DATE: 7/31/00
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LANDLORD: GEOMAX
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TENANT: SIERRA MONITOR CORPORATION
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PREMISES: 1991 Tarob Ct, Milpitas, CA
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LEASE AGREEMENT
TABLE OF CONTENTS
Paragraph...................................................................Page
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1. FUNDAMENTAL LEASE PROVISIONS..............................................2
2. PREMISES..................................................................2
3. USE.......................................................................2
4. RENT......................................................................3
5. TERM......................................................................4
6. POSSESSION................................................................4
7. COMMON AREAS..............................................................4
8. PARKING...................................................................4
9. EXPENSES OF OPERATION AND MAINTENANCE OF THE COMPLEX......................4
10. ACCEPTANCE AND SURRENDER OF PREMISES......................................4
11. ALTERATIONS AND ADDITIONS.................................................5
12. REPAIR AND MAINTENANCE OF THE PREMISES....................................5
13. UTILITIES.................................................................5
14. TAXES.....................................................................5
15. LIABILITY INSURANCE.......................................................6
16. TENANT'S PROPERTY INSURANCE AND WORKER'S COMPENSATION.....................6
17. LANDLORD'S INSURANCE; WAIVER OF SUBROGATION...............................6
18. INDEMNIFICATION; EXEMPTION OF LANDLORD FROM LIABILITY.....................6
19. COMPLIANCE................................................................6
20. LIENS.....................................................................6
21. ASSIGNMENT AND SUBLETTING.................................................6
22. SUBORDINATION AND MORTGAGES...............................................7
23. ENTRY BY LANDLORD.........................................................7
24. TENANT'S DEFAULT..........................................................7
25. LANDLORD'S REMEDIES AND RIGHTS............................................7
26. DESTRUCTION...............................................................8
27. EMINENT DOMAIN............................................................8
28. SALE OR CONVEYANCE BY LANDLORD............................................8
29. ATTORNMENT TO LENDER OR THIRD PARTY.......................................8
30. HOLDING OVER..............................................................8
31. CERTIFICATE OF ESTOPPEL...................................................8
32. CONSTRUCTION CHANGES......................................................9
33. RIGHT OF LANDLORD TO PERFORM..............................................9
34. ATTORNEY'S FEES...........................................................9
35. WAIVER....................................................................9
36. NOTICES...................................................................9
37. EXAMINATION OF LEASE......................................................9
38. DEFAULT BY LANDLORD.......................................................9
39. AUTHORITY.................................................................9
40. LIMITATION OF LIABILITY...................................................9
41. BROKERS...................................................................9
42. SIGNS....................................................................10
43. HAZARDOUS MATERIALS......................................................10
44. INTEREST.................................................................10
45. MISCELLANEOUS AND GENERAL PROVISIONS.....................................10
Exhibits
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A Legal Description
B Site Plan of Complex and Building
C Tenant Improvements Work Letter
D Acknowledgment of Commencement
E Hazardous Materials
Riders
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LEASE AGREEMENT
DATED: 7/31/00
LANDLORD: GEOMAX, a California general partnership
TENANT: SIERRA MONITOR CORPORATION, a California corporation
1. FUNDAMENTAL LEASE PROVISIONS.
A. PREMISES: Approximately 15,788 square feet of leasable area in
the building containing approximately 37,264 leasable square
feet located on a parcel of land in the County of Santa Clara
, State of California, as more particularly described in the
legal description attached as Exhibit A hereto, with a common
address of 1991 Tarob Court, Milipitas, CA . The location of
Premises is indicated on the site plan attached as Exhibit B
hereto. (Paragraph 2)
B. LEASE TERM: 60 full calendar months, plus any partial month at
the beginning of the Lease Term. (Paragraph 5)
C. COMMENCEMENT DATE: April 1 , 2001, or twenty four (24) hours
after substantial completion of the Tenant Improvements,
whichever is later. (Paragraph 5)
<TABLE>
<CAPTION>
D. INITIAL BASIC RENT: (Paragraph 4.A)
Lease Months (inclusive) Basic Rent (per leasable sq.ft.) Basic Rent (total)
------------------------ -------------------------------- ------------------
<S> <C> <C> <C>
01 - 12 2.3500 NNN 37,102
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13 - 24 2.4440 NNN 38,586
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25 - 36 2.5417 NNN 40,734
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37 - 48 2.6433 NNN 41,734
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49 - 60 2.7490 NNN 43,404
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</TABLE>
E. ADDITIONAL RENT: Real Property Taxes, insurance premiums, tenant
association dues (if any), maintenance and other costs and expenses
under this Lease. (Paragraph 4.E)
F. TENANT'S SHARE: Forty-two 4/10 percent (42.4%). (Paragraph 4.E)
G. PREPAID RENT: $ None for the month(s) of the Lease Term. (Paragraph
4.H)
H. BASIC RENT ADJUSTMENT: The Basic Rent shall be subject to a CPI
adjustment on the first day of each of the following full calendar
months of the Lease Term: None . (Paragraph 4.B)
I. SECURITY DEPOSIT: $ 40,000.00. (Paragraph 4.G) $8,641 from previous
lease dated 1/29/86. Balance to be paid by 04/01/01.
J. PERMITTED USE: Research & development, light manufacturing, and related
activities including admin, manufacturing & design of instruments to
monitor hazardous gases . (Paragraph 3)
K. NUMBER OF PARKING SPACES: Sixty (60). (Paragraph 8)
<TABLE>
<CAPTION>
L. ADDRESSES FOR NOTICES AND PAYMENT OF RENT (Paragraphs 4.F and 36):
<S> <C>
To Landlord: GEOMAX To Tenant: SIERRA MONITOR CORPORATION
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2025 Gateway Place #124 1991 Tarob Court
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San Jose, CA 95110 Milpitas, CA 95035
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Facsimile No.: 408-452-0268 Facsimile No.: 408-262-9042
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</TABLE>
M. TENANT'S BROKER: None. (Paragraph 41)
N. GUARANTORS: None.
O. OTHER PROVISIONS: The following Riders are added hereto and included as
part of this Lease:
Rider No. Paragraph No. Title
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Each reference in this Lease to any of the provisions in this Paragraph 1 shall
be construed to incorporate all of the terms of each such provision. In the
event of any conflict between this Paragraph 1 and the balance of the Lease, the
balance of the Lease shall control.
2. PREMISES.
A. Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord for the Lease Term, at the Rent and upon the terms and conditions
hereinafter set forth, that certain space ("Premises") within that certain
building ("Building") described in Paragraph 1.A. As used herein, the "Complex"
shall mean and include all of the land described in Exhibit A and shown on
Exhibit B attached hereto, and all of the buildings, improvements, fixtures and
equipment now or hereafter situated on said land.
Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth, and Tenant covenants as a material part of the
consideration for this Lease to perform and observe each and all of said terms,
covenants and conditions. This Lease is made upon the condition of such
performance and observance.
Landlord agrees to construct any improvements to the Premises ("Tenant
Improvements") as may be described in Exhibit C attached hereto and incorporated
herein by reference, upon such terms and conditions as are set forth in such
Exhibit C. The Tenant Improvements shall be deemed substantially complete when
Landlord notifies Tenant in writing that the Tenant Improvements (if any) are
substantially completed in accordance with Exhibit C, subject only to "punch
list" items that do not materially diminish the usefulness of the Premises.
B. Square Footage. Landlord and Tenant conclusively agree that the
statements of rentable square footage contained herein shall be deemed to be
correct and binding upon the parties for all purposes under this Lease, even if
subsequent measurements determine that one or more of such figures is incorrect.
3. USE.
Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances, including without
limitation the Americans With Disabilities Act of 1990 (the "ADA"), and solely
for the purpose specified in Paragraph 1.J and for no other purpose. Tenant
shall not do or permit to be done in or about the Premises or the Complex nor
bring or keep or permit to be brought or kept in or about the Premises or the
Complex anything which is prohibited by or will in any way increase the existing
rate of (or otherwise affect) fire or any insurance covering the Premises or the
Complex or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Premises or the Complex or any part
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thereof, or any of its contents. Tenant shall not do or permit to be done
anything in, on or about the Premises or the Complex which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Complex 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 or the Complex. No
sale by auction shall be permitted on the Premises. Tenant shall not place any
loads upon the floors, walls, or ceiling, which endanger the structure, or place
any harmful fluids or other materials in the drainage system of the Building
therein, or overload existing electrical or other mechanical systems. No waste
materials or refuse shall be dumped upon or permitted to remain upon any part of
the Premises or outside of the Premises, except in trash containers placed
inside exterior enclosures designated by Landlord for that purpose or inside of
the Building proper where designated by Landlord. No materials, supplies,
equipment, finished products or semi-finished products, raw materials or
articles of any nature shall be stored upon or permitted to remain outside the
Premises. No loudspeaker or other device, system or apparatus which can be heard
outside the Premises shall be used in or at the Premises without the prior
written consent of Landlord. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises. Tenant shall comply with any covenants,
conditions, or restrictions ("CC&R's") affecting the Premises, as the same may
hereafter be amended from time to time, as well as any reasonable rules and
regulations promulgated by Landlord from time to time (the "Rules and
Regulations"). Landlord reserves the right to reasonably amend such Rules and
Regulations from time to time as Landlord may deem appropriate, which amendment
shall be binding upon Tenant upon delivery of a copy thereof to Tenant. Tenant
shall use its best efforts to cause its agents, employees, contractors and
invitees to cooperate in observance of such Rules and Regulations, as the same
may be amended from time to time. The provisions of this Paragraph are for the
benefit of Landlord only and shall not be construed to be for the benefit of any
tenant or occupant of the Complex. Landlord shall not be responsible to Tenant
for the breach of the Rules and Regulations by any other tenant or occupant of
the Complex.
4. RENT
A. Basic Rent. Tenant agrees to pay to Landlord the sum set forth in
Paragraph 1.D hereof as monthly basic rent ("Basic Rent"), in lawful money of
the United States of America, without deduction, offset, prior notice, or
demand, on the first day of every calendar month of the Lease Term, and Landlord
agrees to accept such sum as Basic Rent for the Premises.
B. Basic Rent Adjustment. Basic Rent "per leasable square foot" and
"total" shall be adjusted annually per paragraph 1D.
C. Partial Months. In the event that the Lease Term commences on a date
other than the first day of a calendar month, on the Commencement Date Tenant
shall pay to Landlord as Basic Rent for the period from such Commencement Date
to the first day of the first full calendar month that proportion of the monthly
Basic Rent hereunder which the number of days between such Commencement Date and
the first day of the next succeeding calendar month bears to thirty (30), and
such partial first month shall not be counted when computing the number of
months in the term of this Lease. In the event that the Lease Term is terminated
for any reason on a date other than the last day of a calendar month, on the
first day of the last calendar month of the Lease Term Tenant shall pay to
Landlord as Basic Rent for the period from said first day of said last calendar
month to and including the last day of the Lease Term that proportion of the
monthly Basic Rent hereunder which the number of days between said first day of
said last calendar month and the last day of the term hereof bears to thirty
(30).
D. Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is delinquent in the payment of Rent as set forth in this Paragraph 4, or
any part thereof, Tenant agrees to pay Landlord, in addition to the delinquent
Rent due, a late charge for each Rent payment which is not actually received by
Landlord within ten (10) days after due date for such payment, it being
understood that postmarking a payment by such deadline shall not be sufficient
to meet this requirement. Said late charge shall equal ten (10%) percent of each
Rent payment so in default. In the event that a late charge is payable hereunder
and not paid by Tenant for three (3) consecutive months, then Rent shall
automatically become due and payable three (3) months in advance, rather than
monthly notwithstanding Paragraph 4 or any other provision of this Lease to the
contrary.
E. Additional Rent. Beginning with the Commencement Date, Tenant shall
pay to Landlord, in addition to the Basic Rent, the following additional amounts
("Additional Rent"):
(1) Tenant's proportionate share ("Tenant's Share") as
specified in Paragraph 1.F, of all Real Property Taxes relating to the Complex,
as set forth in Paragraph 14, and
(2) Tenant's Share of all property insurance premiums relating
to the Complex, as set forth in Paragraph 15, and
(3) Tenant's Share of expenses for the operation, management,
maintenance and repair of the Building (including Common Areas of the Building)
and Common Areas of the Complex in which the Premises are located, as set forth
in Paragraph 9, and
(4) The sums required to reimburse Landlord for the cost of
repairs and maintenance to the Premises, as set forth in Paragraph 12; and
(5) All charges, costs and expenses, which Tenant is required
to pay hereunder, together with all interest and penalties, costs and expenses
including without limitation attorneys' fees and legal expenses, that may accrue
thereto in the event of Tenant's failure to pay such amounts, and all damages,
reasonable costs and expenses which Landlord may incur by reason of default of
Tenant or failure on Tenant's part to comply with the terms of this Lease. In
the event of nonpayment by Tenant of Additional Rent, Landlord shall have all
the rights and remedies with respect thereto as Landlord has for nonpayment of
Basic Rent.
The Additional Rent due hereunder shall be paid to Landlord or
Landlord's agent (i) within ten (10) days for taxes and insurance and within ten
(10) days for all other Additional Rent items after presentation of an invoice
from Landlord or Landlord's agent setting forth such Additional Rent, and/or
(ii) at the option of Landlord, directly to the designated recipient thereof, as
and when such amounts are due, in accordance with statements or invoices
presented to Tenant; and/or (iii) at the option of Landlord, to Landlord
monthly, in advance, in an amount estimated by Landlord to be Landlord's
approximate average monthly expenditure for such Additional Rent items, which
estimated amount shall be reconciled at the end of each calendar year as
compared to Landlord's actual expenditure for said Additional Rent items, with
Tenant paying to Landlord, upon demand, any amount of actual expenses expended
by Landlord in excess of said estimated amount, or Landlord applying any amount
of estimated payments made by Tenant in excess of Landlord's actual expenditures
for said Additional Rent items to Basic Rent and/or Additional Rent next
becoming due.
The respective obligations of Landlord and Tenant under this
Paragraph shall survive the expiration or other termination of this Lease, and
if the Lease Term shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the Lease Term expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.
F. Place and Time of Payment of Rent and Additional Rent. All Basic
Rent hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the address of Landlord as specified in Paragraph 1.L or such other
place as Landlord may from time to time designate in writing. It shall be
Tenant's responsibility to ensure that all Rent payments are mailed or sent in
time for Landlord to receive them by the specified deadline, and Landlord shall
not be responsible for any delays in delivery of payments by mail or otherwise.
G. Security Deposit. Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord the sum specified in Paragraph 1.I
hereof as a security deposit (the "Security Deposit"), which shall be held by
Landlord as security for the faithful performance by Tenant of all of the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant, and
shall not in any event be used or applied by Tenant as "last month's rent." If
Tenant defaults with respect to any provision of this Lease, including, but not
limited to, the provisions relating to the payment of Rent, Landlord may (but
shall not be required to) use, apply or retain all or any part of the Security
Deposit for the payment of any amount which Landlord may spend by reason of
Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of said
Security Deposit is so used or applied, Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord in the amount sufficient to
restore the Security Deposit to its original amount. Tenant's failure to do so
shall be a material breach of this Lease. Landlord shall not be required to keep
this Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such Security Deposit. If Tenant fully and faithfully
performs every provision of this Lease to be performed by it, the Security
Deposit or any balance thereof shall be returned to Tenant (or at Landlord's
option, to the last assignee of Tenant's interest hereunder) at the expiration
of the Lease Term and after Tenant has vacated the Premises. In the event of
termination of Landlord's interest in this Lease, Landlord shall transfer said
Security Deposit to Landlord's successor in interest whereupon Landlord shall be
released from liability for the return of such Security Deposit or any
accounting therefor.
H. Prepaid Rent. Concurrently with Tenant's execution of this Lease,
Tenant shall pay to Landlord the sum specified in Paragraph 1.G as prepaid Rent
for the months designated therein.
I. Definition of Rent. The term "Rent" as used in this Lease shall mean
Basic Rent, Additional Rent, and any and all other sums, however designated,
required to be paid by Tenant under this Lease, whether payable to Landlord or
third parties.
J. Additional Rights of Landlord. In addition to any late payment or
interest charges payable to Landlord hereunder and any other rights or remedies
that Landlord may have under this Lease or applicable law, all of which rights
and remedies shall be cumulative, Tenant, as a material part of the
consideration for this Lease, hereby agrees as follows:
(1) If Tenant makes any payment under this Lease by check and
such check is dishonored or otherwise returned unpaid to Landlord due to
insufficient funds, then Landlord, at its option, may require Tenant to make all
future payments under this Lease by cashier's check or wire transfer in
accordance with wiring instructions given to Tenant by Landlord.
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(2) If Landlord fails to receive any payment that Tenant is
required to make under this Lease when due and Landlord thereafter, and prior to
receiving such payment, proceeds to serve a "3-Day Notice" or similar notice to
Tenant as permitted under Section 1162 of the California Code of Civil
Procedure, then in each such instance, and regardless of whether Tenant
thereafter makes such payment, Tenant shall pay to Landlord, upon demand, as
Additional Rent, an administrative charge in the amount of $200. Tenant
acknowledges that such charge constitutes liquidated damages and not a penalty
and represents a reasonable estimate of the additional administrative costs that
Landlord will incur in serving such notice.
(3) If Landlord fails to receive any payment that Tenant is
required to make under this Lease within ten (10) days after the due date for
such payment, and such delinquency occurs on two (2) separate occasions, then,
at Landlord's election, exercisable by written notice to Tenant at any time
after the second such delinquency, any and all rights of first offer with
respect to any premises in the Building or Complex, rights of first refusal with
respect to any such premises, and options to renew or extend the term of this
Lease, which in any case may be granted to Tenant under this Lease or any
exhibit, rider or amendment hereto (each referred to in this Lease as an
"Option") shall terminate. In such event, Tenant shall execute a quitclaim deed
or other similar document as may be requested by Landlord to evidence the
termination of such Option.
(4) If Landlord fails to receive any payment that Tenant is
required to make under this Lease within ten (10) days after the due date for
such payment, and such delinquency occurs on three (3) separate occasions, then
Landlord, at its election, exercisable by one or more written notices to Tenant
at any time after the third such delinquency, may require any or all of the
following: (i) that all future payments of Basic Rent be paid three (3) months
in advance; (ii) that, subject to annual reconciliation as provided in Paragraph
4.E above, all future payments of Additional Rent shall be payable three (3)
months in advance based upon an amount estimated by Landlord to be Landlord's
average quarterly expenditure for such items of Additional Rent; and (iii) that
the Security Deposit specified in Paragraph 1.H be immediately increased by one
hundred percent (100%), in which event Tenant shall, within ten (10) days after
written demand therefor, deposit such additional amount in cash with Landlord.
5. TERM.
The term of this Lease (the "Lease Term") shall be for the period of
time specified in Paragraph 1.B (unless sooner terminated as hereinafter
provided) and, subject to Paragraph 6, shall commence on the commencement date
("Commencement Date") specified in Paragraph 1.C. Within 10 days following the
Commencement Date of the Lease Term, Tenant will execute and deliver to Landlord
a certificate substantially in the form of Exhibit D indicating any exceptions
thereto which may exist at that time. Tenant's failure to execute and deliver
such certificate within such time limit shall constitute an unqualified
acceptance of the Premises and acknowledgement that the statements contained in
Exhibit D are true and correct without exception.
6. POSSESSION.
If Landlord, for any reason whatsoever, cannot deliver possession of
said Premises to Tenant on the date set forth in Paragraph 1.C or any other
date, this Lease shall not be void or voidable; no obligation of Tenant shall be
affected thereby; nor shall Landlord or Landlord's agents be liable to Tenant
for any loss or damage resulting therefrom; but in that event the commencement
and termination dates of the Lease, and all other dates affected thereby shall
be revised to conform to the date of Landlord's delivery to Tenant of possession
of the Premises, and the Lease Term shall be extended for a period equal to the
delay in delivery of possession, plus the number of days necessary to end the
Lease Term on the last day of a month. The above is, however, subject to the
provision that the period of delay of delivery of the Premises shall not exceed
180 days from the date specified in Paragraph 1.C (except those delays caused by
Acts of God, strikes, war, utilities, governmental bodies, weather, unavailable
materials, and delays beyond Landlord's control shall be excluded in calculating
such period) in which instance Tenant, at its option, may, by written notice to
Landlord within ten (10) days after the end of the 180-day period, terminate
this Lease and the parties shall have no further liability thereafter accruing
under this Lease.
7. COMMON AREAS.
Subject to the terms and conditions of this Lease and any Rules and
Regulations, Tenant shall have the non-exclusive right in common with other
occupants of the Complex, to use the access roads, parking areas, and facilities
provided and designated by Landlord for the general use and convenience of the
occupants of the Complex, which areas and facilities are referred to herein as
"Common Areas". This right shall terminate upon the termination of this Lease.
Landlord reserves the right from time to time to make changes in the shape,
size, location, amount and extent of Common Areas.
8. PARKING.
Subject to the terms and conditions of this Lease and subject to the
Rules and Regulations, during the Lease Term, Tenant shall have the
non-exclusive right, in common with other tenants or occupants of the Complex,
to use the number of parking spaces in the common parking areas of the Complex
as is specified in Paragraph 1.K. Neither Tenant nor Tenant's employees, agents,
representatives and/or invitees shall use parking spaces in excess of said
number of spaces allocated to Tenant hereunder. Tenant acknowledges that certain
other tenants of the Complex may have exclusive parking rights to certain
parking spaces in the parking areas of the Complex, and that Tenant shall have
no right to use such exclusive spaces upon receiving notice of the location of
such exclusive spaces from Landlord. Landlord shall have the right (but not the
obligation), at Landlord's sole discretion, to designate the specific location
of Tenant's parking spaces within the common parking areas of the Complex.
Landlord shall also have the right to implement a system of parking charges,
vouchers, fines or other parking control fees to be paid by Tenant and/or the
users of the Complex, if so required by any governmental agency having
jurisdiction over the Complex or if required to meet parking programs mandated
by government.
Tenant's rights under this Paragraph 8 shall be personal to Tenant and
strictly appurtenant to the occupation by Tenant of the Premises during the
Lease Term. Tenant shall have no right to assign or license its rights to use
the parking spaces in any manner whatsoever, except in connection with an
assignment of this Lease or subletting of the Premises consented to by Landlord
in accordance with Paragraph 21.
Tenant shall not, at any time, park, or permit to be parked, any trucks
or vehicles adjacent to the loading areas so as to interfere in any way with the
use of such areas, nor shall Tenant at any time park, or permit the parking of
Tenant's trucks or other vehicles or the trucks and vehicles of Tenant's
suppliers or others, in any portion of the common area not designated by
Landlord for such use by Tenant. Tenant shall not park nor permit to be parked,
any inoperative vehicles or equipment on any portion of the parking area or
outside areas of the Complex, or use the same for storage. Tenant agrees to
assume responsibility for compliance by its employees with the parking
provisions contained herein.
If Tenant or its employees park in other than such designated parking
areas, then Landlord may charge Tenant, as Additional Rent, and Tenant agrees to
pay, ten ($10.00) dollars per day for each day or partial day each such vehicle
is parked in any area other than that designated. Tenant hereby authorizes
Landlord at Tenant's sole expense to tow away from the Complex any vehicle
belonging to Tenant or Tenant's employees parked in violation of these
provisions, or to attach violation stickers or notices to such vehicles and levy
fines for such violations. Landlord shall have no obligation to Tenant to police
the parking areas or enforce any private or public parking restrictions, which
enforcement shall be at Landlord's sole and absolute discretion.
9. EXPENSES OF OPERATION AND MAINTENANCE OF THE COMPLEX.
As Additional Rent and in accordance with Paragraph 4.E of this Lease,
and except for those expenses required to be paid exclusively by Tenant as set
forth in Paragraphs 12 and 13 or elsewhere in this Lease, Tenant shall pay to
Landlord Tenant's Share of all expenses of operation, management, maintenance
and repair of the Building, Complex and Common Areas including, but not limited
to, all sums expended in connection with the Common Areas and Building exteriors
for all general maintenance and repairs; license, permit, and inspection fees;
security; utility charges associated with exterior landscaping and lighting
(including water and sewer charges); janitorial services; trash removal; fire
protection systems; general liability insurance protecting against claims
related to the condition, use or occupancy of the Common Areas (in such amounts
and providing such coverage as determined in Landlord's sole discretion);
exterior window cleaning; maintenance of landscaped areas, irrigation systems,
parking lots, sidewalks, driveways, and stairways, including without limitation
resurfacing, restriping, cleaning and sweeping; maintenance, repair and
replacement of all Building systems and fixtures, including without limitation
electrical, mechanical, lighting, plumbing, and telecommunication systems
including without limitation intra-Building telephone, telecommunication and
network cabling which telecommunication systems are located outside of the
Premises, except as otherwise provided in Paragraph 12 below; repair and
replacement of roofs and structural elements of the buildings (excluding new
capital improvements); salaries and employee benefits of personnel (and payroll
taxes applicable thereto) to the extent they are engaged in the operation,
supervision, and/or maintenance of the Complex; reasonable attorneys' fees with
respect to matters of common interest to occupants of the Complex or relating to
the Complex; fees for accounting, bookkeeping, expense collection, and other
management services rendered by Landlord and/or by a third party manager engaged
by Landlord (which may be a party affiliated with Landlord), except that the
total amount charged for such management services and included in Tenant's share
of expenses shall not exceed three percent (3%) of the then current Basic Rent
payable by Tenant for each respective month; taxes on personal property,
equipment and machinery utilized in the operation of the Complex; supplies,
materials, equipment and tools; maintenance and/or insurance contracts covering
all or any of the repairs or maintenance described in this Paragraph 9; and the
cost of complying with rules, regulations and orders of governmental
authorities, including without limitation maintenance, alterations and repairs
required in connection therewith. At Landlord's election, Landlord may determine
that with respect to certain recurring items of major repair and maintenance
("Major Repairs"), Landlord will not charge the costs thereof as current
expenses when such costs are incurred, but instead will charge Tenant a
reasonable monthly fee to be used by Landlord for performing such Major Repairs
as and when the need therefor shall arise. Such Major Repairs shall include, at
Landlord's election, any or all of the following: (i) replacing (but not
repairing) the roof (ii) repaving (but not resealing) the parking lot; (iii)
replacing (but not repairing) the HVAC compressors or other major system
components; (iv) painting the exterior of the Building; and (v) other similar
items as may be determined by Landlord from time to time.
"Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest; or executive salaries.
10. ACCEPTANCE AND SURRENDER OF PREMISES.
By taking possession hereunder, Tenant accepts the Premises as being in
good and sanitary order, condition and repair and accepts the Building, the
Premises and the Common Areas in their then existing condition and without
representation or warranty by Landlord as to its condition, the use or occupancy
which may be made thereof, or the precise square footage of the Building or the
Premises. Any exceptions to the foregoing must be by written agreement executed
by Landlord and Tenant. Subject to Paragraphs 26 and 27, Tenant agrees on the
last day of the Lease Term, or on the sooner termination of this Lease, to
surrender the Premises promptly and peaceably to Landlord in good condition and
repair (normal wear and tear excepted), with all interior walls painted, or
cleaned so that they appear freshly painted, and repaired and replaced, if
damaged; all floors cleaned and waxed; all carpets cleaned and
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shampooed; the air conditioning and heating equipment serviced by a reputable
and licensed service firm and in good operating condition (provided the
maintenance of such equipment has been Tenant's responsibility during the term
of this Lease) together with all alterations, additions, and improvements which
may have been made in, to, or on the Premises (except movable trade fixtures
installed at the expense of Tenant); provided, however, that Tenant shall
ascertain from Landlord within thirty (30) days before the end of the Lease Term
whether Landlord desires to have the Premises or any part or parts thereof
restored to their condition and configuration as when the Premises were
delivered to Tenant and if Landlord shall so desire, then Tenant shall restore
said Premises or such part or parts thereof before the end of this Lease at
Tenant's sole cost and expense. Tenant, on or before the end of the Lease Term
or sooner termination of this Lease, shall remove all of Tenant's personal
property and trade fixtures from the Premises, and all property not so removed
on or before the end of the Lease Term or sooner termination of this Lease shall
be deemed abandoned by Tenant and title to same shall thereupon pass to Landlord
without compensation to Tenant. Landlord may, upon termination of this Lease,
remove all moveable furniture and equipment so abandoned by Tenant, at Tenant's
sole cost, and repair any damage caused by such removal at Tenant's sole cost.
If the Premises are not surrendered at the end of the term or sooner termination
of this Lease, Tenant shall indemnify Landlord against loss or liability
resulting from the delay by Tenant in so surrendering the Premises including,
without limitation, consequential damages to Landlord caused, in whole or in
part, by such delay. Nothing contained herein shall be construed as an extension
of the term hereof or as a consent of Landlord to any holding over by Tenant.
The voluntary or other surrender of this Lease or the Premises by Tenant or a
mutual cancellation of this Lease shall not work as a merger and, at the option
of Landlord, shall either terminate all or any existing subleases or operate as
an assignment to Landlord of all or any such subleases.
11. ALTERATIONS AND ADDITIONS.
Tenant shall not make, or suffer to be made, any alteration or addition
to the Premises, or any part thereof, without the prior written consent of
Landlord. All work with respect to any alteration or addition shall be done in a
good and workmanlike manner, shall be under the supervision of a competent
architect or competent licensed structural engineer approved by Landlord, and
shall be made in accordance with all applicable laws, ordinances, codes and
regulations related thereto and the plans and specifications with respect
thereto shall be approved in writing by Landlord before commencement of work.
Landlord's approval of Tenant's plans and specification shall create no
responsibility or liability on the part of Landlord for their completeness,
design sufficiency or compliance with governmental laws, rules or regulations.
Tenant agrees that it will not proceed to make such alteration or
additions without having obtained consent from Landlord to do so, and until ten
(10) days after the receipt of such consent, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work. Tenant
shall, if required by Landlord, secure at Tenant's own cost and expense, a
completion and lien indemnity bond, satisfactory to Landlord, for such work.
Tenant further covenants and agrees that any mechanic's lien filed against the
Premises or against the Complex for work claimed to have been done for, or
materials claimed to have been furnished to, Tenant will be discharged by
Tenant, by bond or otherwise, within ten (10) days after the imposition thereof,
at the cost and expense of Tenant. Any exceptions to the foregoing must be made
in writing and executed by both Landlord and Tenant. Upon completion of the
work, Tenant shall file a Notice of Completion as permitted by law in the Office
of the County Recorder where the Premises is located.
Any addition to, or alteration of, the Premises, except moveable
furniture and trade fixtures, shall at once become a part of the Premises and
belong to Landlord. Tenant shall retain title to all moveable furniture and
trade fixtures placed in the Premises. All heating, lighting, electrical, air
conditioning, floor to ceiling partitioning, drapery, carpeting, and floor
installations made by Tenant, together with all property that has become an
integral part of the Premises, shall not be deemed trade fixtures.
12. REPAIR AND MAINTENANCE OF THE PREMISES.
A. Landlord's Obligations. So long as no Event of Default (as defined
in Paragraph 24) has occurred, which remains uncured beyond the applicable cure
period (if any) set forth in this Lease, Landlord shall, at its sole cost and
expense, maintain and repair the building foundations, structural elements of
the exterior walls and structural elements of the roof, except to the extent of
any non-insured damage (or deductible portion of any insured damage) that is the
result of the negligence or willful act of Tenant or Tenant's employees, agents
or contractors, in which case Tenant shall be liable for the repair at Tenant's
sole cost and expense. Landlord shall also maintain and repair (i) the roof
membrane, (ii) the exterior surface of the building (including, maintenance of
equipment located on the roof top, exterior window washing and exterior
painting), and (iii) at Landlord's election, the HVAC equipment (through a
contract with a service company of Landlord's choice); provided, however, that
Tenant shall reimburse Landlord for the cost thereof as Additional Rent in
accordance with Paragraph 4.E. Landlord shall have no obligation to make repairs
under this Paragraph until a reasonable time after receipt of written notice
from Tenant of the need for such repairs. In no event shall any payments owed by
Tenant under this Lease be abated on account of Landlord's failure to make
repairs under this Paragraph. Tenant hereby waives all statutory rights to make
repairs for or at the expense of Landlord.
B. Tenant's Obligations. Except to the extent of Landlord's express
obligations under Paragraph 12.A, Tenant shall, at its sole cost and expense,
keep and maintain the Premises (including appurtenances) and every part thereof
in a high standard of maintenance and repair, and in good and sanitary
condition. Tenant's maintenance and repair responsibilities herein referred to
include, but are not limited to, all windows, window frames, plate glass,
glazing, truck doors, plumbing systems (such as water and drain lines, sinks,
toilets, faucets, drains, showers and water fountains), electrical systems (such
as panels, conduits, outlets, lighting fixtures, lamps, bulbs, tubes, ballasts),
heating and air conditioning distribution and temperature control systems (such
as fans, air handlers, ducts, mixing boxes, thermostats, time clocks, supply and
return grills), telecommunication systems within the Premises (including without
limitation all distribution throughout the Premises from Tenant's computer
closets), and telecommunication systems located outside of the Premises
(including without limitation intra Building telephone, telecommunication and
network cabling) installed to exclusively serve all or any portion of the
Premises, all interior improvements within the Premises including but not
limited to wall coverings, window coverings, carpet, floor coverings,
partitioning, ceilings, doors (both interior and exterior, including closing
mechanisms, latches, and locks), skylights (if any), automatic fire
extinguishing systems, and all other interior improvements of any nature
whatsoever. Tenant also agrees to provide janitorial services for the Premises
as well as carpet shields under all rolling chairs or to otherwise be
responsible for wear and tear of the carpet caused by such rolling chairs if
such wear and tear exceeds that caused by normal foot traffic in surrounding
areas. Areas of excessive wear in the Premises shall be replaced at Tenant's
sole expense upon Lease termination. If Landlord elects to require Tenant to
maintain the HVAC equipment, Tenant shall contract with a service company for
the quarterly maintenance of the heating and air conditioning equipment, with a
copy of the service contract to be furnished to Landlord within ten (10) days
after opening for business, and a copy of any subsequent contracts to be
furnished from time to time. If Tenant needs to access Building system,
including without limitation the Building telecommunication system, Tenant shall
have the right to do so only upon the prior written consent of Landlord and by
utilization of a contractor consented to by Landlord, provided that despite any
such consent by Landlord, Tenant shall remain fully responsible for the acts,
omissions and negligence of any such contractor.
13. UTILITIES.
Tenant shall pay, directly to the provider of such services, as the
same shall become due, all charges for water, gas, electricity, telephone, telex
and other electronic communications service, sewer service, waste pick-up and
any other utilities, materials or services furnished directly to or used by
Tenant on or about the Premises during the Lease Term, including, without
limitation, any temporary or permanent utility surcharge or other exactions
whether or not hereinafter imposed. If any such services and utilities are
jointly metered and not directly billed to Tenant, Tenant shall pay an equitable
portion of all charges as Additional Rent, with the determination of Tenant's
equitable portion to be made by Landlord. At Landlord's request, Tenant shall
pay Landlord for the cost of installing separate meters. Tenant shall pay for
any and all telecommunication or other utility system modifications or additions
which it may require and which Landlord expressly agrees to provide pursuant to
the terms of this Lease or any subsequent written agreement; provided, however,
that nothing in this Lease shall require Landlord to provide, modify or install
any utility system or utility system component for Tenant's use except to the
extent that the same is required by law or by an express written agreement
between Landlord and Tenant. Landlord shall not be liable for, and Tenant shall
not be entitled to, any abatement or reduction of Rent or other compensation by
reason of any interruption or failure of utility services to the Premises.
14. TAXES.
A. Real Property Taxes. As Additional Rent and in accordance with
Paragraph 4.E of this Lease, Tenant shall pay to Landlord Tenant's Share of all
Real Property Taxes that accrue during the Lease Term and which constitute Real
Property Taxes pertaining to the Complex. This obligation shall survive the
expiration or earlier termination of this Lease, and if any Real Property Taxes
are imposed by the County Assessor or other governmental authority for the
period of time constituting the Lease Term, whether or not Landlord is billed
for the same during the Lease Term, Tenant shall pay such Real Property Taxes
when they are ultimately billed, in accordance with Paragraph 4.E. The term
"Real Property Taxes," as used herein, shall mean (i) all taxes, assessments,
levies and other charges of any kind or nature whatsoever, general and special,
foreseen and unforeseen (including all installments of principal and interest
required to pay any general or special assessments for public improvements and
any increases resulting from reassessments caused by any new improvements or any
change in ownership of the Complex) now or hereafter imposed by any governmental
or quasi-governmental authority or special district having the direct or
indirect power to tax or levy assessments, which are levied or assessed against,
or with respect to the value, occupancy or use of, all or any portion of the
Complex (as now constructed or as may at any time hereafter be constructed,
altered, or otherwise changed) or Landlord's interest therein; any improvements
located within the Complex (regardless of ownership); the fixtures, equipment
and other property of Landlord, real or personal, that are an integral part of
and located in the Complex; or parking areas, public utilities, or energy within
the Complex; (ii) all charges, levies or fees imposed by reason of environmental
regulation or other governmental control of the Complex; and (iii) all costs and
fees (including attorneys' fees) incurred by Landlord in contesting any Real
Property Tax and in negotiating with public authorities as to any Real Property
Tax. If at any time during the term of this Lease the taxation or assessment of
the Complex prevailing as of the commencement date of this Lease shall be
altered so that in lieu of or in addition to any Real Property Tax described
above there shall be levied, assessed or imposed (whether by reason of a change
in the method of taxation or assessment, creation of a new tax or charge, or any
other cause) an alternate or additional tax or charge (i) on the value, use or
occupancy of the Complex or Landlord's interest therein or (ii) on or measured
by the gross receipts, income or rentals from the Complex, on Landlord's
business of leasing the Complex, or computed in any manner with respect to the
operation of the Complex, then any such tax or charge, however designated, shall
be included within the meaning of the term "Real Property Taxes" for purposes of
this Lease. If any Real Property Tax is based upon property or rents unrelated
to the Complex, then only that part of such Real Property Tax that is fairly
allocable to the Complex shall be included within the meaning of the term "Real
Property Taxes." Notwithstanding the foregoing, the term "Real Property Taxes"
shall not include estate, inheritance, gift or franchise taxes of Landlord or
the federal or state net income tax imposed on Landlord's income from all
sources.
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B. Taxes on Tenant's Property.
(1) Tenant shall be liable for and shall pay ten (10) days
before delinquency, taxes levied against any personal property or trade fixtures
placed by Tenant in or about the Premises. If any such taxes on Tenant's
personal property or trade fixtures are levied against Landlord or Landlord's
property or if the assessed value of the Premises is increased by the inclusion
therein of a value placed upon such personal property or trade fixtures of
Tenant and if Landlord, after written notice to Tenant, pays the taxes based on
such increased assessment, which Landlord shall have the right to do regardless
of the validity thereof (but only under proper protest if requested by Tenant),
Tenant shall upon demand, as the case may be, repay to Landlord the taxes so
levied against Landlord, or the proportion of such taxes resulting from such
increase in the assessment; provided that in any such event Tenant shall have
the right, in the name of Landlord and with Landlord's full cooperation (but
without cost to Landlord), to bring suit in any court of competent jurisdiction
to recover the amount of any such taxes so paid under protest, and any amount so
recovered shall belong to Tenant.
(2) If the Tenant improvements in the Premises, whether
installed, and/or paid for by Landlord or Tenant and whether or not affixed to
the real property so as to become a part thereof, are assessed for real property
tax purposes at a valuation higher than the valuation at which standard office
improvements in other space in the Complex are assessed, then the real property
taxes and assessments levied against Landlord or the Complex by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Paragraph 14.B (1)
above. If the records of the County Assessor are available and sufficiently
detailed to serve as a basis for determining whether said Tenant improvements
are assessed at a higher valuation than standard office improvements in other
space in the Complex, such records shall be binding on both the Landlord and the
Tenant. If the records of the County Assessor are not available or sufficiently
detailed to serve as a basis for making said determination, the actual cost of
construction shall be used.
15. LIABILITY INSURANCE.
Tenant, at Tenant's expense, agrees to obtain and keep in force during
the term of this Lease a policy of comprehensive public liability insurance
against any and all claims for personal injury, death, property damage, or other
liabilities related to the condition, use or occupancy of the Premises or to
Tenant's operations on the Premises, including an extended liability endorsement
providing contractual liability and broad form property damage coverage. Such
insurance shall also contain a cross-liability clause and shall insure Tenant's
performance of the indemnity agreement set forth in Paragraph 18, although
Tenant's obligations pursuant to such indemnity shall not be limited to the
amount of any insurance required of, or otherwise carried by, Tenant. Such
liability insurance shall have a combined single limit of not less than Two
Million Dollars ($2,000,000) and certificates evidencing such insurance shall be
furnished to Landlord prior to Tenant's occupancy of the Premises. The policy or
policies affecting such insurance shall name Landlord and the beneficiary or
mortgagee of any deed of trust or mortgage affecting the Premises as additional
insureds, and shall insure any liability of Landlord, contingent or otherwise,
with respect to any act or omission of Tenant, its agents, employees or invitees
or otherwise by any conduct or transactions of any of said persons in or about
or concerning the Premises, including any failure of Tenant to observe or
perform any of its obligations hereunder; shall be issued by an insurance
company admitted to transact business in the State of California having a rating
of A or better in "Best's Insurance Guide"; and shall provide that the insurance
effected thereby shall not be canceled, except upon thirty (30) days' prior
written notice to Landlord. Said liability insurance shall be primary and not
contributing to any insurance available to Landlord, and Landlord's insurance
shall be in excess thereto. If, during the Lease Term, in the considered opinion
of Landlord's lender, insurance advisor, or counsel, the amount of insurance
described in this Paragraph 15 is not adequate, Tenant agrees to increase said
coverage to such reasonable amount as Landlord's lender, insurance advisor, or
counsel shall deem adequate.
16. TENANT'S PROPERTY INSURANCE AND WORKER'S COMPENSATION.
Tenant shall maintain a policy or policies of fire and property damage
insurance in "all risk" form with a sprinkler leakage endorsement insuring the
personal property, inventory, trade fixtures, and leasehold improvements within
the Premises for the full replacement value thereof. The proceeds from any of
such policies shall be used for the repair or replacement of such items so
insured. Tenant shall also maintain a policy or policies of worker's
compensation insurance and any other employee benefit insurance sufficient to
comply with all laws.
17. LANDLORD'S INSURANCE; WAIVER OF SUBROGATION.
A. Landlord's Property Insurance. Landlord shall purchase and keep in
force, a policy or policies of casualty insurance covering loss or damage to the
Premises, Building and related Common Area improvements in the amount of the
full replacement value thereof, providing protection against those perils
covered by "all risk" insurance, and including such other casualty endorsements
as Landlord may elect. Landlord shall also maintain at Landlord's election, or
if required by Landlord's lender from time to time, earthquake and/or flood
damage insurance, worker's compensation insurance, sprinkler leakage insurance
and rental income insurance in the amount of one hundred (100%) percent of
twelve (12) months Basic Rent, plus sums paid as Additional Rent. Tenant shall
pay to Landlord Tenant's Share of the cost of Landlord's insurance, as described
herein, as Additional Rent in accordance with Paragraph 4.E hereof. If such
insurance cost is increased due to Tenant's use of the Premises or the Complex,
Tenant agrees to pay to Landlord the full cost of such increase. Tenant shall
have no interest in nor any right to the proceeds of any insurance procured by
Landlord as described in this Paragraph 17.
B. Waiver of Subrogation. Each party hereby releases the other party,
and its partners, officers, agents, employees, and servants, from any and all
claims, demands, loss, expense, or injury to the Premises or to the furnishings,
fixtures, equipment, inventory, or other property in, about, or upon the
Premises, which is caused by or results from perils, events, or happenings which
are the subject of fire or other casualty insurance in force at the time of such
loss irrespective of any negligence on the part of the released party which may
have contributed to or caused such loss; subject to the following limitations:
(i) the party being released shall not be released from any liability to the
extent that such damages are not covered by the insurance recovery obtained by
the releasing party, and (ii) the party being released shall be responsible for
reimbursing the releasing party for any deductible owed as a result of such
damages. Each party shall use commercially reasonable efforts to obtain, if
needed, appropriate endorsements to its policies of insurance with respect to
the foregoing releases; provided, however, that failure to obtain such
endorsements shall not affect the releases hereinabove given.
18. INDEMNIFICATION; EXEMPTION OF LANDLORD FROM LIABILITY.
A. Indemnification. Subject to Section 2782 of the California Civil
Code, Tenant shall defend, protect, indemnify, and hold Landlord and its agents,
contractors and employees harmless (except for gross negligence or willful
misconduct of Landlord and then only to the extent that such loss is not waived
under Paragraph 17.B) from and against any and all obligations, losses, costs,
expenses, liabilities, claims, damages, demands, fines, penalties, attorneys'
fees, investigation costs, court costs or expert witness fees incurred in
connection with or on account of, or arising from any injury or death or
property damage resulting from (i) the use, condition or occupancy of the
Premises or (ii) any act or omission or negligence of Tenant or Tenant's agents,
contractors, employees, or invitees or (iii) any occurrence in, upon or at the
Premises from any cause whatsoever or (iv) any breach, violation or
non-performance by Tenant of any of its obligations hereunder.
B. Exemption of Landlord from Liability. Neither Landlord nor its
agents or contractors or employees shall be liable to Tenant, and Tenant waives
all claims against Landlord, and its agents, contractors and employees for
injury or death to any person (including without limitation Tenant and Tenant's
employees) or for damage or loss to Tenant's business (including consequential
damages) or for damage or loss to any property (including without limitation
Tenant's personal property) by and from all causes, including without limitation
(i) any latent or patent defect in the Premises, Building or Complex, or (ii)
fire, steam, electricity, gas, dampness, water or rain which may leak or flow
from or into any part of the Premises or the Complex, or (iii) interruption,
breakage, leakage, obstruction or defects of pipes, sprinklers, wires,
appliances, or Building Systems, including without limitation plumbing, heating,
air conditioning, telecommunications or lighting systems or fixtures, whether
the damage or injury results from conditions arising in, upon, or about the
Premises, Building or Complex or from other sources or (iv) any act or omission
or neglect of any other tenant of the Building or Complex. Tenant shall
immediately notify Landlord in writing of any known defect in the Premises. The
provisions of this Paragraph 18.B shall not apply to any damage or injury caused
by Landlord's willful misconduct or gross negligence, except to the extent the
same is waived under Paragraph 17.B.
19. COMPLIANCE.
Tenant, at its sole cost and expense, shall promptly comply with all
laws, statutes, ordinances and governmental rules, regulations or requirements
now or hereafter in effect; with the requirements of any board of fire
underwriters or other similar body now or hereafter constituted; and with any
direction or occupancy certificate issued pursuant to law by any public officer;
provided, however, that no such failure shall be deemed a breach of these
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdiction or the
admission by Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This Paragraph shall not
be interpreted as requiring Tenant to make structural changes or structural
improvements, except to the extent such changes or improvements are required as
a result of Tenant's use or alteration of the Premises. Tenant shall, at its
sole cost and expense, comply with any and all requirements pertaining to said
Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance covering the
Premises.
20. LIENS.
Tenant shall keep the Premises and the Complex free from any liens
arising out of any work performed, materials furnished or obligation incurred by
Tenant. In the event that Tenant shall not, within ten (10) days following the
imposition of such lien, cause the same to be released of record, by bond or
otherwise, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it shall deem proper, including payment of the claim
giving rise to such lien. All sums paid by Landlord for such purpose, and all
expenses incurred by it in connection therewith, shall be payable to Landlord by
Tenant on demand with interest thereon as specified in Paragraph 44 below.
21. ASSIGNMENT AND SUBLETTING.
A. Landlord's Consent Required. Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest herein, and
shall not sublet the Premises, or any part thereof, or any right or privilege
appurtenant thereto (including, but not limited to, the parking spaces to be
used in connection with Tenant's occupancy), or suffer any other person or
entity to occupy or use the Premises, or any portion thereof, without, in each
case, the prior written consent of Landlord, which consent will not be
unreasonably withheld. Any attempt to do so without such prior consent shall be
wholly void and shall constitute a default by Tenant under this Lease. In the
event Landlord consents to any assignment or subletting, such consent shall not
constitute a waiver of any of the restrictions of this Paragraph 21 and the same
shall apply to each successive assignment or subletting hereunder, if any. In no
event shall Landlord's consent to an assignment or subletting affect the
continuing primary liability of Tenant (which, following assignment, shall be
joint and several with the assignee), or relieve Tenant of any of its
obligations hereunder without an express written release being given by
Landlord. In the event that Landlord shall
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consent to an assignment or subletting under this Paragraph 21, such assignment
or subletting shall not be effective until the assignee or sublessee shall
assume all of the obligations of this Lease on the part of Tenant to be
performed or observed and whereby the assignee or sublessee shall agree that the
provisions contained in this Lease shall, notwithstanding such assignment or
subletting, continue to be binding upon it with respect to all future
assignments and sublettings. Such assignment or sublease agreement shall be duly
executed and a fully executed copy thereof shall be delivered to Landlord, and
Landlord may collect Rent due hereunder directly from the assignee or sublessee.
Collection of Rent directly from an assignee or sublessee shall not constitute a
consent or a waiver of the necessity of consent to such assignment or
subletting, nor shall such collection constitute a recognition of such assignee
or sublessee as the Tenant hereunder or a release of Tenant from the performance
of all of its obligations hereunder.
B. Reasonable Consent. If Tenant complies with the following
conditions, Landlord shall not unreasonably withhold its consent to the
assignment of the Lease or the subletting of the Premises or any portion
thereof: Tenant shall submit in writing to Landlord (a) the name and legal
composition of the proposed assignee or subtenant; (b) the nature of the
proposed assignee's or subtenant's business to be carried on in the Premises;
(c) the terms and provisions of the proposed assignment or sublease; (d) such
reasonable financial information as Landlord may request concerning the proposed
assignee or subtenant including, without limitation, financial history, credit
rating and business experience. Tenant acknowledges that Landlord has entered
into this Lease in reliance on the particular skills, knowledge and experience
of Tenant and/or the principal officer of Tenant with respect to the conduct of
business in the Premises. Without limiting Landlord's right to refuse to give
such consent on any other reasonable grounds, Landlord reserves the right to
refuse to give such consent if in Landlord's reasonable business judgment (i)
the quality of operation of the Complex may be in any way adversely affected
during the Lease Term; (ii) the proposed assignee or subtenant is a governmental
or quasi-governmental department or agency (iii) the financial worth of the
proposed new tenant is less than that of Tenant executing this Lease; (iv) the
proposed assignee's or subtenant's use of the Premises involves the storage, use
or disposal of any Hazardous Materials; (v) the proposed assignee or subtenant
has been required by any governmental authority to clean up Hazardous Materials;
(vi) the proposed assignee or subtenant is subject to investigation or
enforcement by any governmental authority in connection with the use, disposal
or storage of a Hazardous Material; or (vii) investigation discloses other
information reasonably unsatisfactory to Landlord.
C. Bonus Rent. Tenant agrees that fifty percent (50%) of any amounts
paid by the assignee or sublessee as Basic Rent or its equivalent, however
described, in excess of the Basic Rent payable by Tenant hereunder (or, in the
case of sublease of a portion of the Premises, in excess of the Basic Rent
reasonably allocable to such portion), shall be the property of Landlord and
such amounts shall be payable directly to Landlord by the assignee or sublessee.
At Landlord's request, a written agreement shall be entered into by and among
Tenant, Landlord and the proposed assignee or sublessee confirming the
requirements of this paragraph.
D. Recapture. If the proposed assignment or subletting shall affect 80%
or more of the Premises, Landlord shall have the options to (I) terminate this
Lease as of the proposed effective date for the assignment or for the
commencement of the term of the proposed sublease, and this Lease shall then be
terminated accordingly, or (ii) take assignment of or sublet from Tenant the
affected portion of the Premises pursuant to the same terms and conditions as
set forth in the executed assignment of sublease submitted by Tenant.
E. Certain Transactions. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business), or,
if Tenant is a corporation, limited liability company, an unincorporated
association, or a partnership, the transfer, assignment or hypothecation of any
stock or interest in such corporation, company, association or partnership in
the aggregate in excess of twenty-five percent (25%) (except for publicly traded
shares of stock constituting a transfer of twenty-five percent (25%) or more in
the aggregate, so long as no change in the controlling interests of Tenant
occurs as a result thereof) shall be deemed an assignment within the meaning and
provisions of this Paragraph 21.
F. Costs; Acknowledgment of Reasonableness. Tenant agrees to reimburse
Landlord for Landlord's expenses (including attorneys' fees and costs) incurred
in connection with processing and documentation associated with any consents
requested by Tenant under this Paragraph 21. Tenant agrees that the provisions
of this Paragraph 21 are not unreasonable standards or conditions for any
purpose, including for purposes of the California Civil Code Section 1951.4(b).
22. SUBORDINATION AND MORTGAGES.
In the event Landlord's title or leasehold interest in the Premises or
the Complex is now or hereafter encumbered by the lien of any mortgage or deed
of trust to secure a loan from a lender (hereinafter referred to as a "Lender")
to Landlord, Tenant shall, at the request of Landlord or Lender, execute in
writing an agreement subordinating its rights under this Lease to the lien of
such mortgage or deed of trust, or, if so requested, agreeing that the lien of
Lender's mortgage or deed of trust shall be or remain subject and subordinate to
the rights of Tenant under this Lease. Notwithstanding any such subordination,
Tenant's possession under this Lease shall not be disturbed if Tenant is not in
default and so long as Tenant shall pay all Rent and fully and faithfully
observe and perform all of the provisions set forth in this Lease. Tenant
acknowledges that upon receipt from a lender of a "Demand to Pay Rent to Party
other than Landlord" under Section 2938 of the California Civil Code, Tenant
shall be required to pay all Rents to the Lender as they become due.
23. ENTRY BY LANDLORD.
At all reasonable times after 24 hours prior notice (except in
emergencies, in which case no notice is required) Landlord shall have, the right
to enter the Premises to inspect them; to perform any services to be provided by
Landlord hereunder; to submit the Premises to prospective purchasers, lenders,
or tenants and to post "For Rent" or "For Sale" or other signs relative to the
same; to post notices of non-responsibility; and to alter, improve or repair the
Premises, all without abatement of Rent; and may erect scaffolding and other
necessary structures in or through the Premises where reasonably required by the
character of the work to be performed; provided, however that Landlord shall
endeavor not to unreasonably interfere with Tenant's use of the Premises. For
each of the foregoing purposes, Landlord shall at all times have and retain a
key with which to unlock all of the doors in an emergency. Any entry to the
Premises obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the Premises or an eviction, actual or constructive,
of Tenant from the Premises or any portion thereof. Landlord shall also have the
right at any time to change the arrangement or location of entrances or
passageways, doors and doorways, corridors, elevators, stairs, toilets or other
public parts of the Complex and to change the name, number or designation by
which the Complex is commonly known, and none of the foregoing shall be deemed
an actual or constructive eviction of Tenant, or shall entitle Tenant to any
damages or reduction of Rent hereunder.
24. TENANT'S DEFAULT.
The occurrence of any of the following shall be an "Event of Default"
(sometimes referred to herein as a "default") by Tenant and a material breach of
this Lease:
(1) Tenant shall fail to make any payment owed by Tenant under
this Lease, as and when due, and such failure is not cured within three (3) days
after Tenant receives written notice from Landlord specifying such failure. At
Landlord's election, any such notice shall be concurrent with, and not in
addition to, any notice required under Section 1161 of the California Code of
Civil Procedure;
(2) Tenant shall fail to observe, keep or perform any of the
terms, covenants, agreements or conditions under this Lease that Tenant is
obligated to observe or perform, other than that described in subsection (1)
above, for a period of thirty (30) days after Tenant receives written notice
from Landlord of said failure; provided, however, that if the nature of Tenant's
default is such that more than thirty (30) days are reasonably required for its
cure, then Tenant shall not be deemed to be in default under this Lease if
Tenant shall commence the cure of such default within said thirty (30) day
period and diligently prosecute the same to completion within such time period
as is reasonably needed but not to exceed ninety (90) days from the date of
Landlord's notice. At Landlord's election, any such notice from Landlord shall
be concurrent with, and not in addition to, any notice required under Section
1161 of the California Code of Civil Procedure;
(3) Tenant shall (i) make any general arrangement or
assignment for the benefit of creditors; (ii) become a "debtor" as defined in 11
U.S.C. Section 101 or any successor statute thereto (unless, in case of a
petition filed against Tenant, the same is dismissed within 60 days); (iii)
suffer the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within 30
days; or (iv) suffer the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within 30 days. The
provisions of this subparagraph 24(3) shall also apply to any Guarantor of this
Lease. However, in the event that any provision of this subparagraph is contrary
to any applicable law, such provision shall be of no force or effect; or
(4) Tenant shall vacate or abandon the Premises at any time
during the Lease Term (except that Tenant may vacate so long as it pays Rent,
provides an on site security guard during normal business hours from Monday
through Friday, and otherwise performs its obligations hereunder).
25. LANDLORD'S REMEDIES AND RIGHTS
A. Termination of Lease. In case of an Event of Default by Tenant,
Landlord shall have the right, in addition to all other rights available to
Landlord under this Lease or now or hereafter permitted by law or in equity, to
terminate this Lease by providing Tenant with a notice of termination. Upon
termination, Landlord may recover any damages proximately caused by Tenant's
failure to perform under this Lease, or which are likely in the ordinary course
of business to be incurred, including any amount expended or to be expended by
Landlord in an effort to mitigate damages, as well as any other damages which
Landlord is entitled to recover under any statute now or hereafter in effect.
Landlord's damages include, without limitation, the following:
(1) the worth at the time of the award of any unpaid Rent
which had been earned at the time of termination;
(2) 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
the award exceeds the amount of the loss of such Rent that Tenant proves could
have been reasonably avoided; and
(3) 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 the award exceeds
the amount of the loss of such Rent that Tenant proves could have been
reasonably avoided.
As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be determined by allowing interest at the maximum rate of
interest permitted by applicable law. As used in subparagraph (3), the "worth at
the time of award" shall be determined by discounting to present value such
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amount at one percent (1%) more than the discount rate of the Federal Reserve
Bank in San Francisco in effect at the time of the award.
B. Continuation of Lease. In accordance with California Civil Code
Section 1951.4 (or any successor statute), Tenant acknowledges that in the event
Tenant has breached this Lease and abandoned the Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant's right to
possession, and Landlord may enforce all its rights and remedies under this
Lease, including the right to recover the Rent as it becomes due under this
Lease. Acts of maintenance or preservation or efforts to relet the Premises or
the appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's right
to possession.
C. Right of Entry. In case of an Event of Default by Tenant, Landlord
shall also have the right, with or without terminating this Lease, to enter the
Premises and remove all persons and personal property from the Premises, such
property being removed and stored in a public warehouse or elsewhere at Tenant's
sole cost and expense for at least thirty (30) days, and after such thirty (30)
day period, Landlord shall have the right to discard or otherwise dispose of
such property in accordance with California law. No removal by Landlord of any
persons or property in the Premises shall constitute an election to terminate
this Lease. Such an election to terminate may only be made by Landlord in
writing, or decreed by an arbitrator or a court of competent jurisdiction.
Landlord's right of entry shall include the right to remodel the Premises and
relet the Premises. All costs incurred in such entry and reletting shall be paid
by Tenant. Rents collected by Landlord from any other tenant which occupies the
Premises shall be offset against the amounts owed to Landlord by Tenant. Tenant
shall be responsible for any amounts not recovered by Landlord from any other
tenant which occupies the Premises. Any payments made by Tenant shall be
credited to the amounts owed by Tenant in the sole order and discretion of
Landlord, irrespective of any designation or request by Tenant. No entry by
Landlord shall prevent Landlord from later terminating this Lease by written
notice.
D. Remedies. Tenant hereby waives, for itself and all persons claiming
by, through or under Tenant, all rights and privileges which it might have under
any present or future law to redeem the Premises or to continue this Lease after
being legally dispossessed or ejected from the Premises. The rights and remedies
of Landlord set forth in this Lease are not exclusive, and Landlord may exercise
any other right or remedy available to it under this Lease, at law or in equity.
26. DESTRUCTION.
In the event the Premises are destroyed in whole or in part from any
cause, except damage and destruction caused from vandalism or accident for which
Tenant is responsible for under Paragraph 12, Landlord may, at its option:
(a) Rebuild or restore the Premises to their condition prior to the
damage or destruction, or
(b) Terminate this Lease, provided that the Premises is damaged to the
extent of thirty three percent (33%) of the replacement cost thereof or to any
extent if (i) the damage is not covered by insurance, and/or (ii) the damage
occurs during the last twelve (12) months of the Lease Term.
Landlord shall give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease. In the event Landlord agrees to
rebuild or restore the Premises, Landlord shall do so promptly at its expense.
Unless such damage is caused by Tenant or Tenant's agents, employees or
contractors, Tenant shall be entitled to a reduction in Rent while such repair
is being made in the proportion that the area of the Premises rendered
untenantable by such damage bears to the total area of the Premises. If Landlord
initially estimates that the rebuilding or restoration will exceed 180 days or
if Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
thirty (30) days prior written notice to Landlord. Notwithstanding anything
herein to the contrary, Landlord's obligation to rebuild or restore shall not
include restoration of Tenant's trade fixtures, equipment, (including
telecommunication equipment, whether or not located within the Premises),
merchandise, or any improvements, alterations, or additions made by Tenant to
the Premises, which Tenant shall forthwith replace or fully repair at Tenant's
sole cost and expense provided this Lease is not cancelled according to the
provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions,
this Lease shall remain in full force and effect. Tenant hereby expressly waives
any statutory rights of termination which may arise by reason of any partial or
total destruction of the Premises.
In the event the damage or destruction of the Premises is caused by
Tenant or Tenant's employees, agents or independent contractors, Tenant shall
pay the deductible portion of Landlord's insurance proceeds.
27. EMINENT DOMAIN.
If all or any part of the Premises shall be taken by any public or
quasi-public authority under the power of eminent domain or conveyance in lieu
thereof, this Lease shall terminate as to any portion of the Premises so taken
or conveyed on the date when title vests in the condemnor, and Landlord shall be
entitled to any and all payment, income, rent, award, or any interest therein
whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value or any unexpired term of this Lease. Notwithstanding the foregoing
Paragraph, any compensation specifically awarded to Tenant for loss of business,
Tenant's personal property, moving cost or loss of goodwill, shall be and remain
the property of Tenant.
If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any entity
or body having the right or power of condemnation of its intention to condemn
the Premises or any portion thereof, or (ii) any of the foregoing events occur
with respect to the taking of any other space in the Complex, or (iii) any such
spaces are taken or conveyed in lieu of such taking, Landlord shall have the
right to terminate this Lease by giving Tenant written notice thereof within
sixty (60) days of the date of receipt of said written advice, or commencement
of said action or proceeding, taking or conveyance, which termination shall take
place as of the first to occur of the last day of the calendar month next
following the month in which such notice is given or the date on which title to
the Premises shall vest in the condemnor.
In the event of a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant can
no longer reasonably conduct its business, Tenant shall have the privilege of
terminating this Lease within sixty (60) days from the date of such taking or
conveyance, upon written notice to Landlord of its intention to do so, and upon
giving of such notice this Lease shall terminate on the last day of the calendar
month next following the month in which such notice is given, upon payment by
Tenant of the Rent from the date of such taking or conveyance to the date of
termination.
If a portion of the Premises shall be taken by condemnation or
conveyance in lieu thereof and neither Landlord nor Tenant terminate this Lease
as provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the Rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
Rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.
28. SALE OR CONVEYANCE BY LANDLORD.
In the event of a sale or conveyance of the Complex or any interest
therein, by any owner of the reversion then constituting Landlord, the
transferor shall thereby be released from any further liability upon any of the
terms, covenants or conditions (express or implied) herein contained in favor of
Tenant, and in such event, insofar as such transfer is concerned, Tenant agrees
to look solely to the responsibility of the successor in interest of such
transferor in and to the Complex and this Lease. This Lease shall not be
affected by any such sale or conveyance, and Tenant agrees to attorn to the
successor in interest of such transferor.
29. ATTORNMENT TO LENDER OR THIRD PARTY.
In the event the interest of Landlord in the Complex is encumbered by
mortgage or deed of trust, and such interest is acquired by the lender or any
third party through judicial foreclosure, non-judicial foreclosure, or
conveyance in lieu thereof, Tenant hereby agrees to attorn to such purchaser or
transferee and to recognize such purchaser or transferee as the landlord under
this Lease. In the event the lien of the deed of trust securing the loan from a
lender to Landlord is prior and paramount to the Lease, this Lease shall
nonetheless continue in full force and effect for the remainder of the unexpired
term hereof, at the same rental herein reserved and upon all the other terms,
conditions and covenants herein contained.
30. HOLDING OVER.
Any holding over by Tenant after expiration or other termination of the
Lease Term shall not constitute a renewal of the Lease or give Tenant any rights
to the Premises except as expressly provided in this Lease. Any holding over
after the expiration or other termination of the Lease Term, with the prior
written consent of Landlord, shall be construed to be a tenancy from month to
month, on the same terms and conditions herein specified insofar as applicable
except that the monthly Basic Rent shall be increased to an amount equal to one
hundred fifty (150%) percent of the monthly Basic Rent required during the last
month of the Lease Term.
31. CERTIFICATE OF ESTOPPEL.
Tenant shall, within ten (10) days after written notice from Landlord,
at any time, execute, acknowledge and deliver to Landlord a statement in writing
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the date to which the
rent and other charges are paid in advance, if any; (ii) acknowledging that
there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, or specifying such defaults, if any are claimed; and (iii)
certifying to such other matters concerning the Premises, the Lease or Tenant's
tenancy as Landlord may request. Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Premises. Tenant's
failure to deliver such statement within such time shall be conclusive upon
Tenant that this Lease is in full force and effect, without modification except
as may be represented by Landlord, that there are no uncured defaults in
Landlord's performance, and that not more than one month's Rent has been paid in
advance.
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32. CONSTRUCTION CHANGES.
It is understood that the description of the Premises and the location
of ductwork, plumbing and other facilities therein are subject to such minor
changes as Landlord or Landlord's architect determines to be desirable in the
course of construction of the Premises, and no such changes, or any changes in
plans for any other portions of the Premises or the Complex shall affect this
Lease or entitle Tenant to any reduction of Rent hereunder or result in any
liability of Landlord to Tenant. Landlord does not guarantee the accuracy of any
drawings supplied to Tenant and verification of the accuracy of such drawings
rests with Tenant.
33. RIGHT OF LANDLORD TO PERFORM.
All terms, covenants and conditions of this Lease to be performed or
observed by Tenant shall be performed or observed by Tenant at Tenant's sole
cost and expense and without any reduction of Rent. If Tenant shall fail to pay
Rent, required to be paid by it hereunder, or shall fail to perform any other
term or covenant required to be performed by it hereunder, and such failure
shall continue for five (5) days after written notice thereof from Landlord,
Landlord, without waiving or releasing Tenant from any obligation of Tenant
hereunder, may, but shall not be obligated to, make any such payment or perform
any such other term or covenant on Tenant's part to be performed. All sums so
paid by Landlord and all necessary costs of such performance by Landlord
together with interest thereon at the rate of interest specified in Paragraph 44
below, shall be paid to Landlord on demand as Additional Rent, and Landlord
shall have (in addition to any other right or remedy of Landlord) the same
rights and remedies in the event of nonpayment by Tenant of Rent hereunder.
34. ATTORNEY'S FEES.
In the event that either Landlord or Tenant should bring suit or become
involved in any proceeding for the possession of the Premises, for the recovery
of any sum due under this Lease, or because of the breach of any provision of
this Lease, or for any other relief against the other party hereunder, then all
costs and expenses, including reasonable attorneys' fees, incurred by the
prevailing party therein shall be paid by the other party, which obligation on
the part of the other party shall be deemed to have accrued on the date of the
commencement of such action or proceeding and shall be enforceable whether or
not the action or proceeding is prosecuted to judgment. Should Landlord be named
as a defendant in any suit brought against Tenant in connection with or arising
out of Tenant's occupancy hereunder, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including a reasonable attorneys' fees.
35. WAIVER.
No covenant, term or condition or the breach thereof shall be deemed
waived, except by written consent of the party against whom the waiver is
claimed, and any waiver of the breach of any covenant, term or condition shall
not be deemed to be a waiver of any other covenant, term or condition or any
subsequent failure of the party failing to perform or observe the same or any
other such term, covenant or condition. Acceptance by Landlord of any
performance by Tenant after the time the same shall have become due shall not
constitute a waiver by Landlord of the breach or default of any covenant, term
or condition unless otherwise expressly agreed to by Landlord in writing.
36. NOTICES.
All notices, demands, requests, advises or designations (collectively
"Notices") which may be or are required to be given by either party to the other
party hereunder shall be in writing. All Notices shall be sufficiently given,
made or delivered if (i) to Tenant, personally served on Tenant by leaving the
same at the Premises, or (ii) to Landlord, if personally served on a Landlord
Owner (defined below) executing this Lease. Notice shall also be sufficiently
given, made or delivered if sent by (a) postage prepaid United States mail or
overnight courier, addressed as specified in Paragraph 1.L, or (b) facsimile
transmission to the numbers specified in Paragraph 1.L, with confirming copy
sent by United States mail. Each Notice referred to in this Paragraph shall be
deemed received on the date of the personal service, the next business day after
sending via overnight courier or facsimile transmission, or on the third (3rd)
day after mailing thereof by United States mail, postage prepaid, as the case
may be.
37. EXAMINATION OF LEASE.
Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or option for a lease, and this instrument
is not effective as a lease or otherwise until its execution and delivery by
both Landlord and Tenant.
38. DEFAULT BY LANDLORD.
Landlord shall not be in default unless Landlord fails to perform
obligations required of Landlord within a reasonable time, but in no event
earlier than thirty (30) days after written notice by Tenant to Landlord and to
the holder of any mortgage or deed of trust covering the Premises whose name and
address shall have previously been furnished to Tenant in writing, specifying
wherein Landlord has failed to perform such obligations; provided, however, that
if the nature of Landlord's obligations is such that more than thirty (30) days
are required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
39. AUTHORITY.
If Tenant is a corporation (or other entity) each individual executing
this Lease on behalf of said corporation (or other entity) represents and
warrants that he or she is duly authorized to execute and deliver this Lease on
behalf of said corporation (or other entity) in accordance with the by-laws of
said corporation (or in accordance with the agreement of such other entity) and
that this Lease is binding upon said corporation (or other entity) in accordance
with its terms. Tenant shall, within sixty (60) days after execution of this
Lease, deliver to Landlord a certified copy of the resolution of the Board of
Directors or other governing members of said corporation (or other entity)
authorizing or ratifying the execution of this Lease.
40. LIMITATION OF LIABILITY.
In consideration of the benefits accruing hereunder, Tenant and all
successors and assigns covenant and agree that, in the event of any actual or
alleged failure, breach or default hereunder by Landlord:
(i) the sole and exclusive remedy and source of recovery for any
judgment or award shall be against Landlord's interest in the
Premises;
(ii) no partner, member, shareholder or other owner of Landlord
(collectively, "Landlord Owner") shall be sued or named as a
party in any suit or action (except as may be necessary to
secure jurisdiction of the partnership);
(iii) no service of process shall be made against any Landlord Owner
(except as may be necessary to secure jurisdiction of
Landlord);
(iv) no Landlord Owner shall be required to answer or otherwise
plead to any service of process;
(v) no judgment will be taken against any Landlord Owner;
(vi) any judgment taken against any Landlord Owner may be vacated
and set aside at any time without hearing;
(vii) no writ of execution will ever be levied against the assets of
any Landlord Owner;
(viii) these covenants and agreements are enforceable both by
Landlord and also by any Landlord Owner.
Tenant agrees that each of the foregoing covenants and agreements shall
be applicable to any covenant or agreement either expressly contained in this
Lease or imposed by statute or at common law.
41. BROKERS.
Tenant warrants that it has had dealings with only the real estate
broker(s) or agent(s) specified in Paragraph 1.M in connection with the
negotiation of this Lease and that it knows of no other real estate broker or
agent who is entitled to a commission in connection with this Lease. Tenant
shall indemnify, defend, protect and hold harmless Landlord and Landlord's
agents, employees and independent contractors from and against any and all
liabilities, losses, costs, expenses and damages (including attorneys' fees and
costs) arising out of any allegations or claim by any third party, other than
the broker(s) specified above, for a commission or fee in connection with the
negotiation of this Lease.
42. SIGNS.
No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the prior written
consent of Landlord. If Tenant does not obtain Landlord's prior written consent
pursuant to the preceding sentence, Landlord shall have the right to remove any
such sign, placard, picture, advertisement, name or notice without notice to and
at the expense of Tenant. If Tenant is allowed to print or affix or in any way
place a sign in, on, or about the Premises, upon expiration or other sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign.
All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant or by a person approved of by
Landlord.
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Tenant shall not place anything or allow anything to be placed near the glass of
any window, door partition or wall which may, in Landlord's judgment, appear
unsightly from outside the Premises.
43. HAZARDOUS MATERIALS.
A. Definitions. As used herein, the term "Hazardous Material" shall
mean any substance or material which has been determined by any state, federal,
or local government authority to be capable of posing a risk of injury to
health, safety or property including all of those materials and substances
designated as hazardous or toxic by the Environmental Protection Agency, the
California Water Quality Control Board, the Department of Labor, the California
Department of Industrial Relations, the Department of Transportation, the
Department of Agriculture, the Department of Human Services, the Food and Drug
Agency or any other governmental agency which regulates hazardous or toxic
substances in the environment. Without limiting the generality of the foregoing,
the term "Hazardous Material" shall include (i) all of those materials and
substances listed as hazardous or toxic in Sections 66261.1 through 66261.126 of
Title 22 of the California Code of Regulations, Article 4, Chapter 11, as the
same shall be amended from time to time, or any other federal, state or local
statute, law, ordinance, resolution, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic or dangerous waste, substance or material as
now or at any time hereafter in effect, (ii) any substance, product, waste or
other material of any nature whatsoever which may give rise to liability under
any statutory or common law theory based on negligence, trespass, intentional
tort, nuisance or strict liability or under any reported decisions of a state or
federal court, or (iii) petroleum or crude oil other than petroleum and
petroleum products which are contained within regularly operated motor vehicles.
B. Restriction on Use. Tenant shall not cause or permit any Hazardous
Material to be used, generated, released, discharged, transported to or from,
stored, or disposed of in or about the Premises, the Complex, or any other land
or improvements in the vicinity of the Premises or the Complex, without the
prior written consent of Landlord, which consent may be withheld in Landlord's
sole and absolute discretion. However, subject to the terms and conditions set
forth herein, Landlord agrees that so long as the original party named herein as
Tenant remains the Tenant under this Lease, and so long as no uncured Event of
Default exists under this Lease, Tenant shall be permitted to use and store in
the Premises only the substances listed on Exhibit E attached hereto (however,
the inclusion of Exhibit E shall in no way be deemed to create any obligation on
Landlord's part to review the list of Hazardous Materials for conformity to
laws). Without limiting the generality of the foregoing, Tenant, at its sole
cost and expense, shall comply with all laws relating to the storage, use,
generation, release, transportation and disposal of Hazardous Materials. If the
presence of any Hazardous Material on the Premises caused or permitted by Tenant
results in contamination of the Premises, the Complex, or any nearby premises,
Tenant, at its sole cost and expense, shall promptly take all actions necessary
to return the same to the condition existing prior to such contamination.
Tenant shall indemnify, defend, protect and hold harmless Landlord and
Landlord's agents, employees and independent contractors from and against any
and all claims, judgments, damages (including, without limitation, punitive
damages), losses, penalties, fines, demands, liabilities (including strict
liability), encumbrances, liens, costs and expenses of investigation and defense
of any claim, including, without limitation, reasonable attorneys' fees and
disbursements and consultants' fees, arising out of, relating to or resulting
from any storage, use, generation, discharge, treatment, transportation, release
or disposal by Tenant, or Tenant's agents, employees or independent contractors,
of any Hazardous Material upon, about, above or beneath the Premises, the
Complex or any nearby premises. This indemnity shall survive the expiration or
earlier termination of this Lease. Tenant shall not suffer any lien to be
recorded against the Premises or the Complex as a consequence of a Hazardous
Material, including any so-called state, federal or local "super fund" lien
related to the "clean up" of a Hazardous Material in or about the Premises, the
Complex or any other premises.
C. Compliance. Tenant shall immediately notify Landlord of any inquiry,
test, investigation, or enforcement proceeding by or against Tenant or the
Premises concerning a Hazardous Material. Tenant acknowledges that Landlord, as
the owner of the Premises, at its election, shall have the sole right, at
Tenant's expense, to negotiate, defend, approve and appeal any action taken or
order issued with regard to a Hazardous Material by an applicable governmental
authority. Landlord shall have the right to appoint a consultant, at Tenant's
expense, to conduct an investigation to determine whether any Hazardous Material
is being used, stored and disposed of in an appropriate manner. Tenant, at its
expense, shall comply with all recommendations of the consultant.
D. Certification Upon Termination of Lease. Upon the expiration or
earlier termination of the Lease, Tenant, at its sole cost, shall remove all
Hazardous Materials from the Premises and shall provide a certificate to
Landlord at Landlord's request certifying that there is no contamination of soil
in or about the Premises and that there is no other contamination of Hazardous
Materials in the Premises. If Tenant fails to so surrender the Premises, Tenant
shall, in addition to its obligations under Paragraph 43.B above, indemnify,
defend, protect and hold harmless Landlord and Landlord's agents, employees and
independent contractors from and against any and all damages arising out of,
related to or resulting from Tenant's failure to surrender the Premises as
required by this Paragraph, including without limitation any claims or damages
in connection with the condition of the Premises such as damages occasioned by
the inability to relet the Premises or a reduction in the fair market and/or
rental value of the Premises by reason of the existence of any Hazardous
Material upon, about, above or beneath the Premises, the Complex or any nearby
premises.
E. Clean-up Activities. If any action is required to be taken by a
governmental authority to clean-up Hazardous Materials from the Premises and
such action is not completed prior to the expiration or earlier termination of
the Lease, Tenant shall be deemed to have impermissibly held over until such
time as such required action is completed, and in addition to the requirements
of Paragraph 30, Landlord shall be entitled to all damages directly or
indirectly incurred in connection with such holding over, including without
limitation, damages occasioned by the inability to relet the Premises or a
reduction of the fair market and/or rental value of the Premises.
44. INTEREST.
Any sum accruing to Landlord under the provisions of this Lease which
shall not be paid by Tenant within thirty (30) days after such sum becomes due,
shall bear interest from the expiration of such 30 day period, until paid, at
the rate of twelve percent (12%) per annum, or the maximum rate then permitted
under applicable law, whichever is less.
45. MISCELLANEOUS AND GENERAL PROVISIONS.
A. Use of Building Name. Tenant shall not, without the written consent
of Landlord, use the name of the Building for any purpose other than as the
address of the business conducted by Tenant in the Premises.
B. Governing Law; Partial Invalidity. This Lease shall in all respects
be governed by and construed in accordance with the laws of the State of
California If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.
C. Definitions; Binding Effect. The term "Premises" includes the space
leased hereby and any improvements now or hereafter installed therein or
attached thereto. The term "Landlord" or any pronoun used in place thereof
includes the plural as well as the singular and the successors and assigns of
Landlord. The term "Tenant" or any pronoun used in place thereof includes the
plural as well as the singular and individuals, firms, associations,
partnerships and corporations, and their and each of their respective heirs,
executors, administrators, successors and permitted assigns, according to the
context hereof, and the provisions of this Lease shall inure to the benefit of
and bind such heirs, executors, administrators, successors and permitted
assigns.
The term "person" includes the plural as well as the singular and individuals,
firms, associations, partnerships and corporations. Words used in any gender
include other genders. If there be more than one Tenant, the obligations of
Tenant hereunder are joint and several. The paragraph headings of this Lease are
for convenience of reference only and shall have no effect upon the construction
or interpretation of any provision hereof.
D. Time of the Essence. Time is of the essence of this Lease and of
each and all of its provisions.
E. Quitclaim of Leasehold Interest. At the expiration or earlier
termination of this Lease, Tenant shall execute, acknowledge and deliver to
Landlord, within ten (10) days after written demand from Landlord to Tenant, any
quitclaim deed or other document required by any reputable title company
licensed to operate in the State of California, to remove the cloud or
encumbrance created by this Lease from the real property of which Tenant's
Premises are a part.
F. Entire Agreement. All exhibits, riders and attachments referenced in
this Lease are hereby incorporated into this Lease. This instrument along with
any exhibits, riders and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
hereby acknowledge that neither party has relied upon any representation
concerning the Premises that is not set forth in this Lease and agree that all
prior or contemporaneous oral agreements between and among themselves and their
agents or representatives relative to the leasing of the Premises are merged in
or revoked by this agreement.
G. Recording of Lease. Neither Landlord nor Tenant shall record this
Lease or a short form memorandum hereof without the consent of the other.
H. Amendments Required by Lender. Tenant further agrees to execute any
amendments required by a lender to enable Landlord to obtain financing, so long
as Tenant's rights hereunder are not substantially affected.
I. Air Rights Retained by Landlord. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect this
Lease, entitle Tenant to any reduction of Rent hereunder or result in any
liability of Landlord to Tenant.
J. Early Occupancy. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all of the provisions of
this Lease, and Tenant shall pay Basic Rent, Additional Rent and all other
charges specified in this Lease for the early occupancy period. Early occupancy
of the Premises by Tenant shall not advance the termination date of this Lease.
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<PAGE>
K. Options Personal to Tenant. Any Options shall (i) be personal to the
original Tenant executing this Lease, (ii) not be assignable and (iii) not be
separated from this Lease in any manner, whether by reservation or otherwise.
Any such Option may be exercised only by the original Tenant executing this
Lease while occupying the Premises and provided that such Option shall be
exercised in good faith without the intent of thereafter assigning this Lease or
subletting the Premises, or any portion thereof, and may not be exercised or
assigned, voluntarily or involuntarily, by or to any other person or entity.
<TABLE>
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this Lease
as of the day and year first above written.
<CAPTION>
<S> <C> <C>
LANDLORD: GEOMAX TENANT: SIERRA MONITOR CORPORATION
a California general partnership a California corporation
By Max Gahrahmat By Gordon Arnold
------------------------------------------------------ -----------------------------------------------
Print Name Print Name
/s/ Max Gahrahmat /s/ Gordon R. Arnold
------------------------------------------------------ -----------------------------------------------
Signature Signature
Partner President
------------------------------------------------------ -----------------------------------------------
Title of Signatory Title of Signatory
By George L. Quinn, Jr. By
------------------------------------------------------
Print Name Print Name
/s/ George L. Quinn, Jr.
------------------------------------------------------
Signature Signature
Partner
------------------------------------------------------
Title of Signatory Title of Signatory
</TABLE>
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<PAGE>
EXHIBIT A
LEGAL DESCRIPTION OF COMPLEX
The real property referred to in this Lease as the "Complex" shall mean and
include all that certain real property situated in the County of Santa Clara ,
State of California, more particularly described as follows:
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<PAGE>
EXHIBIT B
SITE PLAN OF COMPLEX AND BUILDING
GRAPHIC OMITTED
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<PAGE>
EXHIBIT C
TENANT IMPROVEMENTS WORKLETTER
[To Be Added]
None.
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<PAGE>
EXHIBIT D
ACKNOWLEDGMENT OF COMMENCEMENT
Landlord: GEOMAX
-----------------------------------------------
Tenant: SIERRA MONITOR CORPORATION
-----------------------------------------------
Complex: Tarob Court Business Park
-----------------------------------------------
Premises: 1991 Tarob Court, Milpitas, CA
-----------------------------------------------
For the Lease dated 7/31, 2000, the undersigned hereby certifies:
I. That the undersigned Tenant occupies the above-described Premises
consisting of approximately 15,788 square feet.
II. That the initial Lease term commenced on 4/01 , 2001 and will
terminate on 3/31 , 2006.
III. That Tenant's obligation to pay monthly Basic Rent in the amount of
$37,102.00 commenced or will commence on 4/01 , 2001.
IV. That a security deposit of $ 40,000.00 has been paid by Tenant to
Landlord. Balance of $31,359.00 to be paid by 4/1/01
V. That all construction to be performed by Landlord is complete and
has been accepted by Tenant.
<TABLE>
Dated as of this 18 day of August , 2000 .
<CAPTION>
<S> <C> <C>
LANDLORD: GEOMAX TENANT: SIERRA MONITOR CORPORATION
By Max Gahrahmat By Gordon Arnold
------------------------------------------------------ -------------------------------------------------
Print Name Print Name
/s/ Max Gahrahmat /s/ Gordon Arnold
------------------------------------------------------ -------------------------------------------------
Signature Signature
Partner President
------------------------------------------------------ --------------------------------------------------
Title of Signatory Title of Signatory
By George L. Quinn, Jr. By
------------------------------------------------------
Print Name Print Name
/s/ George L. Quinn, Jr.
------------------------------------------------------
Signature Signature
Partner
------------------------------------------------------
Title of Signatory Title of Signatory
</TABLE>
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<PAGE>
<TABLE>
EXHIBIT E
HAZARDOUS MATERIALS
<CAPTION>
Subject to the terms and conditions set forth in Paragraph 43 of the
Lease, so long as the original party named therein as Tenant remains the Tenant
under the Lease, and so long as no uncured Event of Default exists under the
Lease, Tenant shall be permitted to use and store in the Premises only the
substances listed below. If no items are listed, then Tenant shall not be
entitled to use or store any Hazardous Material on or about the Premises.
CHEMICAL INVENTORY LISTING
Hazard Class Physical State *Manner of Storage **Note
------------ -------------- ------------------ ------
<S> <C> <C> <C>
Non Flammable Gas Gas E
Flammable Gas Gas E
Oxidizer Gas E
Poison Liquid A 1
N/A Liquid A 2
N/A Liquid A 3
N/A Liquid A 4
N/A Liquid A 5
<FN>
* Indicated as: E - Pressurized Vessels
A - Container on Shelf
**Note
1 - Various aerosol canisters (quarter) of urethane, acrylic
2 - Cleaning fluids (quart and smaller) ie. Household ammonia, soaps
3 - Adhesives and glues in tubes and pint containers
4 - Blue line activator
5 - Laboratory chemicals including alcohols, acids, acids, base (pint
containers)
</FN>
</TABLE>
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<PAGE>
RIDER #1
LEASE AGREEMENT
GEOMAX / SIERRA MONITOR CORPORATION
FIRST ADDENDUM TO LEASE DATED JULY 31, 2000 BY AND BETWEEN GEOMAX, A GENERAL
PARTNERSHIP, AS LESSOR AND SIERRA MONITOR CORPORATION, A CALIFORNIA CORPORATION,
AS LESSEE.
OPTION TO RENEW;
Landlord grants to Tenant an Option to Renew this Lease for a period of five (5)
years on the same terms and conditions, except monthly rental which will be
determined by market conditions for like property, and mutually agreed to by
both parties at the time option is exercised. This Option to Renew is granted
only to Sierra Monitor Corporation and shall not be transferable to any
sub-tenant, affiliated Company or new parent company owner of Sierra Monitor
Corporation. In order to avail himself of said option, Tenant shall notify
Landlord in writing of the intent to exercise such option one hundred twenty
(120) days prior to the expiration of the original term of this Lease.
NOTIFICATION OF HAZARDOUS MATERIALS EVENTS;
Landlord shall protect Tenant and Tenant's employees from the human and
financial risks associated with Hazardous Materials by (1) providing Tenant with
a copy of co-tenant's listing of Hazardous Materials stored on the premises, (2)
immediate notification to Tenant of any non-compliance by co-tenant as soon as
observed by, or reported to, Landlord regarding Hazardous Materials rules and
regulations, and (3) by taking reasonable actions to avoid Hazardous Materials
infringements by co-tenants, neighbors and visitors to the complex.
<TABLE>
<CAPTION>
SIGNED & ACCEPTED:
<S> <C> <C>
SIERRA MONITOR CORPORATION: GEOMAX:
By: /s/ Gordon Arnold By: /s/ Max Gahrahmat /s/ George L. Quinn, Jr.
------------------------------------------- ------------------------------------------------
Its: President Its: Parners
------------------------------------------- ------------------------------------------------
Date: 8/18/2000 Date: 8/21/2000
------------------------------------------- ------------------------------------------------
</TABLE>
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