EXHIBIT 10.17
STANDARD FORM LEASE
PARTIES: This Lease, executed in duplicate at Cupertino, California, on
October 8, 1997, by and between Xxxx & Xxxx Enterprises, Inc., a California
Corporation, and Xilinx, Inc., a Delaware Corporation, hereinafter called
respectively Lessor and Lessee, without regard to number or gender.
USE: Witnesseth: That Lessor hereby leases to Lessee, and Lessee hires from
Lessor, for the purpose of conducting therein office, research and
development, light manufacturing, and warehouse activities, and any other
legal activity; and for no other purpose without obtaining the prior written
consent of Lessor.
PREMISES: The real property with appurtenances as shown on Exhibit A (the
"Premises") situated in the City of San Xxxx, County of Santa Xxxxx, State of
California, and more particularly described as follows:
The Premises includes 180,000 square feet of building, including all
improvements thereto, as shown on Exhibit A including the right to use all the
parking spaces at the Premises. The address for the Premises is _____ Logic
Drive, San Jose, California. Lessee's pro-rata share of the Premises is 100%.
TERM: The term shall be for one hundred twenty (120) months unless extended
pursuant to Section 35 of this Lease (the "Lease Term"), commencing on the
Commencement Date as defined in Section 1 and ending one hundred twenty (120)
months thereafter.
RENT: Base rent shall be payable in monthly installments as follows:
Base rent
---------
Months 1 through 12 $253,350
Monthly base rent to increase by 3% on the annual anniversary of the
Commencement Date each year during the Lease Term over the prior year's rent.
Base rent as scheduled above shall be payable in advance on or before the
first day of each calendar month during the Lease Term. The term "Rent," as
used herein, shall be deemed to be and to mean the base monthly rent and all
other sums required to be paid by Lessee pursuant to the terms of this Lease.
Rent shall be paid in lawful money of the United States of America, without
offset or deduction, and shall be paid to Lessor at such place or places as
may be designated from time to time by Lessor. Rent for any period less than
a calendar month shall be a pro rata portion of the monthly installment. Upon
execution of this Lease, Lessee shall deposit with Lessor the sum of Two
Million Nine Hundred Forty-Nine Thousand Dollars ($2,949,000) representing
full payment of the first year's rent, discounted to present value.
LATE CHARGES: Lessee hereby acknowledges that a late payment made by Lessee to
Lessor of Rent and other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges, which may be imposed on
Lessor according to the terms of any mortgage or trust deed covering the
Premises. Accordingly, if any installment of Rent or any other sum due from
Lessee is not received by Lessor or Lessor's designee within ten (10) days
after such amount is due, Lessee shall pay to Lessor a late charge equal to
five (5%) percent of such overdue amount. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of late payments made by Lessee. Acceptance of such late
charges by Lessor shall in no event constitute a waiver of Lessee's default
with respect to such overdue amount, nor shall it prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
Notwithstanding the above, Lessee shall not be required to pay a late charge
if it is the result of a non-recurring unusual event such as a accounting
error.
SECURITY DEPOSIT: Lessee shall deposit with Lessor the sum of Two Hundred
Fifty-Three Thousand Three Hundred Fifty Dollars ($253,350) (the "Security
Deposit"). The Security Deposit shall be held by Lessor as security for the
faithful performance by Lessee of all of the terms, covenants, and conditions
of this Lease applicable to Lessee. If Lessee commits a default as provided
for herein, including but not limited to a default with respect to the
provisions contained herein relating to the condition of the Premises, Lessor
may (but shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any amount which Lessor may spend by
reason of default by Lessee. If any portion of the Security Deposit is so
used or applied, Lessee shall, within ten days after written demand therefor,
deposit cash with Lessor in an amount sufficient to restore the Security
Deposit to its original amount. Lessee's failure to do so shall be a default
by Lessee. Any attempt by Lessee to transfer or encumber its interest in the
Security Deposit shall be null and void. Upon execution of this Lease, Lessee
shall deposit with Lessor the Security Deposit. Notwithstanding the above,
Lessor agrees to waive the requirement for Lessee to make a Security Deposit
provided Lessee's shareholder's equity exceeds $100 million. If at any time
during this Lease, Lessee's shareholder's equity is less than $100 million,
Lessee shall deposit with Lessor the Security Deposit referenced above within
ten days after the issuance of Lessee's financial statements indicating the
reduction in shareholder's equity below $100 million. If Lessee fails to make
the Security Deposit as required, Lessee shall be deemed to be in default per
Section 14.1 (a) of this Lease.
QUIET ENJOYMENT: Lessor covenants and agrees with Lessee that upon Lessee
paying Rent and performing its covenants and conditions under this Lease,
Lessee shall and may peaceably and quietly have, hold and enjoy the Premises
for the Lease Term, subject, however, to the rights reserved by Lessor
hereunder.
IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:
1. POSSESSION: Possession shall be deemed tendered and the term shall commence
upon the first to occur of the following (the "Commencement Date"): (i) the
Premises are Substantially Complete or (ii) Lessee occupies the Premises and
commences to conduct business operations or (iii) if Lessor is prevented from
or delayed in completing its work under this Lease due to Lessee Delays, such
work will be deemed Substantially Complete as of the date on which it would
have been Substantially Complete had it not been for such Lessee Delays or
(iv) 90 days after Lessee is advised in writing that the Lessee Interior
Improvements as defined in Section 2 may be started by Lessee. It is the
intention of Lessee and Lessor that the Commencement Date shall be no later
than July 31, 1998.
"Substantially Complete" shall mean that: (i) Lessor has tendered possession
of Premises to Lessee, (ii) Lessor has met all legal requirements for
occupancy, (iii) The Lessee Interior Improvements are materially complete per
the approved plans, exclusive of telephone or other communication systems,
punchlist items and there remains no incomplete or defective items of work
which would materially adversely affect Lessee's intended use of the Premises,
and (iv) said interior of the building is in a "broom clean" condition.
1.1 COMMENCEMENT DATE MEMORANDUM: When the actual Commencement Date is
determined, the parties shall execute a Commencement Date Memorandum setting
forth the Commencement Date, the expiration date of the Lease Term and the
actual square footage of the Premises and any required adjustments to base
rent and CAC, but failure to do so shall not affect the continuing validity
and enforceability of this Lease, which shall remain in full force and effect.
2. BUILDING SHELL: The "Building Shell", as defined in the attached Exhibit B
shall be constructed at Lessor's sole cost and expense by independent
contractors to be employed by and under the supervision of Lessor in
accordance with the site plan, elevations, plans, specifications, and working
drawings to be prepared by Lessor, approved by Lessee, and thereafter attached
hereto as Exhibit C (collectively the "Shell Plans"). Lessor shall be
obligated to finish all of the Building Shell prior to the Commencement Date.
Lessee and its designated representatives, shall at all times during the
construction of the Building Shell have access to the Premises to monitor the
progress of construction and Lessor's compliance with its obligation
hereunder; provided however, that such access shall not unreasonably interfere
with the activities of Lessor or its contractors. Lessor shall be responsible
for ensuring that the Building Shell conforms to the approved plans and all
applicable statutes, rules, regulations, ordinances, and San Xxxx Building
Department interpretations necessary for occupancy. Lessor shall assign all
its normal material and construction warranties from sub-contractors to
Lessee.
2.1 LESSEE'S INTERIOR IMPROVEMENTS:
Lessee and Lessor agree to the following with respect to Lessee Interior
Improvements to be constructed by Lessee at the Premises:
a. Lessee shall be responsible for designing, contracting, and completing the
Lessee Interior Improvements. Lessor shall have no responsibility or
liability for: (i) the Lessee Interior Improvements except for payment of the
TI Allowance as specified below, (ii) for any delay of the Commencement Date,
(iii) Lessee's obligation to commence paying Rent on the Commencement Date,
(iv) claims asserted by Lessee or Lessee's Agents related to the Lessee
Interior Improvements, and (v) any claims, responsibility, or liability owner
may assume by signing for building permits for the Lessee Interior
Improvements.
x. Xxxxxx shall review and approve all plans and specifications for the Lessee
Interior Improvements to be made to the Premises within 5 business days of
delivery to Lessor and if unacceptable, Lessor shall advise Lessee of the item
or items that are unacceptable and that must be removed and the Premises
restored at the end of the Lease Term at the sole cost and expense of Lessee.
c. Lessee shall be responsible for ensuring the Lessee Interior Improvements
conform to the approved plans and all applicable statutes, rules, regulations,
ordinances, and the City of San Xxxx Building Department interpretations
necessary for occupancy.
d. The Lessee Interior Improvements shall be completed in a good and
workmanlike manner, in compliance with all government codes, requirements and
regulations, and with all necessary permits.
x. Xxxxxx and its designated representatives, shall at all times during the
construction of the Lessee Interior Improvements have access to the Premises
to monitor the progress of construction, but Lessor shall have no obligation
to verify Lessee's work or compliance with Lessee's obligations herein;
provided however, that such access shall not unreasonably interfere with the
activities of Lessee or its contractors.
f. All of Lessor's reimbursements to Lessee for Lessee Interior Improvements
shall be paid by Lessor within ten (10) days after receipt of the following
from Lessee and subject to the limitations set forth in h below: (a) Lessee
providing Lessor with evidence of the costs paid by Lessee for the Lessee
Interior Improvements to the Premises, (b) Lessee providing Lessor with copies
of final unconditional lien releases from all suppliers, subcontractors, and
the general contractor applicable to the Lessee Interior Improvements, and (c)
Lessee, on completion, providing Lessor with a copy of the final inspections
and certificate of occupancy from the City of San Xxxx applicable to the
Lessee Interior Improvements at the Premises.
x. Xxxxxx shall reimburse Lessee for the cost of the Lessee Interior
Improvements to be constructed by Lessee in an amount not to exceed Three
Million Six Hundred Thousand Dollars ($3,600,000) (the "TI Allowance"), being
Twenty Dollars $20.00 per square foot times 180,000. In the event the cost of
the Lessee Interior Improvements is more than the TI Allowance, such costs for
the Lessee Interior Improvements shall be paid in cash by Lessee. Lessee
shall, at its sole cost and expense, pay any and all costs necessary to
complete the project per the approved plans and specifications less
reimbursements stated herein from Lessor.
h. Lessee acknowledges that Lessor shall cause a notice of non-responsibility
to be posted at the Premises and Lessor shall cause a notice of
non-responsibility to be recorded in the Santa Xxxxx County public records
related to Lessee's Interior Improvements.
i. Lessee and Lessee's Agents shall not change or affect the structural
components or structural characteristics of the Premises without signed
engineering drawings and specific written approval of Lessor.
j. The Lessee Interior Improvements shall at a minimum, include the following:
1. HVAC system with VAV units that services 95% of the Premises.
2. Minimum electric requirements of 3,000 amps, 480 volt, 3 phase service
with open office distribution.
3. Open office lighting and drop ceiling in 90% of the Premises.
k. Lessee and its general contractor shall provide Lessor with evidence of
general liability insurance in the amount of not less than Five Million
Dollars ($5,000,000) naming Lessor as an additional insured prior to Lessee
starting any work at the Premises and prior to taking possession of the
Premises.
l. Lessee shall, within 30 days after final inspection of the Lessee Interior
Improvements provide Lessor with one complete set of all "as-built" drawings
from the architect, plumber, mechanical and electrical contractors as blue
line drawings and one set of "as-built" Auto-Cad diskettes from each trade.
m. In addition to Lessee's indemnity obligations set forth in Section 38 of
the Lease, Lessee shall defend, indemnify and hold Lessor harmless from and
against any and all obligations, losses, costs, expenses, claims, demands,
attorney's fees, investigation costs or liabilities on account of, or arising
out of Lessee or Lessee's Agent's design, contracting, construction, and
completion of the Lessee Interior Improvements at the Premises and any act or
omission to act of Lessee or Lessee's Agents with respect to the design,
contracting, construction, and completion of the Lessee Interior Improvements
at the Premises. It is understood that Lessee is and shall be in control and
possession of the Premises effective on the TI Date and that Lessor shall in
no event be responsible or liable for any injury or damage or injury to any
person whatsoever, happening on, in, about, or in connection with the
Premises, or for any injury or damage to the Premises or any part thereof.
The provisions of this Lease permitting Lessor to enter and inspect the
Premises are for the purpose of enabling Lessor to become informed as to
whether Lessee is complying with the terms of this Lease and Lessor shall be
under no duty to enter, inspect or to perform any of Lessee's covenants set
forth in this Lease.
2.2 ACCEPTANCE OF PREMISES AND COVENANTS TO SURRENDER: Lessee agrees on the
last day of the Lease Term, or on the sooner termination of this Lease, to
surrender the Premises to Lessor in Good Condition and Repair. Good Condition
and Repair ("Good Condition and Repair") shall not mean original condition,
but shall mean that the Premises are in a commercially acceptable condition
suitable for occupancy by a reasonable lessee. The interior walls of all
office and warehouse areas, the floors of all office and warehouse areas, all
suspended ceilings and any carpeting are to be cleaned and in Good Condition
and Repair. Lessee, on or before the end of the Lease Term or sooner
termination of this Lease, shall remove all its personal property and trade
fixtures from the Premises, and all such property not so removed shall be
deemed to be abandoned by Lessee. Lessee shall reimburse Lessor for all
disposition costs incurred by Lessor relative to Lessee's abandoned property.
If the Premises are not surrendered at the end of the Lease Term or earlier
termination of this Lease, Lessee shall indemnify Lessor against loss or
liability resulting from any delay caused by Lessee in surrendering the
Premises including, without limitation, any claims made by any succeeding
Lessee founded on such delay.
3. USES PROHIBITED: Lessee shall not commit, or suffer to be committed, any
waste upon the Premises, or any nuisance, or other act or thing which may
disturb the quiet enjoyment of any other tenant in or around the buildings in
which the subject Premises are located or allow any sale by auction upon the
Premises, or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose, or place any loads upon the floor, walls, or ceiling
which may endanger the structure, or use any machinery or apparatus which will
in any manner vibrate or shake the Premises or the building of which it is a
part, or place any harmful liquids in the drainage system of the building. No
waste materials or refuse shall be dumped upon or permitted to remain upon any
part of the Premises outside of the building proper. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain on any
portion of the Premises outside of the building structure, unless approved by
the local, state federal or other applicable governing authority. Lessor
consents to Lessee's use of materials which are incidental to the normal,
day-to-day operations of any office user, such as copier fluids, cleaning
materials, etc., but this does not relieve Lessee of any of its obligations
not to contaminate the Premises and related real property or violate any
Hazardous Materials Laws.
4. ALTERATIONS AND ADDITIONS: Lessee shall not make, or suffer to be made, any
alteration or addition to said Premises, or any part thereof, without the
express, advance written consent of Lessor; any addition or alteration to said
Premises, except movable furniture and trade fixtures, shall become at once a
part of the realty and belong to Lessor at the end of the Lease Term or
earlier termination of this Lease. Alterations and additions which are not
deemed as trade fixtures shall include HVAC systems, lighting systems,
electrical systems, partitioning, carpeting, or any other installation which
has become an integral part of the Premises. Lessee agrees that it will not
proceed to make such alterations or additions until all required government
permits have been obtained and after having obtained consent from Lessor to do
so, until five (5) days from the receipt of such consent, so that Lessor may
post appropriate notices to avoid any liability to contractors or material
suppliers for payment for Lessee's improvements. Lessee shall at all times
permit such notices to be posted and to remain posted until the completion of
work. At the end of the Lease Term or earlier termination of this Lease,
Lessee shall remove and shall be required to remove its special tenant
improvements, all related equipment, and any additions or alterations
installed by Lessee at or during the Lease Term and Lessee shall return the
Premises to the condition that existed before the installation of the tenant
improvements. Notwithstanding the above, Lessor agrees to allow any
reasonable alterations and improvements and will use its best efforts to
notify Lessee at the time of approval if such improvements or alterations are
to be removed at the end of the Lease Term or earlier termination of this
Lease. Notwithstanding the above, Lessee shall have the right, during the
term of this Lease, to make improvements to the Premises at their sole cost
and expense of Five Hundred Thousand Dollars ($500,000) with no approval from
Lessor, provided they are not structural and subject to the requirement to
remove the subject improvements at the end of the Lease Term.
5. MAINTENANCE OF PREMISES:
(a) Lessor shall at its sole cost and expense keep, repair, and maintain the
interior of the Premises, including, but not limited to, all lighting systems,
temperature control systems, and plumbing systems in Good Condition and
Repair, including any required replacements. Lessee shall maintain all wall
surfaces and floor coverings in Good Condition and Repair, free of holes,
gouges, or defacements and provide interior and exterior window washing as
needed.
(b) Lessee shall, at Lessee's expense, keep, repair, and maintain in Good
Condition and Repair including replacements (based on a pro-rata share of (i)
costs based on square footage or (ii) costs directly related to Lessee's use
of the Premises) the following:
1. The exterior of the building, any appurtenances and every part thereof,
including but not limited to, glazing, sidewalks, parking areas, electrical
systems, HVAC systems, roof membrane, and painting of exterior walls.
2. The HVAC by a service contract with a licensed air conditioning and heating
contractor which contract shall provide for a minimum of quarterly maintenance
of all air conditioning and heating equipment at the Premises including HVAC
repairs or replacements which are either excluded from such service contract
or any existing equipment warranties.
3. The landscaping by a landscape contractor to water, maintain, trim and
replace, when necessary, any shrubbery and landscaping at the Premises.
4. The roof membrane by a service contract with a licensed reputable roofing
contractor which contract shall provide for a minimum of semi-annual
maintenance, cleaning of storm gutters, drains, removing of debris, and
trimming overhanging trees, repair of the roof and application of a finish
coat every five years to the building at the Premises.
5. Exterior pest control.
6. Fire monitoring services.
7. Pro-rata share of Logic Drive maintenance and repair costs.
(c) Lessee hereby waives any and all rights to make repairs at the expense of
Lessor as provided in Section 1942 of the Civil Code of the State of
California, and all rights provided for by Section 1941 of said Civil Code.
(d) Lessor shall be responsible for the repair of any structural defects in
the Premises including the roof structure (not membrane), exterior walls and
foundation during the Lease Term.
6. INSURANCE:
6. INSURANCE:
A) HAZARD INSURANCE: Lessee shall not use, or permit said Premises, or any
part thereof, to be used, for any purpose other than that for which said
Premises are hereby leased; and no use shall be made or permitted to be made
of the Premises, nor acts done, which may cause a cancellation of any
insurance policy covering said building, or any part thereof, nor shall Lessee
sell or permit to be kept, used or sold, in or about said Premises, any
article which may be prohibited by an all risk insurance policy. Lessee
shall, at its sole cost and expense, comply with any and all requirements,
pertaining to said Premises, of any insurance organization or company,
necessary for the maintenance of reasonable all risk insurance, covering said
building and appurtenances. Lessee agrees to purchase and keep in force all
risk insurance, not including earthquake and flood, covering loss or damage to
the Premises in an amount equal to the full replacement cost of the Premises
as determined by Lessor, with proceeds payable to Lessor. Lessee acknowledges
that the insurance referenced above does not include coverage for Lessee's
personal property. In the event of a loss per the insurance provisions of
this paragraph, Lessee shall be responsible for all deductibles. It is agreed
that the full replacement cost of the Premises as of the Commencement Date is
eighteen million dollars ($18,000,000).
B) LOSS OF RENTS INSURANCE: Lessee shall maintain in full force and effect at
Lessee's sole cost, a policy of rental loss insurance, in an amount equal to
the amount of Rent payable by Lessee commencing on the date of loss for the
next ensuing one (1) year, as reasonably determined by Lessor with proceeds
payable to Lessor ("Loss of Rents Insurance"). It is agreed that as of the
Commencement Date the amount of Rent payable under the Loss of Rents Insurance
coverage shall be three million five hundred thousand dollars ($3,500,000).
C) LIABILITY AND PROPERTY DAMAGE INSURANCE: Lessee, as a material part of the
consideration to be rendered to Lessor, hereby waives all claims against
Lessor and Lessor's Agents for damages to goods, wares and merchandise, and
all other personal property in, upon or about said Premises, and for injuries
to persons in, upon or about said Premises, from any cause arising at any
time, and Lessee will hold Lessor and Lessor's Agents exempt and harmless from
any damage or injury to any person, or to the goods, wares and merchandise and
all other personal property of any person, arising from the use or occupancy
of the Premises by Lessee, or from the failure of Lessee to keep the Premises
in Good Condition and Repair, as herein provided. Lessee shall, at Lessee's
sole cost, secure and keep in force a standard policy of commercial general
liability insurance and property damage policy covering the Premises and all
related areas insuring the Lessee having a combined single limit for both
bodily injury, death and property damage in an amount not less than five
million dollars ($5,000,000.00). The limits of said insurance shall not,
however, limit the liability of Lessee hereunder. Lessee shall, at its sole
cost and expense, comply with all of the insurance requirements of all local,
municipal, state and federal authorities now in force, or which may hereafter
be in force, pertaining to Lessee's use and occupancy of the said Premises.
D) PERSONAL PROPERTY INSURANCE: Lessee shall obtain, at Lessee's sole cost and
expense, a policy of fire and extended coverage insurance including coverage
for direct physical loss special form, and a sprinkler leakage endorsement
insuring the personal property of Lessee. The proceeds from any personal
property damage policy shall be payable to Lessee.
All insurance policies required above shall: (i) provide for a certificate of
insurance evidencing the insurance required herein, being deposited with
Lessor ten (10) days prior to the Commencement Date, and upon each renewal,
such certificates shall be provided 30 days prior to the expiration date of
such coverage, (ii) be in a form reasonably satisfactory to Lessor and shall
provide the coverage required by Lessee in this Lease, (iii) be carried with
companies with a Best Rating of A+ minimum, (iv) specifically provide that
such policies shall not be subject to cancellation, reduction of coverage, or
other change except after 30 days prior written notice to Lessor, and (v) name
Lessor, Lessor's lender, and any other party with an insurable interest in the
Premises as additional insureds by endorsement to policy.
Lessor and Lessee hereby waive any rights each may have against the other
related to any loss or damage caused to Lessor or Lessee as the case may be,
or to the Premises or its contents, and which may arise from any risk
generally covered by all risk insurance policy. The parties shall provide
that their respective insurance policies insuring the property or the personal
property include a waiver of any right of subrogation which said insurance
company may have against Lessor or Lessee, as the case may be.
7. ABANDONMENT: Lessee shall not vacate or abandon the Premises at any time
during the Lease Term; and if Lessee shall abandon, vacate or surrender said
Premises, or be dispossessed by process of law, or otherwise, any personal
property belonging to Lessee and left on the Premises shall be deemed to be
abandoned, at the option of Lessor. Notwithstanding the above, the Premises
shall not be considered vacated or abandoned if Lessee maintains the Premises
in Good Condition and Repair, provides security and is not in default.
8. FREE FROM LIENS: Lessee shall keep the subject Premises and the property in
which the subject Premises are situated, free from any and all liens including
but not limited to liens arising out of any work performed, materials
furnished, or obligations incurred by Lessee. However, the Lessor shall allow
Lessee to contest a lien claim, so long as the claim is discharged prior to
any foreclosure proceeding being initiated against the property and provided
Lessee provides Lessor a bond if the lien exceeds $5,000.
9. COMPLIANCE WITH GOVERNMENTAL REGULATIONS: Lessee shall, at its sole cost
and expense, comply with all of the requirements of all local, municipal,
state and federal authorities now in force, or which may hereafter be in
force, pertaining to the Premises, and shall faithfully observe in the use
and occupancy of the Premises all local and municipal ordinances and state and
federal statutes now in force or which may hereafter be in force.
10. INTENTIONALLY OMITTED.
11. ADVERTISEMENTS AND SIGNS: Lessee shall not place or permit to be placed,
in, upon or about the Premises any unusual or extraordinary signs, or any
signs not approved by the city, local, state, federal or other applicable
governing authority. Lessee shall not place, or permit to be placed upon the
Premises, any signs, advertisements or notices without the written consent of
the Lessor, and such consent shall not be unreasonably withheld. A sign so
placed on the Premises shall be so placed upon the understanding and agreement
that Lessee will remove same at the end of the Lease Term or earlier
termination of this Lease and repair any damage or injury to the Premises
caused thereby, and if not so removed by Lessee, then Lessor may have the same
removed at Lessee's expense.
12. UTILITIES: Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities supplied to the Premises. Any charges for sewer
usage, PG&E, and telephone site service or related fees shall be the
obligation of Lessee and paid for by Lessee. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion of all
charges which are jointly metered, the determination to be made by Lessor
acting reasonably and on any equitable basis. Lessor and Lessee agree that
Lessor shall not be liable to Lessee for any disruption in any of the utility
services to the Premises.
13. ATTORNEY'S FEES: In case suit should be brought for the possession of the
Premises, for the recovery of any sum due hereunder, because of the breach of
any other covenant herein, or to enforce, protect, or establish any term,
conditions, or covenant of this Lease or the right of either party hereunder,
the losing party shall pay to the Prevailing Party reasonable attorney's fees
which shall be deemed to have accrued on the commencement of such action and
shall be enforceable whether or not such action is prosecuted to judgment.
The term "Prevailing Party" shall mean the party that received substantially
the relief requested, whether by settlement, dismissal, summary judgment,
judgment, or otherwise.
14.1 DEFAULT: The occurrence of any of the following shall constitute a
default and breach of this Lease by Lessee: a) Any failure by Lessee to pay
Rent or to make any other payment required to be made by Lessee hereunder when
due if not cured within ten (10) days after written notice thereof by Lessor
to Lessee; b) The abandonment or vacation of the Premises by Lessee except as
provided in Section 7; c) A failure by Lessee to observe and perform any other
provision of this Lease to be observed or performed by Lessee, where such
failure continues for thirty days after written notice thereof by Lessor to
Lessee; provided, however, that if the nature of such default is such that the
same cannot be reasonably cured within such thirty (30) day period, Lessee
shall not be deemed to be in default if Lessee shall, within such period,
commence such cure and thereafter diligently prosecute the same to completion;
d) The making by Lessee of any general assignment for the benefit of
creditors; the filing by or against Lessee of a petition to have Lessee
adjudged a bankrupt or of a petition for reorganization or arrangement under
any law relating to bankruptcy; e) the appointment of a trustee or receiver to
take possession of substantially all of Lessee's assets or Lessee's interest
in this Lease, or the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease.
14.2 SURRENDER OF LEASE: In the event of any such default by Lessee, then in
addition to any other remedies available to Lessor at law or in equity, Lessor
shall have the immediate option to terminate this Lease before the end of the
Lease Term and all rights of Lessee hereunder, by giving written notice of
such intention to terminate. In the event that Lessor terminates this Lease
due to a default of Lessee, then Lessor may recover from Lessee: a) the worth
at the time of award of any unpaid Rent which had been earned at the time of
such termination; plus b) the worth at the time of award of unpaid Rent which
would have been earned after termination until the time of award exceeding the
amount of such rental loss that the Lessee proves could have been reasonably
avoided; plus c) the worth at the time of award of the amount by which the
unpaid Rent for the balance of the Lease Term after the time of award exceeds
the amount of such rental loss that the Lessee proves could have been
reasonably avoided; plus d) any other amount necessary to compensate Lessor
for all the detriment proximately caused by Lessee's failure to perform his
obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom; and e) at Lessor's election, such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to
time by applicable California law. As used in (a) and (b) above, the "worth
at the time of award" is computed by allowing interest at the rate of Xxxxx
Fargo's prime rate plus two percent (2%) per annum. As used in (c) above, the
"worth at the time of award" is 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%).
14.3 RIGHT OF ENTRY AND REMOVAL: In the event of any such default by Lessee,
Lessor shall also have the right, with or without terminating this Lease, to
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of and for the account of Lessee.
14.4 ABANDONMENT: In the event of the vacation or abandonment, except as
provided in Section 7, of the Premises by Lessee or in the event that Lessor
shall elect to re-enter as provided in paragraph 14.3 above or shall take
possession of the Premises pursuant to legal proceeding or pursuant to any
notice provided by law, and Lessor does not elect to terminate this Lease as
provided in Section 14.2 above, then Lessor may from time to time, without
terminating this Lease, either recover all Rent as it becomes due or relet the
Premises or any part thereof for such term or terms and at such rental rates
and upon such other terms and conditions as Lessor, in its sole discretion,
may deem advisable with the right to make alterations and repairs to the
Premises. In the event that Lessor elects to relet the Premises, then Rent
received by Lessor from such reletting shall be applied; first, to the payment
of any indebtedness other than Rent due hereunder from Lessee to Lessor;
second, to the payment of any cost of such reletting; third, to the payment of
the cost of any alterations and repairs to the Premises; fourth, to the
payment of Rent due and unpaid hereunder; and the residue, if any, shall be
held by Lessor and applied to the payment of future Rent as the same may
become due and payable hereunder. Should that portion of such Rent received
from such reletting during any month, which is applied by the payment of Rent
hereunder according to the application procedure outlined above, be less than
the Rent payable during that month by Lessee hereunder, then Lessee shall pay
such deficiency to Lessor immediately upon demand therefor by Lessor. Such
deficiency shall be calculated and paid monthly. Lessee shall also pay to
Lessor, as soon as ascertained, any costs and expenses incurred by Lessor in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
14.5 NO IMPLIED TERMINATION: No re-entry or taking possession of the Premises
by Lessor pursuant to Section 14.3 or Section 14.4 of this Lease shall be
construed as an election to terminate this Lease unless a written notice of
such intention is given to Lessee or unless the termination thereof is decreed
by a court of competent jurisdiction. Notwithstanding any reletting without
termination by Lessor because of any default by Lessee, Lessor may at any time
after such reletting elect to terminate this Lease for any such default.
15. SURRENDER OF LEASE: The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work a merger, and shall,
at the option of Lessor, terminate all or any existing subleases or sub
tenancies, or may, at the option of Lessor, operate as an assignment to him of
any or all such subleases or sub tenancies.
16. TAXES: Lessee shall pay and discharge punctually and when the same shall
become due and payable without penalty, all real estate taxes, personal
property taxes, taxes based on vehicles utilizing parking areas in the
Premises, taxes computed or based on rental income (other than federal, state
and municipal net income taxes), environmental surcharges, privilege taxes,
excise taxes, business and occupation taxes, school fees or surcharges, gross
receipts taxes, sales and/or use taxes, employee taxes, occupational license
taxes, water and sewer taxes, assessments (including, but not limited to,
assessments for public improvements or benefit), assessments for local
improvement and maintenance districts, and all other govern-mental impositions
and charges of every kind and nature whatsoever, regardless of whether now
customary or within the contemplation of the parties hereto and regardless of
whether resulting from increased rate and/or valuation, or whether
extraordinary or ordinary, general or special, unforeseen or foreseen, or
similar or dissimilar to any of the foregoing (all of the foregoing being
hereinafter collectively called "Tax" or "Taxes") which, at any time during
the Lease Term, shall be applicable or against the Premises, or shall become
due and payable and a lien or charge upon the Premises under or by virtue of
any present or future laws, statutes, ordinances, regulations, or other
requirements of any governmental authority whatsoever. The term
"Environmental Surcharge" shall include any and all expenses, taxes, charges
or penalties imposed by the Federal Department of Energy, Federal
Environmental Protection Agency, the Federal Clean Air Act, or any regulations
promulgated thereunder, or any other local, state or federal governmental
agency or entity now or hereafter vested with the power to impose taxes,
assessments or other types of surcharges as a means of controlling or abating
environmental pollution or the use of energy in regard to the use, operation
or occupancy of the Premises. The term "Tax" shall include, without
limitation, all taxes, assessments, levies, fees, impositions or charges
levied, imposed, assessed, measured, or based in any manner whatsoever (i) in
whole or in part on the Rent payable by Lessee under this Lease, (ii) upon or
with respect to the use, possession, occupancy, leasing, operation or
management of the Premises, (iii) upon this transaction or any document to
which Lessee is a party creating or transferring an interest or an estate in
the Premises, (iv) upon Lessee's business operations conducted at the
Premises, (v) upon, measured by or reasonably attributable to the cost or
value of Lessee's equipment, furniture, fixtures and other personal property
located on the Premises or the cost or value of any leasehold improvements
made in or to the Premises by or for Lessee, regardless of whether title to
such improvements shall be in Lessor or Lessee, or (vi) in lieu of or
equivalent to any Tax set forth in this Section 16. In the event any such
Taxes are payable by Lessor and it shall not be lawful for Lessee to reimburse
Lessor for such Taxes, then the Rent payable thereunder shall be increased to
net Lessor the same net rent after imposition of any such Tax upon Lessor as
would have been payable to Lessor prior to the imposition of any such Tax. It
is the intention of the parties that Lessor shall be free from all such Taxes
and all other governmental impositions and charges of every kind and nature
whatsoever. However, nothing contained in this Section 16 shall require
Lessee to pay any Federal or State income, franchise, estate, inheritance,
succession, transfer or excess profits tax imposed upon Lessor. If any
general or special assessment is levied and assessed against the Premises,
Lessor agrees to use its best reasonable efforts to cause the assessment to
become a lien on the Premises securing repayment of a bond sold to finance the
improvements to which the assessment relates which is payable in installments
of principal and interest over the maximum term al-lowed by law. It is
understood and agreed that Lessee's obligation under this paragraph will be
prorated to reflect the Commencement Date and the end of the Lease Term. It
is further understood that if Taxes cover the Premises and Lessee does not
occupy the entire Premises, the Taxes will be allocated to the portion of the
Premises occupied by Lessee based on a pro-rata square footage or other
equitable basis, as determined by Lessor.
Subject to any limitations or restrictions imposed by any deeds of trust or
mortgages now or hereafter covering or affecting the Premises, Lessee shall
have the right to contest or review the amount or validity of any Tax by
appropriate legal proceedings but which is not to be deemed or construed in
any way as relieving, modifying or extending Lessee's covenant to pay such Tax
at the time and in the manner as provided in this Section 16. However, as a
condition of Lessee's right to contest, if such contested Tax is not paid
before such contest and if the legal proceedings shall not operate to prevent
or stay the collection of the Tax so contested, Lessee shall, before
instituting any such proceeding, protect the Premises and the interest of
Lessor and of the beneficiary of a deed of trust or the mortgagee of a
mortgage affecting the Premises against any lien upon the Premises by a
surety bond, issued by an insurance company acceptable to Lessor and in an
amount equal to one and one-half (1 1/2) times the amount contested or, at
Lessor's option, the amount of the contested Tax and the interest and
penalties in connection therewith. Any contest as to the validity or amount
of any Tax, whether before or after payment, shall be made by Lessee in
Lessee's own name, or if required by law, in the name of Lessor or both Lessor
and Lessee. Lessee shall defend, indemnify and hold harmless Lessor from and
against any and all costs or expenses, including attorneys' fees, in
connection with any such proceedings brought by Lessee, whether in its own
name or not. Lessee shall be entitled to retain any refund of any such
contested Tax and penalties or interest thereon which have been paid by
Lessee. Nothing contained herein shall be construed as affecting or limiting
Lessor's right to contest any Tax at Lessor's expense.
17. NOTICES: Unless otherwise provided for in this Lease, any and all written
notices or other communication (the "Communication") to be given in connection
with this Lease shall be given in writing and shall be given by personal
delivery, facsimile transmission or by mailing by registered or certified mail
with postage thereon or recognized overnight courier, fully prepaid, in a
sealed envelope addressed to the intended recipient as follows:
(a) to the Lessor at: 00000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Fax No: (000) 000-0000
(b) to the Lessee at: 0000 Xxxxx Xxxxx
Xxx Xxxx, Xxxxxxxxxx
Attention: Xxxxx Xxxxxxx
Fax No: (000) 000-0000
or such other addresses, facsimile number or individual as may be designated
by a Communication given by a party to the other parties as aforesaid. Any
Communication given by personal delivery shall be conclusively deemed to have
been given and received on a date it is so delivered at such address provided
that such date is a business day, otherwise on the first business day
following its receipt, and if given by registered or certified mail, on the
day on which delivery is made or refused or if given by recognized overnight
courier, on the first business day following deposit with such overnight
courier and if given by facsimile transmission, on the day on which it was
transmitted provided such day is a business day, failing which, on the next
business day thereafter.
18. ENTRY BY LESSOR: Lessee shall permit Lessor and its agents to enter into
and upon said Premises at all reasonable times using the minimum amount of
interference and inconvenience to Lessee and Lessee's business, subject to any
security regulations of Lessee, for the purpose of inspecting the same or for
the purpose of maintaining the building in which said Premises are situated,
or for the purpose of making repairs, alterations or additions to any other
portion of said building, including the erection and maintenance of such
scaffolding, canopies, fences and props as may be required, without any rebate
of Rent and without any liability to Lessee for any loss of occupation or
quiet enjoyment of the Premises; and shall permit Lessor and his agents, at
any time within ninety (90) days prior to the end of the Lease Term, to place
upon said Premises any usual or ordinary "For Sale" or "For Lease" signs and
exhibit the Premises to prospective tenants at reasonable hours.
19. DESTRUCTION OF PREMISES: In the event of a partial destruction of the said
Premises during the Lease Term from any cause which is covered by Lessor's
property insurance, Lessor shall forthwith repair the same, provided such
repairs can be made within ninety (90) days after receipt of building permit
under the laws and regulations of State, Federal, County, or Municipal
authorities, but such partial destruction shall in no way annul or void this
Lease, except that Lessee shall be entitled to a proportionate reduction of
Rent while such repairs are being made to the extent of payments received by
Lessor under its Loss of Rents Insurance coverage. With respect to any
partial destruction which Lessor is obligated to repair or may elect to repair
under the terms of this paragraph, the provision of Section 1932, Subdivision
2, and of Section 1933, Subdivision 4, of the Civil Code of the State of
California are waived by Lessee. In the event that the building in which the
subject Premises may be situated is destroyed to an extent greater than
thirty-three and one-third percent (33 1/3%) of the replacement cost thereof,
Lessor may, at its sole option, elect to terminate this Lease, whether the
subject Premises is insured or not. A total destruction of the building in
which the subject Premises are situated shall terminate this Lease.
Notwithstanding the above, Lessor is only obligated to repair or rebuild to
the extent of available insurance proceeds including any deductible amount.
Should Lessor determine that insufficient or no insurance proceeds are
available for repair or reconstruction of Premises, Lessor, at its sole
option, may terminate the Lease. Lessee shall have the option of continuing
this Lease by agreeing to pay all repair costs to the subject Premises.
20. ASSIGNMENT AND SUBLETTING: Lessee shall not assign this Lease, or any
interest therein, and shall not sublet the said Premises or any part thereof,
or any right or privilege appurtenant thereto, or cause any other person or
entity (a bona fide subsidiary or affiliate of Lessee excepted) to occupy or
use the Premises, or any portion thereof, without the advance written consent
of Lessor. Any such assignment or subletting without such consent shall be
void, and shall, at the option of the Lessor, terminate this Lease. This
Lease shall not, or shall any interest therein, be assignable, as to the
interest of Lessee, by operation of law, without the written consent of
Lessor. Notwithstanding Lessor's obligation to provide reasonable approval,
Lessor reserves the right to withhold its consent for any proposed sublessee
or assignee of Lessee if the proposed sublessee or assignee is a user or
generator of Hazardous Materials. If Lessee desires to assign its rights
under this Lease or to sublet, all or a portion of the subject Premises to a
party other than a bona fide subsidiary or affiliate of Lessee, Lessee shall
first notify Lessor of the proposed terms and conditions of such assignment or
subletting. Lessor shall have the right of first refusal to enter into a
direct Lessor-lessee relationship with such party under such proposed terms
and conditions, in which event Lessee shall be relieved of its obligations
hereunder to the extent of the Lessor-lessee relationship entered into between
Lessor and such third party. Notwithstanding the foregoing, Lessee may assign
this Lease to a successor in interest, whether by merger or acquisition,
provided there is no substantial reduction in the net worth of the resulting
entity and the resulting entity is not a user or generator of Hazardous
Materials. Whether or not Lessor's consent to a sublease or assignment is
required, in the event of any sublease or assignment, Lessee shall be and
shall remain primarily liable for the performance of all conditions,
covenants, and obligations of Lessee hereunder and, in the event of a default
by an assignee or sublessee, Lessor may proceed directly against the original
Lessee hereunder and/or any other predecessor of such assignee or sublessee
without the necessity of exhausting remedies against said assignee or
sublessee. Notwithstanding the above, Lessor hereby agrees that Lessee may
sublease up to 90,000 square feet of the Premises without Lessor's approval on
a one time basis for a maximum period of sixty (60) months with no extensions.
21. CONDEMNATION: If any part of the Premises shall be taken for any public or
quasi-public use, under any statute or by right of eminent domain or private
purchase in lieu thereof, and a part thereof remains which is susceptible of
occupation hereunder, this Lease shall as to the part so taken, terminate as
of the date title vests in the condemnor or purchaser, and the Rent payable
hereunder shall be adjusted so that the Lessee shall be required to pay for
the remainder of the Lease Term only that portion of Rent as the value of the
part remaining. The rental adjustment resulting will be computed at the same
Rental rate for the remaining part not taken; however, Lessor shall have the
option to terminate this Lease as of the date when title to the part so taken
vests in the condemnor or purchaser. If all of the Premises, or such part
thereof be taken so that there does not remain a portion susceptible for
occupation hereunder, this Lease shall thereupon terminate. If a part or all
of the Premises be taken, all compensation awarded upon such taking shall be
payable to the Lessor. Lessee may file a separate claim and be entitled to
any award granted to Lessee.
22. EFFECTS OF CONVEYANCE: The term "Lessor" as used in this Lease, means only
the owner for the time being of the land and building constituting the
Premises, so that, in the event of any sale of said land or building, or in
the event of a Lease of said building, Lessor shall be and hereby is entirely
freed and relieved of all covenants and obligations of Lessor hereunder, and
it shall be deemed and construed, without further agreement between the
parties and the purchaser of any such sale, or the Lessor of the building,
that the purchaser or lessor of the building has assumed and agreed to carry
out any and all covenants and obligations of the Lessor hereunder. If any
security is given by Lessee to secure the faithful performance of all or any
of the covenants of this Lease on the part of Lessee, Lessor may transfer and
deliver the security, as such, to the purchaser at any such sale of the
building, and thereupon the Lessor shall be discharged from any further
liability.
23. SUBORDINATION: This Lease, in the event Lessor notifies Lessee in writing,
shall be subordinate to any ground lease, deed of trust, or other
hypothecation for security now or hereafter placed upon the real property at
which the Premises are a part and to any and all advances made on the security
thereof and to renewals, modifications, replacements and extensions thereof.
Lessee agrees to promptly execute any documents which may be required to
effectuate such subordination. Notwithstanding such subordination, if Lessee
is not in default and so long as Lessee shall pay the Rent and observe and
perform all of the provisions and covenants required under this Lease,
Lessee's right to quiet possession of the Premises shall not be disturbed or
effected by any subordination.
24. WAIVER: The waiver by Lessor of any breach of any term, covenant or
condition, herein contained shall not be construed to be a waiver of such
term, covenant or condition or any subsequent breach of the same or any other
term, covenant or condition therein contained. The subsequent acceptance of
Rent hereunder by Lessor shall not be deemed to be a waiver of Lessee's breach
of any term, covenant, or condition of the Lease.
25. HOLDING OVER: Any holding over after the end of the Lease Term requires
Lessor's written approval prior to the end of the Lease Term, which,
notwithstanding any other provisions of this Lease, Lessor may withhold. Such
holding over shall be construed to be a tenancy at sufferance from month to
month. Lessee shall pay to Lessor monthly base rent equal to one and one-half
(1.5) times the monthly base rent installment due in the last month of the
Lease Term and all other additional rent and all other terms and conditions of
the Lease shall apply, so far as applicable. Holding over by Lessee without
written approval of Lessor shall subject Lessee to the liabilities and
obligations provided for in this Lease and by law, including, but not limited
to those in Section 2 of this Lease. Lessee shall indemnify and hold Lessor
harmless against any loss or liability resulting from any delay caused by
Lessee in surrendering the Premises, including without limitation, any claims
made or penalties incurred by any succeeding lessee or by Lessor. No holding
over shall be deemed or construed to exercise any option to extend or renew
this Lease in lieu of full and timely exercise of any such option as required
hereunder.
26. LESSOR'S LIABILITY: If Lessee should recover a money judgment against
Lessor arising in connection with this Lease, the judgment shall be satisfied
only out of the Lessor's interest in the Premises and neither Lessor or any of
its partners shall be liable personally for any deficiency.
27. ESTOPPEL CERTIFICATES: Lessee shall at any time during the Lease Term,
upon not less than ten (10) days prior written notice from Lessor, execute and
deliver to Lessor a statement in writing certifying that, this Lease is
unmodified and in full force and effect (or, if modified, stating the nature
of such modification) and the dates to which the Rent and other charges have
been paid in advance, if any, and acknowledging that there are not, to
Lessee's knowledge, any uncured defaults on the part of Lessor hereunder or
specifying such defaults if they are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises. Lessee's failure to deliver such a statement within such time shall
be conclusive upon the Lessee that (a) this Lease is in full force and effect,
without modification except as may be represented by Lessor; (b) there are no
uncured defaults in Lessor's performance.
28. TIME: Time is of the essence of the Lease.
29. CAPTIONS: The headings on titles to the paragraphs of this Lease are not a
part of this Lease and shall have no effect upon the construction or
interpretation of any part thereof. This instrument contains all of the
agreements and conditions made between the parties hereto and may not be
modified orally or in any other manner than by an agreement in writing signed
by all of the parties hereto or their respective successors in interest.
30. PARTY NAMES: Landlord and Tenant may be used in various places in this
Lease as a substitute for Lessor and Lessee respectively.
31. EARTHQUAKE INSURANCE: As a condition of Lessor agreeing to waive the
requirement for earthquake insurance, Lessee agrees that it will pay, as
additional Rent, which shall be included in the monthly CAC, an amount not to
exceed Seventy-Two Thousand Dollars ($72,000) per year for earthquake
insurance if Lessor desires to obtain some form of earthquake insurance in the
future, if and when available, on terms acceptable to Lessor as determined in
the sole and absolute discretion of Lessor.
32. HABITUAL DEFAULT: Notwithstanding anything to the contrary contained in
Section 14 herein, Lessor and Lessee agree that if Lessee shall have defaulted
in the payment of Rent for three or more times during any twelve month period
during the Lease Term, then such conduct shall, at the option of the Lessor,
represent a separate event of default which cannot be cured by Lessee. Lessee
acknowledges that the purpose of this provision is to prevent repetitive
defaults by the Lessee under the Lease, which constitute a hardship to the
Lessor and deprive the Lessor of the timely performance by the Lessee
hereunder.
33. HAZARDOUS MATERIALS
33.1 DEFINITIONS: As used in this Lease, the following terms shall have the
following meaning:
a. The term "Hazardous Materials" shall mean (i) polychlorinated
biphenyls; (ii) radioactive materials and (iii) any chemical, material or
substance now or hereafter defined as or included in the definitions of
"hazardous substance" "hazardous water", "hazardous material", "extremely
hazardous waste", "restricted hazardous waste" under Section 25115, 25117 or
15122.7, or listed pursuant to Section 25140 of the California Health and
Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii)
defined as "hazardous substance" under Section 25316 of the California Health
and Safety Code, Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous
Substances Account Act), (iii) defined as "hazardous material", "hazardous
substance", or "hazardous waste" under Section 25501 of the California Health
and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release,
Response, Plans and Inventory), (iv) defined as a "hazardous substance" under
Section 25181 of the California Health and Safety Code, Division 20l, Chapter
6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi)
asbestos, (vii) listed under Article 9 or defined as "hazardous" or "extremely
hazardous" pursuant to Article II of Title 22 of the California Administrative
Code, Division 4, Chapter 20, (viii) defined as "hazardous substance" pursuant
to Section 311 of the Federal Water Pollution Control Act, 33 U.S.C. 1251 et
seq. or listed pursuant to Section 1004 of the Federal Water Pollution Control
Act (33 U.S.C. 1317), (ix) defined as a "hazardous waste", pursuant to Section
1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C. 6901 et
seq., (x) defined as "hazardous substance" pursuant to Section 101 of the
Comprehensive Environmental Responsibility Compensations, and Liability Act,
42 U.S.C. 9601 et seq., or (xi) regulated under the Toxic Substances Control
Act, 156 U.S.C. 2601 et seq.
b. The term "Hazardous Materials Laws" shall mean any local, state and
federal laws, rules, regulations, or ordinances relating to the use,
generation, transportation, analysis, manufacture, installation, release,
discharge, storage or disposal of Hazardous Material.
c. The term "Lessor's Agents" shall mean Lessor's agents,
representatives, employees, contractors, subcontractors, directors, officers
and partners.
d. The term "Lessee's Agents" shall mean Lessee's agents,
representatives, employees, contractors, subcontractors, directors, officers,
partners, invitees or any other person in or about the Premises.
33.2 LESSEE'S RIGHT TO INVESTIGATE: Lessee shall be entitled to cause such
inspection, soils and ground water tests, and other evaluations to be made of
the Premises as Lessee deems necessary regarding (i) the presence and use of
Hazardous Materials in or about the Premises, and (ii) the potential for
exposure to Lessee's employees and other persons to any Hazardous Materials
used and stored by previous occupants in or about the Premises. Lessee shall
provide Lessor with copies of all inspections, tests and evaluations. Lessee
shall indemnify, defend and hold Lessor harmless from any cost, claim or
expense arising from such entry by Lessee or from the performance of any such
investigation by such Lessee.
33.3 LESSOR'S REPRESENTATIONS: Lessor hereby represents and warrants to the
best of Lessor's knowledge that the Premises are, as of the date of this
Lease, in compliance with all Hazardous Material Laws.
33.4 LESSEE'S OBLIGATION TO INDEMNIFY: Lessee, at its sole cost and expense,
shall indemnify, defend, protect and hold Lessor and Lessor's Agents harmless
from and against any and all cost or expenses, including those described under
subparagraphs i, ii and iii herein below set forth, arising from or caused in
whole or in part, directly or indirectly by:
a. Lessee's or Lessee's Agents' use, analysis, storage, transportation,
disposal, release, threatened release, discharge or generation of Hazardous
Material to, in, on, under, about or from the Premises; or
b. Lessee's or Lessee's Agents failure to comply with Hazardous Material
laws; or
c. Any release of Hazardous Material to, in, on, under, about, from or
onto the Premises caused by or occurring as a result of acts or omissions of
Lessee or Lessee's Agents or occurring during the Lease Term, except ground
water contamination from other parcels where the source is from off the
Premises not arising from or caused by Lessee or Lessee's Agents.
The cost and expenses indemnified against include, but are not limited to the
following:
i. Any and all claims, actions, suits, proceedings, losses, damages,
liabilities, deficiencies, forfeitures, penalties, fines, punitive damages,
cost or expenses;
ii. Any claim, action, suit or proceeding for personal injury (including
sickness, disease, or death), tangible or intangible property damage,
compensation for lost wages, business income, profits or other economic loss,
damage to the natural resources of the environment, nuisance, pollution,
contamination, leaks, spills, release or other adverse effects on the
environment;
iii. The cost of any repair, clean-up, treatment or detoxification of the
Premises necessary to bring the Premises into compliance with all Hazardous
Material Laws, including the preparation and implementation of any closure,
disposal, remedial action, or other actions with regard to the Premises, and
expenses (including, without limitation, reasonable attorney's fees and
consultants fees, investigation and laboratory fees, court cost and litigation
expenses).
33.5 LESSEE'S OBLIGATION TO REMEDIATE CONTAMINATION: Lessee shall, at its sole
cost and expense, promptly take any and all action necessary to remediate
contamination of the Premises by Hazardous Materials during the Lease Term.
33.6 OBLIGATION TO NOTIFY: Lessor and Lessee shall each give written notice to
the other as soon as reasonably practical of (i) any communication received
from any governmental authority concerning Hazardous Material which related to
the Premises and (ii) any contamination of the Premises by Hazardous Materials
which constitutes a violation of any Hazardous Material Laws.
33.7 SURVIVAL: The obligations of Lessee under this Section 33 shall survive
the Lease Term or earlier termination of this Lease.
33.8 CERTIFICATION AND CLOSURE: On or before the end of the Lease Term or
earlier termination of this Lease, Lessee shall deliver to Lessor a
certification executed by Lessee stating that, to the best of Lessee's
knowledge, there exists no violation of Hazardous Material Laws resulting from
Lessee's obligation in Paragraph 33. If pursuant to local ordinance, state or
federal law, Lessee is required, at the expiration of the Lease Term, to
submit a closure plan for the Premises to a local, state or federal agency,
then Lessee shall furnish to Lessor a copy of such plan.
33.9 PRIOR HAZARDOUS MATERIALS: Lessee shall have no obligation to clean up or
to hold Lessor harmless with respect to, any Hazardous Material or wastes
discovered on the Premises which were not introduced into, in, on, about, from
or under the Premises during the Lease Term or ground water contamination from
other parcels where the source is from off the Premises not arising from or
caused by Lessee or Lessee's Agents.
34. BROKERS: Lessor and Lessee represent that they have not utilized or
contacted a real estate broker or finder with respect to this Lease and Lessee
agrees to indemnify and hold Lessor harmless against any claim, cost,
liability or cause of action asserted by any broker or finder claiming through
Lessee. Lessor shall pay no brokerage commission in connection with this
transaction. Lessor represents and warrants that it has not utilized or
contacted a real estate broker or finder with respect to this Lease and Lessor
agrees to indemnify and hold Lessee harmless against any claim, cost,
liability or cause of action asserted by any broker or finder claiming through
Lessor.
35. OPTION TO EXTEND
A. Option: Lessor hereby grants to Lessee one (1) option to extend the Lease
Term, with the extended term to be for a period of five (5) years, on the
following terms and conditions:
(i) Lessee shall give Lessor written notice of its exercise of its option to
extend no earlier than twenty-four (24) calendar months, nor later than six
(6) calendar months before the Lease Term would end but for said exercise.
Time is of the essence.
(ii) Lessee may not extend the Lease Term pursuant to any option granted by
this Section 35 if Lessee is in default as of the date of the exercise of its
option. If Lessee has committed a default by Lessee as defined in Section 14
or 32 that has not been cured or waived by Lessor in writing by the date that
any extended term is to commence, then Lessor may elect not to allow the Lease
Term to be extended, notwithstanding any notice given by Lessee of an exercise
of this option to extend.
(iii) All terms and conditions of this Lease shall apply during the extended
term, except that the base rent and rental increases for each extended term
shall be determined as provided in Section 35 (B) below
(iv) Lessee must provide Lessor written notice of its exercise of its option
as provided hereunder at least nine (9) months before the Lease Term would end
but for said exercise for purposes of negotiating rental terms. Lessee may
withdraw its notice of exercise of an extension option for any reason prior to
six (6) months before the Lease Term would end but for said exercise.
Lessor shall provide Lessee with Lessor's proposed base monthly rent for the
option period within twenty (20) days of Lessee's written request. However,
once Lessee delivers a notice of exercise of an option to extend the Lease
Term it may not be withdrawn unless notice in writing is provided to Lessor at
least six (6) months before the Lease Term would end but for said exercise
and, subject to the provisions of this Section 35, such notice shall operate
to extend the Lease Term. Upon any extension of the Lease Term pursuant to
this Section 35, the term "Lease Term" as used in this Lease shall thereafter
include the then extended term.
(v) The option rights of Xilinx, Inc. granted under this Section 35 are
granted for Xilinx, Inc.'s personal benefit and may not be assigned or
transferred by Xilinx, Inc. or exercised if Xilinx, Inc. is not occupying the
Premises at the time of exercise.
B. Extended Term Rent - Option Period: The monthly Rent for the Premises
during the extended term shall equal ninety-five percent (95%) of the fair
market monthly Rent for the Premises as of the commencement date of the
extended term, but in no case, less than the Rent during the last month of the
prior Lease term. Promptly upon Lessee's exercise of the option to extend,
Lessee and Lessor shall meet and attempt to agree on the fair market monthly
Rent for the Premises as of the commencement date of the extended term. In
the event the parties fail to agree upon the amount of the monthly Rent for
the extended term prior to commencement thereof, the monthly Rent for the
extended term shall be determined by appraisal in the manner hereafter set
forth; provided, however, that in no event shall the monthly Rent for the
extended term be less than in the immediate preceding period. Annual base
rent increases during the extended term shall be three percent (3%) per year.
In the event it becomes necessary under this paragraph to determine the fair
market monthly Rent of the Premises by appraisal, Lessor and Lessee each shall
appoint a real estate appraiser who shall be a member of the American
Institute of Real Estate Appraiser ("AIREA") and such appraisers shall each
determine the fair market monthly Rent for the Premises taking into account
the value of the Premises and the amenities provided by the outside areas, the
common areas, and the Building, and prevailing comparable Rentals in the area.
Such appraisers shall, within twenty (20) business days after their
appointment, complete their appraisals and submit their appraisal reports to
Lessor and Lessee. If the fair market monthly Rent of the Premises
established in the two (2) appraisals varies by five percent (5%) or less of
the higher Rent, the average of the two shall be controlling. If said fair
market monthly Rent varies by more than five percent (5%) of the higher
Rental, said appraisers, within ten (10) days after submission of the last
appraisal, shall appoint a third appraiser who shall be a member of the AIREA
and who shall also be experienced in the appraisal of Rent values and
adjustment practices for commercial properties in the vicinity of the
Premises. Such third appraiser shall, within twenty (20) business days after
his appointment, determine by appraisal the fair market monthly Rent of the
Premises taking into account the same factors referred to above, and submit
his appraisal report to Lessor and Lessee. The fair market monthly Rent
determined by the third appraiser for the Premises shall be controlling,
unless it is less than that set forth in the lower appraisal previously
obtained, in which case the value set forth in said lower appraisal shall be
controlling, or unless it is greater than that set forth in the higher
appraisal previously obtained in which case the Rent set for in said higher
appraisal shall be controlling. If either Lessor or Lessee fails to appoint
an appraiser, or if an appraiser appointed by either of them fails, after his
appointment to submit his appraisal within the required period in accordance
with the foregoing, the appraisal submitted by the appraiser properly
appointed and timely submitting his appraisal shall be controlling. If the
two appraisers appointed by Lessor and Lessee are unable to agree upon a third
appraiser within the required period in accordance with the foregoing,
application shall be made within twenty (20) days thereafter by either Lessor
or Lessee to AIREA, which shall appoint a member of said institute willing to
serve as appraiser. The cost of all appraisals under this subparagraph shall
be borne equally be Lessor and Lessee.
36. APPROVALS: Whenever in this Lease the Lessor's or Lessee's consent is
required, such consent shall not be unreasonably or arbitrarily withheld or
delayed. In the event that the Lessor or Lessee does not respond to a request
for any consents which may be required of it in this Lease within ten business
days of the request of such consent in writing by the Lessee or Lessor, such
consent shall be deemed to have been given by the Lessor or Lessee.
37. AUTHORITY: Each party executing this Lease represents and warrants that he
or she is duly authorized to execute and deliver the Lease. If executed on
behalf of a corporation, that the Lease is executed in accordance with the
by-laws of said corporation (or a partnership that the Lease is executed in
accordance with the partnership agreement of such partnership), that no other
party's approval or consent to such execution and delivery is required, and
that the Lease is binding upon said individual, corporation (or partnership)
as the case may be in accordance with its terms.
38. INDEMNIFICATION OF LESSOR: Except to the extent caused by the sole
negligence or willful misconduct of Lessor or Lessor's Agents, Lessee shall
defend, indemnify and hold Lessor harmless from and against any and all
obligations, losses, costs, expenses, claims, demands, attorney's fees,
investigation costs or liabilities on account of, or arising out of the use,
condition or occupancy of the Premises or any act or omission to act of Lessee
or Lessee's Agents or any occurrence in, upon, about or at the Premises,
including, without limitation, any of the foregoing provisions arising out of
the use, generation, manufacture, installation, release, discharge, storage,
or disposal of Hazardous Materials by Lessee or Lessee's Agents. It is
understood that Lessee is and shall be in control and possession of the
Premises and that Lessor shall in no event be responsible or liable for any
injury or damage or injury to any person whatsoever, happening on, in, about,
or in connection with the Premises, or for any injury or damage to the
Premises or any part thereof. This Lease is entered into on the express
condition that Lessor shall not be liable for, or suffer loss by reason of
injury to person or property, from whatever cause, which in any way may be
connected with the use, condition or occupancy of the Premises or personal
property located herein. The provisions of this Lease permitting Lessor to
enter and inspect the Premises are for the purpose of enabling Lessor to
become informed as to whether Lessee is complying with the terms of this Lease
and Lessor shall be under no duty to enter, inspect or to perform any of
Lessee's covenants set forth in this Lease. Lessee shall further indemnify,
defend and hold harmless Lessor from and against any and all claims arising
from any breach or default in the performance of any obligation to Lessee's
part to be performed under the terms of this Lease. The provisions of Section
38 shall survive the Lease Term or earlier termination of this Lease with
respect to any damage, injury or death occurring during the Lease Term.
40. OPTION TO PURCHASE: Lessor grants to Lessee an option to purchase the
Premises in accordance with the following terms and conditions:
(a) In order to exercise this option to purchase, Lessee must notify Lessor in
writing of such exercise between the sixth and twelfth months following the
Commencement Date of the initial Lease Term of any property. This option
shall be null and void if not exercised as stated herein before the expiration
of the twelfth month of the initial Lease Term.
(b) The purchase price shall be payable in cash or other immediately
available funds, at close of escrow, which shall occur on a date chosen by
Lessor but in any event (i) no earlier than thirty (30) days after Lessee has
exercised its option to purchase and (ii) not later than the sixth month after
Lessee has exercised its option to purchase.
(c) Upon payment of said purchase price, Lessor shall deliver title to Lessee
by grant deed, free and clear of all claims, liens, restrictions and
encumbrances, other than current taxes, assessments, easements (all as of the
date of Lessee's exercise of its option) and anything of record or not of
record resulting from the acts or omissions of Lessee, and such other matters
as Lessor and Lessee may mutually agree upon.
(d) Upon execution of this Lease, Lessee shall deposit with Lessor an amount
equal to Twenty-Eight Million Three Hundred Fifty-One Thousand Dollars
($28,351,000) (the "Option Deposit"). This deposit shall be in addition to
all other deposits required hereunder. If Lessee elects to exercise this
option to purchase, the purchase price shall be $28,351,000, and Lessor shall
credit the Option Deposit against such purchase price as payment in full. In
addition, if Lessee elects to exercise this option to purchase, the prepaid
first year's rent shall be forfeited to Lessor, and Lessor shall have no
obligation to refund any of such prepaid rent to Lessee regardless of when the
close of escrow shall occur. If Lessee elects not to exercise the option to
purchase, Lessor shall refund the Option Deposit in full to Lessee on the
first anniversary of the Commencement Date, without interest.
(e) Both Lessor and Lessee agree to cooperate with each other in effectuating
a tax-deferred exchange of the Property pursuant to Section 1031 of the
Internal Revenue Code of 1986, as amended. Each party agrees to fully
cooperate with any such exchange, provided that each party's obligation to the
other shall be limited to its purchase or sale of the Property, as the case
may be, in accordance with this paragraph 40 and the purchase and sale
agreement to be executed by the parties as herein provided; neither party
shall have any greater or different obligations and no lesser or different
rights from those set forth in this paragraph and such purchase and sale
agreement; neither party shall be put to any additional cost or expense on
account of any such exchange undertaken by the other party; and neither party
shall have any responsibility whatsoever for the tax or nontax consequences of
an exchange undertaken by the other party, or any liability arising out of
holding title to facilitate such exchange (for which the exchanging party
shall indemnify the cooperating party), including without limitation whether
the tax effects of any such exchange contemplated by such party and/or any
third party to the exchange are in fact successfully realized. No such
exchange shall delay or excuse any of the time periods specified in this
paragraph or in the purchase and sale agreement to be executed by the parties
as herein provided. Accordingly, if an exchange is contemplated but is not,
for whatever reason, completed on the closing date agreed upon by the parties
for the consummation of the sale of the Premises, the party which has
undertaken such exchange (or both parties, if both parties have undertaken
exchanges) nevertheless shall be obligated to close on the purchase and sale
of the Premises at the time and in the manner such close would have occurred
had such party (or both parties, if both parties have undertaken an exchange)
not undertaken an exchange.
(f) There shall be no prorations as of the close of escrow and Lessee shall
assume any assessments and Lessee shall pay all closing costs, transfer taxes,
and escrow fees.
(g) Lessee shall purchase the Premises in an "as is" condition without
warranty or representation from Lessor.
(h) Concurrently herewith Lessee and Lessor have entered an Option to Purchase
which will be recorded by Lessor.
40. SUCCESSORS AND ASSIGNS: The covenants and conditions herein contained
shall, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of all of the parties
hereto; and all of the parties hereto shall be jointly and severally liable
hereunder.
41. MISCELLANEOUS PROVISIONS: All rights and remedies hereunder are cumulative
and not alternative to the extent permitted by law and are in addition to all
other rights or remedies in law and in equity.
42. CHOICE OF LAW: This lease shall be construed and enforced in accordance
with the substantive laws of the State of California. The language of 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 Lessor or Lessee.
43. ENTIRE AGREEMENT: This Lease is the entire agreement between the parties,
and there are no agreements or representations between the parties except as
expressed herein. Except as otherwise provided for herein, no subsequent
change or addition to this Lease shall be binding unless in writing and signed
by the parties hereto.
IN WITNESS WHEREOF, Lessor and Lessee have executed these presents, the day
and year first above written.
LESSOR LESSEE
XXXX & XXXX ENTERPRISES, INC. XILINX, INC.
By: /s/ Xxxx X. Xxxx By: /s/ Xxxxxx X. Xxxxxxxxx
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signature of authorized representative signature of authorized representative
Xxxx X. Xxxx Xxxxxx X. Xxxxxxxxx
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printed name printed name
President CEO, President
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Title Title
October 8, 1997 October 8, 1997
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date date
