effect of Lessee's default shall constitute a termination of the Lease or
Lessee's right to possession unless Lessor gives Lessee written notice of
termination. Any such termination shall not relieve Lessee from the payment of
any sums then due Lessor or from any claim for damages resulting from Lessee's
default.
11.3 Holding Over. If Lessee remains in possession of the Premises after
expiration of the term and if Lessor and Lessee have not executed an express
written agreement as to such holding over, then such occupancy shall be a
tenancy from month to month at a monthly rental equivalent of 150% of the
monthly rental in effect immediately prior to such expiration, such payments to
be made as herein provided. In the event of such holding over all of the terms
of this Lease including the payment of all charges owing hereunder other than
rent shall remain in force and effect on said month to month basis.
11.4 Voluntary Surrender. The voluntary or other surrender of this Lease
by Lessee, or a mutual cancellation thereof, shall not work a merger, but shall,
at the option of Lessor, terminate all or any existing subleases or
subtenancies, or operate as an assignment to Lessor of any or all such subleases
or subtenancies.
ARTICLE 12
CONDEMNATION OF PREMISES
12.1 Total Condemnation. If the entire Premises, whether by exercise of
governmental power or the sale or transfer by Lessor to any condemnor under
threat of condemnation or while proceedings for condemnation are pending, at any
time during the Term, or such portion of the entire Premises, shall be taken by
condemnation such that there does not remain a portion suitable for occupation,
this Lease shall then terminate as of the date transfer of possession is
required. Upon such condemnation, all rent shall be paid up to the date transfer
of possession is required, and Lessee shall have no claim against Lessor for the
value of the unexpired term of this Lease.
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12.2 Partial Condemnation. If any portion of the Premises is taken by
condemnation during the Term, whether by exercise of governmental power or the
sale or transfer by Lessor to any condemnor under threat of condemnation or
while proceedings for condemnation are pending, this Lease shall remain in full
force and effect; except that in the event a partial taking leaves the Premises
unfit for normal and proper conduct of the business of Lessee, then Lessee shall
have the right to terminate this lease effective on the date transfer of
possession is required. Lessee may elect to exercise its right to terminate this
Lease pursuant to this paragraph by serving written notice to Lessor within
thirty (30) days of Lessee's receipt of notice of condemnation. All rent shall
be paid up to the date of termination; and Lessee shall have no claim against
Lessor for the value of any unexpired term of this Lease. If this Lease shall
not be cancelled, the rent after such partial taking shall be that percentage of
the adjusted base rent specified herein, equal to the percentage which the
square footage of the untaken part of the Premises immediately after the taking
bears to the square footage of the entire Premises immediately before the
taking. Any sums owing hereunder which are calculated on the basis of Lessee's
pro rata share (as set forth in Paragraph 1.4) shall also be adjusted to reflect
the decreased square footage of the Premises due to the condemnation. If
Lessee's continued use of the Premises requires alterations and repairs by
reason of a partial taking, Lessor shall make and pay for such alterations and
repairs, but only to the extent of proceeds received by Lessor for the
condemning authority relating to the improvements to be altered and repaired,
and Lessee shall pay the balance of such alterations and repairs. If Lessee is
not willing to pay the balance of such alterations and repairs, Lessor shall
have the right to terminate this Lease as of the date of taking.
12.3 Award to Lessee. In the event of any condemnation, whether total or
partial, Lessee shall have the right to claim and recover from the condemning
authority such compensation as may be separately awarded or recoverable by
Lessee for all losses of Lessee, including loss of business, fixtures or
equipment belonging to Lessee immediately prior to the condemnation. The balance
of any condemnation award shall belong to Lessor, and Lessee shall have no
further right to recover from Lessor or the condemning authority for any
additional claims arising out of such taking.
Notwithstanding the foregoing, any other award made as a result of a total or
partial taking shall belong to and be paid to Lessor, except that Lessee shall
receive from such award the following: (a) a sum attributable to improvements or
alterations made to the Premises by Lessee which Lessee has the right to remove
but elects not to remove and which increase the value of the Premises; and (b)
any part of the award made directly to Lessee for the taking of personal
property or trade fixtures belonging to Lessee, for the interruption of Lessee's
business or for its moving costs, or for loss of Lessee's good will.
ARTICLE 13
ENTRY BY LESSOR
Provided that Lessor gives Lessee prior written notice, Lessee shall permit
Lessor and its agents to enter the Premises at all reasonable times for any of
the following purposes: to inspect the Premises; to maintain the building in
which the Premises
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are located; to make such repairs to the Premises as Lessor is obligated or may
elect to make; to make repairs, alterations or additions to any other portion of
the building in which the Premises are located; to show the Premises and post
"To Lease" signs for the purposes of reletting during the last ninety (90) days
of the Term; to show the Premises as part of a prospective sale by Lessor or to
post notices of non-responsibility. Lessor shall have such right of entry
without any rebate of rent to Lessee for any loss of occupancy or quiet
enjoyment of the Premises thereby occasioned.
In case of emergency, Lessor may enter the Premises without providing notice to
Lessee. In making any entry into the Premises, Lessor shall not unreasonably
interfere with Lessee's business. Lessor shall comply with Lessee's reasonable
security regulations.
Notwithstanding the provisions of Article 13 of the Lease, Lessor shall be
liable for damage or injury to the equipment, goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers or any other person
in or about the Premises, which injury or damage is caused by Lessor's entry
upon the Premises.
ARTICLE 14
INDEMNIFICATION
Lessee agrees not to hold Lessor liable for any injury or damage, either
proximate or remote, occurring through or caused by any repairs or alterations
to the Premises unless such injury or damage arises from the willful misconduct
or negligence of Lessor or its agents. Lessee will defend, indemnify, save and
hold harmless Lessor from all claims, actions, liability, loss, expense, damage
or injury to persons or property arising from or occurring by reason of Lessee's
occupation or use of the Premises unless such losses or injuries are proximately
caused by any willful misconduct or negligence of Lessor or its agents. Lessor
shall not be liable for any injury to persons or damage to or loss of property
of Lessee or other persons located on the Premises, and Lessee shall defend,
indemnify, save and hold Lessor harmless from any claims and losses arising out
of damage to the same, unless such injury, loss or damage is proximately caused
by the willful misconduct or negligence of Lessor or its agents.
ARTICLE 15
ASSIGNMENT AND SUBLETTING
Lessee shall not assign this Lease in whole or in part, or sublet the
Premises or any part thereof, or license the use of all or any portion of the
Premises or business conducted thereon, or encumber or hypothecate this Lease,
without first obtaining the written consent of Lessor, which consent will not be
unreasonably withheld. Lessee shall submit in writing to Lessor: (a) the name
and legal composition of the proposed sublessee; (b) the nature of the proposed
sublessee's business to be carried on in the Premises; (c) the terms and
provisions of the proposed sublease; and (d) such financial and other reasonable
information as Lessor may request concerning the proposed sublessee. Lessor
shall give its consent or give notice that it does not consent, specifying the
reasons therefor, within seven (7) business days after receiving all the
information set forth in the preceding sentence. Any assignment, subletting,
licensing, encumbering, or
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hypothecating of this Lease without such prior written consent shall, at the
option of Lessor, constitute grounds for termination of this Lease. Lessor's
consent to any assignment or sublease shall not constitute a waiver of the
necessity for such consent to any subsequent assignment or sublease. This
prohibition against assignment and subletting shall be construed to include a
prohibition against assignment or subletting by operation of law.
Notwithstanding any assignment or subletting with Lessor's consent, Lessee shall
remain fully liable on this Lease and shall not be released from its obligations
hereunder. In the event Lessor shall consent to a sublease or assignment under
this paragraph, Lessee shall pay Lessor's reasonable attorneys' fees incurred in
connection with giving such consent. In addition, Lessee shall pay to Lessor
with its regularly scheduled rent payments fifty percent (50%) of all rent or
other charges in lieu of rent (but excluding common area expenses, taxes,
insurance, and management fees) collected by Lessee from a sublessee or assignee
which are in excess of the rent then owing pursuant to Article 4.
Notwithstanding the foregoing, Lessee shall be free to assign or sublet without
Lessor's consent (a) to a company that controls, is controlled by, or is under
common control with Lessee, (b) to the surviving entity in connection with a
merger, consolidation or other reorganization of Lessee, and (c) to the
purchaser in connection with the sale of substantially all of the assets of the
business being conducted at the Premises. However, Lessee shall notify Lessor of
Lessee's intent to make such assignment or sublet prior to the date of actual
assignment or sublet.
ARTICLE 16
DAMAGE OR DESTRUCTION
16.1 Right to Terminate on Destruction of Premises. If the Premises are
damaged by a peril not covered by insurance, Lessor may terminate the Lease if
the cost to restore exceeds twenty percent (20%) of the replacement cost of the
Premises and Lessee does not agree in writing to pay such excess within ten (10)
days of receipt of Lessor's written election to terminate.
If the Premises are materially damaged during the Term either Lessor or Lessee
shall have the option to terminate the Lease if such option is exercised in
writing no later than ten (10) calendar days after the occurrence of the damage.
As used herein, materially damaged shall mean that the cost of repair is equal
to or greater than 33% of the replacement cost of the Premises. Notwithstanding
the foregoing, if the insurance proceeds available to Lessor, plus the funds, if
any, which Lessee is willing to contribute to replace the Premises, are
sufficient to replace the Premises, Lessee shall have the right to elect to
continue this Lease and Lessor shall, as soon as possible, commence the
replacement of the Premises and diligently prosecute the construction of the
Premises to completion. Lessee shall exercise such right on or before ten (10)
calendar days after Lessor notifies Lessee of the approximate cost of repair and
the amount of insurance proceeds available; and Lessee's failure to timely
exercise such right shall be deemed a waiver of such right.
16.2 Damage Near End of Term. If the Premises are materially damaged (as
defined in Paragraph 16.1) during the last twenty-four (24) months of the Term,
then Lessor may, at its option cancel and terminate this Lease as of the date of
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the occurrence of such damage. If Lessor does not elect to terminate this Lease,
the repair of such damage shall be governed by Paragraph 16.3.
16.3 Repairs by Lessor. If Lessor or Lessee does not elect to terminate
this Lease pursuant to Paragraph 16.1 or 16.2, Lessor shall, immediately upon
receipt of insurance proceeds paid in connection with such casualty, but in no
event later than ninety (90) days after such damage has occurred, proceed to
repair or rebuild the Premises, on the same plan and design as existed
immediately before such damage or destruction occurred, subject to such delays
as may be reasonably attributable to governmental restrictions or failure to
obtain materials or labor, or other causes beyond the control of Lessor. Lessee
shall be liable for the repair and replacement of all fixtures, leasehold
improvements, furnishings, merchandise, equipment and personal property not
covered by the property insurance described in Paragraphs 6.1 and 6.2.
16.4 Reduction of Rent During Repairs. If Lessee is able to continue to
conduct its business during the making of repairs, the rent then prevailing will
be equitably reduced in the proportion that the unusable part of the Premises
bears to the whole thereof for the period that repairs are being made. No rent
shall be payable while the Premises are wholly unusable due to casualty damage.
16.5 Arbitration. Any controversy, or claim arising out of or relating
to this Article shall be settled by arbitration in accordance with California
Code of Civil Procedure, Sections 1280 et seq. The expenses of arbitration shall
be borne by the parties as allocated by the arbitrators. The party desiring
arbitration shall serve notice upon the other party, together with designation
of the first party's arbitrator.
ARTICLE 17
PARKING
Lessee shall have the nonexclusive right to use the two hundred forty-two (242)
parking spaces in the parking area, provided that under no circumstances shall
Lessor be required to police or monitor the parking rights of Lessee or any
other tenant.
ARTICLE 18
COVENANTS, CONDITIONS AND RESTRICTIONS
This Lease will be subject to the terms and conditions of the Declaration Of
Covenants, Conditions And Restrictions Of Montague Business Park ("Declaration")
imposing certain covenants, conditions and restrictions on the use and
management of the Property. Lessor has delivered to Lessee copies of the
Declaration recorded December 23, 1980 as Instrument No. 6934001. Lessee agrees
to comply with all provisions of the Declaration applicable to its occupancy,
interest, use and utilization of the Premises subject to this Lease, provided
that they are not materially different from the Declaration submitted to Lessee.
Any failure to comply with the Declaration shall be a default under the terms of
this Lease.
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ARTICLE 19
MISCELLANEOUS PROVISIONS
19.1 Waiver. No waiver of any default of any of the covenants or
conditions of this Lease shall be construed to be a waiver of any other default
or to be a consent to any further or succeeding default of the same or other
covenant or condition. The subsequent acceptance of rent hereunder by Lessor
shall not be deemed to be a waiver of any preceding default by Lessee of any
term, covenant or condition of this Lease, other than the failure of Lessee to
pay the particular rent so accepted, regardless of Lessor's knowledge of such
preceding default at the time of acceptance of such rent.
19.2 Successors and Assigns. Except as otherwise provided herein, the
provisions hereof shall be binding upon and shall inure to the benefit of the
heirs, personal representatives, successors and assigns of the parties.
19.3 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and either
personally delivered or sent by certified mail, return receipt requested,
postage prepaid, properly addressed to the other party at the address set forth
next to its signature below, or at such other address as may from time to time
be designated in like manner by one party to the other. Any such notice shall be
deemed given when personally delivered or on the date indicated on the Postal
Service's certified mail receipt.
19.4 Partial Invalidity. If for any reason any provision of this Lease
shall be determined to be invalid or inoperative, the validity and effect of the
other provisions hereof shall not be affected thereby.
19.5 Number and Gender. All terms in this Lease shall be construed to
mean either the singular or the plural, masculine, feminine or neuter, as the
situation may demand.
19.6 Descriptive Headings. The headings used herein and in any of the
documents attached hereto as schedules, lists or exhibits are descriptive only
and for the convenience of identifying provisions, and are not determinative of
the meaning or effect of any such provisions.
19.7 Time is of the Essence. In all matters time is of the essence in
the performance of all obligations under this Lease.
19.8 Entire Agreement. This Lease and the documents attached hereto as
schedules, lists or exhibits, constitute the entire agreement and understanding
between the parties with respect to the subject matters herein and therein, and
supersede and replace any prior agreements and understandings, whether oral or
written, between and among them with respect to the lease of the Premises,
rental therefor, use thereof and all other such matters. The provisions of this
Lease may be waived, altered, amended or repealed in whole or in part only upon
the written consent of Lessor and Lessee.
19.9 Memorandum of Lease. Lessor and Lessee mutually agree that they
will not file or record a copy of this Lease, but that in the event Lessor
requests a recording, Lessor and Lessee shall execute and acknowledge a
memorandum of this Lease in a form approved by the parties setting forth in said
memorandum the description of the Premises, the date of the
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Lease, the Commencement Date and the date of termination. Said memorandum of
Lease may be recorded in the Recorder's Office of the County in which the
Premises are located.
19.10 Applicable Law. This Lease shall be construed and interpreted in
accordance with the laws of the State of California, without giving effect to
any doctrine of renvoi or other doctrine of conflicts of law.
19.11 Corporate Authority. Each individual executing this Lease on
behalf of a corporation represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of the corporation in accordance with a
duly adopted resolution of the Board of Directors of the corporation, and that
this Lease is binding upon said corporation in accordance with its terms.
19.12 Litigation Expense. If any party shall bring an action against any
other party hereto by reason of the breach of any covenant, warranty,
representation or condition hereof, or otherwise arising out of this Lease or
any schedule, list or exhibit hereto, whether for declaratory or other relief,
the prevailing party in such suit shall be entitled to such party's costs of
suit and reasonable attorneys' fees, which shall be payable whether or not such
action is prosecuted to judgment.
19.13 Subordination of Leasehold. Lessee agrees that this Lease is and
shall be, at all times, subject and subordinate to the lien of any mortgage or
other encumbrances which Lessor may create against the Premises or the Property,
or both, including all renewals, replacements and extensions thereof; provided,
however, that regardless of any default under any such mortgage or encumbrance
or any sale of the Premises under such mortgage, so long as Lessee performs all
covenants and conditions of this Lease and continues to make all payments
hereunder, this Lease and Lessee's possession and rights hereunder shall not be
disturbed by the mortgagee or anyone claiming under or through such mortgagee.
Lessee agrees to execute any and all instruments in writing which may be
required by Lessor to subordinate Lessee's rights to the lien of such mortgage.
Lessee's subordination is only effective in favor of a future lender so long as
such lender, on behalf of itself and any purchaser at a foreclosure sale, agrees
in writing to recognize all rights of Lessee under the Lease.
19.14 Lessee's Certificate. Within fifteen (15) days following Lessor's
request, Lessee shall complete, execute and deliver to Lessor a Lessee's
Certificate setting forth the information requested therein relating to this
Lease and Lessor's and Lessee's obligations thereunder. Failure of Lessee to
deliver such Certificate within said fifteen (15) days shall be deemed to be an
acknowledgment that Lessor is not in default under the Lease, and that the terms
of the Lease have not been modified or supplemented in anyway. It is intended
that such Certificate may be relied upon by any prospective purchases, lender,
or assignee of any lender of the Premises.
19.15 Attornment. Lessee shall, in the event of any sale of the
Premises or if proceedings are brought for the foreclosure of, or in the event
of exercise of the power of sale under, any mortgage, installment land contract
or deed of trust made by Lessor covering the Premises, attorn to the
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mortgagee or the purchaser upon any, such foreclosure or sale and recognize such
mortgagee or purchaser as Lessor under this Lease.
19.16 Exhibits. EXHIBITS A and B, attached hereto, are a part hereof.
ARTICLE 20
HAZARDOUS MATERIALS
20.1 Definition. "Hazardous Material" shall mean any substance or
material which has been designated hazardous or toxic by any federal, state,
county, municipal or other governmental agency or authority or determined by
such agency or authority to be capable of endangering or posing a risk of injury
to, or adverse effect on, the health or safety of persons, the environment or
property.
20.2 Use. Lessee shall not store, use, generate, release, or dispose of
any Hazardous Materials in, on or adjacent to the Premises or the Property, or
ship any Hazardous Materials therefrom, except in compliance with all laws,
ordinances, regulations, rules, and policies, including any obligation to notify
Lessor of same. Lessee shall submit to Lessor copies of all permits, licenses,
filings, reports or other documentation submitted to any governmental agency or
authority, at the same time such documents are submitted to the governmental
agency or authority.
20.3 Notice. Lessee shall immediately notify Lessor as soon as possible
of any inquiry, test, investigation, or enforcement proceeding by or against
Lessee or the Premises or the Property concerning a Hazardous Material in, on,
under or within 2,000 feet of the Premises and the Property. Lessee acknowledges
that Lessor, as the owner of the Premises, shall have the right, at its
election, in its own name or as Lessee's agent, to negotiate, defend, approve,
and appeal, at Lessee's expense, any action taken or order issued by an
applicable governmental authority with regard to Lessee's failure to comply with
the provisions of this Article 21. Notwithstanding the foregoing, Lessee shall
not be responsible for the cost of complying with any action taken or order
issued by an applicable governmental authority with regard to any Hazardous
Materials found in, on or under any real property within 2,000 feet of the
Premises or the Property if their presence was not caused by Lessee. Lessee
shall submit to Lessor copies of all such inquiries, tests, investigations and
enforcement proceedings and copies of all reports and responses thereto prepared
by Lessee. Lessee shall submit same to Lessor within five (5) days after receipt
of same by Lessee, whether such receipt is from a governmental authority or
nongovernmental entity.
20.4 Removal and Disposal. In addition, Lessee shall immediately remove
all Hazardous Materials which Lessee has caused to be released or disposed of
in, on, under or adjacent to, the Premises or the Property. Lessee shall dispose
of all Hazardous Material removed from the Premises or the Property in lawful
disposal sites and otherwise in compliance with all applicable laws, ordinances,
regulations, rules and policies, and in all removals of Hazardous Materials,
Lessee shall list itself as the shipper.
20.5 Indemnity. Lessee further agrees to indemnify, defend and hold
Lessor harmless from and against any claims,
-20-
23
suits, causes of action, costs, fees, including attorneys' fees and costs,
arising out of or in connection with any clean-up work, inquiry or enforcement
proceeding, and any Hazardous Materials currently or hereafter stored, used,
generated, released or disposed of by Lessee or its agents, employees,
contractors or invitees in, on, under or adjacent to the Premises or the
Property, or any Hazardous Materials shipped by Lessee therefrom.
20.6 Right of Entry. Notwithstanding any other right of entry granted to
Lessor under this Lease, Lessor shall have the right to enter the Premises or to
have consultants enter the Premises throughout the term of this Lease for the
purpose of determining: (i) whether the Premises are in conformity with federal,
state and local laws, ordinances, regulations, rules and policies including
those pertaining to the environmental condition of the Premises and the
Property, (ii) whether Lessee has complied with this Article 21, and (iii) the
corrective measures, if any, required of Lessee to ensure the safe storage, use,
generation, release, shipment and disposal of Hazardous Materials, or to remove
Hazardous Materials. Such entry shall comply with the provisions of Article 13.
Lessee agrees to provide access and reasonable assistance for such inspections.
Such inspections may include, but are limited to, entering the Premises or the
Property with drill rigs or other machinery for the purpose of obtaining soil,
water or other samples. Lessor shall not be limited in the number of such
inspections during the term of this Lease.
20.7 Inspection. If Lessee does store, use, generate, release, or
dispose of any Hazardous Materials in, on, under or adjacent to the Premises or
the Property, or ship any Hazardous Materials therefrom, Lessee shall pay for
the reasonable cost of any inspection reasonably determined to be necessary by
Lessor. If Lessee does not store, use, generate, release or dispose of any
Hazardous Materials in, on, under or adjacent to the Premises or the Property,
or ship any Hazardous Material therefrom, Lessor shall pay the cost of such
inspection; however, if such inspection, together with any other evidence, shows
that Lessee caused the presence of any Hazardous Materials, Lessee shall pay for
the reasonable cost of such inspection and all subsequent inspections until the
Hazardous Materials are eliminated. If such consultants determine that the
Premises or the Property, or both, are contaminated with Hazardous Materials
caused to be present by Lessee, Lessee shall, in a timely manner, at its
expense, remove such Hazardous Materials or otherwise comply with the
recommendations of such consultants to the reasonable satisfaction of Lessor and
any applicable governmental agencies and reimburse Lessor for the cost of such
inspections within ten (10) days of receipt of a written statement therefor. The
right granted to Lessor herein to inspect the Premises or the Property shall not
create a duty on Lessor's part to inspect the Premises or the Property, or any
liability of Lessor for Lessee's use, storage, release or disposal of Hazardous
materials, it being understood that Lessee shall be solely responsible for all
liability in connection therewith.
20.8 Surrender. Lessee shall surrender the Premises and the Property to
Lessor upon the expiration or earlier termination of this Lease free of all
Hazardous Materials which Lessee has caused to be released or disposed of in,
on, under or adjacent to the Premises or the Property, and in a condition which
complies with all governmental laws, ordinances, regulations, rules and
policies, recommendations of consultants hired by Lessor, and such other
reasonable requirements as may be imposed by Lessor.
-21-
24
Addendum to Lease dated October 25, 1989 between Teachers Insurance and Annuity
Association of America ("Lessor") and GaSonics, Inc. ("Lessee")
22. Letter of Credit
Lessee may deposit with Lessor in lieu of cash, an irrevocable letter of credit
payable to Lessor in the amount of Forty Four Thousand and no/100ths Dollars
($44,000.00) in satisfaction of Lessee's obligation under Section 4.5 of this
Lease. The letter of credit shall be issued by an institutional lender
reasonably acceptable to Lessor and shall not be subject to any security
arrangement between Lessee and the issuing bank at any time during the term of
the letter of credit. The letter of credit shall contain language authorizing
Lessor to draw upon the letter of credit if (i) Lessee is in default of any
term, covenant or condition of this Lease, and (ii) Lessor has incurred costs or
suffered loss or damage as a result of Lessee's default. The letter of credit
shall have a term of at least twelve (12) months and shall provide for drawing
thereon anytime during the term of the letter of credit subject to the
conditions set forth herein. After delivery of a letter of credit to Lessor, as
long as this Lease remains in effect, Lessee shall have no right to withdraw
such letter of credit unless Lessee substitutes a replacement letter or letters
of credit by cash deposit in an equal amount with Lessor. If the letter of
credit expires prior to the expiration of the Lease term, then Lessee shall be
required to replace or renew the letter of credit. Upon substitution of a cash
deposit or replacement letter of credit in an equal amount, Lessor shall return
the replaced letter of credit to Lessee. The proceeds of the letter of credit
shall be applied toward rent or any other sum in default as set forth in
Paragraph 4.5 of the Lease.
LESSOR LESSEE
TEACHERS INSURANCE AND ANNUITY GASONICS, INC., a
ASSOCIATION OF AMERICA, a California corporation
New York corporation
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By [SIGNATURE ILLEGIBLE]
--------------------------------- ---------------------------------
Its ASSISTANT SECRETARY Its President
--------------------------------- ---------------------------------
By
---------------------------------
Its
---------------------------------
25
20.9 Survival. Lessee's and Lessor's obligations under this Article 21
shall survive termination of this Lease.
20.10 Lessor's Covenant. Lessor represents and covenants that it has no
knowledge of the existence of any Hazardous Materials located on or beneath the
Premises prior to Lessee's occupancy of the Premises.
ARTICLE 21
RIGHT OF FIRST REFUSAL
During the term of this Lease, and, provided that Lessee is not in
default of any of the terms and conditions of this Lease, Lessee shall have the
right of first refusal to lease all or any portion of the remaining unleased
space in the Building, consisting of approximately thirty thousand (30,000)
square feet ("Additional Space"), on the following terms. If during the term of
this Lease, Lessor receives from a third party ("Third Party") a bona fide offer
to lease all or any portion of the Additional Space on terms and conditions
acceptable to Lessor, in Lessor's sole discretion, as evidenced by a letter of
intent or other written offer, Lessor shall notify Lessee in writing of the
terms and conditions upon which Lessor would lease the Additional Space or such
portion thereof to the Third Party ("Lessor's Notice"). If Lessee does not
notify Lessor in writing within five (5) business days after its receipt of
Lessor's Notice of its intent to lease the Additional Space or such portion
thereof on the terms and conditions stated in Lessor's Notice, or Lessor and
Lessee, through no fault of Lessor, fail to execute an amendment to this Lease
within thirty (30) days after Lessee's receipt of Lessor's Notice, Lessor may
thereafter lease the Additional Space or such portion thereof to the Third Party
on the terms and conditions stated in Lessor's Notice without additional notice
to Lessee. If Lessor and the Third Party fail to enter into a lease for the
Additional Space or if the Additional Space or any portion thereof becomes
available for lease again during the term of this Lease, Lessee shall have the
right of first refusal to lease the Additional Space as provided herein.
LESSOR LESSEE
Teachers Insurance and GaSonics, Inc., a
Annuity Association California corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By [SIGNATURE ILLEGIBLE]
--------------------------------- ---------------------------------
Its ASSISTANT SECRETARY Its President
---------------------------- ----------------------------
By
---------------------------------
Its
---------------------------
-22-
26
[MAP]
EXHIBIT A
27
EXHIBIT B
WORK LETTER AGREEMENT
In connection with the Tenant Improvements to be installed on the
Premises the parties hereby agree as follows:
1. Plans and Specifications. Lessee shall retain licensed contractors as
the architect ("Architect") for the completion of final architectural plans and
specifications for the tenant improvements to be constructed on the Premises
("Final Plans and Specifications"). A general description of the Tenant
Improvements which Lessee intends to construct is attached as EXHIBIT B-1.
Lessee shall cooperate diligently with the Architect and shall deliver the Final
Plans and Specifications to Lessor for Lessor's approval. Such plans shall have
been previously approved by Lessee. Once the Final Plans and Specifications are
completed and approved by Lessee and Lessor, Lessee shall enter into a
construction contract for the Tenant Improvements. Lessee's contractor and/or
subcontractors shall be licensed, fully bonded and subject to Lessor's approval,
which approval shall not be unreasonably withheld.
2. Drawings, Construction and Work Quality. Upon approval of the Final
Plans and Specifications, Architect shall complete the working drawings in
accordance therewith and submit the working drawings to Lessor and Lessee for
approval. The working drawings shall be approved by Lessor and Lessee by
initialing same and shall thereafter be attached hereto as EXHIBIT B-2. Neither
Lessee nor Lessor shall unreasonably withhold their approval thereto. Thereafter
Lessee shall complete construction of the Tenant Improvements in a good and
workmanlike manner in accordance with the approved working drawings, with new
materials of good quality and with adequately trained and supervised labor.
Lessee shall arrange for all Tenant Improvements to be fully warranted (labor
and materials) by the general contractor, sub-contractor, or appropriate
supplier, as the case may be, for a period of one (1) year after the completion
thereof.
3. Tenant Improvements Allowance. Lessor shall provide an allowance for
the planning and construction of the Tenant Improvements in the amount of Three
Hundred Eighty-Two Thousand Seven Hundred Fifty-Six and no/100ths Dollars
($382,756.00) ("Tenant Improvements Allowance"). The Tenant Improvements
Allowance shall be the maximum contribution by Lessor for the Tenant
Improvements Cost. Any Tenant Improvements to be paid for with the Tenant
Improvements Allowance shall be completed by Lessee prior to the expiration of
the thirty-sixth (36th) month of the term. Lessee shall review and approve all
invoices and forward them to Lessor with lien releases for the work performed
for Lessor's review, approval and payment on a job progress basis. Lessor shall
promptly review and pay all invoices submitted with appropriate lien releases.
4. Tenant Improvements Cost. The Tenant Improvements cost ("Tenant
Improvements Cost") to be paid by
EXHIBIT B
Page 1 of 3
28
Lessor from the Tenant Improvements Allowance shall be the following:
(i) All costs of preliminary and final architectural and
engineering plans and specifications for the Tenant Improvements, and
engineering costs, including governmentally required upgrades, associated with
completion of the State of California energy utilization calculations under
Title 24 legislation;
(ii) All costs of obtaining building permits and other necessary
authorizations from the appropriate governmental entity;
(iii) All costs of interior design and finish schedule plans and
specifications including as-built drawings;
(iv) All direct and indirect costs of procuring, constructing
and installing the Tenant Improvements in the Premises, including, but not
limited to, the construction fee for overhead and profit and the cost of all
on-site supervisory and administrative staff, office, equipment and temporary
services rendered by Lessee's contractor in connection with construction of the
Tenant Improvements and also including, without limitation, the cost of
permanent partitioning, utility systems, fire sprinkler systems, heating,
ventilating and air conditioning systems and equipment, electrical distribution
facilities, wiring, cables, lighting, ceilings, and any necessary installation
of fixtures and equipment, restrooms and carpeting and improvements reasonably
necessary for occupancy by Lessee;
(v) All fees payable to the Architect and Lessor's engineering
firm if they are required by Lessee to redesign any portion of the Tenant
Improvements following Lessee's approval of the Final Plans and Specifications;
(vi) Sewer connection fees.
Except as set forth in this EXHIBIT B, the Tenant Improvements Cost shall not
include any costs of procuring, constructing or installing in the Premises any
of Lessee's personal property.
5. Excess Tenant Improvements Cost. If the Tenant Improvements Cost for
the Premises exceeds the Tenant Improvements Allowance for the Premises, any
such excess costs shall be paid for solely by Lessee.
6. Change Requests. No revisions to the approved Floor Plan and Final
Plans and Specifications shall be made by either Lessor or Lessee unless
approved in writing by both parties. Lessee agrees to make reasonable changes
requested in writing by Lessor. Any Costs resulting from changes requested by
Lessor shall be paid for by Lessor. Costs resulting from such changes shall
include, without limitation, any architectural or design fees, and Lessee's
general contractor's price for effecting the change.
7. Indemnification. Lessee shall indemnify and hold Lessor harmless from
all costs, expenses, and liabilities whatsoever, including attorneys' fees and
costs, arising out of or in connection with the planning and construction of the
Tenant Improvements (except that Lessor shall be liable for payment of the
Tenant Improvement Allowance as provided in
EXHIBIT B
Page 2 of 3
29
Paragraph 3), and Lessee's activities on or about the Premises during the period
of construction of the Tenant Improvements. Lessee shall be required to carry
worker's compensation insurance in the statutory limits, and fire and builder's
All-Risk Insurance during the period of construction of the Tenant Improvements
which insurance shall name Lessor and Lessor's agents as additional insureds.
Lessee's construction of the Tenant Improvements shall not commence until Lessor
has given Lessee written notice that such work may commence.
8. Performance Bond. Lessee at its cost shall furnish to Lessor a
performance and completion bond in a form and with an insurance company
reasonably acceptable to Lessor guaranteeing the completion of the Tenant
Improvements free and clear of all liens and other charges, and in accordance
with the Final Plans and Specifications.
EXHIBIT B
Page 3 of 3
30
[▇▇▇▇▇▇/▇▇▇▇▇ LETTERHEAD]
August 4, 1989
TEACHERS INSURANCE AND ANNUITY
c/o ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ COMMERCIAL REAL ESTATE
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: GaSonics tenant improvements for the property located at ▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
This letter is submitted in order to provide a more complete understanding and
disclosure for both Teachers Insurance and Annuity and GaSonics of the
anticipated use of the Tenant Improvement Allowance.
The primary goal of GaSonics is to provide, upon occupancy of ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, a clean and functional workplace for both office and production
personnel. To this end, the new paint throughout, the new moisture barrier on
the concrete floor, and the new tile throughout is a prerequisite prior to
occupancy of the premises. It is our understanding that Teachers Insurance and
Annuity will provide the above at their cost.
The agreement is that there will be a Tenant Improvement Allowance of Six
Dollars and Thirty Three Cents ($6.33) per square foot to be available to
GaSonics subject to the reasonable approval of Teachers Insurance and Annuity.
In order to circumvent any potential misunderstandings at some future date,
GaSonics would like to, at this time, provide detail of the intended use of the
$6.33 per square foot allowance. This will give Teachers Insurance and Annuity a
clear picture where these Tenant Improvement funds will be allocated, and is
intended to provide GaSonics with a tentative approval of the following:
A. Approximately One Dollar and Fifty Cents ($1.50) per square foot for
electrical distribution to the production area. This will be completed
as soon as possible by Gasonics.
B. Approximately Thirty-Three Cents ($.33) per square foot for the
construction of the exterior enclosure for storage of nitrogen, oxygen,
and Hydrogen as allowed in limited quantities by all code requirements.
C. Approximately Four Dollars and Fifty Cents ($4.50) per square foot for
the construction of one three stage clean room or three separate and
adjacent interlocking clean rooms preparation of final product to
customer. Since GaSonics' products will be installed in a customers'
clean rooms,
EXHIBIT B-1
Page 1 of 2
31
August 4, 1989
Teachers Insurance and Annuity
Page Two
there is pressure on GaSonics to provide a shippable product that is as
clean as possible. Any contamination at all is a problem. Now, the
challenge for GaSonics is to provide the most cost effective clean room
that is economically feasible. The best thinking at this time suggests
three hermetically sealed "bags" that are installed in each of three
progressively clean rooms so that the end customer can reverse the
bagging process for the cleanest end product installed in the clients
facility.
Due to the bulky size of the GaSonics end product, the clean room can
accommodate only a fixed small number at one time. Future production
growth may depend on the right size and clean level i.e. class 1000,
class 100, etc. The clean room is mandated, and GaSonics must install
this three stage process. The exact sizes are now being formulated based
on the long range marketing shipping schedules five years out, to ten
years out.
D. Approximately One Dollar ($1.00) per square foot to One Dollar and Fifty
Cents ($1.50) per square foot for the potential relocation of
miscellaneous walls and recarpeting as necessary. This is optional and
is subject to extra dollar efficiencies being created by the clean room
plans and construction.
We trust that this clarifies any questions and helps to move us one step closer
to a final lease document between Teachers Insurance and Annuity and GaSonics.
[SIGNATURE ILLEGIBLE] 8/11/89
------------------------------- ---------
GaSonics Date
------------------------------- ---------
Teachers Insurance Date
Annuity
/db096
EXHIBIT B-1
Page 2 of 2
32
on?site supervisory and administrative staff, office, equipment and temporary
services rendered by Lessor's contractor in connection with construction of the
Tenant Improvements.
In no event shall the Tenant Improvements Allowance be used for procuring,
constructing or installing in the Expansion Space any of Lessee's personal
property.
5. Excess Tenant Improvements Cost. If the Tenant Improvements Cost
exceeds the Tenant Improvements Allowance, any such excess costs shall be paid
for directly by Lessee.
6. Change Requests. No revisions to the approved Final Plans and
Specifications shall be made by either Lessor or Lessee unless approved in
writing by both parties. Lessee agrees to make all changes: (i) required by any
public agency to conform with governmental regulations, or (ii) reasonably
requested in writing by Lessor.
EXHIBIT C
Page 2 of 2
33
FIFTH AMENDMENT TO LIGHT INDUSTRIAL LEASE
This Fifth Amendment to Light Industrial Lease (the "Fifth Amendment"),
dated as of March 23rd, 2000, is entered into by and between TIAA Realty, Inc.,
a Delaware corporation "Lessor") and Gasonics International, Inc., a California
corporation ("Lessee").
RECITALS
A. Lessor's predecessor-in-interest, Teachers Insurance and Annuity Association
of America, a New York corporation, and Lessee's predecessor-in-interest,
Gasonics, Inc., entered into that certain Light Industrial Lease dated October
25, 1989, as amended by that certain First Amendment to Light Industrial Lease
dated February 21, 1992, that certain Second Amendment to Light Industrial Lease
dated April 1, 1992, that certain Third Amendment to Light Industrial Lease
(undated) and that certain Fourth Amendment to Light Industrial Lease dated
July, 1999 (collectively, the "Lease"), pursuant to which Lessor leased to
Lessee the premises located at ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
consisting of approximately ninety thousand four hundred sixty-seven (90,467)
square feet (the "Original Premises").
B. The Lease is scheduled to expire on December 31, 2001.
▇. ▇▇▇▇▇▇ and Lessee desire to (1) extend the term of the Lease with respect to
the Original Premises, (2) provide for Lessee's occupancy of additional space
consisting of a portion of the building located at ▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ as of May 1, 2000 and (3) provide for Lessee's occupancy of
the remaining space in the building located at ▇▇▇-▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ as of approximately July 1, 2002, as more specifically provided
in this Fifth Amendment.
Now, therefore, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Lessor and Lessee agree as follow:
1. ADDITIONAL LEASED PREMISES: Lessor hereby leases to Lessee, and
Lessee leases from Lessor, the following:
a. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇. The premises consisting of
approximately twenty- seven thousand nine hundred eight
(27,908) rentable square feet of space in the Montague
Business Park, commonly known as ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "404 E. Plumeria
Premises").
b. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇. The premises consisting of
approximately twenty seven thousand five hundred
seventy-six (27,576) rentable square feet of space in
the Montague Business Park, commonly known as ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "410 E.
Plumeria Premises").
The ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and
the real property of which they are a part are referred to hereinafter
collectively as the "Plumeria Property". All references in the Lease to the
"Premises" shall be deemed to refer to the Original Premises, and as of the ▇▇▇
▇. ▇▇▇▇▇▇▇▇ Commencement Date and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-1-
34
Commencement Date, respectively, the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Premises. Lessor and Lessee agree that the rentable square footage of
the Premises as set forth above shall be conclusive as between the parties for
the purposes of this Lease and that if a remeasurement of the Premises, or any
portion thereof, reflects a greater or lesser size, there shall be no adjustment
of the base Monthly Rent or any other amount payable finder the Lease, as
amended by this Fifth Amendment,
2. TERM.
a. COMMENCEMENT.
(1) The Term of the Lease for the Original Premises
has already commenced;
(2) The Term of the Lease for the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises shall commence on May 1, 2000 (the "404
E. Plumeria Commencement Date"); and
(3) The Term of the Lease for the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises shall commence on July 1, 2002 (the
"410 E. Plumeria Commencement Date").
Provided, however, that if Lessor is unable to deliver
possession of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and/or the
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises by the dates provided above,
such failure shall not affect the validity of this Lease
nor shall it extend the Term or render Lessor liable to
Lessee for any loss or damage resulting therefrom or
delay the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Commencement Date except as
provided in Paragraph 9 of this Fifth Amendment.
Notwithstanding any other provision of this Lease, if
Lessor cannot deliver possession of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises to Lessee for any reason including the fault of
Lessor, the Term of the Lease with respect to the ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Premises shall instead commence on the date on
which Lessor tenders possession of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises to Lessee.
b. EARLY OCCUPANCY. After execution of this Fifth Amendment
and the delivery by Lessee of the security deposit,
insurance certificates showing coverage for the ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Premises in the amounts required under the
Lease and any other sums hereunder required to be paid
upon execution of this Fifth Amendment, and upon Lessor
obtaining possession of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises,
Lessee shall be provided with access to the ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Premises for the purpose of performing any
alterations or improvements and otherwise preparing for
the occupancy of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ PREMISES, provided,
however, that any alterations or improvements shall be
undertaken in compliance with the terms of the Lease.
Such early occupancy shall be on the terms and
conditions contained in the Lease, as amended by this
Fifth Amendment, provided,
-2-
35
however, that Lessee shall not be obligated to pay base
Monthly Rent prior to May 1, 2000.
c. TERMINATION. Paragraph 1.2 of the Lease is amended to
extend the Term through and including December 31, 2006.
The Term of the Lease shall expire concurrently for the
Original Premises, the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises.
3. MONTHLY RENT.
a. ORIGINAL PREMISES. Through December 31, 2001, the
Monthly Rent payable for the Original Premises shall
remain as specified in the Lease. Effective January 1,
2002 base Monthly Rent for the Original Premises shall
be as follows:
Period Monthly Rent/RSF Monthly Rent
------ ---------------- ------------
1/1/02 - 4/30/02 $2.00 $180,934.00
5/1/02 - 4/30/03 $2.09 $189,076.03
5/1/03 - 4/30/04 $2.20 $199,027.40
5/1/04 - 4/30/05 $2.31 $208,978.77
5/1/05 - 4/30/06 $2.42 $218,930.14
5/1/06 - 12/31/06 $2.55 $230,690.85
b. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇. Lessee shall pay to Lessor base Monthly
Rent for the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises as follows:
Period Monthly Rent/RSF Monthly Rent
------ ---------------- ------------
5/1/00 - 4/30/01 $1.90 $53,025.20
5/1/01 - 4/30/02 $2.00 $55,816.00
5/1/02 - 4/30/03 $2.09 $58,327.72
5/1/03 - 4/30/04 $2.20 $61,397.60
5/1/04 - 4/30/05 $2.31 $64,467.48
5/1/05 - 4/30/06 $2.42 $67,537.36
5/1/06 - 12/31/06 $2.55 $71,165.40
c. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇. Lessee shall pay to Lessor base Monthly
Rent for the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises as follows:
Period Monthly Rent/RSF Monthly Rent
------ ---------------- ------------
7/1/02 - 4/30/03 $2.09 $57,633.84
5/1/03 - 4/30/04 $2.20 $60,667.20
5/1/04 - 4/30/05 $2.31 $63,700.56
5/1/05 - 4/30/06 $2.42 $66,733.92
5/1/06 - 12/31/06 $2.55 $70,318.80
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4. TRIPLE-NET LEASE. Lessee acknowledges that the provisions of
Paragraph 4.3 of the Lease apply to the entire premises and that Lessee shall
pay all expenses of every kind as described in the Lease with respect to the
Original Premises, the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises. Effective as of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Commencement Date, Lessee shall
pay fifty and three tenths percent (50.3%) of any expenses of the categories
described in the Lease insofar as Lessor incurs those expenses in connection
with the Plumeria Property. Effective as of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Commencement
Date, Lessee shall pay one hundred percent (100%) of any expenses of the
categories described in the Lease insofar as Lessor incurs those expenses in
connection with the Plumeria Property.
5. SECURITY DEPOSIT.
a. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇. Upon execution of this Fifth Amendment,
Lessee shall increase the security deposit required
pursuant to Paragraph 4.5 of the Lease by seventy-one
thousand one hundred sixty-five and 40/100 dollars
($71,165.40). Upon execution of this First Amendment,
Lessee shall replace the existing letter of credit with
a new letter of credit in the amount of one hundred
forty thousand three hundred fifty-eight and 40/100
dollars ($140,358.40) which satisfies the requirements
of Paragraph 22 of the Lease.
b. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇. ▇▇ the day preceding the ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Commencement Date, Lessee shall increase the
security deposit required pursuant to Paragraph 4.5 of
the Lease by seventy thousand three hundred eighteen and
80/100 dollars ($70,318.80). On the day preceding the
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Commencement Date, Lessee shall replace
the existing letter of credit with a new letter of
credit in the amount of two hundred ten thousand six
hundred seventy-seven and 20/100 dollars ($210,677.20)
which satisfies the requirements of Paragraph 22 of the
Lease.
6. CONDITION OF THE PREMISES. Lessee acknowledges and agrees that Lessor
shall have no obligation to perform or construct any other alterations,
improvements or additions to, or redecoration of, the Original Premises, the ▇▇▇
▇. ▇▇▇▇▇▇▇▇ Premises or the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises except as specifically
provided in this Paragraph 6, and that Lessee shall accept the Original Promises
in their existing condition, and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Premises in the condition existing as of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Commencement Date and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Commencement Date, respectively.
Notwithstanding the foregoing (1) on May 1, 2000, the roof of the Original
Premises and the HVAC systems therein (excluding those serving any clean room
areas in the Original Premises) shall be brought into good working condition and
repair, (2) on the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Commencement Date, the roof of the ▇▇▇ ▇.
▇▇▇▇▇▇▇▇ Premises and the HVAC systems therein shall be brought into good
working condition and repair, and (3) on the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Commencement Date,
the roof of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the HVAC systems therein shall be
brought into good working condition and repair.
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7. CONDEMNATION AND DAMAGE AND DESTRUCTION. The provisions of Paragraphs
12 and 16 of the Lease shall apply separately to each of the Original Premises,
the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises, it being the
intent of the parties that if any of such distinct positions of the Premises are
condemned or damaged independently of the other portions of the Premises, the
Lease shall remain in effect for any portion of the Premises if the terms of the
Lease would not provide either party with the right to terminate the Lease with
respect to that portion of the Premises.
8. CROSS DEFAULT. Lessor and Lessee acknowledge and agree that the
payment and performance obligations contained in the Lease, as amended by this
Fifth Amendment, are not distinct obligations as far as they relate to the
Original Premises, the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises, and that any default which would entitle Lessor to terminate the Lease
shall entitle Landlord to terminate the entire Lease, as amended by this Fifth
Amendment, and Lessee's right to occupy all portions of the Premises.
9. RELEVANCE OF LIABILITY. Lessor has disclosed to Lessee that a party
previously negotiated with Lessor for the occupancy of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises, Lessee hereby releases Lessor from all liability for any costs,
expenses or damages of any kind which Lessee may incur if such party files a
lawsuit with respect to the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises, including, without
limitation, any costs incurred by Lessee in improving the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises, any damages resulting from delay or inability to deliver possession of
the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises, and attorneys' fees and court costs incurred by
Lessee in connection therewith. If Lessor is prevented from delivering
possession of the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises to Lessee as a result of any such
action for a period in excess of ninety (90) days, whether by court order or
otherwise, Lessee shall have the right, exercisable by providing written notice
within ten (10) days after the expiration of inch ninety (90) day period, to
terminate the Lease with respect to both (but not one or the other of) the ▇▇▇
▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and to terminate the Fifth
Amendment in its entirety (in which case Lessee shall continue to occupy the
Original Premises pursuant to the terms of the Lease [including the Term
thereof]). If Lessee terminates the Lease with respect to the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises as provided in the preceding sentence
but does not terminate this Fifth Amendment in its entirety, all references to
the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises shall be deleted
If Lessee fails to deliver such notice, the Lease will remain in effect as to
the entire Premises, provided that Lessee shall not be obligated to pay any sums
due for the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises unless and until possession is delivered.
10. SEPARATE LEASES. At any time during the Term of this Lease, Lessor
may require that Lessee enter into distinct leases on identical terms and
conditions as are contained in the Lease, as amended by this Fifth Amendment
(except for such terms as would become unnecessary as a result of the separation
of the lease of the Premises into distinct leases), pursuant to which the
Original Promises, the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and/or the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Premises each would be the subject of a separate and distinct lease (except that
the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises and the ▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Premises may be combined
into one lease).
11. In the event of a conflict between the terms and conditions of the
Lease and the terms and conditions of this Fifth Amendment, the terms and
conditions of this Fifth Amendment
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shall control. Except as amended by this Fifth Amendment, the Lease is in full
force and effect and is hereby ratified by Lessor and Lessee.
In witness whereof, Lessor and Lessee have entered into this Fifth
Amendment as of the date first hereinabove written.
Lessor Lessee
------ ------
TIAA Realty, Inc., a Delaware Gasonics International, Inc.,
a California corporation
By: By: /s/ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------- ----------------------------------
Name: Name: ▇. ▇▇▇▇▇▇▇▇▇
----------------------------- --------------------------------
Title: Title: CFO
---------------------------- --------------------------------
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