EXHIBIT 11.3
LEASE
BY AND BETWEEN
MONTAGUE LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
AS LANDLORD
AND
ULTRATECH STEPPER, INC.,
A DELAWARE CORPORATION
AS TENANT
NOVEMBER __, 1999
53
LEASE
THIS LEASE, dated November 22, 1999, for reference purposes only, is made by and
between MONTAGUE LLC, a California limited liability company ("Landlord") and
ULTRATECH STEPPER, a Delaware corporation ("Tenant"), to be effective and
binding upon the parties as of the date the last of the designated signatories
to this Lease shall have executed this Lease (the "Effective Date of this
Lease").
ARTICLE 1
REFERENCE
1.1 REFERENCES. All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:
Tenant's Address for Notice: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Tenant's Representative: ▇▇▇▇▇ ▇▇▇▇▇▇
CFO, ULTRATECH STEPPER, INC.
Landlord's Address for Notices: c/o Menlo Equities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Landlord's Representative: ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Phone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Intended Commencement Date: March 1, 2000
Intended Term: Ten (10) years
Lease Expiration Date: Ten (10) Years from the Actual Lease
Commencement Date, unless earlier terminated
by Landlord in accordance with the terms of
this Lease, or extended by Tenant pursuant
to Article 15.
Options to Renew: Two option(s) to renew, each for a term of
five (5) years.
First Month's Prepaid Rent $146,414.55 [plus estimated Operating
Expenses] and Operating Expenses:
Tenant's Security Deposit: Cash or check in the amount of $220,000.00
[last month's rent and estimated operating
expenses] and Letter of Credit in the amount
of $2,000,000
Late Charge Amount: Five Percent (5%) of the Delinquent Amount
Tenant's Required Liability
Coverage: $5,000,000 Combined Single Limit
Broker(s): CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ (Tenant's Broker)
Colliers International (Landlord's Broker)
Project: That certain real property situated in the
City of San ▇▇▇▇, County of Santa ▇▇▇▇▇,
State of California, improved with a total
of five (5) building(s), which real property
is shown on the Site Plan attached hereto as
Exhibit "A" and is commonly known as
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or otherwise described as follows: Montague
Park, San Jose, California.
Property: That certain real property within the
Project with APN ▇▇▇-▇▇-▇▇▇, as presently
improved with one building(s), which real
property is shown on the Site Plan attached
hereto as Exhibit "B".
Building: That certain building on the Property in
which the Leased Premises are located
commonly known as ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Building"), which
Building is shown outlined on Exhibit "B"
hereto.
Outside Areas: The "Outside Areas" shall mean all areas
within the Property which are located
outside the Building, such as pedestrian
walkways, parking areas, landscaped areas,
open areas and enclosed trash disposal
areas.
Leased Premises: All the interior space within the Building,
including stairwells, connecting walkways,
and atriums, consisting of approximately
79,143 square feet and, for purposes of this
Lease, agreed to contain said number of
square feet.
Parking Spaces: Tenant shall be entitled to the use of 295
parking spaces located in the parking area
of the Outside Areas. Up to 10 of such
spaces may be marked as reserved for
Tenant's visitors, employees, and vendors;
the balance shall be non-designated and
non-reserved.
Tenant's Building Expense Share: The term "Tenant's Building Expense Share"
shall mean the percentage obtained by
dividing the rentable square footage of the
Leased Premises at the time of calculation
by the rentable square footage of the
Building at the time of calculation. Such
percentage is currently 100%. In the event
that any portion of the Property is sold by
Landlord, or the rentable square footage of
the Leased Premises or the Property is
otherwise changed, Tenant's Building Expense
Share shall be recalculated to equal the
percentage described in the first sentence
of this paragraph, so that the aggregate
Tenant's Building Expense Share of all
tenants of the Property shall equal 100%.
Tenant's Building Expense Share is subject
to adjustment as set forth in Paragraphs
13.12(b) and 13.12 (c).
Tenant's Project Expense Share: The term "Tenant's Project Expense Share"
shall mean the percentage obtained by
dividing the rentable square footage of the
Leased Premises at the time of calculation
by the rentable square footage of all of the
buildings in the Project at the time of
calculation. Such percentage is currently
18.95%. In the event that any portion of the
Project is sold by Landlord, or the rentable
square footage of the Project is otherwise
changed, Tenant's Project Expense Share
shall be recalculated to equal the
percentage in the first sentence of this
paragraph, so that the aggregate Tenant's
Project Expense Share of all tenants of the
Project shall equal 100%. Tenant's Project
Expense Share is subject to adjustment as
set forth in Paragraphs 13.12(b) and
13.12(c).
Base Monthly Rent: The term "Base Monthly Rent" shall mean the
following:
Period Rent
------ ----
Months 1-12 $146,414.55
Months 13-24 $150,806.99
Months 25-36 $155,331.20
Months 37-48 $159,991.13
Months 49-60 $164,790.87
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Months 61-72 $169,734.59
Months 73-84 $174,826.63
Months 85-96 $180,071.43
Months 97-108 $185,473.57
Months 109-120 $191,037.78
Permitted Use: General administrative, field support
office, research and development, assembly,
manufacturing, and any other legally
permitted use compatible with office
buildings of comparable quality, subject to
Landlord's approval, which shall not be
unreasonably withheld.
Exhibits: The term "Exhibits" shall mean the Exhibits
of this Lease which are described as
follows:
Exhibit "A"- Site Plan showing the Project
Exhibit "B" - Site Plan showing the Property
and delineating the Building in which the
Leased Premises are located.
Exhibit "C" - Work Letter
Exhibit "D" - Form of Tenant Estoppel
Certificate
Exhibit "E" - Form of Letter of Credit
Exhibit "F" - Form of ▇▇▇▇ of Sale
ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION
2.1 DEMISE OF LEASED PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord for Tenant's own use in the conduct of Tenant's
business and not for purposes of speculating in real estate, for the Lease Term
and upon the terms and subject to the conditions of this Lease, that certain
interior space described in Article 1 as the Leased Premises, reserving and
excepting to Landlord the right to fifty percent (50%) of all assignment
consideration and excess rentals as provided in Article 7 below. Tenant's lease
of the Leased Premises, together with the appurtenant right to use the Outside
Areas as described in Paragraph 2.2 below, shall be conditioned upon and be
subject to the continuing compliance by Tenant with (i) all the terms and
conditions of this Lease, (ii) all Laws governing the use of the Leased Premises
and the Property, (iii) all Private Restrictions, easements and other matters
now of public record respecting the use of the Leased Premises and Property, and
(iv) all reasonable rules and regulations from time to time established by
Landlord.
2.2 RIGHT TO USE OUTSIDE AREAS. As an appurtenant right to Tenant's right to the
use and occupancy of the Leased Premises, Tenant shall have the right to use the
Outside Areas in conjunction with its use of the Leased Premises solely for the
purposes for which they were designated and intended and for no other purposes
whatsoever. Tenant's right to so use the Outside Areas shall be subject to the
limitations on such use as set forth in Article 1 and shall terminate
concurrently with any termination of this Lease.
2.3 LEASE COMMENCEMENT DATE AND LEASE TERM. Subject to Paragraph 2.4 below, the
term of this Lease shall begin, and the Lease Commencement Date shall be deemed
to have occurred, on the Intended Commencement Date, as set forth in Article 1
(the "Lease Commencement Date"). The term of this Lease shall in all events end
on the Lease Expiration Date (as set forth in Article 1). The Lease Term shall
be that period of time commencing on the Lease Commencement Date and ending on
the Lease Expiration Date (the "Lease Term").
2.4 DELIVERY OF POSSESSION. Landlord shall deliver to Tenant possession of the
Leased Premises thirty (30) days prior to the Intended Commencement Date in its
then "AS-IS" condition, WITH ALL FAULTS, except as otherwise expressly provided
in this Lease. If Landlord is unable to deliver possession of the Leased
Premises to Tenant on or before thirty (30) days before the Intended
Commencement Date, Landlord shall not be in default under this Lease, nor shall
this Lease be void, voidable or cancelable by Tenant until the lapse of ninety
(90) days after the Intended Commencement Date (the "delivery grace period");
however, if Landlord's inability to so deliver the Leased Premises to Tenant is
caused by the existing tenant's hold over in the Leased Premises beyond the term
of its current lease or by Landlord's gross negligence or willful misconduct,
the Lease Commencement Date shall not be deemed to have occurred until thirty
(30) days after the actual date of delivery. If Landlord is unable to deliver
possession of the Leased Premises in the agreed condition to Tenant within the
described
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delivery grace period (including any extension thereof by reason of Force
Majeure or the actions or inactions of Tenant), then Tenant's sole remedy shall
be to terminate this Lease, and in no event shall Landlord be liable in damages
to Tenant for such delay. Tenant may not terminate this Lease at any time after
the date Landlord notifies Tenant that the Leased Premises are available for
delivery to Tenant, unless Landlord's notice is not given in good faith.
Notwithstanding the foregoing delivery grace period, Landlord shall provide the
Leased Premises to Tenant for early occupancy no later than thirty (30) days in
advance of the Lease Commencement Date, subject to Tenant's compliance with all
of the terms and conditions of this Lease other than the payment of Base Monthly
Rent. At the time Landlord delivers the Leased Premises to Tenant, Landlord
shall also deliver to Tenant an executed ▇▇▇▇ of Sale in the form attached as
Exhibit F and possession of the furniture described therein.
2.5 PERFORMANCE OF IMPROVEMENT WORK; ACCEPTANCE OF POSSESSION. Landlord shall
have no obligation to perform any work or make any installations in the Leased
Premises, it being agreed that Tenant accepts the Leased Premises in the
condition called for in Section 2.4 above; provided that, Landlord agrees to
deliver the Building and all Building systems and subsystems serving the
Building and Leased Premises in good working condition and in compliance with
all Laws of the date the Leased Premises are delivered to Tenant. It is agreed
that by occupying the Leased Premises, Tenant formally accepts same and
acknowledges that the Leased Premises are in the condition called for hereunder,
subject to normal punchlist items specified by Tenant to Landlord in writing
within thirty (30) days of such occupancy.
2.6 SURRENDER OF POSSESSION. Immediately prior to the expiration or upon the
sooner termination of this Lease, Tenant shall remove all of Tenant's signs from
the exterior of the Building and shall remove all of Tenant's equipment, trade
fixtures, furniture, supplies, wall decorations and other personal property from
within the Leased Premises, the Building and the Outside Areas, and shall vacate
and surrender the Leased Premises, the Building, the Outside Areas and the
Property to Landlord in the same condition, broom clean, as existed at the Lease
Commencement Date, reasonable wear and tear excepted. Tenant shall repair all
damage to the Leased Premises, the exterior of the Building and the Outside
Areas caused by Tenant's removal of Tenant's property. Tenant shall patch and
refinish, to Landlord's reasonable satisfaction, all penetrations made by Tenant
or its employees to the floor, walls or ceiling of the Leased Premises, whether
such penetrations were made with Landlord's approval or not. Tenant shall remove
all Specialized Improvements (as defined in the Work Letter) identified by
Landlord pursuant to the Work Letter and shall repair all damage to the Leased
Premises, the Building and the Property caused by such removal. Tenant shall
repair all damage caused by Tenant to the exterior surface of the Building and
the paved surfaces of the Outside Areas and, where necessary, replace or
resurface the same. Additionally, to the extent that Landlord shall have
notified or is deemed to have notified Tenant in writing at the time the
improvements were completed that it desired to have certain improvements made by
Tenant or at the request of Tenant removed at the expiration or sooner
termination of the Lease, Tenant shall, upon the expiration or sooner
termination of the Lease, remove any such improvements constructed or installed
by Landlord or Tenant and repair all damage caused by such removal. If the
Leased Premises, the Building, the Outside Areas and the Property are not
surrendered to Landlord in the condition required by this paragraph at the
expiration or sooner termination of this Lease, Landlord may, at Tenant's
expense, so remove Tenant's signs, property and/or improvements not so removed
and make such repairs and replacements not so made or hire, at Tenant's expense,
independent contractors to perform such work. Tenant shall be liable to Landlord
for all costs incurred by Landlord in returning the Leased Premises, the
Building and the Outside Areas to the required condition, together with interest
on all costs so incurred from the date paid by Landlord at the lesser of (i)
that rate quoted by ▇▇▇▇▇ Fargo Bank, N.T. & S.A. from time to time as its prime
rate plus 5% or (ii) the then maximum rate of interest not prohibited or made
usurious by law until paid. Tenant shall pay to Landlord the amount of all costs
so incurred plus such interest thereon, within thirty (30) days of Landlord's
billing Tenant for same. Tenant shall indemnify Landlord against loss or
liability resulting from delay by Tenant in surrendering the Leased Premises,
including, without limitation, any claims made by any succeeding Tenant or any
losses to Landlord with respect to lost opportunities to lease to succeeding
tenants.
ARTICLE 3
RENT, LATE CHARGES AND SECURITY DEPOSITS
3.1 BASE MONTHLY RENT. Commencing on the Lease Commencement Date (as determined
pursuant to Paragraph 2.3 above) and continuing throughout the Lease Term,
Tenant shall pay to Landlord, without prior demand therefor, in advance on the
first day of each calendar month, the amount set forth as "Base Monthly Rent" in
Article 1 (the "Base Monthly Rent").
3.2 ADDITIONAL RENT. Commencing on the Lease Commencement Date (as
determined pursuant to Paragraph 2.3 above) and continuing throughout the Lease
Term, in addition to the Base Monthly Rent and to the extent not required by
Landlord to be contracted for and paid directly by Tenant, Tenant shall pay to
Landlord as additional rent (the "Additional Rent") the following amounts:
(a) An amount equal to all Property Operating Expenses (as defined in
Article 13) incurred by Landlord. Landlord shall deliver to Tenant Landlord's
reasonable estimate of any given expense (such as Landlord's Insurance Costs or
Real Property Taxes), or group of expenses, which it anticipates will be paid or
incurred for the ensuing calendar or fiscal year, as
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Landlord may determine, and Tenant shall pay to Landlord an amount equal to the
estimated amount of such expenses for such year in equal monthly installments
during such year with the installments of Base Monthly Rent.
(b) Landlord's share of the consideration received by Tenant upon
certain assignments and sublettings as required by Article 7.
(c) Any legal fees and costs that Tenant is obligated to pay or
reimburse to Landlord pursuant to Article 13; and
(d) Any other charges or reimbursements due Landlord from Tenant
pursuant to the terms of this Lease.
Notwithstanding the foregoing, Landlord may elect by written notice to Tenant to
have Tenant pay Real Property Taxes or any portion thereof directly to the
applicable taxing authority, in which case Tenant shall make such payments and
deliver satisfactory evidence of payment to Landlord no later than five (5) days
before such Real Property Taxes become delinquent.
3.3 YEAR-END ADJUSTMENTS. If Landlord shall have elected to ▇▇▇▇ Tenant for the
Property Operating Expenses (or any group of such expenses) on an estimated
basis in accordance with the provisions of Paragraph 3.2(a)(iii) above, Landlord
shall furnish to Tenant within three months following the end of the applicable
calendar or fiscal year, as the case may be, a statement (the "Statement")
setting forth (i) the amount of such expenses paid or incurred during the just
ended calendar or fiscal year, as appropriate, and (ii) the amount that Tenant
has paid to Landlord for credit against such expenses for such period. If Tenant
shall have paid more than its obligation for such expenses for the stated
period, Landlord shall, at its election, either (i) credit the amount of such
overpayment toward the next ensuing payment or payments of Additional Rent that
would otherwise be due or (ii) refund in cash to Tenant the amount of such
overpayment. If such year-end statement shall show that Tenant did not pay its
obligation for such expenses in full, then Tenant shall pay to Landlord the
amount of such underpayment within thirty (30) days from Landlord's billing of
same to Tenant. Within thirty (30) days after receipt of the Statement, Tenant
shall have the right to commence an audit, at Tenant's expense, of Landlord's
accounts and records relating to the Property Operating Expenses. Such audit
shall be conducted by a Big Six certified public accounting firm. Such audit
shall be completed within thirty (30) days after Tenant's receipt of Landlord's
accounts and records or access has been provided thereto. If such audit reveals
that Landlord has overcharged Tenant, the amount overcharged shall be paid to
Tenant within thirty (30) days after the audit is concluded. In addition, if the
Statement exceeds the actual Property Operating Expenses which should have been
charged to Tenant by more than five percent (5%), the costs of the audit shall
be paid by Landlord. The provisions of this Paragraph shall survive the
expiration or sooner termination of this Lease.
3.4 LATE CHARGE, AND INTEREST ON RENT IN DEFAULT. Tenant acknowledges that the
late payment by Tenant of a monthly installment of Base Monthly Rent or any
Additional Rent will cause Landlord to incur certain costs and expenses not
contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include without
limitation, administration and collection costs and processing and accounting
expenses. Therefor, if an installment of Base Monthly Rent is not received by
Landlord from Tenant within five (5) calendar days after the same becomes due,
Tenant shall immediately pay to Landlord a late charge in an amount equal to the
amount set forth in Article 1 as the "Late Charge Amount," and if any Additional
Rent is not received by Landlord when the same becomes due, Tenant shall
immediately pay to Landlord a late charge in an amount equal to 5% of the
Additional Rent not so paid; provided however, that once, but only once, in any
twelve (12) month period during the Lease Term, Tenant shall not be liable for
any Late Charge Amount or other late charge hereunder. Landlord and Tenant agree
that this late charge represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the anticipated loss Landlord
would suffer by reason of Tenant's failure to make timely payment. In no event
shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within which to pay any rental installment or
prevent Landlord from exercising any right or remedy available to Landlord upon
Tenant's failure to pay each rental installment due under this Lease when due,
including the right to terminate this Lease as provided in Paragraph 12.2
hereof. If any rent remains delinquent for a period in excess of thirty (30)
calendar days, then, in addition to such late charge, Tenant shall pay to
Landlord interest on any rent that is not so paid from said tenth day at a rate
that is the lesser of (i) that rate quoted by ▇▇▇▇▇ Fargo Bank, N.T. & S.A. from
time to time as its prime rate plus 5% or (ii) the then maximum rate of interest
not prohibited or made usurious by law until paid.
3.5 PAYMENT OF RENT. Except as specifically provided otherwise in this Lease,
all rent shall be paid in lawful money of the United States, without any
abatement, reduction or offset for any reason whatsoever, to Landlord at such
address as Landlord may designate from time to time. Tenant's obligation to pay
Base Monthly Rent and all Additional Rent shall be appropriately prorated at the
commencement and expiration of the Lease Term. The failure by Tenant to pay any
Additional Rent as required pursuant to this Lease when due shall be treated the
same as a failure by Tenant to pay Base Monthly Rent when due, and Landlord
shall have the same rights and remedies against Tenant as Landlord would have
had Tenant failed to pay the Base Monthly Rent when due.
3.6 PREPAID RENT. Tenant shall, upon execution of this Lease, pay to Landlord
the amount set forth in Article 1 as "First Month's Prepaid Rent" as prepayment
of rent for credit against the first payment of Base Monthly Rent due hereunder.
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3.7 SECURITY DEPOSIT.
(a) Tenant shall deposit with Landlord, no later than the Lease
Commencement Date, the amount set forth in Article 1 as the "Security
Deposit" as security for the performance by Tenant of the terms of this Lease
to be performed by Tenant, and not as prepayment of rent. As part of the
Security Deposit, Tenant shall deliver to Landlord a clean, unconditional,
irrevocable, transferable letter of credit in the amount of $2,000,000 (the
"Letter of Credit") in form and issued by a financial institution ("Issuer")
satisfactory to Landlord in its sole discretion, substantially in the form
attached as Exhibit E. The Letter of Credit shall permit partial draws, and
provide that draws thereunder will be honored upon receipt by Issuer of a
written statement signed by Landlord or its authorized agent stating that
Landlord is entitled to draw down on the Letter of Credit pursuant to the
terms of the Lease. The Letter of Credit shall have an expiration period of
one (1) year but shall automatically renew by its terms unless affirmatively
cancelled by either Issuer or Tenant, in which case Issuer must provide
Landlord 30 days' prior written notice of such expiration or cancellation.
Any amount drawn under the Letter of Credit shall be held or used by Landlord
in accordance with this Section 3.7. If the amount of the Letter of Credit is
reduced in accordance with the terms of this Lease, Tenant shall have the
right to replace the existing Letter of Credit with another Letter of Credit
at the reduced amount. If the Tenant fails to renew or replace the Letter of
Credit as required under this Lease at least thirty (30) days before its
stated expiration date, Landlord, after seven (7) days prior written notice
to Tenant, may draw upon the entire amount of the Letter of Credit, provided
however that no notice shall be required after the date seven (7) days prior
to the stated expiration date.
(b) In the event (i) Tenant reports net profits for eight (8)
consecutive quarters (as shown on its quarterly financial statements prepared
in accordance with generally accepted accounting principles), (ii) Tenant has
achieved a market capitalization of $500,000,000 for four (4) consecutive
quarters (based on the closing stock price at the end of each fiscal quarter)
and (iii) provided that Tenant is not then in default or would be in default
with the passage of time or notice or both, upon Tenant's written request to
Landlord (which request shall include supporting documentation), the Letter
of Credit shall be returned to Tenant.
(c) Landlord may apply such portion or portions of the Security
Deposit as are reasonably necessary for the following purposes: (i) to remedy
any default by Tenant in the payment of Base Monthly Rent or Additional Rent
or a late charge or interest on defaulted rent, or any other monetary payment
obligation of Tenant under this Lease; (ii) to repair damage to the Leased
Premises, the Building or the Outside Areas caused or permitted to occur by
Tenant; (iii) to clean and restore and repair the Leased Premises, the
Building or the Outside Areas following their surrender to Landlord if not
surrendered in the condition required pursuant to the provisions of Article
2, and (iv) to remedy any other default of Tenant to the extent permitted by
Law including, without limitation, paying in full on Tenant's behalf any sums
claimed by materialmen or contractors of Tenant to be owing to them by Tenant
for work done or improvements made at Tenant's request to the Leased
Premises. In this regard, Tenant hereby waives any restriction on the uses to
which the Security Deposit may be applied as contained in Section 1950.7(c)
of the California Civil Code and/or any successor statute. In the event the
Security Deposit or any portion thereof is so used, Tenant shall pay to
Landlord, promptly upon demand, an amount in cash sufficient to restore the
Security Deposit to the full original sum. If Tenant fails to promptly
restore the Security Deposit and if Tenant shall have paid to Landlord any
sums as "Last Month's Prepaid Rent," Landlord may, in addition to any other
remedy Landlord may have under this Lease, reduce the amount of Tenant's Last
Month's Prepaid Rent by transferring all or portions of such Last Month's
Prepaid Rent to Tenant's Security Deposit until such Security Deposit is
restored to the amount set forth in Article 1. Landlord shall not be deemed a
trustee of the Security Deposit. Landlord may use the Security Deposit in
Landlord's ordinary business and shall not be required to segregate it from
Landlord's general accounts. Tenant shall not be entitled to any interest on
the Security Deposit. If Landlord transfers the Building or the Property
during the Lease Term, Landlord may pay the Security Deposit to any
subsequent owner in conformity with the provisions of Section 1950.7 of the
California Civil Code and/or any successor statute, in which event the
transferring landlord shall be released from all liability for the return of
the Security Deposit. Tenant specifically grants to Landlord (and Tenant
hereby waives the provisions of California Civil Code Section 1950.7 to the
contrary) a period of ninety (90) days following a surrender of the Leased
Premises by Tenant to Landlord within which to inspect the Leased Premises,
make required restorations and repairs, receive and verify workmen's ▇▇▇▇▇▇▇▇
therefor, and prepare a final accounting with respect to the Security
Deposit. In no event shall the Security Deposit or any portion thereof, be
considered prepaid rent.
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ARTICLE 4
USE OF LEASED PREMISES AND OUTSIDE AREA
4.1 PERMITTED USE. Tenant shall be entitled to use the Leased Premises solely
for the "Permitted Use" as set forth in Article 1 and for no other purpose
whatsoever. Tenant shall have the right to use the Outside Areas in conjunction
with its Permitted Use of the Leased Premises solely for the purposes for which
they were designed and intended and for no other purposes whatsoever. Tenant
shall have the right to vacate the Leased Premises at any time during the Term
of this Lease, provided Tenant maintains the Leased Premises in the same
condition as if fully occupied and as otherwise required by the terms of this
Lease.
4.2 GENERAL LIMITATIONS ON USE. Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Building, the Outside Areas or the
Property which does or could (i) jeopardize the structural integrity of the
Building or (ii) cause damage to any part of the Leased Premises, the Building,
the Outside Areas or the Property. Tenant shall not operate any equipment within
the Leased Premises which does or could (i) injure, vibrate or shake the Leased
Premises or the Building, (ii) damage, overload or impair the efficient
operation of any electrical, plumbing, heating, ventilating or air conditioning
systems within or servicing the Leased Premises or the Building, or (iii) damage
or impair the efficient operation of the sprinkler system (if any) within or
servicing the Leased Premises or the Building. Except as set forth in Paragraph
4.14, Tenant shall not install any equipment or antennas on or make any
penetrations of the exterior walls or roof of the Building. Tenant shall not
affix any equipment to or make any penetrations or cuts in the floor, ceiling,
walls or roof of the Leased Premises. Tenant shall not place any loads upon the
floors, walls, ceiling or roof systems which could endanger the structural
integrity of the Building or damage its floors, foundations or supporting
structural components. Tenant shall not place any explosive, flammable or
harmful fluids or other waste materials in the drainage systems of the Leased
Premises, the Building, the Outside Areas or the Property. Tenant shall not
drain or discharge any fluids in the landscaped areas or across the paved areas
of the Property. Tenant shall not use any of the Outside Areas for the storage
of its materials, supplies, inventory or equipment and all such materials,
supplies, inventory or equipment shall at all times be stored within the Leased
Premises. Tenant shall not commit nor permit to be committed any waste in or
about the Leased Premises, the Building, the Outside Areas or the Property.
4.3 NOISE AND EMISSIONS. All noise generated by Tenant in its use of the Leased
Premises shall be confined or muffled so that it does not interfere with the
businesses of or annoy the occupants and/or users of adjacent properties. All
dust, fumes, odors and other emissions generated by Tenant's use of the Leased
Premises shall be sufficiently dissipated in accordance with sound environmental
practice and exhausted from the Leased Premises in such a manner so as not to
interfere with the businesses of or annoy the occupants and/or users of adjacent
properties, or cause any damage to the Leased Premises, the Building, the
Outside Areas or the Property or any component part thereof or the property of
adjacent property owners.
4.4 TRASH DISPOSAL. Tenant shall provide trash bins or other adequate garbage
disposal facilities within the trash enclosure areas provided or permitted by
Landlord outside the Leased Premises sufficient for the interim disposal of all
of its trash, garbage and waste. All such trash, garbage and waste temporarily
stored in such areas shall be stored in such a manner so that it is not visible
from outside of such areas, and Tenant shall cause such trash, garbage and waste
to be regularly removed from the Property. Tenant shall keep the Leased Premises
and the Outside Areas in a clean, safe and neat condition free and clear of all
of Tenant's trash, garbage, waste and/or boxes, pallets and containers
containing same at all times.
4.5 PARKING. Tenant shall have the non-exclusive use of the number of parking
spaces set forth in Article 1 of this Lease. Tenant shall not, at any time, park
or permit to be parked any recreational vehicles, storage vehicles, inoperative
vehicles, containers or equipment in the Outside Areas or on any portion of the
Property. Tenant agrees to assume responsibility for compliance by its employees
and invitees with the parking provisions contained herein. Landlord reserves the
right to grant easements and access rights to others for use of the parking
areas on the Property, provided that such grants do not materially increase
Tenant's obligations under the Lease or materially negatively impact Tenant's
use of the Leased Premises for operation of its business therein.
4.6 SIGNS. Except for business identification signs permitted by this Paragraph
4.6, Tenant shall not place or install on or within any portion of the Leased
Premises, the exterior of the Building, the Outside Areas or the Property any
sign, advertisement, banner, placard, or picture which is visible from the
exterior of the Leased Premises. So long as Tenant is the sole tenant of the
Building, Tenant shall the right to business identification signage for the
entire Building, provided that Tenant shall not place or install on or within
any portion of the Leased Premises, the exterior of the Building, the Outside
Areas or the Property any business identification sign until Landlord shall have
approved in writing and in its reasonable discretion the location, size,
content, design, method of attachment and material to be used in the making of
such sign. Any sign, once approved by Landlord, shall be installed in compliance
with all requirements of the City of San ▇▇▇▇ and at Tenant's sole cost and
expense and only in strict compliance with Landlord's approval, using a person
approved by Landlord to install same. Landlord may remove any signs (which have
not been approved in writing by Landlord), advertisements, banners, placards or
pictures so placed by Tenant on or within the Leased Premises, the exterior of
the Building, the Outside
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Areas or the Property and charge to Tenant the cost of such removal, together
with any costs incurred by Landlord to repair any damage caused thereby,
including any cost incurred to restore the surface (upon which such sign was so
affixed) to its original condition. Tenant shall remove all of Tenant's signs,
repair any damage caused thereby, and restore the surface upon which the sign
was affixed to its original condition, all to Landlord's reasonable
satisfaction, upon the termination of this Lease. Tenant shall, in addition to
the signage rights granted above, have the nonexclusive right to have its name
displayed on a monument sign located in front of the Building and an illuminated
business identification sign on the exterior of the Building (the "Monument
Signs"). Tenant's right to maintain its name on the Monument Signs shall be
subject to the following requirements: (a) all expenses in connection with the
construction, installation, and maintenance of Tenant's Monument Signs shall be
paid by Tenant; (b) the design, size, location, materials, colors, and lighting
of the Monument Signs shall be approved, in advance and in writing, by Landlord
where such approval shall not be unreasonably withheld provided that Tenant's
Monument Signs are (1) consistent with Landlord's signage program as determined
by Landlord in its sole discretion and (2) does not unreasonably interfere with
the rights of other tenants of the Building; (c) Tenant must obtain all
applicable permits and authorizations by all necessary governmental authorities
before beginning to install the Monument Signs (Landlord agrees to cooperate
with Tenant's efforts to obtain approval from the City of San ▇▇▇▇ for the
installation of the Monument Signs); (d) Tenant pays to Landlord, from time to
time and within ten (10) days after receipt of written demand, all expenses
incurred by Landlord attributable to the insurance, lighting (if applicable),
maintenance, and repair of the Monument Signs during the period of time that
Tenant's name is on the Monument Signs and (e) on the termination or earlier
expiration of the Lease Term, Tenant shall, at its sole cost and expense, remove
the Monument Signs, repair any damage caused by the removal of the Monument Sign
and restore the land or exterior of the Building where the Monument Signs were
located to the condition that existed before the installation of the Monument
Signs. Tenant's monument signage rights under this Paragraph 4.6 may not be
assigned to any assignee of this Lease or to any subtenant.
4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS. Tenant shall abide by and
shall promptly observe and comply with, at its sole cost and expense, all Laws
and Private Restrictions respecting the use and occupancy of the Leased
Premises, the Building, the Outside Areas or the Property including, without
limitation, all Laws governing the use and/or disposal of hazardous materials,
and shall defend with competent counsel, indemnify and hold Landlord harmless
from any claims, damages or liability resulting from Tenant's failure to so
abide, observe, or comply. Tenant's obligations hereunder shall survive the
expiration or sooner termination of this Lease.
4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS. With respect to any insurance
policies required or permitted to be carried by Landlord in accordance with the
provisions of this Lease, Tenant shall not conduct nor permit any other person
to conduct any activities nor keep, store or use (or allow any other person to
keep, store or use) any item or thing within the Leased Premises, the Building,
the Outside Areas or the Property which (i) is prohibited under the terms of any
such policies, (ii) could result in the termination of the coverage afforded
under any of such policies, (iii) could give to the insurance carrier the right
to cancel any of such policies, or (iv) could cause an increase in the rates
(over standard rates) charged for the coverage afforded under any of such
policies. Tenant shall comply with all requirements of any insurance company,
insurance underwriter, or Board of Fire Underwriters which are necessary to
maintain, at standard rates, the insurance coverages carried by either Landlord
or Tenant pursuant to this Lease.
4.9 LANDLORD'S RIGHT TO ENTER. Landlord and its agents shall have the right to
enter the Leased Premises during normal business hours after giving Tenant
reasonable notice and subject to Tenant's reasonable security measures for the
purpose of (i) inspecting the same; (ii) showing the Leased Premises to
prospective purchasers, mortgagees or tenants; (iii) making necessary
alterations, additions or repairs; and (iv) performing any of Tenant's
obligations when Tenant has failed to do so. Landlord shall have the right to
enter the Leased premises during normal business hours (or as otherwise agreed),
subject to Tenant's reasonable security measures, for purposes of supplying any
maintenance or services agreed to be supplied by Landlord. Landlord shall have
the right to enter the Outside Areas during normal business hours for purposes
of (i) inspecting the exterior of the Building and the Outside Areas; (ii)
posting notices of nonresponsibility (and for such purposes Tenant shall provide
Landlord at least thirty days' prior written notice of any work to be performed
on the Leased Premises); and (iii) supplying any services to be provided by
Landlord. Any entry into the Leased Premises or the Outside Areas obtained by
Landlord in accordance with this paragraph shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into, or a detainer of,
the Leased Premises, or an eviction, actual or constructive of Tenant from the
Leased Premises or any portion thereof.
4.10 USE OF OUTSIDE AREAS. Tenant, in its use of the Outside Areas, shall at all
times keep the Outside Areas in a safe condition free and clear of all
materials, equipment, debris, trash (except within existing enclosed trash
areas), inoperable vehicles, and other items which are not specifically
permitted by Landlord to be stored or located thereon by Tenant. If, in the
opinion of Landlord, unauthorized persons are using any of the Outside Areas by
reason of, or under claim of, the express or implied authority or consent of
Tenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest
extent then allowed by Law, such unauthorized use, and shall initiate such
appropriate proceedings as may be required to so restrain such use. Landlord
reserves the right to grant easements and access rights to others for use of the
Outside Areas provided that such easements and access rights do not
substantially diminish Tenant's rights to use the Outside Areas.
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4.11 ENVIRONMENTAL PROTECTION. Tenant's obligations under this Section 4.11
shall survive the expiration or termination of this Lease.
(a) As used herein, the term "Hazardous Materials" shall mean any
toxic or hazardous substance, material or waste or any pollutant or
infectious or radioactive material, including but not limited to those
substances, materials or wastes regulated now or in the future under any of
the following statutes or regulations and any and all of those substances
included within the definitions of "hazardous substances," "hazardous
materials," "hazardous waste," "hazardous chemical substance or mixture,"
"imminently hazardous chemical substance or mixture," "toxic substances,"
"hazardous air pollutant," "toxic pollutant," or "solid waste" in the (a)
Comprehensive Environmental Response, Compensation and Liability Act of 1990
("CERCLA" or "Superfund"), as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), 42 U.S.C. Section 9601 ET SEQ., (b)
Resource Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. Section
6901 ET SEQ., (c) Federal Water Pollution Control Act ("FSPCA"), 33 U.S.C.
Section 1251 ET SEQ., (d) Clean Air Act ("CAA"), 42 U.S.C. Section 7401 ET
SEQ., (e) Toxic Substances Control Act ("TSCA"), 14 U.S.C. Section 2601 ET
SEQ., (f) Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, ET
SEQ., (g) ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substance Account Act
("California Superfund"), Cal. Health & Safety Code Section 25300 ET SEQ.,
(h) California Hazardous Waste Control Act, Cal. Health & Safety code Section
25100 ET SEQ., (i) ▇▇▇▇▇▇-Cologne Water Quality Control Act ("▇▇▇▇▇▇-Cologne
Act"), Cal. Water Code Section 13000 ET SEQ., (j) Hazardous Waste Disposal
Land Use Law, Cal. Health & Safety codes Section 25220 ET SEQ., (k) Safe
Drinking Water and Toxic Enforcement Act of 1986 ("Proposition 65"), Cal.
Health & Safety code Section 25249.5 ET SEQ., (l) Hazardous Substances
Underground Storage Tank Law, Cal. Health & Safety code Section 25280 ET
SEQ., (m) Air Resources Law, Cal. Health & Safety Code Section 39000 ET SEQ.,
and (n) regulations promulgated pursuant to said laws or any replacement
thereof, or as similar terms are defined in the federal, state and local
laws, statutes, regulations, orders or rules. Hazardous Materials shall also
mean any and all other biohazardous wastes and substances, materials and
wastes which are, or in the future become, regulated under applicable Laws
for the protection of health or the environment, or which are classified as
hazardous or toxic substances, materials or wastes, pollutants or
contaminants, as defined, listed or regulated by any federal, state or local
law, regulation or order or by common law decision, including, without
limitation, (i) trichloroethylene, tetrachloroethylene, perchloroethylene and
other chlorinated solvents, (ii) any petroleum products or fractions thereof,
(iii) asbestos, (iv) polychlorinated biphenyls, (v) flammable explosives,
(vi) urea formaldehyde, (vii) radioactive materials and waste, and (viii)
materials and wastes that are harmful to or may threaten human health,
ecology or the environment.
(b) Notwithstanding anything to the contrary in this Lease, Tenant,
at its sole cost, shall comply with all Laws relating to the storage, use and
disposal of Hazardous Materials; PROVIDED, HOWEVER, that Tenant shall not be
responsible for contamination of the Leased Premises by Hazardous Materials
(i) existing as of the date the Leased Premises are delivered to Tenant
unless caused or permitted by Tenant, (ii) that migrate onto the Leased
Premises so long as such migration is not caused or permitted by Tenant, or
(iii) brought, stored, handled or used on the Leased Premises by Landlord or
its agents. Tenant shall not store, use or dispose of any Hazardous Materials
except for those Hazardous Materials listed in a Hazardous Materials
management plan ("HMMP") which Tenant shall deliver to Landlord upon
execution of this Lease and update at least annually with Landlord
("Permitted Materials") which may be used, stored and disposed of provided
(i) such Permitted Materials are used, stored, transported, and disposed of
in strict compliance with applicable laws, (ii) such Permitted Materials
shall be limited to the materials listed on and may be used only in the
quantities specified in the HMMP, and (iii) Tenant shall provide Landlord
with copies of all material safety data sheets and other documentation
required under applicable Laws in connection with Tenant's use of Permitted
Materials as and when such documentation is provided to any regulatory
authority having jurisdiction, in no event shall Tenant cause or permit to be
discharged into the plumbing or sewage system of the Building or onto the
land underlying or adjacent to the Building any Hazardous Materials. Tenant
shall be solely responsible for and shall defend, indemnify, and hold
Landlord and its agents harmless from and against all claims, costs and
liabilities, including attorneys' fees and costs, arising out of or in
connection with Tenant's storage, use and/or disposal of Hazardous Materials.
If the presence of Hazardous Materials on the Leased Premises caused or
permitted by Tenant results in contamination or deterioration of water or
soil, then Tenant shall promptly take any and all action necessary to clean
up such contamination, but the foregoing shall in no event be deemed to
constitute permission by Landlord to allow the presence of such Hazardous
Materials. At any time prior to the expiration of the Lease Term if Tenant
has a reasonable basis to suspect that there has been any release or the
presence of Hazardous Materials in the ground or ground water on the Leased
Premises which did not exist upon commencement of the Lease Term, Tenant
shall have the right to conduct appropriate tests of water and soil and to
deliver to Landlord the results of such tests to demonstrate that no
contamination in excess of permitted levels has occurred as a result of
Tenant's use of the Leased Premises. Tenant shall further be solely
responsible for, and shall defend, indemnify, and hold Landlord and its
agents harmless from and against all claims, costs and liabilities, including
attorneys' fees and costs, arising out of or in connection with any removal,
cleanup and restoration work and materials required hereunder to return the
Leased Premises and any other property of whatever nature to their condition
existing prior to the appearance of the Hazardous Materials (other than any
Hazardous Materials (i) existing as of the date the Leased Premises are
delivered to Tenant unless caused or permitted by Tenant, (ii) that migrate
onto the Leased Premises so long as such migration is not caused or permitted
by Tenant, or (iii) brought, stored, handled or used on the Leased Premises
by Landlord or its agents). Upon receipt of Tenant's written request,
Landlord shall, within thirty (30) days, provide copies of any hazardous
material audit reports regarding to Property (the "Audit Reports"), to the
extent they exist, in its possession to Tenant. Tenant agrees that any Audit
Reports provided pursuant to this Paragraph shall remain the property of
Landlord
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and Tenant represents and warrants that it will use commercially reasonable
efforts to maintain the confidentiality of any Audit Reports.
(c) Upon termination or expiration of the Lease, Tenant at its sole
expense shall cause all Hazardous Materials placed in or about the Leased
Premises, the Building and/or the Property by Tenant, its agents,
contractors, or invitees, and all installations (whether interior or
exterior) made by or on behalf of Tenant relating to the storage, use,
disposal or transportation of Hazardous Materials to be removed from the
property and transported for use, storage or disposal in accordance and
compliance with all Laws and other requirements respecting Hazardous
Materials used or permitted to be used by Tenant. Tenant shall apply for and
shall obtain from all appropriate regulatory authorities (including any
applicable fire department or regional water quality control board) all
permits, approvals and clearances necessary for the closure of the Property
and shall take all other actions as may be required to complete the closure
of the Building and the Property. In addition, prior to vacating the Leased
Premises, if in Landlord's reasonable judgment Hazardous Materials have been
used in violation of applicable Laws or have been released into the soil or
groundwater, Tenant shall undertake and submit to Landlord an environmental
site assessment from an environmental consulting company reasonably
acceptable to Landlord which site assessment shall evidence Tenant's
compliance with this Paragraph 4.11.
(d) At any time prior to expiration of the Lease term, subject to
reasonable prior notice (not less than forty-eight (48) hours) and Tenant's
reasonable security requirements and provided such activities do not
unreasonably interfere with the conduct of Tenant's business at the Leased
Premises, Landlord shall have the right to enter in and upon the Property,
Building and Leased Premises in order to conduct appropriate tests of water
and soil to determine whether levels of any Hazardous Materials in excess of
legally permissible levels has occurred as a result of Tenant's use thereof.
Landlord shall furnish copies of all such test results and reports to Tenant
and, at Tenant's option and cost, shall permit split sampling for testing and
analysis by Tenant. Such testing shall be at Tenant's expense if Landlord has
a reasonable basis for suspecting and confirms the presence of Hazardous
Materials in the soil or surface or ground water in, on, under, or about the
Property, the Building or the Leased Premises, which has been caused by or
resulted from the activities of Tenant, its agents, contractors, or invitees.
(e) Landlord may voluntarily cooperate in a reasonable manner with
the efforts of all governmental agencies in reducing actual or potential
environmental damage provided that such cooperation does not materially
decrease Tenant's rights or increase Tenant's obligations under this Lease.
Tenant shall not be entitled to terminate this Lease or to any reduction in
or abatement of rent by reason of such compliance or cooperation. Tenant
agrees at all times to cooperate fully with the requirements of governmental
agencies regulating, or otherwise involved in, the protection of the
environment.
4.12 RULES AND REGULATIONS. In the event Ultratech Stepper, Inc. is no longer
the sole tenant of the Building, Landlord shall have the right from time to time
to establish reasonable rules and regulations and/or amendments or additions
thereto respecting the use of the Leased Premises and the Outside Areas for the
care and orderly management of the Property provided that such rules and
regulations and/or amendment or additions thereto do not materially increase
Tenant's obligations or materially decrease Tenant's rights under this Lease.
Upon delivery to Tenant of a copy of such rules and regulations or any
amendments or additions thereto, Tenant shall comply with such rules and
regulations. A violation by Tenant of any of such rules and regulations shall
constitute a default by Tenant under this Lease. If there is a conflict between
the rules and regulations and any of the provisions of this Lease, the
provisions of this Lease shall prevail. Landlord shall not be responsible or
liable to Tenant for the violation of such rules and regulations by any other
tenant of the Property.
4.13 RESERVATIONS. Landlord reserves the right from time to time to grant,
without the consent or joinder of Tenant, such easements, rights of way and
dedications that Landlord deems necessary, and to cause the recordation of
parcel maps and restrictions, so long as such easements, rights of way and
dedications not unreasonably interfere with the use of the Leased Premises by
Tenant. Tenant agrees to execute any documents reasonably requested by Landlord
to effectuate any such easement rights, dedications, maps or restrictions
provided that such documents do not materially increase Tenant's obligations or
materially decrease Tenant's rights under this Lease.
4.14 ROOF. Notwithstanding any provision of this Lease to the contrary, Landlord
hereby reserves to itself and its designees rights of access, use and occupancy
of the Building roof, and Tenant shall have no right of access, use or occupancy
of the Building roof except as permitted herein and except to the extent
required in order to enable Tenant to perform Tenant's maintenance and repair
obligations pursuant to this Lease. Subject to Tenant's restoration and repair
obligations under Paragraph 2.6, Tenant shall have the right to install up to
five (5) antennae or satellite dishes for its personal use or supplemental HVAC
equipment on the Building roof in an area reasonably designated by Landlord no
larger than 30 feet by 30 feet, subject to Landlord's prior written reasonable
approval of the plans therefor and subject to all applicable Laws (including any
requirements of the City of San ▇▇▇▇). Nothing contained herein shall be deemed
to give Tenant the right to assign or sublet the roof rights granted herein and
Tenant agrees that, in the event Landlord elects to consent to any such
assignment or sublease, Landlord shall be entitled to all rent and other
payments made pursuant thereto.
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4.15 EXTERIOR GENERATOR AND CONDUITS. Subject to Tenant's restoration and repair
obligations under Paragraph 2.6, Tenant shall have the right to install and
maintain, at its sole costs and expense, an exterior generator directly adjacent
to the Building in a location and with screening approved by Landlord and a __"
conduit between the Building and the premises leased by Tenant at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ pursuant to that certain lease between The Equitable
Life Assurance Society of the United States and Tenant dated September 10, 1993,
as amended from time to time and assigned to Landlord on or about January 29,
1997. Notwithstanding anything to the contrary contained herein, Tenant shall
ensure that the installation, maintenance and use of the exterior generator and
conduit will not unreasonably interfere with any other tenants of the Project.
ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
5.1 REPAIR AND MAINTENANCE. Except in the case of damage to or destruction of
the Leased Premises, the Building, the Outside Areas or the Property caused by
an act of God or other peril, in which case the provisions of Article 10 shall
control, the parties shall have the following obligations and responsibilities
with respect to the repair and maintenance of the Leased Premises, the Building,
the Outside Areas, and the Property.
(a) TENANT'S OBLIGATIONS. Except for repairs or replacements that are
necessitated by Landlord or for which Landlord has received reimbursement in
full, Tenant shall, at all times during the Lease Term and at its sole cost and
expense, regularly clean and continuously keep and maintain in good order,
condition and repair the Leased Premises and every part thereof including,
without limiting the generality of the foregoing, (i) all interior walls, floors
and ceilings, (ii) all windows, doors and skylights, (iii) all electrical
wiring, conduits, connectors and fixtures, (iv) all plumbing, pipes, sinks,
toilets, faucets and drains, (v) all lighting fixtures, bulbs and lamps and all
heating, ventilating and air conditioning equipment, and (vi) all entranceways
to the Leased Premises. Tenant, if requested to do so by Landlord, shall hire,
at Tenant's sole cost and expense, a licensed heating, ventilating and air
conditioning contractor to regularly and periodically (not less frequently than
every three months) inspect and perform required maintenance on the heating,
ventilating and air conditioning equipment and systems serving the Leased
Premises, or alternatively, Landlord may, at its election, contract in its own
name for such regular and periodic inspections of and maintenance on such
heating, ventilating and air conditioning equipment and systems and charge to
Tenant, as Additional Rent, the cost thereof. Tenant, if requested to do so by
Landlord, shall hire, at Tenant's sole cost and expense, a licensed roofing
contractor to regularly and periodically (not less frequently than every three
months) inspect and perform required maintenance of the roof membrane of the
Leased Premises, or alternatively, Landlord may, at its election, contract in
its own name for such regular and periodic inspections and maintenance of the
roof membrane and charge to Tenant, as Additional Rent, the cost thereof. Tenant
shall, at all times during the Lease Term, keep in a clean and safe condition
the Outside Areas. Tenant shall regularly and periodically sweep and clean the
driveways and parking areas. Tenant shall, at its sole cost and expense, repair
all damage to the Leased Premises, the Building, the Outside Areas or the
Property caused by the activities of Tenant, its employees, invitees or
contractors promptly following written notice from Landlord to so repair such
damages. If Tenant shall fail to perform the required maintenance or fail to
make repairs required of it pursuant to this paragraph within a reasonable
period of time following notice from Landlord to do so, then Landlord may, at
its election and without waiving any other remedy it may otherwise have under
this Lease or at law, perform such maintenance or make such repairs and charge
to Tenant, as Additional Rent, the costs so incurred by Landlord for same. All
glass within or a part of the Leased Premises, both interior and exterior, is at
the sole risk of Tenant and any broken glass shall promptly be replaced by
Tenant at Tenant's expense with glass of the same kind, size and quality.
Landlord shall assign all warranties and service contracts applicable to the
Leased Premises and not applicable other property owned by Landlord, to the
extent allowed by such warranties and service contracts.
(b) LANDLORD'S OBLIGATION. Landlord shall, at its sole cost and
expense, at all times during the Lease Term, maintain and repair the foundation,
the roof structure and the load-bearing and exterior walls of the Building
(excluding exterior painting). Landlord shall repair and maintain the roof
membrane of the Building as needed and charge to Tenant, as part of Property
Maintenance Costs, the costs incurred by Landlord in performing such maintenance
and/or making such repairs.
5.2 UTILITIES. Tenant shall arrange at its sole cost and expense and in its own
name, for the supply of gas and electricity to the Leased Premises. In the event
that such services are not separately metered, Tenant shall, at its sole
expense, cause such meters to be installed. Landlord shall maintain the water
meter(s) in its own name; provided, however, that if at any time during the
Lease Term Landlord shall require Tenant to put the water service in Tenant's
name, Tenant shall do so at Tenant's sole cost. Tenant shall be responsible for
determining if the local supplier of water, gas and electricity can supply the
needs of Tenant and whether or not the existing water, gas and electrical
distribution systems within the Building and the Leased Premises are adequate
for Tenant's needs. Tenant shall be responsible for determining if the existing
sanitary and storm sewer systems now servicing the Leased Premises and the
Property are adequate for Tenant's needs. Tenant shall pay
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all charges for water, gas, electricity and storm and sanitary sewer services as
so supplied to the Leased Premises, irrespective of whether or not the services
are maintained in Landlord's or Tenant's name.
5.3 SECURITY. Tenant acknowledges that Landlord has not undertaken any duty
whatsoever to provide security for the Leased Premises, the Building, the
Outside Areas or the Property and, accordingly, Landlord is not responsible for
the security of same or the protection of Tenant's property or Tenant's
employees, invitees or contractors. To the extent Tenant determines that such
security or protection services are advisable or necessary, Tenant shall arrange
for and pay the costs of providing same.
5.4 ENERGY AND RESOURCE CONSUMPTION. Landlord may voluntarily cooperate in a
reasonable manner with the efforts of governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the Property
provided that such cooperation does not materially decrease Tenant's rights or
materially increase Tenant's costs hereunder. Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason of
such compliance or cooperation. Tenant agrees at all times to cooperate fully
with Landlord and to abide by all reasonable rules established by Landlord (i)
in order to maximize the efficient operation of the electrical, heating,
ventilating and air conditioning systems and all other energy or other resource
consumption systems with the Property and/or (ii) in order to comply with the
requirements of utility suppliers and governmental agencies regulating the
consumption of energy and/or other resources.
5.5 LIMITATION OF LANDLORD'S LIABILITY. Landlord shall not be liable to Tenant
for injury to Tenant, its employees, agents, invitees or contractors, damage to
Tenant's property or loss of Tenant's business or profits, nor shall Tenant be
entitled to terminate this Lease or to any reduction in or abatement of rent by
reason of (i) Landlord's failure to provide security services or systems within
the Property for the protection of the Leased Premises, the Building or the
Outside Areas, or the protection of Tenant's property or Tenant's employees,
invitees, agents or contractors, or (ii) Landlord's failure to perform any
maintenance or repairs to the Leased Premises, the Building, the Outside Areas
or the Property until Tenant shall have first notified Landlord, in writing, of
the need for such maintenance or repairs, and then only after Landlord shall
have had a reasonable period of time following its receipt of such notice within
which to perform such maintenance or repairs, or (iii) any failure,
interruption, rationing or other curtailment in the supply of water, electric
current, gas or other utility service to the Leased Premises, the Building, the
Outside Areas or the Property from whatever cause (other than Landlord's sole
active negligence or willful misconduct), or (iv) the unauthorized intrusion or
entry into the Leased Premises by third parties (other than Landlord).
ARTICLE 6
ALTERATIONS AND IMPROVEMENTS
6.1 BY TENANT. Tenant shall not make any alterations to or modifications of the
Leased Premises or construct any improvements within the Leased Premises until
Landlord shall have first approved, in writing, the plans and specifications
therefor, which approval may be withheld in Landlord's reasonable discretion.
Landlord's approval shall be deemed given if not denied by Landlord in a written
notice to Tenant delivered within five (5) business days following receipt of
Tenant's written request. Tenant's written request shall also contain a request
for Landlord to elect whether or not it will require Tenant to remove the
subject alterations, modifications or improvements at the expiration or earlier
termination of this Lease. If such additional request is not included, Landlord
may make such election at the expiration or earlier termination of this Lease
(and for purposes of Tenant's removal obligations set forth in Section 2.6
above, Landlord shall be deemed to have made the election at the time the
alterations, modifications or improvements were completed). All such
modifications, alterations or improvements, once so approved, shall be made,
constructed or installed by Tenant at Tenant's expense (including all permit
fees and governmental charges related thereto), using a licensed contractor
reasonably approved by Landlord, in substantial compliance with the
Landlord-approved plans and specifications therefor. All work undertaken by
Tenant shall be done in accordance with all Laws and in a good and workmanlike
manner using new materials of good quality. Tenant shall not commence the making
of any such modifications or alterations or the construction of any such
improvements until (i) all required governmental approvals and permits shall
have been obtained, (ii) all requirements regarding insurance imposed by this
Lease have been satisfied, (iii) Tenant shall have given Landlord at least five
(5) business days prior written notice of its intention to commence such work so
that Landlord may post and file notices of non-responsibility, and (iv) if
requested by Landlord, Tenant shall have obtained contingent liability and broad
form builder's risk insurance in an amount satisfactory to Landlord in its
reasonable discretion to cover any perils relating to the proposed work not
covered by insurance carried by Tenant pursuant to Article 9. In no event shall
Tenant make any modification, alterations or improvements whatsoever to the
Outside Areas or the exterior or structural components of the Building
including, without limitation, any cuts or penetrations in the floor, roof or
exterior walls of the Leased Premises. As used in this Article, the term
"modifications, alterations and/or improvements" shall include, without
limitation, the installation of additional electrical outlets, overhead lighting
fixtures, drains, sinks, partitions, doorways, or the like. Notwithstanding the
foregoing, Tenant, without Landlord's prior written consent, shall be permitted
to make non-structural alterations to the Building, provided that: (a) such
alterations do not exceed $20,000 individually, (b) Tenant shall timely provide
Landlord the notice no less than ten (10) days prior to commencing such
alterations , (c) Tenant shall notify Landlord in writing within thirty (30)
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days of completion of the alteration and deliver to Landlord a set of the plans
and specifications therefor, either "as built" or marked to show construction
changes made, and (d) Tenant shall, upon Landlord's request, remove the
alteration at the termination of the Lease and restore the Leased Premises to
their condition prior to such alteration.
6.2 OWNERSHIP OF IMPROVEMENTS. All modifications, alterations and improvements
made or added to the Leased Premises by Tenant (other than Tenant's inventory,
equipment, movable furniture, wall decorations and trade fixtures) or at
Tenant's sole cost and expense, which shall not include any made within the
Tenant Improvement Allowance, shall be deemed real property and a part of the
Leased Premises, but shall remain the property of Tenant during the Lease and
Tenant shall be entitled to retain all tax benefits arising out of such
modifications, alterations and improvements. Tenant hereby covenants and agrees
not to grant a security interest in any modifications, alterations and
improvements to any party other than Landlord. Any such modifications,
alterations or improvements, once completed, shall not be altered or removed
from the Leased Premises during the Lease Term without Landlord's written
approval first obtained in accordance with the provisions of Paragraph 6.1
above. At the expiration or sooner termination of this Lease, all such
modifications, alterations and improvements other than Tenant's inventory,
equipment, movable furniture, wall decorations and trade fixtures, shall
automatically become the property of Landlord and shall be surrendered to
Landlord as part of the Leased Premises as required pursuant to Article 2,
unless Landlord shall require Tenant to remove any of such modifications,
alterations or improvements in accordance with the provisions of Article 2, in
which case Tenant shall so remove same. Landlord shall have no obligations to
reimburse Tenant for all or any portion of the cost or value of any such
modifications, alterations or improvements so surrendered to Landlord. All
modifications, alterations or improvements which are installed or constructed on
or attached to the Leased Premises by Landlord and/or at Landlord's expense
shall be deemed real property and a part of the Leased Premises and shall be
property of Landlord. All lighting, plumbing, electrical, heating, ventilating
and air conditioning fixtures, partitioning, window coverings, wall coverings
and floor coverings installed by Tenant shall be deemed improvements to the
Leased Premises and not trade fixtures of Tenant. Notwithstanding anything to
the contrary contained herein, all modifications, alterations and improvements
made prior to the Lease Commencement Date and at Landlord's expense, including
those made with the Tenant Improvement Allowance, shall be the property of
Landlord.
6.3 ALTERATIONS REQUIRED BY LAW. Tenant shall make all modifications,
alterations and improvements to the Leased Premises, at its sole cost, that are
required by any Law because of (i) Tenant's use or occupancy of the Leased
Premises, the Building, the Outside Areas or the Property, (ii) Tenant's
application for any permit or governmental approval, or (iii) Tenant's making of
any modifications, alterations or improvements to or within the Leased Premises.
If Landlord shall, at any time during the Lease Term, be required by any
governmental authority to make any modifications, alterations or improvements to
the Building or the Property, the cost incurred by Landlord in making such
modifications, alterations or improvements, including interest at a rate equal
to the greater of (a) 12%, or (b) the sum of that rate quoted by ▇▇▇▇▇ Fargo
Bank, N.T. & S.A. from time to time as its prime rate, plus two percent (2%)
("▇▇▇▇▇ Prime Plus Two") (but in no event more than the maximum rate of interest
not prohibited or made usurious), shall be amortized by Landlord over the useful
life of such modifications, alterations or improvements, as determined in
accordance with generally accepted accounting principles, and the monthly
amortized cost of such modifications, alterations and improvements as so
amortized shall be considered a Property Maintenance Cost.
6.4 LIENS. Tenant shall keep the Property and every part thereof free from any
lien, and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors relating to the Property. If any such claim of lien is recorded
against Tenant's interest in this Lease, the Property or any part thereof,
Tenant shall bond against, discharge or otherwise cause such lien to be entirely
released within ten (10) days after the same has been recorded. Tenant's failure
to do so shall be conclusively deemed a material default under the terms of this
Lease.
ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT
7.1 BY TENANT. Tenant shall not sublet the Leased Premises or any portion
thereof or assign its interest in this Lease, whether voluntarily or by
operation of Law, without Landlord's prior written consent which shall not be
unreasonably withheld. Any attempted subletting or assignment without Landlord's
prior written consent, at Landlord's election, shall constitute a default by
Tenant under the terms of this Lease. The acceptance of rent by Landlord from
any person or entity other than Tenant, or the acceptance of rent by Landlord
from Tenant with knowledge of a violation of the provisions of this paragraph,
shall not be deemed to be a waiver by Landlord of any provision of this Article
or this Lease or to be a consent to any subletting by Tenant or any assignment
of Tenant's interest in this Lease. Without limiting the circumstances in which
it may be reasonable for Landlord to withhold its consent to an assignment or
subletting, Landlord and Tenant acknowledge that it shall be reasonable for
Landlord to withhold its consent in the following instances:
(a) the proposed assignee or sublessee is a governmental agency;
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(b) in Landlord's reasonable judgment, the use of the Leased Premises
by the proposed assignee or sublessee would involve occupancy by other than for
a Permitted Use (unless such use is permitted in other buildings of the
Project), would entail any alterations which would lessen the value of the
leasehold improvements in the Leased Premises, or would require increased
services by Landlord;
(c) the proposed assignee or sublessee (or any of its affiliates) has
been in material default under a lease, has been in litigation with a previous
landlord, or in the ten years prior to the assignment or sublease has filed for
bankruptcy protection, has been the subject of an involuntary bankruptcy, or has
been adjudged insolvent;
(d) Landlord has experienced a previous uncured default by or is in
litigation with the proposed assignee or sublessee;
(e) in Landlord's reasonable judgment, the Leased Premises, or the
relevant part thereof, will be used in a manner that will violate any negative
covenant as to use contained in this Lease;
(f) the use of the Leased Premises by the proposed assignee or
sublessee will violate any applicable law, ordinance or regulation;
(g) the proposed assignee or sublessee is, as of the date of this
Lease, a tenant in the Building;
(h) the proposed assignment or sublease fails to include all of the
terms and provisions required to be included therein pursuant to this Article 7;
or
(i) Tenant is in default of any obligation of Tenant under this Lease
(beyond any applicable notice and cure periods), or Tenant has defaulted under
this Lease on three or more occasions during the twelve (12) months preceding
the date that Tenant shall request consent.
7.2 MERGER, REORGANIZATION, OR SALE OF ASSETS. Any dissolution, merger,
consolidation or other reorganization of Tenant, or the sale or other transfer
in the aggregate over the Lease Term of a controlling percentage of the capital
stock of Tenant, or the sale or transfer of all or a substantial portion of the
assets of Tenant, shall be deemed a voluntary assignment of Tenant's interest in
this Lease. The phrase "controlling percentage" means the ownership of and the
right to vote stock possessing more than fifty percent of the total combined
voting power of all classes of Tenant's capital stock issued, outstanding and
entitled to vote for the election of directors. If Tenant is a partnership, a
withdrawal or change, voluntary, involuntary or by operation of Law, of any
general partner, or the dissolution of the partnership, shall be deemed a
voluntary assignment of Tenant's interest in this Lease. Upon Landlord's request
from time to time, Tenant shall promptly provide Landlord with a statement
certified by the Tenant's chief financial officer, which shall provide the
following information: (a) the names of all of Tenant's shareholders and their
ownership interests at the time thereof, provided Tenant's shares are not
publicly traded; (b) the state in which Tenant is incorporated; (c) the location
of Tenant's principal place of business; (d) information regarding a material
change in the corporate structure of Tenant, including, without limitation, a
merger or consolidation; and (e) any other information regarding Tenant's
ownership that Landlord reasonably requests. Notwithstanding the foregoing,
Tenant may, without Landlord's prior written consent, sublet the Leased Premises
or assign this Lease to (individually, a "Permitted Assignee," collectively,
"Permitted Assignees"): (i) a subsidiary, affiliate, division, corporation or
joint venture controlling, controlled by or under common control with Tenant; or
(ii) a successor corporation related to Tenant by merger, consolidation,
nonbankruptcy reorganization, or government action.
7.3 LANDLORD'S ELECTION. If Tenant shall desire to assign its interest under the
Lease or to sublet the Leased Premises, Tenant must first notify Landlord, in
writing, of its intent to so assign or sublet, at least fifteen (15) days in
advance of the date it intends to so assign its interest in this Lease or sublet
the Leased Premises but not sooner than one hundred eighty days in advance of
such date, specifying in detail the terms of such proposed assignment or
subletting, including the name of the proposed assignee or sublessee, the
property assignee's or sublessee's intended use of the Leased Premises, current
financial statements (including a balance sheet, income statement and statement
of cash flow, all prepared in accordance with generally accepted accounting
principles) of such proposed assignee or sublessee, the form of documents to be
used in effectuating such assignment or subletting and such other information as
Landlord may reasonably request. Landlord shall have a period of ten (10)
business days following receipt of such notice and the required information
within which to do one of the following: (i) consent to such requested
assignment or subletting subject to Tenant's compliance with the conditions set
forth in Paragraph 7.4 below, or (ii) refuse to so consent to such requested
assignment or subletting, provided that such consent shall not be unreasonably
refused, or (iii) terminate this Lease as to the portion (including all) of the
Leased Premises that is the subject of the proposed assignment or subletting
(the "Recapture Right"). Notwithstanding anything to the contrary contained
herein, Landlord shall not exercise its Recapture Right if (i) Tenant proposes
to assign or sublet less than sixty-five percent (65%) of the Leased Premises
for sixty-five percent (65%) or less of the remaining Lease Term or (ii) Tenant
proposes to assign or sublet more than sixty-five percent (65%) of the Leased
Premises for sixty-five percent (65%) or more of the remaining Lease Term
PROVIDED that the full amount of the Letter of Credit be maintained and/or
reinstated by Tenant
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throughout the duration of the proposed assignment or sublease. In the event
Landlord refuses to consent to such requested assignment or subletting and does
not elect to terminate this Lease, then Landlord shall provide Tenant a detailed
written statement indicating its reason(s) for refusing to consent to the
proposed assignment or sublease. During such ten (10) business day period,
Tenant covenants and agrees to supply to Landlord, upon request, all necessary
or relevant information which Landlord may reasonably request respecting such
proposed assignment or subletting and/or the proposed assignee or sublessee. In
the event Tenant fails to provide all such information, Landlord's refusal to
consent to the assignment or sublease on the grounds that it was not supplied
enough information shall be deemed reasonable.
7.4 CONDITIONS TO LANDLORD'S CONSENT. If Landlord elects to consent, or shall
have been ordered to so consent by a court of competent jurisdiction, to such
requested assignment or subletting, such consent shall be expressly conditioned
upon the occurrence of each of the conditions below set forth, and any purported
assignment or subletting made or ordered prior to the full and complete
satisfaction of each of the following conditions shall be void and, at the
election of Landlord, which election may be exercised at any time following such
a purported assignment or subletting but prior to the satisfaction of each of
the stated conditions, shall constitute a material default by Tenant under this
Lease until cured by satisfying in full each such condition by the assignee or
sublessee. The conditions are as follows:
(a) Landlord having approved in form and substance the assignment or
sublease agreement and any ancillary documents, which approval shall not be
unreasonably withheld by Landlord if the requirements of this Article 7 are
otherwise complied with.
(b) Each such sublessee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant which relate to space being subleased unless such
obligations are expressly retained by Tenant.
(c) Tenant shall reimburse to Landlord within thirty (30) days all
reasonable costs and reasonable attorneys' fees incurred by Landlord in
conjunction with the processing and documentation of any such requested
subletting or assignment.
(d) Tenant having delivered to Landlord a complete and fully-executed
duplicate original of such sublease agreement or assignment agreement (as
applicable) and all related agreements.
(e) Tenant having paid to Landlord fifty percent (50%) of all
assignment consideration or excess rentals to be paid to Tenant or to any other
on Tenant's behalf or for Tenant's benefit for such assignment or subletting as
follows, following receipt of Landlord's consent:
(i) If Tenant assigns its interest under this Lease and if all or a
portion of the consideration for such assignment is to be paid by the assignee
at the time of the assignment, that Tenant shall have paid to Landlord and
Landlord shall have received an amount equal to fifty percent (50%) of the
assignment consideration so paid or to be paid (whichever is the greater) at the
time of the assignment by the assignee; or
(ii) If Tenant assigns its interest under this Lease and if Tenant is
to receive all or a portion of the consideration for such assignment in future
installments, Tenant and Tenant's assignee jointly agree to pay to Landlord an
amount equal to fifty percent (50%) of all such future assignment consideration
installments to be paid by such assignee as and when such assignment
consideration is so paid.
(iii) If Tenant subleases the Leased Premises, that Tenant and
Tenant's sublessee jointly agree to pay to Landlord fifty percent (50%) of all
excess rentals to be paid by such sublessee as and when such excess rentals are
so paid.
7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED. For purposes of this
Article, including any amendment to this Article by way of addendum or other
writing, the term "assignment consideration" shall mean all consideration to be
paid by the assignee to Tenant or to any other party on Tenant's behalf or for
Tenant's benefit as consideration for such assignment, after deduction for
reasonable leasing commissions and reasonable legal fees paid by Tenant in
connection with such assignment but without deductions for any other costs or
expenses (including, without limitation, tenant improvements, capital
improvements, building upgrades, permit fees, and other consultants' fees)
incurred by Tenant in connection with such assignment, and the term "excess
rentals" shall mean all consideration to be paid by the sublessee to Tenant or
to any other party on Tenant's behalf or for Tenant's benefit for the sublease
of all or any portion of the Leased Premises in excess of the rent due to
Landlord under the terms of this Lease for the portion so subleased for the same
period, after deduction for reasonable leasing commissions and reasonable legal
fees paid by Tenant in connection with such assignment but without deductions
for any other costs or expenses (including, without limitation, tenant
improvements, capital improvements, building upgrades, permit fees, and other
consultants' fees) incurred by Tenant in connection with such sublease. Tenant
agrees that the portion of any assignment consideration and/or excess rentals
arising from any assignment or subletting by Tenant which is to be paid to
Landlord pursuant to this Article now is and shall then be the property of
Landlord and not the property of Tenant.
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7.6 PAYMENTS. All payments required by this Article to be made to Landlord shall
be made in cash in full as and when they become due. At the time Tenant,
Tenant's assignee or sublessee makes each such payment to Landlord, Tenant or
Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the party making such payment as
true and correct.
7.7 GOOD FAITH. The rights granted to Tenant by this Article are granted in
consideration of Tenant's express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's personal property which may be conveyed or leased generally
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant has breached this covenant, Landlord may
immediately declare Tenant to be in default under the terms of this Lease and
terminate this Lease and/or exercise any other rights and remedies Landlord
would have under the terms of this Lease in the case of a material default by
Tenant under this Lease.
7.8 EFFECT OF LANDLORD'S CONSENT. No subletting or assignment, even with the
consent of Landlord, shall relieve Tenant of its personal and primary obligation
to pay rent and to perform all of the other obligations to be performed by
Tenant hereunder. Consent by Landlord to one or more assignments of Tenant's
interest in this Lease or to one or more sublettings of the Leased Premises
shall not be deemed to be a consent to any subsequent assignment or subletting.
If Landlord shall have been ordered by a court of competent jurisdiction to
consent to a requested assignment or subletting, or such an assignment or
subletting shall have been ordered by a court of competent jurisdiction over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or sublessee) and Landlord until such time as all
conditions set forth in Paragraph 7.4 above have been fully satisfied (to the
extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord.
ARTICLE 8
LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY
8.1 LIMITATION ON LANDLORD'S LIABILITY AND RELEASE. Landlord shall not be liable
to Tenant for, and Tenant hereby releases Landlord and its partners, principals,
members, officers, agents, employees, lenders, attorneys, and consultants from,
any and all liability, whether in contract, tort or on any other basis, for any
injury to or any damage sustained by Tenant, Tenant's agents, employees,
contractors or invitees, any damage to Tenant's property, or any loss to
Tenant's business, loss of Tenant's profits or other financial loss of Tenant
resulting from or attributable to the condition of, the management of, the
repair or maintenance of, the protection of, the supply of services or utilities
to, the damage in or destruction of the Leased Premises, the Building, the
Property or the Outside Areas, including without limitation (i) the failure,
interruption, rationing or other curtailment or cessation in the supply of
electricity, water, gas or other utility service to the Property, the Building
or the Leased Premises; (ii) the vandalism or forcible entry into the Building
or the Leased Premises; (iii) the penetration of water into or onto any portion
of the Leased Premises; (iv) the failure to provide security and/or adequate
lighting in or about the Property, the Building or the Leased Premises, (v) the
existence of any design or construction defects within the Property, the
Building or the Leased Premises; (vi) the failure of any mechanical systems to
function properly (such as the HVAC systems); (vii) the blockage of access to
any portion of the Property, the Building or the Leased Premises, except that
Tenant does not so release Landlord from such liability to the extent such
damage was proximately caused by Landlord's gross negligence, willful
misconduct, or Landlord's failure to perform an obligation expressly undertaken
pursuant to this Lease after a reasonable period of time shall have lapsed
following receipt of written notice from Tenant to so perform such obligation.
In this regard, Tenant acknowledges that it is fully apprised of the provisions
of Law relating to releases, and particularly to those provisions contained in
Section 1542 of the California Civil Code which reads as follows:
"A general release does not extend to claims which
the creditor does not know or suspect to exist in his
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor."
Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory provision and (ii) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
paragraph is a full and complete settlement and release and discharge of all
claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.
8.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall defend with competent
counsel reasonably satisfactory to Landlord any claims made or legal actions
filed or threatened against Landlord with respect to the violation of any Law,
or the death, bodily injury, personal injury, property damage, or interference
with contractual or property rights suffered by any third party occurring within
the Leased Premises or resulting from Tenant's use or occupancy of the Leased
Premises, the Building or the Outside Areas, or resulting from Tenant's
activities in or about the Leased Premises, the
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Building, the Outside Areas or the Property, and Tenant shall indemnify and hold
Landlord, Landlord's partners, principals, members, employees, agents and
contractors harmless from any loss liability, penalties, or expense whatsoever
(including any loss attributable to vacant space which otherwise would have been
leased, but for such activities) resulting therefrom, except to the extent
proximately caused by the active negligence or willful misconduct of Landlord.
This indemnity agreement shall survive the expiration or sooner termination of
this Lease.
ARTICLE 9
INSURANCE
9.1 TENANT'S INSURANCE. Tenant shall maintain insurance complying with all of
the following:
(a) Tenant shall procure, pay for and keep in full force and effect, at
all times during the Lease Term, the following:
(i) Commercial general liability insurance insuring Tenant against
liability for personal injury, bodily injury, death and damage to property
occurring within the Leased Premises, or resulting from Tenant's use or
occupancy of the Leased Premises, the Building, the Outside Areas or the
Property, or resulting from Tenant's activities in or about the Leased Premises
or the Property, with coverage in an amount equal to Tenant's Required Liability
Coverage (as set forth in Article 1), which insurance shall contain "blanket
contractual liability" and "broad form property damage" endorsements insuring
Tenant's performance of Tenant's obligations to indemnify Landlord as contained
in this Lease.
(ii) Fire and property damage insurance in so-called "fire and
extended coverage" form insuring Tenant against loss from physical damage to
Tenant's personal property, inventory, trade fixtures and improvements within
the Leased Premises with coverage for the full actual replacement cost thereof;
(iii) Business income/extra expense insurance sufficient to pay Base
Monthly Rent and Additional Rent for a period of not less than twelve (12)
months;
(iv) Plate glass insurance, at actual replacement cost;
(v) Boiler and machinery insurance, to limits sufficient to restore
the Building;
(vi) Workers' compensation insurance (statutory coverage) with
employer's liability in amounts not less than $1,000,000 insurance sufficient to
comply with all laws; and
(vii) With respect to making of any alterations or modifications or
the construction of improvements or the like undertaken by Tenant, course of
construction, commercial general liability, automobile liability and workers'
compensation (to be carried by Tenant's contractor), in an amount and with
coverage reasonably satisfactory to Landlord.
(b) Each policy of liability insurance required to be carried by Tenant
pursuant to this paragraph or actually carried by Tenant with respect to the
Leased Premises or the Property: (i) shall, except with respect to insurance
required by subparagraph (a)(vi) above, name Landlord, and such others as are
designated by Landlord, as additional insureds; (ii) shall be primary insurance
providing that the insurer shall be liable for the full amount of the loss, up
to and including the total amount of liability set forth in the declaration of
coverage, without the right of contribution from or prior payment by any other
insurance coverage of Landlord; (iii) shall be in a form satisfactory to
Landlord; (iv) shall be carried with companies reasonably acceptable to Landlord
with Best's ratings of at least A and XI; (v) shall provide that such policy
shall not be subject to cancellation, lapse or change except after at least
thirty (30) days prior written notice to Landlord, and (vi) shall contain a
so-called "severability" or "cross liability" endorsement. Each policy of
property insurance maintained by Tenant with respect to the Leased Premises or
the Property or any property therein (i) shall provide that such policy shall
not be subject to cancellation, lapse or change except after at least thirty
(30) days prior written notice to Landlord and (ii) shall contain a waiver
and/or a permission to waive by the insurer of any right of subrogation against
Landlord, its partners, principals, members, officers, employees, agents and
contractors, which might arise by reason of any payment under such policy or by
reason of any act or omission of Landlord, its partners, principals, members,
officers, employees, agents and contractors.
(c) Prior to the time Tenant or any of its contractors enters the
Leased Premises, Tenant shall deliver to Landlord, with respect to each policy
of insurance required to be carried by Tenant pursuant to this Article, a
certificate of the insurer certifying in form satisfactory to Landlord that a
policy has been issued, premium paid, providing the coverage required by this
Paragraph and containing the provisions specified herein. With respect to each
renewal or replacement of any such insurance, the requirements of this Paragraph
must be complied with not less than thirty days prior to the expiration or
cancellation of the policies being renewed or replaced. Landlord may, at any
time and from time to time, inspect and/or copy
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any and all insurance policies required to be carried by Tenant pursuant to this
Article. If Landlord's Lender, insurance broker, advisor or counsel reasonably
determines at any time that the amount of coverage set forth in Paragraph 9.1(a)
for any policy of insurance Tenant is required to carry pursuant to this Article
is not adequate, then Tenant shall increase the amount of coverage for such
insurance to such greater amount as Landlord's Lender, insurance broker, advisor
or counsel reasonably deems adequate.
9.2 LANDLORD'S INSURANCE. With respect to insurance maintained by Landlord:
(a) Landlord shall maintain, as the minimum coverage required of it by this
Lease, fire and property damage insurance in so-called "fire and extended
coverage" form insuring Landlord (and such others as Landlord may designate)
against loss from physical damage to the Building with coverage of not less than
one hundred percent (100%) of the full actual replacement cost thereof and
against loss of rents for a period of not less than six months. Such fire and
property damage insurance, at Landlord's election but without any requirements
on Landlord's behalf to do so, (i) may be written in so-called "all risk" form,
excluding only those perils commonly excluded from such coverage by Landlord's
then property damage insurer; (ii) may provide coverage for physical damage to
the improvements so insured for up to the entire full actual replacement cost
thereof; (iii) may be endorsed to cover loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; and/or (iv) may provide coverage for loss of rents for a period of up to
twelve months. Landlord shall not be required to cause such insurance to cover
any of Tenant's personal property, inventory, and trade fixtures, or any
modifications, alterations or improvements made or constructed by Tenant to or
within the Leased Premises. Landlord shall use commercially reasonable efforts
to obtain such insurance at competitive rates.
(b) Landlord shall maintain commercial general liability insurance
insuring Landlord (and such others as are designated by Landlord) against
liability for personal injury, bodily injury, death, and damage to property
occurring in, on or about, or resulting from the use or occupancy of the
Property, or any portion thereof, with combined single limit coverage of at
least Five Million Dollars ($5,000,000). Landlord may carry such greater
coverage as Landlord or Landlord's Lender, insurance broker, advisor or counsel
may from time to time determine is reasonably necessary for the adequate
protection of Landlord and the Property.
(c) Landlord may maintain any other insurance which in the opinion of
its insurance broker, advisor or legal counsel is prudent in carry under the
given circumstances, provided such insurance is commonly carried by owners of
property similarly situated and operating under similar circumstances.
9.3 MUTUAL WAIVER OF SUBROGATION. Landlord hereby releases Tenant, and Tenant
hereby releases Landlord and its respective partners, principals, members,
officers, agents, employees and servants, from any and all liability for loss,
damage or injury to the property of the other in or about the Leased Premises or
the Property which is caused by or results from a peril or event or happening
which is covered by insurance actually carried and in force at the time of the
loss by the party sustaining such loss; PROVIDED, HOWEVER, that such waiver
shall be effective only to the extent permitted by the insurance covering such
loss and to the extent such insurance is not prejudiced thereby. Landlord shall
use commercially reasonable efforts to obtain such waiver provided such waiver
is available from an insurance carrier comparable to Landlord's current carrier
and offers comparable coverage, and provided Tenant pays any additional cost to
obtain such coverage.
ARTICLE 10
DAMAGE TO LEASED PREMISES
10.1 LANDLORD'S DUTY TO RESTORE. If the Leased Premises, the Building or the
Outside Area are damaged by any peril after the Effective Date of this Lease,
Landlord shall restore the same, as and when required by this paragraph, unless
this Lease is terminated by Landlord pursuant to Paragraph 10.3 or by Tenant
pursuant to Paragraph 10.4. If this Lease is not so terminated, then upon the
issuance of all necessary governmental permits, Landlord shall commence and
diligently prosecute to completion the restoration of the Leased Premises, the
Building or the Outside Area, as the case may be, to the extent then allowed by
law, to substantially the same condition in which it existed as of the Lease
Commencement Date. Landlord's obligation to restore shall be limited to the
improvements constructed by Landlord. Landlord shall have no obligation to
restore any alterations, modifications or improvements made by Tenant to the
Leased Premises or any of Tenant's personal property, inventory or trade
fixtures. Upon completion of the restoration by Landlord, Tenant shall forthwith
replace or fully repair all of Tenant's personal property, inventory, trade
fixtures and other improvements constructed by Tenant to like or similar
conditions as existed at the time immediately prior to such damage or
destruction.
10.2 INSURANCE PROCEEDS. All insurance proceeds available from the fire and
property damage insurance carried by Landlord shall be paid to and become the
property of Landlord. If this Lease is terminated pursuant to either Paragraph
10.3 or 10.4, all insurance proceeds available from insurance carried by Tenant
which cover loss of property that is Landlord's property or would become
Landlord's property on termination of this Lease shall be paid to and become the
property of
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Landlord, and the remainder of such proceeds (including proceeds for any
alterations Landlord has required Tenant to remove at the end of the Lease Term)
shall be paid to and become the property of Tenant. If this Lease is not
terminated pursuant to either Paragraph 10.3 or 10.4, all insurance proceeds
available from insurance carried by Tenant which cover loss to property that is
Landlord's property shall be paid to and become the property of Landlord, and
all proceeds available from such insurance which cover loss to property which
would only become the property of Landlord upon the termination of this Lease
shall be paid to and remain the property of Tenant. The determination of
Landlord's property and Tenant's property shall be made pursuant to Paragraph
6.2.
10.3 LANDLORD'S RIGHT TO TERMINATE. Landlord shall have the option to terminate
this Lease in the event any of the following occurs, which option may be
exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:
(a) The Building is damaged by any peril covered by valid and
collectible insurance actually carried by Landlord and in force at the time of
such damage or destruction (an "insured peril") to such an extent that the
estimated cost to restore the Building exceeds the lesser of (i) the insurance
proceeds available from insurance actually carried by Landlord, or (ii) fifty
percent of the then actual replacement cost thereof;
(b) The Building is damaged by an uninsured peril, which peril Landlord
was not required to insure against pursuant to the provisions of Article 9 of
this Lease and for which Landlord does not in fact maintain insurance.
(c) The Building is damaged by any peril and, because of the laws then
in force, the Building (i) cannot be restored at reasonable cost or (ii) if
restored, cannot be used for the same use being made thereof before such damage.
10.4 TENANT'S RIGHT TO TERMINATE. If the Leased Premises, the Building or the
Outside Area are damaged by any peril and Landlord does not elect to terminate
this Lease or is not entitled to terminate this Lease pursuant to this Article,
then as soon as reasonably practicable, Landlord shall furnish Tenant with the
written opinion of Landlord's architect or construction consultant as to when
the restoration work required of Landlord may be complete. Tenant shall have the
option to terminate this Lease in the event any of the following occurs, which
option may be exercised only by delivery to Landlord of a written notice of
election to terminate within thirty (30) days after Tenant receives from
Landlord the estimate of the time needed to complete such restoration:
(a) If the time estimated to substantially complete the restoration
exceeds nine (9) months from and after the date the architect's or construction
consultant's written opinion is delivered; or
(b) If the damage occurred within twelve months of the last day of the
Lease Term and the time estimated to substantially complete the restoration
exceeds one hundred eighty (180) days from and after the date the damage or
destruction occurred.
10.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of Paragraph
10.4 above, captioned "Tenant's Right To Terminate", are intended to supersede
and replace the provisions contained in California Civil Code, Section 1932,
Subdivision 2, and California Civil Code, Section 1934, and accordingly, Tenant
hereby waives the provisions of such Civil Code Sections and the provisions of
any successor Civil Code Sections or similar laws hereinafter enacted.
10.6 ABATEMENT OF RENT. In the event of damage to the Leased Premises which does
not result in the termination of this Lease, the Base Monthly Rent (and any
Additional Rent) shall be temporarily abated during the period of restoration in
proportion in the degree to which Tenant's use of the Leased Premises is
impaired by such damage.
ARTICLE 11
CONDEMNATION
11.1 TENANT'S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph 11.4
below regarding temporary takings, Tenant shall have the option to terminate
this Lease if, as a result of any taking, (i) all of the Leased Premises is
taken, or (ii) twenty-five percent (25%) or more of the Leased Premises is taken
and the part of the Leased Premises that remains cannot, within a reasonable
period of time, be made reasonably suitable for the continued operation of
Tenant's business. Tenant must exercise such option within a reasonable period
of time, to be effective on the later to occur of (i) the date that possession
of that portion of the Leased Premises that is condemned is taken by the
condemnor or (ii) the date Tenant vacated the Leased Premises.
11.2 LANDLORD'S RIGHT TO TERMINATE. Except as otherwise provided in Paragraph
11.4 below regarding temporary takings, Landlord shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, (ii) twenty-five percent (25%) or more of the Leased Premises
is taken and the part of the Leased Premises that remains
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cannot, within a reasonable period of time, be made reasonably suitable for the
continued operation of Tenant's business, or (iii) because of the laws then in
force, the Leased Premises may not be used for the same use being made before
such taking, whether or not restored as required by Paragraph 11.3 below. Any
such option to terminate by Landlord must be exercised within a reasonable
period of time, to be effective as of the date possession is taken by the
condemnor.
11.3 RESTORATION. If any part of the Leased Premises or the Building is taken
and this Lease is not terminated, then Landlord shall, to the extent not
prohibited by laws then in force, repair any damage occasioned thereby to the
remainder thereof to a condition reasonably suitable for Tenant's continued
operations and otherwise, to the extent practicable, in the manner and to the
extent provided in Paragraph 10.1.
11.4 TEMPORARY TAKING. If a portion of the Leased Premises is temporarily taken
for a period of nine (9) months or less and such period does not extend beyond
the Lease Expiration Date, this Lease shall remain in effect. If any portion of
the Leased Premises is temporarily taken for a period which exceeds one year or
which extends beyond the Lease Expiration Date, then the rights of Landlord and
Tenant shall be determined in accordance with Paragraphs 11.1 and 11.2 above.
11.5 DIVISION OF CONDEMNATION AWARD. Any award made for any taking of the
Property, the Building, or the Leased Premises, or any portion thereof, shall
belong to and be paid to Landlord, and Tenant hereby assigns to Landlord all of
its right, title and interest in any such award; PROVIDED, HOWEVER, that Tenant
shall be entitled to receive any portion of the award that is made specifically
(i) for the taking of personal property, inventory or trade fixtures belonging
to Tenant, (ii) for the interruption of Tenant's business or its moving costs,
or (iii) for the value of any leasehold improvements installed and paid for by
Tenant. The rights of Landlord and Tenant regarding any condemnation shall be
determined as provided in this Article, and each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure, and
the provisions of any similar law hereinafter enacted, allowing either party to
petition the Supreme Court to terminate this Lease and/or otherwise allocate
condemnation awards between Landlord and Tenant in the event of a taking of the
Leased Premises.
11.6 ABATEMENT OF RENT. In the event of a taking of the Leased Premises which
does not result in a termination of this Lease (other than a temporary taking),
then, as of the date possession is taken by the condemning authority, the Base
Monthly Rent shall be reduced in the same proportion that the area of that part
of the Leased Premises so taken (less any addition to the area of the Leased
Premises by reason of any reconstruction) bears to the area of the Leased
Premises immediately prior to such taking.
11.7 TAKING DEFINED. The term "taking" or "taken" as used in this Article 11
shall mean any transfer or conveyance of all or any portion of the Property to a
public or quasi-public agency or other entity having the power of eminent domain
pursuant to or as a result of the exercise of such power by such an agency,
including any inverse condemnation and/or any sale or transfer by Landlord of
all or any portion of the Property to such an agency under threat of
condemnation or the exercise of such power.
ARTICLE 12
DEFAULT AND REMEDIES
12.1 EVENTS OF TENANT'S DEFAULT. Tenant shall be in default of its obligations
under this Lease if any of the following events occur:
(a) Tenant shall have failed to pay Base Monthly Rent or any Additional
Rent when due; or
(b) Tenant shall have done or permitted to be done any act, use or
thing in its use, occupancy or possession of the Leased Premises or the Building
or the Outside Areas which is prohibited by the terms of this Lease; or
(c) Tenant shall have failed to perform any term, covenant or condition
of this Lease (except those requiring the payment of Base Monthly Rent or
Additional Rent, which failures shall be governed by subparagraph (a) above)
within thirty (30) days after written notice from Landlord to Tenant specifying
the nature of such failure and requesting Tenant to perform same or within such
longer period as is reasonably required in the event such default is curable but
not within such thirty (30) day period, PROVIDED such cure is promptly commenced
within such thirty (30) day period and thereafter is diligently prosecuted to
completion; or
(d) Tenant shall have sublet the Leased Premises or assigned or
encumbered its interest in this Lease in violation of the provisions contained
in Article 7, whether voluntarily or by operation of law; or
(e) Tenant shall have abandoned the Leased Premises; or
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(f) Tenant or any Guarantor of this Lease shall have permitted or
suffered the sequestration or attachment of, or execution on, or the appointment
of a custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such Guarantor) or any property or asset
essential to the conduct of Tenant's (or such Guarantor's) business, and Tenant
(or such Guarantor) shall have failed to obtain a return or release of the same
within sixty (60) days thereafter, or prior to sale pursuant to such
sequestration, attachment or levy, whichever is earlier; or
(g) Tenant or any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or
(h) Tenant or any Guarantor of this Lease shall have allowed (or
sought) to have entered against it a decree or order which: (i) grants or
constitutes an order for relief, appointment of a trustee, or condemnation or a
reorganization plan under the bankruptcy laws of the United States; (ii)
approves as properly filed a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or similar statute
of the United States or any state thereof; or (iii) otherwise directs the
winding up or liquidation of Tenant; provided, however, if any decree or order
was entered without Tenant's consent or over Tenant's objection, Landlord may
not terminate this Lease pursuant to this Subparagraph if such decree or order
is rescinded or reversed within sixty (60) days after its original entry; or
(i) Tenant or any Guarantor of this Lease shall have availed itself of
the protection of any debtor's relief law, moratorium law or other similar law
which does not require the prior entry of a decree or order.
12.2 LANDLORD'S REMEDIES. In the event of any default by Tenant, and without
limiting Landlord's right to indemnification as provided in Article 8.2,
Landlord shall have the following remedies, in addition to all other rights and
remedies provided by law or otherwise provided in this Lease, to which Landlord
may resort cumulatively, or in the alternative:
(a) Landlord may, at Landlord's election, keep this Lease in effect and
enforce, by an action at law or in equity, all of its rights and remedies under
this Lease including, without limitation, (i) the right to recover the rent and
other sums as they become due by appropriate legal action, (ii) the right to
make payments required by Tenant, or perform Tenant's obligations and be
reimbursed by Tenant for the cost thereof with interest at the then maximum rate
of interest not prohibited by law from the date the sum is paid by Landlord
until Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive
relief and specific performance to prevent Tenant from violating the terms of
this Lease and/or to compel Tenant to perform its obligations under this Lease,
as the case may be.
(b) Landlord may, at Landlord's election, terminate this Lease by
giving Tenant written notice of termination, in which event this Lease shall
terminate on the date set forth for termination in such notice, in which event
Tenant shall immediately surrender the Leased Premises to Landlord, and if
Tenant fails to do so, Landlord may, without prejudice to any other remedy which
it may have for possession or arrearages in rent, enter upon and take possession
of the Leased Premises and expel or remove Tenant and any other person who may
be occupying the Leased Premises or any part thereof, without being liable for
prosecution or any claim or damages therefor. Any termination under this
subparagraph shall not relieve Tenant from its obligation to pay to Landlord all
Base Monthly Rent and Additional Rent then or thereafter due, or any other sums
due or thereafter accruing to Landlord, or from any claim against Tenant for
damages previously accrued or then or thereafter accruing. In no event shall any
one or more of the following actions by Landlord, in the absence of a written
election by Landlord to terminate this Lease constitute a termination of this
Lease:
(i) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;
(ii) Consent to any subletting of the Leased Premises or assignment
of this Lease by Tenant, whether pursuant to the provisions hereof or otherwise;
or
(iii) Any action taken by Landlord or its partners, principals,
members, officers, agents, employees, or servants, which is intended to mitigate
the adverse effects of any breach of this Lease by Tenant, including, without
limitation, any action taken to maintain and preserve the Leased Premises on any
action taken to relet the Leased Premises or any portion thereof for the account
at Tenant and in the name of Tenant.
(iv) In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not terminate
unless Landlord gives Tenant written notice of termination. If Landlord does not
terminate this Lease by giving written notice of termination, Landlord may
enforce all its rights and remedies under this Lease, including the right and
remedies provided by California Civil Code Section 1951.4 ("lessor may continue
lease in effect after lessee's breach and abandonment and recover rent as it
becomes due, if lessee has right to sublet or assign, subject only to reasonable
limitations"), as in effect on the Effective Date of this Lease.
(v) In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to the rights and remedies provided in
California Civil Code Section 1951.2, as in effect on the Effective Date of this
Lease. For purposes of
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computing damages pursuant to Section 1951.2, an interest rate equal to the
maximum rate of interest then not prohibited by law shall be used where
permitted. Such damages shall include, without limitation:
(i) The worth at the time of the award of the unpaid rent which had
been earned at the time of termination;
(ii) The worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided, computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco, at the time of award plus one percent; and
(iii) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom, including without limitation, the following: (i) expenses for
cleaning, repairing or restoring the Leased Premises, (ii) expenses for
altering, remodeling or otherwise improving the Leased Premises for the purpose
of reletting, including removal of existing leasehold improvements and/or
installation of additional leasehold improvements (regardless of how the same is
funded, including reduction of rent, a direct payment or allowance to a new
tenant, or otherwise), (iii) broker's fees allocable to the remainder of the
term of this Lease, advertising costs and other expenses of reletting the Leased
Premises; (iv) costs of carrying and maintaining the Leased Premises, such as
taxes, insurance premiums, utility charges and security precautions, (v)
expenses incurred in removing, disposing of and/or storing any of Tenant's
personal property, inventory or trade fixtures remaining therein; (vi)
reasonable attorney's fees, expert witness fees, court costs and other
reasonable expenses incurred by Landlord (but not limited to taxable costs) in
retaking possession of the Leased Premises, establishing damages hereunder, and
releasing the Leased Premises; and (vii) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant's default.
12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES. In the event Landlord fails to
perform its obligations under this Lease, Landlord shall nevertheless not be in
default under the terms of this Lease until such time as Tenant shall have first
given Landlord written notice specifying the nature of such failure to perform
its obligations, and then only after Landlord shall have had thirty (30) days
following its receipt of such notice within which to perform such obligations;
PROVIDED THAT, if longer than thirty (30) days is reasonably required in order
to perform such obligations, Landlord shall have such longer period. In the
event of Landlord's default as above set forth, then, and only then, Tenant may
then proceed in equity or at law to compel Landlord to perform its obligations
and/or to recover damages proximately caused by such failure to perform (except
as and to the extent Tenant has waived its right to damages as provided in this
Lease). Notwithstanding anything to the contrary contained herein, if Tenant
provides notice to Landlord of an event or circumstance regarding the structural
elements of the Building that Tenant reasonably believes constitutes an
emergency and Landlord fails to take action in a commercially reasonable period
of time under the circumstances, Tenant may take the minimally required action
to ▇▇▇▇▇ the emergency. In the event Tenant undertakes such emergency structural
repair work, Tenant shall not be entitled to any abatement or off-set of Rent;
Tenant may then proceed in equity or at law to compel Landlord to perform its
obligations and/or to recover damages proximately caused by such failure to
perform (except as and to the extent Tenant has waived its right to damages as
provided in this Lease).
12.4 LIMITATION OF TENANT'S RECOURSE. If Landlord is a corporation, trust,
partnership, joint venture, limited liability company, unincorporated
association, or other form of business entity, Tenant agrees that (i) the
obligations of Landlord under this Lease shall not constitute personal
obligations of the officers, directors, trustees, partners, joint venturers,
members, owners, stockholders, or other principals of such business entity, and
(ii) Tenant shall have recourse only to the property of such corporation, trust,
partnership, joint venture, limited liability company, unincorporated
association, or other form of business entity for the satisfaction of such
obligations and not against the assets of such officers, directors, trustees,
partners, joint venturers, members, owners, stockholders or principals.
Additionally, if Landlord is a partnership or limited liability company, then
Tenant covenants and agrees:
(a) No partner or member of Landlord shall be sued or named as a party
in any suit or action brought by Tenant with respect to any alleged breach of
this Lease (except to the extent necessary to secure jurisdiction over the
partnership and then only for that sole purpose);
(b) No service of process shall be made against any partner or member
of Landlord except for the sole purpose of securing jurisdiction over the
partnership; and
(c) No writ of execution will ever be levied against the assets of any
partner or member of Landlord other than to the extent of his or her interest in
the assets of the partnership or limited liability company constituting
Landlord.
Tenant further agrees that each of the foregoing covenants and agreements shall
be enforceable by Landlord and by any partner or member of Landlord and shall be
applicable to any actual or alleged misrepresentation or nondisclosure made
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regarding this Lease or the Leased Premises or any actual or alleged failure,
default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statute or at common law.
12.5 TENANT'S WAIVER. Landlord and Tenant agree that the provisions of Paragraph
12.3 above are intended to supersede and replace the provisions of California
Civil Code Sections 1932(1), 1941 and 1942, and accordingly, Tenant hereby
waives the provisions of California Civil Code Sections 1932(1), 1941 and 1942
and/or any similar or successor law regarding Tenant's right to terminate this
Lease or to make repairs and deduct the expenses of such repairs from the rent
due under this Lease.
ARTICLE 13
GENERAL PROVISIONS
13.1 TAXES ON TENANT'S PROPERTY. Tenant shall pay before delinquency any and all
taxes, assessments, license fees, use fees, permit fees and public charges of
whatever nature or description levied, assessed or imposed against Tenant or
Landlord by a governmental agency arising out of, caused by reason of or based
upon Tenant's estate in this Lease, Tenant's ownership of property, improvements
made by Tenant to the Leased Premises or the Outside Areas, improvements made by
Landlord for Tenant's use within the Leased Premises or the Outside Areas,
Tenant's use (or estimated use) of public facilities or services or Tenant's
consumption (or estimated consumption) of public utilities, energy, water or
other resources (collectively, "Tenant's Interest"). Upon demand by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of these payments. If
any such taxes, assessments, fees or public charges are levied against Landlord,
Landlord's property, the Building or the Property, or if the assessed value of
the Building or the Property is increased by the inclusion therein of a value
placed upon Tenant's Interest, regardless of the validity thereof, Landlord
shall have the right to require Tenant to pay such taxes, and if not paid and
satisfactory evidence of payment delivered to Landlord at least five (5) days
prior to delinquency, then Landlord shall have the right to pay such taxes on
Tenant's behalf and to invoice Tenant for the same. Tenant shall, within the
earlier to occur of (a) thirty (30) days of the date it receives an invoice from
Landlord setting forth the amount of such taxes, assessments, fees, or public
charge so levied, or (b) the due date of such invoice, pay to Landlord, as
Additional Rent, the amount set forth in such invoice. Failure by Tenant to pay
the amount so invoiced within such time period shall be conclusively deemed a
default by Tenant under this Lease. Tenant shall have the right to bring suit in
any court of competent jurisdiction to recover from the taxing authority the
amount of any such taxes, assessments, fees or public charges so paid.
13.2 HOLDING OVER. This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased Premises
except as expressly provided in this Paragraph. Any such holding over to which
Landlord has consented shall be construed to be a tenancy from month to month,
on the same terms and conditions herein specified insofar as applicable, except
that the Base Monthly Rent shall be increased to an amount equal to one hundred
fifty percent (150%) of the Base Monthly Rent payable during the last full month
immediately preceding such holding over. Tenant acknowledges that if Tenant
holds over without Landlord's consent, such holding over may compromise or
otherwise affect Landlord's ability to enter into new leases with prospective
tenants regarding the Leased Premises. Therefore, if Tenant fails to surrender
the Leased Premises upon the expiration or termination of this Lease, in
addition to any other liabilities to Landlord accruing therefrom, Tenant shall
protect, defend, indemnify and hold Landlord harmless from and against all
claims resulting from such failure, including, without limiting the foregoing,
any claims made by any succeeding tenant founded upon such failure to surrender,
and any losses suffered by Landlord, including lost profits, resulting from such
failure to surrender.
13.3 SUBORDINATION TO MORTGAGES. This Lease is subject to and subordinate to all
ground leases, mortgages and deeds of trust which affect the Building or the
Property and which are of public record as of the Effective Date of this Lease,
and to all renewals, modifications, consolidations, replacements and extensions
thereof. However, if the lessor under any such ground lease or any lender
holding any such mortgage or deed of trust shall advise Landlord that it desires
or requires this Lease to be made prior and superior thereto, then, upon written
request of Landlord to Tenant, Tenant shall promptly execute, acknowledge and
deliver any and all customary or reasonable documents or instruments which
Landlord and such lessor or lender deems necessary or desirable to make this
Lease prior thereto. Tenant hereby consents to Landlord's ground leasing the
land underlying the Building or the Property and/or encumbering the Building or
the Property as security for future loans on such terms as Landlord shall
desire, all of which future ground leases, mortgages or deeds of trust shall be
subject to and subordinate to this Lease. However, if any lessor under any such
future ground lease or any lender holding such future mortgage or deed of trust
shall desire or require that this Lease be made subject to and subordinate to
such future ground lease, mortgage or deed of trust, then Tenant agrees, within
ten (10) days after Landlord's written request therefor, to execute, acknowledge
and deliver to Landlord any and all documents or instruments requested by
Landlord or by such lessor or lender as may be necessary or proper to assure the
subordination of this Lease to such future ground lease, mortgage or deed of
trust, but only if such lessor or lender agrees to recognize Tenant's rights
under this Lease and agrees not to disturb Tenant's quiet possession of the
Leased Premises so long as Tenant is not in default (beyond any applicable
notice and cure periods) under
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this Lease. If Landlord assigns the Lease as security for a loan, Tenant agrees
to execute such documents as are reasonably requested by the lender and to
provide reasonable provisions in the Lease protecting such lender's security
interest which are customarily required by institutional lenders making loans
secured by a deed of trust. Landlord agrees that a condition precedent to this
Lease shall be obtaining a subordination, non-disturbance agreement and
attornment agreement from the existing lender holding a deed of trust on the
Property prior to Effective Date of the Lease.
13.4 TENANT'S ATTORNMENT UPON FORECLOSURE. Tenant shall, upon request, attorn
(i) to any purchaser of the Building or the Property at any foreclosure sale or
private sale conducted pursuant to any security instruments encumbering the
Building or the Property, (ii) to any grantee or transferee designated in any
deed given in lieu of foreclosure of any security interest encumbering the
Building or the Property, or (iii) to the lessor under an underlying ground
lease of the land underlying the Building or the Property, should such ground
lease be terminated; provided that such purchaser, grantee or lessor recognizes
Tenant's rights under this Lease.
13.5 MORTGAGEE PROTECTION. In the event of any default on the part of Landlord,
Tenant will give notice by registered mail to any Lender or lessor under any
underlying ground lease who shall have requested, in writing, to Tenant that it
be provided with such notice, and Tenant shall offer such Lender or lessor the
same opportunity to cure the default.
13.6 ESTOPPEL CERTIFICATE. Tenant will, following any request by Landlord,
promptly execute and deliver to Landlord an estoppel certificate substantially
in form attached as Exhibit D, (i) certifying that this Lease is unmodified and
in full force and effect, or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect, (ii) stating the date to which the rent and other charges are paid
in advance, if any, (iii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed, and (iv) certifying such other information
about this Lease as may be reasonably requested by Landlord, its Lender or
prospective lenders, investors or purchasers of the Building or the Property.
Tenant's failure to execute and deliver such estoppel certificate within ten
days after Landlord's request therefor shall be a material default by Tenant
under this Lease, and Landlord shall have all of the rights and remedies
available to Landlord as Landlord would otherwise have in the case of any other
material default by Tenant, including the right to terminate this Lease and ▇▇▇
for damages proximately caused thereby, it being agreed and understood by Tenant
that Tenant's failure to so deliver such estoppel certificate in a timely manner
could result in Landlord being unable to perform committed obligations to other
third parties which were made by Landlord in reliance upon this covenant of
Tenant. Landlord and Tenant intend that any statement delivered pursuant to this
paragraph may be relied upon by any Lender or purchaser or prospective Lender or
purchaser of the Building, the Property, or any interest in them.
13.7 TENANT'S FINANCIAL INFORMATION. Tenant shall, within ten (10) business days
after Landlord's request therefor, deliver to Landlord a copy of Tenant's (and
any guarantor's) most current publicly available (so long as Tenant is a
publicly traded on a recognized securities exchange) financial statements
(including a balance sheet, income statement and statement of cash flow, all
prepared in accordance with generally accepted accounting principles) and any
such other information reasonably requested by Landlord regarding Tenant's
financial condition. Landlord shall be entitled to disclose such financial
statements or other information to its Lender, to any present or prospective
principal of or investor in Landlord, or to any prospective Lender or purchaser
of the Building, the Property, or any portion thereof or interest therein. Any
such financial statement or other information which is marked "confidential" or
"company secrets" (or is otherwise similarly marked by Tenant) shall be
confidential and shall not be disclosed by Landlord to any third party except as
specifically provided in this paragraph, unless the same becomes a part of the
public domain without the fault of Landlord.
13.8 TRANSFER BY LANDLORD. Landlord and its successors in interest shall have
the right to transfer their interest in the Building, the Property, or any
portion thereof at any time and to any person or entity. In the event of any
such transfer, the Landlord originally named herein (and in the case of any
subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved, without any further act by any person or entity, of
all liability for the performance of the obligations of the Landlord hereunder
which may accrue after the date of such transfer and (ii) shall be relieved of
all liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer if its transferee agrees to
assume and perform all such prior obligations of the Landlord hereunder. Tenant
shall attorn to any such transferee. After the date of any such transfer, the
term "Landlord" as used herein shall mean the transferee of such interest in the
Building or the Property.
13.9 FORCE MAJEURE. The obligations of each of the parties under this Lease
(other than the obligations to pay money) shall be temporarily excused if such
party is prevented or delayed in performing such obligations by reason of any
strikes, lockouts or labor disputes; government restrictions, regulations,
controls, action or inaction; civil commotion; or extraordinary weather, fire or
other acts of God.
13.10 NOTICES. Any notice required or permitted to be given under this Lease
shall be in writing and (i) personally delivered, (ii) sent by United States
mail, registered or certified mail, postage prepaid, return receipt requested,
(iii) sent by Federal Express or similar nationally recognized overnight courier
service, or (iv) transmitted by facsimile with a hard copy sent
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within one (1) business day by any of the foregoing means, and in all cases
addressed as follows, and such notice shall be deemed to have been given upon
the date of actual receipt or delivery (or refusal to accept delivery) at the
address specified below (or such other addresses as may be specified by notice
in the foregoing manner) as indicated on the return receipt or air ▇▇▇▇:
IF TO LANDLORD: Montague LLC
c/o Menlo Equities LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇/▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: ▇▇▇▇▇▇ Godward LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
IF TO TENANT: Ultratech Stepper, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
with a copy to: ▇▇▇▇ ▇▇▇▇▇
---------------------
ULTRATECH STEPPER
---------------------
3050 ZANKER RD
---------------------
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------------------
Attention:
---------------------
Any notice given in accordance with the foregoing shall be deemed received upon
actual receipt or refusal to accept delivery.
13.11 ATTORNEYS' FEES. In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorneys' fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party.
13.12 DEFINITIONS. Any term that is given a special meaning by any provision in
this Lease shall, unless otherwise specifically stated, have such meaning
wherever used in this Lease or in any Addenda or amendment hereto. In addition
to the terms defined in Article 1, the following terms shall have the following
meanings:
(a) REAL PROPERTY TAXES. The term "Real Property Tax" or "Real Property
Taxes" shall each mean Tenant's Building Expense Share of (i) all taxes,
assessments, levies and other charges of any kind or nature whatsoever, general
and special, foreseen and unforeseen (including all instruments of principal and
interest required to pay any general or special assessments for public
improvements and any increases resulting from reassessments caused by any change
in ownership or new construction), now or hereafter imposed by any governmental
or quasi-governmental authority or special district having the direct or
indirect power to tax or levy assessments, which are levied or assessed for
whatever reason against the Property or any portion thereof, or Landlord's
interest herein, or the fixtures, equipment and other property of Landlord that
is an integral part of the Property and located thereon, or Landlord's business
of owning, leasing or managing the Property or the gross receipts, income or
rentals from the Property, (ii) all charges, levies or fees imposed by any
governmental authority against Landlord by reason of or based upon the use of or
number of parking spaces within the Property, the amount of public services or
public utilities used or consumed (E.G. water, gas, electricity, sewage or waste
water disposal) at the Property, the number of person employed by tenants of the
Property, the size (whether measured in area, volume, number of tenants or
whatever) or the value of the Property, or the type of use or uses conducted
within the Property, and all costs and fees (including attorneys' fees)
reasonably incurred by Landlord in contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax. If, at any time
during the Lease Term, the taxation or assessment of the Property prevailing as
of the Effective Date of this Lease shall be altered so that in lieu of or in
addition to any the Real
78
Property Tax described above there shall be levied, awarded or imposed (whether
by reason of a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate, substitute, or additional use
or charge (i) on the value, size, use or occupancy of the Property or Landlord's
interest therein or (ii) on or measured by the gross receipts, income or rentals
from the Property, or on Landlord's business of owning, leasing or managing the
Property or (iii) computed in any manner with respect to the operation of the
Property, then any such tax or charge, however designated, shall be included
within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is partly based upon property
or rents unrelated to the Property, then only that part of such Real Property
Tax that is fairly allocable to the Property shall be included within the
meaning of the terms "Real Property Tax" or "Real Property Taxes."
Notwithstanding the foregoing, the terms "Real Property Tax" or "Real Property
Taxes" shall not include estate, inheritance, transfer, gift or franchise taxes
of Landlord or the federal or state income tax imposed on Landlord's income from
all sources.
(b) LANDLORD'S INSURANCE COSTS. The term "Landlord's Insurance Costs"
shall mean Tenant's Project Expense Share of the costs to Landlord to carry and
maintain the policies of fire and property damage insurance for the Building and
the Property and general liability and any other insurance required or permitted
to be carried by Landlord pursuant to Article 9, together with any deductible
amounts paid by Landlord upon the occurrence of any insured casualty or loss. If
any of Landlord's Insurance Costs are partly based upon property unrelated to
the Property (e.g., another portion of the Project), then only that part of
Landlord's Insurance Costs that is fairly allocable to the Property shall be
included in Landlord's Insurance Costs hereunder.
(c) PROPERTY MAINTENANCE COSTS. The term "Property Maintenance Costs"
shall mean Tenant's Project Expense Share of all costs and expenses (except
Landlord's Insurance Costs and Real Property Taxes) paid or incurred by Landlord
in protecting, operating, maintaining, repairing and preserving the Project and
all parts thereof, including without limitation, (i) market rate professional
management fees of two and one half percent (2.5%) of all gross income from the
Project, (ii) the amortizing portion of any costs incurred by Landlord in the
making of any modifications, alterations or improvements required by any
governmental authority as set forth in Article 6, which are so amortized during
the Lease Term, and (iii) such other costs as may be paid or incurred with
respect to operating, maintaining, and preserving the Project, repairing and
resurfacing paved areas, and repairing and replacing, when necessary,
electrical, plumbing, heating, ventilating and air conditioning systems serving
the Building, provided that the cost of any capital improvement shall be
amortized over the useful life of such improvement and the amortizing portion of
the cost shall be included in Property Maintenance Costs. Notwithstanding the
foregoing provisions of this Paragraph 13.12(c), the following are specifically
excluded from the definition of Property Maintenance Costs and Tenant shall have
no obligation to pay directly or reimburse Landlord for all or any portion of
the following except to the extent any of the foregoing are caused by the
actions or inactions of Tenant, or result from the failure of Tenant to comply
with the terms of the Lease: the costs of repairing and/or replacing the
foundation, the roof structure and the load-bearing and exterior walls of the
Building; the costs incurred (less costs of recovery) for any repair or
replacement to the extent such costs are actually paid by an original
manufacturer's, materialmen's or vendors warranty; any depreciation on the
Property; costs, including legal fees and space planners' fees, incurred in
connection with the original construction or development of the Building, the
leasing of the Building, or improving space for other tenants in the Building;
costs incurred with the sale, financing, refinancing, mortgaging, selling or
change of ownership of the Project or any portion thereof, including brokerage
commissions, consultants' fees, attorneys' fees and accountants' fees, closing
costs, title insurance premiums, transfer taxes and interest charges; costs for
which Landlord is reimbursed by any tenant of the Project or by its insurance
carrier or any tenant's carrier; any bad debt loss or reserves for bad debts
loss provided such bad debt loss is not caused by Tenant; costs, fines or
penalties incurred due to violation by Landlord or any governmental rule or
authority except to the extent such compliance is assumed by Tenant pursuant to
the terms of this Lease; any costs, fees or penalties incurred in connection
with disputes with other tenants; expenses directly resulting from the gross
negligence of Landlord, its agents, servants or employees, costs arising from
Landlord's charitable or political contributions and any wages, salaries or
other compensation paid to any executive employees above the grade of property
manager or engineer. Notwithstanding the foregoing provisions of this Paragraph
13.12(c), the following are specifically excluded from the definition of
Property Maintenance Costs and Tenant shall have no obligation to pay directly
or reimburse Landlord for all or any portion of the following except to the
extent any of the foregoing are caused by the actions or inactions of Tenant, or
result from the failure of Tenant to comply with the terms of the Lease: (a)
costs associated with any monitoring, removal, remediation or otherwise related
to any Hazard Materials existing on the Leased Premises prior to the Lease
Commencement Date, or (2) costs to repair any damage caused by the gross
negligence or willful misconduct of Landlord or its agents. If any of the
Property Maintenance Costs are partly based upon property unrelated to the
Property (e.g., another portion of the Project), then only that part of Property
Maintenance Costs that is fairly allocable to the Property shall be included in
the definition of Property Maintenance Costs hereunder.
(d) PROPERTY OPERATING EXPENSES. The term "Property Operating Expenses"
shall mean and include all Real Property Taxes, plus all Landlord's Insurance
Costs, plus all Property Maintenance Costs.
(e) LAW. The term "Law" shall mean any judicial decisions and any
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirements of any municipal, county, state, federal, or other
governmental
79
agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Building or the Property, or any of them, in
effect either at the Effective Date of this Lease or at any time during the
Lease Term, including, without limitation, any regulation, order, or policy of
any quasi-official entity or body (e.g. a board of fire examiners or a public
utility or special district).
(f) LENDER. The term "Lender" shall mean the holder of any promissory
note or other evidence of indebtedness secured by the Property or any portion
thereof.
(g) PRIVATE RESTRICTIONS. The term "Private Restrictions" shall mean
(as they may exist from time to time) any and all covenants, conditions and
restrictions, private agreements, easements, and any other recorded documents or
instruments affecting the use of the Property, the Building, the Leased
Premises, or the Outside Areas.
(h) RENT. The term "Rent" shall mean collectively Base Monthly Rent and
all Additional Rent.
13.13 GENERAL WAIVERS. One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof, or
any waiver of any breach of any provision hereof, shall be effective unless in
writing and signed by the waiving party. The receipt by Landlord of any rent or
payment with or without knowledge of the breach of any other provision hereof
shall not be deemed a waiver of any such breach. No waiver of any provision of
this Lease shall be deemed a continuing waiver unless such waiver specifically
states so in writing and is signed by both Landlord and Tenant. No delay or
omission in the exercise of any right or remedy accruing to either party upon
any breach by the other party under this Lease shall impair such right or remedy
or be construed as a waiver of any such breach theretofore or thereafter
occurring. The waiver by either party of any breach of any provision of this
Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other provisions herein contained.
13.14 MISCELLANEOUS. Should any provisions of this Lease prove to be invalid or
illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provisions hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the parties shall be deemed
an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term "party"
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity, then all members of Tenant shall be jointly and
severally liable hereunder. This Lease shall be construed and enforced in
accordance with the Laws of the State in which the Leased Premises are located.
The captions in this Lease are for convenience only and shall not be construed
in the construction or interpretation of any provision hereof. When the context
of this Lease requires, the neuter gender includes the masculine, the feminine,
a partnership, corporation, limited liability company, joint venture, or other
form of business entity, and the singular includes the plural. The terms "must,"
"shall," "will," and "agree" are mandatory. The term "may" is permissive. When a
party is required to do something by this Lease, it shall do so at its sole cost
and expense without right of reimbursement from the other party unless specific
provision is made therefor. Where Landlord's consent is required hereunder, the
consent of any Lender shall also be required. Landlord and Tenant shall both be
deemed to have drafted this Lease, and the rule of construction that a document
is to be construed against the drafting party shall not be employed in the
construction or interpretation of this Lease. Where Tenant is obligated not to
perform any act or is not permitted to perform any act, Tenant is also obligated
to restrain any others reasonably within its control, including agents,
invitees, contractors, subcontractors and employees, from performing such act.
Landlord shall not become or be deemed a partner or a joint venturer with Tenant
by reason of any of the provisions of this Lease.
ARTICLE 14
CORPORATE AUTHORITY
BROKERS AND ENTIRE AGREEMENT
14.1 CORPORATE AUTHORITY. If Tenant is a corporation, each individual executing
this Lease on behalf of such corporation represents and warrants that Tenant is
validly formed and duly authorized and existing, that Tenant is qualified to do
business in the State in which the Leased Premises are located, that Tenant has
the full right and legal authority to enter into this Lease, and that he or she
is duly authorized to execute and deliver this Lease on behalf of Tenant in
accordance with its terms. Tenant shall, within five (5) days after execution of
this Lease, deliver to Landlord a certified copy of Tenant's organizational
documents indicating that Tenant has the corporate authority to lease property
without first obtaining the written authorization of its Board of Directors. In
the event Tenant fails to deliver such documents within such five (5) day
period, Tenant shall, within five (5) days, deliver to Landlord a certified copy
of the resolution of its board of directors
80
authorizing or ratifying the execution of this Lease and if Tenant fails to do
so, Landlord at its sole election may elect to terminate this Lease.
14.2 BROKERAGE COMMISSIONS. Tenant represents, warrants and agrees that it has
not had any dealings with any real estate broker(s), leasing agent(s), finder(s)
or salesmen, other than the Brokers (as named in Article 1) with respect to the
lease by it of the Leased Premises pursuant to this Lease, and that it will
indemnify, defend with competent counsel, and hold Landlord harmless from any
liability for the payment of any real estate brokerage commissions, leasing
commissions or finder's fees claimed by any other real estate broker(s), leasing
agent(s), finder(s), or salesmen to be earned or due and payable by reason of
Tenant's agreement or promise (implied or otherwise) to pay (or to have Landlord
pay) such a commission or finder's fee by reason of its leasing the Leased
Premises pursuant to this Lease.
14.3 ENTIRE AGREEMENT. This Lease and the Exhibits (as described in Article 1),
which Exhibits are by this reference incorporated herein, constitute the entire
agreement between the parties, and there are no other agreements, understandings
or representations between the parties relating to the lease by Landlord of the
Leased Premises to Tenant, except as expressed herein. No subsequent changes,
modifications or additions to this Lease shall be binding upon the parties
unless in writing and signed by both Landlord and Tenant.
14.4 LANDLORD'S REPRESENTATIONS. Tenant acknowledges that neither Landlord nor
any of its agents made any representations or warranties respecting the
Property, the Building or the Leased Premises, upon which Tenant relied in
entering into the Lease, which are not expressly set forth in this Lease. Tenant
further acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for Tenant's
intended use under existing Law, or (ii) the suitability of the Leased Premises
for the conduct of Tenant's business, or (iii) the exact square footage of the
Leased Premises, and that Tenant relies solely upon its own investigations with
respect to such matters. Tenant expressly waives any and all claims for damage
by reason of any statement, representation, warranty, promise or other agreement
of Landlord or Landlord's agent(s), if any, not contained in this Lease or in
any Exhibit attached hereto. Notwithstanding the foregoing, Landlord represents
that to the best of Landlord's knowledge, as of the Lease Commencement Date, the
Leased Premises will comply with current ADA regulations and Title 24
provisions.
ARTICLE 15
OPTIONS TO EXTEND
15.1 So long as Ultratech Stepper, Inc. (or a Permitted Assignee) is the Tenant
hereunder and occupies sixty five percent (65%) or more of the Leased Premises
(PROVIDED if Ultratech Stepper, Inc. (or a Permitted Assignee) does not occupy
the entirety of the Leased Premises, the full amount of the Letter of Credit
must be maintained and/or reinstated by Tenant throughout the duration of the
applicable Extension Period), and subject to the condition set forth in clause
(b) below, Tenant shall have two options to extend the term of this Lease with
respect to the entirety of the Leased Premises, the first for a period of five
(5) years from the expiration of the tenth year of the Lease Term (the "First
Extension Period"), and the second (the "Second Extension Period") for a period
of five (5) years from the expiration of the First Extension Period, subject to
the following conditions:
(a) Each option to extend shall be exercised, if at all, by notice of
exercise given to Landlord by Tenant not more than twelve (12) months nor less
than nine (9) months prior to the expiration of the tenth year of the Lease Term
or the expiration of the First Extension Period, as applicable;
(b) Anything herein to the contrary notwithstanding, if Tenant is in
default beyond any applicable cure periods under any of the terms, covenants or
conditions of this Lease, either at the time Tenant exercises either extension
option or on the commencement date of the First Extension Period or the Second
Extension Period, as applicable, Landlord shall have, in addition to all of
Landlord's other rights and remedies provided in this Lease, the right to
terminate such option(s) to extend upon notice to Tenant.
15.2 In the event the applicable option is exercised in a timely fashion, the
Lease shall be extended for the term of the applicable extension period upon all
of the terms and conditions of this Lease, provided that the Base Monthly Rent
for each extension period shall be the "Fair Market Rent" for the Leased
Premises, increased as set forth below. For purposes hereof, "Fair Market Rent"
shall mean, collectively, the Base Monthly Rent and any annual increases
determined pursuant to the process described below.
15.3 Within thirty (30) days after receipt of Tenant's notice of exercise,
Landlord shall notify Tenant in writing of Landlord's estimate of the Base
Monthly Rent for the applicable extension period, based on the provisions of
Paragraph 15.2 above. Within thirty (30) days after receipt of such notice from
Landlord, Tenant shall have the right either to (i) accept Landlord's statement
of Base Monthly Rent as the Base Monthly Rent for the applicable extension
period; or (ii) elect to arbitrate Landlord's estimate of Fair Market Rent, such
arbitration to be conducted pursuant to the provisions hereof. Failure
81
on the part of Tenant to require arbitration of Fair Market Rent within such
30-day period shall constitute acceptance of the Base Monthly Rent for the
applicable extension period as calculated by Landlord. If Tenant elects
arbitration, the arbitration shall be concluded within ninety (90) days after
the date of Tenant's election, subject to extension for an additional 30-day
period if a third arbitrator is required and does not act in a timely manner. To
the extent that arbitration has not been completed prior to the expiration of
any preceding period for which Base Monthly Rent has been determined, Tenant
shall pay Base Monthly Rent at the rate calculated by Landlord, with the
potential for an adjustment to be made once Fair Market Rent is ultimately
determined by arbitration.
15.4 In the event of arbitration, the judgment or the award rendered in any such
arbitration may be entered in any court having jurisdiction and shall be final
and binding between the parties. The arbitration shall be conducted and
determined in the City of San ▇▇▇▇ in accordance with the then prevailing rules
of the American Arbitration Association or its successor for arbitration of
commercial disputes except to the extent that the procedures mandated by such
rules shall be modified as follows:
(a) Tenant shall make demand for arbitration in writing within thirty
(30) days after service of Landlord's determination of Fair Market Rent given
under Paragraph 15.3 above, specifying therein the name and address of the
person to act as the arbitrator on its behalf. The arbitrator shall be qualified
as a real estate appraiser familiar with the Fair Market Rent of similar
industrial, research and development, or office space in the Silicon Valley area
who would qualify as an expert witness over objection to give opinion testimony
addressed to the issue in a court of competent jurisdiction. Failure on the part
of Tenant to make a proper demand in a timely manner for such arbitration shall
constitute a waiver of the right thereto. Within fifteen (15) days after the
service of the demand for arbitration, Landlord shall give notice to Tenant,
specifying the name and address of the person designated by Landlord to act as
arbitrator on its behalf who shall be similarly qualified. If Landlord fails to
notify Tenant of the appointment of its arbitrator, within or by the time above
specified, then the arbitrator appointed by Tenant shall be the arbitrator to
determine the issue.
(b) In the event that two arbitrators are chosen pursuant to Paragraph
15.4(a) above, the arbitrators so chosen shall, within fifteen (15) days after
the second arbitrator is appointed determine the Fair Market Rent. If the two
arbitrators shall be unable to agree upon a determination of Fair Market Rent
within such 15-day period, they, themselves, shall appoint a third arbitrator,
who shall be a competent and impartial person with qualifications similar to
those required of the first two arbitrators pursuant to Paragraph 15.4(a). In
the event they are unable to agree upon such appointment within seven days after
expiration of such 15-day period, the third arbitrator shall be selected by the
parties themselves, if they can agree thereon, within a further period of
fifteen (15) days. If the parties do not so agree, then either party, on behalf
of both, may request appointment of such a qualified person by the then Chief
Judge of the United States District Court having jurisdiction over the County of
Santa ▇▇▇▇▇, acting in his private and not in his official capacity, and the
other party shall not raise any question as to such Judge's full power and
jurisdiction to entertain the application for and make the appointment. The
three arbitrators shall decide the dispute if it has not previously been
resolved by following the procedure set forth below.
(c) Where an issue cannot be resolved by agreement between the two
arbitrators selected by Landlord and Tenant or settlement between the parties
during the course of arbitration, the issue shall be resolved by the three
arbitrators within 15 days of the appointment of the third arbitrator in
accordance with the following procedure. The arbitrator selected by each of the
parties shall state in writing his determination of the Fair Market Rent
supported by the reasons therefor with counterpart copies to each party. The
arbitrators shall arrange for a simultaneous exchange of such proposed
resolutions. The role of the third arbitrator shall be to select which of the
two proposed resolutions most closely approximates his determination of Fair
Market Rent. The third arbitrator shall have no right to propose a middle ground
or any modification of either of the two proposed resolutions. The resolution he
chooses as most closely approximating his determination shall constitute the
decision of the arbitrators and be final and binding upon the parties.
(d) In the event of a failure, refusal or inability of any arbitrator
to act, his successor shall be appointed by him, but in the case of the third
arbitrator, his successor shall be appointed in the same manner as provided for
appointment of the third arbitrator. The arbitrators shall decide the issue
within fifteen (15) days after the appointment of the third arbitrator. Any
decision in which the arbitrator appointed by Landlord and the arbitrator
appointed by Tenant concur shall be binding and conclusive upon the parties.
Each party shall pay the fee and expenses of its respective arbitrator and both
shall share the fee and expenses of the third arbitrator, if any, and the
attorneys' fees and expenses of counsel for the respective parties and of
witnesses shall be paid by the respective party engaging such counsel or calling
such witnesses.
(e) The arbitrators shall have the right to consult experts and
competent authorities to obtain factual information or evidence pertaining to a
determination of Fair Market Rent, but any such consultation shall be made in
the presence of both parties with full right on their part to cross-examine. The
arbitrators shall render their decision and award in writing with counterpart
copies to each party. The arbitrators shall have no power to modify the
provisions of this Lease.
82
ARTICLE 16
TELEPHONE SERVICE
Notwithstanding any other provision of this Lease to the contrary:
(a) So long as the entirety of the Building is leased to Tenant:
(i) Landlord shall have no responsibility for providing to Tenant any
telephone equipment, including wiring, within the Leased Premises or for
providing telephone service or connections from the utility to the Leased
Premises; and
(ii) Landlord makes no warranty as to the quality, continuity or
availability of the telecommunications services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including damages for loss of business) in the event Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective, except to the extent caused by the grossly negligent or willful act
or omission by Landlord, its agents or employees. Tenant accepts the telephone
equipment (including, without limitation, the INC, as defined below) in its
"AS-IS" condition, and Tenant shall be solely responsible for contracting with a
reliable third party vendor to assume responsibility for the maintenance and
repair thereof (which contract shall contain provisions requiring such vendor to
inspect the INC periodically (the frequency of such inspections to be determined
by such vendor based on its experience and professional judgment), and requiring
such vendor to meet local and federal requirements for telecommunications
material and workmanship). Landlord shall not be liable to Tenant and Tenant
waives all claims against Landlord whatsoever, whether for personal injury,
property damage, loss of use of the Leased Premises, or otherwise, due to the
interruption or failure of telephone services to the Leased Premises. Tenant
hereby holds Landlord harmless and agrees to indemnify, protect and defend
Landlord from and against any liability for any damage, loss or expense due to
any failure or interruption of telephone service to the Leased Premises for any
reason. Tenant agrees to obtain loss of rental insurance adequate to cover any
damage, loss or expense occasioned by the interruption of telephone service.
(b) At such time as the entirety of the Building is no longer leased to
Tenant, Landlord shall in its sole discretion have the right, by written notice
to Tenant, to elect to assume limited responsibility for INC, as provided below,
and upon such assumption of responsibility by Landlord, this subparagraph (b)
shall apply prospectively.
(i) Landlord shall provide Tenant access to such quantity of pairs in
the Building intra-building network cable ("INC") as is determined to be
available by Landlord in its reasonable discretion. Tenant's access to the INC
shall be solely by arrangements made by Tenant, as Tenant may elect, directly
with Pacific ▇▇▇▇ or Landlord (or such vendor as Landlord may designate), and
Tenant shall pay all reasonable charges as may be imposed in connection
therewith. Pacific ▇▇▇▇'▇ charges shall be deemed to be reasonable. Subject to
the foregoing, Landlord shall have no responsibility for providing to Tenant any
telephone equipment, including wiring, within the Leased Premises or for
providing telephone service or connections from the utility to the Leased
Premises, except as required by law.
(ii) Tenant shall not alter, modify, add to or disturb any telephone
wiring in the Leased Premises or elsewhere in the Building without the
Landlord's prior written consent. Tenant shall be liable to Landlord for any
damage to the telephone wiring in the Building due to the act, negligent or
otherwise, of Tenant or any employee, contractor or other agent of Tenant.
Tenant shall have reasonable access to the telephone closets within the Building
provided such access is in compliance with the procedures established by
Landlord. Tenant shall promptly notify Landlord of any actual or suspected
failure of telephone service to the Leased Premises.
(iii) All costs incurred by Landlord for the installation,
maintenance, repair and replacement of telephone wiring in the Building shall be
a Property Maintenance Cost.
(iv) Landlord makes no warranty as to the quality, continuity or
availability of the telecommunications services in the Building, and Tenant
hereby waives any claim against Landlord for any actual or consequential damages
(including damages for loss of business) in the event Tenant's
telecommunications services in any way are interrupted, damaged or rendered less
effective, except to the extent caused by the grossly negligent or willful act
or omission by Landlord, its agents or employees. Tenant acknowledges that
Landlord meets its duty of care to Tenant with respect to the Building INC by
contracting with a reliable third party vendor to assume responsibility for the
maintenance and repair thereof (which contract shall contain provisions
requiring such vendor to inspect the INC periodically (the frequency of such
inspections to be determined by such vendor based on its experience and
professional judgment), and requiring such vendor to meet local and federal
requirements for telecommunications material and workmanship). Subject to the
foregoing, Landlord shall not be liable to Tenant and Tenant waives all claims
against Landlord whatsoever, whether for personal injury, property damage, loss
of use of the Leased Premises, or otherwise, due to the interruption or failure
of telephone services to the Leased Premises. Tenant hereby holds Landlord
harmless and agrees to indemnify, protect and defend Landlord from and against
83
any liability for any damage, loss or expense due to any failure or interruption
of telephone service to the Leased Premises for any reason. Tenant agrees to
obtain loss of rental insurance adequate to cover any damage, loss or expense
occasioned by the interruption of telephone service.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
respective dates below set forth with the intent to be legally bound thereby as
of the Effective Date of this Lease first above set forth.
LANDLORD:
MONTAGUE LLC, a California limited liability company
By: Montague Park Corporation, a California corporation
Date: 11/12/99 /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------- ------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
TENANT:
ULTRATECH STEPPER, INC., a Delaware corporation
Dated: 22 NOV 99 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------- -----------------------------
Title: CHIEF FINANCIAL OFFICER
--------------------------
Dated: 11/22/99 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------- -----------------------------
Title: PRESIDENT
--------------------------
84
EXHIBIT A
PROJECT
85
EXHIBIT B
SITE PLAN
(to be attached)
86
EXHIBIT C
WORK LETTER
THIS WORK LETTER, dated November ___, 1999, is entered into by and MONTAGUE LLC,
a California limited liability company ("Landlord") and ULTRATECH STEPPER, INC.,
a Delaware corporation ("Tenant"). On or about the date hereof, Landlord and
Tenant entered into that certain Lease (the "Lease") for the Premises, as
defined in the Lease. This Work Letter sets forth the agreement of Landlord and
Tenant with respect to the improvements to be constructed in the Premises. In
the event of any inconsistency between the terms of this Work Letter and the
terms of the Lease, the terms of the Lease shall control. All defined terms used
herein shall have the meanings set forth in the Lease, unless otherwise defined
in this Work Letter.
1. IMPROVEMENT WORK. Tenant shall construct, furnish or install all
improvements, equipment or fixtures, that are necessary for Tenant's use and
occupancy of the Premises, including, but not limited to, supplemental HVAC
equipment in the plenum and the Building roof, an exterior generator,
directional signage and a conduit between the Building and the building at 3050
Zanker Road (the "Improvement Work"). Tenant shall also be responsible for the
cost of any alterations to the Building required as a result of the Improvement
Work. The Improvement Work shall be in conformity with drawings and
specifications submitted to and approved by Landlord (as set forth below) and
shall be performed in accordance with the following provisions:
(a) Tenant shall prepare and submit to Landlord for its approval (which
approval shall not be unreasonably withheld) two sets of fully dimensioned scale
drawings (suitable for submission with a building permit application) for the
Improvement Work (including plans, elevations, critical sections and details)
and a specification of Tenant's utility requirements. Tenant shall cause all
drawings and specifications for the Improvement Work to be prepared by licensed
architects and where appropriate, mechanical, electrical and structural
engineers.
(b) Within five (5) business days after receipt of Tenant's drawings
Landlord shall return one set of prints thereof with Landlord's approval and/or
suggested modifications noted thereon as well as a list of those items of the
Improvement Work which Tenant, notwithstanding anything to the contrary
contained in the Lease, shall be required to remove, in accordance with Section
2.6 of the Lease, at the expiration of the Lease (the "Specialized
Improvements"). An initial list of the Specialized Improvements (which have been
approved by Landlord subject to receipt and approval of the plans and
specifications as provided herein) is included on Schedule 1 attached hereto. If
Landlord has approved Tenant's drawings subject to modifications, such
modifications shall be deemed to be acceptable to and approved by Tenant unless
Tenant shall prepare and resubmit revised drawings for further consideration by
Landlord. If Landlord has suggested modifications without approving Tenant's
drawings Tenant shall prepare and resubmit revised drawings within seven days
for consideration by Landlord. All revised drawings shall be submitted, with
changes highlighted, to Landlord within seven (7) days following Landlord's
return to Tenant of the drawings originally submitted, and Landlord shall
approve or disapprove such revised drawings within three (3) business days
following receipt of the same.
(c) Tenant shall obtain all building and other permits necessary in
connection with the Improvement Work prior to the commencement of such work. The
Improvement Work shall (i) be constructed in compliance with all of the terms
and conditions of the Lease and with all applicable laws and regulations, (ii)
not involve changes to structural components of the Building nor involve any
floor, roof, or wall penetrations unless approved by Landlord, and (iii) not
require any material modifications of the Building's mechanical or electrical
systems unless approved by Landlord.
(d) Prior to commencing construction, Tenant shall deliver to Landlord
the following:
(i) The address of Tenant's general contractor, and the names of the
primary subcontractors Tenant's contractor intends to engage for the
construction of the Improvement Work.
(ii) The actual commencement date of construction and the estimated
date of completion of the work, including fixturization.
(iii) Evidence of insurance as called for hereinbelow.
(iv) An executed copy of the applicable building permit for such
work.
(e) After final approval of Tenant's drawings by Landlord, Tenant shall
proceed promptly to commence performance of the Improvement Work. Tenant's
contractors and subcontractors shall be acceptable to and approved in writing by
Landlord, which approval shall not be unreasonably withheld or delayed, and
shall, at Landlord's option, be subject to administrative supervision by
Landlord in their use of the Building (at no additional expense to Tenant).
Tenant
87
shall furnish to Landlord a copy of the executed contract between Tenant and
Tenant's general contractor covering all of Tenant's obligations under this Work
Letter. Tenant shall use commercially reasonable efforts to cause such work to
be performed in as efficient a manner as is commercially reasonable. Tenant
shall immediately, upon demand, repair any damage to the Building caused by
Tenant or its contractors during performance of the Improvement Work. Tenant's
contractors shall conduct their work and employ labor in such manner as to
maintain harmonious labor relations. Tenant's general contractor ("Contractor")
shall obtain a builder's risk policy of insurance in an amount and form and
issued by a carrier reasonably satisfactory to Landlord, and Tenant's general
contractor and subcontractors shall carry worker's compensation insurance for
their employees as required by law. The builder's risk policy of insurance shall
name Landlord as an additional insured and shall not be cancelable without at
least 30 days' prior written notice to Landlord.
(f) Any changes in the Improvement Work from the final drawings
approved by Landlord shall be subject to Landlord's prior written approval,
which shall not be unreasonably withheld. Any deviation in construction from the
design specifications and criteria set forth herein or from Tenant's plans and
specifications as approved by Landlord shall constitute a default for which
Landlord may, within ten (10) days after giving written notice to Tenant, elect
to exercise the remedies available in the event of default under the provisions
of this Lease, unless such default is cured within such ten (10) day period, or,
if the cure reasonably requires more than ten (10) days, unless such default is
cured as soon as reasonably practicable but in no event later than thirty (30)
days after Landlord's notice to Tenant. Only new materials shall be used in the
construction of the Improvement Work, except with the written consent of
Landlord.
(g) Storage of Tenant's contractors' construction materials, tools and
equipment shall be confined within the Building, and in no event shall any
materials or debris be stored outside of the Building.
(h) Tenant acknowledges that if it engages an architect, it shall be
solely responsible for the actions and omissions of its architects and for any
loss, liability, claim, cost, damage or expense suffered by Landlord or any
other entity or person as a result of the acts or omissions of its architects or
for delays caused by its architects. Landlord's approval of any of Tenant's
architects or engineers and of any documents prepared by any of them shall not
be for the benefit of Tenant or any third party, and Landlord shall have no duty
to Tenant or to any third parties for the actions or omissions of Tenant's
architects or engineers. Tenant shall indemnify and hold harmless Landlord
against any and all losses, costs, damages, claims and liabilities arising from
the actions or omissions of Tenant's architects and engineers.
(i) Landlord shall have the right to post in a conspicuous location on
the Building or the Premises, as well as record with the County of Santa ▇▇▇▇▇,
a Notice of Nonresponsibility.
(j) Without limiting the generality of the foregoing, any work to be
performed outside of the Building shall be coordinated with Landlord, and shall
be subject to reasonable scheduling requirements of Landlord.
(k) Tenant shall, upon completion of its work, submit to Landlord two
(2) complete sets of plans (one (1) reproducible) and specifications covering
all of the Improvement Work, including architectural, electrical, and plumbing,
as built.
Upon full execution of the Lease, Landlord shall provide Tenant with a
complete set of base building shell drawings and the site plan for Tenant's
review and use in connection with the Improvement Work.
2. PAYMENT OF COSTS OF THE IMPROVEMENT WORK.
(a) Landlord shall bear and pay the cost of the Improvement Work up to
a maximum of $356,143.50, (the "Improvement Allowance"). The Improvement
Allowance shall be utilized only for building improvements to the Building (and
Tenant's architect fees), and not for any other personal property, furniture
costs, any third party consulting or contracting fees, any telecom/cabling
costs, or any other purpose. Tenant shall bear and pay the cost of the
Improvement Work in excess of the Improvement Allowance, if any. So long as
Tenant manages the construction process, Landlord shall not charge Tenant a
construction management fee. Based upon applications for payment prepared,
certified and submitted by Tenant, Landlord shall make progress payments from
the Improvement Allowance to Tenant in accordance with the provisions of this
paragraph 2.
(b) Not later than the twenty-fifth (25th) day of each month Tenant
shall submit applications for payment to Landlord in a form reasonably
acceptable to Landlord, certified as correct by an officer of Tenant and by
Tenant's architect, for payment of that portion of the cost of the Improvement
Work allocable to labor, materials and equipment incorporated in the Building
during the period from the first day of the same month projected through the
last day of the month. Each application for payment shall set forth such
information and shall be accompanied by such supporting documentation as shall
be reasonably requested by Landlord, including the following:
(i) Invoices and canceled checks.
88
(ii) Fully executed conditional lien releases in the form prescribed
by law from the Contractor and all subcontractors and suppliers furnishing labor
or materials during such period and fully executed unconditional lien releases
from all such entities covering the prior payment period.
(iii) Contractor's worksheets showing percentages of completion.
(iv) Contractor's certification as follows:
"There are no known mechanics' or materialmen's liens outstanding at
the date of this application for payment, all due and payable bills with
respect to the Building have been paid to date or shall be paid from the
proceeds of this application for payment, and there is no known basis for the
filing of any mechanics' or materialmen's liens against the Building or the
Property, and, to the best of our knowledge, waivers from all subcontractors
are valid and constitute an effective waiver of lien under applicable law to
the extent of payments that have been made or shall be made concurrently
herewith."
(c) Tenant shall submit with each application for payment all documents
necessary to effect and perfect the transfer of title to the materials or
equipment for which application for payment is made.
(d) On or before the 15th day of the month following submission of the
application for payment, Landlord shall pay a share of such payment determined
by multiplying the amount of such payment by a fraction, the numerator of which
is the the amount of the Improvement Allowance, and the denominator of which is
the sum of (i) estimated construction cost of all Improvement Work, and (ii) the
estimated cost of all professional services, fees and permits in connection
therewith. Tenant shall pay the balance of such payment, provided that at such
time as Landlord has paid the entire Improvement Allowance on account of such
Improvement Work, all ▇▇▇▇▇▇▇▇ shall be paid entirely by Tenant. If upon
completion of the Improvement Work and payment in full to the Contractor, the
architect and engineer, and payment in full of all fees and permits, the portion
of the cost of the Improvement Work, architects' and engineers' fees, permits
and fees theretofore paid by Landlord is less than the Improvement Allowance,
Landlord shall reimburse Tenant for costs expended by Tenant for Improvement
Work up to the amount by which the Improvement Allowance exceeds the portion of
such cost theretofore paid by Landlord. Landlord shall have no obligation to
advance the Improvement Allowance to the extent it exceeds the total cost of the
Improvement Work. In no event shall Landlord have any responsibility for the
cost of the Improvement Work in excess of the Improvement Allowance. Landlord
shall have no obligation to make any payments to Contractor's material suppliers
or subcontractors or to determine whether amounts due them from Contractor in
connection with the Improvement Work have, in fact, been paid.
3. EVIDENCE OF COMPLETION OF IMPROVEMENT WORK. Upon the completion of the
Improvement Work, Tenant shall:
(a) Submit to Landlord a detailed breakdown of Tenant's final and total
construction costs, together with receipted evidence showing payment thereof,
satisfactory to Landlord.
(b) Submit to Landlord all evidence reasonably available from
governmental authorities showing compliance with any and all other laws, orders
and regulations of any and all governmental authorities having jurisdiction over
the Building, including, without limitation, authorization for physical
occupancy of the Building.
(c) Submit to Landlord the as-built plans and specifications referred
to above.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter as of the
respective dates indicated below.
LANDLORD:
MONTAGUE LLC, a California limited liability company
By: Montague Park Corporation, a California corporation
Date: 11/12/99 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
-------- ---------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
89
TENANT:
ULTRATECH STEPPER, INC., a Delaware corporation
Dated: 22 NOV 99 By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------- ----------------------------------------
Title: CHIEF FINANCIAL OFFICER
-------------------------------------
Dated: 11/22/99 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------- ----------------------------------------
Title: PRESIDENT
-------------------------------------
90
SCHEDULE 1 TO WORK LETTER
SPECIALIZED IMPROVEMENTS
- Clean Room to be constructed on the Leased Premises.
91
EXHIBIT D
FORM OF ESTOPPEL CERTIFICATE
__________________, 19___
___________________________
___________________________
___________________________
___________________________
Re ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to that certain Lease, dated as of _______________, 1999,
between MONTAGUE LLC, a California limited liability company ("Landlord"), and
the undersigned (herein referred to as the "Lease"). A copy of the Lease [and
all amendment thereto] is [are] attached hereto as EXHIBIT A. At the request of
Landlord in connection with [State reasons for request for estoppel
certificate], the undersigned hereby certifies to Landlord and to [State names
of other parties requiring certification] and each of your respective
successors and assigns as follows:
1. The undersigned is the tenant under the Lease.
2. The Lease is in full force and effect and has not been amended,
modified, supplemented or superseded except as indicated in Exhibit A.
3. There is no defense, offset, claim or counterclaim by or in favor of
the undersigned against Landlord under the Lease or against the obligations of
the undersigned under the Lease. The undersigned has no renewal, extension or
expansion option, no right of first offer or right of first refusal and no other
similar right to renew or extend the term of the Lease or expand the property
demised thereunder except as may be expressly set forth in the Lease.
4. The undersigned is not aware of any default now existing of the
undersigned or of Landlord under the Lease, nor of any event which with notice
or the passage of time or both would constitute a default of the undersigned or
of Landlord under the Lease.
5. The undersigned has not received notice of a prior transfer,
assignment, hypothecation or pledge by Landlord of any of Landlord's interest in
the Lease.
6. The monthly rent due under the Lease is $____________ and has been
paid through __________________, and all additional rent due and payable under
the Lease has been paid through _________________.
7. The term of the Lease commenced on __________________, and expires on
___________________, unless sooner terminated pursuant to the provisions of the
Lease. Landlord has performed all work required by the Lease for the
undersigned's initial occupancy of the demised property.
8. The undersigned has deposited the sum of $____________ with Landlord
as security for the performance of its obligations as tenant under the Lease,
and no portion of such deposit has been applied by Landlord to any obligation
under the Lease.
9. There is no free rent period pending, nor is Tenant entitled to any
Landlord's contribution.
The above certifications are made to Landlord and Lender knowing that Landlord
and Lender will rely thereon in accepting an assignment of the Lease.
Very truly yours,
ULTRATECH STEPPER, INC.
By: ___________________________
Name: ___________________________
Title: ___________________________
92
EXHIBIT E
FORM OF LETTER OF CREDIT
Date: ____________________, 1999
Irrevocable Standby Letter of Credit Number: ____________
Beneficiary: Applicant:
Montague LLC Ultratech Stepper, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ __________________________________
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ __________________________________
__________________________________
__________________________________
Amount:
USD $2,000,000.00 (TWO MILLION AND
00/100 U.S. DOLLARS)
Expiration:_______________________
We hereby establish our Irrevocable Standby Letter of Credit No. ______________
in your favor for the account of_______________________________________________,
________________________________, on behalf of_________________________________,
available for drawings for up to an aggregate amount of U.S. $2,000,000.00 (TWO
MILLION AND 00/100 U.S. DOLLARS). This Letter of Credit is available by payment
upon your draft drawn at sight on us, submitted at the office of
____________________________________________________________, Attention: Letter
of Credit Services, and expires at our close of business on the expiration date
or any automatically extended expiration date as hereinafter set forth.
This Letter of Credit shall expire on ________________________, but such
expiration date shall be automatically extended for a period of one (1) year on
______________________ and on each successive expiration date, unless at least
sixty (60) days before the current expiration date we notify you by overnight
courier that this Letter of Credit is not extended beyond the current expiration
date. In the event you are so notified, any unused portion of the Letter of
Credit shall be available upon presentation of a sight draft by Montague LLC,
within the current expiration date.
We give our undertaking to the Beneficiary that sums drawn under and in
compliance with the terms of this Letter of Credit will be duly honored by our
bank on presentation of drawings in accordance with the terms of this credit.
This Letter of Credit is transferable by the Beneficiary. Transfer of this
Letter of Credit is subject to our consent and receipt of Beneficiary's
instructions in the form attached hereto as Exhibit A accompanied by the
original Letter of Credit and amendment(s) if any. Cost or expenses of such
transfer shall be for the account of the Beneficiary.
This Letter of Credit is subject to the Uniform Customs and Practices for
Documentary Credits (1993 Revision) International Chamber of Commerce
Publication No. 500 and engages us to the terms herein.
Yours very truly,
Authorized Signature
Letter of Credit Services
(_____) ____________
93
EXHIBIT A
---------
-------------------------------------
-------------------------------------
-------------------------------------
-------------------------------------
Attention: Letter of Credit Services
Re: Irrevocable Letter of Credit No. ______________
Dear Sirs:
The undersigned acknowledges receipt of your advice No. ____________________ of
a credit issued in our favor, the terms of which are satisfactory. We now return
the original advice of the said credit with all amendments and extensions, if
any, and hereby irrevocably transfer the said credit and all amendments and
extensions thereof, if any, to:
------------------------------------------
[Name of Transferee]
------------------------------------------
[Address]
You are to inform the transferee of this transfer and such transferee shall have
sole rights as beneficiary under the credit, including any amendments, extension
or increases thereof, without notice to or further assent from us.
Yours very truly,
Yours very truly,
By:
--------------------------------------------------
(The above signature with title as stated with that
on file with us and is authorized for execution of
this instrument.)
-----------------------------------------------------
(Bank)
94
EXHIBIT F
SCHEDULE 1
- All video Conference Room furniture and fixtures.
- All Board Room furniture and fixtures.
EXHIBIT F
FORM OF ▇▇▇▇ OF SALE
FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby
expressly acknowledged, MONTAGUE LLC, a California limited liability company
("Landlord"), hereby assigns, transfers and conveys to ULTRATECH STEPPER, INC.
("Tenant"), WITHOUT WARRANTY, EXPRESS OR IMPLIED, all of Seller's right, title
and interest in and to that certain personal property described in the attached
SCHEDULE 1.
IN WITNESS WHEREOF, Landlord has executed this ▇▇▇▇ of Sale as of
_______________, ______.
95
ARTICLE 1 REFERENCE............................................................1
1.1 References.................................................................1
ARTICLE 2 Leased Premises, Term And Possession................................2
2.1 Demise Of Leased Premises.................................................2
2.2 Right To Use Outside Areas................................................2
2.3 Lease Commencement Date And Lease Term....................................3
2.4 Delivery Of Possession....................................................3
2.5 Performance Of Improvement Work; Acceptance Of Possession.................3
2.6 Surrender Of Possession...................................................3
ARTICLE 3 Rent, Late Charges And Security Deposits............................4
3.1 Base Monthly Rent.........................................................4
3.2 Additional Rent...........................................................4
3.3 Year-End Adjustments......................................................4
3.4 Late Charge, And Interest On Rent In Default..............................4
3.5 Payment Of Rent...........................................................5
3.6 Prepaid Rent..............................................................5
3.7 Security Deposit..........................................................5
ARTICLE 4 Use Of Leased Premises And Outside Area.............................6
4.1 Permitted Use.............................................................6
4.2 General Limitations On Use................................................6
4.3 Noise And Emissions.......................................................6
4.4 Trash Disposal............................................................6
4.5 Parking...................................................................6
4.6 Signs.....................................................................6
4.7 Compliance With Laws And Private Restrictions.............................7
4.8 Compliance With Insurance Requirements....................................7
4.9 Landlord's Right To Enter.................................................7
4.10 Use Of Outside Areas......................................................7
4.11 Environmental Protection..................................................7
4.12 Rules And Regulations.....................................................9
4.13 Reservations..............................................................9
4.14 Roof......................................................................9
ARTICLE 5 Repairs, Maintenance, Services And Utilities........................9
5.1 Repair And Maintenance.....................................................9
(a) Tenant's Obligations.......................................................9
(b) Landlord's Obligation......................................................9
5.2 Utilities.................................................................10
5.3 Security..................................................................10
5.4 Energy And Resource Consumption...........................................10
5.5 Limitation Of Landlord's Liability........................................10
ARTICLE 6 Alterations And Improvements.......................................10
6.1 By Tenant.................................................................10
6.2 Ownership Of Improvements.................................................11
6.3 Alterations Required By Law...............................................11
6.4 Liens.....................................................................11
96
ARTICLE 7 Assignment And Subletting By Tenant................................11
7.1 By Tenant................................................................11
7.2 Merger, Reorganization, or Sale of Assets................................12
7.3 Landlord's Election......................................................12
7.4 Conditions To Landlord's Consent.........................................12
7.5 Assignment Consideration And Excess Rentals Defined......................13
7.6 Payments.................................................................13
7.7 Good Faith...............................................................13
7.8 Effect Of Landlord's Consent.............................................13
ARTICLE 8 Limitation On Landlord's Liability And Indemnity...................14
8.1 Limitation On Landlord's Liability And Release...........................14
8.2 Tenant's Indemnification Of Landlord.....................................14
ARTICLE 9 Insurance...........................................................14
9.1 Tenant's Insurance.......................................................14
9.2 Landlord's Insurance.....................................................15
9.3 Mutual Waiver Of Subrogation.............................................15
ARTICLE 10 Damage To Leased Premises.........................................16
10.1 Landlord's Duty To Restore..............................................16
10.2 Insurance Proceeds......................................................16
10.3 Landlord's Right To Terminate...........................................16
10.4 Tenant's Right To Terminate.............................................16
10.5 Tenant's Waiver.........................................................16
10.6 Abatement Of Rent.......................................................16
ARTICLE 11 Condemnation.......................................................17
11.1 Tenant's Right To Terminate.............................................17
11.2 Landlord's Right To Terminate...........................................17
11.3 Restoration.............................................................17
11.4 Temporary Taking........................................................17
11.5 Division Of Condemnation Award..........................................17
11.6 Abatement Of Rent.......................................................17
11.7 Taking Defined..........................................................17
ARTICLE 12 Default And Remedies..............................................17
12.1 Events Of Tenant's Default..............................................17
12.2 Landlord's Remedies.....................................................18
12.3 Landlord's Default And Tenant's Remedies................................19
12.4 Limitation Of Tenant's Recourse.........................................19
12.5 Tenant's Waiver.........................................................19
ARTICLE 13 General Provisions................................................19
13.1 Taxes On Tenant's Property..............................................19
13.2 Holding Over............................................................20
13.3 Subordination To Mortgages..............................................20
13.4 Tenant's Attornment Upon Foreclosure....................................20
13.5 Mortgagee Protection....................................................20
13.6 Estoppel Certificate....................................................20
13.7 Tenant's Financial Information..........................................21
13.8 Transfer By Landlord....................................................21
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13.9 Force Majeure...........................................................21
13.10 Notices.................................................................21
13.11 Attorneys' Fees.........................................................21
13.12 Definitions.............................................................22
(a) Real Property Taxes......................................................22
(b) Landlord's Insurance Costs...............................................22
(c) Property Maintenance Costs...............................................22
(d) Property Operating Expenses..............................................23
(e) Law......................................................................23
(f) Lender...................................................................23
(g) Private Restrictions.....................................................23
(h) Rent.....................................................................23
13.13 General Waivers.........................................................23
13.14 Miscellaneous...........................................................23
ARTICLE 14 Corporate Authority Brokers And Entire Agreement..................24
14.1 Corporate Authority.....................................................24
14.2 Brokerage Commissions...................................................24
14.3 Entire Agreement........................................................24
14.4 Landlord's Representations..............................................24
ARTICLE 15 Options To Extend.................................................24
ARTICLE 16 Telephone Service.................................................26
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