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Exhibit 10.17
OFFICE BUILDING LEASE
This Lease between Integrated Chip Corporation ,
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a California Corporation
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("Landlord"), and Photon Dynamics, Inc. ,
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a California Corporation , ("Tenant"), is
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dated September 6 , 2000.
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1. LEASE OF PREMISES.
In consideration of the Rent (as defined at Section 5.4), and the provisions of
this Lease, Landlord leases to Tenant and Tenant leases from Landlord the
Premises shown by diagonal lines on the floor plan attached hereto as Exhibit
"A," and further described in Section 2I. The Premises are located within the
Building and Project described in Section 2m. Tenant shall have the
non-exclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees.
2. DEFINITIONS
As used in this Lease, the following terms shall have the following meanings:
a. BASE RENT (INITIAL): $ Twenty-Nine Thousand Six Hundred Twenty-One and
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70/100 dollars per month, once TI'S are completed.
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b. BASE YEAR: The calendar year of 2001 .
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c. BROKER(S)
Landlord's: CB Richard Ellis (Stephen Nichols) .
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Tenant's: Cawley International (Katrina Rosevear) .
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In the event that CB Commercial Real Estate Group, Inc. represents both Landlord
and Tenant, Landlord and Tenant hereby confirm that they were timely advised of
the dual representation and that they consent to the same, and that they do not
expect said broker to disclose to either of them the confidential information of
the other party.
d. COMMENCEMENT DATE: 9/15/00 for Warehouse (5,427 sf) only; 12/1/00 or sooner
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for the office space (5,544 sf)
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e. COMMON AREAS: The building lobbies, common corridors and hallways,
restrooms, garage and parking areas, stairways, elevators and other
generally understood public or common areas. Landlord shall have the right
to regulate or restrict the use of the Common Areas.
f. EXPENSE STOP: (fill in if applicable): $ N/A
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g. EXPIRATION DATE: September 14, 2003 , unless otherwise sooner terminated in
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accordance with the provisions of this Lease.
h. Section deleted
i. LANDLORD'S MAILING ADDRESS: 17 Great Oaks Blvd., Ste. 101, San Jose, CA
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95119
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TENANT'S MAILING ADDRESS: 6325 San Ignacio Avenue, San Jose, CA 95119
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j. MONTHLY INSTALLMENTS OF BASE RENT (INITIAL): $ 29,621.70 per month,
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beginning 12/1/00 or sooner (upon TI completion).
k. PARKING: Tenant shall be permitted, upon payment of the then prevailing
monthly rate (as set by Landlord from time to time) to park
thirty-nine (39) cars on a non-exclusive basis in the area(s) designated
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by Landlord for parking. Tenant shall abide by any and all parking
regulations and rules established from time to time by Landlord or
Landlord's parking operator.
1.
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l. PREMISES: That portion of the Building containing approximately 10,971
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square feet of Rentable Area, shown by diagonal lines on Exhibit "A,"
located on the first floor of the Building and known as Suite 100.
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m. Section deleted
n. RENTABLE AREA: As to both the Premises and the Project, the respective
measurements of floor area as may from time to time be subject to lease by
Tenant and all tenants of the Project, respectively, as determined by
Landlord and applied on a consistent basis throughout the Project.
o. SECURITY DEPOSIT (SECTION 7): $ Ninety Thousand and 00/100 Dollars
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($90,000.00)
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p. STATE: The State of California
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q. TENANT'S FIRST ADJUSTMENT DATE (SECTION 5/2): The first day of the calendar
month following the Commencement Date for the 10,971 SF plus twelve (12)
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months.
r. TENANT'S PROPORTIONATE SHARE: 52.06 %. Such share is a fraction, the
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numerator of which is the Rentable Area of the Premises, and the
denominator of which is the Rentable Area of the Project, as determined by
Landlord from time to time. The Project consists of one (1) building(s)
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containing a total Rentable Area of 21,073 square feet.
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s. TENANT'S USE CLAUSE (ARTICLE 8): Administrative, staff, storage and other
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legal uses.
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t. TERM: The period commencing on the Commencement Date and expiring at
midnight on the Expiration Date.
3. EXHIBITS AND ADDENDA.
The exhibits and addenda listed below (unless lined out) are incorporated
by reference in this Lease:
a. Exhibit "A" - Floor Plan showing the Premises.
b. Exhibit "B" - Total Building Plan prior to Tenant Improvements.
c. Exhibit "C" - Building Standard Work Letter.
d. Exhibit "D" - Rules and Regulations.
e. Section deleted
f. Addenda:
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4. DELIVERY OF POSSESSION.
If for any reason Landlord does not deliver possession of the Premises to Tenant
on the commencement Date, Landlord shall not be subject to any liability for
such failure, the Expiration Date shall not change and the validity of this
Lease shall not be impaired, but Rent shall be abated until delivery of
possession. "Delivery of possession" shall be deemed to occur on the date
Landlord completes Landlord's Work as defined in Exhibit "C." If Landlord
permits Tenant to enter into possession of the Premises before the Commencement
Date, such possession shall be subject to the provisions of this Lease,
including, without limitation, the payment of Rent.
5. RENT
5.1 PAYMENT OF BASE RENT. Tenant agrees to pay the Base Rent for the Premises.
Monthly Installments of Base Rent shall be payable in advance on the first day
of each calendar month of the Term. If the Term begins (or ends) on other than
the first (or last) day of a calendar month, the Base Rent for the partial
months shall be prorated on a per diem basis. Tenant shall pay Landlord the
first Monthly Installment of Base Rent when Tenant executes the Lease.
5.2 Section deleted
5.3 PROJECT OPERATING COSTS.
a. In order that the Rent payable during the Term reflect any increase in
Project Operating Costs, Tenant agrees to pay to Landlord as Rent, Tenant's
Proportionate Share of all increases in costs, expenses and obligations
attributable to the Project and its operation, all as provided below.
2.
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b. If, during any calendar year during the Term, Project Operating costs
exceed the Project Operating Costs for the base Year, Tenant shall pay to
Landlord, in addition to the Base Rent and all other payments due under
this Lease, an amount equal to Tenant's Proportionate Share of such excess
Project Operating Costs in accordance with the provisions of this Section
5.3b.
(1) The term "Project Operating Costs" shall include all those items described
in the following subparagraphs (a) and (b).
(a) All taxes, assessments, water and sewer charges and other similar
governmental charges levied on or attributable to the Building or Project
or their operation, including without limitation, (i) real property taxes
or assessments levied or assessed against the Building or Project, (ii)
assessments or charges levied or assessed against the Building or Project
by any redevelopment agency, (iii) any tax measured by gross rentals
received from the leasing of the Premises, Building or Project, excluding
any net income, franchise, capital stock, estate or inheritance taxes
imposed by the State or federal government or their agencies, branches or
departments; provided that if at any time during the Term any governmental
entity levies, assesses or imposes on Landlord any (1) general or special,
ad valorem or specific, excise, capital levy or other tax, assessment, levy
or charge directly on the Rent received under this Lease or on the rent
received under any other leases of space in the Building or Project, or (2)
any license fee, excise or franchise tax, assessment, levy or charge
measured by or based, in whole or in part, upon such rent, or (3) any
transfer, transaction, or similar tax, assessment, levy or charge based
directly or indirectly upon the transaction represented by this Lease or
such other leases, or (4) any occupancy, use, per capita or other tax,
assessment, levy or charge based directly or indirectly upon the use or
occupancy of the Premises or other premises within the Building or Project,
then any such taxes, assessments, levies and charges shall be deemed to be
included in the term Project Operating Costs. If at any time during the
Term the assessed valuation of, or taxes on, the Project are not based on a
completed Project having at least eighty-five percent (85%) of the Rentable
Area occupied, then the "taxes" component of Project Operating Costs shall
be adjusted by Landlord to reasonably approximate the taxes which would
have been payable if the Project were completed and at least eighty-five
percent (85%) occupied.
(b) Operating costs incurred by Landlord in maintaining and operating the
Building and Project, including without limitation the following: costs of
(1) utilities; (2) supplies; (3) insurance (including public liability,
property damage, earthquake, and fire and extended coverage insurance for
the full replacement cost of the Building and Project as required by
Landlord or its lenders for the Project; (4) services of independent
contractors; (5) compensation (including employment taxes and fringe
benefits) of all persons who perform duties connected with the operation,
maintenance, repair or overhaul of the Building or Project, and equipment,
improvements and facilities located within the Project, including without
limitation engineers, janitors, painters, floor waxers, window washers,
security and parking personnel and gardeners (but excluding persons
performing services not uniformly available to or performed for
substantially all Building or Project tenants); (6) operation and
maintenance of a room for delivery and distribution of mail to tenants of
the Building or Project as required by the U.S. Postal Service (including,
without limitation, an amount equal to the fair market rental value of the
mail room premises); (7) management of the Building or Project, whether
managed by Landlord or an independent contractor (including, without
limitation, an amount equal to the fair market value of any on-site
manager's office); (8) rental expenses for (or a reasonable depreciation
allowance on) personal property used in the maintenance, operation or
repair of the Building or Project; (9) costs, expenditures or charges
(whether capitalized or not) required by any governmental or
quasi-governmental authority; (10) amortization of capital expenses
(including financing costs) (i) required by a governmental entity for
energy conservation or life safety purposes, or (ii) made by Landlord to
reduce Project Operating Costs; and (11) any other costs or expenses
incurred by Landlord under this Lease and not otherwise reimbursed by
tenants of the Project. If at any time during the Term, less than
eighty-five percent (85%) of the Rentable Area of the Project is occupied,
the "operating costs" component of Project Operating Costs shall be
adjusted by Landlord to reasonably approximate the operating costs which
would have been incurred if the Project had been at least eighty-five
percent (85%) occupied.
(2) Tenant's Proportionate Share of Project Operating Costs shall be payable by
Tenant to Landlord as follows:
(a) Beginning with the calendar year following the Base Year and for each
calendar year thereafter ("Comparison Year"), Tenant shall pay Landlord an
amount equal to Tenant's Proportionate Share of the Project Operating Costs
incurred by Landlord in the Comparison Year which exceeds the total amount
of Project Operating Costs payable by Landlord for the Base Year. This
excess is referred to as the "Excess Expenses."
(b) To provide for current payments of Excess Expenses, Tenant shall, at
Landlord's request, pay as additional rent during each Comparison Year, an
amount equal to Tenant's Proportionate Share of the Excess Expenses payable
during such Comparison Year, as estimated by Landlord from time to time.
Such payments shall be made in monthly installments, commencing on the
first day of the month following the month in which Landlord notifies
Tenant of the amount it is to pay hereunder and continuing until the first
day of the month following the month in which Landlord gives Tenant a new
notice of estimated Excess Expenses. It is the intention hereunder to
estimate from time to time the amount of the Excess Expenses for each
Comparison Year and Tenant's Proportionate Share thereof, and then to make
an adjustment in the following year based on the actual Excess Expenses
incurred for that Comparison Year.
(c) On or before April 1 of each Comparison Year after the first Comparison
Year (or as soon thereafter as is practical), Landlord shall deliver to
Tenant a statement setting forth Tenant's Proportionate Share of the Excess
Expenses for the preceding Comparison Year. If Tenant's Proportionate Share
of the actual Excess Expenses for the previous Comparison Year exceeds the
total of the estimated monthly payments made by Tenant for such year,
Tenant shall pay Landlord the amount of the deficiency within ten (10) days
of the receipt of the statement. If such total exceeds Tenant's
Proportionate Share of the actual Excess Expenses for such Comparison Year,
then Landlord shall credit against Tenant's next ensuing monthly
installment(s) of additional rent an amount equal to the difference until
the credit is exhausted. If a credit is due from Landlord on the Expiration
Date, Landlord shall pay Tenant the amount of the credit.
3.
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The obligations of Tenant and Landlord to make payments required under this
Section 5.3 shall survive the Expiration Date.
(d) Tenant's Proportionate Share of Excess Expenses in any Comparison Year
having less than 365 days shall be appropriately prorated.
(e) If any dispute arises as to the amount of any additional rent due
hereunder, Tenant shall have the right after reasonable notice and at
reasonable times to inspect Landlord's accounting records at Landlord's
accounting office and, if after such inspection Tenant still disputes the
amount of additional rent owed, a certification as to the proper amount
shall be made by Landlord's certified public accountant, which
certification shall be final and conclusive. Tenant agrees to pay the cost
of such certification unless it is determined that Landlord's original
statement overstated Project Operating Costs by more than five percent
(5%).
(f) Section deleted
5.4 DEFINITION OF AGENT. All costs and expenses which Tenant assumes or agrees
to pay to Landlord under this Lease shall be deemed additional rent (which,
together with the Base Rent is sometimes referred to as the "Rent"). The Rent
shall be paid to the Building manager (or other person) and at such place, as
Landlord may from time to time designate in writing, without any prior demand
therefor and without deduction or offset, in lawful money of the United States
of America.
5.5 RENT CONTROL. If the amount of Rent or any other payment due under this
Lease violates the terms of any governmental restrictions on such Rent or
payment, then the Rent or payment due during the period of such restrictions
shall be the maximum amount allowable under those restrictions. Upon termination
of the restrictions, Landlord shall, to the extent it is legally permitted,
recover from Tenant the difference between the amounts received during the
period of the restrictions and the amounts Landlord would have received had
there been no restrictions.
5.6 TAXES PAYABLE BY TENANT. In addition to the Rent and any other charges to be
paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any
and all taxes payable by Landlord (other than net income taxes) which are not
otherwise reimbursable under this Lease, whether or not now customary or within
the contemplation of the parties, where such taxes are upon, measured by or
reasonably attributable to (a) the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the Premises, or the
cost or value of any leasehold improvements made in or to the Premises by or for
Tenant, other than Building Standard Work made by Landlord, regardless of
whether title to such improvements is held by Tenant or Landlord; (b) the gross
or net Rent payable under this Lease, including, without limitation, any rental
or gross receipts tax levied by any taxing authority with respect to the receipt
of the Rent hereunder; (c) the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (d) this transaction or any document to which Tenant is
a party creating or transferring an interest or an estate in the Premises. If it
becomes unlawful for Tenant to reimburse Landlord for any costs as required
under this Lease, the Base Rent shall be revised to net Landlord the same net
Rent after imposition of any tax or other charge upon Landlord as would have
been payable to Landlord but for the reimbursement being unlawful.
6. INTEREST AND LATE CHARGES.
If Tenant fails to pay when due any Rent or other amounts or charges which
Tenant is obligated to pay under the terms of this Lease, the unpaid amounts
shall bear interest at the maximum rate then allowed by law. Tenant acknowledges
that the late payment of any Monthly Installment of Base Rent will cause
Landlord to lose the use of that money and incur costs and expenses not
contemplated under this Lease, including without limitation, administrative and
collection costs and processing and accounting expenses, the exact amount of
which is extremely difficult to ascertain. Therefore, in addition to interest,
if any such installment is not received by Landlord within ten (10) days from
the date it is due, Tenant shall pay Landlord a late charge equal to ten percent
(10%) of such installment. Landlord and Tenant agree that this late charge
represents a reasonable estimate of such costs and expenses and is fair
compensation to Landlord for the loss suffered from such nonpayment by Tenant.
Acceptance of any interest or late charge shall not constitute a waiver of
Tenant's default with respect to such nonpayment by Tenant nor prevent Landlord
from exercising any other rights or remedies available to Landlord under this
Lease.
7. SECURITY DEPOSIT.
Tenant agrees to deposit with Landlord the Security Deposit set forth at Section
2.0 upon execution of this Lease, as security for Tenant's faithful performance
of its obligations under this Lease. Landlord and Tenant agree that the Security
Deposit may be commingled with funds of Landlord and Landlord shall have no
obligation or liability for payment of interest on such deposit. Tenant shall
not mortgage, assign, transfer or encumber the Security Deposit without the
prior written consent of Landlord and any attempt by Tenant to do so shall be
void, without force or effect and shall not be binding upon Landlord.
If Tenant fails to pay any Rent or other amount when due and payable under this
Lease, or fails to perform any of the terms hereof, Landlord may appropriate and
apply or use all or any portion of the Security Deposit for Rent payments or any
other amount then due and unpaid, for payment of any amount for which Landlord
has become obligated as a result of Tenant's default or breach, and for any loss
or damage sustained by Landlord as a result of Tenant's default or breach, and
Landlord may so apply or use this deposit without prejudice to any other remedy
Landlord may have by reason of Tenant's default or breach. If Landlord so uses
any of the Security Deposit, Tenant shall, within ten (10) days after written
demand therefor, restore the Security Deposit to the full amount originally
deposited; Tenant's failure to do so shall constitute an act of default
hereunder and Landlord shall have the right to exercise any remedy provided for
at Article 27 hereof. Within fifteen (15) days after the Term (or any extension
thereof) has expired or Tenant has vacated the Premises, whichever shall last
occur, and
4.
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provided Tenant is not then in default on any of its obligations hereunder,
Landlord shall return the Security Deposit to Tenant, or, if Tenant has assigned
its interest under this Lease, to the last assignee of Tenant. If Landlord sells
its interest in the Premises. Landlord may deliver this deposit to the purchaser
of Landlord's interest and thereupon be relieved of any further liability or
obligation with respect to the Security Deposit.
8. TENANTS USE OF THE PREMISES.
Tenant shall use the Premises solely for the purposes set forth in Tenant's Use
Clause. Tenant shall not use or occupy the Premises in violation of law or any
covenant, condition or restriction affecting the Building or Project or the
certificate of occupancy issued for the Building or Project, and shall, upon
notice from Landlord, immediately discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation of
law or the certificate of occupancy. Tenant, at Tenant's own cost and expense,
shall comply with all laws, ordinances, regulations, rules and/or any directions
of any governmental agencies or authorities having jurisdiction which shall, by
reason of the nature of Tenant's use or occupancy of the Premises, impose any
duty upon Tenant or Landlord with respect to the Premises or its use or
occupation. A judgment of any court of competent jurisdiction or the admission
by Tenant in any action or proceeding against Tenant that Tenant has violated
any such laws, ordinances, regulations, rules and/or directions in the use of
the Premises shall be deemed to be a conclusive determination of that fact as
between Landlord and Tenant. Tenant shall not do or permit to be done anything
which will invalidate or increase the cost of any fire, extended coverage or
other insurance policy covering the Building or Project and/or property located
therein, and shall comply with all rules, orders, regulations, requirements and
recommendations of/he Insurance Services Office or any other organization
performing a similar function. Tenant shall promptly upon demand reimburse
Landlord for any additional premium charged for such policy by reason of
Tenant's failure to comply with the provisions of this Article. Tenant shall not
do or permit anything to be done in or about the Premises which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Building or Project, or injure or annoy them. or use or allow the Premises to be
used for any improper, immoral, unlawful or objectionable purpose, nor shall
Tenant cause, maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises.
9. SERVICES AND UTILITIES.
Provided that Tenant is not in default hereunder, Landlord agrees to furnish to
the Premises during generally recognized business days, and during hours
determined by Landlord in its sole discretion, and subject to the Rules and
Regulations of the Building or Project, electricity for normal desk top office
equipment and normal copying equipment, and heating, ventilation and air
conditioning ("HVAC") as required in Landlord's judgment for the comfortable use
and occupancy of the Premises. If Tenant desires HVAC at any other time,
Landlord shall use reasonable efforts to furnish such service upon reasonable
notice from Tenant and Tenant shall pay Landlord's charges therefor on demand.
Landlord shall also maintain and keep lighted the common stairs, common entries
and restrooms in the Building. Landlord shall not be in default hereunder or be
liable for any damages directly or indirectly resulting from, nor shall the Rent
be abated by reason of (i) the installation, use or interruption of use of any
equipment in connection with the furnishing of any of the foregoing services,
(ii) failure to furnish or delay in furnishing any such services where such
failure or delay is caused by accident or any condition or event beyond the
reasonable control of Landlord, or by the making of necessary repairs or
improvements to the Premises, Building or Project, or (iii) the limitation,
curtailment or rationing of, or restrictions on, use of water, electricity, gas
or any other form of energy serving the Premises, Building or Project. Landlord
shall not be liable under any circumstances for a loss of or injury to property
or business, however occurring, through or in connection with or incidental to
failure to furnish any such services. If Tenant uses heat generating machines or
equipment in the Premises which affect the temperature otherwise maintained by
the HVAC system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation, operation and maintenance thereof, shall be paid by Tenant to
Landlord upon demand by Landlord.
Tenant shall not, without the written consent of Landlord, use any apparatus or
device in the Premises, including without limitation, electronic data processing
machines, punch card machines or machines using in excess of 120 volts, which
consumes more electricity than is usually furnished or supplied for the use of
premises as general office space, as determined by Landlord. Tenant shall not
connect any apparatus with electric current except through existing electrical
outlets in the Premises. Tenant shall not consume water or electric current in
excess of that usually furnished or supplied for the use of premises as general
office space (as determined by Landlord), without first procuring the written
consent of Landlord, which Landlord may refuse, and in the event of consent,
Landlord may have installed a water meter or electrical current meter in the
Premises to measure the amount of water or electric current consumed. The cost
of any such meter and of its installation, maintenance and repair shall be paid
for by the Tenant and Tenant agrees to pay to Landlord promptly upon demand for
all such water and electric current consumed as shown by said meters, at the
rates charged for such services by the local public utility plus any additional
expense incurred in keeping account of the water and electric current so
consumed. If a separate meter is not installed, the excess cost for such water
and electric current shall be established by an estimate made by a utility
company or electrical engineer hired by Landlord at Tenant's expense.
Nothing contained in this Article shall restrict Landlord's right to require at
any time separate metering of utilities furnished to the Premises. In the event
utilities are separately metered, Tenant shall pay promptly upon demand for all
utilities consumed at utility rates charged by the local public utility plus any
additional expense incurred by Landlord in keeping account of the utilities so
consumed. Tenant shall be responsible for the maintenance and repair of any such
meters at its sole cost.
Landlord shall furnish elevator service, lighting replacement for building
standard lights, restroom supplies, window washing and janitor services in a
manner that such services are customarily furnished to comparable office
buildings in the area.
5.
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10. CONDITION OF THE PREMISES.
Tenant's taking possession of the Premises shall be deemed conclusive evidence
that as of the date of taking possession the Premises are in good order and
satisfactory condition, except for such matters as to which Tenant gave Landlord
notice on or before the Commencement Date. No promise of Landlord to alter,
remodel, repair or improve the Premises, the Building or the Project and no
representation, express or implied, respecting any matter or thing relating to
the Premises, Building, Project or this Lease (including, without limitation,
the condition of the Premises, the Building or the Project) have been made to
Tenant by Landlord or its Broker or Sales Agent, other than as may be contained
herein or in a separate exhibit or addendum signed by Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE.
a. LANDLORD'S OBLIGATIONS. Landlord shall perform Landlord's Work to the
Premises as described in Exhibit "C," Landlord shall maintain in good
order, condition and repair the Building and all other portions of the
Premises not the obligation of Tenant or of any other tenant in the
Building.
b. TENANT'S OBLIGATIONS.
(1) Tenant shall perform Tenant's Work to the Premises as described in
Exhibit "C."
(2) Tenant at Tenant's sole expense shall, except for services
furnished by Landlord pursuant to Article 9 hereof, maintain the
Premises in good order, condition and repair, including the interior
surfaces of the ceilings, walls and floors, all doors, all interior
windows, all plumbing, pipes and fixtures, electrical wiring, switches
and fixtures, Building Standard furnishings and special items and
equipment installed by or at the expense of Tenant.
(3) Tenant shall be responsible for all repairs and alterations in and
to the Premises, Building and Project and the facilities and systems
thereof, the need for which arises out of (i) Tenant's use or occupancy
of the Premises, (ii) the installation, removal, use or operation of
Tenant's Properly (as defined in Article 13) in the Premises, (iii) the
moving of Tenant's Property into or out of the Building, or (iv) the
act, omission, misuse or negligence of Tenant, its agents, contractors,
employees or invitees.
(4) If Tenant fails to maintain the Premises in good order, condition
and repair. Landlord shall give Tenant notice to do such acts as are
reasonably required to so maintain the Premises. If Tenant fails to
promptly commence such work and diligently prosecute it to completion,
then Landlord shall have the right to do such acts and expend such
funds at the expense of Tenant as are reasonably required to perform
such work. Any amount so expended by Landlord shall be paid by Tenant
promptly after demand with interest at the prime commercial rate then
being charged by Bank of America NT & SA plus two percent (2%) per
annum, from the date of such work, but not to exceed the maximum rate
then allowed by law. Landlord shall have no liability to Tenant for any
damage, inconvenience, or interference with the use of the Premises by
Tenant as a result of performing any such work.
c. COMPLIANCE WITH LAW. Landlord and Tenant shall each do all acts required
to comply with all applicable laws, ordinances, and rules of any public
authority relating to their respective maintenance obligations as set forth
herein.
d. WAIVER BY TENANT. Tenant expressly waives the benefits of any statute
now or hereafter in effect which would otherwise afford the Tenant the
right to make repairs at Landlord's expense or to terminate this Lease
because of Landlord's failure to keep the Premises in good order, condition
and repair.
e. LOAD AND EQUIPMENT LIMITS. Tenant shall not place a load upon any floor
of the Premises which exceeds the load per square foot which such floor was
designed to carry, as determined by Landlord or Landlord's structural
engineer. The cost of any such determination made by Landlord's structural
engineer shall be paid for by Tenant upon demand. Tenant shall not install
business machines or mechanical equipment which cause noise or vibration to
such a degree as to be objectionable to Landlord or other Building tenants.
f. Except as otherwise expressly provided in this Lease, Landlord shall
have no liability to Tenant nor shall Tenant's obligations under this Lease
be reduced or abated in any manner whatsoever by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord's making any repairs or changes which Landlord is required or
permitted by this Lease or by any other tenant's lease or required by law
to make in or to any portion of the Project, Building or the Premises.
Landlord shall nevertheless use reasonable efforts to minimize any
interference with Tenant's business in the Premises.
g. Tenant shall give Landlord prompt notice of any damage to or defective
condition in any part or appurtenance of the Building's mechanical,
electrical, plumbing, HVAC or other systems serving, located in, or passing
through the Premises.
h. Upon the expiration or earlier termination of this Lease, Tenant shall
return the Premises to Landlord clean and in the same condition as on the
date Tenant took possession, except for normal wear and tear. Any damage to
the Premises, including any structural damage, resulting from Tenant's use
or from the removal of Tenant's fixtures, furnishings and equipment
pursuant to Section 13b shall be repaired by Tenant at Tenant's expense.
12. ALTERATIONS AND ADDITIONS.
6.
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a. Tenant shall not make any additions, alterations or improvements to the
Premises without obtaining the prior written consent of Landlord.
Landlord's consent may be conditioned on Tenant's removing any such
additions, alterations or improvements upon the expiration of the Term and
restoring the Premises to the same condition as on the date Tenant took
possession. All work with respect to any addition, alteration or
improvement shall be done in a good and workmanlike manner by properly
qualified and licensed personnel approved by Landlord, and such work shall
be diligently prosecuted to completion. Landlord may, at Landlord's option,
require that any such work be performed by Landlord's contractor, in which
case the cost of such work shall be paid for before commencement of the
work. Tenant shall pay to Landlord upon completion of any such work by
Landlord's contractor, an administrative fee of fifteen percent (15%) of
the cost of the work.
b. Tenant shall pay the costs of any work done on the Premises pursuant to
Section 12a, and shall keep the Premises, Building and Project free and
clear of liens of any kind. Tenant shall indemnify, defend against and keep
Landlord free and harmless from all liability, loss, damage, costs,
attorneys' fees and any other expense incurred on account of claims by any
person performing work or furnishing materials or supplies for Tenant or
any person claiming under Tenant.
Tenant shall keep Tenant's leasehold interest, and any additions or
improvements which are or become the property of Landlord under this Lease,
free and clear of all attachment or judgment liens. Before the actual
commencement of any work for which a claim or lien may be filed, Tenant
shall give Landlord notice of the intended commencement date a sufficient
time before that date to enable Landlord to post notices of
non-responsibility or any other notices which Landlord deems necessary for
the proper protection of Landlord's interest in the Premises, Building or
the Project, and Landlord shall have the right to enter the Premises and
post such notices at any reasonable time.
c. Landlord may require, at Landlord's sole option, that Tenant provide to
Landlord, at Tenant's expense, a lien and completion bond in an amount
equal to at least one and one-half (1 1/2) times the total estimated cost
of any additions, alterations or improvements to be made in or to the
Premises, to protect Landlord against any liability for mechanic's and
materialmen's liens and to insure timely completion of the work. Nothing
contained in this Section 12c shall relieve Tenant of its obligation under
Section 12b to keep the Premises, Building and Project free of all liens.
d. Unless their removal is required by Landlord as provided in Section 12a,
all additions, alterations and improvements made to the Premises shall
become the property of Landlord and be surrendered with the Premises upon
the expiration of the Term; provided, however, Tenant's equipment,
machinery and trade fixtures which can be removed without damage to the
Premises shall remain the property of Tenant and may be removed, subject to
the provisions of Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY.
a. All fixtures, equipment, improvements and appurtenances attached to or
built into the Premises at the commencement of or during the Term, whether
or not by or at the expense of Tenant ("Leasehold Improvements"), shall be
and remain a part of the Premises, shall be the property of Landlord and
shall not be removed by Tenant, except as expressly provided in Section
13b.
b. All movable partitions, business and trade fixtures, machinery and
equipment, communications equipment and office equipment located in the
Premises and acquired by or for the account of Tenant, without expense to
Landlord, which can be removed without structural damage to the Building,
and all furniture, furnishings and other articles of movable personal
property owned by Tenant and located in the Premises (collectively
"Tenant's Property") shall be and shall remain the property of Tenant and
may be removed by Tenant at any time during the Term; provided that if any
of Tenant's Property is removed, Tenant shall promptly repair any damage to
the Premises or to the Building resulting from such removal.
14. RULES AND REGULATIONS.
Tenant agrees to comply with (and cause its agents, contractors, employees and
invitees to comply with) the rules and regulations attached hereto as Exhibit
"D" and with such reasonable modifications thereof and additions thereto as
Landlord may from time to time make. Landlord shall not be responsible for any
violation of said rules and regulations by other tenants or occupants of the
Building or Project.
15. CERTAIN RIGHTS RESERVED BY LANDLORD.
Landlord reserves the following rights, exercisable without liability to Tenant
for (a) damage or injury to property, person or business, (b) causing an actual
or constructive eviction from the Premises, or (c) disturbing Tenant's use or
possession of the Premises:
a. To name the Building and Project and to change the name or street
address of the Building or Project;
b. To install and maintain all signs on the exterior and interior of the
Building and Project;
c. To have pass keys to the Premises and all doors within the Premises,
excluding Tenant's vaults and safes;
7.
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d. At any time during the Term, and on reasonable prior notice to Tenant,
to inspect the Premises, and to show the Premises to any prospective
purchaser or mortgagee of the Project, or to any assignee of any mortgage
on the Project, or to others having an interest in the Project or Landlord,
and during the last six months of the Term, to show the Premises to
prospective tenants thereof; and
e. To enter the Premises for the purpose of making inspections, repairs,
alterations, additions or improvements to the Premises or the Building
(including, without limitation, checking, calibrating, adjusting or
balancing controls and other parts of the HVAC system), and to take all
steps as may be necessary or desirable for the safety, protection,
maintenance or preservation of the Premises or the Building or Landlord's
interest therein, or as may be necessary or desirable for the operation or
improvement of the Building or in order to comply with laws, orders or
requirements of governmental or other authority. Landlord agrees to use its
best efforts (except in an emergency) to minimize interference with
Tenant's business in the Premises in the course of any such entry.
16. ASSIGNMENT AND SUBLETTING.
No assignment of this Lease or sublease of all or any part of the Premises shall
be permitted, except as provided in this Article 16.
a. Tenant shall not, without the prior written consent of Landlord, assign
or hypothecate this Lease or any interest herein or sublet the Premises or
any part thereof, or permit the use of the Premises by any party other than
Tenant. Any of the foregoing acts without such consent shall be void and
shall, at the option of Landlord, terminate this Lease. This Lease shall
not, nor shall any interest of Tenant herein, be assignable by operation of
law without the written consent of Landlord.
b. If at any time or from time to time during the Term Tenant desires to
assign this Lease or sublet all or any part of the Premises, Tenant shall
give notice to Landlord setting forth the terms and provisions of the
proposed assignment or sublease, and the identity of the proposed assignee
or subtenant. Tenant shall promptly supply Landlord with such information
concerning the business background and financial condition of such proposed
assignee or subtenant as Landlord may reasonably request. Landlord shall
have the option, exercisable by notice given to Tenant within twenty (20)
days after Tenant's notice is given, either to sublet such space from
Tenant at the rental and on the other terms set forth in this Lease for the
term set forth in Tenant's notice, or, in the case of an assignment, to
terminate this Lease. If Landlord does not exercise such option, Tenant may
assign the Lease or sublet such space to such proposed assignee or
subtenant on the following further conditions:
(1) Landlord shall have the right to approve such proposed assignee or
subtenant, which approval shall not be unreasonably withheld;
(2) The assignment or sublease shall be on the same terms set forth in
the notice given to Landlord;
(3) No assignment or sublease shall be valid and no assignee or
sublessee shall take possession of the Premises until an executed
counterpart of such assignment or sublease has been delivered to
Landlord;
(4) No assignee or sublessee shall have a further right to assign or
sublet except on the terms herein contained; and
(5) Any sums or other economic consideration received by Tenant as a
result of such assignment or subletting, however denominated under the
assignment or sublease, which exceed, in the aggregate, (i) the total
sums which Tenant is obligated to pay Landlord under this Lease
(prorated to reflect obligations allocable to any portion of the
Premises subleased), plus (ii) any real estate brokerage commissions or
fees payable in connection with such assignment or subletting, shall be
paid to Landlord as additional rent under this Lease without affecting
or reducing any other obligations of Tenant hereunder.
c. Notwithstanding the provisions of paragraphs a and b above. Tenant may
assign this Lease or sublet the Premises or any portion thereof, without
Landlord's consent and without extending any recapture or termination
option to Landlord, to any corporation which controls, is controlled by or
is under common control with Tenant, or to any corporation resulting from a
merger or consolidation with Tenant, or to any person or entity which
acquires all the assets of Tenant's business as a going concern, provided
that (i) the assignee or sublessee assumes, in full, the obligations of
Tenant under this Lease, (ii) Tenant remains fully liable under this Lease,
and (iii) the use of the Premises under Article 8 remains unchanged.
d. No subletting or assignment shall release Tenant of Tenant's obligations
under this Lease or alter the primary liability of Tenant to pay the Rent
and to perform all other obligations to be performed by Tenant hereunder.
The acceptance of Rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by an assignee or
subtenant of Tenant or any successor of Tenant in the performance of any of
the terms hereof, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against such assignee, subtenant or
successor. Landlord may consent to subsequent assignments of the Lease or
sublettings or amendments or modifications to the Lease with assignees of
Tenant, without notifying Tenant, or any successor of Tenant, and without
obtaining its or their consent thereto and any such actions shall not
relieve Tenant of liability under this Lease.
8.
<PAGE>
e. If Tenant assigns the Lease or sublets the Premises or requests the
consent of Landlord to any assignment or subletting or if Tenant requests
the consent of Landlord for any act that Tenant proposes to do, then Tenant
shall, upon demand, pay Landlord an administrative fee of One Hundred Fifty
and No/100ths Dollars ($150.00) plus any attorneys' fees reasonably
incurred by Landlord in connection with such act or request.
17. HOLDING OVER.
If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord's permission (express or implied), Tenant shall become a tenant
from month to month only, upon all the provisions of this Lease (except as to
term and Base Rent), but the "Monthly Installments of Base Rent" payable by
Tenant shall be increased to one hundred fifty percent (150%) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such
monthly rent shall be payable in advance on or before the first day of each
month. If either party desires to terminate such month to month tenancy, it
shall give the other party not less than thirty (30) days advance written notice
of the date of termination.
18. SURRENDER OF PREMISES.
a. Tenant shall peaceably surrender the Premises to Landlord on the
Expiration Date, in broom-clean condition and in as good condition as when
Tenant took possession, except for (i) reasonable wear and tear, (ii) loss
by fire or other casualty, and (iii) loss by condemnation. Tenant shall, on
Landlord's request, remove Tenant's Property on or before the Expiration
Date and promptly repair all damage to the Premises or Building caused by
such removal.
b. If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any of Tenant's Property left on the Premises
shall be deemed to be abandoned, and, at Landlord's option, title shall
pass to Landlord under this Lease as by a bill of sale. If Landlord elects
to remove all or any part of such Tenant's Property, the cost of removal,
including repairing any damage to the Premises or Building caused by such
removal, shall be paid by Tenant. On the Expiration Date Tenant shall
surrender all keys to the Premises.
19. DESTRUCTION OR DAMAGE.
a. If the Premises or the portion of the Building necessary for Tenant's
occupancy is damaged by fire, earthquake, act of God, the elements or other
casualty, Landlord shall, subject to the provisions of this Article,
promptly repair the damage, if such repairs can, in Landlord's opinion, be
completed within (90) ninety days. If Landlord determines that repairs can
be completed within ninety (90) days, this Lease shall remain in full force
and effect, except that if such damage is not the result of the negligence
or willful misconduct of Tenant or Tenant's agents, employees, contractors,
licensees or invitees, the Base Rent shall be abated to the extent Tenant's
use of the Premises is impaired, commencing with the date of damage and
continuing until completion of the repairs required of Landlord under
Section 19d.
b. If in Landlord's opinion, such repairs to the Premises or portion of the
Building necessary for Tenant's occupancy cannot be completed within ninety
(90) days, Landlord may elect, upon notice to Tenant given within thirty
(30) days after the date of such fire or other casualty, to repair such
damage, in which event this Lease shall continue in full force and effect,
but the Base Rent shall be partially abated as provided in Section 19a. If
Landlord does not so elect to make such repairs, this Lease shall terminate
as of the date of such fire or other casualty.
c. If any other portion of the Building or Project is totally destroyed or
damaged to the extent that in Landlord's opinion repair thereof cannot be
completed within ninety (90) days, Landlord may elect upon notice to Tenant
given within thirty (30) days after the date of such fire or other
casualty, to repair such damage, in which event this Lease shall continue
in full force and effect, but the Base Rent shall be partially abated as
provided in Section 19a. If Landlord does not elect to make such repairs,
this Lease shall terminate as of the date of such fire or other casualty.
d. If the Premises are to be repaired under this Article, Landlord shall
repair at its cost any injury or damage to the Building and Building
Standard Work in the Premises. Tenant shall be responsible at its sole cost
and expense for the repair, restoration and replacement of any other
Leasehold Improvements and Tenant's Property. Landlord shall not be liable
for any loss of business, inconvenience or annoyance arising from any
repair or restoration of any portion of the Premises, Building or Project
as a result of any damage from fire or other casualty.
e. This Lease shall be considered an express agreement governing any case
of damage to or destruction of the Premises, Building or Project by fire or
other casualty, and any present or future law which purports to govern the
rights of Landlord and Tenant in such circumstances in the absence of
express agreement, shall have no application.
20. EMINENT DOMAIN.
a. If the whole of the Building or Premises is lawfully taken by
condemnation or in any other manner for any public or quasi-public purpose,
this Lease shall terminate as of the date of such taking, and Rent shall be
prorated to such date. If less than the whole of the Building or Premises
is so taken, this Lease shall be unaffected by such taking, provided that
(i) Tenant shall have the right to terminate this Lease by notice to
Landlord given within ninety (90) days after the date of such taking if
twenty percent (20%) or more of the Premises is taken and the remaining
area of the Premises is not reasonably sufficient for Tenant to continue
operation of its business, and (ii) Landlord shall have the right to
terminate this Lease by notice to Tenant given within ninety (90) days
after the date of such taking. If either Landlord or Tenant so elects to
terminate this Lease, the Lease shall terminate on the thirtieth (30th) day
after either such notice. The Rent shall be prorated to the date of
termination. If this Lease continues in force upon such partial taking, the
Base Rent and
9.
<PAGE>
Tenant's Proportionate Share shall be equitably adjusted according to the
remaining Rentable Area of the Premises and Project.
b. In the event of any taking, partial or whole, all of the proceeds of any
award, judgment or settlement payable by the condemning authority shall be
the exclusive property of Landlord, and Tenant hereby assigns to Landlord
all of its right, title and interest in any award, judgment or settlement
from the condemning authority. Tenant, however, shall have the right, to
the extent that Landlord's award is not reduced or prejudiced, to claim
from the condemning authority (but not from Landlord) such compensation as
may be recoverable by Tenant in its own right for relocation expenses and
damage to Tenant's personal property.
c. In the event of a partial taking of the Premises which does not result
in a termination of this Lease, Landlord shall restore the remaining
portion of the Premises as nearly as practicable to its condition prior to
the condemnation or taking, but only to the extent of Building Standard
Work. Tenant shall be responsible at its sole cost and expense for the
repair, restoration and replacement of any other Leasehold Improvements and
Tenant's Property.
21. INDEMNIFICATION.
a. Tenant shall indemnify and hold Landlord harmless against and from
liability and claims of any kind for loss or damage to property of Tenant
or any other person, or for any injury to or death of any person, arising
out of: (1) Tenant's use and occupancy of the Premises, or any work,
activity or other things allowed or suffered by Tenant to be done in, on or
about the Premises; (2) any breach or default by Tenant of any of Tenant's
obligations under this Lease; or (3) any negligent or otherwise tortious
act or omission of Tenant, its agents, employees, invitees or contractors.
Tenant shall at Tenant's expense, and by counsel satisfactory to Landlord,
defend Landlord in any action or proceeding arising from any such claim and
shall indemnify Landlord against all costs, attorneys' fees, expert witness
fees and any other expenses incurred in such action or proceeding. As a
material part of the consideration for Landlord's execution of this Lease,
Tenant hereby assumes all risk of damage or injury to any person or
property in, on or about the Premises from any cause.
b. Landlord shall not be liable for injury or damage which may be sustained
by the person or property of Tenant, its employees, invitees or customers,
or any other person in or about the Premises, caused by or resulting from
fire, steam, electricity, gas, water or rain which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction
or other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, whether such damage or injury results
from conditions arising upon the Premises or upon other portions of the
Building or Project or from other sources. Landlord shall not be liable for
any damages arising from any act or omission of any other tenant of the
Building or Project.
22. TENANT'S INSURANCE.
a. All insurance required to be carried by Tenant hereunder shall be issued
by responsible insurance companies acceptable to Landlord and Landlord's
lender and qualified to do business in the State. Each policy shall name
Landlord, and at Landlord's request any mortgagee of Landlord, as an
additional insured, as their respective interests may appear. Each policy
shall contain (i) a cross-liability endorsement, (ii) a provision that such
policy and the coverage evidenced thereby shall be primary and
non-contributing with respect to any policies carried by Landlord and that
any coverage carried by Landlord shall be excess insurance, and (iii) a
waiver by the insurer of any right of subrogation against Landlord, its
agents, employees and representatives, which arises or might arise by
reason of any payment under such policy or by reason of any act or omission
of Landlord, its agents, employees or representatives. A copy of each paid
up policy (authenticated by the insurer) or certificate of the insurer
evidencing the existence and amount of each insurance policy required
hereunder shall be delivered to Landlord before the date Tenant is first
given the right of possession of the Premises, and thereafter within thirty
(30) days after any demand by Landlord therefor. Landlord may, at any time
and from time to time, inspect and/or copy any insurance policies required
to be maintained by Tenant hereunder. No such policy shall be cancellable
except after twenty (20) days written notice to Landlord and Landlord's
lender. Tenant shall furnish Landlord with renewals or "binders" of any
such policy at least ten (10) days prior to the expiration thereof. Tenant
agrees that if Tenant does not take out and maintain such insurance,
Landlord may (but shall not be required to) procure said insurance on
Tenant's behalf and charge the Tenant the premiums together with a
twenty-five percent (25%) handling charge, payable upon demand. Tenant
shall have the right to provide such insurance coverage pursuant to blanket
policies obtained by the Tenant, provided such blanket policies expressly
afford coverage to the Premises, Landlord, Landlord's mortgagee and Tenant
as required by this Lease.
b. Beginning on the date Tenant is given access to the Premises for any
purpose and continuing until expiration of the Term, Tenant shall procure,
pay for and maintain in effect policies of casualty insurance covering (i)
all Leasehold Improvements (including any alterations, additions or
improvements as may be made by Tenant pursuant to the provisions of Article
12 hereof), and (ii) trade fixtures, merchandise and other personal
property from time to time in, on or about the Premises, in an amount not
less than one hundred percent (100%) of their actual replacement cost from
time to time, providing protection against any peril included within the
classification "Fire and Extended Coverage" together with insurance against
sprinkler damage, vandalism and malicious mischief. The proceeds of such
insurance shall be used for the repair or replacement of the property so
insured. Upon termination of this Lease following a casualty as set forth
herein, the proceeds under (i) shall be paid to Landlord, and the proceeds
under (ii) above shall be paid to Tenant.
c. Beginning on the date Tenant is given access to the Premises for any
purpose and continuing until expiration of the Term, Tenant shall procure,
pay for and maintain in effect workers' compensation insurance as required
by law and comprehensive public liability and property damage insurance
with respect to the construction of improvements on the
10.
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Premises, the use, operation or condition of the Premises and the
operations of Tenant in, on or about the Premises, providing personal
injury and broad form property damage coverage for not less than One
Million Dollars ($1,000,000.00) combined single limit for bodily injury,
death and property damage liability.
d. Section deleted
23. WAIVER OF SUBROGATION.
Landlord and Tenant each hereby waive all rights of recovery against the other
and against the officers, employees, agents and representatives of the other, on
account of loss by or damage to the waiving party of its property or the
property of others under its control, to the extent that such loss or damage is
insured against under any fire and extended coverage insurance policy which
either may have in force at the time of the loss or damage. Tenant shall, upon
obtaining the policies of insurance required under this Lease, give notice to
its insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT.
Upon written request of Landlord, or any first mortgagee or first deed of trust
beneficiary of Landlord, or ground lessor of Landlord, Tenant shall, in writing,
subordinate its rights under this Lease to the lien of any first mortgage or
first deed of trust, or to the interest of any lease in which Landlord is
lessee, and for all advances made or hereafter to be made thereunder. However,
before signing any subordination agreement, Tenant shall have the right to
obtain from any lender or lessor or Landlord requesting such subordination, an
agreement in writing providing that, as long as Tenant is not in default
hereunder, this Lease shall remain in effect for the full Term. The holder of
any security interest may, upon written notice to Tenant, elect to have this
Lease prior to its security interest regardless of the time of the granting or
recording of such security interest.
In the event of any foreclosure sale, transfer in lieu of foreclosure or
termination of the lease in which Landlord is lessee, Tenant shall attorn to the
purchaser, transferee or lessor as the case may be, and recognize that party as
Landlord under this Lease, provided such party acquires and accepts the Premises
subject to this Lease.
25. TENANT ESTOPPEL CERTIFICATES.
Within ten (10) days after written request from Landlord, Tenant shall execute
and deliver to Landlord or Landlord's designee, a written statement certifying
(a) that this Lease is unmodified and in full force and effect, or is in full
force and effect as modified and stating the modifications; (b) the amount of
Base Rent and the date to which Base Rent and additional rent have been paid in
advance; (c) the amount of any security deposited with Landlord; and (d) that
Landlord is not in default hereunder or, if Landlord is claimed to be in
default, stating the nature of any claimed default. Any such statement may be
relied upon by a purchaser, assignee or lender. Tenant's failure to execute and
deliver such statement within the time required shall at Landlord's election be
a default under this Lease and shall also be conclusive upon Tenant that: (1)
this Lease is in full force and effect and has not been modified except as
represented by Landlord; (2) there are no uncured defaults in Landlord's
performance and that Tenant has no right of offset, counter-claim or deduction
against Rent; and (3) not more than one month's Rent has been paid in advance.
26. TRANSFER OF LANDLORD'S INTEREST.
In the event of any sale or transfer by Landlord of the Premises, Building or
Project, and assignment of this Lease by Landlord, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission relating to the Premises, Building, Project or Lease occurring after
the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this
Lease. If any security deposit or prepaid Rent has been paid by Tenant, Landlord
may transfer the security deposit or prepaid Rent to Landlord's successor and
upon such transfer, Landlord shall be relieved of any and all further liability
with respect thereto.
27. DEFAULT.
27.1 TENANT'S DEFAULT. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
a. If Tenant abandons or vacates the Premises; or
b. If Tenant fails to pay any Rent or any other charges required to be paid
by Tenant under this Lease and such failure continues for five (5) days
after such payment is due and payable; or
c. If Tenant fails to promptly and fully perform any other covenant,
condition or agreement contained in this Lease and such failure continues
for thirty (30) days after written notice thereof from Landlord to Tenant;
or
d. If a writ of attachment or execution is levied on this Lease or on any
of Tenant's Property; or
11.
<PAGE>
e. If Tenant makes a general assignment for the benefit of creditors, or
provides for an arrangement, composition, extension or adjustment with its
creditors; or
f. If Tenant files a voluntary petition for relief or if a petition against
Tenant in a proceeding under the federal bankruptcy laws or other
insolvency laws is filed and not withdrawn or dismissed within forty-five
(45) days thereafter, or if under the provisions of any law providing for
reorganization or winding up of corporations, any court of competent
jurisdiction assumes jurisdiction, custody or control of Tenant or any
substantial part of its property and such jurisdiction, custody or control
remains in force unrelinquished, unstayed or unterminated for a period of
forty-five (45) days; or
g. If in any proceeding or action in which Tenant is a party, a trustee,
receiver, agent or custodian is appointed to take charge of the Premises or
Tenant's Property (or has the authority to do so) for the purpose of
enforcing a lien against the Premises or Tenant's Property; or
h. If Tenant is a partnership or consists of more than one (1) person or
entity, if any partner of the partnership or other person or entity is
involved in any of the acts or events described in subparagraphs d through
g above.
27.2 REMEDIES. In the event of Tenant's default hereunder, then in addition to
any other rights or remedies Landlord may have under any law, Landlord shall
have the right, at Landlord's option, without further notice or demand of any
kind to do the following:
a. Terminate this Lease and Tenant's right to possession of the Premises
and reenter the Premises and take possession thereof, and Tenant shall have
no further claim to the Premises or under this Lease; or
b. Continue this Lease in effect, reenter and occupy the Premises for the
account of Tenant, and collect any unpaid Rent or other charges which have
or thereafter become due and payable; or
c. Reenter the Premises under the provisions of subparagraph b, and
thereafter elect to terminate this Lease and Tenant's right to possession
of the Premises.
If Landlord reenters the Premises under the provisions of subparagraphs b or c
above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter accruing,
unless Landlord notifies Tenant in writing of Landlord's election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant's Property in the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Premises; fourth to the payment of Rent due and
unpaid hereunder; and the balance, if any, shall be held by Landlord and applied
in payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less than
the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly
upon demand by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations
and repairs to the Premises, which are not covered by the rent received from the
reletting.
Should Landlord elect to terminate this Lease under the provisions of
subparagraph a or c above, Landlord may recover as damages from Tenant the
following:
1. PAST RENT. The worth at the time of the award of any unpaid Rent which
had been earned at the time of termination; plus
2. RENT PRIOR TO AWARD. The worth at the time of the 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
3. RENT AFTER AWARD. The worth at the time of the award of the amount by
which the unpaid Rent for the balance of the Term after the time of
award exceeds the amount of the rental loss that Tenant proves could be
reasonably avoided; plus
4. PROXIMATELY CAUSED DAMAGES. Any other amount necessary to compensate
Landlord for all detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including, but
not limited to, any costs or expenses (including attorneys' fees),
incurred by Landlord in (a) retaking possession of the Premises, (b)
maintaining the Premises after Tenant's default, (c) preparing the
Premises for reletting to a new tenant, including any repairs or
alterations, and (d) reletting the Premises, including broker's
commissions.
"The worth at the time of the award" as used in subparagraphs 1 and 2 above, is
to be computed by allowing interest at the rate of ten percent (10%) per annum.
"The worth at the time of the award" as used in subparagraph 3 above, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1%).
12.
<PAGE>
The waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.
27.3 LANDLORD'S DEFAULT. If Landlord fails to perform any covenant, condition or
agreement contained in this Lease within thirty (30) days after receipt of
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within thirty (30) days, if Landlord fails to commence to
cure within that thirty (30) day period, then Landlord shall be liable to Tenant
for any damages sustained by Tenant as a result of Landlord's breach; provided,
however, it is expressly understood and agreed that if Tenant obtains a money
judgment against Landlord resulting from any default or other claim arising
under this Lease, that judgment shall be satisfied only out of the rents,
issues, profits, and other income actually received on account of Landlord's
right, title and interest in the Premises, Building or Project, and no other
real, personal or mixed property of Landlord (or of any of the partners which
comprise Landlord, if any) wherever situated, shall be subject to levy to
satisfy such judgment. If, after notice to Landlord of default, Landlord (or any
first mortgagee or first deed of trust beneficiary of Landlord) fails to cure
the default as provided herein, then Tenant shall have the right to cure that
default at Landlord's expense. Tenant shall not have the right to terminate this
Lease or to withhold, reduce or offset any amount against any payments of Rent
or any other charges due and payable under this Lease except as otherwise
specifically provided herein.
28. BROKERAGE FEES.
Tenant warrants and represents that it has not dealt with any real estate broker
or agent in connection with this Lease or its negotiation except those noted in
Section 2.c. Tenant shall indemnify and hold Landlord harmless from any cost,
expense or liability (including costs of suit and reasonable attorneys' fees)
for any compensation, commission or fees claimed by any other real estate broker
or agent in connection with this Lease or its negotiation by reason of any act
of Tenant.
29. NOTICES.
All notices, approvals and demands permitted or required to be given under this
Lease shall be in writing and deemed duly served or given if personally
delivered or sent by certified or registered U.S. mail, postage prepaid, and
addressed as follows: (a) if to Landlord, to Landlord's Mailing Address and to
the Building manager, and (b) if to Tenant, to Tenant's Mailing Address;
provided, however, notices to Tenant shall be deemed duly served or given if
delivered or mailed to Tenant at the Premises. Landlord and Tenant may from time
to time by notice to the other designate another place for receipt of future
notices.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS.
In the event of imposition of federal, state or local government controls,
rules, regulations, or restrictions on the use or consumption of energy or other
utilities during the Term, both Landlord and Tenant shall be bound thereby. In
the event of a difference in interpretation by Landlord and Tenant of any such
controls, the interpretation of Landlord shall prevail, and Landlord shall have
the right to enforce compliance therewith, including the right of entry into the
Premises to effect compliance.
31. Section deleted
32. QUIET ENJOYMENT.
Tenant, upon paying the Rent and performing all of its obligations under this
Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of
this Lease and to any mortgage, lease, or other agreement to which this Lease
may be subordinate.
33. OBSERVANCE OF LAW.
Tenant shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated. Tenant shall, at its sole cost and expense, promptly comply with
all laws, statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force, and with the
requirements of any board of fire insurance underwriters or other similar bodies
now or hereafter constituted, relating to, or affecting the condition, use or
occupancy of the Premises, excluding structural changes not related to or
affected by Tenant's improvements or acts. The judgment of any court of
competent jurisdiction or the admission of Tenant in any action against Tenant,
whether Landlord is a party thereto or not, that Tenant has violated any law,
ordinance or governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.
34. FORCE MAJEURE.
Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefor, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, fire or other casualty, or other causes
beyond the reasonable control of the party obligated to perform hereunder, shall
excuse performance of the work by
13.
<PAGE>
that party for a period equal to the duration of that prevention, delay or
stoppage. Nothing in this Article 34 shall excuse or delay Tenant's obligation
to pay Rent or other charges under this Lease.
35. CURING TENANT'S DEFAULTS.
If Tenant defaults in the performance of any of its obligations under this
Lease, Landlord may (but shall not be obligated to) without waiving such
default, perform the same for the account at the expense of Tenant. Tenant shall
pay Landlord all costs of such performance promptly upon receipt of a bill
therefor.
36. SIGN CONTROL.
Tenant shall not affix, paint, erect or inscribe any sign, projection, awning,
signal or advertisement of any kind to any part of the Premises, Building or
Project, including without limitation, the inside or outside of windows or
doors, without the written consent of Landlord. Landlord shall have the right to
remove any signs or other matter installed without Landlord's permission,
without being liable to Tenant by reason of such removal, and to charge the cost
of removal to Tenant as additional rent hereunder, payable within ten (10) days
of written demand by Landlord.
37. MISCELLANEOUS.
a. ACCORD AND SATISFACTION; ALLOCATION OF PAYMENTS. No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent provided for in this Lease
shall be deemed to be other than on account of the earliest due Rent, nor shall
any endorsement or statement on any Check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.
b. ADDENDA. If any provision contained in an addendum to this Lease is
inconsistent with any other provision herein, the provision contained in the
addendum shall control, unless otherwise provided in the addendum.
c. ATTORNEYS' FEES. If any action or proceeding is brought by either party
against the other pertaining to or arising out of this Lease, the finally
prevailing party shall be entitled to recover all costs and expenses, including
reasonable attorneys' fees, incurred on account of such action or proceeding.
d. CAPTIONS, ARTICLES AND SECTION NUMBERS. The captions appearing within the
body of this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning of
this Lease. All references to Article and Section numbers refer to Articles and
Sections in this Lease.
e. CHANGES REQUESTED BY LENDER. Neither Landlord or Tenant shall unreasonably
withhold its consent to changes or amendments to this Lease requested by the
lender on Landlord's interest, so long as these changes do not alter the basic
business terms of this Lease or otherwise materially diminish any rights or
materially increase any obligations of the party from whom consent to such
charge or amendment is requested.
f. CHOICE OF LAW. This Lease shall be construed and enforced in accordance with
the laws of the State.
g. CONSENT. Notwithstanding anything contained in this Lease to the contrary,
Tenant shall have no claim, and hereby waives the right to any claim against
Landlord for money damages by reason of any refusal, withholding or delaying by
Landlord of any consent, approval or statement of satisfaction, and in such
event, Tenant's only remedies therefor shall be an action for specific
performance, injunction or declaratory judgment to enforce any right to such
consent, etc.
h. CORPORATE AUTHORITY. If Tenant is a corporation, each individual signing this
Lease on behalf of Tenant represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of the corporation, and that this Lease
is binding on Tenant in accordance with its terms. Tenant shall, at Landlord's
request, deliver a certified copy of a resolution of its board of directors
authorizing such execution.
i. COUNTERPARTS. This Lease may be executed in multiple counterparts, all of
which shall constitute one and the same Lease.
j. EXECUTION OF LEASE; NO OPTION. The submission of this Lease to Tenant shall
be for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any interest
of Tenant in the Premises or any other premises within the Building or Project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, until Landlord has in
fact signed and delivered this Lease to Tenant.
k. FURNISHING OF FINANCIAL STATEMENTS; TENANT'S REPRESENTATIONS. In order to
induce Landlord to enter into this Lease Tenant agrees that it shall promptly
furnish Landlord, from time to time, upon Landlord's written request, with
financial statements reflecting Tenant's current financial condition. Tenant
represents and warrants that all financial statements, records and information
furnished by Tenant to Landlord in connection with this Lease are true, correct
and complete in all respects.
14.
<PAGE>
l. FURTHER ASSURANCES. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.
m. MORTGAGEE PROTECTION. Tenant agrees to send by certified or registered mail
to any first mortgagee or first deed of trust beneficiary of Landlord whose
address has been furnished to Tenant, a copy of any notice of default served by
Tenant on Landlord. If Landlord fails to cure such default within the time
provided for in this Lease, such mortgagee or beneficiary shall have an
additional thirty (30) days to cure such default; provided that if such default
cannot reasonably be cured within that thirty (30) day period, then such
mortgagee or beneficiary shall have such additional time to cure the default as
is reasonably necessary under the circumstances.
n. PRIOR AGREEMENTS; AMENDMENTS. This Lease contains all of the agreements of
the parties with respect to any matter covered or mentioned in this Lease, and
no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provisions of this Lease may be amended or added
to except by an agreement in writing signed by the parties or their respective
successors in interest.
o. RECORDING. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and
acknowledge a "short form" memorandum of this Lease for recording purposes.
p. SEVERABILITY. A final determination by a court of competent jurisdiction
that any provision of this Lease is invalid shall not affect the validity of
any other provision, and any provision so determined to be invalid shall, to
the extent possible, be construed to accomplish its intended effect.
q. SUCCESSORS AND ASSIGNS. This Lease shall apply to and bind the heirs,
personal representatives, and permitted successors and assigns of the parties.
r. TIME OF THE ESSENCE. Time is of the essence of this Lease.
s. WAIVER. No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver of such default.
t. COMPLIANCE. The parties hereto agree to comply with all applicable federal,
state and local laws, regulations, codes, ordinances and administrative orders
having jurisdiction over the parties, property or the subject matter of this
Agreement, including, but not limited to, the 1964 Civil Rights Act and all
amendments thereto, the Foreign Investment In Real Property Tax Act, the
Comprehensive Environmental Response Compensation and Liability Act, and The
Americans With Disabilities Act.
The receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.
No act or conduct of Landlord, including, without limitation, the acceptance of
keys to the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term. Only a written notice from
Landlord to Tenant shall constitute acceptance of the surrender of the Premises
and accomplish a termination of the Lease.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease.
The parties hereto have executed this Lease as of the dates set forth below.
<TABLE>
<S> <C>
Date: 9/14/2000 Date: 9/13/2000
---------------------------------------- ------------------------------------
Landlord: Integrated Power Chip Corporation Tenant: Photon Dynamics, Inc.
------------------------------------ ----------------------------------
By: /s/ By: /s/
---------------------------------------- ------------------------------------
Isaac Yang Rick Dissley
Title: President Title: Chief Financial Officer
---------------------------------------- ------------------------------------
By: By: /s/
---------------------------------------- ------------------------------------
Title: Title: President
---------------------------------------- ------------------------------------
</TABLE>
CONSULT YOUR ADVISORS - This document has been prepared for approval by
your attorney. No representation or recommendation is made by CB Commercial as
to the legal sufficiency or tax consequences of this document or the transaction
to which it relates. These are questions for your attorney.
15.
<PAGE>
In any real estate transaction, it is recommended that you consult with
a professional, such as a civil engineer, industrial hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
16.
<PAGE>
CB RICHARD ELLIS OFFICE BUILDING LEASE ADDENDUM
Brokerage & Management
Licensed Real Estate Broker
This is an Addendum to the Office Building Lease dated September 6, 2000,
between Integrated Power Chip Corporation as Landlord and Photon Dynamics, Inc.
as Tenant, concerning the property located at 17 Great Oaks Boulevard, Suite
100, San Jose, CA 95119, as more specifically described in the Contract.
38. RENT
Tenant shall deliver to Landlord upon execution of this Lease an amount
equal to the first (1st) month's rent (for the 5,427 sf warehouse house
portion only); Fourteen Thousand Six Hundred Fifty-Two and 90/100 dollars
($14,652.90) together with the Security Deposit of Ninety Thousand and
00/100 Dollars ($90,000.00). Once the Tenant improvements for the office
area are complete, but no later than December 1, 2000, the rent for the
total area of 1 I, 178 sf shall be Thirty Thousand One Hundred Eighty and
60/100 Dollars ($30,180.60) through September 14, 2001.
September 15, 2001 - September 14, 2002 $31,102.79
September 15, 2002 - September 14, 2003 $32,657.92
39. OPTIONS
Lessee shall have option to lease other space in the Building, which
becomes available during term of Lease under same terms and conditions of
Lease.
40. EXPENSES
Lessee to pay only for the change in operating expenses from actual
expenses for calendar year 2001. Base year expenses to based upon fully
leased and assessed Building. Any structural expenses are to be borne by
Lessor. In no event shall Lessee be responsible for any tax increases due
to sale of Building.
41. RIGHT TO SUBLEASE
Lessee may sublease Premises upon reasonable approval of Lessor. Any
profits from subleasing shall be equally split after reasonable deductions
for Lessee costs of subleasing. Lessor shall have the right to reclaim
Premises in the event of subleasing. Lessee will notify Lessor in writing
of intention to sublease Premises and the Intended Date of sublease at
least 40 days in advance. If lessor decides to reclaim premises, they must
respond in writing to Lessee within ten (10) days. Lessor must reclaim the
premises on the Intended Date to sublease.
42. SIGNAGE
Tenant shall be able to provide their own building and suite signage as
long as it receives City of San Jose written approval as well as Landlord's
prior written approval, which shall not be unreasonably withheld.
43. TERM
Lease to commence on September 15, 2000 and terminate thirty-six (36)
months thereafter. The warehouse space will be delivered on September 15,
2000 without the Tenant Improvements completed. The office space will be
delivered on the later of completion of all Tenant Improvements or November
1, 2000. Tenant shall have right to cancel Lease if the Full Premises are
not delivered by December 1, 2000, if not caused by Tenant's actions.
To the best of the Landlord's knowledge, the building contains no hazardous
materials and the only ADA requirement not met is the drinking fountain.
In the event of any conflict between the terms of this Addendum and the Lease,
the terms of this Addendum shall prevail.
<TABLE>
<S> <C>
Landlord: IPC Tenant: Photon Dynamics
---------------------------------------- ------------------------------------
By: /s/ By: /s/
---------------------------------------------- ----------------------------------------
Title: President Title: CFO
------------------------------------------- -------------------------------------
Address: 17 Great Oaks Blvd. Address: 6325 San Ignacio Ave.
----------------------------------------- -----------------------------------
San Jose, CA 95119 San Jose, CA 95119
-------------------------------------------------- -------------------------------------------
Date: 9/14/2000 Date: 9/13/2000
--------------------------------------------- --------------------------------------
By: /s/
----------------------------------------
Title: President
-------------------------------------
Address:
-----------------------------------
-------------------------------------------
Date: 9/13/2000
--------------------------------------
</TABLE>
17.
<PAGE>
CB RICHARD ELLIS OFFICE BUILDING LEASE SECOND ADDENDUM
Brokerage & Management
Licensed Real Estate Broker
This is a Second Addendum to the Office Building Lease dated September 6, 2000,
between Integrated Power Chip Corporation as Landlord and Photon Dynamics, Inc.
as Tenant, concerning the property located at 17 Great Oaks Boulevard, Suite
100, San Jose, CA 95119, as more specifically described in the Contract.
The following provisions of this Second Addendum are an integral part of that
certain Office Building Lease dated September 6, 2000 between Landlord and
Tenant with respect to the Property. In the event of any conflict or
inconsistency between the printed or typewritten provisions of the completed
Lease Agreement and provision of this Second Addendum, the provisions of this
Second Addendum shall control. The Lease Agreement includes the "Lease," The
Addendum, The Second Addendum and Exhibits A, B, C, & D.
2a. Add: "SEE ADDENDUM."
2d. Add: "SEE ADDENDUM."
2e. Add: "Landlord has the right to regulate or restrict the use of the
common areas, AS LONG AS THEY DO NOT IMPAIR THE USE OF THE
PREMISES BY TENANT."
2j. Add: "SEE ADDENDUM."
2n. Add: "UPON SIGNING OF THE LEASE THE SQUARE FOOTAGE WILL NOT CHANGE
DURING THE TERM OF THE LEASE."
2r. Add: "UPON SIGNING OF THE LEASE THE SQUARE FOOTAGE WILL NOT CHANGE
DURING THE TERM OF THE LEASE."
5.3.1. Add: "Project operating costs shall include all COMMERCIALLY
REASONABLE AND CUSTOMARY ITEMS DESCRIBED AS THE FOLLOWING..."
5.3.2.b. Add: "reasonably" to "To provide for current payments of... as
REASONABLY estimated by Landlord from time to time."
5.3.1.b.7. Add: "NOT TO EXCEED A MAXIMUM OF THREE PERCENT (3%) OF THE RENT,
MANAGEMENT OF THE BUILDING...."
5.3.1.b.10. Add: "amortization of capital expenses OVER THE TERM OF THE LEASE."
5.3.2.e. Delete: Landlord's certified public accountant and add "A MUTUALLY
AGREED TO CPA" Add: "IF THE ADDITIONAL RENT IS OVER FIVE PERCENT
(5%), LANDLORD WILL PAY THE COST OF THE AUDIT AND TENANT WILL BE
CREDITED FOR THE OVERPAYMENT OF RENT."
6. Delete: "maximum interest by law." Replace with PRIME +4%.
9. Add: Building hours are 8:00 A.M. to 6:00 PM Monday through Friday
except for national holidays.
10. Please underlined text: "Tenant's taking possession OF THE FULL
PREMISES INCLUDING THE OFFICE AND WAREHOUSE SPACE THAT IS SHOWN ON
EXHIBIT A shall be deemed conclusive evidence..."
11If. Add: Except as otherwise expressly provided in this Lease,
PROVIDING TENANT'S USE IS NOT MATERIALLY IMPACTED, LANDLORD SHALL
HAVE..."
12a. Delete "Landlord may...require that any such work be performed by
Landlord's contractor...of the cost of the work,"
14. Rules Regulations
Add: "UNBIASED reasonable modifications..."
15e. Add: To enter the premises "WITH REASONABLE NOTICE TO MINIMIZE
INTERFERENCE," for the purpose of making inspections
16e. ADD A CAP OF $3,000.00 FOR ATTORNEY FEES INSTEAD ORS1000.00.
18.
<PAGE>
Second Addendum to Lease dated September 6, 2000
Between Integrated Power Chip Corporation and Photon Dynamics
For 17 Great Oaks Boulevard, San Jose, CA 95119
19. a. 3rd line down, Add: "REASONABLE opinion of Landlord"
b. Add: "Reasonably completed in ninety (90) days."
c. Add: "Landlord shall not be liable "UNLESS DUE TO LANDLORD'S
NEGLIGENCE OR WILLFUL MISCONDUCT" for any loss.
21a. Add: "EXCEPT FOR THE LANDLORD'S NEGLIGENCE, WILLFUL MISCONDUCT OR
BREACH OF LEASE, Tenant shall indemnify..."
27. Add: after vacates "FOR MORE THAN THIRTY (30) DAYS."
<TABLE>
<S> <C>
Landlord: IPC Tenant: Photon Dynamics
------------------------------------- -------------------------------------
By: /s/ By: /s/
------------------------------------------- -----------------------------------------
Title: President Title: CFO
---------------------------------------- --------------------------------------
Address: 17 Great Oaks Blvd. Address: 6325 San Ignacio Ave.
-------------------------------------- ------------------------------------
San Jose, CA 95119 San Jose, CA 95119
---------------------------------------------- --------------------------------------------
Date: 9/14/2000 Date: 9/13/2000
----------------------------------------- ---------------------------------------
By: /s/
-----------------------------------------
Title: President
--------------------------------------
Address:
------------------------------------
--------------------------------------------
Date: 9/13/2000
---------------------------------------
</TABLE>
19.
<PAGE>
EXHIBIT A: Floor Plan
[MAP AND FLOOR PLAN OF 17 GREAT OAKS BLVD. STE. 100, SAN JOSE, CA GOES HERE]
<PAGE>
EXHIBIT B: Total building prior to TI's.
[GRAPHIC OF TOTAL BUILDING PRIOR TO TI'S GOES HERE]
<PAGE>
EXHIBIT C
BUILDING STANDARD (TENANT IMPROVEMENTS) WORK LETTER
---------------------------------------------------
This Exhibit is attached to and made a part of that certain Lease
("Lease") dated September 6, 2000 by and between Landlord and Tenant for the
Premises commonly known as 17 Great Oaks Boulevard, Suite 100, San Jose, CA
95119.
1. CONSTRUCTION OF PREMISES
(a) LANDLORD TO CONSTRUCT.
Landlord shall cause the construction of the Building to be
completed as promptly as may be reasonably possible, subject to Unavoidable
Delays arising from causes beyond Landlord's control. Such work ("Landlord's
Work") shall be done in conformity with the description of Landlord's Work and
outline specifications set forth in below. Landlord's Work shall be deemed
approved by Tenant in all respects when Tenant enters into the Premises, except
as to non substantial "punch list/items" itemized in writing by Tenant and
delivered to Landlord as provided in this Lease.
1. Landlord to provide: one (1) additional bathroom, carpeting throughout
office area (where tile now exists except for bathrooms), one (1)
dividing wall in the warehouse area plus the office area, one (1)
hallway to the restrooms.
2. TENANT IMPROVMENTS
After Tenant's written approval of the Working Drawings no change shall
be made therein except with the prior written approval of Landlord. All
architectural services necessitated shall be rendered by Tenant's previously
approved architect at the sole expense of Tenant. All construction work
necessitated by any change shall be performed at the sole expense of Tenant.
3. LANDLORD'S WORK
Landlord shall cause Tenant's Work to be performed by a licensed
general contractor, or contractors, reasonably approved by Landlord. Landlord,
in its sole discretion, may require that said general contractor post a
"completion bond" to secure full performance and construction of Tenant's Work.
All of Tenant's Work shall be performed in a First Class Manner with applicable
permits and in accordance with all laws. Tenant's Work shall be commenced within
10 (ten) days after Landlord's approval of the Working Drawings shall occur.
Tenant shall cause Tenant's Work to be completed in accordance with the approved
Working Drawings at the earliest possible date. Landlord shall provide the space
broom clean, in reasonable repair, and all systems, including but not limited to
AC, electrical, and plumbing in good and working condition.
<TABLE>
<S> <C>
Landlord: Tenant:
Integrated Power Chip Corp., Inc. Photon Dynamics, Inc.
By: /s/ By: /s/
-------------------------------------- --------------------------------------
Title: President Title: CFO
----------------------------------- -----------------------------------
By: /s/
--------------------------------------
Title: President
-----------------------------------
</TABLE>
Initials:
Initials:
------------
------------
Page 1 of 1
<PAGE>
EXHIBIT D
RULES AND REGULATIONS
This Exhibit is attached and made a part of that certain Lease dated
September 6, 2000, by and between "Integrated Power Chip Corporation," known as
"Landlord" and Photon Dynamics, Inc., known as "Tenant" for the Premises
commonly known as 17 Great Oaks Blvd., San Jose, CA 95119.
This Exhibit sets forth the rules and regulations governing Tenant's
use of the Premises, Building, Common Area and Project leased to Tenant
pursuant to the terms, covenants and conditions of the Lease to which this
Exhibit is attached and therein made part thereof. Unless otherwise defined,
capitalized terms used herein shall have the same meanings as set forth in
the Lease. In the event of any conflict or inconsistency between this Exhibit
and the Lease, the Lease shall control.
1. Tenant shall not place anything or attach anything to be placed near
the glass of any window, door, partition or wall which may appear unsightly from
outside the Premises.
2. The walls, walkways, sidewalks, entrance passages, courts and
vestibules shall not be obstructed or used for any purpose other than ingress
and egress of pedestrian travel to and from the Premises and shall not be used
for loitering or gathering, or to display, store or place any merchandise,
equipment or devices, or for any other purpose. The walkways, entrance
passageways, courts, vestibules and roof are not for the use of the general
public and landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the sole judgment of the
Landlord shall be prejudicial to the safety, character, reputation, and
interests of the Premises and its Tenant, provided that nothing herein contained
shall be construed to prevent such access to persons with whom Tenant normally
deals in the ordinary course of Tenant's business unless such persons are
engaged in illegal activities or conflict with any of the Restrictions or the
Rules and Regulations. No tenant, employee or invitee of any Tenant shall be
permitted upon the roof of the Building.
3. No awnings or other projections shall be attached to the outside
walls of the Premises, Building or Project. No security bars or gates,
curtains, blinds, shades or screens shall be attached to or hung in or used
in connection with any window or door of the Premises, without prior written
consent of Landlord. Neither the interior nor exterior of any window shall be
coated or otherwise sunscreened without the express written consent of
Landlord.
4. Tenant shall not in any way deface any part of the Premises. Tenant
shall not lay linoleum, tile, carpet or other similar floor covering so that the
same shall be affixed to the floor of the Premises in any manner except as
approved by Landlord in writing. The expense of repairing any damage resulting
from a violation of this rule or removal of any floor covering shall be borne by
the Tenant.
5. The toilet rooms, urinals, wash bowls and other plumbing apparatus
shall not be used for any purpose other than that for which they are constructed
and no foreign substance of any kind whatsoever shall be thrown therein. The
expense of any breakage, stoppage or damage resulting from the violation of this
rule shall be borne by the Tenant.
6. Landlord shall direct electricians as to the manner and location
of any future telephone wiring. No boring or cutting for wires will be
allowed without the prior consent of the Landlord. The locations of the
telephones, call boxes and other office equipment affixed to the Premises
shall be subject to the prior written approval of Landlord. Tenant shall be
allowed to install data and telephone cabling as required for the operation
of its business; however, Landlord makes no representation as to the adequacy
or availability of such utilities.
7. No exterior storage shall be allotted at any time without the prior
written approval of Landlord. The Premises shall not be used for washing
clothes, lodging or sleeping, or for immoral or illegal purposes.
8. Tenant shall not make or permit to be made any unseemly or
disturbing noises or disturb or interfere with occupants of this or neighboring
buildings or properties or those having business with them, whether by the use
of any musical instrument, radio, phonograph, machinery, or otherwise. The
Tenant shall not use, keep or permit to be used or kept any foul or obnoxious
gas or substance in the Premises or permit or suffer the Premises to be used or
occupied in any manner offensive or objectionable to Landlord or other occupants
of this or neighboring buildings or premises by reason of any orders, fumes or
gases.
9. Neither Tenant nor any of Tenant's Agents shall, at any time, bring
or keep upon the Premises any toxic, hazardous, flammable, combustible or
explosive fluid, chemical or substance without the prior written consent of
Landlord.
10. No animals shall be permitted at any time within the Premises.
11. Tenant shall not use the name of the Building or Project in
connection with or in promoting or advertising the business of the Tenant,
except as Tenant's address, without the prior written consent of the Landlord.
Landlord shall have the reasonable right to prohibit any advertising by Tenant
which, in Landlord's reasonable opinion, tends to impair the reputation of the
Project or its desirability for its intended uses and, upon written notice from
Landlord, Tenant shall refrain from or discontinue such advertising.
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12. Canvassing, soliciting, peddling, parading, picketing,
demonstrating, or otherwise engaging in any conduct that unreasonably impairs
the value or use of the Premises, are prohibited and Tenant shall cooperate to
prevent the same.
13. All equipment including electrical, mechanical, plumbing, and fire
extinguisher systems shall be placed by the Tenant on the Premises, in settings
approved by Landlord in writing, in such a way as to best minimize, absorb and
prevent any vibration, noise or annoyance. No equipment of any type shall be
placed on the Premises which in Landlord's opinion exceeds the load limits of
the floor or otherwise threatens the soundness of the structure or improvements
of the Premises.
14. All furniture, equipment and freight moved in and out of the
Building shall not impair vehicular and pedestrian circulation. Landlord will
not be responsible for loss or damage to any furniture, equipment or other
personal property of the Tenant from any cause.
15. No air conditioning unit or other similar apparatus shall be
installed or used by the Tenant without the prior written consent of Landlord.
16. No exterior antenna shall be erected on the roof or exterior
walls of the Premises, without in each instance, the prior written consent of
Landlord. Any aerial or antenna so installed by or on behalf of Tenant
without such written consent shall be subject to removal by Landlord at any
time without prior notice at the expense of Tenant.
17. The entire Premises, including vestibules, entrances, doors,
fixtures, windows and plate glass, shall at all times be maintained in a safe,
neat and clean condition by Tenant. All trash, refuse and waste materials shall
be regularly removed from the Premises by Tenant and placed in the containers
for refuse collection. All cardboard boxes must be "broken down" prior to being
placed in the trash container. All Styrofoam chips must be bagged or otherwise
contained prior to placement in the trash containers so as not to constitute a
nuisance. Pallets may not be disposed of in the trash containers or enclosures.
The burning of trash, refuse or waste materials is prohibited.
18. Tenant shall use at Tenant's sole cost such pest extermination
contractor as Landlord may reasonably direct and at such intervals as Landlord
may require.
19. All keys for the Premises provided to Tenant by Landlord shall
be returned to Landlord upon the expiration or sooner termination of the
Lease. Tenant shall not change locks on doors of the Premises without the
prior written consent of Landlord. In the event of loss of any keys furnished
by Landlord for Tenant, Tenant shall pay to Landlord the costs thereof.
20. No person shall enter or remain within the Premises, while
intoxicated or under the influence of liquor or drugs. Landlord shall have
the right to exclude or expel from the Premises any person who in the
absolute discretion of the Landlord is under the influence of liquor or
drugs. If Tenant is or allows repeat violations of this rule, Landlord may,
upon the occurrence of three (3) or more incidents require police or security
attention consider this a default of the Lease and act to so terminate the
Lease.
Tenant agrees to comply with all such Rules and Regulations. Should
Tenant not abide by these Rules and Regulations, Tenant will be in default of
the Lease and Landlord and/or its designee shall have the right, without further
notice, to cure the violation of Tenant's expense or to pursue any other remedy
allowed by law.
Landlord reserves the right to amend or supplement the foregoing Rules
and Regulations and to adopt and promulgate additional Rules and Regulations
applicable to the Premises. Notice of such Rules and Regulations and amendments
and supplements thereto, if any shall be given to the Tenant.
Neither Landlord, Landlord's Agent or any other person or entities
shall be responsible to Tenant or to any other person for any violation of
these Rules and Regulations by any other tenant or other person. Tenant shall
be deemed to have read these Rules and Regulations and to have agreed to
abide by them as a condition precedent, waivable only by Landlord, to
Tenant's occupancy of the Premises.
<TABLE>
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Landlord: Tenant:
Integrated Power Chip Corp., Inc. Photon Dynamics, Inc.
By: /s/ By: /s/
------------------------------------ --------------------------------------
Title: President Title: CFO
--------------------------------- -----------------------------------
By: /s/
--------------------------------------
Title: President
-----------------------------------
</TABLE>
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CB RICHARD ELLIS SALE/LEASE DISCLOSURES
Property: 09101/00 17 GREAT OAKS BOULEVARD, SUITE 100, SAN JOSE, CALIFORNIA
FLOOD ZONES. According to PAGE 27 OF FIRM #50, the Property / / is / /X/ may
or may not be located in a flood zone. Man lenders require flood insurance
for properties located in flood zones, and government authorities may
regulate development and construction in flood zones. Whether or not located
in a flood zone, properties can be subject to flooding and moisture problems,
especially properties on a slope or in low-lying areas or in a dam inundation
zone (California Government Code Section 8589.5). Buyers and tenants should
have their experts confirm whether the Property is in a flood zone and
otherwise investigate and evaluate these matters. Flood Zone Designation:
Zone N/A.
EARTHQUAKES. Earthquakes occur throughout California. According to PAGE 27 OF
FIRM #50, the Property / / is / /X/ may or may not be situated in an
Earthquake Fault Zone and/or a Seismic Hazard Zone (Sections 2621 et seq. and
Sections 2690 et seq. of the California Public Resources Code, respectively).
Property development and construction in such zones generally are subject to
the findings of a geologic report prepared by a state-registered geologist.
Whether or not located in such a zone, properties in California are subject
to earthquake risks and may be subject to a variety of state and local
earthquake-related requirements, including retrofit requirements. Among other
items, all new and existing water heaters must be braced, anchored or
strapped to resist falling or horizontal displacement, and in sales
transactions, sellers must execute a written certification that water heaters
are so braced, anchored or strapped (California Health and Safety Code
Section 19211). Buyers and tenant should have their experts confirm whether
the Property is in any earthquake zone and otherwise investigate and evaluate
these matters.
HAZARDOUS MATERIALS AND UNDERGROUND STORAGE TANKS. Due to prior or current
uses of the Property or in the area or the construction materials used, the
Property may have hazardous or undesirable metals (including lead-based
paint), mineral (including asbestos), chemicals, hydrocarbons,
petroleum-related compounds, or biological or radioactive/emissive items
(including electrical and magnetic fields) in soils, water, building
components, above or below-ground tanks/containers or elsewhere in areas that
may or may not be accessible or noticeable. Such items may leak or otherwise
be released. Asbestos has been used in items such as fireproofing,
heating/cooling systems, insulation, spray-on and tile acoustical materials,
floor tiles and coverings, roofing, drywall and plaster. If the Property was
built before 1978 and has a residential unit, sellers/landlords must disclose
all reports, surveys and other information known to them regarding lead-based
paint to buyer and tenants and allow for inspections (42 United States Code
Sections 4851 et seq.). Sellers/landlords are required to advise
buyers/tenants if they have any reasonable cause to believe that any
hazardous substance has come to be located on or beneath the Property
(California Health and Safety Code Section 25359.7), and sellers/landlords
must disclose reports and surveys regarding asbestos to certain persons,
including their employees, contractors, buyers and tenants (California Health
and Safety Code Sections 25915 et seq.); buyers/tenants have similar
obligations. Have your experts investigate and evaluate these matters.
AMERICANS WITH DISABILITIES ACT (ADA). The Americans With Disabilities Act
(42 United States Code Sections 12101 et seq.) and other federal, state and
local requirements may require changes to the Property. Have your experts
investigate and evaluate these matters.
TAXES. Sales, leases and other real estate transactions can have federal,
state and local tax consequences. In sales transactions, Internal Revenue
Code Section 1446 requires buyers to withhold and pay to the IRS 10% of the
gross sales price within 10 days of the date of a sale unless the buyers can
establish that the sellers are not foreigners, generally by having the
sellers sign a Non-Foreign Seller Affidavit. Depending on the structure of
the transaction, the tax withholding liability can exceed the net cash
proceeds to be paid to the sellers at closing. California imposes an
additional withholding requirement equal to 1/3% of the gross sales price not
only on foreign sellers but also out-of-state sellers and sellers leaving the
state if the sale price exceeds $100,000. Withholding generally is required
if the last known address of a seller is outside California, if the proceeds
are disbursed outside of California or if a financial intermediary is used.
Have your experts investigate and evaluate these matters.
FIRES. California Public Resources Code Sections 4125 et seq. require sellers
of real properly located within slat responsibility areas to advise buyers
that the properly is located within such a wildland zone, that the state does
not have the responsibility to provide fire protection services to any
structure within such a zone and that such zones may contain substantial
forest/wildland fire risks. Government Code Sections 51178 et seq. require
sellers of real properly located within certain fire hazard zones to disclose
that the property is located in such a zone. Sellers must disclose that a
property located in a wildland or fire hazard zone is subject to the fire
prevention requirements of Public Resources Code Section 4291 and Government
Code Section 51182, respectively. Sellers must make such disclosures if
either the sellers have actual knowledge that a property is in such a zone or
a map showing the property to be in such a zone has been provided to the
county assessor. Properties, whether or not located in such a zone, are
subject to fire/life safety risks and may be subject to state and local
fire/life safety-related requirements, including retrofit requirements. Have
your experts investigate and evaluate these matters.
BROKER REPRESENTATION. CB Richard Ellis, Inc. is a national brokerage firm
representing a variety of clients. Depending on the circumstances, CB Richard
Ellis, Inc. may represent both the seller/landlord and the buyer/tenant in a
transaction, or you may be interested in a property that may be of interest
to other CB Richard Ellis, Inc. clients. If CB Richard Ellis, Inc. represents
more than one party with respect to a property, CB Richard Ellis, Inc. will
not disclose the confidential information of one principal to the other.
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SELLER/LANDLORD DISCLOSURE, DELIVERY OF REPORTS, PEST CONTROL REPORTS AND
COMPLIANCE WITH LAWS. Sellers/landlords are hereby requested to disclose
directly to buyers/tenants all information known to sellers/landlords
regarding the Property including but not limited to, hazardous materials,
zoning, construction, design, engineering, soils, title, survey, fire/life
safety, and other matters, and to provide buyers/tenants with copies of all
reports in the possession of or accessible to sellers/landlord regarding the
Property. Seller/landlords and buyers/tenants must comply with all applicable
federal, state and local laws regulations, codes, ordinances and
administrative orders, including, but not limited to, the 1964 Civil Rights
Act and amendments thereto, the Foreign Investment in Real Property Tax Act,
the Comprehensive Environmental Response Compensation and Liability Act, and
The Americans With Disabilities Act. If a pest control report is a condition
of the purchase contract, buyers are entitled to receive a copy of the report
and any certification and notice of work completed.
PROPERTY INSPECTIONS AND EVALUATIONS. Buyers/tenants should have the Property
thoroughly inspected and all parties should have the transaction thoroughly
evaluated by the experts of their choice. Ask your experts what
investigations and evaluation may be appropriate as well as the risks of not
performing any such investigations or evaluations. Information regarding the
Property supplied by the real estate brokers has been received from third
party sources and has not been independently verified by the brokers. Have
your experts verify all information regarding the Property, including any
linear or area measurements and the availability of all utilities. All work
should be inspected and evaluated by your experts as they deem appropriate.
Any projections or estimates are for example only, are based on assumptions
that may not occur and do not represent the current or future performance of
the Property. Real estate brokers are not experts concerning nor can they
determine if any expert is qualified to provide advice on legal, tax, design,
ADA, engineering, construction, soils, title, survey, fire/life safety,
insurance, hazardous materials, or other such matters. Such areas require
special education and, generally, special licenses not possessed by real
estate brokers. Consult with the experts of your choice regarding these
matters.
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<S> <C> <C>
CB RICHARD ELLIS OFFICE BUILDING LEASE Now known as CB Richard Ellis, Inc.
Brokerage & Management
Licensed Real Estate Broker
</TABLE>
TABLE OF CONTENTS
<TABLE>
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1. LEASE OF PREMISES................................................................................1
2. DEFINITIONS......................................................................................1
3. EXHIBITS AND ADDENDA.............................................................................2
4. DELIVERY OF POSSESSION...........................................................................2
5. RENT.............................................................................................2
6. INTEREST AND LATE CHARGES........................................................................4
7. SECURITY DEPOSIT.................................................................................4
8. TENANTS USE OF THE PREMISES......................................................................5
9. SERVICES AND UTILITIES...........................................................................5
10. CONDITION OF THE PREMISES........................................................................6
11. CONSTRUCTION, REPAIRS AND MAINTENANCE............................................................6
12. ALTERATIONS AND ADDITIONS........................................................................6
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY........................................................7
14. RULES AND REGULATIONS............................................................................7
15. CERTAIN RIGHTS RESERVED BY LANDLORD..............................................................7
16. ASSIGNMENT AND SUBLETTING........................................................................8
17. HOLDING OVER.....................................................................................9
18. SURRENDER OF PREMISES............................................................................9
19. DESTRUCTION OR DAMAGE............................................................................9
20. EMINENT DOMAIN...................................................................................9
21. INDEMNIFICATION.................................................................................10
22. TENANT'S INSURANCE..............................................................................10
23. WAIVER OF SUBROGATION...........................................................................11
24. SUBORDINATION AND ATTORNMENT....................................................................11
25. TENANT ESTOPPEL CERTIFICATES....................................................................11
26. TRANSFER OF LANDLORD'S INTEREST.................................................................11
27. DEFAULT.........................................................................................11
28. BROKERAGE FEES..................................................................................13
29. NOTICES.........................................................................................13
30. GOVERNMENT ENERGY OR UTILITY CONTROLS...........................................................13
32. QUIET ENJOYMENT.................................................................................13
33. OBSERVANCE OF LAW...............................................................................13
34. FORCE MAJEURE...................................................................................13
35. CURING TENANT'S DEFAULTS........................................................................14
36. SIGN CONTROL....................................................................................14
37. MISCELLANEOUS...................................................................................14
38. RENT............................................................................................17
39. OPTIONS.........................................................................................17
40. EXPENSES........................................................................................17
</TABLE>
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<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
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41. RIGHT TO SUBLEASE...............................................................................17
42. SIGNAGE.........................................................................................17
43. TERM............................................................................................17
</TABLE>
Exhibit A Floor Plan
Exhibit B Total Building Prior to TI's
Exhibit C Tenant Improvements Work Letter
Exhibit D Rules & Regulations
Sales & Lease Disclosure
ii.
