LEASE
BY AND BETWEEN
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES,
a New York corporation, as Landlord
and
FMC CORPORATION,
a Delaware corporation,
as Tenant
for
BUILDING A
TABLE OF CONTENTS
Page
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ARTICLE 1. DEFINITIONS........................................... 1
1.1. Commencement Date....................................... 1
1.2. Rent Start Date......................................... 1
1.3. Lease Term.............................................. 1
1.4. Property................................................ 1
1.5. Premises................................................ 2
1.6. Permitted Use........................................... 2
1.7. Tenant's Minimum Liability Insurance Coverage........... 2
1.8. Tenant's Allocated Parking Stalls....................... 2
1.9. Retained Real Estate Brokers............................ 2
1.10. Address for Notices..................................... 2
1.11. Lease................................................... 2
1.12. Building C Lease........................................ 2
1.13. Tenant's Allocated Share................................ 2
1.14. Continuing Tenant Default............................... 3
1.15. Additional Definitions.................................. 3
ARTICLE 2. DEMISE AND ACCEPTANCE................................. 3
2.1. Demise of Premises...................................... 3
2.2. Delivery and Acceptance of Possession................... 3
2.3. Construction of Interior Improvements................... 3
2.4. Options to Extend Lease Term............................ 3
ARTICLE 3. RENT.................................................. 5
3.1. Base Monthly Rent....................................... 5
3.2. Additional Rent......................................... 6
3.3. Payment of Rent......................................... 6
3.4. Late Charge and Interest on Rent in Default............. 6
ARTICLE 4. USE OF PREMISES....................................... 7
4.1. Limitation on Type...................................... 7
4.2. Compliance with Laws and Private Restrictions........... 7
4.3. Insurance Requirements.................................. 7
4.4. Outside Areas........................................... 8
4.5. Signs................................................... 8
4.6. Rules and Regulations................................... 8
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4.7. Parking................................................. 8
4.8. Window Coverings........................................ 9
4.9. Outside Sales........................................... 9
ARTICLE 5. TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS............. 9
5.1. Trade Fixtures.......................................... 9
5.2. Leasehold Improvements.................................. 9
5.3. Alterations Required by Law............................. 10
5.4. Landlord's Improvements................................. 11
5.5. Liens................................................... 11
5.6. Modifications to the Premises........................... 11
ARTICLE 6. REPAIR AND MAINTENANCE................................ 12
6.1. Tenant's Obligation to Maintain......................... 12
6.2. Landlord's Obligation to Maintain....................... 12
6.3. Tenant's Obligation to Reimburse........................ 13
6.4. Common Operating Expenses Defined....................... 14
6.5. Control of Common Area.................................. 14
6.6. Tenant's Negligence..................................... 15
ARTICLE 7. WASTE DISPOSAL AND UTILITIES.......................... 15
7.1. Waste Disposal.......................................... 15
7.2. Hazardous Materials..................................... 15
7.3. Utilities............................................... 17
7.4. Compliance with Governmental Regulations................ 17
ARTICLE 8. REAL PROPERTY TAXES................................... 18
8.1. Real Property Taxes Defined............................. 18
8.2. Tenant's Obligation to Reimburse........................ 18
8.3. Taxes on Tenant's Property.............................. 19
ARTICLE 9. INSURANCE............................................. 19
9.1. Tenant's Insurance...................................... 19
9.2. Landlord's Insurance.................................... 20
9.3. Tenant's Obligation to Reimburse........................ 20
9.4. Release and Waiver of Subrogation....................... 20
ARTICLE 10. LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY..... 21
10.1. Limitation on Landlord's Liability...................... 21
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10.2. Limitation on Tenant's Recourse......................... 21
10.3. Indemnification of Landlord............................. 22
ARTICLE 11. DAMAGE TO PREMISES................................... 22
11.1. Landlord's Duty to Restore.............................. 22
11.2. Landlord's Right to Terminate........................... 22
11.3. Tenant's Right to Terminate............................. 23
11.4. Abatement of Rent....................................... 23
ARTICLE 12. CONDEMNATION......................................... 24
12.1. Tenant's Termination Right.............................. 24
12.2. Restoration and Abatement of Rent....................... 24
12.3. Temporary Taking........................................ 24
12.4. Division of Condemnation Award.......................... 24
ARTICLE 13. DEFAULT AND REMEDIES................................. 25
13.1. Events of Tenant's Default.............................. 25
13.2. Landlord's Remedies..................................... 26
13.3. Waiver by Tenant of Certain Remedies.................... 27
13.4. Waiver.................................................. 27
13.5. Limitation on Exercise of Rights........................ 27
ARTICLE 14. ASSIGNMENT AND SUBLETTING............................ 27
14.1. By Tenant............................................... 27
14.2. By Landlord............................................. 29
ARTICLE 15. GENERAL PROVISIONS................................... 30
15.1. Landlord's Right to Enter............................... 30
15.2. Surrender of the Premises............................... 30
15.3. Holding Over............................................ 30
15.4. Subordination........................................... 31
15.5. Tenant's Attornment..................................... 31
15.6. Mortgagee Protection.................................... 31
15.7. Estoppel Certificates and Financial Statements.......... 31
15.8. Force Majeure........................................... 32
15.9. Notices................................................. 32
15.10. Obligation to Act Reasonably........................... 32
15.11. Corporate Authority.................................... 32
15.12. Additional Definitions................................. 32
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15.13. Miscellaneous.......................................... 33
15.14. Termination by Exercise of Right....................... 33
15.15. Brokerage Commissions.................................. 34
15.16. Entire Agreement....................................... 34
15.17. Right of First Offer to Lease.......................... 34
SCHEDULE OF EXHIBITS
EXHIBIT A - SITE PLAN OF PROPERTY
EXHIBIT B - APPROVED PLANS FOR INTERIOR IMPROVEMENTS
EXHIBIT C - INTERIOR IMPROVEMENT AGREEMENT
EXHIBIT D - FORM OF SUBORDINATION AGREEMENT
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LEASE
(Building A)
THIS LEASE, dated June 1, 1989 for reference purposes only, is made by
and between THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New
York corporation ("Landlord"), and FMC CORPORATION, a Delaware corporation
("Tenant").
ARTICLE 1.
DEFINITIONS
1.1. COMMENCEMENT DATE: The term "Commencement Date" shall mean the date
the last signatory to this Lease whose execution is required to make it
binding on Landlord and Tenant shall have executed this Lease.
1.2. RENT START DATE: The term "Rent Start Date" shall mean November 1,
1989; provided, however, that if the Interior Improvements to be constructed
pursuant to the Interior Improvement Agreement attached as EXHIBIT "C" are
not "Substantially Completed" (as defined in EXHIBIT "C") by November 1, 1989
because of delays in construction resulting from "Force Majeure" (as defined
in this paragraph 1.2), then the Rent Start Date shall be extended for one
day for each such day of delay experienced by Tenant in constructing the
Interior Improvements pursuant to EXHIBIT "C". For purposes of this
paragraph, the following shall apply:
A. The term "Force Majeure" shall mean (i) any material default
by Landlord of its obligations under this Lease which delays construction;
(ii) strikes, labor disputes or work stoppages which are not directed solely
at the construction of the Interior Improvements or only because of job
conditions at the Premises but which also affect other construction projects;
(iii) damage to the Interior Improvements or the Premises caused by fire,
earthquake, vandalism or other peril; and (iv) civil commotion, civil unrest,
or acts of war. The term "Force Majeure" shall not include any of the
following: (i) delays caused by the Prime Contractor or any subcontractor,
including delays resulting from contractor default; (ii) inability to obtain
labor, materials, equipment, or reasonable substitutes therefor when ordered;
or (iii) inability to obtain any governmental approval required in connection
with the construction of the Interior Improvements.
B. Tenant shall notify Landlord promptly of the occurrence of
any event of Force Majeure. If Tenant does not notify Landlord in writing of
the occurrence of an event of Force Majeure within five (5) days after such
event has commenced to occur, then the Rent Start Date shall only be extended
by the amount of delay that occurs after Tenant actually gives written notice
to Landlord of the occurrence of the event of Force Majeure in question.
1.3. LEASE TERM: The Lease Term shall commence on the Commencement
Date and shall continue until the tenth (10th) anniversary of the Rent Start
Date (unless the Lease Term is extended pursuant to paragraph 2.4 hereof).
1.4. PROPERTY: The term "Property" shall mean that real property shown
on the site plan attached hereto as EXHIBIT "A" and all improvements now or
hereafter located thereon, including, without limitation, the five (5)
buildings presently located thereon, including, without limitation, the give
(5) buildings presently located thereon, the aggregate gross leasable area of
which is approximately 295,271 square feet (the "Property Gross Leasable
Area"), allocated among the five buildings as shown on the attached EXHIBIT
"A"; provided, however, that Landlord may change the boundaries and
composition of the Property by removing or adding land and/or buildings and
thereafter the term "Property" shall refer to such real property so enlarged
or reduced and the amount of the "Property Gross Leasable Area" shall be
appropriately adjusted.
1.5. PREMISES: The term "Premises" shall mean the building structure
situated on the Property commonly known as Building A of Airport Technology
Park, 2890 De La Cruz Boulevard, Santa Clara, California, containing
approximately 68,708 square feet of gross leasable area (the "Premises Gross
Leasable Area") located as shown on EXHIBIT "A". Landlord and Tenant agree
that (i) all measurements of gross leasable area contained in this Lease are
conclusively agreed to be correct and binding upon the parties, even if a
subsequent measurement of any one of these areas determines that it is more
or less than the amount of area reflected in this Lease; and (ii) any such
subsequent determination that the area is more or less than shown in this
Lease shall not result in a change in any of the computations of rent,
improvement allowances, or other matters described in this Lease where gross
leasable area is a factor.
1.6. PERMITTED USE: The term "Permitted Use" shall mean the use of the
Premises for (i) research and development, production, sales, and general
administrative offices and other legal uses incidental thereto, and (ii) any
other legal use first approved in writing by Landlord.
1.7. TENANT'S MINIMUM LIABILITY INSURANCE COVERAGE: The term "Tenant's
Minimum Liability Insurance Coverage" shall mean Two Million Five Hundred
Thousand Dollars ($2,500,000).
1.8. TENANT'S ALLOCATED PARKING STALLS: The term "Tenant's Allocated
Parking Stalls" shall mean 274 parking stalls for the non-exclusive use of
Tenant. Notwithstanding the foregoing, or any other provision of this Lease,
the parties acknowledge that although Tenant is allocated a combined total of
620 parking spaces pursuant to this Lease and the Building C Lease, after a
restripping of the parking areas on the Property to increase to 1,155 the
number of spaces available, only a total of 603 spaces shall be available for
Tenant's use. In this regard the parties agree that the total number of
parking spaces allocated for Tenant's use under this Lease and under the
Building C Lease shall be reduced by 17; such spaces shall be proportionably
allocated between the Premises and the premises leased pursuant to the
Building A Lease. Landlord agrees, at the written request of Tenant, to
construct at Landlord's expense 17 additional parking spaces on the Property,
if Landlord can do so at a reasonable cost by relocating or removing
landscaped area or driveways, and the construction of such additional parking
spaces is permitted by all applicable Laws.
1.9. RETAINED REAL ESTATE BROKERS: The term "Retained Real Estate
Brokers" shall mean LaSalle Partners Limited and J.R. Parrish, Inc.
1.10. ADDRESS FOR NOTICES: The term "Address for Notices" shall mean
the following:
A. In the case of Landlord, such term shall mean The Equitable
Life Assurance Society of the United States, One Market Plaza, 1900 Steuart
Tower, San Francisco, California 94105, Attention: Property Management
Department.
B. In the case of Tenant, such term shall mean (i) before the
Commencement Date, its present address which is 881 Martin Avenue, Box 58123,
Santa Clara, California 95052; and (ii) after the Commencement Date, the
address of the Premises which is 2830 De La Cruz Boulevard, Santa Clara,
California 95050.
1.11. LEASE: The term "Lease" shall mean this printed lease, Exhibits
"A" (site plan), "B" (Approved Plans for Interior Improvements), "C"
(Interior Improvement Agreement), "D" (form of subordination agreement), all
of which are attached hereto and incorporated herein by this reference.
1.12. BUILDING C LEASE: The term "Building C Lease" shall mean that
lease dated as of June 1, 1989 between Landlord and Tenant, pursuant to which
Tenant leases from Landlord that certain building identified as Building C on
the site plan attached hereto as EXHIBIT "A" and which contains approximately
86,785 square feet, the address of which is 2830 De La Cruz Boulevard, Santa
Clara, California.
1.13. TENANT'S ALLOCATED SHARE: The term "Tenant's Allocated Share"
shall mean one hundred percent (100%).
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1.14. CONTINUING TENANT DEFAULT: A "Continuing Tenant Default" shall
be deemed to exist when an "Event of Tenant's Default" (as defined in
paragraph 13.1) has occurred, and the underlying default or breach by Tenant
of its obligations which resulted in such Event of Tenant's Default has not
been completely cured.
1.15. ADDITIONAL DEFINITIONS: As used in this Lease or any addendum or
amendment thereto, the following terms shall have the meanings set forth in
paragraph 15.12: "Agreed Interest Rate", "Common Area", "Law", "Leasehold
Improvements", "Lender", "Private Restrictions" and "Trade Fixtures".
ARTICLE 2.
DEMISE AND ACCEPTANCE
2.1. DEMISE OF PREMISES: Landlord hereby leases to Tenant, and Tenant
leases from Landlord, for the Lease Term upon the terms and conditions of
this Lease, the Premises together with (i) the non-exclusive right to use no
more than the number of Tenant's Allocated Parking Stalls within the Common
Area (subject to the limitations set forth in paragraph 4.7), and (ii) the
non-exclusive right to use the Common Area for ingress to and egress from the
Premises. Tenant's lease of the Premises shall be subject to (i) all Laws,
(ii) all Private Restrictions, easements, and other matters of public record,
and (iii) the reasonable and non-discriminatory rules and regulations from
time to time promulgated by Landlord pursuant to paragraph 4.6.
2.2. DELIVERY AND ACCEPTANCE OF POSSESSION: Landlord shall deliver to
Tenant possession of the Premises on the Commencement Date in their presently
existing condition, broom clean. Tenant shall accept possession of the
Premises in its presently existing condition, "as-is" (except for latent
defects in the structural elements of the Premises), acknowledging that (i)
Tenant intends to do substantial renovation work and construct completely new
interior improvements pursuant to paragraph 2.3 hereof and the Interior
Improvement Agreement attached as EXHIBIT "C", and (ii) Landlord is obligated
to make certain repairs as set forth in the Interior Improvement Agreement.
2.3. CONSTRUCTION OF INTERIOR IMPROVEMENTS: Tenant shall construct
certain improvements for Tenant's use in the Premises pursuant to the terms
of the Interior Improvement Agreement executed concurrently with this Lease
by Landlord and Tenant and attached hereto as EXHIBIT "C".
2.4. OPTIONS TO EXTEND LEASE TERM: Landlord hereby grants to Tenant
two (2) options (each referred to as the "Option") to extend the Lease Term
each for a five (5) year period (the "Option Term"), on the following terms
and conditions:
A. Tenant must give Landlord notice in writing of its exercise
of the Option before the later to occur of (i) the two hundred fortieth
(240th) day before the date of the initial Lease Term (or then extended Lease
Term as the case may be) would end but for said exercise, or (ii) the seventh
(7th) day following the establishment of the fair market rent for the
Premises by appraisal pursuant to subparagraph 2.4F if such appraisal process
is commenced pursuant to subparagraphs 2.4E and 2.4F.
B. Tenant may not exercise the Option at any time that either
of the following is true: (i) a Continuing Tenant Default exists under this
Lease (unless caused by a subTenant of the original Tenant under this Lease
and such original Tenant is using reasonable efforts to cause such default to
be cured) or (ii) a Continuing Tenant Default exists under the Building A
Lease (unless caused by a subTenant or assignee of the original Tenant under
this Lease and such original Tenant is using reasonable efforts to cause such
default to be cured) and the same person or entity is the owner of record of
both the Premises and the real property leased pursuant to the Building C
Lease.
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C. All terms and conditions of this Lease shall apply during
the Option Term, except that the Base Monthly Rent for the Option Term shall
be determined as provided in subparagraph 2.4D below.
D. The Base Monthly Rent for the Option Term with respect to
the Premises shall be the ninety-five percent (95%) of the fair market rent
for the Premises for the Option Term on the terms contained in this Lease as
of the commencement of the Option Term, determined pursuant to subparagraphs
2.4E and 2.4F. For purposes of this Lease, the term "fair market rent for
the Premises" shall mean the projected going market rent for the Premises as
of the commencement of the Option Term in question, including a provision for
periodic increases of such rent during the Option Term (which increases shall
be established as part of such fair market rent), taking into account the
value of all improvements in the Premises, regardless of whether made by
Landlord or Tenant (except for those Leasehold Improvements that Tenant has
the right to remove at the expiration of the Lease Term).
E. Tenant may not exercise the Option in question unless Tenant
has delivered to Landlord a written request (a "Rent Quote Request") that
Landlord state in writing Landlord's opinion of the fair market rent for the
Premises for the upcoming Option Term in question, which Rent Quote Request
may only be delivered and shall only be effective if delivered (i) no sooner
than fifteen (15) months before the expiration of the Lease Term, and (ii) no
later than thirteen (13) months prior to the expiration of the Lease Term.
After receipt of a Rent Quote Request and no later than twelve (12) months
prior to the expiration of the Lease Term, Landlord shall deliver to Tenant a
written statement setting forth Landlord's opinion of the fair market rent
for the Premises for the Option Term in question (a "Landlord's Rent Quote").
For a period of thirty (30) days following delivery to Tenant of Landlord's
Rent Quote (the "Negotiation Period"), Landlord and Tenant shall confer to
attempt to reach agreement upon the fair market rent for the Premises for the
Option Term in question. If Landlord and Tenant are unable to reach
agreement in writing within the Negotiation Period, for purposes of
establishing the Base Monthly Rent for the Option Term in question, the fair
market rent for the Premises shall be deemed to be the amount stated in
Landlord's Rent Quote unless Tenant delivers to Landlord during the
Negotiation Period a written notice which states the following: (i) Tenant
requires that the fair market rent for the Premises for the Option Term in
question be established by the appraisal process described in subparagraph
2.4F; and (ii) the name, address, and qualifications of the appraiser
selected by Tenant for purposes of the appraisal process described in
subparagraph 2.4F ("Tenant's Appraisal Demand"). If Tenant so timely
delivers to Landlord a Tenant's Appraisal Demand, the Base Monthly Rent for
the Option Term in question shall be established based on the result of the
appraisal process described in subparagraph 2.4F.
F. If Tenant delivers to Landlord a Tenant's Appraisal Demand
during the Negotiation Period, then the fair market rent for the Premises
shall be determined by three (3) real estate appraisers, all of whom shall be
members of the American Institute of Real Estate Appraisers with not less
than five (5) years experience appraising real property (other than
residential or agricultural property) located in Santa Clara County,
California, in accordance with the following procedures:
(1) One of the appraisers shall be the appraiser identified
in Tenant's Appraisal Demand. Within ten (10) days of receipt of Tenant's
Appraisal Demand, Landlord shall select its appraiser and notify Tenant, in
writing, of the name, address and qualifications of an appraiser selected by
it. Failure by Landlord to select a qualified appraiser within said ten (10)
day period shall be deemed a waiver of its right to select a second appraiser
on its own behalf and Tenant shall select a second appraiser on behalf of
Landlord within five (5) days after the expiration of said ten (10) day
period. Within ten (10) days from the date the second appraiser shall have
been appointed, the two (2) appraisers selected by the parties shall appoint
a third appraiser. If the two appraisers fail to select a third qualified
appraiser, the third appraiser shall be selected by the American Arbitration
Association at the request of either party or, if there is then no American
Arbitration Association or if it refuses to perform this function, then at
the request of either Landlord or Tenant, the third appraiser shall be
appointed by the then Presiding Judge of the Superior Court of the State of
California for the County of Santa Clara.
(2) The three (3) appraisers so selected shall meet in San
Jose,
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California, not later than twenty (20) days following the selection of the
third appraiser. At said meeting the appraisers shall attempt to determine
the fair market rent for the Premises for the Option Term in question.
(3) If the appraisers are unable to complete their
determinations in one meeting, they may continue to consult at such times as
they deem necessary for a fifteen (15) day period from the date of their
first meeting, in an attempt to have at least two (2) of them agree. If, at
the initial meeting or at any time during said fifteen (15) day period, two
(2) or more of the appraisers agree on the fair market rent for the Premises,
such agreement shall be determinative and binding on the parties hereto, and
the agreeing appraisers shall, in simple letter form executed by the agreeing
appraisers, forthwith notify both Landlord and Tenant of the amount set by
such agreement.
(4) If two (2) or more appraisers do not agree within said
fifteen (15) day period as set forth above, then each appraiser shall, within
five (5) days after the expiration of said fifteen (15) day period, submit
his independent appraisal in simple letter form to Landlord and Tenant
stating his determination of the fair market rent for the Premises for the
Option Term in question. Landlord and Tenant shall then determine the fair
market rent for the Premises for the Option Term by determining the average
of the fair market rent set by each of the appraisers; provided, however, if
the lowest appraisal is less than eighty-five percent (85%) of the middle
appraisal then such lowest appraisal shall be disregarded, and/or if the
highest appraisal is greater than one hundred fifteen percent (115%) of the
middle appraisal then such highest appraisal shall be disregarded. If any
appraisal is disregarded, then the average shall be determined by computing
the average set by the other appraisals that have not been disregarded. For
purposes of determining the relative amount of the appraisals to implement
the provisions of this subparagraph requiring that an appraisal be
disregarded if it is too high or too low, the amount of an appraisal that
calls for periodic rent increases based upon an index (E.G., the Consumer
Price Index) shall be determined by assuming that such index will increase at
the same average annual rate during the option period in question that such
index increased on an average annual basis during the five (5) year period
preceding the commencement of the option period in question.
(5) Each party shall bear the fees and expenses of the
appraisers selected by or for it, and the fees and expenses of the third
appraiser shall be borne fifty percent (50%) by Landlord and fifty percent
(50%) by Tenant.
ARTICLE 3.
RENT
3.1. BASE MONTHLY RENT: Commencing on the Rent Start Date and
continuing thereafter throughout the initial Lease Term, Tenant shall pay to
Landlord a monthly rent (which rent is referred to as the "Base Monthly
Rent"), which shall be the following:
A. No Base Monthly Rent shall be payable for the period
beginning on the Rent Start Date and ending on the last day of the sixth
(6th) month of the Lease Term.
B. The Base Monthly Rent for the period beginning on the first
day of the seventh (7th) month of the Lease Term and ending on the last day
of the twenty-fourth (24th) month of the Lease Term is Forty Eight Thousand
Ninety Six Dollars ($48,096) (I.E., $0.70 per square foot per month).
C. The Base Monthly Rent for the period beginning on the first
day of the twenty-fifth (25th) month of the Lease Term and ending on the last
day of the forty-eighth (48th) month of the Lease Term is Fifty Eight
Thousand Four Dollars ($58,402) (I.E., $0.85 per square foot per month).
D. The Base Monthly Rent for the period beginning on the first
day of the forty-ninth (49th) month of the Lease Term and ending on the last
day of the seventy-second
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(72nd) month of the Lease Term is Sixty-One Thousand Eight Hundred
Thirty-Seven Dollars ($61,837.90) (I.E., $0.90 per square foot per month).
E. The Base Monthly Rent for the period beginning on the first
day of the seventy-third (73rd) month of the Lease Term and ending on the
last day of the one hundred twentieth (120th) month of the Lease Term is
Sixty-Five Thousand Two Hundred Seventy-Three Dollars ($65,273) (I.E., $0.95
per square foot per month).
F. For purposes of applying the provisions of this paragraph
3.1, the term "month of the Lease Term" shall mean that period which begins
on that day of the calendar month in question which corresponds to the Rent
Start Date and which continues for thirty (30) or thirty-one (31) days until
the day of the next calendar month which precedes the day in that calendar
month which corresponds to the Rent Start Date. By way of example only, if
it is assumed that the Rent Start Date is September 15, 1989, then for
purposes of this paragraph 3.1 (i) the first month of the Lease Term would
commence September 15 and end on October 14, 1989; and (ii) the seventh (7th)
month of the Lease Term would commence on March 15 and end on April 14, 1990.
3.2. ADDITIONAL RENT: Commencing on the Rent Start Date and
continuing thereafter throughout the Lease Term, Tenant shall pay, as
additional rent (the "Additional Rent"), (i) Tenant's share of Common
Operating Expenses as required by paragraph 6.3, (ii) Tenant's share of the
Real Property Taxes as required by paragraph 8.2, (iii) Landlord's share of
the net consideration received by Tenant upon certain assignments and
sublettings as required by paragraph 14.1, (iv) any late charges or interest
due Landlord pursuant to paragraph 3.4, (v) Tenant's share of the amortized
cost of certain additional improvements as provided in paragraph 5.4, and
(vi) any other charges due Landlord pursuant to this Lease.
3.3. PAYMENT OF RENT: All rent required to be paid in monthly
installments shall be paid in advance on the first day of each calendar month
during the Lease Term. All rent shall be paid in lawful money of the United
States, without any abatement, deduction or offset whatsoever (except as
permitted by paragraphs 11.4 and 12.2), and without any prior demand
therefor, to Landlord at its address set forth above or at such other place
as Landlord may designate from time to time. Tenant's obligation to pay rent
shall be prorated as of the Rent Start Date and at expiration or earlier
termination of the Lease Term such that Tenant shall not be required to pay
Base Monthly Rent or Additional Rent for any period preceding the Rent Start
Date or following the expiration or earlier termination of the Lease Term
(except in the case of a termination of this Lease as a result of an Event of
Tenant's Default).
3.4. LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges
that the late payment by Tenant of any monthly installment of Base Monthly
Rent or any Additional Rent will cause Landlord to incur certain costs and
expenses not contemplated under this Lease, the exact amount of which are
extremely difficult or impractical to fix. Such costs and expenses will
include, without limitation, administration and collection costs and
processing and accounting expenses. Therefore, if any such Base Monthly Rent
or Additional Rent is not received by Landlord from Tenant within five (5)
days after Landlord delivers written notice to Tenant that such amount is
delinquent, Tenant shall immediately pay to Landlord a late charge equal to
five percent (5%) of such delinquent rent. Landlord and Tenant agree that
this late charge represents a reasonable estimate of such costs and expenses
and is fair compensation to Landlord for its loss suffered by 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 rent or prevent Landlord from exercising any right or
remedy available to Landlord upon Tenant's failure to pay any rent due under
this Lease in a timely fashion, including the right to terminate this Lease.
If any rent remains delinquent for a period in excess of thirty (30) days
after Landlord delivers written notice to Tenant that such amount is
delinquent, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not paid when due at the Agreed Interest Rate
following the date such amount became due until paid.
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ARTICLE 4.
USE OF PREMISES
4.1. LIMITATION ON TYPE: Tenant shall use the Premises solely for the
Permitted Use (as described in paragraph 1.6). Tenant shall not do or permit
anything to be done in or about the Premises or Common Area which will (i)
interfere with the rights of other occupants of the Property, (ii) cause
structural damage to the Premises and Tenant fails to promptly commence and
diligently pursue to completion the repair of such damage, or (iii) cause
damage to any part of the Premises or Property except to the extent
reasonably necessary for the installation of Tenant's equipment and trade
fixtures and Tenant fails to promptly commence and diligently pursue to
completion the repair of such damage. Tenant shall not operate any equipment
within the Premises which will (i) injure, vibrate or shake the Premises,
(ii) overload existing electrical systems or other mechanical equipment
servicing the Premises, or (iii) impair the efficient operation of the
sprinkler system or the heating, ventilating or air conditioning ("HVAC")
equipment servicing the Premises, or (iv) damage, overload or corrode the
sanitary sewer system. Tenant shall not attach, hang or suspend anything
from the ceiling, roof, walls or columns of the Premises or set any load on
the floor in excess of approved structural limits as defined by Landlord's
architect. Any dust, fumes, or waste products generated by Tenant's use of
the Premises shall be contained and disposed so that they do not (i) create a
fire or health hazard, (ii) damage the Premises, or (iii) interfere with the
businesses of other Tenants of the Property. All noise or odors generated by
Tenant's use of the Premises shall be contained or muffled so that they do
not interfere with the businesses of other Tenants of the Property. Tenant
shall not (i) change the exterior of the Premises (subject to Tenant's right
to install signs pursuant to paragraph 4.5), or (ii) install any equipment or
antennas on or make any penetrations of the exterior or roof of the Premises
without the prior written consent of Landlord. Tenant shall not commit nor
permit to be committed any waste in or about the Premises, and Tenant shall
keep the Premises in a neat, clean, attractive and orderly condition, free of
any objectionable noises, odors, dust or nuisances which may disturb the
quiet enjoyment of other Tenants or occupants of the Property.
Notwithstanding the foregoing restrictions, the parties agree as follows:
A. Tenant may bring military fighting vehicles onto the first
floor of the Premises so long as (i) Tenant puts into place such reinforcing
as is reasonably necessary to upgrade the floor load capacity so that it will
accept such fighting vehicles; and (ii) Tenant repairs any damage to the
Premises caused by the entry of such vehicles.
B. Tenant may install antennas, radio "dishes" or other
electronic equipment reasonably necessary for the conduct of Tenant's
business upon the roof of the Premises so long as (i) such installations are
done in compliance with all Laws and Private Restrictions; (ii) such
installations are accomplished in a manner which does not compromise the
watertight integrity of the roof; (iii) all damage to the Premises caused by
such installation is repaired by Tenant; and (iv) any such equipment is
properly and effectively screened from view in a manner reasonably acceptable
to Landlord.
C. In the event Tenant desires to operate equipment within the
Premises that will or may overload existing mechanical, electrical, or other
systems, Tenant may do so only if it first installs, at its sole cost, all
necessary modifications, repairs or upgrades of existing systems so that such
equipment may be operated without overloading such systems as so modified by
Tenant.
4.2. COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall not
use or permit any person to use the Premises in any manner which violates any
Laws or Private Restrictions. Tenant shall abide by and promptly observe and
comply with all Laws and Private Restrictions and shall indemnify and hold
Landlord harmless from any liability resulting from Tenant's failure to do so.
4.3. INSURANCE REQUIREMENTS: Tenant shall not use or permit any
person to use the Premises or Common Area in any manner which will cause a
cancellation of any insurance policy covering the Premises. Tenant shall not
sell, or permit to be kept, used, or sold in or about
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the Premises any article which may be prohibited by the standard form of fire
insurance policy; provided, however, that Tenant may bring military fighting
vehicles onto the first floor of the Premises as permitted pursuant to
subparagraph 4.1A. Tenant shall comply with all reasonable requirements of
any insurance company, insurance underwriter, or Board of Fire Underwriters
which are necessary to maintain, at reasonable rates, the insurance coverage
carried by Landlord pursuant to this Lease.
4.4. OUTSIDE AREAS: No materials, supplies, storage tanks or
containers, equipment, finished products or semi-finished products, raw
materials, inoperable vehicles or articles of any nature shall be stored upon
or permitted to remain outside of the Premises except in fully fenced and
screened areas outside the Premises which have been designed for such purpose
and have been approved in writing by Landlord for such use by Tenant;
provided, however, that Tenant may bring military fighting vehicles onto the
first floor of the Premises as permitted pursuant to subparagraph 4.1A.
4.5. SIGNS: Tenant shall not place on any portion of the Premises or
the Property any sign, placard, lettering in or on windows, banner, displays
or other advertising or communicative material which is visible from the
exterior of the Premises without the prior written approval of Landlord. All
such approved signs shall strictly conform to all Laws and Private
Restrictions and shall be installed at the expense of Tenant. If Landlord so
elects, Tenant shall, at the expiration or sooner termination of this Lease,
remove all signs installed by it and repair any damage caused by such
removal. Tenant shall at all times maintain such signs in good condition and
repair. Upon Tenant's written request and at Tenant's cost and expense,
Landlord shall remove both of the Airport Technology Park monument signs
located on De La Cruz Boulevard. Subject to Landlord's prior written
approval of Tenant's specific design plan, (i) Tenant shall have the right to
install a monument sign at the entrance to the Premises, and at the two
entrances to Airport Technology Park, and (ii) Tenant shall have the right to
install signs on the exterior of the Premises. Approved signs installed by
Tenant may be illuminated in compliance with the provisions of applicable
laws and Private Restrictions.
4.6. RULES AND REGULATIONS: Landlord may from time to time promulgate
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Property for the care and orderly management of the Property
and the safety of its Tenants and invitees. Such rules and regulations shall
be binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant
agrees to abide by such rules and regulations. 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 for the violation by any other Tenant of the Property of any such
rules and regulations.
4.7. PARKING: Tenant is allocated and shall have the non-exclusive
right to use (without charge in addition to the Base Monthly Rent) no more
than the number of parking spaces contained within the Property described in
paragraph 2.1 for its use and the use of its employees and invitees, the
location of which may be designated from time to time by Landlord but shall
be on the Property and within reasonable proximity to the Premises. Tenant
shall not at any time use or permit its employees or invitees to use more
parking spaces than the number so allocated to Tenant or to park or permit
the parking of its vehicles or the vehicles of others in any portion of the
Property not designated by Landlord as a non-exclusive parking area.
Landlord shall not oversubscribe the parking within the Property, and shall
assure that the total number of spaces committed to the non-exclusive use of
all Tenants of the Property shall not exceed the total number of spaces
within the Common Area. Of the parking spaces allotted to Tenant pursuant to
paragraph 2.1, Tenant shall have the right to designate a reasonable number
of such spaces as reserved spaces for its executives, which shall not exceed
ten percent (10%) of the total of spaces and which shall be in immediate
proximity to the Premises. In the event Tenant elects to install a patio as
set forth in subparagraph 5.6A, the number of parking spaces allocated to
Tenant shall be reduced based upon the square footage of said patio, which at
the time this Lease is executed is anticipated to be a reduction in eight (8)
parking spaces. If Landlord grants to any other Tenant the exclusive right
to use any particular parking space(s), neither Tenant nor its employees or
invitees shall use such spaces. Within ten (10) business days after written
request therefor from Landlord, Tenant shall furnish Landlord with a list of
its and its employees vehicle license numbers and Tenant shall thereafter
notify Landlord of any change in such list within five
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(5) days after each such change occurs. Tenant shall have the right, at
Tenant's option, to provide its employees with stickers or other
identification markers or tags to be affixed to or on the employees'
automobiles or other vehicles, evidencing the right of such employees to use
the parking area. Such stickers shall be subject to prior review and
approval by Landlord, which shall not be unreasonably withheld or delayed.
Tenant shall furnish to Landlord a list of identifying numbers for the
stickers distributed from time to time by Tenant to its employees. If Tenant
elects to use such stickers as provided herein, Tenant shall not be obligated
to furnish Landlord with a list of vehicle license numbers for its employees,
for as long as Tenant maintains such sticker system of identification.
Landlord reserves the right, after having given Tenant reasonable notice, to
have any vehicles owned by Tenant or its employees or invitees utilizing
parking spaces in excess of the parking spaces allowed for Tenant's use to be
towed away at Tenant's cost. All trucks and delivery vehicles shall be (i)
parked at the rear of the Premises, (ii) loaded and unloaded in a manner
which does not interfere with the businesses of other occupants of the
Property, and (iii) permitted to remain on the Property only so long as is
reasonably necessary to complete loading and unloading. In the event
Landlord elects or is required by any Law to limit or control parking in the
Property, whether by validation of parking tickets or any other method of
assessment, Tenant agrees to participate in such validation or assessment
program under such reasonable rules and regulations as are from time to time
established by Landlord, so long as such participation does not result in any
increase in costs to Tenant.
4.8. WINDOW COVERINGS: To the extent Tenant elects to use window
coverings visible from the exterior of the Premises, Tenant shall use the
same window covering to cover all windows Tenant so elects to cover in the
Premises to maintain a consistent and uniform exterior appearance.
4.9. OUTSIDE SALES: Tenant shall not conduct or permit to be
conducted on any portion of the Common Area any sale of any kind, including
(i) any public or private auction, fire sale, going-out-of-business sale,
distress sale or other liquidation sale, or (ii) any so-called "flea market",
open-air market or any other similar activity. Notwithstanding the
foregoing, Tenant shall be allowed to conduct occasional sales outside of the
Premises on that part of the Common Area that is in close proximity to the
Premises so long as each of the following conditions is satisfied with
respect to each such sale: (i) Landlord is given at least two (2) business
days prior written notice of the date of any such sale; (ii) such sale does
not violate any Laws; (iii) such sale is conducted in a manner that does not
interfere with the rights of other occupants of the Property; (iv) Tenant
provides all necessary security, cleans up all debris and repairs any damage
caused by such sale; and (v) the purpose of such sale is to permit employees
of Tenant to purchase or to receive free of charge property of Tenant.
ARTICLE 5.
TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS
5.1. TRADE FIXTURES: Throughout the Lease Term, Tenant shall provide,
install, and maintain in good condition all Trade Fixtures required in the
conduct of its business in the Premises. All Trade Fixtures shall remain
Tenant's property.
5.2. LEASEHOLD IMPROVEMENTS: The following provisions govern
Leasehold Improvements constructed by Tenant:
A. Tenant shall not construct any Leasehold Improvements or
otherwise alter the Premises without Landlord's prior approval if such action
results in the demolition, removal, or material alteration of existing
Improvements (including partitions, wall and floor coverings, ceilings,
lighting fixtures or other utility installations) and if the cost of such
construction or alteration exceeds Fifteen Thousand Dollars ($15,000) per
work of improvement or if the cost of Leasehold Improvements done, under
construction, or for which approval is sought during any calendar quarter
exceeds Twenty-Five Thousand Dollars ($25,000). With respect to any
Leasehold Improvements which must be approved by Landlord pursuant to the
immediately
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preceding sentence, Tenant shall not commence construction of such Leasehold
Improvements until Landlord shall have first approved the plans and
specifications therefor, which approval shall be deemed given if not denied
in writing within ten (10) working days after Landlord shall have received
Tenant's request for such approval. In no event shall Tenant make any
alterations to the Premises which could significantly affect the structural
integrity or the exterior design of the Premises without Landlord's prior
approval.
B. All Leasehold Improvements requiring Landlord's approval
shall be installed by Tenant in substantial compliance with the approved
plans and specifications therefor. All construction undertaken by Tenant
shall be done in accordance with all Laws and in a good and workmanlike
manner using materials of good quality. Tenant shall not commence
construction of any Leasehold Improvements until (i) all required
governmental approvals and pe-rmits shall have been obtained, (ii) all
requirements regarding insurance imposed by this Lease have been satisfied,
and (iii) if reasonably requested by Landlord, Tenant shall have obtained
contingent liability and broad form builders risk insurance in an amount
reasonably satisfactory to Landlord if there are any perils relating to the
proposed construction not covered by insurance carried pursuant to Article 9.
If Landlord so requests in writing with respect to Leasehold Improvements
requiring Landlord's prior approval, Tenant shall inform Landlord of Tenant's
scheduled date for commencement of construction at least five (5) days prior
to such date of commencement.
C. At all times during the Lease Term, (i) Tenant shall
maintain all plans and change orders prepared in connection with the
construction of any Leasehold Improvements which required a building permit
or other governmental approval, and (ii) Tenant shall provide to Landlord
copies of such plans and change orders (and, to the extent Tenant causes such
to be prepared for its own use, "As-Built" plans) at any time that Landlord
requests copies thereof.
D. All Leasehold Improvements shall remain the property of
Tenant during the Lease Term. Tenant shall have the right to remove only the
following kinds of Leasehold Improvements so long as it repairs all damage
caused by the installation thereof and returns the Premises to the condition
existing prior to the installation of such Leasehold Improvements: (i)
built-in cabinets, file drawers and bookcases; (ii) computer room air
conditioning; (iii) canteen equipment; (iv) office cubicle systems; and (v)
ornamental statues. At the expiration or sooner termination of the Lease
Term, all Leasehold Improvements that Tenant does not remove shall be
surrendered to Landlord as a part of the realty and shall then become
Landlord's property, and Landlord shall have no obligation to reimburse
Tenant for all or any portion of the value or cost thereof. However, if
Landlord so requires, at the expiration or earlier termination of the Lease
Term, Tenant shall remove any Leasehold Improvements designated for removal
by Landlord and shall restore the Premises to the condition existing prior to
the installation of such Leasehold Improvements to the extent necessary to
return the Premises to substantially the same condition that existed on the
completion of the Interior Improvements constructed pursuant to EXHIBIT "C",
ordinary wear and tear excepted. Notwithstanding the foregoing:
(1) Tenant shall only be required to remove Leasehold
Improvements for which either of the following is true: (i) such Leasehold
Improvements were not approved in writing by Landlord; or (ii) at the time
approval was given by Landlord, Landlord informed Tenant in writing that
Landlord would require that such Leasehold Improvements be removed at the
termination of the Lease Term.
(2) Tenant may cause interior partitions to be moved,
reconfigured, or removed altogether, or cause interior offices to be deleted
or added, all without the obligation to restore such partitions or interior
offices to any prior condition upon expiration or termination of the Lease.
5.3. ALTERATIONS REQUIRED BY LAW: Tenant shall make any alteration,
addition or change of any sort, whether structural or otherwise, to the
Premises that is required by any Law because of (i) a specific use or change
of use made of the Premises by Tenant (which alteration, addition or change
is not generally required to be made by owners or Tenants of other properties
similar to the Premises), (ii) Tenant's application for any permit or
governmental approval, or (iii) Tenant's construction or installation of any
Leasehold Improvements or Trade Fixtures.
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5.4. LANDLORD'S IMPROVEMENTS: All fixtures, improvements or equipment
which are installed, constructed on or attached to the Property by Landlord
at its expense shall become a part of the realty and belong to Landlord.
Tenant shall pay additional rent in the event Landlord, in its sole
discretion, elects to make any of the following kinds of capital improvements
to the Property: (i) capital improvements required to be constructed in
order to comply with any Law not in effect or applicable to the Property as
of the Commencement Date; (ii) modification of existing or construction of
additional capital improvements or building service equipment for the purpose
of reducing the consumption of utility services or Common Operating Expenses
of the Property; (iii) replacement of capital improvements or building
service equipment existing as of the Commencement Date when required because
of normal wear and tear; and (iv) the amount of "deductibles" paid by
Landlord for the restoration of any part of the Property that has been
damaged to the extent such "deductible" is not included within Common
Operating Expenses. With respect to any expenditure in excess of Fifty
Thousand Dollars ($50,000) for which Landlord seeks contribution pursuant to
this paragraph 5.4 from Tenant, prior to incurring such expense, Landlord
shall notify Tenant of the nature and estimated amount of such expenditure
and, if Tenant so requests, shall provide Tenant with such information upon
which such cost estimate is based for Tenant's approval. The amount of
additional rent Tenant is to pay with respect to each such capital
improvement shall be determined as follows:
A. Tenant shall have the option to pay in cash an amount
equal to Tenant's Allocated Share of all costs paid by Landlord to construct
the improvements in question fairly allocable to the Premises (including
financing costs) in cash within thirty (30) days after the improvement has
been substantially completed and Landlord has notified Tenant of the cost of
such improvement and the amount of Tenant's required contribution. If Tenant
does not exercise such option to pay such amount in cash, then the provisions
of subparagraph 5.4B shall apply.
B. All costs paid by Landlord to construct such
improvement (including financing costs) shall be amortized on a straight line
basis over the useful life of such improvement (determined in accordance with
generally accepted accounting principles) with interest on the unamortized
balance at the then prevailing market rate Landlord would pay if it borrowed
funds to construct such improvement from an institutional lender, and
Landlord shall inform Tenant of the monthly amortization payment required to
so amortize such costs, and shall also provide Tenant with the information
upon which such determination is made. As additional rent, Tenant shall pay
an amount equal to Tenant's Allocated Share of that portion of such monthly
amortization payment fairly allocable to the Premises (as reasonably
determined by Landlord) for each month after such improvement is completed
until the first to occur of (i) the expiration of the Lease Term (as the same
may be extended), or (ii) the end of the term over which such costs were
amortized, which amount shall be due at the same time the Base Monthly Rent
is due.
C. Notwithstanding anything contained in this paragraph
5.4, the additional rent Tenant is to pay with respect to any modification of
existing or construction of additional capital improvements or building
service equipment for the purpose of reducing the consumption of utility
expenses or Common Operating Expenses of the Property shall not for any
period exceed the actual amount of savings in Additional Rent realized by
Tenant as a result of such modification or construction.
5.5. LIENS: Tenant shall keep the Premises and the Property free from
any liens and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees
or contractors relating to the Premises. If any claim of lien is recorded,
Tenant shall bond against or discharge the same within thirty (30) days after
the same has been recorded against the Premises and/or the Property. Should
any lien be filed against the Premises or any action commenced affecting
title to the Premises, the party receiving notice of such lien or action
shall immediately give the other party written notice thereof.
5.6. MODIFICATIONS TO THE PREMISES: Subject to Landlord's prior
written approval, and the provisions of paragraphs 5.2 and 5.3 hereof, Tenant
shall have the right to:
A. Modify the parking area behind the Premises, which area is
highlighted on the attached EXHIBIT "A", to construct a patio;
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B. Install a datalink approximately twenty (20) inches wide
between the Premises and Building A;
C. Install up to a total of four (4) flagpoles allocated
between the front of the Premises and the front of the premises leased
pursuant to the Building A Lease; and
D. Fill in existing loading docks so long as (i) existing
drainage systems serving such loading docks are appropriately capped; (ii)
such fill is accomplished in a manner that the loading docks may be restored
to their condition existing as of the Commencement Date upon expiration of
the Lease Term, and (iii) Tenant agrees to restore such loading docks to the
condition existing as of the Commencement Date upon the expiration of the
Lease Term.
E. Trim or relocate on the Property to a new location approved
by Landlord any trees, shrubs or other landscaping that obscures any sign
installed on the Property by Tenant.
ARTICLE 6.
REPAIR AND MAINTENANCE
6.1. TENANT'S OBLIGATION TO MAINTAIN: Except as otherwise provided in
paragraph 6.2 and in Article 11 regarding the restoration of damage caused by
fire and other perils, Tenant shall, at all times during the Lease Term,
clean, keep, and maintain in good order, condition, and repair the Premises
and every part thereof, through regular inspections and servicing, including,
but not limited to, (i) all plumbing and sewage facilities (including all
sinks, toilets, faucets and drains), and all ducts, pipes, vents or other
parts of the HVAC or plumbing system, (ii) all fixtures, interior walls,
floors, carpets and ceilings, (iii) all windows, doors, entrances, plate
glass, showcases and skylights (including cleaning both interior and exterior
surfaces), (iv) all electrical facilities and all HVAC equipment and other
mechanical systems (including all lighting fixtures, lamps, bulbs, tubes,
fans, vents, exhaust equipment and systems), (v) any automatic fire
extinguisher equipment in the Premises, and (vi) the roof membrane (including
any necessary resurfacing or patching to preserve the membrane or to repair
leaks except that Tenant shall not be required to make any repair to the
extent such repair is required because of Landlord's repair or maintenance of
the structural roof system). Tenant shall replace any damaged or broken
glass in the Premises (including all interior and exterior doors and windows)
with glass of the same kind, size and quality. Tenant shall repair any
damage to the Premises (including exterior doors and windows) caused by
vandalism or any unauthorized entry. Tenant shall maintain continuously
throughout the Lease Term a service contract for the maintenance of all HVAC
equipment serving the Premises with a licensed HVAC repair and maintenance
contractor, which contract provides for the periodic inspection and servicing
of the HVAC equipment at least once every sixty (60) days during the Lease
Term. Tenant shall also maintain continuously throughout the Lease Term a
service contract for the washing of all windows (both interior and exterior
surfaces) in the Premises with a contractor, which contract provides for the
periodic washing of all such windows on such basis as shall keep the exterior
appearance of the Premises in first class condition, but no less frequently
than once every calendar year. If and when Landlord so requests in writing,
Tenant shall furnish Landlord with copies of all such service contracts. All
repairs and replacements required of Tenant shall be promptly made with
materials of good quality. If the work affects the structural parts of the
Premises or if the estimated cost of any item of repair or replacement is in
excess of Fifteen Thousand Dollars ($15,000), then Tenant shall first obtain
Landlord's written approval of the scope of work, plans therefor, and
materials to be used, except in the case of emergency in which event Tenant
shall within a reasonable period of time after performing the work, notify
Landlord of the scope of the work performed and the materials used, and shall
furnish Landlord with the plans therefor.
6.2. LANDLORD'S OBLIGATION TO MAINTAIN: Landlord, at its cost
without right of reimbursement from Tenant, shall be responsible for the
maintenance, repair, and replacement of the structural parts of the Premises
(I.E., foundation, first and second story floor slab and second story floor
deck, load-bearing walls, and structural roof system, but excluding roof
membrane) except to the extent that (i) the same is necessitated by the wrongful
or negligent act or omission
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of Tenant, its subTenants, or their respective agents, employees,
contractors, or invitees, or (ii) reimbursement is permitted pursuant to
paragraph 5.4 hereof. Landlord at its cost without right of reimbursement
from Tenant, shall repair damage to interior improvements and Leasehold
Improvements that have been approved by Landlord pursuant to the terms
hereof, or damage to the roof membrane of the Premises if caused by the
maintenance work required to be performed by Landlord pursuant to the
provisions of this paragraph. Landlord shall repair, maintain, operate and
replace when necessary the Common Area, with such right of reimbursement from
Tenant as is specified in paragraphs 5.4 and 6.3. The parties acknowledge
that the air-conditioning units located on the roof of the Premises were
installed when the Building was constructed and subsequently have not
operated. Landlord agrees to make any repairs necessary to put such units in
good operating condition, if within the six month period following the
Commencement Date, Tenant notifies Landlord in writing of the need for such
repairs. Landlord shall not be responsible for repairs required by an
accident, fire or other peril except as otherwise required by Article 11, or
for damage caused to any part of the Property by any act, negligence or
omission of Tenant or its agents, contractors, employees or invitees.
Landlord may engage contractors of its choice to perform the obligations
required of it by this Article, and the necessity of any expenditure to
perform such obligations shall be at the sole discretion of Landlord.
6.3. TENANT'S OBLIGATION TO REIMBURSE: As additional rent, commencing
on the Rent Start Date and continuing throughout the remainder of the Lease
Term, Tenant shall pay Tenant's Allocated Share of all Common Operating
Expenses fairly allocable to the Premises including (i) all Common Operating
Expenses paid with respect to the maintenance, repair, replacement and use of
the Premises and (ii) a proportionate share (based on the Premises Gross
Leasable Area as a percentage of the Property Gross Leasable Area) of all
Common Area Expenses which relate to the Property in general and are not
fairly allocable to any one building on the Property. Landlord agrees that
it shall not recover from all Tenants of the Property more than one hundred
percent (100%) of the actual Common Operating Expenses incurred by Landlord
for the period in question. As provided in paragraph 3.3, Tenant's
obligation to pay Tenant's Allocated Share of Common Operating Expenses
fairly allocable to the Premises shall be prorated as of the Rent Start Date
and at the expiration or earlier termination of the Lease Term, and if Tenant
has paid any amount on account of Common Operating Expenses relating to a
period that is not within the Lease Term (E.G., prepayment of insurance
premiums for one year), such amount shall be reimbursed to Tenant in
connection with such proration. Payment shall be made by whichever of the
following methods is from time to time designated by Landlord, and Landlord
may change the method of payment at any time so long as (i) Landlord gives
Tenant at least sixty (60) days prior written notice, and (ii) the method is
not changed more than once in any calendar year. Tenant shall pay such share
of the actual Common Operating Expenses incurred or paid by Landlord but not
theretofore billed to Tenant within thirty (30) days after receipt of a
written bill therefor from Landlord, on such periodic basis as Landlord shall
designate, but in no event more frequently than once a month. Alternatively,
(i) Landlord shall deliver to Tenant Landlord's reasonable estimate of the
Common Operating Expenses it anticipates will be paid or incurred for the
calendar year in question, (ii) during such calendar year, Tenant shall pay
such share of the estimated Common Operating Expenses in advance in monthly
installments as required by Landlord due with the installments of Base
Monthly Rent, and (iii) within ninety (90) days after the end of each
calendar year, Landlord shall furnish to Tenant a statement in reasonable
detail of the actual Common Operating Expenses paid or incurred by Landlord
during the just ending calendar year and thereupon there shall be an
adjustment between Landlord and Tenant, with payment to Landlord or credit by
Landlord against the next installment of Base Monthly Rent, as the case may
require, within thirty (30) days after delivery by Landlord to Tenant of said
statement, so that Landlord shall receive the entire amount of Tenant's share
of all Common Operating Expenses for such calendar year and no more. Tenant
and its agents (including accountants) shall have the right at its expense,
exercisable upon reasonable prior written notice to Landlord, to inspect at
Landlord's office during normal business hours Landlord's books and records
as they relate to Common Operating Expenses. Such inspection must be made
within one hundred eighty (180) days of Tenant's receipt of Landlord's annual
statement for the same, and shall be limited to verification of the charges
contained in such statement. Tenant may not withhold payment of such bill
pending completion of such inspection.
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6.4. COMMON OPERATING EXPENSES DEFINED: The term "Common Operating
Expenses" shall mean the sum of the following:
A. All costs and expenses paid or incurred by Landlord in doing
the following (including payments to independent contractors providing
services related to the performance of the following): (i) maintaining,
cleaning, and repairing the exterior surfaces (including painting of exterior
surfaces of buildings not more than once every 5 years) of all buildings
located on the Property; (ii) maintenance of the liability, fire and property
damage insurance covering the Property carried by Landlord pursuant to
paragraph 9.2 (including the payment of commercially reasonable "deductibles"
and the prepayment of premiums for coverage of up to one year); (iii)
maintaining, repairing, operating and replacing when necessary HVAC
equipment, utility facilities and other building service equipment; (iv)
providing utilities to the Common Area (including lighting, trash removal and
water for landscaping irrigation); (v) complying with all applicable Laws and
Private Restrictions; (vi) operating, maintaining, repairing, cleaning,
painting, restripping and resurfacing the Common Area; (vii) replacement or
installation of lighting fixtures, directional or other signs and signals,
irrigation systems, trees, shrubs, ground cover and other plant materials,
and all landscaping in the Common Area; and (viii) depreciation and financing
costs on maintenance and operating machinery and equipment (if owned) and
rental paid for such machinery and equipment (if rented);
B. All additional costs and expenses incurred by Landlord with
respect to the operation, protection, maintenance, repair and replacement of
the Property which pursuant to generally accepted accounting principles would
be considered a current expense and not a capital expenditure;
C. That portion of all compensation (including benefits and
premiums for workers' compensation and other insurance) paid to or on behalf
of employees of Landlord but only to the extent they are involved in the
performance of the work described by subparagraphs A and B above and that is
fairly allocable to the Property;
D. An additional amount equal to a commercially reasonable and
competitive management fee that would be charged by an independent third
party property manager for the management of the Property (except that
Tenant's Allocated Share of such management fee for any period shall not
exceed two percent (2%) of the Base Monthly Rent and Additional Rent payable
by Tenant for the same period); and
E. Notwithstanding anything contained herein, the term "Common
Operating Expenses" shall not include any of the following: (i) mortgage
principle payments; (ii) ground rent and other payments made pursuant to any
ground lease affecting the Property; (iii) the cost of refinancing any loan
secured by the Property; (iv) interest and penalties imposed against Landlord
for late payments by Landlord; (v) legal fees incurred by Landlord in
connection with the negotiation or enforcement of, or litigation in
connection with, any lease affecting the Property; (vi) the cost of any
paintings, sculptures, or other art objects installed on the Property; (vii)
any costs reimbursed to Landlord by insurance or other third party payments
that are not reimbursements by Tenants for their share of Common Operating
Expenses; (viii) brokerage commissions or other costs related to the leasing
of space within the Property; (ix) the cost of any Tenant improvements
installed for the exclusive use of any other Tenant of the Property.
6.5. CONTROL OF COMMON AREA: Landlord shall at all times have
exclusive control of the Common Area. Landlord shall have the right, without
the same constituting an actual or constructive eviction and without
entitling Tenant to any abatement of rent, to: (i) close any part of the
Common Area to the minimum extent reasonably necessary in the reasonable
opinion of Landlord's counsel to prevent a dedication thereof or the accrual
of any prescriptive rights therein; (ii) temporarily close the Common Area to
perform maintenance or for any other reason deemed sufficient by Landlord;
(iii) designate other property outside the boundaries of the Property to
become part of the Property; (iv) construct multi-deck parking structures in
any part of the Common Area; (v) change the shape, size, location, number and
extent of improvements on the Common Area; (vi) select a third party to
maintain and operate any of the Common Area at any time Landlord determines
that the best interests of the Property will be served by having the Common
Area maintained and operated by that third party so long as the fees and
charges of such third party are reasonable and competitive with the fees of
others in the marketplace
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providing the same services; (vii) make changes to the Common Area including,
without limitation, changes in the location of driveways, parking spaces,
parking areas, sidewalks or the direction of the flow of traffic and the site
of the Common Area; and/or (viii) voluntarily change the address of the
Property. Landlord agrees not to change the name of Airport Technology Park
without the prior consent of Tenant. The use of the Common Area shall be
subject to such reasonable regulation and changes therein as Landlord shall
make from time to time. Landlord shall not exercise its rights to control
the Common Area in a manner that would materially interfere with Tenant's use
of the Premises without first obtaining Tenant's approval. Tenant shall keep
the Common Area free and clear of all obstructions created or permitted by
Tenant. If in the opinion of Landlord unauthorized persons are using any of
the Common Area by reason of the presence of Tenant in the Premises, Tenant,
upon demand of Landlord, shall restrain such unauthorized use by appropriate
proceedings. Nothing herein shall affect the right of Landlord at any time
to remove such unauthorized person from the Common Area nor to prohibit the
use of the Common Area by unauthorized persons. In exercising any such
rights described in this paragraph 6.5 regarding the Common Area, Landlord
shall make a reasonable effort to minimize any disruption to Tenant's
business.
6.6. TENANT'S NEGLIGENCE: Anything in this Lease to the contrary
notwithstanding, Tenant shall pay for all damage to the Premises or the
Property caused by the negligent act or omission of Tenant, its employees,
contractors, or invitees, or by the failure of Tenant to discharge promptly
its obligations under this Lease or to comply with the terms of this Lease,
but only to the extent such damage is not covered by insurance proceeds
actually recovered by Landlord. Tenant shall make payment within thirty (30)
days after demand therefor by Landlord.
ARTICLE 7.
WASTE DISPOSAL AND UTILITIES
7.1. WASTE DISPOSAL: Tenant shall store its waste either inside the
Premises or within outside trash enclosures that are (i) fully fenced and
screened in compliance with all Private Restrictions, (ii) designed for such
purpose to be used either exclusively by Tenant or in common with other
occupants of the Property, as designated by Landlord, and (iii) first
approved by Landlord. All entrances to such outside trash enclosures shall
be kept closed, and waste shall be stored in such manner as not to be visible
from the exterior of such outside enclosures. Tenant shall cause all of its
waste to be regularly removed from the Property at Tenant's sole cost.
Tenant shall keep all fire corridors and mechanical equipment rooms in the
Premises free and clear of all obstructions at all times.
7.2. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Property:
A. Landlord hereby makes the following representations to
Tenant, each of which is made to the best of Landlord's knowledge as of the
Commencement Date:
(1) The soil and ground water on or under the Property
does not contain Hazardous Materials in amounts which violate any Hazardous
Materials Laws to the extent that any governmental entity could require
either Landlord or Tenant to take any remedial action or impose any penalties
with respect to such Hazardous Materials.
(2) During Landlord's period of ownership, no litigation
or any administrative proceeding has been brought or threatened, nor any
settlements reached with any governmental or private party, concerning the
actual or alleged presence of Hazardous Materials on or about the Property or
any disposal, release or threatened release of Hazardous Materials in or
about the Property.
(3) During the time that Landlord has owned the Property,
Landlord has received no notice of (i) any violation, or alleged violation,
of any Hazardous Material Law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to the
presence of Hazardous Material on the Property, or (iii) any pending
investigation
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by any governmental agency concerning the Property relating to Hazardous
Materials.
(4) The Property does not contain any (i) equipment
containing PCBs, or (ii) underground storage tanks.
B. Any handling, transportation, storage, treatment, disposal
or use of Hazardous Materials by Tenant and Tenant's agents, employees,
contractors, invitees or subTenants after the Commencement Date in or about
the Property shall strictly comply with all applicable Hazardous Materials
Laws. Tenant shall indemnify, defend upon demand with counsel reasonably
acceptable to Landlord, and hold harmless Landlord from and against any and
all liabilities, losses, claims, damages, interest, penalties, fines,
monetary sanctions, attorneys' fees, experts' fees, court costs, remediation
costs, investigation costs, and other expenses which result from or arise in
any manner whatsoever out of the use, storage, treatment, transportation,
release, or disposal of Hazardous Materials on or about the Property by
Tenant or Tenant's agents, employees, contractors, invitees or subTenants
after the Commencement Date.
C. If the presence of Hazardous Materials on the Property
caused or permitted by Tenant or Tenant's agents, employees, contractors,
invitees or subTenants after the Commencement Date results in contamination
or deterioration of water or soil resulting in a level of contamination
greater than the levels established as acceptable by any governmental agency
having jurisdiction over such contamination, then Tenant shall promptly take
any and all action necessary to clean up such contamination if required by
Law or as a condition to the issuance or continuing effectiveness of any
governmental approval which relates to the use of the Property or any part
thereof. 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, clean-up and restoration work and
materials required hereunder to return the Property to its condition existing
prior to the appearance of such Hazardous Materials.
D. Landlord and Tenant shall each give written notice to the
other as soon as reasonably practicable of (i) any communication received
from any governmental authority concerning Hazardous Materials which relates
to the Property, and (ii) any contamination of the Property by Hazardous
Materials which constitutes a violation of any Hazardous Materials Law.
Landlord and Tenant agree to keep such information confidential, except for
(i) disclosures that are approved by the other party, (ii) disclosures
required by Law or (iii) disclosures to any environmental consultant, lender,
purchaser, prospective purchaser, attorneys for either Landlord or Tenant, or
brokers for either Landlord or Tenant, so long as an agreement of
confidentiality is obtained from a party to whom the disclosure is to be
made, and (iv) disclosures in connection with any litigation or
administrative proceeding in which either Landlord or Tenant is involved.
Tenant and Tenant's agents, employees, contractors, invitees or subTenants
shall not bring Hazardous Materials onto the Property without first obtaining
the written consent of Landlord; provided, however, Tenant may, without being
required to obtain the prior written consent of Landlord, use at the Premises
in small quantities office supplies, cleaning materials and other maintenance
materials that are customarily used in business offices, even though such
supplies and materials may fall within the definition of Hazardous Materials.
At any time during the Lease Term, Tenant shall, within five days after
written request therefor received from Landlord, disclose in writing all
Hazardous Materials that are being used by Tenant on the Property, the nature
of such use, and the manner of storage and disposal.
E. Landlord may cause testing wells to be installed on the
Property, and may cause the ground water to be tested to detect the presence
of Hazardous Material by the use of such tests as are then customarily used
for such purposes. Any such installation of wells or tests shall be done in
a manner which minimizes the interference with Tenant's use of the Premises.
If Tenant so requests, Landlord shall supply Tenant with copies of such test
results. The cost of such tests and of the installation, maintenance, repair
and replacement of such wells shall be paid by Tenant if such tests disclose
the existence of facts which give rise to liability of Tenant pursuant to its
indemnity given in subparagraph 7.2B or 7.2C, and Tenant's liability is
established in a judicial or administrative proceeding, or in an action for
declaratory relief brought by Landlord.
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F. Landlord, at its sole cost, shall comply with all Hazardous
Materials Laws affecting the Property (without right of reimbursement from
Tenant) to the extent that (i) Landlord is legally obligated to do so by such
Laws, and (ii) such compliance (or the cost of such compliance) is not made
the responsibility of Tenant pursuant to subparagraph 7.2B or subparagraph
7.2C. Landlord shall indemnify, defend upon demand with competent counsel,
and hold harmless Tenant from and against any and all liability for response
costs imposed upon Tenant by any governmental agency pursuant to the Federal
Law known as "CERCLA" (more particularly identified in subparagraph 7.2G) and
the comparable California statute (commonly known as the
Carpenter-Presley-Tanner Hazardous Substances Account Act, California Health
and Safety Code Section 25300 et. seq.) that results from the presence of
Hazardous Materials on the Property not caused or contributed to by the use,
storage, treatment, release or disposal of Hazardous Materials on or about
the Property by Tenant, its subTenants, or their respective agents,
employees, contractors, or invitees. Notwithstanding the foregoing, the
indemnity given by Landlord in the immediately preceding sentence shall not
apply with respect to liability caused by any contamination of the Property
by a Hazardous Material that is or has been used, stored, treated, released
or disposed of on the Property by Tenant, its subTenants, or their respective
agents, employees, contractors, or invitees unless Tenant can prove such
contamination was not caused or contributed to by any of such parties.
G. As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated
by any local governmental authority, the State of California or the United
States Government. The term "Hazardous Material," includes, without
limitation, asbestos, PCBs, petroleum and petroleum products, and any
material or substance which is (i) listed under Article 9 or defined as
hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (ii) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C.
Section 6903), or (iii) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section
9601). As used herein, the term "Hazardous Material Law" shall mean any
statute, law, ordinance, or regulation of any governmental body or agency
(including the U.S. Environmental Protection Agency, the California Regional
Water Quality Control Board, and the California Department of Health
Services) which regulates the use, storage, release or disposal of any
Hazardous Material.
H. The obligations of Landlord and Tenant under this paragraph
7.2 shall survive the expiration or earlier termination of the Lease Term.
The rights and obligations of Landlord and Tenant with respect to issues
relating to Hazardous Materials are exclusively established by this paragraph
7.2. In the event of any inconsistency between any other part of this Lease
and this paragraph 7.2, the terms of this paragraph 7.2 shall control.
7.3 UTILITIES: Tenant shall promptly pay, as the same become due,
all charges for water, gas, electricity, telephone, sewer service, waste pick-up
and any other utilities, materials or services furnished directly to or used by
Tenant on or about the Premises during the Lease Term, including, without
limitation, (i) meter, use and/or connection fees, hook-up fees, standby fees,
and (ii) penalties for discontinued or interrupted service.
7.4 COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Landlord and Tenant
shall comply with all rules, regulations and requirements promulgated by
national, state or local governmental agencies or utility suppliers
concerning the use of utility services, including any rationing, limitation
or other control. Landlord may voluntarily cooperate in a reasonable manner
with the efforts of all governmental agencies or utility suppliers in
reducing energy or other resource consumption. Tenant shall not be entitled
to terminate this Lease nor to any abatement in rent by reason of such
compliance or cooperation. Tenant agrees at all times to cooperate fully with
Landlord and to abide by all rules, regulations and requirements which
Landlord may prescribe in order to maximize the efficient operation of the
HVAC system and all other utility systems.
-17-
ARTICLE 8.
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REAL PROPERTY TAXES
8.1. REAL PROPERTY TAXES DEFINED: The term "Real Property Taxes" as
used herein shall mean (i) all taxes, assessments, levies, and other charges
of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to
pay any existing or future general or special assessments for public
improvements, services or benefits, and any increases resulting from
reassessments or resulting from a change in ownership or any other cause),
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 against, or with respect to the
value, occupancy or use of, all or any portion of the Property (as now
constructed or as may at any time hereafter be constructed, altered, or
otherwise changed) or Landlord's interest therein, the fixtures, equipment
and other property of Landlord, real or personal, that are an integral part
of and located on the Property, the gross receipts, income, or rentals from
the Property, or the use of parking areas, public utilities, or energy within
the Property, (ii) all charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the Property
(excluding costs and expenses for which Landlord is responsible pursuant to
subparagraph 7.2F), and (iii) all costs and fees (including attorneys' fees)
incurred by Landlord in contesting any Real Property Tax and in negotiating
with public authorities as to any Real Property Tax. If at any time during
the Lease Term the method of taxation or assessment of the Property
prevailing as of the Commencement Date shall be altered so that in lieu of or
in addition to any Real Property Tax described above there shall be levied,
assessed 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 or additional tax or charge (i) on the value, use or occupancy of
the Property, (ii) on or measured by the gross receipts, income, or rentals
from the Property, (iii) on Landlord's business of leasing the Property, or
(iv) 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 term "Real Property Taxes" for purposes of this Lease. If any
Real Property Tax is 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 term "Real Property
Taxes". Notwithstanding the foregoing, the term "Real Property Taxes" shall
not include estate, inheritance, transfer, gift or franchise taxes of
Landlord or the federal or state net income tax imposed on Landlord's income
from all sources.
8.2. TENANT'S OBLIGATION TO REIMBURSE: As Additional Rent, Tenant shall
pay to Landlord Tenant's Allocated Share of all Real Property Taxes which
become due after the Rent Start Date and during the Lease Term which are
fairly allocable to the Premises, which include (i) all Real Property Taxes
assessed with respect to the value, use or occupancy of the Premises and the
land beneath it, and (ii) a proportionate share (based on the Premises Gross
Leasable Area as a percentage of the Property Gross Leasable Area) of all
Real Property Taxes assessed with respect to the Common Area or with respect
to the Property in general which are not fairly allocable to any one building
on the Property. Tenant shall pay its share of Real Property Taxes (i) within
thirty (30) days after being billed for the same by Landlord, or (ii) no
later than ten (10) days before such Real Property Tax becomes delinquent,
whichever last occurs. If requested by Tenant in writing within one year
from receipt of a bill for Tenant's Allocated Share of Real Property Taxes,
Landlord shall furnish Tenant with such evidence as is reasonably available
to Landlord with respect to the amount of any Real Property Tax which is part
of such bill. Tenant may not withhold payment of such bill pending receipt
and/or review of such evidence. Upon Landlord's election or if any Lender
requires Landlord to impound Real Property Taxes on a periodic basis during
the Lease Term, then Tenant, on notice from Landlord indicating this
requirement, shall pay a sum of money toward its liability under this Article
to Landlord on the same periodic basis in accordance with the Lender's
requirements (if any). Landlord shall impound the Real Property Tax payments
received from Tenant in accordance with the requirements of the Lender (if
any). If any assessments are levied against the Property, Landlord may elect
either to pay the assessment in full or to allow the assessment to go to
bond. If Landlord pays the assessment in full, Tenant shall pay to Landlord
each time payment of Real Property Taxes is made a sum equal to that which
would have been payable (as both principal
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and interest) had Landlord allowed the assessment to go to bond.
Notwithstanding anything to the contrary contained in paragraphs 8.1 and 8.2,
if there is an increase in Real Property Taxes resulting from a "change in
ownership" (as that term is defined in California Revenue and Taxation Code
Section 60, et. seq.) which occurs prior to the fourth (4th) anniversary of
the Commencement Date, then Tenant shall not be obligated to pay any such
increase that results from such "change of ownership".
8.3. TAXES ON TENANT'S PROPERTY: Tenant shall pay before delinquency
any and all taxes, assessments, license fees and public charges levied,
assessed or imposed against Tenant or Tenant's estate in this Lease or the
property of Tenant situated within the Premises which become due during the
Lease Term. Tenant shall furnish Landlord with satisfactory evidence of
these payments within thirty (30) days after receipt of written request
therefor from Landlord.
ARTICLE 9
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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 the following:
(1) Commercial general liability insurance, including
property damage, against liability for personal injury, bodily injury, death
and damage to property occurring in or about, or resulting from an occurrence
in or about, the Premises with combined single limit coverage of not less
than the amount of Tenant's Minimum Liability Insurance Coverage set forth in
paragraph 1.8, which insurance shall contain a "contractual liability"
endorsement insuring Tenant's performance of Tenant's obligation to indemnify
Landlord contained in paragraph 10.3;
(2) Plate-glass insurance, at actual replacement cost; and
(3) Fire and property damage insurance against loss caused by
fire, extended coverage perils including steam boiler insurance, sprinkler
leakage, if applicable, vandalism, malicious mischief and such other
additional perils as now are or hereafter may be included in a standard
extended coverage endorsement from time to time in general use in the county
in which the Property is located, insuring Tenant's personal property,
inventory, Trade Fixtures and Leasehold Improvements within the Premises for
the full actual replacement cost thereof.
B. Where applicable and required by Landlord, each policy of
insurance required to be carried by Tenant pursuant to this paragraph
(i) shall name Landlord and such other parties in interest as Landlord
designates as additional insureds; (ii) shall be primary insurance which
provides 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 declarations
without the right of contribution from 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; (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; (vi) shall
not have a "deductible" in excess of $500,000 or such greater amount as is
approved by Landlord; (vii) shall (to the extent available) contain a waiver
by the insurer of any right to subrogation against Landlord, its agents,
employees and contractors which might arise by reason of any payment under
such policy or by reason of any act or omission of Landlord, its agents,
employees or contractors; and (viii) shall contain a "severability" clause.
If Tenant has in force and effect a blanket policy of liability insurance
with the same coverage for the Premises as described above, as well as other
coverage of other premises and properties of Tenant, or in which Tenant has
some interest, such blanket insurance shall satisfy the requirements hereof.
-19-
C. A certificate of each paid-up policy evidencing the insurance
required to be carried by Tenant pursuant to this paragraph (appropriately
authenticated by the insurer), certifying that such policy has been issued,
providing the coverage required by this paragraph, and containing the
provisions specified herein, shall be delivered to Landlord prior to the time
Tenant or any of its contractors enters the Premises and upon renewal of such
policies, but not less than five (5) days prior to the expiration of the term
of such coverage. If Landlord's insurance advisor reasonably determines at
any time that the amount of coverage required for any policy of insurance
Tenant is to obtain pursuant to this paragraph is not adequate, then Tenant
shall increase such coverage for such insurance to such amount as Landlord's
insurance advisor reasonably deems adequate, not to exceed the level of
coverage commonly carried by comparable businesses similarly situated for
such insurance; provided, however, that Landlord may not require an
adjustment pursuant to this sentence more frequently than once every two (2)
years during the Lease Term.
9.2. LANDLORD'S INSURANCE: Landlord shall have the following
obligations and options regarding insurance:
A. Landlord shall maintain a policy or policies of fire and
property damage insurance in so-called "all risk" form insuring Landlord (and
such others as Landlord may designate) against loss of rents for a period of
not less than six (6) months and from physical damage to the Premises with
coverage of not less than the full replacement cost of (i) the building of
which the Premises are a part, including the structural elements thereof and
all electrical, mechanical, plumbing, and other systems, and (ii) all
Interior Improvements constructed pursuant to the Interior Improvement
Agreement attached as Exhibit "C". Landlord may so insure the Premises
separately, or may insure the Premises with other buildings and improvements
within the Property and/or other property owned by Landlord which Landlord
elects to insure together under the same policy or policies. Such fire and
property damage insurance, at Landlord's election, (i) may be endorsed to
cover loss caused by such additional perils against which Landlord may elect
to insure, including earthquake and/or flood, (ii) shall contain commercially
reasonable "deductibles" which, in the case of earthquake and flood
insurance, may be up to ten percent (10%) of the replacement value of the
property insured or such higher amount as is then commercially reasonable,
(iii) may provide coverage for loss of rents for a period of up to twelve
(12) months, and (iv) may contain additional endorsements or coverage
reasonably required by Landlord or any Lender, including an "agreed amount"
endorsement, demolition insurance (covering the cost of demolishing damaged
improvements or improvements required by Law to be demolished), and
difference in condition coverage. Landlord shall not be required to cause
such insurance to cover any Trade Fixtures, Leasehold Improvements or any
inventory or other personal property of Tenant.
B. Landlord may maintain a policy or policies of 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 or resulting from an occurrence in, on
about the Property, with combined single limit coverage in such amount as
Landlord may from time to time determine is reasonably necessary for its
protection and with commercially reasonable deductibles.
9.3. TENANT'S OBLIGATION TO REIMBURSE: The cost of the insurance
carried by Landlord pursuant to paragraph 9.2 (and any commercially
reasonable "deductible" amount paid by Landlord in connection with the
restoration of any loss and excluded from the coverage of such insurance)
shall be a Common Operating Expense and Tenant shall pay its share thereof as
provided in paragraph 6.3. However, if Landlord's insurance rates for the
Premises are increased at any time during the Lease Term as a result of the
nature of Tenant's use of the Premises, Tenant shall reimburse Landlord for
the full amount of such increase immediately upon receipt of a bill from
Landlord therefor.
9.4. RELEASE AND WAIVER OF SUBROGATION: The parties hereto release
each other, and their respective agents and employees, from any liability for
injury to any person or damage to property that is caused by or results from
any risk insured against under any valid and collectible insurance policy
carried by either of the parties which contains a waiver of subrogation by
the insurer and is in force at the time of such injury or damage, subject to
the following limitations:
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(i) the foregoing provisions shall not apply to the commercial general
liability insurance described by subparagraph 9.1A and 9.1B; and (ii) such
release shall apply to liability resulting from any risk insured against or
covered by self-insurance maintained or provided by Tenant to satisfy the
requirements of paragraph 9.1. This release shall be in effect only so long
as the applicable insurance policy contains a clause to the effect that this
release shall not affect the right of the insured to recover under such
policy. Each party shall use reasonable efforts to cause each insurance
policy obtained by it to provide that the insurer waives all right of
recovery by way of subrogation against the other party and its agents and
employees in connection with any injury or damage covered by such policy.
However, if any insurance policy cannot be obtained with such a waiver of
subrogation, or if such waiver of subrogation is only available at additional
cost and the party for whose benefit the waiver is to be obtained does not
pay such additional cost, then the party obtaining such insurance shall
notify the other party of that fact and thereupon shall be relieved of the
obligation to obtain such waiver of subrogation rights from the insurer with
respect to the particular insurance involved.
ARTICLE 10.
LIMITATION ON LANDLORD'S
LIABILITY AND INDEMNITY
10.1. LIMITATION ON LANDLORD'S LIABILITY: Landlord shall not be liable
to Tenant, nor shall Tenant be entitled to terminate this Lease or to any
abatement of rent, for any injury to Tenant, its agents, employees,
contractors or invitees, damage to Tenant's property, or loss to Tenant's
business resulting from any cause, including without limitation any (i)
failure, interruption or installation of any HVAC or other utility system or
service; (ii) failure to furnish or delay in furnishing any utilities or
services when such failure or delay is caused by Acts of God or the elements,
labor disturbances of any character, any other accidents or other conditions
beyond the reasonable control of Landlord; (iii) limitation, curtailment,
rationing or restriction on the use of water or electricity, gas or any other
form of energy or any services or utility serving the Premises; (iv)
vandalism or forcible entry by unauthorized persons; or (v) penetration of
water into or onto any portion of the Premises or the Common Area through
roof leaks or otherwise. Notwithstanding the foregoing:
A. Subject to paragraph 9.4, Landlord shall be liable for any
such injury, damage or loss which is proximately caused by Landlord's gross
negligence or willful misconduct, of which Landlord has actual notice and a
reasonable opportunity to cure but which it fails to so cure.
B. Tenant shall have the option to terminate this Lease upon
the occurrence of the following: (i) water, electricity, or other utility
service essential to the conduct of Tenant's business in the Premises is
interrupted or substantially impaired for a period of more than two hundred
seventy (270) consecutive days during which time the Premises are rendered
substantially unusable for the conduct of Tenant's business (a "Material
Interruption"); and (ii) the Material Interruption is not caused by the act
or omission of Tenant, its agents, employees or contractors.
10.2. LIMITATION ON TENANT'S RECOURSE: So long as the Landlord is a
corporation, trust, partnership, joint venture, unincorporated association or
other form of business entity, (i) the obligations of Landlord shall not
constitute personal obligations of the officers, directors, trustees,
partners, joint venturers, members, owners, stockholders, or other principals
or representatives of such business entity, and (ii) Tenant shall have
recourse only to the assets of such business entity for the satisfaction of
such obligations and not against the assets of such officers, directors,
trustees, partners, joint venturers, members, owners, stockholders,
principals or representatives, except to the extent of their interests in the
entity that is Landlord. If Landlord is a natural person or persons, Tenant
shall have recourse only to the interest of such natural persons in the
Property for the satisfaction of the obligations of Landlord and shall not
have recourse to any other assets of such natural persons for the
satisfaction of such obligations.
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10.3. INDEMNIFICATION OF LANDLORD: Tenant shall hold harmless,
indemnify and defend Landlord, and its employees, agents and contractors,
with competent counsel, from all liability, penalties, losses, damages,
costs, expenses, causes of action, claims and/or judgments arising by reason
of any death, bodily injury, personal injury or property damage (i) resulting
from any cause or causes whatsoever (other than the negligence or willful
misconduct of Landlord of which Landlord has had notice and a reasonable time
to cure, but which Landlord has failed to cure) occurring in or about or
resulting from an occurrence in or about the Premises, or (ii) resulting from
the negligence or willful misconduct of Tenant, its agents, employees and
contractors, wherever the same may occur, or (iii) resulting from an Event of
Tenant's Default. The provisions of this paragraph shall survive the
expiration or sooner termination of this Lease.
ARTICLE 11.
DAMAGE TO PREMISES
11.1. LANDLORD'S DUTY TO RESTORE: If the Premises are damaged by any
peril after the Commencement Date of this Lease, Landlord shall restore the
Premises unless the Lease is terminated by Landlord pursuant to paragraph
11.2 or by Tenant pursuant to paragraph 11.3. All insurance proceeds
available from the fire and property damage insurance carried by Landlord
pursuant to paragraph 9.2 shall be paid to and become the property of
Landlord. If this Lease is terminated pursuant to either paragraphs 11.2 or
11.3, then all insurance proceeds available from insurance carried by Tenant
which covers loss to property that is Landlord's property or would become
Landlord's property on termination of this Lease shall be paid to and become
the property of Landlord. If this Lease is not so terminated, then upon
receipt of the insurance proceeds (if the loss is covered by insurance) and
the issuance of all necessary governmental permits, Landlord shall commence
and diligently prosecute to completion the restoration of the Premises, to
the extent then allowed by Law, to substantially the same condition in which
the Premises were immediately prior to such damage. Landlord's obligation to
restore shall be limited to the Premises and interior improvements
constructed by Tenant but financed by Landlord pursuant to the Interior
Improvement Agreement as such improvements existed upon completion thereof
excluding any Leasehold Improvements, Trade Fixtures and/or personal property
constructed or installed by Tenant in the Premises. To the extent that
insurance proceeds recovered by Landlord from the insurance carried pursuant
to paragraph 9.2A exceed the amount needed by Landlord to discharge its
restoration obligation pursuant to the immediately preceding sentence,
Landlord shall make such excess insurance proceeds available to Tenant for
the purpose of restoring interior improvements that were constructed by
Tenant and financed by Tenant pursuant to the Interior Improvement Agreement,
so that such improvements may be restored to substantially the same condition
existing as of the date such improvements were initially completed.
11.2. LANDLORD'S RIGHT TO TERMINATE: Landlord shall have the right to
terminate this Lease in the event any of the following occurs, which right
may be exercised only by delivery to Tenant of a written notice of election
to terminate within thirty (30) days after the date of such damage:
A. Either the Property or the Premises is damaged by an Insured
Peril to such an extent that the estimated cost to restore equals or exceeds
eighty percent (80%) of the then actual replacement cost thereof and there
remains less than three (3) years in the Lease Term; provided, however, that
Landlord may not terminate this Lease pursuant to this subparagraph 11.2A if
Tenant at the time of such damage has a then valid written option to extend
the Lease Term and Tenant exercises such option to extend the Lease Term
within fifteen (15) days after Tenant receives Landlord's notice of election
to terminate and such action results in there being more than three (3) years
remaining in the Lease Term (as it has been extended by the Exercise of such
option);
B. Either the Property or the Premises is damaged by an
Uninsured Peril to such an extent that the estimated cost to restore exceeds
two percent (2%) of the actual replacement cost thereof; provided, however,
that Landlord may not terminate this Lease
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pursuant to this paragraph 11.2B if one or more Tenants of the Property agree
in writing to pay the amount by which the cost to restore the damage exceeds
such amount and subsequently deposit such amount with Landlord within thirty
(30) days after Landlord has notified Tenant of its election to terminate
this Lease;
C. The Premises are damaged by any peril within twelve (12)
months of the last day of the Lease Term to such an extent that the estimated
cost to restore equals or exceeds an amount equal to six (6) times the Base
Monthly Rent then due; provided, however, that Landlord may not terminate
this Lease pursuant to this subparagraph 11.2C if Tenant, at the time of such
damage, has a then valid express written option to extend the Lease Term and
Tenant exercises such option to extend the Lease Term within fifteen (15)
days following the date of such damage; or
D. As used herein, the following terms shall have the following
meanings: (i) the term "Insured Peril" shall mean a peril actually insured
against for which the insurance proceeds paid or made available to Landlord
are sufficient (except for any "deductible" amount specified by such
insurance) to restore the Property under the then existing building codes to
the condition existing immediately prior to the damage; and (ii) the term
"Uninsured Peril" shall mean and include any peril not actually insured
against, any peril actually insured against but for which the insurance
proceeds paid or made available to Landlord are for any reason (except for
any "deductible" amount specified by such insurance) insufficient to restore
the Property under then existing building codes to the condition existing
immediately prior to the damage, and any peril actually insured against but
for which the insurance proceeds are not paid or made available to Landlord.
11.3. TENANT'S RIGHT TO TERMINATE: If the Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled
to terminate this Lease pursuant to paragraph 11.2, 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 completed. Tenant shall have
the right to terminate this Lease in the event any of the following occurs,
which right 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. The Premises are damaged by any peril and, in the reasonable
opinion of Landlord's architect or construction consultant, the restoration
of the Premises cannot be substantially completed within two hundred seventy
(270) days after the date of such damage; or
B. The Premises are damaged by any peril within twelve (12)
months of the last day of the Lease Term and in the reasonable opinion of
Landlord's architect or construction consultant the restoration of the
Premises cannot be substantially completed within ninety (90) days after the
date of such damage; or
C. The Premises are not restored within eighteen (18) months
following the date of such damage; provided, however, that if at the time
restoration of the "shell" of the building in which the Premises are located
is substantially completed (excluding Interior Improvements) Landlord
reasonably estimates that Landlord will not be able to complete restoration
of the Premises within such eighteen (18) month period, then at that time
Landlord may offer in writing to Tenant the option to terminate this Lease,
and if Tenant does not exercise such option to terminate the Lease so offered
to Tenant by Landlord, then Tenant may not thereafter elect to terminate this
Lease pursuant to this subparagraph 11.3C.
11.4. ABATEMENT OF RENT: In the event of damage to the Premises which
does not result in the termination of this Lease, the Base Monthly Rent and
the Additional Rent shall be temporarily abated commencing on the date of
damage and continuing through the Period of restoration in proportion to the
degree to which Tenant's use of the Premises is impaired by such damage.
Tenant shall not be entitled to any compensation or damages from Landlord for
loss of Tenant's business or property or for any inconvenience or annoyance
caused by such damage or restoration. Tenant hereby waives the provisions of
Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the
California Civil Code, and the provisions of any similar law hereinafter
enacted.
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ARTICLE 12.
CONDEMNATION
12.1. TENANT'S TERMINATION RIGHT: Tenant shall have the right to
terminate this Lease if, as a result of any taking by means of the exercise
of the power of eminent domain (including any voluntary sale or transfer by
Landlord to any condemnor under threat of condemnation), (i) ten percent
(10%) or more of the Premises is so taken, or (ii) there is a taking
affecting the Common Area and, as a result of such taking, Landlord cannot
provide parking spaces within reasonable walking distance of the Premises
equal in number to at least ninety percent (90%) of the number of spaces
allocated to Tenant by paragraph 2.1, whether by rearrangement of the
remaining parking areas in the Common Area (including construction of
multi-deck parking structures or restripping for compact cars where permitted
by Law) or by alternative parking facilities on other land. Tenant must
exercise such right within a reasonable period of time, to be effective on
the date that possession of that portion of the Premises or Common Area that
is condemned is taken by the condemnor.
12.2 RESTORATION AND ABATEMENT OF RENT: If any part of the Premises
or the Common Area is taken by condemnation and this Lease is not terminated,
then Landlord shall restore the remaining portion of the Premises and Common
Area to substantially the same condition in which the Premises and Common
Area were immediately prior to such taking, excluding any Leasehold
Improvements, Trade Fixtures and/or personal property constructed or
installed by Tenant; provided, however, that Landlord shall not be obligated
to spend more for such restoration than the amount of any condemnation award
recovered by or pursuant to paragraph 12.3. Thereafter, except in the case
of a temporary taking, (i) as of the date possession is taken the Base
Monthly Rent (but not any Additional Rent) shall be reduced in the same
proportion that the floor area of that part of the Premises so taken (less
any addition thereto by reason of any reconstruction) bears to the original
floor area of the Premises, and (ii) to the extent that Landlord is obligated
to undertake any restoration work as a result of such condemnation, the Base
Monthly Rent shall be further abated in proportion to the extent to which
such restoration work interferes with Tenant's ability to use that part of
the Premises which remains after the condemnation.
12.3 TEMPORARY TAKING: If any portion of the Premises is temporarily
taken for six (6) months or less, this Lease shall remain in effect and
Tenant shall be entitled to recover any condemnation award that is made for
such taking and shall be responsible for restoring the Premises to the
condition existing immediately prior to such temporary taking. If any
portion of the Premises is temporarily taken by condemnation for a period
which exceeds six (6) months or which extends beyond the natural expiration
of the Lease Term, and such taking materially and adversely affects Tenant's
ability to use the Premises for the Permitted Use, then Tenant shall have the
right to terminate this Lease, effective on the date possession is taken by
the condemnor.
12.4. DIVISION OF CONDEMNATION AWARD: Any award made as a result of
any condemnation of the Premises or the Common Area 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 recover out of any condemnation award made for a taking of all or
part of the Premises an amount equal to the unamortized cost of all interior
improvements paid for by Tenant constructed pursuant to the Interior
Improvement Agreement and all Leasehold Improvements constructed by Tenant
(amortized on a straight line basis over the initial Lease Term for Interior
Improvements, and over the period from completion of construction until
expiration of the Lease Term for Leasehold Improvements); and provided
further that Tenant shall be entitled to receive any condemnation award that
is made directly to Tenant for the following so long as the award made to
Landlord is not thereby reduced: (i) for the taking of personal property or
Trade Fixtures belonging to Tenant, (ii) for the interruption of Tenant's
business or its moving costs, (iii) for loss of Tenant's goodwill, or
(iv) for any temporary taking where this Lease is not terminated as a result of
such taking. The rights of Landlord and Tenant regarding any condemnation
shall be determined as provided in this Article,
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and each party hereby waives the provisions of Section 1265.130 of the
California Code of Civil Procedure and the provisions of any similar law
hereinafter enacted allowing either party to petition the Superior Court to
terminate this Lease in the event of a partial taking of the Premises.
ARTICLE 13.
DEFAULT AND REMEDIES
13.1. EVENTS OF TENANT'S DEFAULT: Tenant shall be in default of its
obligations under this Lease if any of the following events occurs (an "Event
of Tenant's Default"):
A. Tenant shall have failed to pay Base Monthly Rent or any
Additional Rent when due and such failure is not cured within ten (10) days
after delivery of written notice from Landlord specifying such failure to
pay; or
B. 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, and Tenant shall have failed to cure such breach
within thirty (30) days after written notice from Landlord specifying the
nature of such breach, or if such breach could not reasonably be cured within
said thirty (30) day period, Tenant shall have failed to commence such cure
within said thirty (30) day period and thereafter continue with due diligence
to prosecute such cure to completion within such time period as is reasonably
needed; or
C. Tenant shall have made a general assignment of its assets
for the benefit of its creditors; or
D. Tenant shall have sublet the Premises or assigned its
interest in the Lease in violation of the provisions contained in Article 14,
whether voluntarily or by operation of law; Landlord shall have notified
Tenant in writing that such Transfer constitutes a violation of the
provisions contained in Article 14, and Tenant does not cause such Transfer
to be rescinded or terminated and possession of the Premises affected by the
Transfer recovered from the Transferee within ninety (90) days after receipt
of such notice; or
E. Tenant shall have permitted 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 of Tenant or any
property essential to the conduct of Tenant's business, and Tenant shall have
failed to obtain a return or release of such property within ninety (90) days
thereafter or prior to sale pursuant to such sequestration, attachment or
levy, whichever is earlier; or
F. A court shall have made or entered any decree or order with
respect to Tenant, or Tenant shall have submitted to or sought a decree or
order (or a petition or pleading shall have been filed in connection
therewith) which: (i) grants or constitutes (or seeks) an order for relief,
appointment of a trustee, or confirmation of a reorganization plan under the
bankruptcy laws of the United States; (ii) approves as properly filed (or
seeks such approval of) a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or statute of the
United States or any state thereof; or (iii) otherwise directs (or seeks) the
winding up or liquidation of Tenant; and such petition, decree or order shall
have continued in effect for a period of ninety (90) or more days; or
G. Tenant shall have failed to deliver documents as required of
it pursuant to paragraph 15.4 or 15.7 within the time periods specified
therein and Tenant shall have failed to cure such default within ten (10)
days after Landlord has delivered to Tenant written notice that Tenant is in
default of its obligations to deliver such documents pursuant to either
paragraph 15.4 or 15.7; or
H. An Event of Tenant's Default has occurred under the Building
C Lease (unless caused by subTenant or assignee of the original Tenant under
this Lease and such original Tenant is using reasonable efforts to cause such
default to be cured) and, at the time
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Tenant is so in default, the Premises and the real property leased to Tenant
pursuant to the Building C Lease are both owned of record by the same person
or entity.
13.2. LANDLORD'S REMEDIES: If an Event of Tenant's Default occurs,
Landlord shall have the following remedies, in addition to all other rights
and remedies provided by any 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 (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 of Tenant or perform Tenant's obligations and be
reimbursed by Tenant for the cost thereof with interest at the Agreed
Interest Rate 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 compel Tenant to perform its obligations under this
Lease.
B. Landlord may, at Landlord's election, terminate this Lease
by giving Tenant written notice of termination, in which event this Lease
shall terminate on the date set forth for termination in such notice. Any
termination under this subparagraph shall not relieve Tenant from its
obligation to pay sums then due Landlord or from any claim against Tenant for
damages or rent previously accrued or then 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:
(1) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;
(2) Consent to any subletting of the Premises or assignment
of this Lease by Tenant, whether pursuant to the provisions hereof or
otherwise; or
(3) Any other action by Landlord or Landlord's agents
intended to mitigate the adverse effects of any breach of this Lease by
Tenant, including without limitation any action taken to maintain and
preserve the Premises or any action taken to relet the Premises or any
portions thereof, for the account of Tenant and in the name of Tenant.
C. In the event Tenant breaches this Lease and abandons the
Premises, this Lease shall not terminate unless Landlord gives Tenant written
notice of its election to so terminate this Lease. No act by or on behalf of
Landlord intended to mitigate the adverse effect of such breach, including
those described by subparagraphs 13.2B(1), (2) and (3) immediately preceding,
shall constitute a termination of Tenant's right to possession unless
Landlord gives Tenant written notice of termination. Should Landlord not
terminate this Lease by giving Tenant written notice, Landlord may enforce
all its rights and remedies under this Lease, including the right to recover
the rent as it becomes due under the Lease as provided in California Civil
Code Section 1951.4 as in effect on the Commencement Date of this Lease.
D. In the event Landlord terminates this Lease, Landlord shall
be entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2 as in effect on the Commencement Date of
this Lease. For purposes of computing damages pursuant to Section 1951.2,
(i) an interest rate equal to the Agreed Interest Rate shall be used where
permitted, and (ii) the term "rent" includes Base Monthly Rent and Additional
Rent. Such damages shall include without limitation:
(1) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably
avoided, computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%); and
(2) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would
be likely to result therefrom, including,
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without limitation, the following: (i) expenses for cleaning, repairing or
restoring the Premises; (ii) expenses for altering, remodeling or otherwise
improving the Premises for the purpose of reletting, including installation
of leasehold improvements (whether such installation be funded by a reduction
of rent, direct payment or allowance to a new Tenant, or otherwise); (iii)
broker's fees, advertising costs and other expenses of reletting the
Premises; (iv) costs of carrying the Premises, such as taxes, insurance
premiums, utilities and security precautions; (v) expenses in retaking
possession of the Premises; and (vi) attorneys' fees and court costs incurred
by Landlord in retaking possession of the Premises and in releasing the
Premises or otherwise incurred as a result of Tenant's default.
E. Nothing in this paragraph shall limit Landlord's right to
indemnification from Tenant as provided in paragraph 7.2 and paragraph 10.3.
Any notice given by Landlord in order to satisfy the requirements of
subparagraphs 13.1A or B above shall also satisfy the notice requirements of
California Code of Civil Procedure Section 1161 regarding unlawful detainer
proceedings.
13.3. WAIVER BY TENANT OF CERTAIN REMEDIES: Tenant waives the
provisions of Sections 1932(1), 1941 and 1942 of the California Civil Code
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 the Lease.
13.4. WAIVER: 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. 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
unless such waiver is in writing and signed by Landlord. 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 of any other provisions herein contained.
13.5. LIMITATION ON EXERCISE OF RIGHTS: At any time that an Event of
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval
requested of it by Tenant which Landlord would otherwise be obligated to
give, and (ii) Tenant may not exercise any option to extend, right to
terminate this Lease, or other right granted to it by this Lease which would
otherwise be available to it.
ARTICLE 14.
ASSIGNMENT AND SUBLETTING
14.1. BY TENANT: The following provisions shall apply to any
assignment, subletting or other transfer by Tenant or any subTenant or
assignee or other successor in interest of the original Tenant (collectively
referred to in this paragraph as "Tenant"):
A. Tenant shall not do any of the following (collectively
referred to herein as a "Transfer"), whether voluntarily, involuntarily or by
operation of laws, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed: (i) sublet all or any
part of the Premises or allow it to be sublet, occupied or used by any person
or entity other than Tenant; (ii) assign its interest in this Lease; (iii)
transfer any right appurTenant to this Lease or the Premises; (iv) mortgage
or encumber the Lease (or otherwise use the Lease as a security device) in
any manner; or (v) terminate or materially amend or modify an assignment,
sublease or other transfer that has been previously approved by Landlord.
Any Transfer so approved by Landlord shall not be effective until Tenant has
delivered to Landlord an executed counterpart of the document evidencing the
Transfer which (i) is in form approved by Landlord, (ii) contains the same
terms and conditions as stated in Tenant's notice given to Landlord pursuant
to subparagraph 14.1B, and (iii) contains the agreement of the proposed
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transferee to assume all obligations of Tenant related to the Transfer
arising after the effective date of such Transfer and to remain jointly and
severally liable therefor with Tenant. Any attempted Transfer without
Landlord's consent shall be voidable at Landlord's option. Landlord's
consent to any one Transfer shall not constitute a waiver of the provisions
of this paragraph 14.1 as to any subsequent Transfer nor a consent to any
subsequent Transfer. No Transfer, even with the consent of Landlord, shall
relieve Tenant of its personal and primary obligation to pay the rent and to
perform all of the other obligations to be performed by Tenant hereunder.
The acceptance of rent by Landlord from any person shall not be deemed to be
a waiver by Landlord of any provision of this Lease nor to be a consent to
any Transfer.
B. Tenant shall give Landlord at least fifteen (15) days prior
written notice of any desired Transfer and of the proposed terms of such
Transfer including but not limited to (i) the name and legal composition of
the proposed transferee; (ii) a current financial statement of the
transferee, financial statements of the transferee covering the preceding
three years if the same exist, and (if available) an audited financial
statement of the transferee for a period ending not more than one year prior
to the proposed effective date of the Transfer, all of which statements are
prepared in accordance with generally accepted accounting principles;
(iii) the nature of the proposed transferee's business to be carried on in
the Premises; (iv) all consideration to be given on account of the Transfer;
(v) a current financial statement of Tenant; and (vi) such other information
as may be reasonably requested by Landlord. Tenant's notice shall not be
deemed to have been served or given until such time as Tenant has provided
Landlord with all information reasonably requested by Landlord pursuant to
this subparagraph 14.1B. Tenant shall immediately notify Landlord of any
modification to the proposed terms of such Transfer.
C. In the event that Tenant seeks to make any Transfer, then
Landlord, by giving Tenant written notice of its election within fifteen (15)
days after Tenant's notice of intent to Transfer has been deemed given to
Landlord, shall have the right to elect (i) to withhold its consent to such
Transfer, as permitted pursuant to subparagraph 14.1A, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which
event Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the following
shall apply:
(1) Subject to subparagraph 14.1C(5), if Tenant assigns its
interest in this Lease in accordance with this subparagraph 14.1C, then
Tenant shall pay to Landlord fifty percent (50%) of all consideration
received by Tenant over and above (i) the assignee's agreement to assume the
obligations of Tenant under this Lease and (ii) all Permitted Transfer Costs
related to such assignment.
(2) Subject to subparagraph 14.1C(5), if Tenant sublets all
or part of the Premises, then Tenant shall pay to Landlord fifty percent
(50%) of the positive difference, if any, between (i) all rent and other
consideration paid by the subTenant to Tenant, less (ii) all rent paid by
Tenant to Landlord pursuant to this Lease which is allocable to the area so
sublet and all Permitted Transfer Costs related to such sublease. Such
amount shall be paid to Landlord on the same basis, whether periodic or in
lump sum, that such rent and other consideration is paid to Tenant by its
subTenant, within seven (7) days after it is received by Tenant.
(3) Tenant's obligations under this subparagraph shall
survive any assignment or sublease. At the time Tenant makes any payment to
Landlord required by this subparagraph, Tenant shall deliver an itemized
statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the
right to inspect Tenant's books and records relating to the payments due
pursuant to this subparagraph. Upon request therefor, Tenant shall deliver
to Landlord copies of all bills, invoices or other documents upon which its
calculations are based. Landlord may condition its approval of any Transfer
upon obtaining a certification from both Tenant and the proposed transferee
of all amounts that are to be paid to Tenant in connection with such Transfer.
(4) As used herein, the term "consideration" shall mean any
consideration of any kind received, or to be received, by Tenant as a result
of the Transfer, if such sums are related to Tenant's interest in this Lease
or in the Premises, including payments (in excess of the fair market value
thereof) for Tenant's assets, fixtures, leasehold improvements,
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inventory, accounts, goodwill, equipment, furniture, general intangibles and
any capital stock or other equity ownership interest in Tenant. As used in
this subparagraph, the term "Permitted Transfer Costs" shall mean (i) all
reasonable leasing commissions paid to third parties not affiliated with
Tenant in order to obtain the Transfer in question, (ii) all reasonable
attorneys' fees incurred by Tenant with respect to the Transfer in question,
(iii) the cost of Tenant improvements installed for the use of the subTenant
or assignee to the extent required by such party as a condition to the
Transfer, and (iv) any payments made by Tenant to the transferee to induce it
to enter into the Transfer (e.g., payment of moving expenses).
(5) Notwithstanding anything to the contrary contained in
the foregoing, Landlord shall not participate in excess consideration
received by Tenant from an assignee or subTenant as provided for in
subparagraphs 14.1C(1) and 14.1C(2) unless such assignment or sublease occurs
during an Option Term or, in the case of a sublease, extends into an Option
Term (in which latter event Landlord shall be entitled to its share of the
excess consideration paid during the Option Term).
D. If Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or the sale or transfer in
the aggregate over the Lease Term of a controlling percentage of the capital
stock of Tenant, shall be deemed a voluntary assignment of Tenant's interest
in this Lease; provided, however, that the foregoing shall not apply to
corporations, the capital stock of which is publicly traded. The phrase
"controlling percentage" means the ownership of and the right to vote stock
possessing more than fifty percent (50%) 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, any
withdrawal or substitution (whether voluntary, involuntary or by operation of
law, and whether occurring at one time or over a period of time) of any
partner(s) owning twenty-five percent (25%) or more (cumulatively) of any
interest in the capital or profits of the partnership, or the dissolution of
the partnership, shall be deemed a voluntary assignment of Tenant's interest
in this Lease.
E. Notwithstanding anything contained in this paragraph 14.1,
so long as Tenant otherwise complies with the provisions of paragraph 14.1
Tenant may enter into any one of the following transfers (a "Permitted
Transfer") without Landlord's prior written consent, and Landlord shall not
be entitled to receive any part of any excess rentals or other consideration
resulting therefrom that would otherwise be due to it pursuant to paragraph
14.1C:
(1) Tenant may sublease all or part of the Premises or
assign its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with the original Tenant to this
Lease by means of an ownership interest of more than fifty percent (50%);
(2) Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation, so long as
(i) Tenant demonstrates to Landlord's reasonable satisfaction that the
surviving corporation will have sufficient creditworthiness to provide
adequate assurance of future performance of all of Tenant's obligations under
this Lease, or (ii) the surviving corporation has a net worth at the time of
such assignment that is equal to or greater than the net worth of Tenant
immediately prior to such transaction; and
(3) Tenant may assign this Lease to a corporation which
purchases or otherwise acquires all or substantially all of the assets of
Tenant, so long as (i) Tenant demonstrates to Landlord's reasonable
satisfaction that the acquiring corporation will have sufficient
creditworthiness to provide adequate assurance of future performance of all
of Tenant's obligations under this Lease, or (ii) such acquiring corporation
has a net worth at the time of such assignment that is equal to or greater
than the net worth of Tenant immediately prior to such transaction.
14.2. BY LANDLORD: Landlord and its successors in interest shall have
the right to transfer their interest in the Premises and the Property 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
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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
obligations of the Landlord hereunder. After the date of any such transfer,
the term "Landlord" as used herein shall mean the transferee of such interest
in the Premises and the Property.
ARTICLE 15.
GENERAL PROVISIONS
15.1. LANDLORD'S RIGHT TO ENTER: Landlord and its agents may enter the
Premises immediately in case of emergency and otherwise only at such time as
is approved by Tenant which time of Entry shall be within seven (7) days
after Landlord delivers written notice to Tenant requesting approval of a
time to enter, and Landlord may thereafter continue such entry for such
reasonable period of time as is necessary to accomplish Landlord's permitted
purpose for such entry. Landlord may so enter the Premises for the following
purposes: (i) inspecting the same, (ii) posting notices of
non-responsibility, (iii) supplying any service to be provided by Landlord to
Tenant, (iv) showing the Premises to prospective purchasers or mortgagees,
(v) making necessary alterations, additions or repairs, (vi) performing
Tenant's obligations when Tenant has failed to do so after written notice
from Landlord, (vii) placing upon the Premises ordinary "for sale" signs,
(viii) responding to an emergency, and/or (ix) during the last six (6) months
of the Lease Term or at any time when there is a Continuing Tenant Default,
showing the Premises to prospective Tenants and placing upon the Premises
ordinary "for lease" signs. For each of the aforesaid purposes, Landlord may
enter the Premises by means of a master key, and Landlord shall have the
right to use any and all means Landlord may deem necessary and proper to open
the doors of the Premises in an emergency. Any entry into the Premises or
portions thereof obtained by Landlord by any of said means or otherwise shall
not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction, actual
or constructive, of Tenant from the Premises or any portion thereof.
15.2. SURRENDER OF THE PREMISES: Immediately prior to the expiration
or upon the sooner termination of this Lease, Tenant shall remove all
Tenant's Trade Fixtures and other personal property, and shall vacate and
surrender the Premises to Landlord in the same condition as existed at the
Commencement Date, except for (i) reasonable wear and tear, (ii) damage
caused by any peril or condemnation, and (iii) contamination by Hazardous
Materials for which Tenant is not responsible pursuant to subparagraphs 7.2B
or 7.2C. In this regard reasonable wear and tear shall be construed to mean
wear and tear caused to the Premises by the natural aging process which
occurs in spite of prudent application of reasonable standards for
maintenance, repair and janitorial practices, and does not include items of
neglected or deferred maintenance. If Landlord so requests, Tenant shall,
prior to the expiration or sooner termination of this Lease, remove any
Leasehold Improvements designated by Landlord and repair all damage caused by
such removal if such removal is required pursuant to paragraph 5.2. If the
Premises are not so surrendered at the termination of this Lease, Tenant
shall be liable to Landlord for all costs incurred by Landlord in returning
the Premises to the required condition, plus interest on all costs incurred
at the Agreed Interest Rate.
15.3. HOLDING OVER: This Lease shall terminate without further notice
at the expiration of the Lease Term. Any holding over by Tenant after
expiration of the Lease Term shall not constitute a renewal or extension of
the Lease or give Tenant any rights in or to the Premises except as expressly
provided in this Lease. Any holding over after such expiration with the
consent of Landlord shall be construed to be a tenancy from month to month on
the same terms and conditions herein specified insofar as applicable except
that Base Monthly Rent shall be increased to an amount equal to one hundred
twenty-five percent (125%) of the Base Monthly Rent required during the last
month of the Lease Term.
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15.4. SUBORDINATION: The following provisions shall govern the
relationship of this Lease to any underlying lease, mortgage or deed of trust
which now or hereafter affects the Property, and any renewal, modification,
consolidation, replacement or extension thereof (a "Security Instrument"):
A. This Lease is subject and subordinate to all Security
Instruments existing as of the Commencement Date. However, if any Lender so
requires, this Lease shall become prior and superior to any such Security
Instrument.
B. At Landlord's election, this Lease shall become subject and
subordinate to any Security Instrument created after the Commencement Date.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed and the terms of this Lease shall not be
modified so long as Tenant is not in default and performs all of its
obligations under this Lease, unless this Lease is otherwise terminated
pursuant to its terms.
C. No subordination of this Lease to a Security Instrument
pursuant to subparagraphs 15.4A or 15.4B shall be effective until the holder
of a Security Instrument executes a subordination and non-disturbance
agreement in favor of Tenant by which the Lender agrees to be bound by the
immediately preceding sentence.
D. Tenant shall execute any document or instrument required by
Landlord or any Lender to make this Lease either prior or subordinate to a
Security Instrument, which may include such other matters as the Lender
customarily requires in connection with such agreements, including provisions
that (i) the Lender not be liable for any defaults on the part of Landlord
occurring prior to the time the Lender takes possession of the Premises in
connection with the enforcement of its Security Instrument; (ii) the Lender
not be liable for the performance of any obligations contained in the
Interior Improvement Agreement, for the completion of any improvements under
construction or required to be constructed by Landlord; (iii) recourse
against the Lender is limited to its interest in the Premises; (iv) any
notices given by Tenant to Landlord should also be delivered to the Lender;
(v) Tenant shall attorn to any purchaser at a foreclosure sale or a grantee
designated in a deed in lieu of foreclosure; (vi) the Lender shall not be
bound by any rent which Tenant might have paid in advance to any prior
Landlord for a period in excess of one month; (vii) the Lender shall not be
bound by any agreement or modification of the Lease made without the written
consent of the Lender; and (viii) upon request, Tenant shall enter into a new
lease with Lender of the Premises upon the same terms and conditions as the
Lease between Landlord and Tenant, which lease shall cover any unexpired term
of the Lease existing prior to a foreclosure, trustee's sale, or conveyance
in lieu of foreclosure. Tenant's failure to execute any such document or
instrument within ten (10) days after written demand therefor shall
constitute a default by Tenant. Tenant approves as reasonable the form of
subordination and non-disturbance agreement attached to this Lease as
EXHIBIT "D".
15.5. TENANT'S ATTORNMENT: Tenant shall attorn (i) to any purchaser of
the Premises or Property at any foreclosure sale or private sale conducted
pursuant to any security instrument encumbering the Premises and/or the
Property, (ii) to any grantee or transferee designated in any deed given in
lieu of foreclosure, or (iii) to the lessor under any underlying ground lease
should such ground lease be terminated.
15.6. MORTGAGEE PROTECTION: In the event of any default on the part of
the Landlord, Tenant will give notice by registered mail to any Lender or
lessor under any underlying ground lease whose name has been provided to
Tenant and shall offer such Lender or lessor a reasonable opportunity to cure
the default, not to exceed thirty (30) days from the expiration of the time
period granted to Landlord to cure such default; provided, however, that if
such Lender requires additional time to cure a default on the part of
Landlord or to obtain possession of the Premises by power of sale or judicial
foreclosure or other appropriate legal proceedings if obtaining possession is
necessary to effect a cure, the Lender shall be granted such opportunity,
provided that the Lender gives reasonable assurances to Tenant that such
default will be cured.
15.7 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS: At all times
during the Lease Term, Tenant agrees, following any request by Landlord,
promptly to execute and deliver to Landlord an estoppel certificate, (i)
certifying that this Lease is unmodified and in full force and effect or, if
modified, stating the nature of such modification and certifying that this
Lease, as so
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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, if there are uncured defaults, specifying the nature
of such defaults and (iv) certifying such other information about the Lease
as may be reasonably required by Landlord. Tenant's failure to deliver an
estoppel certificate within ten (10) days after delivery of Landlord's
request therefor shall be a conclusive admission by Tenant that, as of the
date of the request for such statement, (i) this Lease is unmodified except
as may be represented by Landlord in said request and is in full force and
effect, (ii) there are no uncured defaults in Landlord's performance, and
(iii) no rent has been paid in advance. At any time during the Lease Term
Tenant shall, upon ten (10) days' prior written notice from Landlord, provide
Tenant's most recent financial statement and financial statements covering
the twenty-four (24) month period prior to the date of such most recent
financial statement to any existing Lender or to any potential Lender or
buyer of the Property; provided, however, that if Tenant is a corporation
whose stock is publicly traded, Tenant may satisfy the foregoing requirement
by delivering to the appropriate parties copies of its most recent annual
report prepared to satisfy requirements of the federal securities laws. Such
statements shall be prepared in accordance with generally accepted accounting
principles and, if such is the normal practice of Tenant, shall be audited by
an independent certified public accountant.
15.8. FORCE MAJEURE: Any prevention, delay or stoppage due to strikes,
lockouts, inclement weather, labor disputes, inability to obtain labor,
materials, fuels or reasonable substitutes therefor, governmental
restrictions, regulations, controls, action or inaction, civil commotion,
fire or other acts of God, and other causes beyond the reasonable control of
the party obligated to perform (except financial inability) shall excuse the
performance, for a period equal to the period of any said prevention, delay,
or stoppage, of any obligation hereunder except the obligation of Tenant to
pay rent or any other sums due hereunder.
15.9 NOTICES: Any notice required or desired to be given regarding
this Lease shall be in writing and may be given by personal delivery, by
facsimile telecopy, by courier service, or by mail. A notice shall be deemed
to have been given (i) on the third (3rd) business day after mailing if such
notice was deposited in the United States mail, certified or registered,
postage prepaid, addressed to the party to be served at its address first
above set forth, (ii) when delivered if given by personal delivery, and (iii)
in all other cases when actually received. Either party may change its
address by giving notice of same in accordance with this paragraph.
15.10. OBLIGATION TO ACT REASONABLY: Whenever the consent or approval
of a party to this Lease is required to be obtained before the other party to
this Lease may take an action, such consent or approval shall not be
unreasonably withheld or delayed.
15.11. CORPORATE AUTHORITY: If Tenant is a corporation (or a
partnership), each individual executing this Lease on behalf of said
corporation (or partnership) represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said corporation in
accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement of said partnership) and that this Lease is
binding upon said corporation (or partnership) in accordance with its terms.
If Tenant is a corporation, each of the persons executing this Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duly
authorized and existing corporation, that Tenant is qualified to do business
in California and that the corporation has full right and authority to enter
into this Lease.
15.12. ADDITIONAL DEFINITIONS: Any term that is given a special meaning
by a provision in this Lease shall have such meaning when used in this Lease
or any addendum or amendment hereto. As used herein, the following terms
shall have the following meanings:
A. AGREED INTEREST RATE: The term "Agreed Interest Rate" shall
mean that interest rate determined as of the time it is to be applied that is
equal to the lesser of (i) two percent (2%) in excess of the "prime rate",
"reference rate", or "base rate" established by Bank of America (or if Bank
of America shall cease to exist, by the commercial bank with its headquarters
in California that has the greatest net worth among commercial banks
headquartered in California) as it may be adjusted from time to time, or (ii)
the maximum interest rate permitted by law.
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B. COMMON AREA: The term "Common Area" shall mean all areas
and facilities within the Property that are not designated by Landlord for
the exclusive use of Tenant or any other lessee or other occupant of the
Property, including the parking areas, access and perimeter roads, pedestrian
sidewalk, landscaped areas, trash enclosures, recreation areas and the like.
C. LAW: The term "Law" shall mean any judicial decision,
statute, constitution, ordinance, resolution, regulation, rule,
administrative order, or other requirement of any municipal, counting, state,
federal or other government agency or authority having jurisdiction over the
parties to this Lease or the Premises, or both, in effect either at the
Commencement Date of this Lease or any time during the Lease Term, including,
without limitation, any regulation, order or policy of any quasi-official
entity or body (e.g., board of fire examiners, public utilities or special
district).
D. LEASEHOLD IMPROVEMENTS: The term "Leasehold Improvements"
shall mean all improvement, additions, alterations and fixtures installed in
the Premises by Tenant at its expense which are not Trade Fixtures.
E. LENDER: The term "Lender" shall mean any beneficiary,
mortgagee, secured party, lessor, or other holder of any Security Instrument.
F. PRIVATE RESTRICTIONS: The term "Private Restrictions" shall
mean all recorded covenants, conditions and restrictions, reciprocal easement
agreements, and any other recorded instruments affecting the use of the
Premises as they may exist from time to time.
G. TRADE FIXTURES: The term "Trade Fixtures" shall mean
anything affixed to the Premises by Tenant at its expense for purposes of
trade, manufacture, ornament or domestic use (except replacement of similar
work or material originally installed by Landlord) which can be removed
without injury to the Premises unless such thing has, by the manner in which
it is affixed, become an integral part of the Premises; provided, however,
that all of Tenant's signs shall be Trade Fixtures regardless of how affixed
to the Premises.
15.13. MISCELLANEOUS: Should any provision of this Lease prove to be
invalid or illegal, such invalidity or illegality shall in no way affect,
impair or invalidate any other provision hereof, and such remaining
provisions shall remain in full force and effect. Time is of the essence
with respect to the performance of every provision of this Lease in which
time of performance is a factor. The captions used in this Lease are for
convenience only and shall not be considered in the construction or
interpretation of any provision hereof. Any executed copy of this Lease 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.
"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 of California. The language
in all parts of this Lease shall in all cases be construed as a whole
according to its fair meaning, and not strictly for or against either
Landlord or Tenant. When the context of this Lease requires, the neuter
gender includes the masculine, the feminine, a partnership or corporation or
joint venture, and the singular includes the plural. The terms "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 Tenant is obligated not to
perform any act, Tenant is also obligated to use reasonable efforts to
restrain any others within its control from performing said act, including
agents, invitees, contractors, and subcontractors. Landlord shall not become
or be deemed a partner nor a joint venturer with Tenant by reason of the
provisions of this Lease.
15.14. TERMINATION BY EXERCISE OF RIGHT: If this Lease is terminated
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this Lease
shall terminate thirty (30) days after the date the right to terminate is
properly exercised (unless another date is specified in that part of the
Lease creating the right, in which event the date so specified for
termination shall prevail), the rent and all other charges due hereunder
shall be prorated as of the date of termination, and neither Landlord nor
Tenant shall
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have any further rights or obligations under this Lease except for those that
have accrued prior to the date of termination. This paragraph does not apply
to a termination of this Lease by Landlord as a result of a default by Tenant.
15.15. BROKERAGE COMMISSIONS: Tenant warrants that it has not had any
dealings with any real estate brokers, leasing agents or salesmen, or
incurred any obligations for the payment of real estate brokerage commissions
or finder's fees which would be earned or due and payable by reason of the
execution of this Lease other than to the Retained Real Estate Brokers.
Landlord shall be responsible for the payment of any commission owed pursuant
to a separate written commission agreement between Landlord and J.R. Parrish,
Inc. for the payment of the commission as a result of the execution of this
Lease.
15.16. ENTIRE AGREEMENT: This Lease constitutes the entire agreement
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein. Tenant acknowledges that
neither Landlord nor Landlord's agent(s) has made any representation or
warranty as to (i) whether the Premises may be used for Tenant's intended use
under existing Law or (ii) the suitability of the Premises or the Common Area
for the conduct of Tenant's business or the condition of any improvements
located thereon. Tenant expressly waives 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 addendum or amendment hereto. No subsequent change or addition to this
Lease shall be binding unless in writing and signed by the parties hereto.
15.17. RIGHT OF FIRST OFFER TO LEASE: If at any time and from time to
time during the Lease Term Landlord desires to lease all or any portion of
any buildings located on the Property, Landlord shall first give written
notice of such fact to Tenant (an "Offer to Lease"), which shall be
accompanied by the form of lease that Landlord intends to use for the
transaction and the following information regarding the basic business terms
of the transaction (the "Basic Business Terms"): (i) a description of the
premises to be leased; (ii) the term of the proposed lease; (iii) the
improvements Landlord is willing to construct or that it will require to be
constructed; (iv) the method of payment for such improvements; (v) the base
monthly rent for the term; (vi) additional rent to be paid by the Tenant to
the extent not reflected in the form lease; (vii) the estimated commencement
date for the lease term; (viii) any options to extend the lease term and the
rent to be charged during any such extension periods; and (ix) any other
material business terms Landlord elects to specify.
A. Landlord shall lease to Tenant and Tenant shall lease form
Landlord the Premises identified in the Offer to Lease on the Basic Business
Terms stated in the Offer to Lease if: (i) the Premises offered for Lease in
the Offer to Lease consist of an area that is less than 14,000 square feet of
gross leasable area and Tenant notifies Landlord in writing of Tenant's
agreement to lease such Premises on the terms stated in the Offer to Lease
within thirty (30) days after receipt of the Offer to Lease in question; or
(ii) the Premises described in the Offer to Lease consist of an area that is
more than 14,000 square feet and Tenant notifies Landlord in writing of
Tenant's agreement to Lease such premises on the terms stated in the Offer to
Lease within fifteen (15) days after receipt of the Offer to Lease in
question. If Tenant so timely elects to lease the space so offered, Landlord
shall lease to Tenant and Tenant shall lease from Landlord such space on the
following terms:
(1) The Lease of such space shall be on the Basic Business
Terms stated in the Offer to Lease; provided, however, that Tenant's
obligation to pay rent shall not commence until the earlier of: (i) the date
any improvements that Landlord is to construct as set forth in the Basic
Business Terms have been substantially completed, subject to punchlist items;
or (ii) ninety (90) days after the space has been delivered to Tenant vacant
and ready for improvement work, if such improvement work is not to be
performed by Landlord.
(2) The lease of such premises shall be consummated by the
preparation and execution of a written lease, in the form and content of the
form of lease accompanying the Offer to Lease, except as modified to
incorporate the Basic Business Terms set forth in the Offer to Lease and as
expressly provided herein. The lease shall be executed by Landlord and Tenant
as soon as reasonably practicable after Tenant has made its election to
accept the Offer to Lease, but in no event later than forty-five (45) days
thereafter.
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B. If Tenant does not indicate in writing its agreement to lease
the premises offered on the terms contained in the Offer to Lease within the
time period specified in subparagraph 15.17A, then the following shall apply:
(1) Landlord shall have the right to lease such premises to
any third party on the same Basic Business Terms set forth in the Offer to
Lease and such other terms as are contained in the form of lease included
with the Offer to Lease; provided, however, that Landlord may make any
changes to such form of Lease at the request of a prospective Tenant to
induce it to lease such space from Landlord so long as such changes are
commercially reasonable and do not materially change the Basic Business Terms
set forth in the Offer to Lease, and such lease is executed within one
hundred twenty (120) days after the Offer to Lease is delivered to Tenant.
(2) If within one hundred twenty (120) days after the Offer
to Lease is delivered to Tenant, Landlord elects to lease the premises in
question on terms different than the Basic Business Terms stated in the Offer
to Lease, then Landlord shall give notice to Tenant of such election setting
forth the new terms upon which Landlord is willing to so lease the premises
in question (the "Amended Offer to Lease"). Tenant shall have the right to
lease the premises in question upon the terms stated in the Offer to Lease,
as modified by the Amended Offer to Lease, which right may be exercised by
delivering written notice of such election to exercise to Landlord within
five (5) days following delivery to Tenant of the Amended Offer to Lease. If
Tenant does not send written notice to Landlord of its election to lease the
premises in question upon the terms set forth in the Offer to Lease, as
modified by the Amended Offer to Lease, within said five (5) day period, then
Landlord may lease the premises in question to any third party in accordance
with the terms and conditions set forth in the Offer to Lease, as modified by
the Amended Offer to Lease; provided, however, that Landlord may make any
changes to the form of lease included in the Offer to Lease or the Amended
Offer to Lease at the request of a prospective Tenant to induce it to lease
such space from Landlord so long as such changes are commercially reasonable
and do not materially change the Basic Business Terms set forth in the Offer
to Lease, as modified by the Amended Offer to Lease and the lease is executed
within sixty (60) days after the Amended Offer to Lease is delivered to
Tenant.
C. If Tenant is offered the opportunity to lease all or a portion
of any building on the Property and declines to exercise such right, and if
Landlord subsequently enters into a lease with a third party affecting the
space so offered to Tenant, the right of first offer contained in this
paragraph shall thereafter be subject and subordinate to any rights granted
to such third party Tenant with respect to such space, or any other space in
the Property, including rights of first refusal, options to extend, and
options to expand.
D. If Landlord has delivered to Tenant a Offer to Lease and
Tenant has not elected to lease the premises offered on the terms contained
in the Offer to Lease, then if Landlord so requests, Tenant shall deliver to
Landlord or any prospective Tenant a certificate or certificates stating
that: (i) Landlord has complied with the provisions of this paragraph 15.17
and may lease the premises in question pursuant to the Offer to Lease free of
any rights or claims of Tenant; or (ii) Landlord has not complied with the
provisions of this paragraph 15.17 and specifying the manner in which
Landlord has failed to so comply. Such certificate shall be delivered
promptly after request therefor but in no event not more than five (5) days
after request has been delivered to Tenant. Tenant's failure to deliver such
certificate within the required time period shall be deemed an admission upon
which any party may rely that Landlord has complied with the provisions of
this paragraph 15.17 and may lease the premises in question pursuant to the
terms of the Offer to Lease free of any rights or claims by Tenant.
E. Notwithstanding anything to the contrary contained in the
foregoing, Tenant may not exercise its right to lease the space described in
the Offer to Lease, nor, at the option of Landlord, shall a new lease for
such space commence, unless Tenant demonstrates to Landlord's reasonable
satisfaction that Tenant has sufficient creditworthiness to provide adequate
assurance of future performance of all of Tenant's obligations under the new
lease.
F. Within ten (10) days after receipt of written request therefor
from Tenant, Landlord shall inform Tenant in writing of the following with
respect to all leases affecting the Property: (i) the scheduled lease term
expiration date; (ii) any options to extend (including the
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commencement and termination date of such options to extend); and (iii) such
other information as is reasonably requested by Tenant concerning the status
of leases then affecting the Property as it relates to determining when such
leases will terminate and space become available. In addition, Landlord
shall use reasonable efforts to promptly notify Tenant of the availability of
space within the Property that results from events other than the natural
expiration of a lease term (e.g., termination of a lease resulting from a
Tenant's default or negotiations regarding the rescission of a lease by
mutual consent).
G. The parties acknowledge that (i) paragraph 15.17 of the
Building C Lease contains substantially the same provisions as those set
forth in this paragraph 15.17, and (ii) it is their intention that there be
only one right of first offer to lease that is held and may be exercised by
only one person or entity. If Landlord complies with the provisions of
paragraph 15.17 of this Lease or paragraph 15.17 of the Building C Lease with
respect to a lease of space within the Property to a third party, Landlord
shall be deemed to have satisfied the requirements of both Leases with
respect to this subject. The parties further agree that the right of first
offer to lease set forth in this paragraph 15.17 and in paragraph 15.17 of
the Building C Lease may only be held by one entity who is FMC Corporation or
its successor. If Tenant concurrently assigns its interest in this Lease and
the Building C Lease to the same person or entity pursuant to an assignment
described by subparagraphs 14.1E(2) or (3), such assignment shall not affect
the provisions of this paragraph 15.17. However, if Tenant assigns its
interest in this Lease without concurrently also assignment its interest in
the Building C Lease to the same person or entity pursuant to an assignment
described by subparagraphs 14.1E(2) or (3), then effective upon such
assignment the provisions of this paragraph 15.17 shall terminate and be of
no further force or effect. Notwithstanding the foregoing sentence, if the
Building C Lease has been terminated or if the provisions of paragraph 15.17
of the Building C Lease have terminated because of an assignment of the
Tenant's interest in the Building C Lease, then any subsequent assignment by
Tenant of its interest in this Lease pursuant to an assignment described by
subparagraphs 14.1E(2) or (3) shall not cause the right of first offer to
lease created by this paragraph 15.17 to terminate. The rights created by
this paragraph 15.17 may not be assigned or otherwise transferred to any
third party except in connection with an assignment of all of Tenant's right,
title and interest in this Lease made in compliance with paragraph 14.1
hereof. A sublease shall not affect the rights granted by this paragraph
15.17; provided, however, that no subTenant of Tenant shall have the right to
directly lease the Offered Space from Landlord (although Tenant may exercise
the right of first offer to lease and then sublease to any existing subTenant
pursuant to the terms of the new lease).
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with the
intent to be legally bound thereby, to be effective as of the Commencement Date
of this Lease.
LANDLORD: TENANT:
THE EQUITABLE LIFE ASSURANCE SOCIETY FMC CORPORATION,
OF THE UNITED STATES, a New York a Delaware corporation
corporation
By: /s/ James Piane By: /s/ Charles Fink
-------------------------------- ------------------------------
Printed Printed
Name: James Piane Name: Charles Fink
------------------------------ ----------------------------
Title: Attorney in Fact Title: V.P. & Group Manager
----------------------------- ---------------------------
By: By:
----------------------------- ---------------------------
Printed Printed
Name: Name:
----------------------------- ---------------------------
Title: Title:
----------------------------- ---------------------------
Dated: Dated:
----------------------------- ---------------------------
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If Tenant is a CORPORATION, the authorized officers must sign on behalf of
the corporation and indicate the capacity in which they are signing. The
Lease must be executed by the chairman of the board, president or
vice-president AND the secretary, assistant secretary, the chief financial
officer or assistant treasurer, UNLESS the Bylaws or resolution of the Board
of Directors shall otherwise provide, in which event the Bylaws or a
certified copy of the resolution, as the case may be, must be attached to
this Lease.
EXHIBIT "A"
[MAP]
[MAP]
EXHIBIT "B"
PLANS AND SPECIFICATIONS
FOR BUILDING "A"
PLANS AND SPECIFICATIONS PREPARED BY DES
SHEET TITLE CURRENT DATE
----- ----- ------------
A-1 Title Sheet 6-9-89
A-2 Bldg. "A" - First Floor Plan 6-9-89
A-3 Bldg. "A" - Second Floor Plan 6-5-89
A-4 Bldg. "A" - First Floor Plan
Reflected Ceiling Plan 6-9-89
A-5 Bldg. "A" - Second Floor Plan
Reflected Ceiling Plan 6-9-89
A-6 Bldg. "A" - First Floor
Finish Plan 6-9-89
A-7 Bldg. "A" - Second Floor
Finish Plan 6-9-89
A-8 Bldg. "A" - First Floor
Electrical/Telephone Plan 6-9-89
A-9 Bldg. "A" - Second Floor
Electrical/Telephone Plan 6-9-89
A-10 Details, Interior Elevantions,
Enlarged Shower Plan, Door/Window Schedule 6-9-89
A-11 Details 5-15-89
A-12 Architectural Details
Structural Details 6-9-89
PLANS AND SPECIFICATIONS PREPARED BY HAUGE-RICHARDS ASSOCIATES, LTD.
SHEET TITLE CURRENT DATE
----- ----- ------------
D-1 Lobby - Bldgs. "A" & "C"
Plans, Elevations, Details 6-9-89
EXHIBIT C
INTERIOR IMPROVEMENT AGREEMENT
(Building A)
This Interior Improvement Agreement is made part of that Lease dated for
reference purposes only June 1, 1989 (the "Lease"), by and between THE EQUITABLE
LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New York corporation ("Landlord")
and FMC Corporation, a Delaware corporation ("Tenant") of approximately 68,708
square feet of gross leasable area located in that building commonly known as
Building A of Airport Technology Park, 2890 De La Cruz Boulevard, Santa Clara,
California.
Landlord and Tenant agree that the following terms are hereby added to the
Lease:
1. DEFINITIONS: As used herein and in the Lease, the following
terms shall have the following meanings:
A. APPROVED PLANS: The term "Approved Plans" shall mean those
final plans, specifications and working drawings described by EXHIBIT "B" to
the Lease.
B. INTERIOR IMPROVEMENTS: The term "Interior Improvements" shall
mean those improvements described by the Approved Plans that Tenant has the
right to construct in the Premises pursuant to paragraph 2 hereof.
C. INTERIOR IMPROVEMENT COSTS: The term "Interior Improvement
Costs" shall mean the following: (i) the total amount due pursuant to the
construction contract entered into by Tenant pursuant to subparagraph 2B
hereof to construct the Interior Improvements; (ii) the cost of all
governmental approvals, permits and fees required as a condition to the
construction of the Interior Improvements; (iii) all utility connection or
use fees; (iv) fees of architects, designers, or engineers for services
rendered in connection with the design and construction of the Interior
Improvements; (v) the cost of payment and performance bonds obtained to
assure completion of the Interior Improvements; and (vi) relocation and
moving expenses incurred by Tenant in connection with Tenant's move to the
Premises. There shall be excluded from Interior Improvement Costs the
following, to the extent not included in the construction contract with the
Prime Contractor referred to in subparagraph 2B hereof: (i) any fee for
Landlord's review of Tenant's plans for the Interior Improvements; (ii)
temporary electricity used during the construction period in connection with
the construction of the Interior Improvements; and (iii) any fees charged by
Tenant or its agents or employees for supervising/reviewing the construction
of the Interior Improvements (excluding overhead and profits of prime
contractor).
D. LANDLORD'S INTERIOR IMPROVEMENT ALLOWANCE: The term "Landlord's
Interior Improvement Allowance" shall mean the maximum amount Landlord is
required to spend toward the payment of the Interior Improvement Costs, which
amount is equal to the product obtained by multiplying (i) Twenty-One Dollars
($21.00) per square foot by (ii) the Premises Gross Leasable Area (expressed in
square feet) of 68,708 square feet, for a total of One Million Four Hundred
Forty-Two Thousand Eight Hundred Eighty-Five Dollars ($1,442,885).
E. SUBSTANTIALLY COMPLETED: The Interior Improvements shall be
deemed to be "Substantially Completed" when (i) Prime Contractor has issued
its written certificate stating that such improvements have been
substantially completed in accordance with the Approved Plans therefor, (ii)
electrified office partitions are installed, and (iii) the Building
Department of the City of Santa Clara has completed its final inspection of
such improvements and has "signed off" the building inspection card approving
such work as complete.
F. PRIME CONTRACTOR: The term "Prime Contractor" shall mean Alacon
Construction, Inc.
2. CONSTRUCTION OF INTERIOR IMPROVEMENTS: Tenant shall have the right to
construct the Interior Improvements in accordance with the following:
A. Tenant warrants that the Interior Improvements shall be
constructed in a good and workmanlike manner substantially in accordance with
the Approved Plans (as modified by any change orders approved by Landlord and
Tenant pursuant to paragraph 3 hereof) and all Laws. All materials and
equipment furnished shall be fully paid for and be free of liens, chattel
mortgages, and security interests of any kind.
B. The Interior Improvements shall be constructed by Prime
Contractor pursuant to a construction contract between Tenant and Prime
Contractor. Landlord shall have the right to review such form of construction
contract before it is executed. Once the construction contract between Prime
Contractor and Tenant has been executed, Tenant shall not materially amend,
modify or alter the responsibilities of Prime Contractor thereunder without
Landlord's written consent, except for change orders approved pursuant to
paragraph 3 hereof. In purposes connection with the execution of such
construction contract, Tenant shall use reasonable efforts to provide that
all construction or equipment warranties or guarantees obtained by Tenant
shall, to the extent obtainable, provide that such warranties and guarantees
obtained by Tenant shall, to the extent obtainable, provide that such
warranties and guaranties shall also run for the benefit of Landlord. Upon
reasonable written advance request of Landlord, Tenant shall inform Landlord
of all written construction and equipment warranties existing in favor of
Tenant which affect the Interior Improvements. Tenant shall cooperate with
Landlord in enforcing such warranties and in bringing any suit that may be
necessary to enforce liability with regard to any defects.
C. Tenant shall use reasonable efforts to commence construction
of the Interior Improvements as soon as reasonably practicable, and shall
thereafter continuously prosecute such construction to completion.
D. Tenant shall properly obtain, comply with and keep in effect
all permits, licenses and other governmental approvals which are required to
be obtained form governmental bodies in order to construct the Interior
Improvements. Upon reasonable written advance request, Tenant shall promptly
deliver copies of all such permits, licenses and approvals to Landlord.
E. Tenant shall be solely responsible for all aspects of the
construction of the Interior Improvements, including the development and
design thereof as set forth in the Approved Plans, the supervision of the
work of construction, the qualification, financial condition, and performance
of all architects, engineers, contractors, material suppliers, consultants,
and the accuracy of all applications for payment and the proper application
of all disbursement. Landlord is not obligated to supervise, inspect or
inform Tenant or any third party of any aspect of the construction of the
Interior Improvements. Any inspection or review by Landlord is to determine
whether Tenant is properly discharging its obligations to Landlord and may
not be relied upon by Tenant or any third party. Landlord owes no duty of
care to Tenant or any third party to protect against or to inform Tenant or
any third party of, any negligence, faulty, inadequate or defective design or
construction of the Interior Improvements.
3. CHANGES TO APPROVED PLANS FOR INTERIOR IMPROVEMENTS: Neither
Landlord nor Tenant shall have the right to order extra work or change orders
with respect to the Approved Plans or the construction of the Interior
Improvements without the prior written consent of the other. All extra work
or change orders requested by either Landlord or Tenant shall be made in
writing, shall specify the amount of delay or the time saved resulting
therefrom, shall specify any added or reduced cost resulting therefrom, and
shall become effective and a part of the Approved Plans once approved in
writing by both parties. Notwithstanding the foregoing, Tenant's failure to
obtain Landlord's consent to an extra work or change order shall not be an
Event of Tenant's Default if Landlord would have been required to consent to
the change pursuant to the terms hereof.
-2-
4. PAYMENT OF INTERIOR IMPROVEMENT COSTS: The Interior Improvement Costs
and certain noise attenuating improvement costs shall be paid as follows:
A. Landlord and Tenant desire to improve the Premises so that the
following maximum interior noise levels are achieved for the types of office
space identified: 55 dBA for executive offices and conference rooms; 60 dBA
for staff offices; and 65 dBA for sales and secretarial offices. To achieve
these goals Landlord and Tenant agree to contribute to the cost of
improvements as follows. Tenant at its sole cost and expense shall install
(i) extra sheetrock in the roof and sound attenuating ceiling tiles in second
floor ceilings, and (ii) sheetrock beneath the structural ceiling and above
the suspended ceilings of all the second floor offices, and sprinklers as
required by the City of Santa Clara, along with caulking required in
connection therewith. Landlord at its sole cost and expense shall cause the
sliding glass doors on the second floor to be removed and replaced with
double pane sound attenuating glass windows. In the event upon completion of
all of the work described above in this subparagraph A, the desired noise
levels are not achieved, Landlord agrees to pay for the cost of additional
improvements designed to reduce noise levels; provided Landlord shall not be
required to contribute more than One Hundred Fifty Thousand Dollars
($150,000) for such additional improvements.
B. In addition to those contributions of Landlord described in
subparagraph A above, Landlord shall contribute to the payment of all
Interior Improvement Costs up to an amount equal to Landlord's Interior
Improvement Allowance. If any part of the Landlord's Interior Improvement
Allowance is not used by Tenant, or Tenant does not qualify for a
disbursement pursuant to the provisions of this paragraph 4 with the result
that the entire allowance is not disbursed, there shall nonetheless be no
adjustment in the Base Monthly Rent due from Tenant pursuant to the Lease.
If the Interior Improvement Costs exceed the maximum amount of Landlord's
required contribution, then Tenant shall pay the entire amount of such excess.
C. Landlord and Tenant acknowledge that the construction contract
Tenant will enter into for the construction of the Interior Improvements will
provide for progress payments to Prime Contractor in stages as the work is
completed. Landlord shall pay the full amount of each such progress payment
until all of Landlord's Interior Improvement Allowance is expended.
Thereafter, if the cost of the Interior Improvements exceeds the amount of
Landlord's required contribution for such improvements, then Tenant shall pay
the rest of the progress payments due to Prime Contractor. Landlord shall
pay any progress payment due from Landlord to Prime Contractor within thirty
(30) days after satisfaction of all of the conditions precedent to such
progress payment by Landlord that has been requested by Tenant which are set
forth in subparagraph 4D and 4E hereof. If Landlord fails to pay any such
amount when due, then Tenant may (but without the obligation to do so)
advance such funds on Landlord's behalf, and Landlord shall be obligated to
reimburse Tenant for the amount of funds so advanced on its behalf and all
costs incurred by Tenant in so doing, including all interest at the Agreed
Interest Rate.
D. If Tenant desires to obtain a disbursement from Landlord from
the Landlord's Interior Improvement Allowance for the purpose of paying
Interior Improvement Costs, Tenant shall submit to Landlord a written
itemized statement, signed by Tenant (an "Application for Payment") setting
forth the following: (i) a description of the construction work performed,
materials supplied and/or costs incurred or due for which disbursement is
requested; and (ii) the total amount incurred, expended and/or due for each
requested item less prior disbursements; and (iii) the amount due to be paid
by Landlord from Landlord's Interior Improvement Allowance.
E. Landlord shall have no obligation to make any disbursement
from Landlord's Interior Improvement Allowance at any time that there is a
Continuing Tenant Default (as defined in paragraph 1.14 of the Lease), or
there has occurred an event, omission or failure of conditions which would
constitute an Event of Tenant's Default (as defined in paragraph 13.1 of the
Lease) after notice or lapse of time, or both. In addition, Landlord shall
have the right to condition any disbursement from Landlord's Interior
Improvement Allowance upon Landlord's receipt and approval of the following
with respect to each Application for Payment:
-3-
(1) The form of Application for Payment and the sufficiency
of the information contained therein;
(2) Bills and invoices and any other documents evidencing the
total amount expended, incurred, or due for any requested contribution to
Interior Improvement Costs;
(3) Evidence of Tenant's use of lien releases acceptable to
Landlord for payments or disbursements to any contractor, subcontractor,
materialmen, supplier, or lien claimant:
(4) Architects, inspectors and/or engineer's periodic
certification and the stage of construction that has been completed and its
conformance to the Approved Plans based upon any such architects, inspectors
and/or engineers periodic, physical inspections of the Premises and Interior
Improvements;
(5) Waivers and releases of mechanics' lien, stop notice
claim, equitable lien claim or other lien claim rights or lien bonds in form
and amount reasonably satisfactory to Landlord;
(6) Evidence of Tenant's compliance with its obligations
pursuant to paragraph 2 hereof;
(7) Any other document, requirement, evidence or information
that Landlord may reasonably request pursuant to any provision of this
Interior Improvement Agreement.
F. Tenant agrees that all disbursements made to Tenant by
Landlord from Landlord's Interior Improvement Allowance shall be used only
for the payment of Interior Improvement Costs and shall be applied as set
forth, and for the purposes described in, the relevant Application for
Payment based upon which the disbursement is made.
5. PUNCHLIST: Within a reasonable period of time after the
Interior Improvements are Substantially Completed, Landlord, Tenant and
Tenant's architect shall together walk through and inspect such improvements
so completed, using reasonable efforts to discover all uncompleted or
defective construction. After such inspection has been completed. Tenant
shall use reasonable efforts to complete and/or repair all "punch list" items
within thirty (30) days thereafter.
6. CONSTRUCTION WARRANTY FOR THE INTERIOR IMPROVEMENTS: Tenant
warrants that the construction of the Interior Improvements will be performed
in accordance with the Approved Plans therefor and all Laws in a good and
workmanlike manner, and that all materials and equipment furnished will
conform to said plans and shall be new and otherwise of good quality. Tenant
shall promptly commence the cure of any breach of such warranty and complete
such cure with diligence at Tenant's cost and expense.
7. OWNERSHIP OF THE INTERIOR IMPROVEMENTS: All of the Interior
Improvements which are constructed with funds of Landlord shall become the
property of Landlord upon installation and shall not be removed or altered by
Tenant. Any part of the Interior Improvements which are constructed by
Landlord with funds of Tenant shall become the property of Tenant upon
installation and Tenant shall have the right to depreciate and claim and
collect investment tax credits in such improvements; provided, however, that
(i) Tenant shall not remove or alter such improvements during the term of the
Lease; (ii) such improvements shall be surrendered to Landlord, and title to
such improvements shall best in Landlord, at the expiration or earlier
termination of the Lease Term; and (iii) in no event shall Landlord have any
obligation to pay Tenant for the cost or value of such improvements.
Notwithstanding the foregoing, Tenant shall have the right to remove only the
following kinds of Interior Improvements so long as it repairs all damage
caused by the installation thereof and returns the Premises to the condition
existing prior to the installation of such Interior Improvements: (i)
built-in cabinets, file drawers and bookcases; (ii) computer room air
conditioning; (iii) canteen equipment; (iv) office cubicle systems; and (v)
ornamental statutes. If both Landlord and Tenant contribute to the cost of
-4-
constructing the Interior Improvements, Landlord and Tenant shall agree in
writing which of such improvements are to be constructed using Landlord's
funds (and therefore are Landlord's property) and which of them are to be
installed with Tenant's funds (and therefore are Tenant's property during the
Lease Term).
8. DOCUMENTS: Within fifteen (15) days after receiving a written
request from Landlord, Tenant shall deliver to Landlord the most current
version of the following: (i) a complete and correct list showing the name,
address and telephone number of each contractor, subcontractor and principal
materials supplier engaged in connection with the construction of the
Interior Improvements, and the total dollar amount of each contract and
subcontract (including any changes) together with the amounts paid through
the date of the list; (ii) true and correct copies of all executed contracts
and subcontracts identified in the list described in the immediately
preceding clause, including any changes; (iii) a construction progress
schedule; and (iv) any update to any item described in the preceding clauses
which Tenant may have previously delivered to Landlord. Tenant expressly
authorizes Landlord to contact any contractor, subcontractor or materials
supplier to verify any information disclosed in accordance with this
paragraph. Within sixty (60) days after the Interior Improvements have been
Substantially Completed, Tenant shall cause the following to be delivered to
Landlord:
A. Statements from Tenant's architect in form reasonably
satisfactory to Landlord certifying that the Interior Improvements have been
completed substantially in accordance with the Approved Plans and all Laws;
B. A copy of all permanent certificates of occupancy and other
governmental approvals which may be received by Tenant with respect to the
construction of the Interior Improvements;
C. One (1) copy of the Approved Plans, one (1) copy of each extra
work or change order, and one (1) copy of any "As-Built" plans and
specifications for the Interior Improvements, which Tenant may have elected
to cause to be prepared;
D. One (1) copy of all warranties, guaranties, and operational
manuals relating to the Interior Improvements;
E. A copy of a recorded notice of completion relating to the
construction of the Interior Improvements.
9. INDEMNITY: Tenant agrees to indemnify and hold Landlord harmless
from and against all liabilities, claims, actions, damages, costs and
expenses (including attorneys' fees incurred by Landlord in protecting its
interest from the following) arising out of or resulting from construction of
the Interior Improvements, including any mechanics' liens, defective
workmanship or materials and any claim or cause of action of any kind by any
party that Landlord is liable for any act or omission committed or made by
Tenant, its agents, employees, or contractors in connection with the
construction of the Interior Improvements.
10. ROOF AND OTHER WORK: Landlord agrees to cause the structural support
of the roof mounted mechanical units on the Premises to be inspected by Cabak
Randall Jasper Griffiths Associates. If as a result of such inspection,
remedial work is recommended, Landlord shall cause the same to be performed by
Prime Contractor at Landlord's expense, as soon as reasonably practicable.
Landlord agrees to replace, at Landlord's expense, the broken window on the
east side, south end of the second floor of the Premises.
11. EFFECT OF AGREEMENT: In the event of any inconsistency between this
Agreement and the Lease, the terms of this Agreement shall prevail.
-5-
AS TENANT: AS LANDLORD:
--------- -----------
FMC CORPORATION, THE EQUITABLE LIFE ASSURANCE
a Delaware corporation SOCIETY OF THE UNITED STATES,
a New York corporation
By: /s/ Charles Fink By: /s/ James Piane
---------------------- -----------------------------
Its: V.P. & Group Manager Its: Attorney in Fact
---------------------- ----------------------------
Dated: June 23, 1989 Dated: 6-23-89
------------------- -------------------------
-6-
EXHIBIT D
RECORDING REQUESTED BY:
The Equitable Life Assurance
Society of the Untied States
WHEN RECORDED RETURN TO:
Morrison & Foerster
345 California Street
San Francisco, CA 94104-2105
Att'n: Leslie M. Browne
-------------------------------------------------------------------------------
(Space above this lien for Recorder's use)
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT RESULTS
IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING SUBJECT TO AND OF
LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT.
THIS AGREEMENT is entered into as of the ______ day of _____________,
1986, by and between THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNTIED STATES,
a New York corporation (the "Beneficiary"), TELEDYNE INDUSTRIES, INC., a
California corporation (the "Lessee") and AIRPORT TECHNOLOGY ASSOCIATES, a
California general partnership (collectively the "Lessor").
W I T N E S S E T H
WHEREAS, Lessee has entered into a certain lease dated June 30, 1986
(the "Lease"), with Lessor covering certain space (the "Premises") located in
and upon the real property described in Exhibit A attached hereto (the
"Property");
WHEREAS, Beneficiary is the holder of a first mortgage loan (the
"Loan") to Lessor in the amount of Thirty One Million Two Hundred Thousand
and/no 100 Dollars ($31,200,000.00) which is secured by a first lien
Construction and Permanent Deed of Trust, Security Agreement and Fixture Filing
with Assignment of Rents (the "Deed of Trust") covering the Property;
WHEREAS, the parties hereto desire expressly to confirm the
subordination of the Lease to the lien of the Deed of Trust, it being a
requirement by Beneficiary that the lien and charge of the Deed of Trust be
unconditionally and at all times prior and superior to the leasehold interests
and estates created by the Lease; and
WHEREAS, Lessee has requested that Beneficiary agree not to disturb
Lessee's possessory rights in the Premises in the event beneficiary should
foreclose the Deed of Trust, provided that Lessee is not in default under the
Lease and provided that Lessee attorns to beneficiary or the purchaser at any
foreclosure or Trustee's sale of the Property.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and of other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. Notwithstanding anything to the contrary set forth in the Lease,
the Lease and the leasehold estate created thereby and all of Lessee's rights
thereunder shall be and shall at all times remain subject, subordinate and
inferior to the Deed of Trust and the lien thereof and all rights of Beneficiary
thereunder and to any and all renewals, modifications, consolidations,
replacements and extensions thereof.
2. Lessee hereby declares, agrees and acknowledges that:
a. Beneficiary would not have agreed to recognize the Lease
without this Agreement; and
b. Beneficiary, in making disbursements pursuant to the
agreements evidencing and securing the Loan, is under no obligation or duty to
oversee or direct the application of the proceeds of such disbursements and such
proceeds may be used by Lessor for purposes other than improvement of the
premises.
3. In the event of foreclosure of the Deed of Trust, or upon a
sale of the property encumbered thereby pursuant to the Trustee's power of
sale contained therein, or upon a transfer of said property by deed in lieu
of foreclosure, then so long as Lessee is not in default under any of the
terms, covenants, or conditions of the Lease, the Lease shall continue in
full force and effect as a direct lease between the succeeding owner of the
Property and Lessee, upon and subject to all of the terms, covenants and
conditions of the Lease for the balance of the term of the Lease. Lessee
hereby agrees to attorn to and accept any such successor owner as landlord
under the Lease, and to be bound by and perform all of the obligations
imposed by the Lease, and Beneficiary or any such successor owner of the
Property will not disturb the possession of Lessee, and will be bound by all
of the obligations imposed by the Lease upon the landlord thereunder;
provided, however, that the Beneficiary, or any purchaser at a trustee's or
sheriff's sale or any successor owner of the Property shall not be:
a. liable for any act or omission of a prior landlord
(including the Lessor); or
b. subject to any offsets or defenses which the Lessee might
have against any prior landlord (including the Lessor); or
c. bound by any rent or additional rent which the Lessee might
have paid in advance to any prior landlord (including the Lessor) for a period
in excess of one month; or
d. bound by any agreement or modification of the Lease made
without the written consent of the Beneficiary; or
e. liable or responsible for or with respect to the retention,
application and/or return to Lessee of any security deposit paid to any prior
lessor (including the Lessor), whether or not still held by such prior lessor,
unless and until beneficiary or such other purchaser has actually received for
its own account as lessor the full amount of such security deposit.
Beneficiary acknowledges that it is presently a general partner in
Lessor and that the provisions of this Agreement shall not affect any
obligations it may have under the Lease in its capacity as general partner of
Lessor.
4. Upon the written request of either Beneficiary or Lessee to the
other given at the time of a foreclosure, trustee's sale or deed in lieu
thereof, the parties agree to execute a lease of the Premises upon the same
terms and conditions as the Lease between the Lessor and Lessee, which lease
shall cover any unexpired term of the Lease existing prior to such foreclosure,
trustee' sale or conveyance in lieu of foreclosure.
5. Lessee from and after the date hereof, in the event of any act or
omission by Lessor which would give Lessee the right, either immediately or
after the lapse of time, to terminate the Lease or to claim a partial or total
eviction or to offset against the rental due under the Lease any amount due
Lessee as a result of a breach by Lessor, will not exercise any such
-2-
right: (a) until it has given written notice of such act to Beneficiary; and
(b) until the same period of time as is given to Lessor under the Lease to
cure such act or omission shall have elapsed following such giving of notice
to beneficiary and following the time when Beneficiary shall have become
entitled under the Deed of Trust to remedy the same.
6. Lessor, as landlord under the Lease and trustor under the Deed
of Trust, agrees for itself and its heirs, successors and assigns, that:
(a) this Agreement does not (i) constitute a waiver by Beneficiary of any of
its rights under the Deed of Trust, and/or (ii) in any way release Lessor
from its obligation to comply with the terms, provisions, conditions,
covenants, agreements and clauses of the Deed of Trust; (b) the provisions of
the Deed of Trust remain in full force and effect and must be complied with
by Lessor; and (c) in the event of a default under the Deed of Trust, Lessee
may pay all rent and all other sums due under the Lease to beneficiary as
provided in this Agreement.
7. Lessee acknowledges that it has notice that the Lease and the
rent and all other sums due thereunder have been assigned or are to be
assigned to Beneficiary as security for the Loan secured by the Deed of
Trust. In the event that Beneficiary notifies Lessee in writing of a default
under the Deed of Trust and demands that Lessee pay its rent and all other
sums due under the Lease to Beneficiary, Lessee agrees that it will honor
such demand and pay its rent and all other sums due under the Lease directly
to the Beneficiary or as otherwise required pursuant to such notice.
8. Any provision of this Agreement to the contrary
notwithstanding, beneficiary shall have no obligation or incur any liability
with respect to the erection and completion of the building in which the
Premises are located or for completion of the Premises or any improvements
for Lessee's use and occupancy.
9. Lessee from and after the date hereof shall send a copy of any
notice or statement under the Lease to Beneficiary at the same time such
notice or statement is sent to the Lessor under the Lease.
10. All notices hereunder shall be deemed to have been duly given if
mailed by United States registered or certified mail, with return receipt
requested, postage prepaid to beneficiary at the following address (or at such
other address as shall be given in writing by Beneficiary to the Lessee) and
shall be deemed complete upon any such mailing:
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
c/o Equitable Real Estate Management, Inc.
1 Market Plaza, 1900 Steuart Street Tower
San Francisco, CA 94105
Attention: Senior Vice President
with a copy to: Mr. Richard Dolson, Senior Vice President
EQUITABLE REAL ESTATE INVESTMENT MANAGEMENT, INC.
3414 PEACHTREE ROAD NE, SUITE 1405
ATLANTA, GEORGIA 30326-1162
11. This Agreement supersedes any inconsistent provisions of the
Lease.
12. Nothing contained in this Agreement shall be construed to
derogate from or in any way impair or affect the lien and charge or
provisions of the Deed of Trust, except as specifically set forth herein.
13. This Agreement shall inure to the benefit of the parties
hereto, their successors and permitted assigns; provided however, that in the
event of the assignment or transfer of the interest of Beneficiary, all
obligations and liabilities of Beneficiary under this Agreement shall
terminate, and thereupon all such obligations and liabilities shall be the
responsibility of the party to whom beneficiary's interest is assigned or
transferred; and provided
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further that the interest of Lessee under this Agreement may not be assigned
or transferred without the prior written consent of Beneficiary.
14. Lessee agrees that this Agreement satisfies any condition or
requirement in the Lease relating to the granting of a non-disturbance
agreement.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first set forth above.
NOTICE: THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT CONTAINS
A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON THE LEASE TO OBTAIN
A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOSES THAN
IMPROVEMENT OF THE PROPERTY.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
a New York corporation
"Beneficiary"
By
------------------------------
Printed
Name: Richard B. Duffy
---------------------------
Title Assistant Secretary
---------------------------
TELEDYNE INDUSTRIES, INC.
a California corporation
"Lessee"
By
------------------------------
Printed
Name
----------------------------
Title
---------------------------
AIRPORT TECHNOLOGY PARK ASSOCIATES,
a California general partnership
"Lessor"
By Birstaf II,
a California partnership,
General Partner
By
------------------------------
Hudson R. Staffield,
a general partner of
Birstaf II
-4-
By Birtcher Pacific II
a California general partnership,
a general partner of
Birstaf II
By
------------------------------------
Printed
Name:
----------------------------------
Title
----------------------------------
By The Equitable Life Assurance
Society of the United States,
a New York corporation,
General Partner
By
-------------------------------------
Printed
Name Richard B. Duffy
-----------------------------------
Title Assistant Secretary
-----------------------------------
IT IS RECOMMENDED THAT PRIOR TO THE EXECUTION OF THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT, THE PARTIES CONSULT
WITH THEIR ATTORNEYS WITH RESPECT THERETO.
-5-
STATE OF )
) ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
Richard B. Duffy, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
Assistant Secretary, on behalf of The Equitable Life Assurance Society of the
United States, a New York corporation, the corporation therein named, and
acknowledge to me that such corporation executed the within instrument
pursuant to its by-laws or to a resolution of its board of directors.
WITNESS my hand and official seal.
----------------------------------------
NOTARY PUBLIC
STATE OF )
) ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
______________________, personally known to me, or proved to me on the basis
of satisfactory evidence, to be the person who executed the within instrument
as ____________________, on behalf of Teledyne Industries, Inc., a California
corporation, the corporation therein named, and acknowledge to me that such
corporation executed the within instrument pursuant to its by-laws or to a
resolution of its board of directors.
WITNESS my hand and official seal.
------------------------------------------
NOTARY PUBLIC
STATE OF )
) ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
Hudson R. Staffield, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
a general partner of Birstaf II, a California partnership, and acknowledged
to me that Birstaf II is a general partner of Airport Technology Park
Associates, the California general partnership that executed the within
instrument, and that Birstaf II executed the same as a general partner of
Airport Technology Park Associates.
WITNESS my hand and official seal.
----------------------------------------
NOTARY PUBLIC
STATE OF )
) ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
___________________, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
the ______________________ of Birtcher Pacific II, a California general
partnership, and acknowledged to me that Birtcher Pacific II is a general
partner of Birstaf II, a California partnership, that Birstaf II is a general
partner of Airport Technology Park Associates, the California general
partnership that executed the within instrument, that Birtcher Pacific II
executed the same as a general partner of Birstaf II, that Birstaf II
executed the same as a general partner of Airport Technology Park Associates,
and that Airport Technology Park Associates executed the same.
WITNESS my hand and official seal.
----------------------------------------
NOTARY PUBLIC
-2-
STATE OF )
) ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
Richard B. Duffy, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
the Assistant Secretary of The Equitable Life Assurance Society of the United
States, a New York corporation, and acknowledge to me that The Equitable Life
Assurance Society of the United States is a general partner of Airport
Technology Park Associates, the California general partnership that executed
the within instrument, and that The Equitable Life Assurance Society of the
United States executed the same as a general partner of Airport Technology
Park Associates.
WITNESS my hand and official seal.
----------------------------------------
NOTARY PUBLIC
-3-
LEASE
BY AND BETWEEN
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES,
a New York corporation, as Landlord
and
FMC CORPORATION,
a Delaware corporation,
as Tenant
for
BUILDING C
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Commencement Date. . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Rent Start Date. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3. Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4. Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.5. Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6. Permitted Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7. Tenant's Minimum Liability Insurance Coverage. . . . . . . . . . . . 2
1.8. Tenant's Allocated Parking Stalls. . . . . . . . . . . . . . . . . . 2
1.9. Retained Real Estate Brokers . . . . . . . . . . . . . . . . . . . . 2
1.10. Address for Notices . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11. Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.12. Building A Lease. . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.13. Tenant's Allocated Share. . . . . . . . . . . . . . . . . . . . . . 2
1.14. Continuing Tenant Default . . . . . . . . . . . . . . . . . . . . . 3
1.15. Additional Definitions. . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 2. DEMISE AND ACCEPTANCE. . . . . . . . . . . . . . . . . . . . . . 3
2.1. Demise of Premises . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2. Delivery and Acceptance of Possession. . . . . . . . . . . . . . . . 3
2.3. Construction of Interior Improvements. . . . . . . . . . . . . . . . 3
2.4. Options to Extend Lease Term . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1. Base Monthly Rent. . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2. Additional Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3. Payment of Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4. Late Charge and Interest on Rent in Default. . . . . . . . . . . . . 6
ARTICLE 4. USE OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1. Limitation on Type . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2. Compliance with Laws and Private Restrictions. . . . . . . . . . . . 7
4.3. Insurance Requirements . . . . . . . . . . . . . . . . . . . . . . . 7
4.4. Outside Areas. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.5. Signs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4.6. Rules and Regulations. . . . . . . . . . . . . . . . . . . . . . . . 8
4.7. Parking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
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4.8. Window Coverings . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.9. Outside Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 5. TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS. . . . . . . . . . . . 9
5.1. Trade Fixtures . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2. Leasehold Improvements . . . . . . . . . . . . . . . . . . . . . . . 9
5.3. Alterations Required by Law. . . . . . . . . . . . . . . . . . . . . 10
5.4. Landlord's Improvements. . . . . . . . . . . . . . . . . . . . . . . 11
5.5. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6. Modifications to the Premises. . . . . . . . . . . . . . . . . . . . 11
ARTICLE 6. REPAIR AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . 12
6.1. Tenant's Obligation to Maintain. . . . . . . . . . . . . . . . . . . 12
6.2. Landlord's Obligation to Maintain. . . . . . . . . . . . . . . . . . 12
6.3. Tenant's Obligation to Reimburse . . . . . . . . . . . . . . . . . . 13
6.4. Common Operating Expenses Defined. . . . . . . . . . . . . . . . . . 13
6.5. Control of Common Area . . . . . . . . . . . . . . . . . . . . . . . 14
6.6. Tenant's Negligence. . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 7. WASTE DISPOSAL AND UTILITIES . . . . . . . . . . . . . . . . . . 15
7.1. Waste Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2. Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . 15
7.3. Utilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.4. Compliance with Governmental Regulations . . . . . . . . . . . . . . 17
ARTICLE 8. REAL PROPERTY TAXES. . . . . . . . . . . . . . . . . . . . . . . 17
8.1. Real Property Taxes Defined. . . . . . . . . . . . . . . . . . . . . 17
8.2. Tenant's Obligation to Reimburse . . . . . . . . . . . . . . . . . . 18
8.3. Taxes on Tenant's Property . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 9. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.1. Tenant's Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 19
9.2. Landlord's Insurance . . . . . . . . . . . . . . . . . . . . . . . . 20
9.3. Tenant's Obligation to Reimburse . . . . . . . . . . . . . . . . . . 20
9.4. Release and Waiver of Subrogation. . . . . . . . . . . . . . . . . . 20
ARTICLE 10. LIMITATION ON LANDLORD'S LIABILITY AND INDEMNITY. . . . . . . . 21
10.1. Limitation on Landlord's Liability. . . . . . . . . . . . . . . . . 21
10.2. Limitation on Tenant's Recourse . . . . . . . . . . . . . . . . . . 21
10.3. Indemnification of Landlord . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 11. DAMAGE TO PREMISES. . . . . . . . . . . . . . . . . . . . . . . 22
11.1. Landlord's Duty to Restore. . . . . . . . . . . . . . . . . . . . . 22
11.2. Landlord's Right to Terminate . . . . . . . . . . . . . . . . . . . 22
11.3. Tenant's Right to Terminate . . . . . . . . . . . . . . . . . . . . 23
11.4. Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 12. CONDEMNATION. . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.1. Tenant's Termination Right. . . . . . . . . . . . . . . . . . . . . 24
12.2. Restoration and Abatement of Rent . . . . . . . . . . . . . . . . . 24
12.3. Temporary Taking. . . . . . . . . . . . . . . . . . . . . . . . . . 24
12.4. Division of Condemnation Award. . . . . . . . . . . . . . . . . . . 24
ARTICLE 13. DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . 25
13.1. Events of Tenant's Default. . . . . . . . . . . . . . . . . . . . . 25
13.2. Landlord's Remedies . . . . . . . . . . . . . . . . . . . . . . . . 26
13.3. Waiver by Tenant of Certain Remedies. . . . . . . . . . . . . . . . 27
13.4. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
13.5. Limitation on Exercise of Rights. . . . . . . . . . . . . . . . . . 27
ARTICLE 14. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . 27
14.1. By Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
14.2. By Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 15. GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 30
15.1. Landlord's Right to Enter . . . . . . . . . . . . . . . . . . . . . 30
15.2. Surrender of the Premises . . . . . . . . . . . . . . . . . . . . . 30
15.3. Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
15.4. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
15.5. Tenant's Attornment . . . . . . . . . . . . . . . . . . . . . . . . 31
15.6. Mortgagee Protection . . . . . . . . . . . . . . . . . . . . . . . 31
15.7. Estoppel Certificates and Financial Statements . . . . . . . . . . 31
15.8. Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
15.9. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
15.10. Obligation to Act Reasonably . . . . . . . . . . . . . . . . . . . 32
15.11. Corporate Authority . . . . . . . . . . . . . . . . . . . . . . . 32
15.12. Additional Definitions . . . . . . . . . . . . . . . . . . . . . . 32
15.13. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 33
15.14. Termination by Exercise of Right . . . . . . . . . . . . . . . . . 33
15.15. Brokerage Commissions . . . . . . . . . . . . . . . . . . . . . . 34
15.16. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 34
15.17. Right of First Offer to Lease . . . . . . . . . . . . . . . . . . 34
SCHEDULE OF EXHIBITS
EXHIBIT A - SITE PLAN OF PROPERTY
EXHIBIT B - APPROVED PLANS FOR INTERIOR IMPROVEMENTS
EXHIBIT C - INTERIOR IMPROVEMENT AGREEMENT
EXHIBIT D - FORM OF SUBORDINATION AGREEMENT
LEASE
(Building C)
THIS LEASE, dated June 1, 1989 for reference purposes only, is made by
and between THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES, a New
York corporation ("Landlord"), and FMC CORPORATION, a Delaware corporation
("Tenant").
ARTICLE 1.
DEFINITIONS
1.1. COMMENCEMENT DATE: The term "Commencement Date" shall mean the
date the last signatory to this Lease whose execution is required to make it
binding on Landlord and Tenant shall have executed this Lease.
1.2. RENT START DATE: The term "Rent Start Date" shall mean November 1,
1989; provided, however, that if the Interior Improvements to be constructed
pursuant to the Interior Improvement Agreement attached as EXHIBIT "C" are
not "Substantially Completed" (as defined in EXHIBIT "C") by November 1, 1989
because of delays in construction resulting from "Force Majeure" (as defined
in this paragraph 1.2), then the Rent Start Date shall be extended for one
day for each such day of delay experienced by Tenant in constructing the
Interior Improvements pursuant to EXHIBIT "C". For purposes of this
paragraph, the following shall apply:
A. The term "Force Majeure" shall mean (i) any material default by
Landlord of its obligations under this Lease which delays construction; (ii)
strikes, labor disputes or work stoppages which are not directed solely at
the construction of the Interior Improvements or only because of job
conditions at the Premises but which also affect other construction projects;
(iii) damage to the Interior Improvements or the Premises caused by fire,
earthquake, vandalism or other peril; and (iv) civil commotion, civil unrest,
or acts of war. The term "Force Majeure" shall not include any of the
following: (i) delays caused by the Prime Contractor or any subcontractor,
including delays resulting from contractor default; (ii) inability to obtain
labor, materials, equipment, or reasonable substitutes therefor when ordered;
or (iii) inability to obtain any governmental approval required in connection
with the construction of the Interior Improvements.
B. Tenant shall notify Landlord promptly of the occurrence of any
event of Force Majeure. If Tenant does not notify Landlord in writing of the
occurrence of an event of Force Majeure within five (5) days after such event
has commenced to occur, then the Rent Start Date shall only be extended by
the amount of delay that occurs after Tenant actually gives written notice to
Landlord of the occurrence of the event of Force Majeure in question.
1.3. LEASE TERM: The Lease Term shall commence on the Commencement Date
and shall continue until the tenth (10th) anniversary of the Rent Start Date
(unless the Lease Term is extended pursuant to paragraph 2.4 hereof).
1.4. PROPERTY: The term "Property" shall mean that real property shown
on the site plan attached hereto as EXHIBIT "A" and all improvements now or
hereafter located thereon, including, without limitation, the five (5)
buildings presently located thereon, including, without limitation, the five
(5) buildings presently located thereon, the aggregate gross leasable area of
which is approximately 295,271 square feet (the "Property Gross Leasable
Area"), allocated among the five buildings as shown on the attached EXHIBIT
"A"; provided, however, that Landlord may change the boundaries and
composition of the Property by removing or adding land and/or buildings and
thereafter the term "Property" shall refer to such real property so enlarged
or reduced and the amount of the "Property Gross Leasable Area" shall be
appropriately adjusted.
1.5. PREMISES: The term "Premises" shall mean the building structure
situated on the Property commonly known as Building C of Airport Technology
Park, 2830 De La Cruz Boulevard, Santa Clara, California, containing
approximately 86,785 square feet of gross leasable area (the "Premises Gross
Leasable Area") located as shown on EXHIBIT "A". Landlord and Tenant agree
that (i) all measurements of gross leasable area contained in this Lease are
conclusively agreed to be correct and binding upon the parties, even if a
subsequent measurement of any one of these areas determines that it is more
or less than the amount of area reflected in this Lease; and (ii) any such
subsequent determination that the area is more or less than shown in this
Lease shall not result in a change in any of the computations of rent,
improvement allowances, or other matters described in this Lease where gross
leasable area is a factor.
1.6. PERMITTED USE: The term "Permitted Use" shall mean the use of the
Premises for (i) research and development, production, sales, and general
administrative offices and other legal uses incidental thereto, and (ii) any
other legal use first approved in writing by Landlord.
1.7. TENANT'S MINIMUM LIABILITY INSURANCE COVERAGE: The term "Tenant's
Minimum Liability Insurance Coverage" shall mean Two Million Five Hundred
Thousand Dollars ($2,500,000).
1.8. TENANT'S ALLOCATED PARKING STALLS: The term "Tenant's Allocated
Parking Stalls" shall mean 347 parking stalls for the non-exclusive use of
Tenant, subject to reduction as set forth in paragraph 5.6A. Notwithstanding
the foregoing, or any other provision of this Lease, the parties acknowledge
that although Tenant is allocated a combined total of 620 parking spaces
pursuant to this Lease and the Building A Lease, after a restripping of the
parking areas on the Property to increase to 1,155 the number of spaces
available, only a total of 603 spaces shall be available for Tenant's use.
In this regard the parties agree that the total number of parking spaces
allocated for Tenant's use under this Lease and under the Building A Lease
shall be reduced by 17; such spaces shall be proportionately allocated
between the Premises and the premises leased pursuant to the Building A
Lease. Landlord agrees, at the written request of Tenant, to construct at
Landlord's expense 17 additional parking spaces on the Property, if Landlord
can do so at a reasonable cost by relocating or removing landscaped area or
driveways, and the construction of such additional parking spaces is
permitted by all applicable Laws.
1.9. RETAINED REAL ESTATE BROKERS: The term "Retained Real Estate
Brokers" shall mean LaSalle Partners Limited and J.R. Parrish, Inc.
1.10. ADDRESS FOR NOTICES: The term "Address for Notices" shall mean the
following:
A. In the case of Landlord, such term shall mean The Equitable
Life Assurance Society of the United States, One Market Plaza, 1900 Steuart
Tower, San Francisco, California 94105, Attention: Property Management
Department.
B. In the case of Tenant, such term shall mean (i) before the
Commencement Date, its present address which is 881 Martin Avenue, Box 58123,
Santa Clara, California 95052; and (ii) after the Commencement Date, the
address of the Premises which is 2830 De La Cruz Boulevard, Santa Clara,
California 95050.
1.11. LEASE: The term "Lease" shall mean this printed lease, Exhibits
"A" (site plan), "B" (Approved Plans for Interior Improvements), "C"
(Interior Improvement Agreement), "D" (form of subordination agreement), all
of which are attached hereto and incorporated herein by this reference.
1.12. BUILDING A LEASE: The term "Building A Lease" shall mean that
lease dated as of June 1, 1989 between Landlord and Tenant, pursuant to which
Tenant leases from Landlord that certain building identified as Building A on
the site plan attached hereto as EXHIBIT "A" and which contains approximately
68,708 square feet, the address of which is 2890 De La Cruz Boulevard, Santa
Clara, California.
1.13. TENANT'S ALLOCATED SHARE: The term "Tenant's Allocated Share"
shall mean one hundred percent (100%).
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1.14. CONTINUING TENANT DEFAULT: A "Continuing Tenant Default" shall be
deemed to exist when an "Event of Tenant's Default" (as defined in paragraph
13.1) has occurred, and the underlying default or breach by Tenant of its
obligations which resulted in such Event of Tenant's Default has not been
completely cured.
1.15. ADDITIONAL DEFINITIONS: As used in this Lease or any addendum or
amendment thereto, the following terms shall have the meanings set forth in
paragraph 15.12: "Agreed Interest Rate", "Common Area", "Law", "Leasehold
Improvements", "Lender", "Private Restrictions" and "Trade Fixtures".
ARTICLE 2.
DEMISE AND ACCEPTANCE
2.1. DEMISE OF PREMISES: Landlord hereby leases to Tenant, and Tenant
leases from Landlord, for the Lease Term upon the terms and conditions of
this Lease, the Premises together with (i) the non-exclusive right to use no
more than the number of Tenant's Allocated Parking Stalls within the Common
Area (subject to the limitations set forth in paragraph 4.7), and (ii) the
non-exclusive right to use the Common Area for ingress to and egress from the
Premises. Tenant's lease of the Premises shall be subject to (i) all Laws,
(ii) all Private Restrictions, easements, and other matters of public record,
and (iii) the reasonable and non-discriminatory rules and regulations from
time to time promulgated by Landlord pursuant to paragraph 4.6.
2.2. DELIVERY AND ACCEPTANCE OF POSSESSION: Landlord shall deliver to
Tenant possession of the Premises on the Commencement Date in their presently
existing condition, broom clean. Tenant shall accept possession of the
Premises in its presently existing condition, "as-is" (except for latent
defects in the structural elements of the Premises), acknowledging that (i)
Tenant intends to do substantial renovation work and construct completely new
interior improvements pursuant to paragraph 2.3 hereof and the Interior
Improvement Agreement attached as EXHIBIT "C", and (ii) Landlord is obligated
to make certain repairs as set forth in the Interior Improvement Agreement.
2.3. CONSTRUCTION OF INTERIOR IMPROVEMENTS: Tenant shall construct
certain improvements for Tenant's use in the Premises pursuant to the terms
of the Interior Improvement Agreement executed concurrently with this Lease
by Landlord and Tenant and attached hereto as EXHIBIT "C".
2.4. OPTIONS TO EXTEND LEASE TERM: Landlord hereby grants to Tenant two
(2) options (each referred to as the "Option") to extend the Lease Term each
for a five (5) year period (the "Option Term"), on the following terms and
conditions:
A. Tenant must give Landlord notice in writing of its exercise of
the Option before the later to occur of (i) the two hundred fortieth (240th)
day before the date the initial Lease Term (or then extended Lease Term as
the case may be) would end but for said exercise, or (ii) the seventh (7th)
day following the establishment of the fair market rent for the Premises by
appraisal pursuant to subparagraph 2.4F if such appraisal process is
commenced pursuant to subparagraphs 2.4E and 2.4F.
B. Tenant may not exercise the Option at any time that either of
the following is true: (i) a Continuing Tenant Default exists under this
Lease (unless caused by a subtenant of the original Tenant under this Lease
and such original Tenant is using reasonable efforts to cause such default to
be cured) or (ii) a Continuing Tenant Default exists under the Building A
Lease (unless caused by a subtenant or assignee of the original Tenant under
this Lease and such original Tenant is using reasonable efforts to cause such
default to be cured) and the same person or entity is the owner of record of
both the Premises and the real property leased pursuant to the Building A
Lease.
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C. All the terms and conditions of this Lease shall apply during
the Option Term, except that the Base Monthly Rent for the Option Term shall
be determined as provided in subparagraph 2.4D below.
D. The Base Monthly Rent for the Option Term with respect to the
Premises shall be the ninety-five percent (95%) of the fair market rent for
the Premises for the Option Term on the terms contained in this Lease as of
the commencement of the Option Term, determined pursuant to subparagraphs
2.4E and 2.4F. For purposes of this Lease, the term "fair market rent for
the Premises" shall mean the projected going market rent for the Premises as
of the commencement of the Option Term in question, including a provision for
periodic increases of such rent during the Option Term (which increases shall
be established as part of such fair market rent), taking into account the
value of all improvements in the Premises, regardless of whether made by
Landlord or Tenant (except for those Leasehold Improvements that Tenant has
the right to remove at the expiration of the Lease Term).
E. Tenant may not exercise the Option in question unless Tenant
has delivered to Landlord a written request (a "Rent Quote Request") that
Landlord state in writing Landlord's opinion of the fair market rent for the
Premises for the upcoming Option Term in question, which Rent Quote Request
may only be delivered and shall only be effective if delivered (i) no sooner
than fifteen (15) months before the expiration of the Lease Term, and (ii) no
later than thirteen (13) months prior to the expiration of the Lease Term.
After receipt of a Rent Quote Request and no later than twelve (12) months
prior to the expiration of the Lease Term, Landlord shall deliver to Tenant a
written statement setting forth Landlord's opinion of the fair market rent
for the Premises for the Option Term in question (a "Landlord's Rent Quote").
For a period of thirty (30) days following delivery to Tenant of Landlord's
Rent Quote (the "Negotiation Period"), Landlord and Tenant shall confer to
attempt to reach agreement upon the fair market rent for the Premises for the
Option Term in question. If Landlord and Tenant are unable to reach
agreement in writing within the Negotiation Period, for purposes of
establishing the Base Monthly Rent for the Option Term in question, the fair
market rent for the Premises shall be deemed to be the amount stated in
Landlord's Rent Quote unless Tenant delivers to Landlord during the
Negotiation Period a written notice which states the following: (i) Tenant
requires that the fair market rent for the Premises for the Option Term in
question be established by the appraisal process described in subparagraph
2.4F; and (ii) the name, address, and qualifications of the appraiser
selected by Tenant for purposes of the appraisal process described in
subparagraph 2.4F ("Tenant's Appraisal Demand"). If Tenant so timely
delivers to Landlord a Tenant's Appraisal Demand, the Base Monthly Rent for
the Option Term in question shall be established based on the result of the
appraisal process described in subparagraph 2.4F.
F. If Tenant delivers to Landlord a Tenant's Appraisal Demand
during the Negotiation Period, then the fair market rent for the Premises
shall be determined by three (3) real estate appraisers, all of whom shall be
members of the American Institute of Real Estate Appraisers with not less
than five (5) years experience appraising real property (other than
residential or agricultural property) located in Santa Clara County,
California, in accordance with the following procedures:
(1) One of the appraisers shall be the appraiser identified in
Tenant's Appraisal Demand. Within ten (10) days of receipt of Tenant's
Appraisal Demand, Landlord shall select its appraiser and notify Tenant, in
writing, of the name, address and qualifications of an appraiser selected by
it. Failure by Landlord to select a qualified appraiser within said ten (10)
day period shall be deemed a waiver of its right to select a second appraiser
on its own behalf and Tenant shall select a second appraiser on behalf of
Landlord within five (5) days after the expiration of said ten (10) day
period. Within ten (10) days from the date the second appraiser shall have
been appointed, the two (2) appraisers selected by the parties shall appoint
a third appraiser. If the two appraisers fail to select a third qualified
appraiser, the third appraiser shall be selected by the American Arbitration
Association at the request of either party or, if there is then no American
Arbitration Association or if it refuses to perform this function, then at
the request of either Landlord or Tenant, the third appraiser shall be
appointed by the then Presiding Judge of the Superior Court of the State of
California for the County of Santa Clara.
(2) The three (3) appraisers so selected shall meet in San
Jose,
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California, not later than twenty (20) days following the selection of the
third appraiser. At said meeting the appraisers shall attempt to determine
the fair market rent for the Premises for the Option Term in question.
(3) If the appraisers are unable to complete their
determinations in one meeting, they may continue to consult at such times as
they deem necessary for a fifteen (15) day period from the date of their
first meeting, in an attempt to have at least two (2) of them agree. If, at
the initial meeting or at any time during said fifteen (15) day period, two
(2) or more of the appraisers agree on the fair market rent for the Premises,
such agreement shall be determinative and binding on the parties hereto, and
the agreeing appraisers shall, in simple letter form executed by the agreeing
appraisers, forthwith notify both Landlord and Tenant of the amount set by
such agreement.
(4) If two (2) or more appraisers do not agree within said
fifteen (15) day period as set forth above, then each appraiser shall, within
five (5) days after the expiration of said fifteen (15) day period, submit
his independent appraisal in simple letter form to Landlord and Tenant
stating his determination of the fair market rent for the Premises for the
Option Term in question. Landlord and Tenant shall then determine the fair
market rent for the Premises for the Option Term by determining the average
of the fair market rent set by each of the appraisers; provided, however, if
the lowest appraisal is less than eighty-five percent (85%) of the middle
appraisal then such lowest appraisal shall be disregarded, and/or if the
highest appraisal is greater than one hundred fifteen percent (115%) of the
middle appraisal then such highest appraisal shall be disregarded. If any
appraisal is disregarded, then the average shall be determined by computing
the average set by the other appraisals that have not been disregarded. For
purposes of determining the relative amount of the appraisals to implement
the provisions of this subparagraph requiring that an appraisal be
disregarded if it is too high or too low, the amount of an appraisal that
calls for periodic rent increases based upon an index (E.G., the Consumer
Price Index) shall be determined by assuming that such index will increase at
the same average annual rate during the option period in question that such
index increased on an average annual basis during the five (5) year period
preceding the commencement of the option period in question.
(5) Each party shall bear the fees and expenses of the
appraisers selected by or for it, and the fees and expenses of the third
appraiser shall be borne fifty percent (50%) by Landlord and fifty percent
(50%) by Tenant.
ARTICLE 3.
RENT
3.1. BASE MONTHLY RENT: Commencing on the Rent Start Date and
continuing thereafter throughout the initial Lease Term, Tenant shall pay to
Landlord a monthly rent (which rent is referred to as the "Base Monthly
Rent"), which shall be the following:
A. No Base Monthly Rent shall be payable for the period beginning
on the Rent Start Date and ending on the last day of the sixth (6th) month of
the Lease Term.
B. The Base Monthly Rent for the period beginning on the first day
of the seventh (7th) month of the Lease Term and ending on the last day of
the twenty-fourth (24th) month of the Lease Term is Sixty-Thousand Seven
Hundred Fifty Dollars ($60,750) (I.E., $0.70 per square foot per month).
C. The Base Monthly Rent for the period beginning on the first day
of the twenty-fifth (25th) month of the Lease Term and ending on the last day
of the forty-eighth (48th) month of the Lease Term is Seventy-Three Thousand
Seven Hundred Sixty-Seven Dollars ($73,767) (I.E., $0.85 per square foot per
month).
D. The Base Monthly Rent for the period beginning on the first day
of the forty-ninth (49th) month of the Lease Term and ending on the last day
of the seventy-second
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(72nd) month of the Lease Term is Seventy-Eight Thousand One Hundred Six
Dollars ($78,106) (I.E., $0.90 per square foot per month).
E. The Base Monthly Rent for the period beginning on the first day
of the seventy-third (73rd) month of the Lease Term and ending on the last
day of the one hundred twentieth (120th) month of the Lease Term is
Eighty-Two Thousand Four Hundred Forty-Six Dollars ($82,446) (I.E., $0.95 per
square foot per month).
F. For purposes of applying the provisions of this paragraph 3.1,
the term "month of the Lease Term" shall mean that period which begins on
that day of the calendar month in question which corresponds to the Rent
Start Date and which continues for thirty (30) or thirty-one (31) days until
the day of the next calendar month which precedes the day in that calendar
month which corresponds to the Rent Start Date. By way of example only, if
it is assumed that the Rent Start Date is September 15, 1989, then for
purposes of this paragraph 3.1 (i) the first month of the Lease Term would
commence September 15 and end on October 14, 1989; and (ii) the seventh (7th)
month of the Lease Term would commence on March 15 and end on April 14, 1990.
3.2. ADDITIONAL RENT: Commencing on the Rent Start Date and continuing
thereafter throughout the Lease Term, Tenant shall pay, as additional rent
(the "Additional Rent"), (i) Tenant's share of Common Operating Expenses as
required by paragraph 6.3, (ii) Tenant's share of Real Property Taxes as
required by paragraph 8.2, (iii) Landlord's share of the net consideration
received by Tenant upon certain assignments and sublettings as required by
paragraph 14.1, (iv) any late charges or interest due Landlord pursuant to
paragraph 3.4, (v) Tenant's share of the amortized cost of certain additional
improvements as provided in paragraph 5.4, and (vi) any other charges due
Landlord pursuant to this Lease.
3.3. PAYMENT OF RENT: All rent required to be paid in monthly
installments shall be paid in advance on the first day of each calendar month
during the Lease Term. All rent shall be paid in lawful money of the United
States, without any abatement, deduction or offset whatsoever (except as
permitted by paragraphs 11.4 and 12.2), and without any prior demand
therefor, to Landlord at its address set forth above or at such other place
as Landlord may designate from time to time. Tenant's obligation to pay rent
shall be prorated as of the Rent Start Date and at expiration or earlier
termination of the Lease Term such that Tenant shall not be required to pay
Base Monthly Rent or Additional Rent for any period preceding the Rent Start
Date or following the expiration or earlier termination of the Lease Term
(except in the case of a termination of this Lease as a result of an Event of
Tenant's Default).
3.4. LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges
that the late payment by Tenant of any monthly installment of Base Monthly
Rent or any Additional Rent will cause Landlord to incur certain costs and
expenses not contemplated under this Lease, the exact amount of which are
extremely difficult or impractical to fix. Such costs and expenses will
include, without limitation, administration and collection costs and
processing and accounting expenses. Therefore, if any such Base Monthly Rent
or Additional Rent is not received by Landlord from Tenant within five (5)
days after Landlord delivers written notice to Tenant that such amount is
delinquent, Tenant shall immediately pay to Landlord a late charge equal to
five percent (5%) of such delinquent rent. Landlord and Tenant agree that
this late charge represents a reasonable estimate of such costs and expenses
and is fair compensation to Landlord for its loss suffered by 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 rent or prevent Landlord from exercising any right or
remedy available to Landlord upon Tenant's failure to pay any rent due under
this Lease in a timely fashion, including the right to terminate this Lease.
If any rent remains delinquent for a period in excess of thirty (30) days
after Landlord delivers written notice to Tenant that such amount is
delinquent, in addition to such late charge, Tenant shall pay to Landlord
interest on any rent that is not paid when due at the Agreed Interest Rate
following the date such amount became due until paid.
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ARTICLE 4.
USE OF PREMISES
4.1. LIMITATION ON TYPE: Tenant shall use the Premises solely for the
Permitted Use (as described in paragraph 1.6). Tenant shall not do or permit
anything to be done in or about the Premises or Common Area which will (i)
interfere with the rights of other occupants of the Property, (ii) cause
structural damage to the Premises and Tenant fails to promptly commence and
diligently pursue to completion the repair of such damage, or (iii) cause
damage to any part of the Premises or Property except to the extent
reasonably necessary for the installation of Tenant's equipment and trade
fixtures and Tenant fails to promptly commence and diligently pursue to
completion the repair of such damage. Tenant shall not operate any equipment
within the Premises which will (i) injure, vibrate or shake the Premises,
(ii) overload existing electrical systems or other mechanical equipment
servicing the Premises, or (iii) impair the efficient operation of the
sprinkler system or the heating, ventilating or air conditioning ("HVAC")
equipment servicing the Premises, or (iv) damage, overload or corrode the
sanitary sewer system. Tenant shall not attach, hang or suspend anything
from the ceiling, roof, walls or columns of the Premises or set any load on
the floor in excess of approved structural limits as defined by Landlord's
architect. Any dust, fumes, or waste products generated by Tenant's use of
the Premises shall be contained and disposed so that they do not (i) create a
fire or health hazard, (ii) damage the Premises, or (iii) interfere with the
businesses of other tenants of the Property. All noise or odors generated by
Tenant's use of the Premises shall be contained or muffled so that they do
not interfere with the businesses of other tenants of the Property. Tenant
shall not (i) change the exterior of the Premises (subject to Tenant's right
to install signs pursuant to paragraph 4.5), or (ii) install any equipment or
antennas on or make any penetrations of the exterior or roof of the Premises
without the prior written consent of Landlord. Tenant shall not commit nor
permit to be committed any waste in or about the Premises, and Tenant shall
keep the Premises in a neat, clean, attractive and orderly condition, free of
any objectionable noises, odors, dust or nuisances which may disturb the
quiet enjoyment of other tenants or occupants of the Property.
Notwithstanding the foregoing restrictions, the parties agree as follows:
A. Tenant may bring military fighting vehicles onto the first
floor of the Premises so long as (i) Tenant puts into place such reinforcing
as is reasonably necessary to upgrade the floor load capacity so that it will
accept such fighting vehicles; and (ii) Tenant repairs any damage to the
Premises caused by the entry of such vehicles.
B. Tenant may install antennas, radio "dishes" or other electronic
equipment reasonably necessary for the conduct of Tenant's business upon the
roof of the Premises so long as (i) such installations are done in compliance
with all Laws and Private Restrictions; (ii) such installations are
accomplished in a manner which does not compromise the watertight integrity
of the roof; (iii) all damage to the Premises caused by such installation is
repaired by Tenant; and (iv) any such equipment is properly and effectively
screened from view in a manner reasonably acceptable to Landlord.
C. In the event Tenant desires to operate equipment within the
Premises that will or may overload existing mechanical, electrical, or other
systems, Tenant may do so only if it first installs, at its sole cost, all
necessary modifications, repairs or upgrades of existing systems so that such
equipment may be operated without overloading such systems as so modified by
Tenant.
4.2. COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall not
use or permit any person to use the Premises in any manner which violates any
Laws or Private Restrictions. Tenant shall abide by and promptly observe and
comply with all Laws and Private Restrictions and shall indemnify and hold
Landlord harmless from any liability resulting from Tenant's failure to do so.
4.3. INSURANCE REQUIREMENTS: Tenant shall not use or permit any person
to use the Premises or Common Area in any manner which will cause a
cancellation of any insurance policy covering the Premises. Tenant shall not
sell, or permit to be kept, used, or sold in or about
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the Premises any article which may be prohibited by the standard form of fire
insurance policy; provided, however, that Tenant may bring military fighting
vehicles onto the first floor of the Premises as permitted pursuant to
subparagraph 4.1A. Tenant shall comply with all reasonable requirements of
any insurance company, insurance underwriter, or Board of Fire Underwriters
which are necessary to maintain, at reasonable rates, the insurance coverage
carried by Landlord pursuant to this Lease.
4.4. OUTSIDE AREAS: No materials, supplies, storage tanks or
containers, equipment, finished products or semi-finished products, raw
materials, inoperable vehicles or articles of any nature shall be stored upon
or permitted to remain outside of the Premises except in fully fenced and
screened areas outside the Premises which have been designed for such purpose
and have been approved in writing by Landlord for such use by Tenant;
provided, however, that Tenant may bring military fighting vehicles onto the
first floor of the Premises as permitted pursuant to subparagraph 4.1A.
4.5. SIGNS: Tenant shall not place on any portion of the Premises or
the Property any sign, placard, lettering in or on windows, banner, displays
or other advertising or communicative material which is visible from the
exterior of the Premises without the prior written approval of Landlord. All
such approved signs shall strictly conform to all Laws and Private
Restrictions and shall be installed at the expense of Tenant. If Landlord so
elects, Tenant shall, at the expiration or sooner termination of this Lease,
remove all signs installed by it and repair any damage caused by such
removal. Tenant shall at all times maintain such signs in good condition and
repair. Upon Tenant's written request and at Tenant's cost and expense,
Landlord shall remove both of the Airport Technology Park monument signs
located on De La Cruz Boulevard. Subject to Landlord's prior written
approval of Tenant's specific design plan, (i) Tenant shall have the right to
install a monument sign at the entrance to the Premises, and at the two
entrances to Airport Technology Park, and (ii) Tenant shall have the right to
install signs on the exterior of the Premises. Approved signs installed by
Tenant may be illuminated in compliance with the provisions of applicable
laws and Private Restrictions.
4.6. RULES AND REGULATIONS: Landlord may from time to time promulgate
reasonable and nondiscriminatory rules and regulations applicable to all
occupants of the Property for the care and orderly management of the Property
and the safety of its tenants and invitees. Such rules and regulations shall
be binding upon Tenant upon delivery of a copy thereof to Tenant, and Tenant
agrees to abide by such rules and regulations. 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 for the violation by any other tenant of the Property of any such
rules and regulations.
4.7. PARKING: Tenant is allocated and shall have the non-exclusive
right to use (without charge in addition to the Base Monthly Rent) no more
than the number of parking spaces contained within the Property described in
paragraph 2.1 for its use and the use of its employees and invitees, the
location of which may be designated from time to time by Landlord but shall
be on the Property and within reasonable proximity to the Premises. Tenant
shall not at any time use or permit its employees or invitees to use more
parking spaces than the number so allocated to Tenant or to park or permit
the parking of its vehicles or the vehicles of others in any portion of the
Property not designated by Landlord as a non-exclusive parking area.
Landlord shall not oversubscribe the parking within the Property, and shall
assure that the total number of spaces committed to the non-exclusive use of
all tenants of the Property shall not exceed the total number of spaces
within the Common Area. Of the parking spaces allotted to Tenant pursuant to
paragraph 2.1, Tenant shall have the right to designate a reasonable number
of such spaces as reserved spaces for its executives, which shall not exceed
ten percent (10%) of the total of spaces and which shall be in immediate
proximity to the Premises. In the event Tenant elects to install a patio as
set forth in subparagraph 5.6A, the number of parking spaces allocated to
Tenant shall be reduced based upon the square footage of said patio, which at
the time this Lease is executed is anticipated to be a reduction in eight (8)
parking spaces. If Landlord grants to any other tenant the exclusive right
to use any particular parking space(s), neither Tenant nor its employees or
invitees shall use such spaces. Within ten (10) business days after written
request therefor from Landlord, Tenant shall furnish Landlord with a list of
its and its employees vehicle license numbers and Tenant shall thereafter
notify Landlord of any change in such list within five (5)
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days after each such change occurs. Tenant shall have the right, at Tenant's
option, to provide its employees with stickers or other identification
markers or tags to be affixed to or on the employees' automobiles or other
vehicles, evidencing the right of such employees to use the parking area.
Such stickers shall be subject to prior review and approval by Landlord,
which shall not be unreasonably withheld or delayed. Tenant shall furnish to
Landlord a list of identifying numbers for the stickers distributed from time
to time by Tenant to its employees. If Tenant elects to use such stickers as
provided herein, Tenant shall not be obligated to furnish Landlord with a
list of vehicle license numbers for its employees, for as long as Tenant
maintains such sticker system of identification. Landlord reserves the
right, after having given Tenant reasonable notice, to have any vehicles
owned by Tenant or its employees or invitees utilizing parking spaces in
excess of the parking spaces allowed by Tenant's use to be towed away at
Tenant's cost. All trucks and delivery vehicles shall be (i) parked at the
rear of the Premises, (ii) loaded and unloaded in a manner which does not
interfere with the businesses of other occupants of the Property, and (iii)
permitted to remain on the Property only so long as is reasonably necessary
to complete loading and unloading. In the event Landlord elects or is
required by any Law to limit or control parking in the Property, whether by
validation of parking tickets or any other method of assessment, Tenant
agrees to participate in such validation or assessment program under such
reasonable rules and regulations as are from time to time established by
Landlord, so long as such participation does not result in any increase in
costs to Tenant.
4.8. WINDOW COVERINGS: To the extent Tenant elects to use window
coverings visible from the exterior of the Premises, Tenant shall use the
same window covering to cover all windows Tenant so elects to cover in the
Premises to maintain a consistent and uniform exterior appearance.
4.9. OUTSIDE SALES: Tenant shall not conduct or permit to be conducted
on any portion of the Common Area any sale of any kind, including (i) any
public or private auction, fire sale, going-out-of-business sale, distress
sale or other liquidation sale, or (ii) any so-called "flea market", open-air
market or any other similar activity. Notwithstanding the foregoing, Tenant
shall be allowed to conduct occasional sales outside of the Premises on that
part of the Common Area that is in close proximity to the Premises so long as
each of the following conditions is satisfied with respect to each such sale:
(i) Landlord is given at least two (2) business days prior written notice of
the date of any such sale; (ii) such sale does not violate any Laws; (iii)
such sale is conducted in a manner that does not interfere with the rights of
other occupants of the Property; (iv) Tenant provides all necessary security,
cleans up all debris and repairs any damage caused by such sale; and (v) the
purpose of such sale is to permit employees of Tenant to purchase or to
receive free of charge property of Tenant.
ARTICLE 5.
TRADE FIXTURES AND LEASEHOLD IMPROVEMENTS
5.1. TRADE FIXTURES: Throughout the Lease Term, Tenant shall provide,
install, and maintain in good condition all Trade Fixtures required in the
conduct of its business in the Premises. All Trade Fixtures shall remain
Tenant's property.
5.2. LEASEHOLD IMPROVEMENTS: The following provisions govern Leasehold
Improvements constructed by Tenant:
A. Tenant shall not construct any Leasehold Improvements or
otherwise alter the Premises without Landlord's prior approval if such action
results in the demolition, removal, or material alteration of existing
Improvements (including partitions, wall and floor coverings, ceilings,
lighting fixtures or other utility installations) and if the cost of such
construction or alteration exceeds Fifteen Thousand Dollars ($15,000) per
work of improvement or if the cost of Leasehold Improvements done, under
construction, or for which approval is sought during any calendar quarter
exceeds Twenty-Five Thousand Dollars ($25,000). With respect to any
Leasehold Improvements which must be approved by Landlord pursuant to the
immediately
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preceding sentence, Tenant shall not commence construction of such Leasehold
Improvements until Landlord shall have first approved the plans and
specifications therefor, which approval shall be deemed given if not denied
in writing within ten (10) working days after Landlord shall have received
Tenant's request for such approval. In no event shall Tenant make any
alterations to the Premises which could significantly affect the structural
integrity or the exterior design of the Premises without Landlord's prior
approval.
B. All Leasehold Improvements requiring Landlord's approval shall
be installed by Tenant in substantial compliance with the approved plans and
specifications therefor. All construction undertaken by Tenant shall be done
in accordance with all Laws and in a good and workmanlike manner using
materials of good quality. Tenant shall not commence construction of any
Leasehold 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, and (iii) if reasonably requested
by Landlord, Tenant shall have obtained contingent liability and broad form
builders risk insurance in an amount reasonably satisfactory to Landlord if
there are any perils relating to the proposed construction not covered by
insurance carried pursuant to Article 9. If Landlord so requests in writing
with respect to Leasehold Improvements requiring Landlord's prior approval,
Tenant shall inform Landlord of Tenant's scheduled date for commencement of
construction at least five (5) days prior to such date of commencement.
C. At all times during the Lease Term, (i) Tenant shall maintain
all plans and change orders prepared in connection with the construction of
any Leasehold Improvements which required a building permit or other
governmental approval, and (ii) Tenant shall provide to Landlord copies of
such plans and change orders (and, to the extent Tenant causes such to be
prepared for its own use, "As-Built" plans) at any time that Landlord
requests copies thereof.
D. All Leasehold Improvements shall remain the property of Tenant
during the Lease Term. Tenant shall have the right to remove only the
following kinds of Leasehold Improvements so long as it repairs all damage
caused by the installation thereof and returns the Premises to the condition
existing prior to the installation of such Leasehold Improvements: (i)
built-in cabinets, file drawers and bookcases; (ii) computer room air
conditioning; (iii) canteen equipment; (iv) office cubicle systems; and (v)
ornamental statues. At the expiration or sooner termination of the Lease
Term, all Leasehold Improvements that Tenant does not remove shall be
surrendered to Landlord as a part of the realty and shall then become
Landlord's property, and Landlord shall have no obligation to reimburse
Tenant for all or any portion of the value or cost thereof. However, if
Landlord so requires, at the expiration or earlier termination of the Lease
Term, Tenant shall remove any Leasehold Improvements designated for removal
by Landlord and shall restore the Premises to the condition existing prior to
the installation of such Leasehold Improvements to the extent necessary to
return the Premises to substantially the same condition that existed on the
completion of the Interior Improvements constructed pursuant to EXHIBIT "C",
ordinary wear and tear excepted. Notwithstanding the foregoing:
(1) Tenant shall only be required to remove Leasehold
Improvements for which either of the following is true: (i) such Leasehold
Improvements were not approved in writing by Landlord; or (ii) at the time
approval was given by Landlord, Landlord informed Tenant in writing that
Landlord would require that such Leasehold Improvements be removed at the
termination of the Lease Term.
(2) Tenant may cause interior partitions to be moved,
reconfigured, or removed altogether, or cause interior offices to be deleted
or added, all without the obligation to restore such partitions or interior
offices to any prior condition upon expiration or termination of the Lease.
5.3. ALTERATIONS REQUIRED BY LAW: Tenant shall make any alteration,
addition or change of any sort, whether structural or otherwise, to the
Premises that is required by any Law because of (i) a specific use or change
of use made of the Premises by Tenant (which alteration, addition or change
is not generally required to be made by owners or Tenants of other properties
similar to the Premises), (ii) Tenant's application for any permit or
governmental approval, or (iii) Tenant's construction or installation of any
Leasehold Improvements or Trade Fixtures.
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5.4. LANDLORD'S IMPROVEMENTS: All fixtures, improvements or equipment
which are installed, constructed on or attached to the Property by Landlord
at its expense shall become a part of the realty and belong to Landlord.
Tenant shall pay additional rent in the event Landlord, in its sole
discretion, elects to make any of the following kinds of capital improvements
to the Property: (i) capital improvements required to be constructed in
order to comply with any Law not in effect or applicable to the Property as
of the Commencement Date; (ii) modification of existing or construction of
additional capital improvements or building service equipment for the purpose
of reducing the consumption of utility services or Common Operating Expenses
of the Property; (iii) replacement of capital improvements or building
service equipment existing as of the Commencement Date when required because
of normal wear and tear; and (iv) the amount of "deductibles" paid by
Landlord for the restoration of any part of the Property that has been
damaged to the extent such "deductible" is not included within Common
Operating Expenses. With respect to any expenditure in excess of Fifty
Thousand Dollars ($50,000) for which Landlord seeks contribution pursuant to
this paragraph 5.4 from Tenant, prior to incurring such expense, Landlord
shall notify Tenant of the nature and estimated amount of such expenditure
and, if Tenant so requests, shall provide Tenant with such information upon
which such cost estimate is based for Tenant's approval. The amount of
additional rent Tenant is to pay with respect to each such capital
improvement shall be determined as follows:
A. Tenant shall have the option to pay in cash an amount equal to
Tenant's Allocated Share of all costs paid by Landlord to construct the
improvements in question fairly allocable to the Premises (including
financing costs) in cash within thirty (30) days after the improvement has
been substantially completed and Landlord has notified Tenant of the cost of
such improvement and the amount of Tenant's required contribution. If Tenant
does not exercise such option to pay such amount in cash, then the provisions
of subparagraph 5.4B shall apply.
B. All costs paid by Landlord to construct such improvement
(including financing costs) shall be amortized on a straight line basis over
the useful life of such improvement (determined in accordance with generally
accepted accounting principles) with interest on the unamortized balance at
the then prevailing market rate Landlord would pay if it borrowed funds to
construct such improvement from an institutional lender, and Landlord shall
inform Tenant of the monthly amortization payment required to so amortize
such costs, and shall also provide Tenant with the information upon which
such determination is made. As additional rent, Tenant shall pay an amount
equal to Tenant's Allocated Share of that portion of such monthly
amortization payment fairly allocable to the Premises (as reasonably
determined by Landlord) for each month after such improvement is completed
until the first to occur of (i) the expiration of the Lease Term (as the same
may be extended), or (ii) the end of the term over which such costs were
amortized, which amount shall be due at the same time the Base Monthly Rate
is due.
C. Notwithstanding anything contained in this paragraph 5.4, the
additional rent Tenant is to pay with respect to any modification of existing
or construction of additional capital improvements or building service
equipment for the purpose of reducing the consumption of utility expenses or
Common Operating Expenses of the Property shall not for any period exceed the
actual amount of savings in Additional Rent realized by Tenant as a result of
such modification or construction.
5.5. LIENS: Tenant shall keep the Premises and the Property free from
any liens and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees
or contractors relating to the Premises. If any claim of lien is recorded,
Tenant shall bond against or discharge the same within thirty (30) days after
the same has been recorded against the Premises and/or the Property. Should
any lien be filed against the Premises or any action commenced affecting
title to the Premises, the party receiving notice of such lien or action
shall immediately give the other party written notice thereof.
5.6. MODIFICATIONS TO THE PREMISES: Subject to Landlord's prior written
approval, and the provisions of paragraphs 5.2 and 5.3 hereof, Tenant shall
have the right to:
A. Modify the parking area behind the Premises, which area is
highlighted on the attached EXHIBIT "A", to construct a patio;
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B. Install a datalink approximately twenty (20) inches wide
between the Premises and Building A;
C. Install up to a total of four (4) flagpoles allocated between
the front of the Premises and the front of the premises leased pursuant to
the Building A Lease; and
D. Fill in existing loading docks so long as (i) existing drainage
systems serving such loading docks are appropriately capped; (ii) such fill
is accomplished in a manner that the loading docks may be restored to their
condition existing as of the Commencement Date upon expiration of the Lease
Term, and (iii) Tenant agrees to restore such loading docks to the condition
existing as of the Commencement Date upon the expiration of the Lease Term.
E. Trim or relocate on the Property to a new location approved by
Landlord any trees, shrubs or other landscaping that obscures any sign
installed on the Property by Tenant.
ARTICLE 6.
REPAIR AND MAINTENANCE
6.1. TENANT'S OBLIGATION TO MAINTAIN: Except as otherwise provided in
paragraph 6.2 and in Article 11 regarding the restoration of damage caused by
fire and other perils, Tenant shall, at all times during the Lease Term,
clean, keep, and maintain in good order, condition, and repair the Premises
and every part thereof, through regular inspections and servicing, including,
but not limited to, (i) all plumbing and sewage facilities (including all
sinks, toilets, faucets and drains), and all ducts, pipes, vents or other
parts of the HVAC or plumbing system, (ii) all fixtures, interior walls,
floors, carpets and ceilings, (iii) all windows, doors, entrances, plate
glass, showcases and skylights (including cleaning both interior and exterior
surfaces), (iv) all electrical facilities and all HVAC equipment and other
mechanical systems (including all lighting fixtures, lamps, bulbs, tubes,
fans, vents, exhaust equipment and systems), (v) any automatic fire
extinguisher equipment in the Premises, and (vi) the roof membrane (including
any necessary resurfacing or patching to preserve the membrane or to repair
leaks except that Tenant shall not be required to make any repair to the
extent such repair is required because of Landlord's repair or maintenance of
the structural roof system). Tenant shall replace any damaged or broken
glass in the Premises (including all interior and exterior doors and windows)
with glass of the same kind, size and quality. Tenant shall repair any
damage to the Premises (including exterior doors and windows) caused by
vandalism or any unauthorized entry. Tenant shall maintain continuously
throughout the Lease Term a service contract for the maintenance of all HVAC
equipment serving the Premises with a licensed HVAC repair and maintenance
contractor, which contract provides for the periodic inspection and servicing
of the HVAC equipment at least once every sixty (60) days during the Lease
Term. Tenant shall also maintain continuously throughout the Lease Term a
service contract for the washing of all windows (both interior and exterior
surfaces) in the Premises with a contractor, which contract provides for the
periodic washing of all such windows on such basis as shall keep the exterior
appearance of the Premises in first class condition, but no less frequently
than once every calendar year. If and when Landlord so requests in writing,
Tenant shall furnish Landlord with copies of all such service contracts. All
repairs and replacements required of Tenant shall be promptly made with
materials of good quality. If the work affects the structural parts of the
Premises or if the estimated cost of any item of repair or replacement is in
excess of Fifteen Thousand Dollars ($15,000), then Tenant shall first obtain
Landlord's written approval of the scope of work, plans therefor, and
materials to be used, except in the case of emergency in which event Tenant
shall within a reasonable period of time after performing the work, notify
Landlord of the scope of the work performed and the materials used, and shall
furnish Landlord with the plans therefor.
6.2. LANDLORD'S OBLIGATION TO MAINTAIN: Landlord, at its cost without
right of reimbursement from Tenant, shall be responsible for the maintenance,
repair, and replacement of the structural parts of the Premises (i.e.,
foundation, first and second story floor slab and second story floor deck,
load-bearing walls, and structural roof system, but excluding roof membrane)
except to the extent that (i) the same is necessitated by the wrongful or
negligent act or omission
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of Tenant, its subtenants, or their respective agents, employees,
contractors, or invitees, or (ii) reimbursement is permitted pursuant to
paragraph 5.4 hereof. Landlord at its cost without right of reimbursement
from Tenant, shall repair damage to interior improvements and Leasehold
Improvements that have been approved by Landlord pursuant to the term hereof,
or damage to the roof membrane of the Premises if caused by the maintenance
work required to be performed by Landlord pursuant to the provisions of this
paragraph. Landlord shall repair, maintain, operate and replace when
necessary the Common Area, with such right of reimbursement from Tenant as is
specified in paragraphs 5.4 and 6.3. Landlord shall not be responsible for
repairs required by an accident, fire or other peril except as otherwise
required by Article 11, or for damage caused to any part of the Property by
any act, negligence or omission of Tenant or its agents, contractors,
employees or invitees. Landlord may engage contractors of its choice to
perform the obligations required of it by this Article, and the necessity of
any expenditure to perform such obligations shall be at the sole discretion
of Landlord.
6.3. TENANT'S OBLIGATION TO REIMBURSE: As additional rent, commencing
on the Rent Start Date and continuing throughout the remainder of the Lease
Term, Tenant shall pay Tenant's Allocated Share of all Common Operating
Expenses fairly allocable to the Premises including (i) all Common Operating
Expenses paid with respect to the maintenance, repair, replacement and use of
the Premises and (ii) a proportionate share (based on the Premises Gross
Leasable Area as a percentage of the Property Gross Leasable Area) of all
Common Area Expenses which relate to the Property in general and are not
fairly allocable to any one building on the Property. Landlord agrees that
it shall not recover from all tenants of the Property more than one hundred
percent (100%) of the actual Common Operating Expenses incurred by Landlord
for the period in question. As provided in paragraph 3.3, Tenant's
obligation to pay Tenant's Allocated Share of Common Operating Expenses
fairly allocable to the Premises shall be prorated as of the Rent Start Date
and at the expiration or earlier termination of the Lease Term, and if Tenant
has paid any amount on account of Common Operating Expenses relating to a
period that is not within the Lease Term (e.g., prepayment of insurance
premiums for one year), such amount shall be reimbursed to Tenant in
connection with such proration. Payment shall be made by whichever of the
following methods is from time to time designated by Landlord, and Landlord
may change the method of payment at any time so long as (i) Landlord gives
Tenant at least sixty (60) days prior written notice, and (ii) the method is
not changed more than once in any calendar year. Tenant shall pay such share
of the actual Common Operating Expenses incurred or paid by Landlord but not
theretofore billed to Tenant within thirty (30) days after receipt of a
written bill therefor from Landlord, on such periodic basis as Landlord shall
designate, but in no event more frequently than once a month. Alternatively,
(i) Landlord shall deliver to Tenant Landlord's reasonable estimate of the
Common Operating Expenses it anticipates will be paid or incurred for the
calendar year in question, (ii) during such calendar year, Tenant shall pay
such share of the estimated Common Operating Expenses in advance in monthly
installments as required by Landlord due with the installments of Base
Monthly Rent, and (iii) within ninety (90) days after the end of each
calendar year, Landlord shall furnish to Tenant a statement in reasonable
detail of the actual Common Operating Expenses paid or incurred by Landlord
during the just ending calendar year and thereupon there shall be an
adjustment between Landlord and Tenant, with payment to Landlord or credit by
Landlord against the next installment of Base Monthly Rent, as the case may
require, within thirty (30) days after delivery by Landlord to Tenant of said
statement, so that Landlord shall receive the entire amount of Tenant's share
of all Common Operating Expenses for such calendar year and no more. Tenant
and its agents (including accountants) shall have the right at its expense,
exercisable upon reasonable prior written notice to Landlord, to inspect at
Landlord's office during normal business hours Landlord's books and records
as they relate to Common Operating Expenses. Such inspection must be made
within one hundred eighty (180) days of Tenant's receipt of Landlord's annual
statement for the same, and shall be limited to verification of the charges
contained in such statement. Tenant may not withhold payment of such bill
pending completion of such inspection.
6.4. COMMON OPERATING EXPENSES DEFINED: The term "Common Operating
Expenses" shall mean the sum of the following:
A. All costs and expenses paid or incurred by Landlord in doing
the following (including payments to independent contractors providing
services related to the
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performance of the following): (i) maintaining, cleaning, and repairing the
exterior surfaces (including painting of exterior surfaces of buildings not
more than once every 5 years) of all buildings located on the Property; (ii)
maintenance of the liability, fire and property damage insurance covering the
Property carried by Landlord pursuant to paragraph 9.2 (including the payment
of commercially reasonable "deductibles" and the prepayment of premiums for
coverage of up to one year); (iii) maintaining, repairing, operating and
replacing when necessary HVAC equipment, utility facilities and other
building service equipment; (iv) providing utilities to the Common Area
(including lighting, trash removal and water for landscaping irrigation); (v)
complying with all applicable Laws and Private Restrictions; (vi) operating,
maintaining, repairing, cleaning, painting, restripping and resurfacing the
Common Area; (vii) replacement or installation of lighting fixtures,
directional or other signs and signals, irrigation systems, trees, shrubs,
ground cover and other plant materials, and all landscaping in the Common
Area; and (viii) depreciation and financing costs on maintenance and
operating machinery and equipment (if owned) and rental paid for such
machinery and equipment (if rented);
B. All additional costs and expenses incurred by Landlord with
respect to the operation, protection, maintenance, repair and replacement of
the Property which pursuant to generally accepted accounting principles would
be considered a current expense and not a capital expenditure;
C. That portion of all compensation (including benefits and
premiums for workers' compensation and other insurance) paid to or on behalf
of employees of Landlord but only to the extent they are involved in the
performance of the work described by subparagraphs A and B above and that is
fairly allocable to the Property;
D. An additional amount equal to a commercially reasonable and
competitive management fee that would be charged by an independent third
party property manager for the management of the Property (except that
Tenant's Allocated Share of such management fee for any period shall not
exceed two percent (2%) of the Base Monthly Rent and Additional Rent payable
by Tenant for the same period); and
E. Notwithstanding anything contained herein, the term "Common
Operating Expenses" shall not include any of the following: (i) mortgage
principle payments; (ii) ground rent and other payments made pursuant to any
ground lease affecting the Property; (iii) the cost of refinancing any loan
secured by the Property; (iv) interest and penalties imposed against Landlord
for late payments by Landlord; (v) legal fees incurred by Landlord in
connection with the negotiation or enforcement of, or litigation in
connection with, any lease affecting the Property; (vi) the cost of any
paintings, sculptures, or other art objects installed on the Property; (vii)
any costs reimbursed to Landlord by insurance or other third party payments
that are not reimbursements by tenants for their share of Common Operating
Expenses; (viii) brokerage commissions or other costs related to the leasing
of space within the Property; (ix) the cost of any tenant improvements
installed for the exclusive use of any other tenant of the Property.
6.5. CONTROL OF COMMON AREA: Landlord shall at all times have exclusive
control of the Common Area. Landlord shall have the right, without the same
constituting an actual or constructive eviction and without entitling Tenant
to any abatement of rent, to: (i) close any part of the Common Area to the
minimum extent reasonably necessary in the reasonable opinion required in the
opinion of Landlord's counsel to prevent a dedication thereof or the accrual
of any prescriptive rights therein; (ii) temporarily close the Common Area to
perform maintenance or for any other reason deemed sufficient by Landlord;
(iii) designate other property outside the boundaries of the Property to
become part of the Property; (iv) construct multi-deck parking structures in
any part of the Common Area; (v) change the shape, size, location, number and
extent of improvements on the Common Area; (vi) select a third party to
maintain and operate any of the Common Area at any time Landlord determines
that the best interests of the Property will be served by having the Common
Area maintained and operated by that third party so long as the fees and
charges of such third party are reasonable and competitive with the fees of
others in the marketplace providing the same services; (vii) make changes to
the Common Area including, without limitation, changes in the location of
driveways, parking spaces, parking areas, sidewalks or the direction of the
flow of traffic and the site of the Common Area; and/or (viii) voluntarily
change the address of the Property. Landlord agrees not to change the name of
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Airport Technology Park without the prior consent of Tenant. The use of the
Common Area shall be subject to such reasonable regulation and changes
therein as Landlord shall make from time to time. Landlord shall not
exercise its rights to control the Common Area in a manner that would
materially interfere with Tenant's use of the Premises without first
obtaining Tenant's approval. Tenant shall keep the Common Area free and
clear of all obstructions created or permitted by Tenant. If in the opinion
of Landlord unauthorized persons are using any of the Common Area by reason
of the presence of Tenant in the Premises, Tenant, upon demand of Landlord,
shall restrain such unauthorized use by appropriate proceedings. Nothing
herein shall affect the right of Landlord at any time to remove such
unauthorized person from the Common Area nor to prohibit the use of the
Common Area by unauthorized persons. In exercising any such rights described
in this paragraph 6.5 regarding the Common Area, Landlord shall make a
reasonable effort to minimize any disruption to Tenant's business.
6.6. TENANT'S NEGLIGENCE: Anything in this Lease to the contrary
notwithstanding, Tenant shall pay for all damage to the Premises or the
Property caused by the negligent act or omission of Tenant, its employees,
contractors, or invitees, or by the failure of Tenant to discharge promptly
its obligations under this Lease or to comply with the terms of this Lease,
but only to the extent such damage is not covered by insurance proceeds
actually recovered by Landlord. Tenant shall make payment within thirty (30)
days after demand therefor by Landlord.
ARTICLE 7.
WASTE DISPOSAL AND UTILITIES
7.1. WASTE DISPOSAL: Tenant shall store its waste either inside the
Premises or within outside trash enclosures that are (i) fully fenced and
screened in compliance with all Private Restrictions, (ii) designed for such
purpose to be used either exclusively by Tenant or in common with other
occupants of the Property, as designated by Landlord, and (iii) first
approved by Landlord. All entrances to such outside trash enclosures shall
be kept closed, and waste shall be stored in such manner as not to be visible
from the exterior of such outside enclosures. Tenant shall cause all of its
waste to be regularly removed from the Property at Tenant's sole cost.
Tenant shall keep all fire corridors and mechanical equipment rooms in the
Premises free and clear of all obstructions at all times.
7.2. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with
respect to the existence or use of Hazardous Materials on the Property:
A. Landlord hereby makes the following representations to Tenant,
each of which is made to the best of Landlord's knowledge as of the
Commencement Date:
(1) The soil and ground water on or under the Property does not
contain Hazardous Materials in amounts which violate any Hazardous Materials
Laws to the extent that any governmental entity could require either Landlord
or Tenant to take any remedial action or impose any penalties with respect to
such Hazardous Materials.
(2) During Landlord's period of ownership, no litigation or any
administrative proceeding has been brought or threatened, nor any settlements
reached with any governmental or private party, concerning the actual or
alleged presence of Hazardous Materials on or about the Property or any
disposal, release or threatened release of Hazardous Materials in or about
the Property.
(3) During the time that Landlord has owned the Property,
Landlord has received no notice of (i) any violation, or alleged violation,
of any Hazardous Material Law that has not been corrected to the satisfaction
of the appropriate authority, (ii) any pending claims relating to the
presence of Hazardous Material on the Property, or (iii) any pending
investigation by any governmental agency concerning the Property relating to
Hazardous Materials.
(4) The Property does not contain any (i) equipment containing
PCBs, or (ii) underground storage tanks.
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B. Any handling, transportation, storage, treatment, disposal or
use of Hazardous Materials by Tenant and Tenant's agents, employees,
contractors, invitees or subtenants after the Commencement Date in or about
the Property shall strictly comply with all applicable Hazardous Materials
Laws. Tenant shall indemnify, defend upon demand with counsel reasonably
acceptable to Landlord, and hold harmless Landlord from and against any and
all liabilities, losses, claims, damages, interest, penalties, fines,
monetary sanctions, attorneys' fees, experts' fees, court costs, remediation
costs, investigation costs, and other expenses which result from or arise in
any manner whatsoever out of the use, storage, treatment, transportation,
release, or disposal of Hazardous Materials on or about the Property by
Tenant or Tenant's agents, employees, contractors, invitees or subtenants
after the Commencement Date.
C. If the presence of Hazardous Materials on the Property caused
or permitted by Tenant or Tenant's agents, employees, contractors, invitees
or subtenants after the Commencement Date results in contamination or
deterioration of water or soil resulting in a level of contamination greater
than the levels established as acceptable by any governmental agency having
jurisdiction over such contamination, then Tenant shall promptly take any and
all action necessary to clean up such contamination if required by Law or as
a condition to the issuance or continuing effectiveness of any governmental
approval which relates to the use of the Property or any part thereof.
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, clean-up and restoration work and materials
required hereunder to return the Property to its condition existing prior to
the appearance of such Hazardous Materials.
D. Landlord and Tenant shall each give written notice to the other
as soon as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials which relates to the
Property, and (ii) any contamination of the Property by Hazardous Materials
which constitutes a violation of any Hazardous Materials Law. Landlord and
Tenant agree to keep such information confidential, except for (i)
disclosures that are approved by the other party, (ii) disclosures required
by Law or (iii) disclosures to any environmental consultant, lender,
purchaser, prospective purchaser, attorneys for either Landlord or Tenant, or
brokers for either Landlord or Tenant, so long as an agreement of
confidentiality is obtained from a party to whom the disclosure is to be
made, and (iv) disclosures in connection with any litigation or
administrative proceeding in which either Landlord or Tenant is involved.
Tenant and Tenant's agents, employees, contractors, invitees or subtenants
shall not bring Hazardous Materials onto the Property without first obtaining
the written consent of Landlord; provided, however, Tenant may, without being
required to obtain the prior written consent of Landlord, use at the Premises
in small quantities office supplies, cleaning materials and other maintenance
materials that are customarily used in business offices, even though such
supplies and materials may fall within the definition of Hazardous Materials.
At any time during the Lease Term, Tenant shall, within five days after
written request therefor received from Landlord, disclose in writing all
Hazardous Materials that are being used by Tenant on the Property, the nature
of such use, and the manner of storage and disposal.
E. Landlord may cause testing wells to be installed on the
Property, and may cause the ground water to be tested to detect the presence
of Hazardous Material by the use of such tests as are then customarily used
for such purposes. Any such installation of wells or tests shall be done in
a manner which minimizes the interference with Tenant's use of the Premises.
If Tenant so requests, Landlord shall supply Tenant with copies of such test
results. The cost of such tests and of the installation, maintenance, repair
and replacement of such wells shall be paid by Tenant if such tests disclose
the existence of facts which give rise to liability of Tenant pursuant to its
indemnity given in subparagraph 7.2B or 7.2C, and Tenant's liability is
established in a judicial or administrative proceeding, or in an action for
declaratory relief brought by Landlord.
F. Landlord, at its sole cost, shall comply with all Hazardous
Materials Laws affecting the Property (without right of reimbursement from
Tenant) to the extent that (i) Landlord is legally obligated to do so by such
Laws, and (ii) such compliance (or the cost of such compliance) is not made
the responsibility of Tenant pursuant to subparagraph 7.2B or subparagraph
7.2C. Landlord shall indemnify, defend upon demand with competent counsel,
and
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hold harmless Tenant from and against any and all liability for response
costs imposed upon Tenant by any governmental agency pursuant to the Federal
Law known as "CERCLA" (more particularly identified in subparagraph 7.2G) and
the comparable California statute (commonly known as the
Carpenter-Presley-Tanner Hazardous Substances Account Act, California Health
and Safety Code Section 25300 ET. SEQ.) that results from the presence of
Hazardous Materials on the Property not caused or contributed to by the use,
storage, treatment, release or disposal of Hazardous Materials on or about
the Property by Tenant, its subtenants, or their respective agents,
employees, contractors, or invitees. Notwithstanding the foregoing, the
indemnity given by Landlord in the immediately preceding sentence shall not
apply with respect to liability caused by any contamination of the Property
by a Hazardous Material that is or has been used, stored, treated, released
or disposed of on the Property by Tenant, its subtenants, or their respective
agents, employees, contractors, or invitees unless Tenant can prove such
contamination was not caused or contributed to by any of such parties.
G. As used herein, the term "Hazardous Material," means any
hazardous or toxic substance, material or waste which is or becomes regulated
by any local governmental authority, the State of California or the United
States Government. The term "Hazardous Material," includes, without
limitation, asbestos, PCB's, petroleum and petroleum products, and any
material or substance which is (i) listed under Article 9 or defined as
hazardous or extremely hazardous pursuant to Article 11 of Title 22 of the
California Administrative Code, Division 4, Chapter 20, (ii) defined as a
"hazardous waste" pursuant to Section 1004 of the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42 U.S.C.
Section 6903), or (iii) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section
9601). As used herein, the term "Hazardous Material Law" shall mean any
statute, law, ordinance, or regulation of any governmental body or agency
(including the U.S. Environmental Protection Agency, the California Regional
Water Quality Control Board, and the California Department of Health
Services) which regulates the use, storage, release or disposal of any
Hazardous Material.
H. The obligations of Landlord and Tenant under this paragraph 7.2
shall survive the expiration or earlier termination of the Lease Term. The
rights and obligations of Landlord and Tenant with respect to issues relating
to Hazardous Materials are exclusively established by this paragraph 7.2. In
the event of any inconsistency between any other part of this Lease and this
paragraph 7.2, the terms of this paragraph 7.2 shall control.
7.3. UTILITIES: Tenant shall promptly pay, as the same become due, all
charges for water, gas, electricity, telephone, sewer service, waste pick-up
and any other utilities, materials or services furnished directly to or used
by Tenant on or about the Premises during the Lease Term, including, without
limitation, (i) meter, use and/or connection fees, hook-up fees, standby
fees, and (ii) penalties for discontinued or interrupted service.
7.4. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Landlord and Tenant
shall comply with all rules, regulations and requirements promulgated by
national, state or local governmental agencies or utility suppliers
concerning the use of utility services, including any rationing, limitation
or other control. Landlord may voluntarily cooperate in a reasonable manner
with the efforts of all governmental agencies or utility suppliers in
reducing energy or other resource consumption. Tenant shall not be entitled
to terminate this Lease nor to any abatement in rent by reason of such
compliance or cooperation. Tenant agrees at all times to cooperate fully with
Landlord and to abide by all rules, regulations and requirements which
Landlord may prescribe in order to maximize the efficient operation of the
HVAC system and all other utility systems.
ARTICLE 8.
REAL PROPERTY TAXES
8.1. REAL PROPERTY TAXES DEFINED: The term "Real Property Taxes" as
used herein shall mean (i) all taxes, assessments, levies, and other charges
of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest
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required to pay any existing or future general or special assessments for
public improvements, services or benefits, and any increases resulting from
reassessments or resulting from a change in ownership or any other cause),
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 against, or with respect to the
value, occupancy or use of, all or any portion of the Property (as now
constructed or as may at any time hereafter be constructed, altered, or
otherwise changed) or Landlord's interest therein, the fixtures, equipment
and other property of Landlord, real or personal, that are an integral part
of and located on the Property, the gross receipts, income, or rentals from
the Property, or the use of parking areas, public utilities, or energy within
the Property, (ii) all charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the Property
(excluding costs and expenses for which Landlord is responsible pursuant to
subparagraph 7.2F), and (iii) all costs and fees (including attorneys' fees)
incurred by Landlord in contesting any Real Property Tax and in negotiating
with public authorities as to any Real Property Tax. If at any time during
the Lease Term the method of taxation or assessment of the Property
prevailing as of the Commencement Date shall be altered so that in lieu of or
in addition to any Real Property Tax described above there shall be levied,
assessed 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 or additional tax or charge (i) on the value, use or occupancy of
the Property, (ii) on or measured by the gross receipts, income, or rentals
from the Property, (iii) on Landlord's business of leasing the Property, or
(iv) 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 term "Real Property Taxes" for purposes of this Lease. If any
Real Property Tax is 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 term "Real Property
Taxes". Notwithstanding the foregoing, the term "Real Property Taxes" shall
not include estate, inheritance, transfer, gift or franchise taxes of
Landlord or the federal or state net income tax imposed on Landlord's income
from all sources.
8.2. TENANT'S OBLIGATION TO REIMBURSE: As Additional Rent, Tenant shall
pay to Landlord Tenant's Allocated Share of all Real Property Taxes which
become due after the Rent Start Date and during the Lease Term which are
fairly allocable to the Premises, which include (i) all Real Property Taxes
assessed with respect to the value, use or occupancy of the Premises and the
land beneath it, and (ii) a proportionate share (based on the Premises Gross
Leasable Area as a percentage of the Property Gross Leasable Area) of all
Real Property Taxes assessed with respect to the Common Area or with respect
to the Property in general which are not fairly allocable to any one building
on the Property. Tenant shall pay its share of Real Property Taxes (i) within
thirty (30) days after being billed for the same by Landlord, or (ii) no
later than ten (10) days before such Real Property Tax becomes delinquent,
whichever last occurs. If requested by Tenant in writing within one year
from receipt of a bill for Tenant's Allocated Share of Real Property Taxes,
Landlord shall furnish Tenant with such evidence as is reasonably available
to Landlord with respect to the amount of any Real Property Tax which is part
of such bill. Tenant may not withhold payment of such bill pending receipt
and/or review of such evidence. Upon Landlord's election or if any Lender
requires Landlord to impound Real Property Taxes on a periodic basis during
the Lease Term, then Tenant, on notice from Landlord indicating this
requirement, shall pay a sum of money toward its liability under this Article
to Landlord on the same periodic basis in accordance with the Lender's
requirements (if any). Landlord shall impound the Real Property Tax payments
received from Tenant in accordance with the requirements of the Lender (if
any). If any assessments are levied against the Property, Landlord may elect
either to pay the assessment in full or to allow the assessment to go to
bond. If Landlord pays the assessment in full, Tenant shall pay to Landlord
each time payment of Real Property Taxes is made a sum equal to that which
would have been payable (as both principal and interest) had Landlord allowed
the assessment to go to bond. Notwithstanding anything to the contrary
contained in paragraphs 8.1 and 8.2, if there is an increase in Real Property
Taxes resulting from a "change in ownership" (as that term is defined in
California Revenue and Taxation Code Section 60, ET. SEQ.) which occurs prior
to the fourth (4th) anniversary of the Commencement Date, then Tenant shall
not be obligated to pay any such increase that results from such "change of
ownership".
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8.3. TAXES ON TENANT'S PROPERTY: Tenant shall pay before delinquency
any and all taxes, assessments, license fees and public charges levied,
assessed or imposed against Tenant or Tenant's estate in this Lease or the
property of Tenant situated within the Premises which become due during the
Lease Term. Tenant shall furnish Landlord with satisfactory evidence of
these payments within thirty (30) days after receipt of written request
therefor from Landlord.
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
the following:
(1) Commercial general liability insurance, including property
damage, against liability for personal injury, bodily injury, death and
damage to property occurring in or about, or resulting from an occurrence in
or about, the Premises with combined single limit coverage of not less than
the amount of Tenant's Minimum Liability Insurance Coverage set forth in
paragraph 1.8, which insurance shall contain a "contractual liability"
endorsement insuring Tenant's performance of Tenant's obligation to indemnify
Landlord contained in paragraph 10.3;
(2) Plate-glass insurance, at actual replacement cost; and
(3) Fire and property damage insurance against loss caused by
fire, extended coverage perils including steam boiler insurance, sprinkler
leakage, if applicable, vandalism, malicious mischief and such other
additional perils as now are or hereafter may be included in a standard
extended coverage endorsement from time to time in general use in the county
in which the Property is located, insuring Tenant's personal property,
inventory, Trade Fixtures and Leasehold Improvements within the Premises for
the full actual replacement cost thereof.
B. Where applicable and required by Landlord, each policy of
insurance required to be carried by Tenant pursuant to this paragraph (i)
shall name Landlord and such other parties in interest as Landlord designates
as additional insureds; (ii) shall be primary insurance which provides 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 declarations without
the right of contribution from 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; (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; (vi) shall not have
a "deductible" in excess of $500,000 or such greater amount as is approved by
Landlord; (vii) shall (to the extent available) contain a waiver by the
insurer of any right to subrogation against Landlord, its agents, employees
and contractors which might arise by reason of any payment under such policy
or by reason of any act or omission of Landlord, its agents, employees or
contractors; and (viii) shall contain a "severability" clause. If Tenant has
in force and effect a blanket policy of liability insurance with the same
coverage for the Premises as described above, as well as other coverage of
other premises and properties of Tenant, or in which Tenant has some
interest, such blanket insurance shall satisfy the requirements hereof.
C. A certificate of each paid-up policy evidencing the insurance
required to be carried by Tenant pursuant to this paragraph (appropriately
authenticated by the insurer), certifying that such policy has been issued,
providing the coverage required by this paragraph, and containing the
provisions specified herein, shall be delivered to Landlord prior to the time
Tenant or any of its contractors enters the Premises and upon renewal of such
policies, but not less than five (5) days prior to the expiration of the term
of such coverage. If Landlord's insurance advisor reasonably determines at
any time that the amount of coverage required for any
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policy of insurance Tenant is to obtain pursuant to this paragraph is not
adequate, then Tenant shall increase such coverage for such insurance to such
amount as Landlord's insurance advisory reasonably deems adequate, not to
exceed the level of coverage commonly carried by comparable businesses
similarly situated for such insurance; provided, however, that Landlord may
not require an adjustment pursuant to this sentence more frequently than once
every two (2) years during the Lease Term.
9.2. LANDLORD'S INSURANCE: Landlord shall have the following
obligations and options regarding insurance:
A. Landlord shall maintain a policy or policies of fire and
property damage insurance in so-called "all risk" form insuring Landlord (and
such others as Landlord may designate) against loss of rents for a period of
not less than six (6) months and from physical damage to the Premises with
coverage of not less than the full replacement cost of (i) the building of
which the Premises are a part, including the structural elements thereof and
all electrical, mechanical, plumbing, and other systems, and (ii) all
Interior Improvements constructed pursuant to the Interior Improvement
Agreement attached as EXHIBIT "C". Landlord may so insure the Premises
separately, or may insure the Premises with other buildings and improvements
within the Property and/or other property owned by Landlord which Landlord
elects to insure together under the same policy or policies. Such fire and
property damage insurance, at Landlord's election, (i) may be endorsed to
cover loss caused by such additional perils against which Landlord may elect
to insure, including earthquake and/or flood, (ii) shall contain commercially
reasonable "deductibles" which, in the case of earthquake and flood
insurance, may be up to ten percent (10%) of the replacement value of the
property insured or such higher amount as is then commercially reasonable,
(iii) may provide coverage for loss of rents for a period of up to twelve
(12) months, and (iv) may contain additional endorsements or coverage
reasonably required by Landlord or any Lender, including an "agreed amount"
endorsement, demolition insurance (covering the cost of demolishing damaged
improvements or improvements required by Law to be demolished), and
difference in condition coverage. Landlord shall not be required to cause
such insurance to cover any Trade Fixtures, Leasehold Improvements or any
inventory or other personal property of Tenant.
B. Landlord may maintain a policy or policies of 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 or resulting from an occurrence in, or
about the Property, with combined single limit coverage in such amount as
Landlord may from time to time determine is reasonably necessary for its
protection and with commercially reasonable deductibles.
9.3. TENANT'S OBLIGATION TO REIMBURSE: The cost of the insurance
carried by Landlord pursuant to paragraph 9.2 (and any commercially
reasonable "deductible" amount paid by Landlord in connection with the
restoration of any loss and excluded from the coverage of such insurance)
shall be a Common Operating Expense and Tenant shall pay its share thereof as
provided in paragraph 6.3. However, if Landlord's insurance rates for the
Premises are increased at any time during the Lease Term as a result of the
nature of Tenant's use of the Premises, Tenant shall reimburse Landlord for
the full amount of such increase immediately upon receipt of a bill from
Landlord therefor.
9.4. RELEASE AND WAIVER OF SUBROGATION: The parties hereto release each
other, and their respective agents and employees, from any liability for
injury to any person or damage to property that is caused by or results from
any risk insured against under any valid and collectible insurance policy
carried by either of the parties which contains a waiver of subrogation by
the insurer and is in force at the time of such injury or damage, subject to
the following limitations: (i) the foregoing provisions shall not apply to
the commercial general liability insurance described by subparagraph 9.1A and
9.1B; and (ii) such release shall apply to liability resulting from any risk
insured against or covered by self-insurance maintained or provided by Tenant
to satisfy the requirements of paragraph 9.1. This release shall be in
effect only so long as the applicable insurance policy contains a clause to
the effect that this release shall not affect the right of the insured to
recover under such policy. Each party shall use reasonable efforts to cause
each insurance policy obtained by it to provide that the insurer waives all
right of recovery by
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way of subrogation against the other party and its agents and employees in
connection with any injury or damage covered by such policy. However, if any
insurance policy cannot be obtained with such a waiver of subrogation, or if
such waiver of subrogation is only available at additional cost and the party
for whose benefit the waiver is to be obtained does not pay such additional
cost, then the party obtaining such insurance shall notify the other party of
that fact and thereupon shall be relieved of the obligation to obtain such
waiver of subrogation rights from the insurer with respect to the particular
insurance involved.
ARTICLE 10.
LIMITATION ON LANDLORD'S
LIABILITY AND INDEMNITY
10.1. LIMITATION ON LANDLORD'S LIABILITY: Landlord shall not be liable
to Tenant, nor shall Tenant be entitled to terminate this Lease or to any
abatement of rent, for any injury to Tenant, its agents, employees,
contractors or invitees, damage to Tenant's property, or loss to Tenant's
business resulting from any cause, including without limitation any (i)
failure, interruption or installation of any HVAC or other utility system or
service; (ii) failure to furnish or delay in furnishing any utilities or
services when such failure or delay is caused by Acts of God or the elements,
labor disturbances of any character, any other accidents or other conditions
beyond the reasonable control of Landlord; (iii) limitation, curtailment,
rationing or restriction on the use of water or electricity, gas or any other
form of energy or any services or utility serving the Premises; (iv)
vandalism or forcible entry by unauthorized persons; or (v) penetration of
water into or onto any portion of the Premises or the Common Area through
roof leaks or otherwise. Notwithstanding the foregoing:
A. Subject to paragraph 9.4, Landlord shall be liable for any such
injury, damage or loss which is proximately caused by Landlord's gross
negligence or willful misconduct, of which Landlord has actual notice and a
reasonable opportunity to cure but which it fails to so cure.
B. Tenant shall have the option to terminate this Lease upon the
occurrence of the following: (i) water, electricity, or other utility
service essential to the conduct of Tenant's business in the Premises is
interrupted or substantially impaired for a period of more than two hundred
seventy (270) consecutive days during which time the Premises are rendered
substantially unusable for the conduct of Tenant's business (a "Material
Interruption"); and (ii) the Material Interruption is not caused by the act
or omission of Tenant, its agents, employees or contractors.
10.2. LIMITATION ON TENANT'S RECOURSE: So long as the Landlord is a
corporation, trust, partnership, joint venture, unincorporated association or
other form of business entity, (i) the obligations of Landlord shall not
constitute personal obligations of the officers, directors, trustees,
partners, joint venturers, members, owners, stockholders, or other principals
or representatives of such business entity, and (ii) Tenant shall have
recourse only to the assets of such business entity for the satisfaction of
such obligations and not against the assets of such officers, directors,
trustees, partners, joint venturers, members, owners, stockholders,
principals or representatives, except to the extent of their interests in the
entity that is Landlord. If Landlord is a natural person or persons, Tenant
shall have recourse only to the interest of such natural persons in the
Property for the satisfaction of the obligations of Landlord and shall not
have recourse to any other assets of such natural persons for the
satisfaction of such obligations.
10.3. INDEMNIFICATION OF LANDLORD: Tenant shall hold harmless, indemnify
and defend Landlord, and its employees, agents and contractors, with
competent counsel, from all liability, penalties, losses, damages, costs,
expenses, causes of action, claims and/or judgments arising by reason of any
death, bodily injury, personal injury or property damage (i) resulting from
any cause or causes whatsoever (other than the negligence or willful
misconduct of Landlord of which Landlord has had notice and a reasonable time
to cure, but which Landlord has failed to cure) occurring in or about or
resulting from an occurrence in or about the Premises, or
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(ii) resulting from the negligence or willful misconduct of Tenant, its
agents, employees and contractors, wherever the same may occur, or (iii)
resulting from an Event of Tenant's Default. The provisions of this
paragraph shall survive the expiration or sooner termination of this Lease.
ARTICLE 11.
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DAMAGE TO PREMISES
11.1. LANDLORD'S DUTY TO RESTORE: If the Premises are damaged by any
peril after the Commencement Date of this Lease, Landlord shall restore the
Premises unless the Lease is terminated by Landlord pursuant to paragraph
11.2 or by Tenant pursuant to paragraph 11.3. All insurance proceeds
available from the fire and property damage insurance carried by Landlord
pursuant to paragraph 9.2 shall be paid to and become the property of
Landlord. If this Lease is terminated pursuant to either paragraphs 11.2 or
11.3, then all insurance proceeds available from insurance carried by Tenant
which covers loss to property that is Landlord's property or would become
Landlord's property on termination of this Lease shall be paid to and become
the property of Landlord. If this Lease is not so terminated, then upon
receipt of the insurance proceeds (if the loss is covered by insurance) and
the issuance of all necessary governmental permits, Landlord shall commence
and diligently prosecute to completion the restoration of the Premises, to
the extent then allowed by Law, to substantially the same condition in which
the Premises were immediately prior to such damage. Landlord's obligation to
restore shall be limited to the Premises and interior improvements
constructed by Tenant but financed by Landlord pursuant to the Interior
Improvement Agreement as such improvements existed upon completion thereof
excluding any Leasehold Improvements, Trade Fixtures and/or personal property
constructed or installed by Tenant in the Premises. To the extent that
insurance proceeds recovered by Landlord from the insurance carried pursuant
to paragraph 9.2A exceed the amount needed by Landlord to discharge its
restoration obligation pursuant to the immediately preceding sentence,
Landlord shall make such excess insurance proceeds available to Tenant for
the purpose of restoring interior improvements that were constructed by
Tenant and financed by Tenant pursuant to the Interior Improvement Agreement,
so that such improvements may be restored to substantially the same condition
existing as of the date such improvements were initially completed.
11.2. LANDLORD'S RIGHT TO TERMINATE: Landlord shall have the right to
terminate this Lease in the event any of the following occurs, which right
may be exercised only by delivery to Tenant of a written notice of election
to terminate within thirty (30) days after the date of such damage:
A. Either the Property or the Premises is damaged by an
Insured Peril to such an extent that the estimated cost to restore equals or
exceeds eighty percent (80%) of the then actual replacement cost thereof and
there remains less than three (3) years in the Lease Term; provided, however,
that Landlord may not terminate this Lease pursuant to this subparagraph
11.2A if Tenant at the time of such damage has a then valid written option to
extend the Lease Term and Tenant exercises such option to extend the Lease
Term within fifteen (15) days after Tenant receives Landlord's notice of
election to terminate and such action results in there being more than three
(3) years remaining in the Lease Term (as it has been extended by the
Exercise of such option);
B. Either the Property or the Premises is damaged by an
Uninsured Peril to such an extent that the estimated cost to restore exceeds
two percent (2%) of the actual replacement cost thereof; provided, however,
that Landlord may not terminate this Lease pursuant to this paragraph 11.2B
if one or more tenants of the Property agree in writing to pay the amount by
which the cost to restore the damage exceeds such amount and subsequently
deposit such amount with Landlord within thirty (30) days after Landlord has
notified Tenant of its election to terminate this Lease;
C. The Premises are damaged by any peril within twelve (12)
months of the last day of the Lease Term to such an extent that the estimated
cost to restore equals or exceeds
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an amount equal to six (6) times the Base Monthly Rent then due; provided,
however, that Landlord may not terminate this Lease pursuant to this
subparagraph 11.2C if Tenant, at the time of such damage, has a then valid
express written option to extend the Lease Term and Tenant exercises such
option to extend the Lease Term within fifteen (15) days following the date
of such damage; or
D. As used herein, the following terms shall have the
following meanings: (i) the term "Insured Peril" shall mean a peril actually
insured against for which the insurance proceeds paid or made available to
Landlord are sufficient (except for any "deductible" amount specified by such
insurance) to restore the Property under the then existing building codes to
the condition existing immediately prior to the damage; and (ii) the term
"Uninsured Peril" shall mean and include any peril not actually insured
against, any peril actually insured against but for which the insurance
proceeds paid or made available to Landlord are for any reason (except for
any "deductible" amount specified by such insurance) insufficient to restore
the Property under then existing building codes to the condition existing
immediately prior to the damage, and any peril actually insured against but
for which the insurance proceeds are not paid or made available to Landlord.
11.3. TENANT'S RIGHT TO TERMINATE: If the Premises are damaged by any
peril and Landlord does not elect to terminate this Lease or is not entitled
to terminate this Lease pursuant to paragraph 11.2, 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 completed. Tenant shall have
the right to terminate this Lease in the event any of the following occurs,
which right 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. The Premises are damaged by any peril and, in the
reasonable opinion of Landlord's architect or construction consultant, the
restoration of the Premises cannot be substantially completed within two
hundred seventy (270) days after the date of such damage; or
B. The Premises are damaged by any peril within twelve (12)
months of the last day of the Lease Term and in the reasonable opinion of
Landlord's architect or construction consultant the restoration of the
Premises cannot be substantially completed within ninety (90) days after the
date of such damage; or
C. The Premises are not restored within eighteen (18) months following
the date of such damage; provided, however, that if at the time restoration
of the "shell" of the building in which the Premises are located is
substantially completed (excluding Interior Improvements) Landlord reasonably
estimates that Landlord will not be able to complete restoration of the
Premises within such eighteen (18) month period, then at that time Landlord
may offer in writing to Tenant the option to terminate this Lease, and if
Tenant does not exercise such option to terminate the Lease so offered to
Tenant by Landlord, then Tenant may not thereafter elect to terminate this
Lease pursuant to this subparagraph 11.3C.
11.4. ABATEMENT OF RENT: In the event of damage to the Premises which
does not result in the termination of this Lease, the Base Monthly Rent and
the Additional Rent shall be temporarily abated commencing on the date of
damage and continuing through the Period of restoration in proportion to the
degree to which Tenant's use of the Premises is impaired by such damage.
Tenant shall not be entitled to any compensation or damages from Landlord for
loss of Tenant's business or property or for any inconvenience or annoyance
caused by such damage or restoration. Tenant hereby waives the provisions of
Section 1932, Subdivision 2, and Section 1933, Subdivision 4, of the
California Civil Code, and the provisions of any similar law hereinafter
enacted.
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ARTICLE 12.
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CONDEMNATION
12.1 TENANT'S TERMINATION RIGHT: Tenant shall have the right to
terminate this Lease if, as a result of any taking by means of the exercise
of the power of eminent domain (including any voluntary sale or transfer by
Landlord to any condemnor under threat of condemnation), (i) ten percent
(10%) or more of the Premises is so taken, or (ii) there is a taking
affecting the Common Area and, as a result of such taking, Landlord cannot
provide parking spaces within reasonable walking distance of the Premises
equal in number to at least ninety percent (90%) of the number of spaces
allocated to Tenant by paragraph 2.1, whether by rearrangement of the
remaining parking areas in the Common Area (including construction of
multi-deck parking structures or restripping for compact cars where permitted
by Law) or by alternative parking facilities on other land. Tenant must
exercise such right within a reasonable period of time, to be effective on
the date that possession of that portion of the Premises or Common Area that
is condemned is taken by the condemnor.
12.2 RESTORATION AND ABATEMENT OF RENT: If any part of the Premises
or the Common Area is taken by condemnation and this Lease is not terminated,
then Landlord shall restore the remaining portion of the Premises and Common
Area to substantially the same condition in which the Premises and Common
Area were immediately prior to such taking, excluding any Leasehold
Improvements, Trade Fixtures and/or personal property constructed or
installed by Tenant; provided, however, that Landlord shall not be obligated
to spend more for such restoration than the amount of any condemnation award
recovered by or pursuant to paragraph 12.3. Thereafter, except in the case
of a temporary taking, (i) as of the date possession is taken the Base
Monthly Rent (but not any Additional Rent) shall be reduced in the same
proportion that the floor area of that part of the Premises so taken (less
any addition thereto by reason of any reconstruction) bears to the original
floor area of the Premises, and (ii) to the extent that Landlord is obligated
to undertake any restoration work as a result of such condemnation, the Base
Monthly Rent shall be further abated in proportion to the extent to which
such restoration work interferes with Tenant's ability to use that part of
the Premises which remains after the condemnation.
12.3. TEMPORARY TAKING: If any portion of the Premises is temporarily
taken for six (6) months or less, this Lease shall remain in effect and
Tenant shall be entitled to recover any condemnation award that is made for
such taking and shall be responsible for restoring the Premises to the
condition existing immediately prior to such temporary taking. If any
portion of the Premises is temporarily taken by condemnation for a period
which exceeds six (6) months or which extends beyond the natural expiration
of the Lease Term, and such taking materially and adversely affects Tenant's
ability to use the Premises for the Permitted Use, then Tenant shall have the
right to terminate this Lease, effective on the date possession is taken by
the condemnor.
12.4. DIVISION OF CONDEMNATION AWARD: Any award made as a result of
any condemnation of the Premises or the Common Area 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 recover out of any condemnation award made for a taking of all or
part of the Premises an amount equal to the unamortized cost of all interior
improvements paid for by Tenant constructed pursuant to the Interior
Improvement Agreement and all Leasehold Improvements constructed by Tenant
(amortized on a straight line basis over the initial Lease Term for Interior
Improvements, and over the period from completion of construction until
expiration of the Lease Term for Leasehold Improvements); and provided
further that Tenant shall be entitled to receive any condemnation award that
is made directly to Tenant for the following so long as the award made to
Landlord is not thereby reduced: (i) for the taking of personal property or
Trade Fixtures belonging to Tenant, (ii) for the interruption of Tenant's
business or its moving costs, (iii) for loss of Tenant's goodwill, or (iv)
for any temporary taking where this Lease is not terminated as a result of
such taking. The rights of Landlord and Tenant regarding any condemnation
shall be determined as provided in this Article, and each party hereby waives
the provisions of Section 1265.130 of the California Code of Civil
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Procedure and the provisions of any similar law hereinafter enacted allowing
either party to petition the Superior Court to terminate this Lease in the
event of a partial taking of the Premises.
ARTICLE 13.
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DEFAULT AND REMEDIES
13.1 EVENTS OF TENANT'S DEFAULT: Tenant shall be in default of its
obligations under this Lease if any of the following events occurs (an "Event
of Tenant's Default"):
A. Tenant shall have failed to pay Base Monthly Rent or any
Additional Rent when due and such failure is not cured within ten (10) days
after delivery of written notice from Landlord specifying such failure to
pay; or
B. 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, and Tenant shall have failed to cure such breach
within thirty (30) days after written notice from Landlord specifying the
nature of such breach, or if such breach could not reasonably be cured within
said thirty (30) day period, Tenant shall have failed to commence such cure
within said thirty (30) day period and thereafter continue with due diligence
to prosecute such cure to completion within such time period as is reasonably
needed; or
C. Tenant shall have made a general assignment of its assets
for the benefit of its creditors; or
D. Tenant shall have sublet the Premises or assigned its
interest in the Lease in violation of the provisions contained in Article 14,
whether voluntarily or by operation of law; Landlord shall have notified
Tenant in writing that such Transfer constitutes a violation of the
provisions contained in Article 14, and Tenant does not cause such Transfer
to be rescinded or terminated and possession of the Premises affected by the
Transfer recovered from the Transferee within ninety (90) days after receipt
of such notice; or
E. Tenant shall have permitted 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 of Tenant or any
property essential to the conduct of Tenant's business, and Tenant shall have
failed to obtain a return or release of such property within ninety (90) days
thereafter or prior to sale pursuant to such sequestration, attachment or
levy, whichever is earlier; or
F. A court shall have made or entered any decree or order with
respect to Tenant, or Tenant shall have submitted to or sought a decree or
order (or a petition or pleading shall have been filed in connection
therewith) which: (i) grants or constitutes (or seeks) an order for relief,
appointment of a trustee, or confirmation of a reorganization plan under the
bankruptcy laws of the United States; (ii) approves as properly filed (or
seeks such approval of) a petition seeking liquidation or reorganization
under said bankruptcy laws or any other debtor's relief law or statute of the
United States or any state thereof; or (iii) otherwise directs (or seeks) the
winding up or liquidation of Tenant; and such petition, decree or order shall
have continued in effect for a period of ninety (90) or more days; or
G. Tenant shall have failed to deliver documents as required
of it pursuant to paragraph 15.4 or 15.7 within the time periods specified
therein and Tenant shall have failed to cure such default within ten (10)
days after Landlord has delivered to Tenant written notice that Tenant is in
default of its obligations to deliver such documents pursuant to either
paragraph 15.4 or 15.7; or
H. An Event of Tenant's Default has occurred under the
Building A Lease (unless caused by subtenant or assignee of the original
Tenant under this Lease and such original Tenant is using reasonable efforts
to cause such default to be cured) and, at the time Tenant is so
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in default, the Premises and the real property leased to Tenant pursuant to
the Building A Lease are both owned of record by the same person or entity.
13.2. LANDLORD'S REMEDIES: If an event of Tenant's Default occurs,
Landlord shall have the following remedies, in addition to all other rights
and remedies provided by any 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 (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 of Tenant or perform Tenant's obligations and be
reimbursed by Tenant for the cost thereof with interest at the Agreed
Interest Rate 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 compel Tenant to perform its obligations under this
Lease.
B. Landlord may, at Landlord's election, terminate this Lease
by giving Tenant written notice of termination, in which event this Lease
shall terminate on the date set forth for termination in such notice. Any
termination under this subparagraph shall not relieve Tenant from its
obligation to pay sums then due Landlord or from any claim against Tenant for
damages or rent previously accured or then 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:
(1) Appointment of a receiver or keeper in order to
protect Landlord's interest hereunder;
(2) Consent to any subletting of the Premises or
assignment of this Lease by Tenant, whether pursuant to the provisions hereof
or otherwise; or
(3) Any other action by Landlord or Landlord's agents
intended to mitigate the adverse effects of any breach of this Lease by
Tenant, including without limitation any action taken to maintain and
preserve the Premises or any action taken to relet the Premises or any
portions thereof, for the account of Tenant and in the name of Tenant.
C. In the event Tenant breaches this Lease and abandons the
Premises, this Lease shall not terminate unless Landlord gives Tenant written
notice of its election to so terminate this Lease. No act by or on behalf of
Landlord intended to mitigate the adverse effect of such breach, including
those described by subparagraphs 13.2B(1), (2) and (3) immediately preceding,
shall constitute a termination of Tenant's right to possession unless
Landlord gives Tenant written notice of termination. Should Landlord not
terminate this Lease by giving Tenant written notice, Landlord may enforce
all its rights and remedies under this Lease, including the right to recover
the rent as it becomes due under the Lease as provided in California Civil
Code Section 1951.4 as in effect on the Commencement Date of this Lease.
D. In the event Landlord terminates this Lease, Landlord shall
be entitled, at Landlord's election, to damages in an amount as set forth in
California Civil Code Section 1951.2 as in effect on the Commencement Date of
this Lease. For purposes of computing damages pursuant to Section 1951.2,
(i) an interest rate equal to the Agreed Interest Rate shall be used where
permitted, and (ii) the term "rent" includes Base Monthly Rent and Additional
Rent. Such damages shall include without limitation:
(1) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably
avoided, computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%); and
(2) Any other amount necessary to compensate Landlord for
all detriment proximately caused by Tenant's failure to perform Tenant's
obligations under this Lease, or which in the ordinary course of things would
be likely to result therefrom, including,
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without limitation, the following: (i) expenses for cleaning, repairing or
restoring the Premises; (ii) expenses for altering, remodeling or otherwise
improving the Premises for the purpose of reletting, including installation
of leasehold improvements (whether such installation be funded by a reduction
of rent, direct payment or allowance to a new tenant, or otherwise); (iii)
broker's fees, advertising costs and other expenses of reletting the
Premises; (iv) costs of carrying the Premises, such as taxes, insurance
premiums, utilities and security precautions; (v) expenses in retaking
possession of the Premises; and (vi) attorneys' fees and court costs incurred
by Landlord in retaking possession of the Premises and in releasing the
Premises or otherwise incurred as a result of Tenant's default.
E. Nothing in this paragraph shall limit Landlord's right to
indemnification from Tenant as provided in paragraph 7.2 and paragraph 10.3.
Any notice given by Landlord in order to satisfy the requirements of
subparagraphs 13.1A or B above shall also satisfy the notice requirements of
California Code of Civil Procedure Section 1161 regarding unlawful detainer
proceedings.
13.3. WAIVER BY TENANT OF CERTAIN REMEDIES: Tenant waives the
provisions of Sections 1932(1), 1941 and 1942 of the California Civil Code
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 the Lease.
13.4. WAIVER: 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. 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
unless such waiver is in writing and signed by Landlord. 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 of any other provisions herein contained.
13.5. LIMITATION ON EXERCISE OF RIGHTS: At any time that an Event of
Tenant's Default has occurred and remains uncured, (i) it shall not be
unreasonable for Landlord to deny or withhold any consent or approval
requested of it by Tenant which Landlord would otherwise be obligated to
give, and (ii) Tenant may not exercise any option to extend, right to
terminate this Lease, or other right granted to it by this Lease which would
otherwise be available to it.
ARTICLE 14.
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ASSIGNMENT AND SUBLETTING
14.1. BY TENANT: The following provisions shall apply to any
assignment, subletting or other transfer by Tenant or any subtenant or
assignee or other successor in interest of the original Tenant (collectively
referred to in this paragraph as "Tenant"):
A. Tenant shall not do any of the following (collectively
referred to herein as a "Transfer"), whether voluntarily, involuntarily or by
operation of laws, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed: (i) sublet all or any
part of the Premises or allow it to be sublet, occupied or used by any person
or entity other than Tenant; (ii) assign its interest in this Lease; (iii)
transfer any right appurtenant to this Lease or the Premises; (iv) mortgage
or encumber the Lease (or otherwise use the Lease as a security device) in
any manner; or (v) terminate or materially amend or modify an assignment,
sublease or other transfer that has been previously approved by Landlord.
Any Transfer so approved by Landlord shall not be effective until Tenant has
delivered to Landlord an executed counterpart of the document evidencing the
Transfer which (i) is in form approved by Landlord, (ii) contains the same
terms and conditions as stated in Tenant's notice given to Landlord pursuant
to subparagraph 14.1B, and (iii) contains the agreement of the proposed
transferee to
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assume all obligations of Tenant related to the Transfer arising after the
effective date of such Transfer and to remain jointly and severally liable
therefor with Tenant. Any attempted Transfer without Landlord's consent
shall be voidable at Landlord's option. Landlord's consent to any one
Transfer shall not constitute a waiver of the provisions of this paragraph
14.1 as to any subsequent Transfer nor a consent to any subsequent Transfer.
No Transfer, even with the consent of Landlord, shall relieve Tenant of its
personal and primary obligation to pay the rent and to perform all of the
other obligations to be performed by Tenant hereunder. The acceptance of
rent by Landlord from any person shall not be deemed to be a waiver by
Landlord of any provision of this Lease nor to be a consent to any Transfer.
B. Tenant shall give Landlord at least fifteen (15) days prior
written notice of any desired Transfer and of the proposed terms of such
Transfer including but not limited to (i) the name and legal composition of
the proposed transferee; (ii) a current financial statement of the
transferee, financial statements of the transferee covering the preceding
three years if the same exist, and (if available) an audited financial
statement of the transferee for a period ending not more than one year prior
to the proposed effective date of the Transfer, all of which statements are
prepared in accordance with generally accepted accounting principles; (iii)
the nature of the proposed transferee's business to be carried on in the
Premises; (iv) all consideration to be given on account of the Transfer; (v)
a current financial statement of Tenant; and (vi) such other information as
may be reasonably requested by Landlord. Tenant's notice shall not be deemed
to have been served or given until such time as Tenant has provided Landlord
with all information reasonably requested by Landlord pursuant to this
subparagraph 14.1B. Tenant shall immediately notify Landlord of any
modification to the proposed terms of such Transfer.
C. In the event that Tenant seeks to make any Transfer, then
Landlord, by giving Tenant written notice of its election within fifteen (15)
days after Tenant's notice of intent to Transfer has been deemed given to
Landlord, shall have the right to elect (i) to withhold its consent to such
Transfer, as permitted pursuant to subparagraph 14.1A, or (ii) to permit
Tenant to so assign the Lease or sublease such part of the Premises, in which
event Tenant may do so, but without being released of its liability for the
performance of all of its obligations under the Lease, and the following
shall apply:
(1) Subject to subparagraph 14.1C(5), if Tenant assigns
its interest in this Lease in accordance with this subparagraph 14.1C, then
Tenant shall pay to Landlord fifty percent (50%) of all consideration
received by Tenant over and above (i) the assignee's agreement to assume the
obligations of Tenant under this Lease and (ii) all Permitted Transfer Costs
related to such assignment.
(2) Subject to subparagraph 14.1C(5), if Tenant sublets
all or part of the Premises, then Tenant shall pay to Landlord fifty percent
(50%) of the positive difference, if any, between (i) all rent and other
consideration paid by the subtenant to Tenant, less (ii) all rent paid by
Tenant to Landlord pursuant to this Lease which is allocable to the area so
sublet and all Permitted Transfer Costs related to such sublease. Such
amount shall be paid to Landlord on the same basis, whether periodic or in
lump sum, that such rent and other consideration is paid to Tenant by its
subtenant, within seven (7) days after it is received by Tenant.
(3) Tenant's obligations under this subparagraph shall
survive any assignment or sublease. At the time Tenant makes any payment to
Landlord required by this subparagraph, Tenant shall deliver an itemized
statement of the method by which the amount to which Landlord is entitled was
calculated, certified by Tenant as true and correct. Landlord shall have the
right to inspect Tenant's books and records relating to the payments due
pursuant to this subparagraph. Upon request therefor, Tenant shall deliver
to Landlord copies of all bills, invoices or other documents upon which its
calculations are based. Landlord may condition its approval of any Transfer
upon obtaining a certification from both Tenant and the proposed transferee
of all amounts that are to be paid to Tenant in connection with such Transfer.
(4) As used herein, the term "consideration" shall mean
any consideration of any kind received, or to be received, by Tenant as a
result of the Transfer, if such sums are related to Tenant's interest in this
Lease or in the Premises, including payments (in excess of the fair market
value thereof) for Tenant's assets, fixtures, leasehold improvements,
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inventory accounts, goodwill, equipment, furniture, general intangibles and
any capital stock or other equity ownership interest in Tenant. As used in
this subparagraph, the term "Permitted Transfer Costs" shall mean (i) all
reasonable leasing commissions paid to third parties not affiliated with
Tenant in order to obtain the Transfer in question, (ii) all reasonable
attorneys' fees incurred by Tenant with respect to the Transfer in question,
(iii) the cost of tenant improvements installed for the use of the subtenant
or assignee to the extent required by such party as a condition to the
Transfer, and (iv) any payments made by Tenant to the transferee to induce it
to enter into the Transfer (E.G., payment of moving expenses).
(5) Notwithstanding anything to the contrary contained in
the foregoing, Landlord shall not participate in excess consideration
received by Tenant from an assignee or subtenant as provided for in
subparagraphs 14.1C(1) and 14.1C(2) unless such assignment or sublease occurs
during an Option Term or, in the case of a sublease, extends into an Option
Term (in which latter event Landlord shall be entitled to its share of the
excess consideration paid during the Option Term).
D. If Tenant is a corporation, any dissolution, merger,
consolidation or other reorganization of Tenant, or the sale or transfer in
the aggregate over the Lease Term of a controlling percentage of the capital
stock of Tenant, shall be deemed a voluntary assignment of Tenant's interest
in this Lease; provided, however, that the foregoing shall not apply to
corporations the capital stock of which is publicly traded. The phrase
"controlling percentage" means the ownership of and the right to vote stock
possessing more than fifty percent (50%) 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, any
withdrawal or substitution (whether voluntary, involuntary or by operation of
law, and whether occurring at one time or over a period of time) of any
partner(s) owning twenty-five percent (25%) or more (cumulatively) of any
interest in the capital or profits of the partnership, or the dissolution of
the partnership, shall be deemed a voluntary assignment of Tenant's interest
in this Lease.
E. Notwithstanding anything contained in this paragraph 14.1,
so long as Tenant otherwise complies with the provisions of paragraph 14.1
Tenant may enter into any one of the following transfers (a "Permitted
Transfer") without Landlord's prior written consent, and Landlord shall not
be entitled to receive any part of any excess rentals or other consideration
resulting therefrom that would otherwise be due to it pursuant to paragraph
14.1C:
(1) Tenant may sublease all or part of the Premises or
assign its interest in this Lease to any corporation which controls, is
controlled by, or is under common control with the original Tenant to this
Lease by means of an ownership interest of more than fifty percent (50%);
(2) Tenant may assign its interest in the Lease to a
corporation which results from a merger, consolidation or other
reorganization in which Tenant is not the surviving corporation, so long as
(i) Tenant demonstrates to Landlord's reasonable satisfaction that the
surviving corporation will have sufficient creditworthiness to provide
adequate assurance of future performance of all of Tenant's obligations under
this Lease, or (ii) the surviving corporation has a net worth at the time of
such assignment that is equal to or greater than the net worth of Tenant
immediately prior to such transaction; and
(3) Tenant may assign this Lease to a corporation which
purchases or otherwise acquires all or substantially all of the assets of
Tenant, so long as (i) Tenant demonstrates to Landlord's reasonable
satisfaction that the acquiring corporation will have sufficient
creditworthiness to provide adequate assurance of future performance of all
of Tenant's obligations under this Lease, or (ii) such acquiring corporation
has a net worth at the time of such assignment that is equal to or greater
than the net worth of Tenant immediately prior to such transaction.
14.2. BY LANDLORD: Landlord and its successors in interest shall have
the right to transfer their interest in the Premises and the Property 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
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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
obligations of the Landlord hereunder. After the date of any such transfer,
the term "Landlord" as used herein shall mean the transferee of such interest
in the Premises and the Property.
ARTICLE 15.
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GENERAL PROVISIONS
15.1. LANDLORD'S RIGHT TO ENTER: Landlord and its agents may enter
the Premises immediately in case of emergency and otherwise only at such time
as is approved by Tenant which time of Entry shall be within seven (7) days
after Landlord delivers written notice to Tenant requesting approval of a
time to enter, and Landlord may thereafter continue such entry for such
reasonable period of time as is necessary to accomplish Landlord's permitted
purpose for such entry. Landlord may so enter the Premises for the following
purposes: (i) inspecting the same, (ii) posting notices of
non-responsibility, (iii) supplying any service to be provided by Landlord to
Tenant, (iv) showing the Premises to prospective purchasers or mortgagees,
(v) making necessary alterations, additions or repairs, (vi) performing
Tenant's obligations when Tenant has failed to do so after written notice
from Landlord, (vii) placing upon the Premises ordinary "for sale" signs,
(viii) responding to an emergency, and/or (ix) during the last six (6) months
of the Lease Term or at any time when there is a Continuing Tenant Default,
showing the Premises to prospective tenants and placing upon the Premises
ordinary "for lease" signs. For each of the aforesaid purposes, Landlord may
enter the Premises by means of a master key, and Landlord shall have the
right to use any and all means Landlord may deem necessary and proper to open
the doors of the Premises in an emergency. Any entry into the Premises or
portions thereof obtained by Landlord by any of said means or otherwise shall
not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction, actual
or constructive, of Tenant from the Premises or any portion thereof.
15.2. SURRENDER OF THE PREMISES: Immediately prior to the expiration
or upon the sooner termination of this Lease, Tenant shall remove all
Tenant's Trade Fixtures and other personal property, and shall vacate and
surrender the Premises to Landlord in the same condition as existed at the
Commencement Date, except for (i) reasonable wear and tear, (ii) damage
caused by any peril or condemnation, and (iii) contamination by Hazardous
Materials for which Tenant is not responsible pursuant to subparagraphs 7.2B
or 7.2C. In this regard reasonable wear and tear shall be construed to mean
wear and tear caused to the Premises by the natural aging process which
occurs in spite of prudent application of reasonable standards for
maintenance, repair and janitorial practices, and does not include items of
neglected or deferred maintenance. If Landlord so requests, Tenant shall,
prior to the expiration or sooner termination of this Lease, remove any
Leasehold Improvements designated by Landlord and repair all damage caused by
such removal if such removal is required pursuant to paragraph 5.2. If the
Premises are not so surrendered at the termination of this Lease, Tenant
shall be liable to Landlord for all costs incurred by Landlord in returning
the Premises to the required condition, plus interest on all costs incurred
at the Agreed Interest Rate.
15.3. HOLDING OVER: This Lease shall terminate without further notice
at the expiration of the Lease Term. Any holding over by Tenant after
expiration of the Lease Term shall not constitute a renewal or extension of
the Lease or give Tenant any rights in or to the Premises except as expressly
provided in this Lease. Any holding over after such expiration with the
consent of Landlord shall be construed to be a tenancy from month to month on
the same terms and conditions herein specified insofar as applicable except
that Base Monthly Rent shall be increased to an amount equal to one hundred
twenty-five percent (125%) of the Base Monthly Rent required during the last
month of the Lease Term.
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15.4. SUBORDINATION: The following provisions shall govern the
relationship of this Lease to any underlying lease, mortgage or deed of trust
which now or hereafter affects the Property, and any renewal, modification,
consolidation, replacement or extension thereof (a "Security Instrument"):
A. This Lease is subject and subordinate to all Security
Instruments existing as of the Commencement Date. However, if any Lender so
requires, this Lease shall become prior and superior to any such Security
Instrument.
B. At Landlord's election, this Lease shall become subject and
subordinate to any Security Instrument created after the Commencement Date.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed and the terms of this Lease shall not be
modified so long as Tenant is not in default and performs all of its
obligations under this Lease, unless this Lease is otherwise terminated
pursuant to its terms.
C. No subordination of this Lease to a Security Instrument
pursuant to subparagraphs 15.4A or 15.4B shall be effective until the holder
of a Security Instrument executes a subordination and non-disturbance
agreement in favor of Tenant by which the Lender agrees to be bound by the
immediately preceding sentence.
D. Tenant shall execute any document or instrument required by
Landlord or any Lender to make this Lease either prior or subordinate to a
Security Instrument, which may include such other matters as the Lender
customarily requires in connection with such agreements, including provisions
that (i) the Lender not be liable for any defaults on the part of Landlord
occurring prior to the time the Lender takes possession of the Premises in
connection with the enforcement of its Security Instrument; (ii) the Lender
not be liable for the performance of any obligations contained in the
Interior Improvement Agreement, for the completion of any improvements under
construction or required to be constructed by Landlord; (iii) recourse
against the Lender is limited to its interest in the Premises; (iv) any
notices given by Tenant to Landlord should also be delivered to the Lender;
(v) Tenant shall attorn to any purchaser at a foreclosure sale or a grantee
designated in a deed in lieu of foreclosure; (vi) the Lender shall not be
bound by any rent which Tenant might have paid in advance to any prior
Landlord for a period in excess of one month; (vii) the Lender shall not be
bound by any agreement or modification of the Lease made without the written
consent of the Lender; and (viii) upon request, Tenant shall enter into a new
lease with Lender of the Premises upon the same terms and conditions as the
Lease between Landlord and Tenant, which lease shall cover any unexpired term
of the Lease existing prior to a foreclosure, trustee's sale, or conveyance
in lieu of foreclosure. Tenant's failure to execute any such document or
instrument within ten (10) days after written demand therefor shall
constitute a default by Tenant. Tenant approves as reasonable the form of
subordination and non-disturbance agreement attached to this Lease as Exhibit
"D".
15.5. TENANT'S ATTORNMENT: Tenant shall attorn (i) to any purchaser
of the Premises or Property at any foreclosure sale or private sale conducted
pursuant to any security instrument encumbering the Premises and/or the
Property, (ii) to any grantee or transferee designated in any deed given in
lieu of foreclosure, or (iii) to the lessor under any underlying ground lease
should such ground lease be terminated.
15.6. MORTGAGEE PROTECTION: In the event of any default on the part
of the Landlord, Tenant will give notice by registered mail to any Lender or
lessor under any underlying ground lease whose name has been provided by
Tenant and shall offer such Lender or lessor a reasonable opportunity to cure
the default, not to exceed thirty (30) days from the expiration of the time
period granted to Landlord to cure such default; provided, however, that if
such Lender requires additional time to cure a default on the part of
Landlord or to obtain possession of the Premises by power of sale or judicial
foreclosure or other appropriate legal proceedings if obtaining possession is
necessary to effect a cure, the Lender shall be granted such opportunity,
provided that the Lender gives reasonable assurances to Tenant that such
default will be cured.
15.7. ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS: At all times
during the Lease Term, Tenant agrees, following any request by Landlord,
promptly to execute and deliver to Landlord an estoppel certificate, (i)
certifying that this Lease is unmodified and in full force and effect or, if
modified, stating the nature of such modification and certifying that this
Lease, as so
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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, if there are uncured defaults, specifying the nature
of such defaults and (iv) certifying such other information about the Lease
as may be reasonably required by Landlord. Tenant's failure to deliver an
estoppel certificate within ten (10) days after delivery of Landlord's
request therefor shall be a conclusive admission by Tenant that, as of the
date of the request for such statement, (i) this Lease is unmodified except
as may be represented by Landlord in said request and is in full force and
effect, (ii) there are no uncured defaults in Landlord's performance, and
(iii) no rent has been paid in advance. At any time during the Lease Term
Tenant shall, upon ten (10) days' prior written notice from Landlord, provide
Tenant's most recent financial statement and financial statements covering
the twenty-four (24) month period prior to the date of such most recent
financial statement to any existing Lender or to any potential Lender or
buyer of the Property; provided, however, that if Tenant is a corporation
whose stock is publicly traded, Tenant may satisfy the foregoing requirement
by delivering to the appropriate parties copies of its most recent annual
report prepared to satisfy requirements of the federal securities laws. Such
statements shall be prepared in accordance with generally accepted accounting
principles and, if such is the normal practice of Tenant shall be audited by
an independent certified public accountant.
15.8. FORCE MAJEURE: Any prevention, delay or stoppage due to
strikes, lockouts, inclement weather, labor disputes, inability to obtain
labor, materials, fuels or reasonable substitutes therefor, governmental
restrictions, regulations, controls, action or inaction, civil commotion,
fire or other acts of God, and other causes beyond the reasonable control of
the party obligated to perform (except financial inability) shall excuse the
performance, for a period equal to the period of any said prevention, delay,
or stoppage, of any obligation hereunder except the obligation of Tenant to
pay rent or any other sums due hereunder.
15.9. NOTICES: Any notice required or desired to be given regarding
this Lease shall be in writing and may be given by personal delivery, by
facsimile telecopy, by courier service, or by mail. A notice shall be deemed
to have been given (i) on the third (3rd) business day after mailing if such
notice was deposited in the United States mail, certified or registered,
postage prepaid, addressed to the party to be served at its address first
above set forth, (ii) when delivered if given by personal delivery, and (iii)
in all other cases when actually received. Either party may change its
address by giving notice of same in accordance with this paragraph.
15.10. OBLIGATION TO ACT REASONABLY: Whenever the consent or approval
of a party to this Lease is required to be obtained before the other party to
this Lease may take an action, such consent or approval shall not be
unreasonably withheld or delayed.
15.11. CORPORATE AUTHORITY: If Tenant is a corporation (or a
partnership), each individual executing this Lease on behalf of said
corporation (or partnership) represents and warrants that he is duly
authorized to execute and deliver this Lease on behalf of said corporation in
accordance with the by-laws of said corporation (or partnership in accordance
with the partnership agreement of said partnership) and that this Lease is
binding upon said corporation (or partnership) in accordance with its terms.
If Tenant is a corporation, each of the persons executing this Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duly
authorized and existing corporation, that Tenant is qualified to do business
in California and that the corporation has full right and authority to enter
into this Lease.
15.12. ADDITIONAL DEFINITIONS: Any term that is given a special
meaning by a provision in this Lease shall have such meaning when used in
this Lease or any addendum or amendment hereto. As used herein, the
following terms shall have the following meanings:
A. AGREED INTEREST RATE: The term "Agreed Interest Rate"
shall mean that interest rate determined as of the time it is to be applied
that is equal to the lesser of (i) two percent (2%) in excess of the "prime
rate", "reference rate", or "base rate" established by Bank of America (or if
Bank of America shall cease to exist, by the commercial bank with its
headquarters in California that has the greatest net worth among commercial
banks headquartered in California) as it may be adjusted from time to time,
or (ii) the maximum interest rate permitted by law.
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B. COMMON AREA: The term "Common Area" shall mean all areas
and facilities within the Property that are not designated by Landlord for
the exclusive use of Tenant or any other lessee or other occupant of the
Property, including the parking areas, access and perimeter roads, pedestrian
sidewalk, landscaped areas, trash enclosures, recreation areas and the like.
C. LAW: The term "Law" shall mean any judicial decision,
statute, constitution, ordinance, resolution, regulation, rule,
administrative order, or other requirement of any municipal, counting, state,
federal or other government agency or authority having jurisdiction over the
parties to this Lease or the Premises, or both, in effect either at the
Commencement Date of this Lease or any time during the Lease Term, including,
without limitation, any regulation, order or policy of any quasi-official
entity or body (e.g., board of fire examiners, public utilities or special
district).
D. LEASEHOLD IMPROVEMENTS: The term "Leasehold Improvements"
shall mean all improvement, additions, alterations and fixtures installed in
the Premises by Tenant at its expense which are not Trade Fixtures.
E. LENDER: The term "Lender" shall mean any beneficiary,
mortgagee, secured party, lessor, or other holder of any Security Instrument.
F. PRIVATE RESTRICTIONS: The term "Private Restrictions"
shall mean all recorded covenants, conditions and restrictions, reciprocal
easement agreements, and any other recorded instruments affecting the use of
the Premises as they may exist from time to time.
G. TRADE FIXTURES: The term "Trade Fixtures" shall mean
anything affixed to the Premises by Tenant at its expense for purposes of
trade, manufacture, ornament or domestic use (except replacement of similar
work or material originally installed by Landlord) which can be removed
without injury to the Premises unless such thing has, by the manner in which
it is affixed, become an integral part of the Premises; provided, however,
that all of Tenant's signs shall be Trade Fixtures regardless of how affixed
to the Premises.
15.13. MISCELLANEOUS: Should any provision of this Lease prove to be
invalid or illegal, such invalidity or illegality shall in no way affect,
impair or invalidate any other provision hereof, and such remaining
provisions shall remain in full force and effect. Time is of the essence
with respect to the performance of every provision of this Lease in which
time of performance is a factor. The captions used in this Lease are for
convenience only and shall not be considered in the construction or
interpretation of any provision hereof. Any executed copy of this Lease 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.
"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 of California. The language
in all parts of this Lease shall in all cases be construed as a whole
according to its fair meaning, and not strictly for or against either
Landlord or Tenant. When the context of this Lease requires, the neuter
gender includes the masculine, the feminine, a partnership or corporation or
joint venture, and the singular includes the plural. The terms "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 Tenant is obligated not to
perform any act, Tenant is also obligated to use reasonable efforts to
restrain any others within its control from performing said act, including
agents, invitees, contractors, and subcontractors. Landlord shall not become
or be deemed a partner nor a joint venturer with Tenant by reason of the
provisions of this Lease.
15.14. TERMINATION BY EXERCISE OF RIGHT: If this Lease is terminated
pursuant to its terms by the proper exercise of a right to terminate
specifically granted to Landlord or Tenant by this Lease, then this Lease
shall terminate thirty (30) days after the date the right to terminate is
properly exercised (unless another date is specified in that part of the
Lease creating the right, in which event the date so specified for
termination shall prevail), the rent and all other charges due hereunder
shall be prorated as of the date of termination, and neither Landlord nor
Tenant shall
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have any further rights or obligations under this Lease except for those that
have accrued prior to the date of termination. This paragraph does not apply
to a termination of this Lease by Landlord as a result of a default by Tenant.
15.15. BROKERAGE COMMISSIONS: Tenant warrants that it has not had any
dealings with any real estate brokers, leasing agents or salesmen, or
incurred any obligations for the payment of real estate brokerage commissions
or finder's fees which would be earned or due and payable by reason of the
execution of this Lease other than to the Retained Real Estate Brokers.
Landlord shall be responsible for the payment of any commission owed pursuant
to a separate written commission agreement between Landlord and J.R. Parrish,
Inc. for the payment of the commission as a result of the execution of this
Lease.
15.16. ENTIRE AGREEMENT: This Lease constitutes the entire agreement
between the parties, and there are no binding agreements or representations
between the parties except as expressed herein. Tenant acknowledges that
neither Landlord nor Landlord's agent(s) has made any representation or
warranty as to (i) whether the Premises may be used for tenant's intended use
under existing Law or (ii) the suitability of the Premises or the Common Area
for the conduct of Tenant's business or the condition of any improvements
located thereon. Tenant expressly waives 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 addendum or amendment hereto. No subsequent change or addition to this
Lease shall be binding unless in writing and signed by the parties hereto.
15.17. RIGHT OF FIRST OFFER TO LEASE: If at any time and from time to
time during the Lease Term Landlord desires to lease all or any portion of
any buildings located on the Property, Landlord shall first give written
notice of such fact to Tenant (an "Offer to Lease"), which shall be
accompanied by the form of lease that Landlord intends to use for the
transaction and the following information regarding the basic business terms
of the transaction (the "Basic Business Terms"): (i) a description of the
premises to be leased; (ii) the term of the proposed lease; (iii) the
improvements Landlord is willing to construct or that it will require to be
constructed; (iv) the method of payment for such improvements; (v) the base
monthly rent for the term; (vi) additional rent to be paid by the tenant to
the extent not reflected in the form lease; (vii) the estimated commencement
date for the lease term; (viii) any options to extend the lease term and the
rent to be charged during any such extension periods; and (ix) any other
material business terms Landlord elects to specify.
A. Landlord shall lease to Tenant and Tenant shall lease form
Landlord the Premises identified in the Offer to Lease on the Basic Business
Terms stated in the Offer to Lease if: (i) the Premises offered for Lease in
the Offer to Lease consist of an area that is less than 14,000 square feet of
gross leasable area and Tenant notifies Landlord in writing of Tenant's
agreement to lease such Premises on the terms stated in the Offer to Lease
within thirty (30) days after receipt of the Offer to Lease in question; or
(ii) the Premises described in the Offer to Lease consist of an area that is
more than 14,000 square feet and Tenant notifies Landlord in writing of
Tenant's agreement to Lease such premises on the terms stated in the Offer to
Lease within fifteen (15) days after receipt of the Offer to Lease in
question. If Tenant so timely elects to lease the space so offered, Landlord
shall lease to Tenant and Tenant shall lease from Landlord such space on the
following terms:
(1) The Lease of such space shall be on the Basic
Business Terms stated in the Offer to Lease; provided, however, that Tenant's
obligation to pay rent shall not commence until the earlier of: (i) the date
any improvements that Landlord is to construct as set forth in the Basic
Business Terms have been substantially completed, subject to punchlist items;
or (ii) ninety (90) days after the space has been delivered to Tenant vacant
and ready for improvement work, if such improvement work is not to be
performed by Landlord.
(2) The lease of such premises shall be consummated by
the preparation and execution of a written lease, in the form and content of
the form of lease accompanying the Offer to Lease, except as modified to
incorporate the Basic Business Terms set forth in the Offer to Lease and as
expressly provided herein. The lease shall be executed by Landlord and Tenant
as soon as reasonably practicable after Tenant has made its election to
accept the Offer to Lease, but in no event later than forty-five (45) days
thereafter.
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B. If Tenant does not indicate in writing its agreement to
lease the premises offered on the terms contained in the Offer to Lease
within the time period specified in subparagraph 15.17A, then the following
shall apply:
(1) Landlord shall have the right to lease such premises
to any third party on the same Basic Business Terms set forth in the Offer to
Lease and such other terms as are contained in the form of lease included
with the Offer to Lease; provided, however, that Landlord may make any
changes to such form of Lease at the request of a prospective tenant to
induce it to lease such space from Landlord so long as such changes are
commercially reasonable and do not materially change the Basic Business Terms
set forth in the Offer to Lease, and such lease is executed within one
hundred twenty (120) days after the Offer to Lease is delivered to Tenant.
(2) If within one hundred twenty (120) days after the
Offer to Lease is delivered to Tenant, Landlord elects to lease the premises
in question on terms different than the Basic Business Terms stated in the
Offer to Lease, then Landlord shall give notice to Tenant of such election
setting forth the new terms upon which Landlord is willing to so lease the
premises in question (the "Amended Offer to Lease"). Tenant shall have the
right to lease the premises in question upon the terms stated in the Offer to
Lease, as modified by the Amended Offer to Lease, which right may be
exercised by delivering written notice of such election to exercise to
Landlord within five (5) days following delivery to Tenant of the Amended
Offer to Lease. If Tenant does not send written notice to Landlord of its
election to lease the premises in question upon the terms set forth in the
Offer to Lease, as modified by the Amended Offer to Lease, within said five
(5) day period, then Landlord may lease the premises in question to any third
party in accordance with the terms and conditions set forth in the Offer to
Lease, as modified by the Amended Offer to Lease; provided, however, that
Landlord may make any changes to the form of lease included in the Offer to
Lease or the Amended Offer to Lease at the request of a prospective tenant to
induce it to lease such space from Landlord so long as such changes are
commercially reasonable and do not materially change the Basic Business Terms
set forth in the Offer to Lease, as modified by the Amended Offer to Lease
and the lease is executed within sixty (60) days after the Amended Offer to
Lease is delivered to Tenant.
C. If Tenant is offered the opportunity to lease all or a
portion of any building on the Property and declines to exercise such right,
and if Landlord subsequently enters into a lease with a third party affecting
the space so offered to Tenant, the right of first offer contained in this
paragraph shall thereafter be subject and subordinate to any rights granted
to such third party tenant with respect to such space, or any other space in
the Property, including rights of first refusal, options to extend, and
options to expand.
D. If Landlord has delivered to Tenant a Offer to Lease and
Tenant has not elected to lease the premises offered on the terms contained
in the Offer to Lease, then if Landlord so requests, Tenant shall deliver to
Landlord or any prospective tenant a certificate or certificates stating
that: (i) Landlord has complied with the provisions of this paragraph 15.17
and may lease the premises in question pursuant to the Offer to Lease free of
any rights or claims of Tenant; or (ii) Landlord has not complied with the
provisions of this paragraph 15.17 and specifying the manner in which
Landlord has failed to so comply. Such certificate shall be delivered
promptly after request therefor but in no event not more than five (5) days
after request has been delivered to Tenant. Tenant's failure to deliver such
certificate within the required time period shall be deemed an admission upon
which any party may rely that Landlord has complied with the provisions of
this paragraph 15.17 and may lease the premises in question pursuant to the
terms of the Offer to Lease free of any rights or claims by Tenant.
E. Notwithstanding anything to the contrary contained in the
foregoing, tenant may not exercise its right to lease the space described in
the Offer to Lease, nor, at the option of Landlord, shall a new lease for
such space commence, unless Tenant demonstrates to Landlord's reasonable
satisfaction that tenant has sufficient creditworthiness to provide adequate
assurance of future performance of all of Tenant's obligations under the new
lease.
F. Within ten (10) days after receipt of written request
therefor from tenant, Landlord shall inform Tenant in writing of the
following with respect to all leases affecting the Property: (i) the
scheduled lease term expiration date; (ii) any options to extend (including
the
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commencement and termination date of such options to extend); and (iii) such
other information as is reasonably requested by Tenant concerning the status
of leases then affecting the Property as it relates to determining when such
leases will terminate and space become available. In addition, Landlord
shall use reasonable efforts to promptly notify tenant of the availability of
space within the Property that results from events other than the natural
expiration of a lease term (E.G., termination of a lease resulting from a
tenant's default or negotiations regarding the rescission of a lease by
mutual consent).
G. The parties acknowledge that (i) paragraph 15.17 of the
Building A Lease contains substantially the same provisions as those set
forth in this paragraph 15.17, and (ii) it is their intention that there be
only one right of first offer to lease that is held and may be exercised by
only one person or entity. If Landlord complies with the provisions of
paragraph 15.17 of this Lease or paragraph 15.17 of the Building A Lease with
respect to a lease of space within the Property to a third party, Landlord
shall be deemed to have satisfied the requirements of both Leases with
respect to this subject. The parties further agree that the right of first
offer to lease set forth in this paragraph 15.17 and in paragraph 15.17 of
the Building A Lease may only be held by one entity who is FMC Corporation or
its successor. If Tenant concurrently assigns its interest in this Lease and
the Building A Lease to the same person or entity pursuant to an assignment
described by subparagraphs 14.1E(2) or (3), such assignment shall not affect
the provisions of this paragraph 15.17. However, if tenant assigns its
interest in this Lease without concurrently also assignment its interest in
the Building A Lease to the same person or entity pursuant to an assignment
described by subparagraphs 14.1E(2) or (3), then effective upon such
assignment the provisions of this paragraph 15.17 shall terminate and be of
no further force or effect. Notwithstanding the foregoing sentence, if the
Building A Lease has been terminated or if the provisions of paragraph 15.17
of the Building A Lease have terminated because of an assignment of the
tenant's interest in the Building A Lease, then any subsequent assignment by
Tenant of its interest in this Lease pursuant to an assignment described by
subparagraphs 14.1E(2) or (3) shall not cause the right of first offer to
lease created by this paragraph 15.17 to terminate. The rights created by
this paragraph 15.17 may not be assigned or otherwise transferred to any
third party except in connection with an assignment of all of Tenant's right,
title and interest in this Lease made in compliance with paragraph 14.1
hereof. A sublease shall not affect the rights granted by this paragraph
15.17; provided, however, that no subtenant of Tenant shall have the right to
directly lease the Offered Space from Landlord (although Tenant may exercise
the right of first offer to lease and then sublease to any existing subtenant
pursuant to the terms of the new lease).
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease with
the intent to be legally bound thereby, to be effective as of the
Commencement Date of this Lease.
LANDLORD: TENANT:
THE EQUITABLE LIFE ASSURANCE SOCIETY FMC CORPORATION,
OF THE UNITED STATES, a New York a Delaware corporation
corporation
By: /s/ James Piane By: /s/ Charles Fink
------------------------------ -----------------------------
Printed Printed
Name: James Piane Name: Charles Fink
---------------------------- ---------------------------
Title: Attorney in Fact Title: V.P. & Group Manager
-------------------------- --------------------------
By: By:
------------------------------ -----------------------------
Printed Printed
Name: Name:
------------------------------ ---------------------------
Title: Title:
------------------------------ ---------------------------
Dated: Dated:
------------------------------ --------------------------
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If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. The Lease must
be executed by the chairman of the board, president or vice-president AND the
secretary, assistant secretary, the chief financial officer or assistant
treasurer, UNLESS the Bylaws or resolution of the Board of Directors shall
otherwise provide, in which event the Bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.
EXHIBIT "A"
-----------
[MAP]
[MAP]
EXHIBIT "B"
PLANS AND SPECIFICATIONS
FOR BUILDING "C"
Plans and Specifications Prepared by DES
----------------------------------------
Sheet Title Current Date
----- ------- ------------
A-1 Title Sheet 6-9-89
A-2 Bldg. "C" - First Floor Demolition Plan 6-9-89
A-3 Bldg. "C" - Second Floor Demolition Plan 6-5-89
A-4 Bldg. "C" - First Floor Plan 6-9-89
A-5 Bldg. "C" - Second Floor Plan 6-9-89
A-6 Bldg. "C" - Third Floor Plan 6-9-89
A-7 Bldg. "C" - First Floor
Reflected Ceiling Plan 6-9-89
A-8 Bldg. "C" - Second Floor
Reflected Ceiling Plan 6-9-89
A-9 Bldg. "C" - Third Floor
Reflected Ceiling Plan 6-9-89
A-10 Bldg. "C" - First Floor Finish Plan 6-9-89
A-11 Bldg. "C" - Second Floor Finish Plan 6-9-89
A-12 Bldg. "C" - Third Floor Finish Plan 6-9-89
A-13 Bldg. "C" - First Floor
Electrical/Telephone Plan 6-9-89
A-14 Bldg. "C" - Second Floor
Electrical/Telephone Plan 6-9-89
A-15 Bldg. "C" - Third Floor
Electrical/Telephone Plan 6-9-89
A-16 Details, Interior Elevations, Enlarged
Shower Plan, Door & Window Schedule 6-5-89
A-17 Details 6-5-89
A-18 Structural Details, Architectural Details 6-9-89
Plans and Specifications Prepared by Hague-Richards Associates, Ltd.
--------------------------------------------------------------------
Sheet Title Current Date
----- ------- ------------
DA-1 Lobby Plans
Reflected Ceiling Plans, Elevations, Details 6-9-89
D-1 Third Floor - Architectural Plan Elevations 6-9-89
D-2 Third Floor - Reflected Ceiling Plan 6-9-89
D-3 Third Floor - Elevations 6-9-89
D-4 Third Floor - Details 6-9-89
D-5 Third Floor - Details 6-9-89
D-6 Third Floor - Details 6-9-89
D-9 Third Floor - Finish Legend
Room Finish Schedule 6-9-89
Plans/Specs
-2-
EXHIBIT C
INTERIOR IMPROVEMENT AGREEMENT
(Building C)
This Interior Improvement Agreement is made part of that Lease dated
for reference purposes only June 1, 1989 (the "Lease"), by and between THE
EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNTIED STATES, a New York corporation
("Landlord") and FMC Corporation, a Delaware corporation ("Tenant") of
approximately 86,785 square feet of gross leasable area located in that
building commonly known as Building C of Airport Technology Park, 2830 De La
Cruz Boulevard, Santa Clara, California.
Landlord and Tenant agree that the following terms are hereby added to
the Lease:
1. DEFINITIONS: As used herein and in the Lease, the
following terms shall have the following meanings:
A. APPROVED PLANS: The term "Approved Plans" shall mean those
final plans, specifications and working drawings described by Exhibit "B" to
the Lease.
B. INTERIOR IMPROVEMENTS: The term "Interior Improvements"
shall mean those improvements described by the Approved Plans that Tenant has
the right to construct in the Premises pursuant to paragraph 2 hereof.
C. INTERIOR IMPROVEMENT COSTS: The term "Interior Improvement
Costs" shall mean the following: (i) the total amount due pursuant to the
construction contract entered into by Tenant pursuant to subparagraph 2B
hereof to construct the Interior Improvements; (ii) the cost of all
governmental approvals, permits and fees required as a condition to the
construction of the Interior Improvements; (iii) all utility connection or
use fees; (iv) fees of architects, designers, or engineers for services
rendered in connection with the design and construction of the Interior
Improvements; (v) the cost of payment and performance bonds obtained to
assure completion of the Interior Improvements; and (vi) relocation and
moving expenses incurred by Tenant in connection with Tenant's move to the
Premises. There shall be excluded from Interior Improvement Costs the
following, to the extent not included in the construction contract with the
Prime Contractor referred to in subparagraph 2B hereof: (i) any fee for
Landlord's review of Tenant's plans for the Interior Improvements; (ii)
temporary electricity used during the construction period in connection with
the construction of the Interior Improvements; and (iii) any fees charged by
Tenant or its agents or employees for supervising/reviewing the construction
of the Interior Improvements (excluding overhead and profits of prime
contractor).
D. LANDLORD'S INTERIOR IMPROVEMENT ALLOWANCE: The term
"Landlord's Interior Improvement Allowance" shall mean the maximum amount
Landlord is required to spend toward the payment of the Interior Improvement
Costs, which amount is equal to the product obtained by multiplying (i)
Twenty-One Dollars ($21.00) per square foot by (ii) the Premises Gross
Leasable Area (expressed in square feet) of 86,785 square feet, for a total
of One Million Eight Hundred Twenty-Two Thousand Four Hundred Eighty-Five
Dollars ($1,822,485).
E. SUBSTANTIALLY COMPLETED: The Interior Improvements shall
be deemed to be "Substantially Completed" when (i) Prime Contractor has
issued its written certificate stating that such improvements have been
substantially completed in accordance with the Approved Plans therefor, (ii)
electrified office partitions are installed, and (iii) the Building
Department of the City of Santa Clara has completed its final inspection of
such improvements and has "signed off" the building inspection card approving
such work as complete.
F. PRIME CONTRACTOR: The term "Prime Contractor" shall mean
Alacon Construction, Inc.
2. CONSTRUCTION OF INTERIOR IMPROVEMENTS: Tenant shall have the
right to construct the Interior Improvements in accordance with the
following:
A. Tenant warrants that the Interior Improvements shall be
constructed in a good and workmanlike manner substantially in accordance with
the Approved Plans (as modified by any change orders approved by Landlord and
Tenant pursuant to paragraph 3 hereof) and all Laws. All materials and
equipment furnished shall be fully paid for and be free of liens, chattel
mortgages, and security interests of any kind.
B. The Interior Improvements shall be constructed by Prime
Contractor pursuant to a construction contract between Tenant and Prime
Contractor. Landlord shall have the right to review such form of construction
contract before it is executed. Once the construction contract between Prime
Contractor and Tenant has been executed, Tenant shall not materially amend,
modify or alter the responsibilities of Prime Contractor thereunder without
Landlord's written consent, except for change orders approved pursuant to
paragraph 3 hereof. In purposes connection with the execution of such
construction contract, Tenant shall use reasonable efforts to provide that
all construction or equipment warranties or guarantees obtained by Tenant
shall, to the extent obtainable, provide that such warranties and guarantees
obtained by tenant shall, to the extent obtainable, provide that such
warranties and guaranties shall also run for the benefit of Landlord. Upon
reasonable written advance request of Landlord, Tenant shall inform Landlord
of all written construction and equipment warranties existing in favor of
Tenant which affect the Interior Improvements. Tenant shall cooperate with
Landlord in enforcing such warranties and in bringing any suit that may be
necessary to enforce liability with regard to any defects.
C. Tenant shall use reasonable efforts to commence
construction of the Interior Improvements as soon as reasonably practicable,
and shall thereafter continuously prosecute such construction to completion.
D. Tenant shall properly obtain, comply with and keep in
effect all permits, licenses and other governmental approvals which are
required to be obtained form governmental bodies in order to construct the
Interior Improvements. Upon reasonable written advance request, Tenant shall
promptly deliver copies of all such permits, licenses and approvals to
Landlord.
E. Tenant shall be solely responsible for all aspects of the
construction of the Interior Improvements, including the development and
design thereof as set forth in the Approved Plans, the supervision of the
work of construction, the qualification, financial condition, and performance
of all architects, engineers, contractors, material suppliers, consultants,
and the accuracy of all applications for payment and the proper application
of all disbursement. Landlord is not obligated to supervise, inspect or
inform Tenant or any third party of any aspect of the construction of the
Interior Improvements. Any inspection or review by Landlord is to determine
whether Tenant is properly discharging its obligations to Landlord and may
not be relied upon by tenant or any third party. Landlord owes no duty of
care to Tenant or any third party to protect against or to inform Tenant or
any third party of, any negligence, faulty, inadequate or defective design or
construction of the Interior Improvements.
3. CHANGES TO APPROVED PLANS FOR INTERIOR IMPROVEMENTS: Neither
Landlord nor Tenant shall have the right to order extra work or change orders
with respect to the Approved Plans or the construction of the Interior
Improvements without the prior written consent of the other. All extra work
or change orders requested by either Landlord or Tenant shall be made in
writing, shall specify the amount of delay or the time saved resulting
therefrom, shall specify any added or reduced cost resulting therefrom, and
shall become effective and a part of the Approved Plans once approved in
writing by both parties. Notwithstanding the foregoing, tenant's failure to
obtain Landlord's consent to an extra work or change order shall not be an
Event of Tenant's Default if Landlord would have been required to consent to
the change pursuant to the terms hereof.
-2-
4. PAYMENT OF INTERIOR IMPROVEMENT COSTS: The Interior Improvement
Costs and certain noise attenuating improvement costs shall be paid as
follows:
A. Landlord and Tenant desire to improve the Premises so that
the following maximum interior noise levels are achieved for the types of
office space identified: 55 dBA for executive offices and conference rooms;
60 dBA for staff offices; and 65 dBA for sales and secretarial offices. To
achieve these goals Landlord and Tenant agree to contribute to the cost of
improvements as follows. Tenant at its sole cost and expense shall install
(i) extra sheetrock in the roof and sound attenuating ceiling tiles in third
floor ceilings, and (ii) sheetrock beneath the structural ceiling and above
the suspended ceilings of all the second and third floor offices, and
sprinklers as required by the City of Santa Clara, along with caulking
required in connection therewith. Landlord at its sole cost and expense shall
cause the sliding glass doors on the second and third floor to be removed and
replaced with double pane sound attenuating glass windows. In the event upon
completion of all of the work described above in this subparagraph A, the
desired noise levels are not achieved, Landlord agrees to pay for the cost of
additional improvements designed to reduce noise levels; provided Landlord
shall not be required to contribute more than One Hundred Fifty Thousand
Dollars ($150,000) for such additional improvements.
B. In addition to those contributions of Landlord described in
subparagraph A above, Landlord shall contribute to the payment of all
Interior Improvement Costs up to an amount equal to Landlord's Interior
Improvement Allowance. If any part of the Landlord's Interior Improvement
Allowance is not used by tenant, or Tenant does not qualify for a
disbursement pursuant to the provisions of this paragraph 4 with the result
that the entire allowance is not disbursed, there shall nonetheless be no
adjustment in the Base Monthly Rent due from tenant pursuant to the Lease.
If the Interior Improvement Costs exceed the maximum amount of Landlord's
required contribution, then Tenant shall pay the entire amount of such excess.
C. Landlord and Tenant acknowledge that the construction
contract Tenant will enter into for the construction of the Interior
Improvements will provide for progress payments to Prime Contractor in stages
as the work is completed. Landlord shall pay the full amount of each such
progress payment until all of Landlord's Interior Improvement Allowance is
expended. Thereafter, if the cost of the Interior Improvements exceeds the
amount of Landlord's required contribution for such improvements, then Tenant
shall pay the rest of the progress payments due to Prime Contractor.
Landlord shall pay any progress payment due from Landlord to Prime Contractor
within thirty (30) days after satisfaction of all of the conditions precedent
to such progress payment by Landlord that has been requested by tenant which
are set forth in subparagraph 4D and 4E hereof. If Landlord fails to pay any
such amount when due, then Tenant may (but without the obligation to do so)
advance such funds on Landlord's behalf, and Landlord shall be obligated to
reimburse Tenant for the amount of funds so advanced on its behalf and all
costs incurred by Tenant in so doing, including all interest at the Agreed
Interest Rate.
D. If Tenant desires to obtain a disbursement from Landlord
from the Landlord's Interior Improvement Allowance for the purpose of paying
Interior Improvement Costs, Tenant shall submit to Landlord a written
itemized statement, signed by Tenant (an "Application for Payment") setting
forth the following: (i) a description of the construction work performed,
materials supplied and/or costs incurred or due for which disbursement is
requested; and (ii) the total amount incurred, expended and/or due for each
requested item less prior disbursements; and (iii) the amount due to be paid
by Landlord from Landlord's Interior Improvement Allowance.
E. Landlord shall have no obligation to make any disbursement
from Landlord's Interior Improvement Allowance at any time that there is a
Continuing Tenant Default (as defined in paragraph 1.14 of the Lease), or
there has occurred an event, omission or failure of conditions which would
constitute an Event of Tenant's Default (as defined in paragraph 13.1 of the
Lease) after notice or lapse of time, or both. In addition, Landlord shall
have the right to condition any disbursement from Landlord's Interior
Improvement Allowance
-3-
upon Landlord's receipt and approval of the following with respect to each
Application for Payment:
(1) The form of Application for Payment and the
sufficiency of the information contained therein;
(2) Bills and invoices and any other documents evidencing
the total amount expended, incurred, or due for any requested contribution to
Interior Improvement Costs;
(3) Evidence of Tenant's use of lien releases acceptable
to Landlord for payments or disbursements to any contractor, subcontractor,
materialmen, supplier, or lien claimant
(4) Architects, inspectors and/or engineer's periodic
certification and the stage of construction that has been completed and its
conformance to the Approved Plans based upon any such architects, inspectors
and/or engineers periodic, physical inspections of the Premises and Interior
Improvements;
(5) Waivers and releases of mechanics' lien, stop notice
claim, equitable lien claim or other lien claim rights or lien bonds in form
and amount reasonably satisfactory to Landlord;
(6) Evidence of Tenant's compliance with its obligations
pursuant to paragraph 2 hereof;
(7) Any other document, requirement, evidence or
information that Landlord may reasonably request pursuant to any provision of
this Interior Improvement Agreement.
F. Tenant agrees that all disbursements made to Tenant by
Landlord from Landlord's Interior Improvement Allowance shall be used only
for the payment of Interior Improvement Costs and shall be applied as set
forth, and for the purposes described in, the relevant Application for
Payment based upon which the disbursement is made.
5. PUNCHLIST: Within a reasonable period of time after the
Interior Improvements are Substantially Completed, Landlord, Tenant and
Tenant's architect shall together walk through and inspect such improvements
so completed, using reasonable efforts to discover all uncompleted or
defective construction. After such inspection has been completed. Tenant
shall use reasonable efforts to complete and/or repair all "punch list" items
within thirty (30) days thereafter.
6. CONSTRUCTION WARRANTY FOR THE INTERIOR IMPROVEMENTS: Tenant
warrants that the construction of the Interior Improvements will be performed
in accordance with the Approved Plans therefor and all Laws in a good and
workmanlike manner, and that all materials and equipment furnished will
conform to said plans and shall be new and otherwise of good quality. Tenant
shall promptly commence the cure of any breach of such warranty and complete
such cure with diligence at Tenant's cost and expense.
7. OWNERSHIP OF THE INTERIOR IMPROVEMENTS: All of the Interior
Improvements which are constructed with funds of Landlord shall become the
property of Landlord upon installation and shall not be removed or altered by
Tenant. Any part of the Interior Improvements which are constructed by
Landlord with funds of Tenant shall become the property of Tenant upon
installation and Tenant shall have the right to depreciate and claim and
collect investment tax credits in such improvements; provided, however, that
(i) Tenant shall not remove or alter such improvements during the term of the
Lease; (ii) such improvements shall be surrendered to Landlord, and title to
such improvements shall best in Landlord, at the expiration or earlier
termination of the Lease Term; and (iii) in no event shall Landlord have any
obligation to pay Tenant for the cost or value of such improvements.
Notwithstanding the foregoing, Tenant shall have the right to remove only the
following kinds of Interior Improvements so long as it repairs all damage
caused by the installation thereof and returns the Premises to the condition
existing
-4-
prior to the installation of such Interior Improvements: (i) built-in
cabinets, file drawers and bookcases; (ii) computer room air conditioning;
(iii) canteen equipment; (iv) office cubicle systems; and (v) ornamental
statutes. If both Landlord and Tenant contribute to the cost of constructing
the Interior Improvements, Landlord and Tenant shall agree in writing which
of such improvements are to be constructed using Landlord's funds (and
therefore are Landlord's property) and which of them are to be installed with
Tenant's funds (and therefore are Tenant's property during the Lease Term).
8. DOCUMENTS: Within fifteen (15) days after receiving a written
request from Landlord, Tenant shall deliver to Landlord the most current
version of the following: (i) a complete and correct list showing the name,
address and telephone number of each contractor, subcontractor and principal
materials supplier engaged in connection with the construction of the
Interior Improvements, and the total dollar amount of each contract and
subcontract (including any changes) together with the amounts paid through
the date of the list; (ii) true and correct copies of all executed contracts
and subcontracts identified in the list described in the immediately
preceding clause, including any changes; (iii) a construction progress
schedule; and (iv) any update to any item described in the preceding clauses
which Tenant may have previously delivered to Landlord. Tenant expressly
authorizes Landlord to contact any contractor, subcontractor or materials
supplier to verify any information disclosed in accordance with this
paragraph. Within sixty (60) days after the Interior Improvements have been
Substantially Completed, Tenant shall cause the following to be delivered to
Landlord:
A. Statements from Tenant's architect in form reasonably
satisfactory to Landlord certifying that the Interior Improvements have been
completed substantially in accordance with the Approved Plans and all Laws;
B. A copy of all permanent certificates of occupancy and other
governmental approvals which may be received by Tenant with respect to the
construction of the Interior Improvements;
C. One (1) copy of the Approved Plans, one (1) copy of each extra
work or change order, and one (1) copy of any "As-Built" plans and
specifications for the Interior Improvements, which Tenant may have elected
to cause to be prepared;
D. One (1) copy of all warranties, guaranties, and operational
manuals relating to the Interior Improvements;
E. A copy of a recorded notice of completion relating to the
construction of the Interior Improvements.
9. INDEMNITY: Tenant agrees to indemnify and hold Landlord harmless
from and against all liabilities, claims, actions, damages, costs and
expenses (including attorneys' fees incurred by Landlord in protecting its
interest from the following) arising out of or resulting from construction of
the Interior Improvements, including any mechanics' liens, defective
workmanship or materials and any claim or cause of action of any kind by any
party that Landlord is liable for any act or omission committed or made by
Tenant, its agents, employees, or contractors in connection with the
construction of the Interior Improvements.
10. ROOF AND OTHER WORK: Landlord agrees to cause the structural
support of the roof mounted mechanical units on the Premises to be inspected
by Cabak Randall Jasper Griffiths Associates. If as a result of such
inspection, remedial work is recommended, Landlord shall cause the same to be
performed by Prime Contractor at Landlord's expense, as soon as reasonably
practicable.
Landlord agrees to replace, at Landlord's expense, the broken window on
the east side, south end of the second floor of the Premises.
11. EFFECT OF AGREEMENT: In the event of any inconsistency between
this Agreement and the Lease, the terms of this Agreement shall prevail.
-5-
AS TENANT: AS LANDLORD:
---------- ------------
FMC CORPORATION, THE EQUITABLE LIFE ASSURANCE
a Delaware corporation SOCIETY OF THE UNITED STATES,
a New York corporation
By: /s/ Charles Fink By: /s/ James Piane
--------------------------- ---------------------------
Its: V.P. & Group Manager Its: Attorney in Fact
--------------------------- ---------------------------
Dated: June 23, 1989 Dated: 6-23-89
----------------------- ------------------------
-6-
EXHIBIT D
RECORDING REQUESTED BY:
The Equitable Life Assurance
Society of the Untied States
WHEN RECORDED RETURN TO:
Morrison & Foerster
345 California Street
San Francisco, CA 94104-2105
Att'n: Leslie M. Browne
--------------------------------------------------------------------------
(Space above this lien for Recorder's use)
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY BECOMING
SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER
OR LATER SECURITY INSTRUMENT.
THIS AGREEMENT is entered into as of the ______ day of
_____________, 1986, by and between THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNTIED STATES, a New York corporation (the "Beneficiary"), TELEDYNE
INDUSTRIES, INC., a California corporation (the "Lessee") and AIRPORT
TECHNOLOGY ASSOCIATES, a California general partnership (collectively the
"Lessor").
W I T N E S S E T H
WHEREAS, Lessee has entered into a certain lease dated June 30,
1986 (the "Lease"), with Lessor covering certain space (the "Premises")
located in and upon the real property described in Exhibit A attached hereto
(the "Property");
WHEREAS, Beneficiary is the holder of a first mortgage loan (the
"Loan") to Lessor in the amount of Thirty One Million Two Hundred Thousand
and/no 100 Dollars ($31,200,000.00) which is secured by a first lien
Construction and Permanent Deed of Trust, Security Agreement and Fixture
Filing with Assignment of Rents (the "Deed of Trust") covering the Property;
WHEREAS, the parties hereto desire expressly to confirm the
subordination of the Lease to the lien of the Deed of Trust, it being a
requirement by Beneficiary that the lien and charge of the Deed of Trust be
unconditionally and at all times prior and superior to the leasehold
interests and estates created by the Lease; and
WHEREAS, Lessee has requested that Beneficiary agree not to disturb
Lessee's possessory rights in the Premises in the event beneficiary should
foreclose the Deed of Trust, provided that Lessee is not in default under the
Lease and provided that Lessee attorns to beneficiary or the purchaser at any
foreclosure or Trustee's sale of the Property.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. Notwithstanding anything to the contrary set forth in the
Lease, the Lease and the leasehold estate created thereby and all of Lessee's
rights thereunder shall be and shall at all times remain subject, subordinate
and inferior to the Deed of Trust and the lien thereof and all rights of
Beneficiary thereunder and to any and all renewals, modifications,
consolidations, replacements and extensions thereof.
2. Lessee hereby declares, agrees and acknowledges that:
a. Beneficiary would not have agreed to recognize the Lease
without this Agreement; and
b. Beneficiary, in making disbursements pursuant to the
agreements evidencing and securing the Loan, is under no obligation or duty
to oversee or direct the application of the proceeds of such disbursements
and such proceeds may be used by Lessor for purposes other than improvement
of the premises.
3. In the event of foreclosure of the Deed of Trust, or upon a
sale of the property encumbered thereby pursuant to the Trustee's power of
sale contained therein, or upon a transfer of said property by deed in lieu
of foreclosure, then so long as Lessee is not in default under any of the
terms, covenants, or conditions of the Lease, the Lease shall continue in
full force and effect as a direct lease between the succeeding owner of the
Property and Lessee, upon and subject to all of the terms, covenants and
conditions of the Lease for the balance of the term of the Lease. Lessee
hereby agrees to attorn to and accept any such successor owner as landlord
under the Lease, and to be bound by and perform all of the obligations
imposed by the Lease, and Beneficiary or any such successor owner of the
Property will not disturb the possession of Lessee, and will be bound by all
of the obligations imposed by the Lease upon the landlord thereunder;
provided, however, that the Beneficiary, or any purchaser at a trustee's or
sheriff's sale or any successor owner of the Property shall not be:
a. liable for any act or omission of a prior landlord
(including the Lessor); or
b. subject to any offsets or defenses which the Lessee might
have against any prior landlord (including the Lessor); or
c. bound by any rent or additional rent which the Lessee
might have paid in advance to any prior landlord (including the Lessor) for a
period in excess of one month; or
d. bound by any agreement or modification of the Lease made
without the written consent of the Beneficiary; or
e. liable or responsible for or with respect to the
retention, application and/or return to Lessee of any security deposit paid
to any prior lessor (including the Lessor), whether or not still held by such
prior lessor, unless and until beneficiary or such other purchaser has
actually received for its own account as lessor the full amount of such
security deposit.
Beneficiary acknowledges that it is presently a general partner in
Lessor and that the provisions of this Agreement shall not affect any
obligations it may have under the Lease in its capacity as general partner of
Lessor.
4. Upon the written request of either Beneficiary or Lessee to
the other given at the time of a foreclosure, trustee's sale or deed in lieu
thereof, the parties agree to execute a lease of the Premises upon the same
terms and conditions as the Lease between the Lessor and Lessee, which lease
shall cover any unexpired term of the Lease existing prior to such
foreclosure, trustee' sale or conveyance in lieu of foreclosure.
5. Lessee from and after the date hereof, in the event of any act
or omission by Lessor which would give Lessee the right, either immediately
or after the lapse of time, to terminate the Lease or to claim a partial or
total eviction or to offset against the rental due under the Lease any amount
due Lessee as a result of a breach by Lessor, will not exercise any such
-2-
right: (a) until it has given written notice of such act to Beneficiary; and
(b) until the same period of time as is given to Lessor under the Lease to
cure such act or omission shall have elapsed following such giving of notice
to beneficiary and following the time when Beneficiary shall have become
entitled under the Deed of Trust to remedy the same.
6. Lessor, as landlord under the Lease and trustor under the Deed
of Trust, agrees for itself and its heirs, successors and assigns, that: (a)
this Agreement does not (i) constitute a waiver by Beneficiary of any of its
rights under the Deed of Trust, and/or (ii) in any way release Lessor from
its obligation to comply with the terms, provisions, conditions, covenants,
agreements and clauses of the Deed of Trust; (b) the provisions of the Deed
of Trust remain in full force and effect and must be complied with by Lessor;
and (c) in the event of a default under the Deed of Trust, Lessee may pay all
rent and all other sums due under the Lease to beneficiary as provided in
this Agreement.
7. Lessee acknowledges that it has notice that the Lease and the
rent and all other sums due thereunder have been assigned or are to be
assigned to Beneficiary as security for the Loan secured by the Deed of
Trust. In the event that Beneficiary notifies Lessee in writing of a default
under the Deed of Trust and demands that Lessee pay its rent and all other
sums due under the Lease to Beneficiary, Lessee agrees that it will honor
such demand and pay its rent and all other sums due under the Lease directly
to the Beneficiary or as otherwise required pursuant to such notice.
8. Any provision of this Agreement to the contrary
notwithstanding, beneficiary shall have no obligation or incur any liability
with respect to the erection and completion of the building in which the
Premises are located or for completion of the Premises or any improvements
for Lessee's use and occupancy.
9. Lessee from and after the date hereof shall send a copy of any
notice or statement under the Lease to Beneficiary at the same time such
notice or statement is sent to the Lessor under the Lease.
10. All notices hereunder shall be deemed to have been duly given
if mailed by United States registered or certified mail, with return receipt
requested, postage prepaid to beneficiary at the following address (or at
such other address as shall be given in writing by Beneficiary to the Lessee)
and shall be deemed complete upon any such mailing:
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
c/o Equitable Real Estate Management, Inc.
1 Market Plaza, 1900 Steuart Street Tower
San Francisco, CA 94105
Attention: Senior Vice President
with a copy to: Mr. Richard Dolson, Senior Vice President
EQUITABLE REAL ESTATE INVESTMENT MANAGEMENT, INC.
3414 PEACHTREE ROAD NE, SUITE 1405
ATLANTA, GEORGIA 30326-1162
11. This Agreement supersedes any inconsistent provisions of the
Lease.
12. Nothing contained in this Agreement shall be construed to
derogate from or in any way impair or affect the lien and charge or
provisions of the Deed of Trust, except as specifically set forth herein.
13. This Agreement shall inure to the benefit of the parties
hereto, their successors and permitted assigns; provided however, that in the
event of the assignment or transfer of the interest of Beneficiary, all
obligations and liabilities of Beneficiary under this Agreement shall
terminate, and thereupon all such obligations and liabilities shall be the
responsibility of the party to whom beneficiary's interest is assigned or
transferred; and provided
-3-
further that the interest of Lessee under this Agreement may not be assigned
or transferred without the prior written consent of Beneficiary.
14. Lessee agrees that this Agreement satisfies any condition or
requirement in the Lease relating to the granting of a non-disturbance
agreement.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first set forth above.
NOTICE: THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON THE LEASE
TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER
PURPOSES THAN IMPROVEMENT OF THE PROPERTY.
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
a New York corporation
"Beneficiary"
By
------------------------------
Printed
Name: Richard B. Duffy
----------------------------
Title Assistant Secretary
----------------------------
TELEDYNE INDUSTRIES, INC.
a California corporation
"Lessee"
By
-------------------------------
Printed
Name
-----------------------------
Title
----------------------------
AIRPORT TECHNOLOGY PARK ASSOCIATES,
a California general partnership
"Lessor"
By Birstaf II,
a California partnership,
General Partner
By
------------------------------
Hudson R. Staffield,
a general partner of
Birstaf II
-4-
By Birtcher Pacific II
a California general partnership,
a general partner of
Birstaf II
By
--------------------------------
Printed
Name:
-----------------------------
Title
-----------------------------
By The Equitable Life Assurance
Society of the United States,
a New York corporation,
General Partner
By
--------------------------------
Printed
Name Richard B. Duffy
------------------------------
Title Assistant Secretary
------------------------------
IT IS RECOMMENDED THAT PRIOR TO THE EXECUTION OF THIS
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT, THE PARTIES CONSULT
WITH THEIR ATTORNEYS WITH RESPECT THERETO.
-5-
STATE OF )
)ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
Richard B. Duffy, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
Assistant Secretary, on behalf of The Equitable Life Assurance Society of the
United States, a New York corporation, the corporation therein named, and
acknowledge to me that such corporation executed the within instrument
pursuant to its by-laws or to a resolution of its board of directors.
WITNESS my hand and official seal.
-------------------------------------------
NOTARY PUBLIC
STATE OF )
)ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
_________________, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
_____________________, on behalf of Teledyne Industries, Inc., a California
corporation, the corporation therein named, and acknowledge to me that such
corporation executed the within instrument pursuant to its by-laws or to a
resolution of its board of directors.
WITNESS my hand and official seal.
-------------------------------------------
NOTARY PUBLIC
STATE OF )
)ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
Hudson R. Staffield, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
a general partner of Birstaf II, a California partnership, and acknowledged
to me that Birstaf II is a general partner of Airport Technology Park
Associates, the California general partnership that executed the within
instrument, and that Birstaf II executed the same as a general partner of
Airport Technology Park Associates.
WITNESS my hand and official seal.
-------------------------------------------
NOTARY PUBLIC
STATE OF )
)ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
_____________________________, personally known to me, or proved to me on the
basis of satisfactory evidence, to be the person who executed the within
instrument as the __________________ of Birtcher Pacific II, a California
general partnership, and acknowledged to me that Birtcher Pacific II is a
general partner of Birstaf II, a California partnership, that Birstaf II is a
general partner of Airport Technology Park Associates, the California general
partnership that executed the within instrument, that Birtcher Pacific II
executed the same as a general partner of Birstaf II, that Birstaf II
executed the same as a general partner of Airport Technology Park Associates,
and that Airport Technology Park Associates executed the same.
WITNESS my hand and official seal.
-------------------------------------------
NOTARY PUBLIC
-2-
STATE OF )
)ss.
COUNTY OF )
On this ____ day of ____________, in the year 1986, before me, the
undersigned, a Notary Public in and for said State, personally appeared
Richard B. Duffy, personally known to me, or proved to me on the basis of
satisfactory evidence, to be the person who executed the within instrument as
the Assistant Secretary of The Equitable Life Assurance Society of the United
States, a New York corporation, and acknowledge to me that The Equitable Life
Assurance Society of the United States is a general partner of Airport
Technology Park Associates, the California general partnership that executed
the within instrument, and that The Equitable Life Assurance Society of the
United States executed the same as a general partner of Airport Technology
Park Associates.
WITNESS my hand and official seal.
-------------------------------------------
NOTARY PUBLIC
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2890 De La Cruz Boulevard (San Jose, CA) Lease - The Equitable Life Assurance Society of the United States and FMC Corp.
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