LEASE AGREEMENT
1. Parties. This Lease, dated for reference purposes only, March 11, 1996, is
made by and between South Bay/Fortran, a California limited partnership,
("Landlord"), and Elexsys International, Inc., a California corporation
("Tenant").
2. Premises. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord, upon the terms and conditions hereinafter set forth, those certain
premises (the "Premises") presently known, as of the date of this Lease, as 0000
Xxxxxxx Xxxxx, situated in the City of San Xxxx, County of Santa Xxxxx, State of
California, described as follows: for purposes of this Lease, the rentable
square footage area of the Building shall be deemed to be approximately
sixty-six thousand three hundred sixty-eight (66,368) square feet (the
"Building"), as shown cross-hatched on the site plan (the "Site Plan") attached
hereto as Exhibit "A". The Building is located on a larger parcel (the "Parcel")
containing other buildings (the "Buildings") as shown on the Site Plan, which
Parcel is described in Exhibit "B" attached hereto. In the event Landlord
subdivides the Parcel in the future into two (2) or more legal parcels, the term
"Parcel" shall thereafter refer to the legal parcel on which the Premises are
located. Except as provided in Exhibit "C", Landlord shall not be required to
make any alterations, additions or improvements to the Premises and the Premises
shall be leased to Tenant in an "as-is" condition; provided, however, the
Premises will be delivered to Tenant in good condition and repair, including the
roof and structural integrity of the Building, and the Premises as they exist on
the date of execution of this Lease (exclusive of any Tenant Improvements
constructed pursuant to Exhibit "C"), will be in compliance with all
governmental codes, ordinances and statutes, including Americans With
Disabilities Act ("ADA").
3. Term. The term of this Lease ("Lease Term") shall be for seven (7) year,
commencing on July 1, 1996, (the "Commencement Date") and ending on June 30,
2003, unless sooner terminated pursuant to any provision hereof. Notwithstanding
said scheduled Commencement Date, if for any reason Landlord cannot deliver
possession of the Premises to Tenant on said date, Landlord shall not be subject
to any liability therefor, nor shall such failure affect the validity of this
Lease or the obligations of Tenant hereunder, but in such case Tenant shall not
be obligated to pay rent until possession of the Premises is tendered to Tenant
and the commencement and termination dates of this Lease shall be revised to
conform to the date of the Landlord's delivery of possession. In the event
Landlord shall permit Tenant to occupy the Premises prior to the Commencement
Date, such occupancy shall be subject to all the provisions of this Lease,
including the obligation to pay the Monthly Installment of rent, and Common Area
Charges.
4. Rent.
A. Time of Payment. Tenant shall pay to Landlord as rent for the Premises
the sum specified in paragraph 4.b below (the "Monthly Installment") each
month in advance on the first day of each calendar month, without deduction
or offset, prior notice or demand, commencing on the Commencement Date and
continuing through the term of this Lease, together with such additional
rents as are payable by Tenant to Landlord under the terms of this Lease.
The Monthly Installment for any period during the Lease Term which period
is less than one (1) full month shall be a prorata portion of the Monthly
installment based upon a thirty (30) day month.
B. Monthly Installment
(1) Initial Monthly Installment. The initial Monthly Installment of
rent payable each month during the first (1st) through the
twenty-fourth (24th) month of the Lease Term shall be the sum of
Forty-six Thousand Four hundred Fifty-eight and no/100ths Dollars per
month. ($46,458.00).
(2) Rent Adjustments.
(a) Commencing with the twenty-fifth (25th) month of the Lease
Term, the Monthly Installment of rent shall be increased to
Forty-nine Thousand Seven Hundred Seventy-six and no/100ths
Dollars ($49,776.00);
(b) Commencing with the forty-ninth (49th) month of the Lease
Term, the Monthly Installment of rent shall be increased to
Fifty-three Thousand Ninety-four and no/100ths Dollars
($53,094.00); and,
(c) Commencing with the seventy-third (73rd) month of the Lease
Term, the Monthly Installment of rent shall be increased to
Fifty-three Thousand Four Hundred Thirteen and no/100ths Dollars
($56,413.00).
C. Late Charge. Tenant acknowledges that late payment by Tenant to Landlord
of rent and other sums due hereunder will cause Landlord 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
Landlord by the terms of any mortgage or deed of trust covering the
Premises. Accordingly, if any installment of rent or any other sum due from
Tenant shall not be received by Landlord within ten (10) days after such
amount shall be due, Tenant shall pay to Landlord, as additional rent, a
late charge equal to six percent (6%) of such overdue amount. The parties
hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by
Tenant. Acceptance of such late charge by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue
amount, nor prevent Landlord from exercising any of its other rights and
remedies granted hereunder.
D. Additional Rent. All taxes, insurance premiums, Common Area Charges,
late charges, costs and expenses which Tenant is required to pay hereunder,
together with all interest and penalties that may accrue thereon in the
event of Tenant's failure to pay such amounts, and all reasonable damages,
costs and attorneys' fees and expenses which Landlord may incur by reason
of any default of Tenant or failure on Tenant's part to comply with the
terms of this Lease, shall be deemed to be additional rent ("Additional
Rent") and shall be paid in additional to the Monthly Installment of rent,
and, in the event of nonpayment of the Monthly Installment of rent.
E. Place of Payment. Rent shall be payable in lawful money of the United
States of America to Landlord at 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, XX, or to
such other person(s) or at such other place(s) as Landlord may designate in
writing.
F. Advance Payment. Concurrently with the execution of this Lease, Tenant
shall pay to Landlord the sum of Forty-six Thousand four Hundred
Fifty-eight and no/100ths Dollars ($46,458.00) to be applied to the Monthly
Installment of rent first accruing under this Lease.
5. Security Deposit. Tenant shall deposit the sum of Fifty-six Thousand Four
Hundred Thirteen and no/100ths Dollars ($56,413.00) (the "Security Deposit")
upon execution of this Lease, to secure the faithful performance by Tenant of
each term, convenient and condition of this Lease. If Tenant shall at any time
fail to may any payment or fail to keep or perform any term, covenant or
condition on its part to be made or performed or kept under this Lease, Landlord
may, but shall not be obligated to and without waiving or releasing tenant from
any obligation under this Lease, use, apply or retain the whole or any part of
the Security Deposit (A) to the extent of any sum due to Landlord; (B) to make
any required payment on Tenant's behalf; or (C) to compensate Landlord for any
loss, damages, attorneys' fees or expense sustained by Landlord due to Tenant's
default. In such event, Tenant shall, within five (5) days of written demand by
Landlord, remit to Landlord sufficient funds to restore the Security Deposit to
its original sum. No interest shall accrue on the Security Deposit. Landlord
shall not be required to keep the Security Deposit separate from its. general
funds. Should Tenant comply with all the terms, covenants and conditions of this
Lease and at the end of the term of this Lease leave the Premises in the
condition required by this Lease, then said Security Deposit, less any sums
owing to Landlord, shall be returned to Tenant within thirty (30) days after the
termination of this Lease and vacancy of the Premises by Tenant.
6. Use of Premises. Tenant shall use the Premises only in conformance with
applicable governmental laws, regulations, rules and ordinances for the purpose
of general office, research and development, light manufacturing, assembly,
warehousing and distribution of electronic products, and for no other purpose.
Tenant shall indemnify, protect, defend, and hold Landlord harmless against any
loss, expense, damage, attorney' fees or liability arising out of failure of
Tenant to comply with any applicable law. Tenant shall not commit or suffer to
be committed, any waster upon the Premises, or any nuisance, or other acts or
things which may disturb the quiet enjoyment of any other tenant in the
buildings adjacent to the Premises, or allow any sale by auction upon the
Premises, or allow the Premises to be used for any unlawful purpose, or place
any loads upon the floor, walls or ceiling which endanger the structure, 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 Buildings proper, except in trash containers place
inside exterior enclosures designated for that purpose by Landlord. No material,
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 the Building proper. Tenant shall strictly
comply with the provisions of Paragraph 39 below.
7. Taxes and Assessments
A. Tenant's Property. Tenant shall pay before delinquency any and all taxes
and assessments, license fees and public charges levied, assessed or
imposed upon or against Tenant's fixtures, equipment, furnishings,
furniture, appliances and personal property installed or located on or
within the Premises. Tenant shall cause said fixtures, equipment,
furnishings, furniture, appliances and personal property to be assessed and
billed separately from the real property of Landlord. If any of Tenant's
said personal property shall be assessed with Landlord's real property,
Tenant shall pay Landlord the taxes attributable to Tenant within ten (10)
days after receipt of a written statement from Landlord setting forth the
taxes applicable to Tenant's property.
B. Property Taxes. Tenant shall pay, as additional rent, its Pro Rata Share
(as defined below) of all Property Taxes levied or assessed with respect to
the land comprising the Parcel with respect to all buildings and
improvements located on the Parcel which become due or accrue during the
term of this Lease. Tenant shall pay such Property Taxes to Landlord within
twenty (20) days after receipt of billing. Provided that Landlord bills
Tenant at least thirty (30) days prior to the delinquency date of such
Property Taxes, Tenant shall pay such Property Taxes to Landlord at least
ten (10) days prior to the delinquency date, and if Tenant fails to do so,
Tenant shall reimburse Landlord, on demand, for all interest, late fees and
penalties that the taxing authority charges Landlord. In the event
Landlord's mortgagee requires an impound for Property Taxes, then on the
first day of each month during the Lease Term, Tenant shall pay Landlord on
twelfth (1/12) of its annual share of such Property Taxes. Tenant's
liability hereunder shall be prorated to reflect the Commencement and
termination dates of this Lease. Tenant's share of the Property Taxes shall
be determined by Landlord from the respective valuation assigned in the
Assessor's worksheet or such other information as may be reasonably
available. Landlord's reasonable determination thereof, in good faith,
shall be conclusive. As used in this Lease, the term "Tenant's Pro Rata
Share" shall mean a fraction, expressed as a percentage, the numerator of
which is the number of square feet of floor space contained in all of the
Buildings located on the Parcel. As of the Commencement Date, Tenant's Pro
Rata Share is twenty-two and forty-eight hundredths percent (22.48%).
Notwithstanding the foregoing, in the event of a reassessment of the
Property Taxes due to the voluntary sale of the Premises which sale occurs
any time after the expiration of the second year of the Lease Term. Tenant
shall not be responsible to pay its Pro Rata Share of any increase in
Property Taxes due to such sale to the extent such increase exceeds
twenty-five percent (25%) of the Property Tax xxxx assessed immediately
prior to the sale of the Premises. This cap shall not apply to any sale
that occurs during the first two (2) years of the Lease Term or any time
after the initial Lease Term expires, and shall not apply for any other
reassessment of the property due to construction of tenant improvements or
any other increase in value of the property. Also, this cap shall no apply
to any increase in real property taxes that result from a foreclosure sale,
deed in lieu of foreclosure or other involuntary transfer of the Premises.
For the purpose of this Lease, "Property Taxes" means and includes all
taxes, assessments (including, but not limited to, assessments for public
improvements or benefits), taxes based on vehicles, utilizing parking
areas, taxes based or measured by the rent paid, payable or received under
this Lease, taxes on the value, use, or occupancy of the Premises, the
Buildings and/or the Parcel, Environmental Surcharges, and all other
governmental impositions and charges of every kind and nature whatsoever,
whether or not customary or within the contemplation of the parties hereto
and regardless of whether the same shall be extraordinary or ordinary,
general or special, unforeseen or foreseen, or similar or dissimilar to any
of the foregoing which, at any time during the Lease Term shall be
applicable to the Premises, the Buildings and/or the Parcel or assessed,
levied or imposed upon to the Premises, the Buildings and/or the Parcel, or
become due and payable and a lien or charge upon to the Premises, the
Buildings and/or the Parcel, or any part thereof, under or by virtue of any
present or future laws, statutes, ordinances, regulations or other
requirements of any governmental authority whatsoever. The term
"Environmental Surcharges" shall mean and include any and all expenses,
taxes, charges or penalties imposed by the Federal Department of Energy,
the 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. The
term "Property Taxes" shall not include any federal, state, or local net
income, estate, or inheritance tax imposed on Landlord.
C. Other Taxes. Tenant shall, as additional rent, pay or reimburse Landlord
for any tax based upon, allocable to, or measured by the area of the
Premises or the Buildings or the Parcel; or by the rent paid, payable or
received under this Lease; any tax upon or with respect to the possession,
leasing,
operation, management, maintenance, alteration, repair, use or occupancy of
the Premises or any portion thereof; any privilege tax, excise tax,
business and occupation tax, gross receipts tax, sales and /or use tax,
water tax, sewer tax, employee tax, occupational license tax imposed upon
Landlord or Tenant with respect to the Premises; any tax upon this
transaction or any document to which Tenant is party creating or
transferring an interest or an estate in the Premises.
8. Insurance
A. Indemnity. Tenant agrees to indemnify, protect and defend Landlord
against and hold Landlord harmless from any and all claims, causes of
action, judgments, obligations or liabilities, and all reasonable expenses
incurred in investigating or resisting the same (including reasonable
attorneys' fees), on account of, or arising out of, the operation,
maintenance, use or occupancy of the Premises and all areas appurtenant
thereto. This Lease is made on the express understanding that Landlord
shall not be liable for, or suffer loss by reason of, injury to person or
property, from whatever cause (except fro active negligence or willful
misconduct of Landlord), which in any way may be connected with the
operation, use or occupancy of the Premises specifically including, without
limitation, any liability for injury to the person or property of Tenant,
its agents, officers, employees, licensees and invitees.
B. Liability Insurance. Tenant shall, at Tenant's expense, obtain and keep
in force during the term of this Lease a policy of comprehensive public
liability insurance insuring Landlord and tenant against claims and
liabilities arising out of the operation, use, or occupancy of the Premises
and all areas appurtenant thereto, including parking areas. Such insurance
shall be in an amount of not less than Three Million Dollars
($3,000,000.00) for bodily injury or death as a result of any one
occurrence and Five Hundred Thousand Dollars ($500,000.00) for damage to
property as a result of any one occurrence. The insurance shall be with
companies approved by Landlord, which approval Landlord agrees not to
withhold unreasonably. Tenant shall deliver to Landlord, which approval
Landlord agrees not to thirty (30) days prior to the expiration thereof, a
certificate of insurance evidencing the existence of the policy required
hereunder and such certificate shall certify that the policy (1) names
Landlord as an additional insured, (2) shall not be canceled or altered
without thirty (30) days prior written notice to Landlord, (3) insures
performance of the indemnity set forth in Paragraph 8.A above, (4) the
coverage is primary and any coverage by Landlord is in excess thereto and
(5) contains a cross-liability endorsement. Landlord may maintain a policy
or policies of comprehensive general liability insurance insuring Landlord
(and such others as are designation by Landlord), against liability for
personal injury, bodily injury, death and damage to property occurring or
resulting from an occurrence in, on or about the Premises or the Common
Area, with such limits of coverage as Landlord may from time to time
determine are reasonably necessary for its protection. The cost of such
liability insurance maintained by Landlord shall be a Common Area Charge
and Tenant shall pay, as additional rent, its share of such cost to
Landlord as provided in Paragraph 12 below.
C. Property Insurance. Landlord shall obtain and keep in force during the
term of the Lease a policy or policies of insurance covering loss or damage
to the Premises and the Buildings, in the amount of the full replacement
value thereof, providing protection against those perils included within
the classification of "all risk" insurance, plus a policy of rental income
insurance in the amount of one hundred percent (100%) of twelve (12) months
rent (including, without limitation, sums payable as Additional Rent),
plus, at Landlord's option, flood insurance and earthquake insurance, and
any other coverages which may be required from time to time by Landlord's
mortgagee. Tenant shall have no interest in nor any right to the proceeds
of any insurance procured by Landlord on the Premises. Tenant shall, within
twenty (20) days after receipt of billing pay to the Landlord as additional
rent, the full cost of such insurance procured and maintained by Landlord.
Tenant acknowledges that such insurance procured by Landlord shall contain
a deductible which reduces Tenant's cost for such insurance and, in the
event of loss or damage, Tenant shall be required to pay the Landlord the
amount of such deductible.
D. Tenants Insurance. Release of Landlord. Tenant acknowledges that the
insurance to be maintained by Landlord on the Premises pursuant to
Subparagraph C above will not insure any of Tenant's property. Accordingly,
Tenant, at Tenant's own expense, shall maintain in full force and effect on
all of its fixtures, equipment, leasehold improvements and personal
property in the Premises, a policy of "All Risk" coverage insurance to the
extent of at least ninety percent (90%) of their insurable value. Tenant
hereby releases Landlord, and its partners, officers, agents, employees and
servants from any and all claims, demands, losses, expenses or injuries to
the Premises or to the furnishings, fixtures, equipment, inventory or other
personal property of Tenant in, about, or upon the Premises, which are
caused by perils, events or happenings where the same are covered by the
insurance required by this Lease or which are the subject of insurance
carried by Tenant and in force at the time of such loss.
9. Utilities. Tenant shall pay for all water, gas, light, heat, power,
electricity, telephone, trash pick-up, sewer charges and all other services
supplied to or consumed on the Premises, and all taxes and surcharges thereon.
In addition, the cost of any utility services supplied to the Common Area or not
separately metered to the Premises shall be a Common Area Charge and Tenant
shall pay its share of such costs to Landlord as provided in Paragraph 12 below.
10. Repairs and Maintenance
A. Landlord's Repairs. Subject to provisions of Xxxxxxxxx 00, Xxxxxxxx
shall keep and maintain the exterior roof, structural elements and exterior
walls of the Building in good order and repair. Landlord shall not,
however, be required to maintain, repair or replace the interior surface of
exterior walls, nor shall Landlord be required to maintain, repair or
replace windows, doors, skylights or plate glass. Landlord shall have no
obligation to make repairs under this Subparagraph until a reasonable time
after receipt of written notice from Tenant of the need for such repairs.
Tenant shall reimburse Landlord, as additional rent, within fifteen (15)
days after receipt of billing, for the cost of such repairs and maintenance
which are the obligation of the Landlord hereunder, provided however, that
Tenant shall not be required to reimburse Landlord for the cost of
maintenance and repairs of the structural elements of the Building unless
such maintenance or repair is required because of the negligence or willful
misconduct of Tenant or its employees, agents or invitees. As used herein,
the term "structural elements of the building" shall mean and be limited to
the foundation, footings, floor slab (but not flooring), structural walls,
and roof structure ( but not roofing or roof membrane). Notwithstanding
anything in the foregoing to the contrary, Tenant shall not be responsible
to reimburse Landlord for the cost of any roof replacement during the first
two (2) years of the Lease Term; however, if at any time after the
expiration of the second (2nd) year of the Lease Term, throughout the
balance of the term of this Lease or any extension thereof, the roof
membrane requires replacement, Landlord shall perform such replacement and
Tenant shall pay to Landlord, as Additional Rent, a fraction of the cost of
such replacement, which fraction shall have as its numerator the number of
calendar months remaining in
the Lease Term at the time of if such replacement and shall have as its
denominator 240 months. If Tenant exercises any option to extend the term
of this Lease, then at the commencement of any such option term, Tenant
shall pay to Landlord an additional fraction of the cost of such
replacement, which fraction shall have as its denominator the number of
months in the option term in question, and shall have as its denominator
240 months. All payments required of Tenant under this Subparagraph 10.A
shall be made within thirty (30) days after receipt of billing.
B. Tenant's repairs. Except as expressing provided in Subparagraph A above,
Tenant shall, at its sole cost, keep and maintain the entire Premises and
every part thereof, including without limitation, the windows, window
frames, plate glass, glazing, skylights, truck doors, doors and all door
hardware, the walls and partitions, and the electrical, plumbing, lighting,
heating, ventilating and air conditioning systems and equipment in good
order, condition and repair. The term "repair" shall include replacements,
restorations and/or renewals when necessary as well as painting. Tenant's
obligation shall extend to all alterations, additions and improvements to
the Premises, and all fixtures and appurtenances therein and thereto.
Tenant shall, at all times during the Lease Term, have in effect a service
contract for the maintenance of the heating, ventilating and air
conditioning ("HVAC") equipment with an HVAC repair and maintenance
contractor approved by Landlord. The HVAC service contract shall provide
for periodic inspection and servicing at least once every three (3) months
during the term hereof, and Tenant shall provide Landlord with a copy of
such contract and all periodic service reports.
Should Tenant fail to make repairs required of Tenant hereunder forthwith
upon five (5) days notice from Landlord or should Tenant fail thereafter to
diligently complete the repairs, Landlord, in addition to all other
remedies, may make the same, and in that event, Tenant shall reimburse
Landlord as additional rent for the cost of such maintenance or repairs
within five (5) days of written demand by Landlord.
Landlord shall have no maintenance or repair obligations whatsoever with
respect to the Premises except as expressing provided in Paragraphs 10.A
and 11. Tenant hereby expressly waives the provisions of Subsection 1 of
Section 1932 and Sections 1941 and 1942 of the Civil Code of California and
all rights to make repairs at the expense of Landlord as provided in
Section 1942 of said Civil Code. There shall be no allowance to Tenant for
diminution of rental value, and no liability on the part of Landlord by
reason of inconvenience, annoyance or injury to business arising from the
making of or the failure to make, any repairs, alterations, decorations,
additions or improvements in or to any portion of the Premises or the
Building or Common Area (or any of the area used in connection with the
operation thereof, or in or to any fixtures, appurtenances or equipment),
or by reason of the negligence of tenant or any other tenant or occupant of
the Parcel. In no event shall Landlord be responsible for any consequential
damages arising or alleged to have arisen from any of the foregoing
matters. Tenant hereby agrees that Landlord shall not be liable for injury
to Tenant's business or any loss of income therefrom or for damage to the
goods, wares, merchandise or other property of Tenant, Tenant's employees,
invitees, customers, or any other person in or about the Premises, the
Building, or the Common Area, nor shall Landlord be liable for injury to
the person of Tenant, Tenant's employees, agents or contractors whether
such damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, or from breakage leakage,, obstruction or
other defects of wires, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, or from any other cause, whether the
said damage or injury results from any other cause, whether the said damage
or injury results from conditions arising upon the Premises or upon other
portions of the Building, or from other sources or places and regardless of
whether the cause of such damage or injury or the means of repairing the
same is inaccessible to Tenant. Landlord shall not be liable for any
damages arising from any act of neglect of any other tenant, if any, of the
Building or the Parcel.
11. Common Area. Subject to the terms and conditions of this Lease and such
rules and regulations as Landlord may from time to time prescribe, Tenant and
Tenant's employees, invitees and customers shall, in common with other occupants
of the Parcel, and their respective employees, invitees and customers, and
others entitled to the use thereof, have the nonexclusive right to use the
access roads, parking areas and facilities provided and designated by Landlord
for the general use and convenience of the occupants of the Parcel, which areas
and facilities are referred to herein as "Common Area". This right shall
terminate upon the termination of this Lease. Landlord reserves the right from
time to time to make changes in the shape, size, location , amount and extent of
the Common Area. Landlord further reserves the right to promulgate such
reasonable rules and regulations relating to the use of the Common Area, and any
part of parts thereof, as Landlord may deem appropriate for the best interest of
the occupants of the Parcel. the rules and regulations shall be binding upon
Tenant upon delivery of a copy of them to Tenant, and Tenant shall abide by them
and cooperate in their observance. Such rules and regulations may be amended by
Landlord from time to time, with or without advance notice, and all amendments
shall be effective upon delivery of a copy of them to Tenant. Tenant shall have
the non-exclusive use of no more than two hundred fifty (250) of the parking
spaces in the Common Area as designated from time to time by Landlord. Tenant
shall not at any time park or permit the parking of Tenant's trucks or other
vehicles, or the trucks or other vehicles of others, adjacent to loading areas
so as to interfere in any way with the use of such areas, nor shall Tenant at
any time park or permit the paring of Tenant's vehicles or trucks, or the
vehicles or trucks of Tenant's suppliers or others, in any portion of the Common
Area not designated by Landlord for such use by Tenant. Tenant shall not abandon
any inoperative vehicles or equipment on any portion of the Common Area. Tenant
shall make no alterations, improvements or additions to the Common Area.
Landlord shall operate, manage, insure, maintain and repair the Common Area in
good order condition and repair. The manner in which the Common Area shall be
maintained and the expenditures for such maintenance shall be a the discretion
of Landlord. The cost of such repair, maintenance, operation, insurance and
management, including without limitation, maintenance and repair of landscaping,
irrigation systems, paving, sidewalks, fences, and lighting, shall be a Common
Area Charge and Tenant shall pay to Landlord its share of such costs as provided
in Paragraph 12 below.
12. Common Area Charges. Tenant shall pay to landlord, ass additional rent, upon
demand but not more often than once each calendar month, an amount equal its Pro
Rata Share of the Common Area Charges as defined in Paragraphs 8C,9,11 of this
Lease. Tenant acknowledges and agrees that the Common Area Charges shall include
an additional five percent (5%) of the actual expenditures in order to
compensate Landlord for accounting, management and processing services.
13. Alterations. Tenant shall not make or suffer to be made, any alterations,
improvements or additions in , on, about or to the Premises or any part thereof,
without the prior written consent of Landlord and without a valid building
permit issued by the appropriate governmental authority. As a condition to
giving such consent, Landlord may require that Tenant agree to remove any such
alterations, improvements or additions at the termination of this Lease, and to
restore the Premises to their prior condition. unless Landlord requires that
Tenant remove any such alterations, improvement or additions, any alteration,
addition or improvement to the Premises, except movable furniture and trade
fixtures not affixed to the Premises, shall be come the property of Landlord
upon termination of the lease and shall remain upon and be surrendered with the
Premises at the termination of this Lease. Without limiting he generality of the
foregoing, all heating, lighting, electrical (including all wiring, conduit,
outlets, drops, xxxx ducts, main and subpanels), air conditioning, partitioning,
drapery, and carpet installations made by Tenant regardless of how affixed to
the Premises, together with all other additions, alterations that have become an
integral part of the Building, shall be and become the property of the Landlord
upon termination of the Lease, and shall not be deemed trade fixtures, and shall
remain upon and be surrendered with the Premises at the termination of this
Lease.
If, during the term hereof, any alteration, addition or change of any sort to
all or any portion of the Premises is required by law, regulation, ordinance or
order of any public agency, Tenant shall promptly make the same at its sole cost
and expense. If during the term hereof, any alteration, addition, or change to
the Common Area is required by law, regulation, ordinance or order of any public
agency, Landlord shall make the same and the cost of such alteration, addition
or change shall be a Common Area Charge and Tenant shall pay its share of said
cost to Landlord as provided in Paragraph 12 above.
14. Acceptance of the Premises. By entry and taking possession of the Premises
pursuant to this Lease, Tenant accepts the Premises as being in good and
sanitary order, condition and repair and accepts the Premises in their condition
existing as of the date of such entry, and Tenant further accepts the tenant
improvements to be constructed by Landlord, if any, as being completed in
accordance with the plans and specifications for such improvements, except for
punch list items. Tenant shall be thirty (30) days after it has taken possession
of the Premises to notify Landlord of any problems needing correction with
respect to the HVAC, plumbing, and electrical, excluding any work done by Tenant
or its contractors, employees or agents in retrofitting the Premises to suit its
specific requirements. Tenant acknowledges that neither the Landlord nor
Landlord's agents has made any representation or warranty as to the suitability
of the Premises to the conduct of Tenant's business. Any agreements, warranties
or representations no expressly contained herein shall in no way bind either
Landlord or Tenant, and Landlord and Tenant expressly waive all claims for
damages by reason of any statement, representation, warranty, promise or
agreement, if any, not contained in this Lease. This Lease constitutes the
entire understanding between the parties hereto and no addition do, or
modification of, any term or provision of this Lease shall be effective until
set forth in a writing signed by both Landlord and Tenant.
15. Default
A. Events of Default. A breach of this Lease shall exist if any of the
following events (hereinafter referred to as "Event of Default") shall
occur:
1. Default in the payment when due of any installment of rent or other
payment required to be made by Tenant hereunder, where such default
shall not have been cured within three (3) days after a written notice
of such default is given to Tenant;
2. Tenant's failure to perform any other term, covenant or condition
contained in this Lease where such failure shall have continued for
twenty (20) days after written notice of such failure is given to
Tenant;
3. Tenant's vacating or abandonment of the Premises;
4. Tenant's assignment of its assets for the benefit of its creditors;
5. The sequestration of, attachment of, or execution on, any
substantial part of the property essential to the conduct of tenant's
business shall have occurred and Tenant shall have failed to obtain a
return or release of such property within thirty (30) days thereafter,
or prior to sale pursuant to such sequestration, attachment or levy,
whichever is earlier;
6. Tenant or any guarantor of tenant's obligations hereunder shall
commence any case, proceeding or other action seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it
or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a
receiver, trustee, custodian, or other similar official for it or for
all or any substantial part of its property;
7. Tenant or any such guarantor shall take any corporate action to
authorize any of the actions set forth in Clause 6 above;
8. Any case, proceeding or other action against Tenant or any guarantor
of tenant's obligations hereunder shall be commences seeking to have an
order for relief entered against it as debtor, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking appointment
of a receiver, trustee, custodian, or other similar official for it or
for all or any substantial part of its property, and such case,
proceeding or other action (i) results in the
entry of an order for relief against it which is not fully stayed
within seven (7) business days after the entry thereof or (ii) remains
undismissed for a period of forty-five (45) days.
B. Remedies. Upon any Event of Default, Landlord shall have the
following remedies, in addition to all other rights and remedies
provided by law, to which Landlord may resort cumulatively, or in the
alternative.
1. Recovery of Rent. Landlord shall be entitled to keep this Lease in
full force and effect (whether or not Tenant shall have abandoned the
Premises) and to enforce all of its rights and remedies under this
Lease, including the right to recover rent and other sums as they
become due, plus interest at the Permitted Rate (as defined in
Paragraph 33 below) from the due date of each installment of rent or
other sum until paid.
2. Termination. Landlord may terminate this Lease by giving Tenant
written notice of termination. On the giving of the notice all of the
Tenant's rights in the Premises and the Building and Parcel shall
terminate. Upon the giving of the notice of termination, Tenant shall
surrender and vacate the Premises in the condition require by paragraph
34, and Landlord may re-enter and take possession of the Premises and
all the remaining improvements or property and eject Tenant or any of
Tenant's subtenants, assignees or other person or persons claiming any
right under or through Tenant or eject some and not others or eject
none. This Lease may also be terminated by a judgment specifically
providing for termination. Any termination under this paragraph shall
not release Tenant from the payment of any sum then due Landlord or
from any claim for damages or rent previously accrued or then accruing
against Tenant. In no event shall any one or more of the following
actions by landlord constitute a termination of this Lease:
a. maintenance and preservation of the Premises;
b. efforts to relet the Premises;
c. appointment of a receiver in order to protect Landlord's
interest hereunder;
d. consent to any subletting of the Premises or assignment of
this Lease by Tenant, whether pursuant to provisions hereof
concerning subletting and assignment or otherwise; or
e. any other action by Landlord or Landlord's agents intended
to mitigate the adverse effects from any breach of this Lease
by Tenant.
3. Damages. In the event this Lease is terminated pursuant to
Subparagraph 15.B.2 above, or otherwise, Landlord shall be entitled to
damages in the following sums:
a. the worth at the time of award of the unpaid rent which has
been earned at the time of termination: plus
b. the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; plus
c. the worth at the time of award of the amount by which the
unpaid rent for the balance of the term after the time of
award exceeds the amount of such rental loss that the Tenant
proves could be reasonably avoided; and
d. any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform
tenant's obligations under this Lease, or which in
the ordinary course of things would be likely to result
therefrom including, without limitation, the following: (I)
expenses fro 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 the succeeding lessee, or otherwise); (iii)
real estate broker's fees, advertising costs and other
expenses of reletting the Premises; (iv) costs of carrying the
Premises such as taxes and insurance premiums thereon,
utilities and security precautions; (v) expenses in retaking
possession of the Premises; (vi) attorneys' fees and court
costs; and (vii) any unamortized real estate brokerage
commission paid in connection with this Lease.
e. the "worth at the time of award" of the amounts referred to
in Subparagraphs (a) and (b) of this Paragraph, is computed by
allowing interest at the Permitted Rate. The "worth at the
time of award" of the amounts referred to in Subparagraph (c)
of this Paragraph is computed by discounting such amount at
the discount rat of the Federal reserve Board of San Francisco
at the time of award plus one percent (1%). The term "rent" as
used in the Paragraph shall include all sums required to be
paid by tenant to Landlord pursuant to the terms of this
Lease.
16. Destruction. In the event that any portion of the Premises are destroyed or
damaged by an uninsured peril, Landlord or Tenant may, upon written notice to
the other, given within thirty (30 days after the occurrence of such damage or
destruction, elect to terminate this Lease; provided however, that either party
may, within thirty (30) days after receipt of such notice, elect to make any
required repairs and/or restoration at such party's sole cost and expense, in
which event this Lease shall remain in full force and effect, and the party
having made such election to restore or repair shall thereafter diligently
proceed with such repairs and/or restorations.
In the event that any portion of the Premises are destroyed or damaged by an
uninsured peril to the extent of fifty percent (50%) or more of the then
replacement cost of the Premises, landlord may, upon written notice to Tenant,
given within thirty (30) days after the occurrence of such damage or
destruction, elect to terminate this Lease. If Landlord does not give such
notice in writing within such period, Landlord shall be deemed to have elected
to rebuild or restore the Premises, in which event, Landlord, shall at its
expense, promptly rebuild or restore the Premises to their condition prior to
the damage or destruction and Tenant shall pay to Landlord upon commencement of
reconstruction the amount of any deductible from the insurance policy.
In the event that, pursuant to the foregoing provisions, Landlord is to rebuild
or restore the Premises, Landlord shall, within thirty (30) days after the
occurrence of such damage or destruction, provide Tenant with written notice of
the time required for such repair or restoration. If such period is longer than
two hundred seventy (270) days from the issuance of a building permit, tenant
may, within thirty (30) days after receipt of Landlord's notice, elect to
terminate the Lease by giving written notice to Landlord of such election,
whereupon the Lease shall immediately terminate. The period of time for Landlord
to complete the repair or restoration shall be extended for delays caused by the
fault or neglect of Tenant or because of acts of God, acts of publication, labor
disputes, strikes, fires, freight embargoes, rainy or stormy weather, inability
to obtain materials, supplies or fuels, acts of contractors or subcontractors,
or delay of contractors or subcontractors due to such causes, or other
contingencies beyond of Landlord. Landlord's obligation to repair or restore the
Premises shall not include restoration of Tenant's trade fixtures, equipment,
merchandise, or any improvements, alterations or additions made by Tenant to the
Premises.
17. Condemnation
A. Definition of Terms. For the purposes of this Lease, the term (1)
"Taking" means a taking of the Premises or damage to the Premises
related to the exercise of the power of eminent domain and includes a
voluntary conveyance, in lieu of court proceedings, to any agency,
authority, public utility, person or corporate entity empowered to
condemn property; (2) "Total Taking" means the taking of the entire
Premises or so much of the Premises as to prevent or substantially
impair the use thereof by Tenant for the uses herein specified;
provided, however, in no event shall a Taking of less than ten percent
(10%) of the Premises be deemed a Total Taking; (3) "partial Taking"
means the taking of only a portion of the Premises which does not
constitute a Total Taking; (4) "Date of Taking" means the date upon
which the title to the Premises, or a portion thereof, passes to and
vests in the condemnor or the effective date of any order for
possession if issued prior to the date title vests in the condemnor;
and (5) "Award" means the amount of any award made, consideration paid,
or damages ordered as a result of a Taking.
B. Rights. The parties agree that in the event of a taking all rights
between them or in and to an Award shall be as set forth herein and
Tenant shall have no right to any Award except as set forth herein.
C. Total Taking. In the event of a Total Taking during the term hereof
(1) the rights of Tenant under the Lease and the leasehold estate of
Tenant in and to the Premises shall cease and terminate as of the Date
of Taking; (2) Landlord shall refund to Tenant any prepaid rent; (3)
Tenant shall pay Landlord any rent or charges due Landlord under the
Lease, each prorated as of the Date of taking; (4) Tenant shall receive
from Landlord those portions of the Award attributable to trade
fixtures of Tenant and for moving expenses of Tenant; and (5) the
remainder of the Award shall be paid to and be the property of
Landlord.
D. Partial Taking. In the event of a Partial Taking during the term
hereof (1) the rights of Tenant under the Lease and leasehold estate of
Tenant in and to the portions of the Premises taken shall cease and
terminate as of the Date of Taking; (2) from and after the Date of
Taking the Monthly Installment of rent shall be an amount equal to the
product obtained by multiplying the Monthly Installment of rent
immediately prior to the Taking by a fraction, the numerator of which
is the number of square feet contained in the Premises after the Taking
and the denominator of which is the number of square feet contained the
Premises prior to the Taking; (3) Tenant shall receive from the Award
the portions of the award attributable to trade fixtures of Tenant; and
(4) the remainder of the Award shall be paid to and be the property of
Landlord.
18. Mechanics' Lien. Tenant shall (A) pay for all labor and services performed
for, materials used by or furnished to, Tenant or any contractor employed by
Tenant with respect to the Premises: (B) indemnify, defend, protect, and hold
Landlord and the Premises harmless and free from any liens, claims, liabilities,
demand, encumbrances, or judgments created or suffered by reason of any labor or
services performed for, materials used by or furnished to, Tenant or any
contractor employed by Tenant with respect to the Premises; (C) give notice to
Landlord in writing five (5) days prior to employing any laborer or contractor
to perform service related to, or receiving materials for use upon the Premises;
and (D) permit Landlord to post a notice of nonresponsibility in accordance with
the statutory requirements of California Civil Code Section 3094 or any
amendment thereof. In the event Tenant is required to post an improvement bond
with a public agency in connection with the above, Tenant agrees to include
Landlord as an additional obligee.
19. Inspection of the Premises. Tenant shall permit Landlord and its agents to
enter the Premises at any reasonable time for the purpose of inspecting the
same, performing Landlord's maintenance and repair responsibilities, posting a
notice of non-responsibility for alterations, additions or repairs and at any
time within ninety (90) days prior to expiration of this Lease, to place upon
the Premises, ordinary "For Lease" or "For Sale" signs.
20. Compliance with Laws. Tenant shall, at its own cost, comply with all of the
requirements of all municipal, county, state and federal authorities now in
force, or which may hereafter be in force, pertaining to the use and occupancy
of the Premises, and shall faithfully observe all municipal, county, state and
federal law, statutes or ordinances no in force or which may hereafter be in
force. The judgment of any court of competent jurisdiction or the admission of
Tenant in any action or proceeding against tenant, whether Landlord be a party
thereto or not, that Tenant has violated any such ordinance or statute in the
use and occupancy of the Premises shall be conclusive of the fact that such
violation by Tenant has occurred.
21. Subordination. The following provisions shall govern the relationship of
this Lease to any underlying lease, mortgage or deed of trust which no or
hereafter affects the Premises, the Building and/or the Parcel, or Landlord's
interest or estate therein (the "Project") and any renewal, modification,
consolidation, replacement, or extension thereof (a "Security Instrument").
A. Priority. This Lease is subject and subordinate to 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. Subsequent Security Instruments. 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 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. Documents. Tenant shall execute any document or instrument required
by Landlord or any Lender to make this lease wither 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 the Lender not be liable for (1)
the return of the Security Deposit unless the Lender receives it from
Landlord, and (2) any defaults on the part of Landlord occurring prior
to the time that the Lender takes possession of the Project in
connection with the enforcement of its Security Instrument. Tenant's
failure to execute any such document or instrument within ten (10) days
after written demand therefor shall constitute a default by Tenant or,
at Landlord's option, landlord may execute such documents on behalf of
Tenant as tenant's attorney-in-fact. Tenant does hereby make,
constitute and irrevocably appoint Landlord as Tenant's
attorney-in-fact to execute such documents in accordance with this
paragraph.
D. Tenant's Attornment. Tenant shall attorn (1) to any purchaser of the
Premises at any foreclosure sale or private sale conducted pursuant to
any Security Instrument encumbering the project; (2) to grantee or
transferee designated in any deed given in lieu of foreclosure; or (3)
to the lessor under any underlying ground lease should such ground
lease be terminated.
E. Lender. The term "Lender" shall mean (1) any beneficiary, mortgagee,
secured party, or other holder of any deed of trust, mortgagee, or
other written security device or agreement affecting the Project; and
(2) any lessor under any underlying lease under which Landlord holds
its interest in the Project.
22. Holding Over. This Lease shall terminate without further notice at the
expiration of the Lease Term. Any holding over by Tenant after expiration shall
not constitute a renewal or extension or give Tenant any rights in or to the
Premises except as expressly provided in this Lease. Any holding over after the
expiration with the consent of Landlord shall be construed to be a tenancy from
month to month, at one hundred fifty percent (150%) of the monthly rent for the
last month of the Lease Term, and shall otherwise be on the terms and conditions
herein specified insofar as applicable.
23. Notices. Any notice required or desired to be given under this Lease shall
be in writing with copies directed as indicated below and shall be personally
served or given by mail. Any notice given by mail shall be deemed to have been
given when forty-eight (48) hours have elapsed from the time such notice was
deposited in the United State mails, certified and postage prepaid, addressed to
the party to be served with a copy as indicated herein at the last address given
by that party to the other party under the provisions of this Paragraph. At this
date of execution of this Lease, the address of Landlord is:
000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
and the address of Tenant is:
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx, CFO
After the Commencement Date, the address of the Tenant shall be at the Premises.
23. Attorneys' Fees. In the event either party shall bring any action or legal
proceeding for damages for any alleged breach of any provision of this Lease, to
recover rent or possession of the Premises, to terminate this Lease, or to
enforce, protect or establish any term or covenant of this Lease or right or
remedy of either party, the prevailing party shall be entitled to receive as a
part of such action or proceeding, reasonable attorneys' fees and court costs,
including attorneys' fees and costs for appeal, as may be fixed by the court or
jury. The term "prevailing party" shall mean the party who received
substantially the relief requested, whether by settlement, dismissal, summary
judgment, or otherwise.
25. Nonassignment.
A. Landlord's Consent Required. Tenant's interest in this Lease is no
assignable, by operation of law or otherwise, nor shall Tenant have the
right to sublet the Premises, transfer of any interest of Tenant
therein or permit any use of the Premises by another party, without the
prior written consent of Landlord to such assignment, subletting,
transfer or use, which consent Landlord agrees not to withhold
unreasonably subject to the provisions of Subparagraph B below. A
consent to one assignment, subletting, occupancy or use by another
party shall not be deemed to be a consent to any subsequent assignment,
subletting, occupancy or use by another party. Any assignment or
subletting without such consent shall be void and shall, at the options
of landlord, terminate this Lease.
Landlord's waiver or consent to any assignment or subletting hereunder
shall not relieve Tenant from any obligation under this Lease unless
the consent shall so provide.
B. Transferee Information Required. If Tenant desires to assign its
interest in this Lease or sublet the Premise, or transfer any interest
of Tenant therein, or permit the use of the Premises by another party
(hereinafter collectively referred to as a "Transfer"), Tenant shall
give Landlord at lease thirty (30) days prior written notice of the
proposed Transfer and of the terms of such proposed Transfer,
including, but not limited to, the name and legal composition of the
proposed transferee, a financial statement of the proposed transferee,
the nature of the proposed transferee's business to be carried on in
the Premises, the payment to be made or other consideration to be given
to Tenant on account of the Transfer, and such pertinent information as
may be requested by Landlord, all in sufficient detail to enable
Landlord to evaluate the Proposed transfer and the prospective
transferee. It is the intent of the parties hereto that this Lease
shall confer upon Tenant only the right to use and occupy the Premises,
and to exercise such other rights as are conferred upon Tenant by this
Lease. The parties agree that this Lease is not intended to have a
bonus value nor to serve as a vehicle whereby Tenant may profit by a
future Transfer of this lease or the right to use or occupy the
Premises as a result of any favorable terms contained herein, or future
changes in the market for lease space. It is the intent of the parties
that any such bonus value that may attach to this Lease shall be and
remain the exclusive property of Landlord, except as provided for in
Subparagraph (2) below. Accordingly, in the event Tenant seeks to
Transfer its interest in this Lease or the Premises, Landlord shall
have the following options, which may be exercised at its sole choice
without limiting Landlord in the exercise of any other right or remedy
which Landlord may have by reason of such proposed Transfer:
1. Landlord may elect to terminate this Lease effective as of
the proposed effective date of the proposed Transfer and
release Tenant from any further liability hereunder accruing
after such termination date by giving Tenant written notice of
such termination within twenty (20) days after receipt by
Landlord of Tenant's notice of intent to transfer as provided
above. If Landlord makes such election to terminate this
Lease, Tenant shall surrender the Premises, in accordance with
Paragraph 34, on or before the effective termination date; or
2. Landlord may consent to the proposed Transfer on the
condition that tenant agrees to pay to Landlord, as additional
rent, fifty percent (50%) of any and all rents or other
consideration (including key money) received by Tenant from
the transferee by reason of such Transfer in excess of the
rent payable by Tenant to Landlord under this Lease (less any
brokerage commissions or advertising expenses incurred by
Tenant in connection with the Transfer). Tenant expressly
agrees that the foregoing is a reasonable condition for
obtaining Landlord's consent to any Transfer; or
3. Landlord may reasonably withhold its consent to the
proposed Transfer.
26. Successors. The covenants and agreements contained in this Lease shall be
binding on the parties hereto and on their respective heirs, successors and
assigns (to the extent the Lease is assignable).
27. Mortgagee Protection. In the event of any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any beneficiary of a
deed of trust or mortgagee of a mortgage encumbering the Premises, whose address
shall have been furnished to Tenant, and shall offer such beneficiary or
mortgagee a reasonable opportunity to cure the default, including time to obtain
possession of the Premises by power of sale or judicial foreclosure, if such
should prove necessary to effect a cure.
28. Landlord Loan or Sale. Tenant agrees promptly following request by Landlord
to (A) execute and deliver to Landlord any documents, including estoppel
certificates presented to Tenant by Landlord, (i) certifying that this Lease is
unmodified and in full Force and effect and the date to which the rent and other
charges are paid in advance, if any, and (ii) acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder,
and (iii) evidencing the status of the Lease as may be required either by a
lender making a loan to Landlord to be secured by a deed of trust or mortgage
covering the Premises or a purchaser of the Premises from Landlord and (B) to
deliver to Landlord the financial statement of Tenant with an opinion of a
certified public accountant, including a balance sheet and profit and loss
statement, for the last completed fiscal year all prepared in accordance with
generally accepted accounting principles consistently applied. Tenant's failure
to deliver an estoppel certificate promptly following such request shall be an
Event of Default under this Lease.
29. Surrender of Lease Not Merger. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation thereof, shall not work a merger and
shall, at the option of Landlord, terminate all or any existing subleases or
subtenants, or operate as an assignment to Landlord of any or all such subleases
or subtenants.
30. Waiver. The waiver by Landlord or Tenant of any breach of any term, covenant
or condition herein contained shall not be deemed to be a waiver of any
preceding or succeeding breach of the same or any other covenant or condition
herein contained.
31. General
A. Captions. The captions and paragraph headings used in this Lease are
for the purposes of convenience only. They shall not be construed to
limit or extend the meaning of any part of this Lease, or be used to
interpret specific sections. The work(s) enclosed in quotation marks
shall be construed as defined terms for purposed of this Lease. As used
in this Lease, the masculine, feminine and neuter and the singular or
plural number shall each be deemed to include the other whenever the
context so requires.
B. Definition of Landlord. The term "Landlord" as used in this Lease,
so far a the covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the owner at the
time in question of the fee title of the Premises, and in the event of
any transfer or transfers of the title of such fee, the Landlord herein
named (and in case of any subsequent transfers or conveyances, the then
grantor) shall be after the date of such transfer or conveyance be
automatically freed and relieved of all liability with respect to
performance of any covenants or obligations on the part of Landlord
contained in this Lease, thereafter to be performed; provided that any
funds in the hands of Landlord or the then grantor at the time of such
transfer, in which Tenant has an interest, shall be turned over to the
grantee. It is intended that the covenants and obligations contained in
this Lease on the part of Landlord shall, subject as aforesaid, be
binding upon each Landlord, its heirs, personal representatives,
successors and assigns only during its respective period of ownership.
C. Time of Essence. Time is of the essence for the performance of each
term, covenant and condition of this Lease.
D. Severability. In case any one or more of the provisions contained
herein, except for the payment of rent, shall for any reason be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of
this Lease, but this Lease shall be construed and enforced in
accordance with the laws of the State of California.
E. Joint and Several Liability. If Tenant is more than one person or
entity, each such person or entity shall be jointly and severally
liable for the obligations of Tenant hereunder.
F. Law. The term "law" shall mean any judicial decision, statute,
constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirement of any government agency or authority have
jurisdiction over the parties to this Lease or the Premises or both, in
effect 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 utility or special district).
G. Agent. As used herein the term "Agent" shall mean, with respect to
either Landlord or Tenant, its respective agents, employees,
contractors ( and their subcontractors), and invitees (and in the case
of Tenant, its subtenants).
H. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE THEIR
RESPECTIVE RIGHT TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM,
COUNTERCLAIM OR CROSS-COMPLAINT IN ANY ACTION, PROCEEDING, AND/OR
HEARING BROUGHT BY EITHER LANDLORD AGAINST TENANT OR TENANT AGAINST
LANDLORD ON ANY MATTER WHATSOEVER ARISING OUT OF, OR IN ANY WAY
CONNECTED WITH, THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT,
TENANT'S USE OR OCCUPANCY OF THE PREMISES OR ANY CLAIM OF INJURY OR
DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE, OR
REGULATION, EMERGENCY OR OTHERWISE, NO OR HEREAFTER IN EFFECT.
INITIALS: LANDLORD
TENANT
32. Sign. Tenant shall not place or permit to be placed any sign or decoration
on the land or the exterior of the Building without the prior written consent of
Landlord. Tenant, upon written notice by Landlord, shall immediately remove any
sign or decoration that Tenant has placed or permitted to be placed on the land
or the exterior of the Building without the prior written consent of Landlord,
and if Tenant fails to so remove such sign or decoration within five (5) days
after Landlord's written notice, Landlord may enter upon the Premises and remove
said sign or decoration and Tenant agrees to pay Landlord, as additional rent
upon demand, the cost of such removal. At the termination of this Lease, Tenant
shall remove any sign which it has placed on the Parcel or Building and shall
repair any damage caused by the installation or removal of such sign.
33. Interest on Past Due Obligations. Any Monthly Installment of rent or any
other sum due from Tenant under this Lease which is received by Landlord after
the date the same is due shall bear interest from said due date until paid, at
an annual rate equal to the lesser of (the "Permitted Rate"): (1) twelve percent
(12%); or (2) five percent (5%) plus the rate established by the Federal Reserve
Bank of San Francisco, as of the twenty-fifth (25th) day of the month
immediately preceding the due date, on advances to member banks under Section 13
and 13(a) of the Federal Reserve Act, as now in effect or hereafter from time to
time amended. Payment of such interest shall not excuse or cure any default by
Tenant. In addition, Tenant shall pay all costs and attorneys' fees incurred by
Landlord in collection of such amounts.
34. Surrender of the Premises. On the last day of the term hereof, or on the
sooner termination of this Lease, tenant shall surrender the Premises to
Landlord in their condition existing as of the Commencement Date of this Lease,
ordinary wear and tear excepted, with all originally painted interior walls
washed, and other interior walls cleaned, and repaired or replaced,, all carpets
shampooed and cleaned, the air conditioning and heating equipment serviced and
repaired by a reputable and licensed service firm, all floors cleaned and waxed,
all to the reasonable satisfaction of Landlord. Tenant shall remove all of
Tenant's personal property and trade fixtures from the Premises, and all
property not so removed shall be deemed abandoned by Tenant. Tenant, at its sole
cost, shall repair any damage to the Premises caused by the removal of Tenant's
personal property, machinery and equipment, which repair shall include, without
limitation, the patching and filling of holes and repair of structural damage.
If the Premises are not o surrendered at the termination of this Lease, Tenant
will indemnify, defend, protect and hold Landlord harmless from and against loss
or liability resulting from delay by Tenant in so surrendering the Premises
including without limitation, any claims made by any succeeding tenant or losses
to Landlord due to lost opportunities to lease to succeeding tenants.
35. Authority. The undersigned parties, hereby warrant that they have proper
authority and are empowered to execute this Lease on behalf of Landlord and
Tenant, respectively.
36. Public Record. This Lease is made subject to all matters of public record
affecting title to the property of which the Premises or a part.
37. Brokers. Tenant represents and warrants to Landlord that it has dealt only
with Xxxx Xxxx of Equus Associates respecting this transaction and hereby agrees
to indemnify and hold Landlord harmless from and against any brokerage
commission or fee, obligation, claim or damage (including attorneys' fees) paid
or incurred respecting any other broker claiming through Tenant or with
which/whom Tenant has dealt. It is acknowledged that one or more of Landlord's
partners may be real estate brokers.
38. Limitation on Landlord's Liability. Tenant, for itself and its successors
and assigns (to the extent this Lease is assignable), hereby agrees that in the
event of any actual, alleged, breach or default by Landlord under this Lease
that:
A) Tenant's sole and exclusive remedy against Landlord shall be as
against Landlord's interest in the Building;
B) No partner or officer of any partner of Landlord shall be sued or
named as a party in a suit or action (except as may be necessary to
secure jurisdiction of the partnership);
C) No service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership);
D) No partner of Landlord shall be required to answer or otherwise
plead to any service of process;
E) No judgment will be taken against any partner of Landlord;
F) Any judgment taken against any partner of Landlord maybe vacated and
set aside at any time nunc pro tunc;
G) No writ of execution will ever be levied against the assets of any
partner of Landlord;
H) The covenants and agreements of Tenant set forth in this section 38
shall be enforceable by Landlord and any partner of Landlord.
39. Hazardous Material
A. Definitions. As used herein, the term "Hazardous Material" shall
mean any substance; (i) the presence of which requires investigation or
remediation under any federal, state or local statutes, regulation,
ordinance, order, action, policy or common law; (ii) which is or
becomes defined "hazardous waste", "hazardous substance", pollutant or
contaminant under any federal, state or local statute, regulation, rule
or ordinance or amendments thereto including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Action
(42 U.S.C. Section 9601 et seq.) and/or the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.); (iii) which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous and is or becomes regulated by any
governmental authority, agency, department, commission, board, agency,
or instrumentality of the United States, the State of California or any
political subdivision thereof; (iv) the presence of which on the
Premises causes or threatens to cause a nuisance upon the Premises or
to adjacent properties or poses or threatens to pose a hazard to the
health or safety of persons on or about the Premises; (v) the presence
of which on adjacent properties could constitute a trespass to Landlord
or Tenant; (vi) without limitation which contains gasoline, diesel
fuel, or other petroleum hydrocarbons; (vii) without limitation which
contains polychlorinated biphenyls (PCBs), asbestos, or urea
formaldehyde form insulation; or (viii) without limitation radon gas.
B. Landlord's Indemnity. Landlord shall indemnify, defend, protect and
hold Tenant harmless from and against all liabilities, claims,
penalties, fines, response costs and other expenses (including, but
limited to, reasonable attorneys' fees and consultants' fees and costs)
arising out of, resulting from, or caused by any Hazardous Material
used, generated, discharged, transported to or from, stored or disposed
of by Landlord or its Agents in, on, under, over, through or about the
Premises and/or the surrounding real property.
C. Permitted Use. Subject to the compliance by Tenant with the
provisions of Subparagraphs D, E, F, G, I, J and K below, Tenant shall
be permitted to use and store on the Premises those Hazardous Materials
listed in Exhibit "D" attached hereto in the quantities attached set
forth in Exhibit "D".
D. Hazardous Materials Management Plan. Prior to Tenant using,
handling, transporting or storing any Hazardous Materials at or about
the Premises (including, without limitation, those listed in Exhibit
"D"), Tenant shall submit to Landlord a Hazardous Materials Management
Plan ("HMMP") for Landlord's review and approval, which approval shall
not be unreasonably withheld. The HMMP shall describe: (i) the
quantities of each material to be used, (ii) the purpose for which each
material is to be used, (iii) the method of storage of each material,
(iv) the method of transporting each material to and from the Premises
and within the Premises, (v) the methods Tenant will employ to monitor
the use of the material and to detect any leaks or potential hazards,
and (vi) any other information any department of any governmental
entity (city, state or federal) requires prior to the issuance of any
required permit for the Premises or during Tenant's occupancy of the
Premises. Landlord may, but shall have no obligation to review and
approve the foregoing information and HMO, and such review and approval
or failure to review and approve shall not act as an estoppel or
otherwise waive Landlord's rights under this Lease or relieve
Tenant of its obligations under this Lease. If Landlord determines in
good faith by inspection of the Premises or review of the HMMP that the
methods in use or described by Tenant are not adequate in Landlord's
food faith judgment to prevent or eliminate the existence of
environmental hazards, then Tenant shall not use, handle, transport, or
store such Hazardous Materials at or about the Premises unless and
until such methods are approved by landlord in good faith and added to
an approved HMMP. Once approved by landlord, Tenant shall strictly
comply with the HMMP and shall not change its use, operations or
procedures with respect to Hazardous Materials without submitting an
amended HMMP for Landlord's review and approval as provided above.
E. Use Restriction. Except as specifically allowed in Subparagraph C
above, Tenant shall not cause or permit any Hazardous Material to be
used, stored, generated, discharged, transported to or from, or
disposed of in or about the Premises, or any other land or improvements
in the vicinity of the Premises. Without limiting the generality of
foregoing, Tenant, at its sole cost, shall comply with all Laws
relating to the storage, use, generation, transport, discharge and
disposal by Tenant or its Agents of any Hazardous Material. If the
presence of any Hazardous Material on the Premises caused or permitted
by Tenant or its Agents results in contamination of the Premises or any
soil, air, ground or surface waters under, through, over, on, in or
about the Premises, Tenant, at it expense shall promptly take all
actions necessary to return the Premises and/or the surrounding real
property to the condition existing prior to the appearance of such
Hazardous Material.
F. Tenant Indemnity. Tenant shall defend, protect, hold harmless and
indemnify Landlord and its Agents and Lenders with respect to all
actions, claims, losses (including, diminution in value of the
Premises), fines, penalties, fees, (including, but not limited to,
reasonable attorneys' and consultants' fees and costs) costs, damages,
liabilities, remediation costs, investigation costs, response costs and
other expenses arising out of, resulting from, or caused by any
Hazardous Material used, generated, discharged, transported to or from,
stored or disposed of by Tenant or its Agents, in, on, under, over,
through or about the Premises and/or the surrounding real property.
Tenant shall not suffer any lien to be recorded against the Premises as
a consequence for the disposal of any Hazardous Material on the
Premises by Tenant or its Agents, including any so called state,
federal or local "super fund" lien related to the "lean up" of any
Hazardous Material in, over, on, under, through or about the Premises.
Landlord agrees that Tenant shall have no liability or obligation to
Landlord under this Lease with respect to any Hazardous Materials on or
about the Premises, which were not caused or contributed to by Tenant
or Tenant's Agents.
G. Compliance. Tenant shall immediately notify Landlord of any inquiry,
test, investigation, enforcement proceeding by or against Tenant or the
Premises concerning any Hazardous Material. Any remediation plan
prepared by or on behalf of Tenant must be submitted Landlord prior to
conducting any work pursuance to such plan and prior to submittal to
any applicable government authority and shall be subject to Landlord's
consent. Tenant acknowledges that Landlord, as the owner of the
Property, at its election, shall have the sole right to negotiate,
defend, approve and appeal any action taken or order issued with regard
to any Hazardous Material by any applicable governmental authority.
H. Assignment and Subletting. It shall not be unreasonable for Landlord
to withhold its consent to any proposed assignment or subletting if (i)
the proposed assignee's or subtenant's anticipated use of the Premises
involves the storage, generation, discharge, transport, use or disposal
of any Hazardous Material not permitted under Subparagraph C above;
(ii) if the proposed assignee or subtenant has been required by any
prior landlord, lender, or government authority to "clean up" or
remediate any Hazardous Material and has failed to promptly do so;
(iii) if the proposed assignee or subtenant is subject to investigation
or enforcement order or proceeding by any governmental authority in
connection with the use, generation, discharged, transport, disposal or
storage of any material amount of Hazardous Material; provided that
(ii) and (iii) will not apply in the case of a Fortune 500 Company.
I. Surrender. Upon the expiration or earlier termination of the Lease,
Tenant, at its sole cost, shall remove all Hazardous Materials from the
Premises that Tenant or its Agents introduced to the Premises. If
Tenant fails to so surrender the Premises, Tenant shall indemnify,
protect, defend and hold Landlord harmless from and against all damages
resulting from Tenant's failure to surrender the Premises as required
by this Paragraph, including, without limitation, any actions, claims,
losses, liabilities, fees (including, but not limited to, reasonable
attorneys' fees and consultants' fees and costs), fines, costs,
penalties, or damages occasioned by the inability to relet the Premises
or a reduction in the fair market and/or rental value of the Premises
by reason of the existence of any Hazardous Materials in, on, over,
under, through or around the Premises.
J. Right to Appoint Consultant. Landlord shall have the right to
appoint a consultant to conduct an investigation to determine whether
any Hazardous Material is being used, generated, discharged,
transported to or from, stored or disposed of in, on, over, through, or
about the Premises, in an appropriate and lawful manner. If Tenant has
violated any Law or covenant in this Lease regarding the use, storage
or disposal of Hazardous Materials on or about the Premises, Tenant
shall reimburse Landlord for the cost of such investigation. Tenant, at
its expense, shall comply with all reasonable recommendations of the
consultant required to conform Tenant's use, storage or disposal of
Hazardous Materials to the requirements of applicable Law or to fulfill
the obligations of Tenant hereunder.
K. Holding over. If any action of any kind is required to be taken by
any governmental authority to clean-up, remove, remediate or monitor
Hazardous Material (the presence of which is the result of the acts or
omissions of Tenant or its Agents) and such action is not completed
prior to the expiration or earlier termination of the Lease, Tenant
shall be deemed to have impermissibly held over until such time as such
required action is completed, and Landlord shall be entitled to all
damages directly or indirectly incurred in connection with such holding
over, including with out limitation, damages occasioned by the
inability to re-let the Premises or a reduction of the fair market
and/or rental value of the Premises.
L. Existing Environmental Reports. Tenant hereby acknowledges that it
has received, read and reviewed the reports and test result described
in Exhibit "E" attached hereto and made a part of hereof (the "Existing
Environmental Reports").
M. Provisions Survive Termination. The provisions of this Paragraph 39
shall survive expiration or termination of this Lease.
N. Controlling Provisions. The provisions of this Paragraph 39 are
intended to govern the rights and liabilities of the Landlord and
Tenant hereunder respecting Hazardous Materials to the exclusion of any
other provisions in this Lease that might otherwise be deemed
applicable. The provisions of this Paragraph 39 shall be controlling
with respect to any provisions in the Lease that are inconsistent with
this Paragraph 39.
40. Option to Extend.
A. Provided that Tenant is not in default under this Lease at the time
of exercise of the hereinafter described option or at the time of
termination of the then existing term of this Lease, as the case may
be, Tenant shall have one (1) option to extend the term of this Lease
for a period of five (5) years (the "Option Term"). Said option shall
be exercised only by written notice delivered to Landlord not later
than one hundred eighty (180) days prior to the expiration date of the
then existing term of this Lease. In all respects, the terms, covenants
and conditions of this Lease shall remain unchanged during the Option
Term, except that the Monthly Installment of rent payable during the
Option Term, which shall be determined in accordance with Subparagraph
B and C below, and except that there shall be no further option to
extend the term of this Lease at the end of the Option Term.
B. The Monthly Installment of rent payable during the Option Term shall
be ninety-five percent (95%) of the fair market rental for the Premises
as of the first day of the Option Term (the "Fair Market Rental"); but
in no event shall the Monthly Installment of rent payable during the
Option Term be less than the Monthly Installment of rent payable during
the last calendar month of the original Lease Term.
C. Promptly following exercise of the option to extend, the parties
shall meet and endeavor to agree on the Fair Market Rental of the
Premises as of the first day of the Option Term. In determining the
Fair Market Rental for the Premises, the Premises shall be compared
only to buildings of a similar quality and size. If within thirty (30)
days after exercise of the option, the parties cannot agree upon the
Fair Market Rental, the parties shall submit the matter to binding
appraisal in accordance with the following procedure: Within sixty (60)
days after exercise of the option, the parties shall either (a) jointly
appoint an appraiser for this purpose or (b) failing this joint action,
separately designate a disinterested appraiser. No person shall be
appointed or designated an appraiser unless he or she has at lease five
(5) years experience n appraising major commercial property in Santa
Xxxxx County and is a member of a recognized society of real estate
appraisers. If, within thirty (30) days after the appointment, the two
appraisers reach agreement on the Fair Market Rental, that value shall
be binding and conclusive upon the parties. If the two appraisers this
appointed cannot reach agreement on the question presented within
thirty (30) days after their appointment, then the appraiser thus
appointed shall appoint a third disinterested appraiser having like
qualifications. If within thirty (30) days after the appointment of the
third appraiser, a majority of the appraiser agree on the Fair Market
Rental, that value shall be binding and conclusive upon the parties. If
within thirty (30) days after the appointment of the third appraiser, a
majority of the appraisers cannot reach agreement on the question
presented, then the appraisal farthest from the median of the three
appraisals shall be disregarded and the mean average of the remaining
two appraisals shall be deemed to be the Fair Market Rental of the
Premises as of the first day of the Option Term and shall be binding
and conclusive upon the parties. Each party shall pay the fees and
expenses of the appraiser appointed by it and shall share equally the
fees and expenses of the third appraiser. If the two appraisers
appointed by the parties cannot agree on the appointment of the third
appraiser, they or either of them shall give notice of such failure to
agree to the parties and if the parties fail to agree upon the
selection of such third appraiser within ten (10) days after the
appraisers appointed by the parties give such notice, then either of
the parties, upon notice to the other party may request such
appointment by the American Arbitration Association, or on it failure,
refusal or inability to act, may apply for such appointment to the
presiding judge of the Court of Santa Xxxxx County, California.
41. Third Opportunity to Lease.
A. Definitions. As used in this Paragraph 41, the following terms shall
be the following meanings:
1. "Third Opportunity Space" shall mean the space located in
Building C commonly known as 0000 Xxxxxxx Xxxxx and currently
lease to Novellus Systems, Inc. ("Novellus").
2. "Prior Right" or Prior Rights" shall mean (a) the option to
expand into the Third Opportunity Space which has been
previously granted to AG Associated, Inc. ("AG") and/or (b)
the right of the first refusal covering the Third Opportunity
Space which has been previously granted to Novellus Systems,
Inc.
3. "Novellus Lease" shall mean the existing lease between
Landlord and Novellus covering the Third Opportunity Space.
B. Third Opportunity Space. Provided that (i) Tenant is not in default
under this Lease; (ii) this Lease is in full force and effect; (iii)
Tenant has not assigned this Lease and is in physical occupancy of at
least fifty percent (50%) of the area of the Premises; and (iv) neither
AG nor Novellus has exercised its respective Prior Right and all Prior
Rights have expired; then, and only then, tenant shall have the right
to lease the Third Opportunity Space, as the Third Opportunity Space
becomes available upon the expiration of the Novellus Lease subject,
however, to the following terms and conditions.
C. Landlord's Notice. If Landlord proposes to lease the Third
Opportunity Space to a prospective tenant after the expiration of
Novellus Lease and all conditions set forth in Subparagraph B above are
satisfied, the Landlord shall notify Tenant in writing ("Landlord's
Notice") of the form of lease Landlord intends to use, and the
following basic business terms upon which Landlord is willing to lease
such space (collectively referred to herein as the "Basic Business
Terms"): (i) the description of the particular Third Opportunity Space
then available (the "Proposed Space"); (ii) the term of the lease;
(iii) the tenants improvements landlord is willing to construct or that
it will required to be constructed and the contribution Landlord is
willing to make to pay for such tenant improvements, if any; (iv) the
rent for the initial term or the formula to be used to determine such
rent (including, if applicable the rental commencement date, Tenant's
share of taxes, assessments, operating expenses, insurance costs and
the like; (v) any option or options to extend (including the rent to be
charged or the formula for such charges during the extension periods;
and (vi) any other material business term Landlord elects to specify.
D. Second Lease. If Tenant, within two (2) business days after receipt
of Landlord's Notice, indicated in writing its agreement to lease the
Proposed Space on the Basic Business Terms stated in Landlord's Notice
(the "Second Lease"), and within two (2) days after Tenant's receipt
thereof, Tenant executes and returns to Landlord the Second Lease,
Landlord shall lease to Tenant and Tenant shall lease from Landlord the
Proposed Space on the terms and conditions contained in the Second
Lease, provided, however, that this Lease shall be modified to include,
and the Second Lease shall include, a cross-default provision providing
that Tenant will be in default under both the Second Lease and this
Lease, if Tenant is in default under either Lease.
E. Failure to Exercise. If Tenant does not indicate in writing its
agreement to lease the Proposed Space on the terms contained in
Landlord's Notice within the two (2) business day time period, or if
Tenant does not execute and return to Landlord the Second Lease within
two (20) business days after Tenant's receipt thereof, then Landlord
shall thereafter have the unfettered right to lease the Proposed Space
to any third party on any terms and conditions.
F. Termination. The provisions of this Paragraph shall terminate upon
(i) the expiration of earlier termination of this Lease; or (ii) any
assignment by Tenant of its interest in this Lease or the subletting by
Tenant of substantially all of the Premises for substantially all of
the remainder of the Lease Term; or (iii) as to any particular Proposed
Space, Tenant's failure to exercise its right to lease granted herein
as to such Proposed Space as its first opportunity to do so, or (iv)
the exercise of any Prior right by any party then holding such Prior
Right.
IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth below.
TENANT LANDLORD
ELEXSYS INTERNATIONAL, INC. SOUTH BY/FORTRAN, a California limited
a California corporation partnership
By: By:
Printed: Printed:
Title: Title:
Dated: Dated:
EXHIBIT A
Exhibit A is a map of the buildings on Fortan Court with square footage as well
as a map of the immediate vicinity.
EXHIBIT B
LEGAL DESCRIPTION
All that read property situated in the City of San Xxxx, Counter of Santa Xxxxx,
State of California, described as follows:
Beginning at the Southwesterly corner of that certain 31.74 acre tract of land
described in the deed from The First National Bank of San Xxxx, a corporation,
to X. X. Xxxxxx and Curtner Zanker, date May 5, 1939, recorded Xxxx 8, 1939 in
Book 934 Official Records, page 16, Santa Xxxxx County Records, in the Northerly
line Alviso-Milpitas Road, thence from said point of beginning N. 89 deg. 35' E.
630.30 feet to the Southeasterly corner thereof; thence along the Easterly line
of said 31.74 acre tract for the three following courses and distances: N. 1
deg. 13'E. 768.9 feet, N. 0 deg. 57' E. 597.96 feet and N. 0 deg. 31' E. 149.97
feet to the Southeasterly corner of that certain 9.316 acre tract of land
described in the deed from X. X. Xxxxxx, et al, to B. S. Brazil, a single man,
dated October 25, 1943, recorded November 16, 1943 in Book 1176 Official
Records, page 21, Santa Xxxxx County Records; thence S. 89 deg. 35' W, along the
Southerly line of said 9.316 acre tract 651.78 feet to the Southwesterly corner
thereof in the Westerly line of said 31.74 tract; thence S. 0 deg. 08' W. along
said last mentioned line 1512.88 feet to the point of beginning.
Excepting therefrom that portion thereof conveyed to the City of San Xxxx, a
municipal corporation, recorded September 2, 1985, in Book J828, page 1719,
Official Records, described as follows:
Beginning at the Southeasterly corner of that certain 31.74 acre tract of land
described in the deed from The First National Bank of San Xxxx, a corporation,
to X. X. Xxxxxx and Xxxxxxx Xxxxxx, dated May 5, 1939, recorded May 8, 1939 in
Book 934 Official Records, page 16, Santa Xxxxx County Records, said point being
on the Northerly line of Alviso-Milpitas Road, thence leaving said point of
beginning alone the Easterly line of said 31.74 acre parcel N. 1 deg. 13' E.
30.00 feet to the true pint of beginning of the parcel herein being described:
thence leaving said true point of beginning and said Easterly line along the
following courses and distances; From a tangent bearing of N. 88 deg. 47'00" W.
along a curve to the right with a radius for 50.0 feet, through a central angle
of 36 deg. 52'12" for an arc length of 32.18 feet; N. 1 deg. 13.00' E. 361.13
feet; N. 0 deg. 57'00" E. 597.93 feet; N. 0 deg. 31'52" E. 18.69 feet; along a
tangent curve to the left with a radius of 40.00 feet, through a central angle
of 90 deg. 56'58" for an arc length of 63.50 feet to a point on a line parallel
with and distant 90.00 feet Southerly, measured at right angles from the
Southerly line of that certain 9.316 acre parcel of land described in the deed
from X. X. Xxxxxx, et al, to B. S. Brazil, recorded November 16, 1943 in Book
1176 Official Records, at page 21, Santa Xxxxx County Records; thence along said
parallel line, s. 89 deg. 34'54" W. 579.99 feet to a point on the Westerly line
of said 31.74 acre parcel of land; thence leaving said parallel line along said
Westerly line, N. 0 deg. 06'10" E. 90.00 feet to the Southwesterly corner of the
hereinabove described 9.316 acre parcel; thence leaving said Westerly line along
the Southerly line of said 9.316 acre parcel , N. 89 de. 34'54" E. 651.24 feet
to the Southeasterly corner thereof, said corner lying in said Easterly line of
the hereinabove described 31.74 acre parcel, thence along said Easterly line the
following course and distances: S. 0 deg. 31'52" W. 149.08 feet; S. 0 deg.
57'00" W. 598.11 feet and S. 1 deg. 13"00" W.471.20 feet to the true point of
beginning.
ALSO EXCEPTING THEREFROM all that portion conveyed to the State of California by
Grant Deed recorded August 31, 1994 in Book N 579, Page 2028, Official Records
described as follows: Being a portion of that certain parcel of land described
in the Deed from Xxx X. Xxxxxxxxx and Xxxxxx Xxxxxxxxx, husband and wife to
Xxxxxxx X. Xxxxxxx, a single man, recorded May 4, 1982 in Book G 762 of Official
Records at Page 218, Santa Xxxxx County Records.
Beginning at the southeast corner of said parcel conveyed to Marocco; thence
from said Point of Beginning, along the southerly line of said parcel conveyed
to Marocco N. 89 deg. 01'16" W. 626.45 feet to the southwest corner of said
parcel conveyed to Marocco; thence along the westerly line of said parcel
conveyed to Marocco N. 1 deg. 13'13" E. 227.77 feet; thence leaving said
westerly line, from a tangent bearing of S. 67 deg. 46'42" E., along a curve to
the right with a radius of 275.00 feet, through a central angle of 18 deg.
08'37" for an arc length of 87.08 feet; thence s. 49 deg. 38'05" E., 103.64
feet; thence along a tangent curve to the left with a radius of 275.00 feet,
through a central angle of 34 de. 57'21" for an arc length of 167.78 feet;
thence S. 84 deg. 35'26" E. 318.98 feet to a point in the easterly line of said
parcel conveyed to Marocco said easterly line S. 2 deg. 20'03" W., 31.97 feet to
the Point of Beginning.
EXHIBIT "C"
IMPROVEMENT AGREEMENT
This Improvement Agreement is made part of that Lease dated March 11,
1996 (the "Lease") by and between SOUTH BAY/FORTRAN, a California limited
partnership, ("Landlord"), and ELEXSYS INTERNATIONAL, INC., a California
corporation ("Tenant"). Landlord and Tenant agree that the following terms are
part of the Lease:
1. Purpose of Improvement Agreement. The purpose of this Improvement
Agreement is to set forth the rights and obligations of Landlord and Tenant with
respect to the construction of the Tenant Improvements in the Premises.
2. Definitions. As used in this Improvement Agreement, the following
terms shall have the following meanings, and initially capitalized terms which
are not defined below, but which are defined in the lease and which are used in
this Improvement Agreement, shall have the meanings ascribed to them by the
Lease:
A. Final Tenant Improvement Plans. The term "Final Tenant
Improvement Plans" shall mean those plans and specifications for the Tenant is
to be constructed by Landlord which are to be designed and approved by Landlord
and Tenant.
B. Tenant Improvements. The term "Tenant Improvements" shall
mean the tenant improvements to be constructed by Landlord in accordance with
the Final Tenant Improvements Plans.
C. Landlord's Code Work. The term "Landlord's Code Work" shall
mean all work required to bring the Premises as they exist on the date of
execution of this Lease (prior to the construction of any Tenant Improvements)
into compliance with all governmental codes, ordinances and statutes, including
Americans With Disabilities Act ("ADA"). If the Tenant Improvements are going to
replace or substantially alter any existing improvement which are not now in
compliance with governmental codes, then Landlord shall not be required to bring
such existing improvements into compliance with governmental codes and such work
shall be excluded from the definitions "Landlord's Code Work". For example, if
any existing bathrooms which do not comply with ADA requirements are going to be
replaced or substantially altered by the Tenant Improvements then Landlord shall
not be required to make any alterations to such existing bathrooms.
D. Substantial Completion and Substantially Complete. The
terms "Substantial Completion" and "Substantially Complete" shall each mean the
date when all of the following have occurred with respect to the Tenant
Improvements: (i) the construction of the Tenant Improvements has been
substantially completed in accordance with the provisions of this Improvement
Agreement (except for minor punch list items which do not substantially
interfere with the Tenant's use of the Premises); and (ii) the Building
department of the City of San Xxxx has completed its final inspection of such
improvements and has "signed off" the building inspection card approving such
work as complete.
E. TI Costs. The term "TI Costs" shall mean and include all
costs and expenses paid or incurred by Landlord for any and all of the
following: architectural and engineering fees and costs, all building permit
fees and taxes and other governmental fees and taxes required for the
construction and occupancy of the Tenant Improvements, all of Landlord's
contractors' and subcontractors' prices and fees for constructing the Tenant
Improvements, including the cost of all partitioning, utility systems, fire
sprinkler systems, heating, ventilating and air conditioning systems and
equipment, rook screens, electrical distribution facilities, wiring, lighting,
ceilings, installation of fixtures and equipment, restrooms, carpeting, and all
other improvements and alterations required to finish the existing Building for
occupancy by Tenant in accordance with the Final Tenant Improvement Plans;
provided, however, TI Costs shall not include any costs attributable Landlord's
Code Work. The Landlord's contractors' price for constructing the Tenant
Improvements shall include the cost of a job superintendent and project manager
plus a fee of five percent (5%) of all other TI Costs.
F. Maximum TI Allowance. The term "Maximum TI Allowance" shall
mean a sum equal to $11.90 multiplied by the number of square feet of floor
space contained within the Premises. The square footage of the Premises is 66,
638 sq. ft. Accordingly, the Maximum TI Allowance is Seven Hundred Eighty-Nine
Thousand Seven Hundred Seventy-Nine Dollars ($789,779.00).
G. Excess TI Costs. The term" Excess TI Costs" shall mean all
TI Costs in excess of the Maximum TI Allowance.
3. Design of Tenant Improvements
A. Preliminary Tenant Improvement Plans. Tenant shall, on or
before April 10 , 1996, prepare and deliver to Landlord for its review and
approval preliminary plans for the Tenant Improvements, which preliminary plans
shall show Tenant's desired floor plan, layout, electrical requirements, HVAC
requirements and general requirements in sufficient detail in order to permit
Landlord to prepare working drawings for the Tenant Improvements (the
"Preliminary Tenant Improvement Plans"). Within five (5) business days after
receipt of the Preliminary Tenant Improvement Plans, Landlord shall wither
approve such plans or notify Tenant in writing of any request for changes to the
Preliminary Tenant Improvement Plans. If Landlord submits any request for
changes, the parties shall meet and confer to develop Preliminary Tenant
Improvement Plans that are acceptable to both Landlord and Tenant within five
(5) business days after landlord has notifies Tenant of its request for changes.
B. Development and Approval of Tenant Improvement Plans. Once
the Preliminary Tenant Improvement Plans have been approved by Landlord and
Tenant, Landlord shall complete and submit to tenant for its approval final
working drawings for the Tenant Improvements. Tenant shall approve the final
working drawings for the Tenant Improvements or notify Landlord in writing of
its specific request for changes within five (5) business days after receipt of
the working drawings from Landlord. If tenant submits any request for changes,
the parties shall confer and reach agreement upon the final working drawings for
the Tenant Improvements within five (5) business days after Tenant has notified
Landlord of its request for changes. When Landlord and Tenant agree upon the
final working drawings for the Tenant Improvements, a representative of each
shall sign the same. The final working drawings so approved by Landlord and
Tenant are referred to herein as the "Final Tenant Improvement Plans".
4. Construction of Tenant Improvements. Landlord shall, at the expense
of Landlord and Tenant as specified in Paragraph 10 below, construct the Tenant
Improvements in accordance with the following:
A. Building Permit. As soon as the Final Tenant Improvement
Plans have been approved by Landlord and Tenant, Landlord shall apply for a
building permit for the Tenant Improvements, and shall diligently pursue the
obtaining of such building permit.
B. Commencement of Tenant Improvements. As soon as the
building permit for the Tenant Improvements has been issued, Landlord shall
commence construction of the Tenant Improvements and shall diligently prosecute
such construction to completion.
5. Construction Contract. The following shall govern the manner in
which the construction contract shall be let by Landlord for the construction of
the Tenant Improvements:
A. Landlord shall engage South Bay Construction Company, a
California corporation ("SBCC") as the general contractor to construct the
Tenant Improvements. Tenant acknowledges that SBCC is an affiliate of the
Landlord.
B. All major subcontractors for the Tenant Improvements shall
be chosen by a competitive bid process where (i) tenant shall have the right to
approve subcontractors who bid on specific parts of the Job; (ii) the
subcontractor shall be awarded to the lowest responsible bidder unless Landlord
and Tenant otherwise agree (which decision may arise from concerns as to whether
the subcontractor will be able to complete it work in a timely manner; and (iii)
Tenant shall have the right to review and approve all subcontracts prior to
submission to subcontractors.
C. The construction contract with SBCC shall provide for SBCC
to be compensated or reimbursed as follows with respect to the construction of
the Tenant Improvements: (i) to be paid a general contractor's fee equal to five
percent (5%) of all TI Costs; (ii) to be reimburses for all payments to
subcontractors or material suppliers; (iii) to be reimbursed for the following
cost items (a) temporary electric power, (b) on-site office trailer, (c)
temporary on-site toilets, (d) trash removal and site clean up, (e) long
distance telephone charges, (f) messenger and air courier charges; and (vi) to
be reimbursed for the following hour rates for the cost of a job superintendent
($55.00/hr) and of a project manager ($68.00/hr).
6. Substitutions. In developing the Preliminary Tenant Improvement
Plans and Final Tenant Improvement Plans, Tenant shall designate and select
material and equipment which can be obtained with normal lead times. If at any
time during the plan development process or the course of construction, it
becomes apparent that a particular material or item of equipment is not or will
not be obtainable within a reasonable period of time, the parties shall meet and
confer to find a substitute therefor.
7. Changes to Approved Plan. Once the Final Tenant Improvement Plans
have been approved by Landlord and Tenant, neither shall have the right to order
extra work or change orders with respect to the construction of the Tenant
Improvements without the prior written consent of the other, which consent shall
not be unreasonably withheld or delayed, provided there is a reasonable basis
for such change or such change is required by any Law. All extra work or change
orders requested by either Landlord or Tenant shall be made in writing, shall
specify any added or reduced cost and/or construction time resulting therefrom,
and shall become effective and a part of the Final Tenant Improvement Plans once
approved in writing by both parties. If a change order requested by Tenant
results in a net increase in the TI Costs which causes the total TI Costs to
exceed the Maximum TI Allowance, Tenant shall pay to Landlord the amount of such
increase caused by the change order requested by Tenant in accordance with the
provisions of Paragraph 10 below.
8. Delivery and Possession, Punch List and Acceptance Agreement. As
soon as the Tenant Improvements are Substantially Completed, Landlord and Tenant
shall together walk through the Premises and inspect all Tenant Improvements so
completed, using reasonable efforts to discover all uncompleted or defective
construction in the Tenant Improvements. Unless any uncompleted or defective
construction would materially affect Tenant's ability to conduct its business,
then when such inspection has been completed, tenant shall sign an acceptance
agreement which shall (i) include a list of all :punch List" items which the
parties agree are to be corrected by Landlord and (ii) state the Commencement
Date. As soon as such inspection has been completed and such acceptance
executed, Landlord shall deliver possession of the Premises to Tenant. Landlord
shall use reasonable efforts to complete and/ore repair such "punch list " items
within thirty (30) days after receiving the acceptance agreement and punch list.
Landlord shall have no obligation to deliver possession of the Premises to
Tenant until such procedures regarding the preparation of t a punch list and the
execution of the acceptance agreement have completed. Tenant's taking possession
of any part of the Premises shall be deemed to be an acceptance by Tenant of
Landlord's work of improvement in such part as complete and in accordance with
the terms of the Lease except for the punch list items noted and latent defects
that could not reasonable have been discovered by Tenant during its inspection
of the Tenant Improvements prior to completion of the acceptance agreement.
Notwithstanding anything contained herein, Tenant's obligation to pay the
Monthly Installment of rent and Additional Rent shall commence as provided in
the Lease, regardless of whether Tenant completes such inspection or executes
such acceptance agreement.
9. Standard of Construction and Warranty. Landlord warrants that the
Tenant Improvements shall be constructed in a good and workmanlike manner
substantially in accordance with the Final Tenant Improvement Plans (as modified
by change orders approved by landlord and Tenant). All materials and equipment
furnished shall be new, of good quality and installed in accordance with the
vendor's or manufacturer's specifications, instructions and requirements. The
foregoing warranty shall terminate one (1) year following the date of
Substantial Completion of the Tenant Improvements unless Tenant makes a written
claim against Landlord under the foregoing warranty within said one (1) year
period, in which case the warranty shall survive only a s to the specific matter
described in such claim.
10. Payment of TI Costs. The TI Costs for the Tenant Improvements shall
be paid by Landlord and Tenant as follows:
A. Landlord shall pay all TI Costs up to the Maximum TI
Allowance. In no event shall Landlord be required to pay any TI Costs in excess
of the Maximum TI Allowance.
B. If the TI Costs exceed the Maximum TI Allowance, then
Tenant shall pay to Landlord the full amount of all Excess TI Costs in
accordance with the procedure set forth in Subparagraph C below.
C. During the course of constructing the Tenant Improvements,
each progress payment due to Landlord's contractor or to any subcontractor or
material supplier shall be paid by Landlord and Tenant as follow: (i) Landlord
shall pay a fraction of each progress payment, which fraction shall have as its
numerator the Maximum TI Allowance and shall have as its denominator Landlord's
estimate of the total TI Costs to complete the construction of the Tenant
Improvements; and (ii) Tenant shall pay the balance of each progress payment
("Tenant's Share). Tenant shall pay Tenant's Share of each progress payment to
landlord within ten (10) days after receipt of billing. If, at any time during
the course of constructing the Tenant Improvements, Landlord revises its
estimate of the total TI Costs to complete the Tenant Improvements so that the
amount previously paid by Tenant is not sufficient to pay Tenant's Share of the
TI Costs paid to date, then Tenant shall pay to Landlord within ten (10) days
after receipt of billing, the amount necessary to increase Tenant's contribution
toward the TI Costs so that Landlord has paid only its fractional share of the
TI Costs and Tenant has paid the balance. Upon the completion of the Tenant
Improvements, landlord shall provide Tenant with a reconciliation of the
estimated TI Costs to the actual TI Costs and Tenant's payments on account
thereof, and Tenant shall pay to Landlord, or Landlord
shall refund to Tenant, any net amount due or refundable, as the case may be,
within ten (10) days after Tenant's receipt of reconciliation. If Tenant shall
fail to comply with any demand for payment made pursuant to this Paragraph 10. C
within ten (10) days of receipt thereof, Landlord may (i) terminate, effective
immediately, this Lease by giving written notice of termination to Tenant, (ii)
cease construction of the Tenant Improvements, and/or (iii) exercise any and all
remedies available to Landlord at law or in equity, including those set forth in
Paragraph 12.b of the Lease.
11. Accounting. When the Tenant Improvements are Substantially
Completed and all TI Costs have been determined, Landlord shall submit to Tenant
a final and detailed accounting of all TI Costs paid by Landlord. Tenant shall
have the right to audit books, records and supporting documents of Landlord to
the extent necessary to determine the accuracy of such accounting during normal
business hours after giving Landlord at least five (5) business days prior
written notice. Any such audit must be conducted, if at all, within thirty (30)
days after Landlord delivers such accounting to Tenant.
12. Landlord's Code Work. Landlord shall perform all of the landlord's
Code Work at the Landlord's sole cost and expense.
13. Effect of Agreement. In the event of any inconsistency between this
Improvement Agreement and the Lease, the terms of this Improvement Agreement
shall prevail.
TENANT
ELEXSYS INTERNATIONAL, INC.
a California corporation
DATED: By:
Name:
Title:
LANDLORD
SOUTH BY/FORTRAN, a California limited partnership
DATED: By:
Name:
Title:
EXHIBIT D
HAZARDOUS MATERIALS MANAGEMENT PLAN
(To be provided by Tenant prior to occupancy)
EXHIBIT E
1. ATT report dated July 9, 1992: Preliminary (Phase I) Environmental Site
Assessment Update for the Property at 4405 - 0000 Xxxxxxx Xxxxx, Xxx Xxxx,
XX (Project No. 929368).
2. XXXXX International Incorporated report dated July 10, 1995: Phase I
Environmental Site Assessment Report - 4405,4415,4425,4435 and 0000 Xxxxxxx
Xxxxx, Xxx Xxxx, XX (Job No. 70076-001-01).
3. XXXXX International Incorporated report dated July 24, 1995: Technical
Report Soil Sampling and Grab Groundwater Sampling - 4405 - 0000 Xxxxxxx
Xxxxx, Xxx Xxxx, XX
