<PAGE> 1
U.S. Securities And Exchange Commission
Washington, D.C. 20549
___________________________
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____ to _____
COMMISSION FILE NUMBER 0-15963
SAFETYTEK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 77-0115161
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation)
4900 HOPYARD RD. PLEASANTON, CALIFORNIA 94588
(Address of principal executive offices) (Zip Code)
TELEPHONE: (510) 468-7600
(Registrant's telephone number)
______________________________________________________
Indicate by check whether the registrant (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the Registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes /X/ No / /
The number of shares outstanding of the issuer's Common Stock, par value $.0008
per share, at March 31, 1996 was 3,225,993 shares.
<PAGE> 2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SAFETYTEK CORPORATION
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30,
1995
March 31, (Derived from
1996 audited financial
(Unaudited) statements)
----------- -----------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 202,600 321,600
Trade receivables, net 6,815,200 6,199,600
Inventories 5,791,900 5,082,400
Deferred income taxes 519,500 519,500
Prepaid expenses and other current assets 432,100 456,500
------- -------
Total current assets 13,761,300 12,579,600
Property and equipment, net 2,652,600 2,516,600
Intangible and other assets 5,628,100 4,763,900
--------- ---------
$22,042,000 19,860,100
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accrued expenses $ 1,606,300 1,967,200
Accounts payable 1,700,600 1,343,500
Current portion of long-term debt and
bank borrowings 2,155,000 2,483,300
Income taxes payable 489,100 267,800
Other 115,100 90,300
----------- ----------
Total current liabilities 6,066,100 6,152,100
Long-term debt, excluding current portion 738,300 926,400
Deferred income taxes 165,500 165,500
----------- ----------
Total liabilities 6,969,900 7,244,000
Stockholders' equity:
Common stock 2,600 2,600
Additional paid-in capital 12,490,600 12,406,500
Retained earnings 2,578,900 207,000
----------- ----------
Total stockholders' equity 15,072,100 12,616,100
Commitments and contingencies
$22,042,000 19,860,100
=========== ==========
</TABLE>
See accompanying note to consolidated financial statements.
<PAGE> 3
SAFETYTEK CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31, 1996 AND 1995 AND
THE NINE MONTHS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $7,905,000 8,525,400 23,612,100 23,576,100
Cost of goods sold 3,876,900 4,093,500 11,556,600 11,471,400
---------- --------- ---------- ----------
Gross profit 4,028,100 4,431,900 12,055,500 12,104,700
Operating expenses:
Selling, general
and administrative 2,448,300 2,486,200 6,883,700 7,063,900
Research and experimental 541,400 454,400 1,513,900 1,345,100
---------- --------- ---------- ----------
Total operating expenses 2,989,700 2,940,600 8,397,600 8,409,000
Income from operations 1,038,400 1,491,300 3,657,900 3,695,700
Other income (expense):
Interest expense (28,300) (29,000) (129,000) (86,700)
Other, net 36,600 28,900 64,900 62,800
---------- --------- ---------- ----------
Income before income taxes 1,046,700 1,491,200 3,593,800 3,671,800
Income tax expense 355,900 551,900 1,221,900 1,337,100
---------- --------- --------- ----------
Net income $ 690,800 939,300 2,371,900 2,334,700
---------- --------- ---------- ----------
Net income per common share $ .20 .28 .69 .69
========== ========= ========== ==========
Weighted average common
shares outstanding 3,455,830 3,402,840 3,461,187 3,375,353
========== ========= ========== ==========
</TABLE>
See accompanying note to consolidated financial statements.
<PAGE> 4
SAFETYTEK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,371,900 2,334,700
Adjustments to reconcile net income to
cash provided by operating activities:
Depreciation and amortization 435,400 383,500
Change in operating assets and liabilities:
Trade receivables (615,600) (1,065,400)
Inventories (709,500) (844,100)
Prepaid expenses and other current assets 24,400 (12,800)
Accrued expenses (360,900) (114,100)
Accounts payable 357,100 501,900
Income taxes payable 221,300 113,700
Other current liabilities 24,800 23,600
----------- ----------
Net cash provided by operating activities 1,748,900 1,321,000
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for business acquired (963,400) (25,000)
Capital expenditures (472,200) (633,200)
----------- ----------
Net cash used by investing activities (1,435,600) (658,200)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options 84,100 29,700
Bank borrowings 915,000 416,300
Principal payments under acquisition notes
payable, long term debt and other (1,431,400) (1,185,800)
--------- ---------
Net cash used in financing activities (432,300) (739,800)
--------- ---------
Net decrease in cash and cash equivalents (119,000) (77,000)
Cash and cash equivalents at beginning of period 321,600 215,700
--------- ---------
Cash and cash equivalents at end of period $ 202,600 138,700
=========== =========
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes $ 951,800 1,227,500
=========== ==========
Interest $ 129,100 86,700
=========== ==========
</TABLE>
See accompanying note to consolidated financial statements.
<PAGE> 5
SAFETYTEK CORPORATION
NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The consolidated balance sheet as of March 31, 1996 and the related
consolidated statements of operations for the nine month periods ended March 31,
1996 and 1995; and the consolidated statements of cash flows for the nine month
periods ended March 31, 1996 and 1995 are unaudited. The consolidated financial
statements reflect, in the opinion of management, all adjustments necessary to
present fairly the financial position and results of operations as of the end of
and for the periods indicated. Interim results are not necessarily indicative of
results for a full year.
The financial statements and notes are presented as permitted by Form
10-Q, and do not contain certain information included in the Company's annual
financial statements and notes.
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE AND NINE MONTH PERIOD ENDED MARCH 31, 1996 AND 1995
Sales
Sales decreased 7.3% for the three month period ended March 31, 1996 as
compared to the same period in fiscal 1995. The decrease was primarily the
result of a decline in sales of the Company's MRI vital signs monitors at its
patient safety monitoring business as compared to the prior year period. In
addition, sales of the older non-MRI vital signs monitors have been affected by
the upcoming introduction of the Company's new multi-parameter vital signs
monitor. The new monitor received FDA approval in April, 1996 and will be
introduced in July, 1996. Sales for the nine month period ended March 31, 1996
were essentially unchanged as compared to the same period in fiscal 1995. Strong
sales growth for the Company's "MicroMax" portable multi-gas monitor at its gas
detection business offset the sales declines at the patient safety monitoring
business and oxygen monitoring business in the nine month period.
Gross Profit
Gross profit margin decreased to 51.0% in the third quarter of fiscal
1996 from 52.0% in the third quarter of fiscal 1995. This decrease was due
principally to the decreased sales volume at the Company's patient safety
monitoring business. For the nine months ended March 31, 1996, the Company's
gross profit margin remained stable at approximately 51% as the increased sales
volume and higher gross margins at the Company's gas detection business offset
the lower gross margins at the patient safety monitoring business.
Operating Expenses
Selling, general and administrative expenses were 31.0% and 29.2% of
sales in the three and nine month periods of fiscal 1996 compared with 29.2% and
30.0% for the same periods of fiscal 1995. The increase in these expenditures as
a percentage of sales for the three months ended March 31, 1996 was principally
the result of the spreading of fixed general and administrative expenses over
the lower sales volume at the patient safety monitoring business. Selling,
general and administrative expenses for the nine month period ended March 31,
1996 decreased $180,200 or 2.6% over the prior year period largely due to lower
sales commission expenses associated with the lower sales volume at the patient
safety monitoring business. In connection with the introduction of its new
multi-parameter vital signs monitor, the Company intends to significantly
increase selling, general and administrative expenses over the next twelve
months.
Research and experimental expenses were 6.8% and 6.4% of sales for the
three and nine month periods ended March 31, 1996 compared to 5.3% and 5.7% for
the same periods in fiscal 1995. The increase in aggregate research and
experimental expenses for the three and nine month periods ended March 31, 1996
was due to higher research and experimental expenditures on behalf of the
patient safety monitoring business as the Company continues its efforts in
developing and enhancing its new multi-parameter vital signs monitor and other
vital signs monitoring products.
<PAGE> 7
Other Income and Expense
Interest expense of $129,000 in the first nine months of fiscal 1996
reflected the interest expense incurred from the Company's revolving bank line
of credit and acquisition related term loan and the interest portion of the
Company's mortgage on the patient safety monitoring facility.
Provision for Income Taxes
The effective tax rate for the first nine months of fiscal 1996 was
34.0% compared with 36.4% for same period in fiscal 1995. This reduction in the
effective tax rate was principally due to the review and subsequent beneficial
changes in the Company's state income tax filing status in certain states.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at March 31, 1996 increased to $7,695,200 compared with
$6,427,500 at June 30, 1995. Cash and cash equivalents at March 31, 1996 were
$202,600 compared with $321,600 at June 30, 1995. Net cash provided by operating
activities was $1,748,900 for the nine months ended March 31, 1996 compared with
$1,321,000 for the nine months ended March 31, 1995 as net income and
depreciation along with an increase in income taxes payable and accounts payable
more than offset increases in trade receivables, inventories, and a decrease in
accrued expenses. Capital expenditures were $472,200 for the nine months ended
March 31, 1996 compared to $633,200 for the first nine months of fiscal 1995.
In fiscal 1993, the Company purchased 80% of the outstanding common
stock of Invivo Research, Inc. The agreement provided for a contingent payment
resulting in an initial payment of $1,000,000 made on July 15, 1994 and a final
payment of $2,000,000 paid on July 15, 1995. In fiscal 1994, the Company entered
into an agreement to acquire the remaining 20% of the Invivo Research, Inc.
shares. The contingent purchase price for such shares is to be paid in one or
more installments. One-fifth of the price "vests" on each of January 1, 1996,
1997 and 1998 and two-fifths vest on January 1, 1999. The former Invivo
shareholders can make one election each year beginning in 1996 to be paid any
vested payment. The amount of any payment is based on the after tax profits of
Invivo for the calendar year preceding the year that the payment is made,
regardless of when the payment vested, subject to a minimum share price if
certain milestones are achieved. The former Invivo shareholders must, generally,
elect to receive a payment in any calendar year by giving notice to the Company
by March of that year and the payment so elected is to be made on June 1 of that
year. The payments are to be made in cash, but if the shareholders require that
more than one-fifth of the payments be made in any year, the Company can elect
to make the excess amount of the payment in the form of its shares. The Company
was informed in March of this year that the former Invivo shareholders would
elect to be paid on their first installment. Based on the 1995 calendar year
results for Invivo and assuming no subsequent changes to the financial
statements for the referenced period, the payment on June 1, 1996, will be
approximately $960,000.
Bank borrowings increased $915,000 in the first nine months of fiscal
1996 as the contingent payment of $2,000,000 was made on July 15, 1995 in
connection with the Invivo Research acquisition. The Company's revolving bank
line of credit and $243,750 acquisition related term loan are collateralized by
the Company's accounts receivable, inventory, and equipment. In December 1995,
the Company renewed the bank line of credit to December 1, 1996 and increased
the amount under the revolving line of credit from $3,000,000 to $4,000,000. At
March 31, 1996, $915,000 was outstanding on the line of credit.
<PAGE> 8
The Company believes that its cash flow from operations and amounts
available from the bank line of credit will be adequate to meet its anticipated
cash needs for working capital and capital expenditures through the end of
fiscal 1996. The Company will continue to explore opportunities for the possible
acquisitions of technologies or businesses, which may require the Company to
seek additional financing.
OUTLOOK. The statements contained in this Outlook are based on current
expectations. These statements are forward looking, and
actual results may differ materially.
In April, 1996 the Company's Invivo Research subsidiary received FDA
approval to market its new portable multi-parameter vital signs monitor. The
Company believes this product will enable it to expand from its current MRI
monitoring market niche into the much larger mainstream patient monitoring
market. The Company expects this product to have a substantial impact on future
revenue growth and that its future financial results will to a large extent
depend on the success of this product. In connection with the introduction of
the new vital signs monitor, the Company intends to significantly expand its
direct domestic sales force and increase associated marketing expenses in the
next twelve months. Based on typical sales cycles in the patient monitoring
industry, the Company does not expect to receive orders for this product prior
to the second quarter of fiscal 1997. Therefore, the Company's operating results
for the upcoming fourth quarter and the first quarter of fiscal 1997 may be
below those of prior fiscal periods.
The success of this new product will be dependent on a variety of
factors, some of which may be beyond the control of the Company. Among the
factors that could influence the success of this new product are: economic
conditions affecting the healthcare industry and general economy; successful
integration of the planned expansion of the Company's direct sales force;
adoption of an appropriate marketing program for the new product; competitive
factors, such as competitor's new products and pricing pressures; and
manufacturing ramp and capacity. There can be no assurance that the Company will
achieve the desired level of success from this new product.
<PAGE> 9
PART II - OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS:
None.
ITEM 2: CHANGES IN SECURITIES:
None.
ITEM 3: DEFAULTS UPON SENIOR SECURITIES:
None.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS:
None.
ITEM 5: OTHER INFORMATION:
On April 1, 1996, the Company sold its wholly-owned subsidiary, Gamma
Instruments, Inc. Payment was primarily on deferred terms.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index included herein on page 9.
(b) Reports on Form 8-K:
None.
<PAGE> 10
SAFETYTEK CORPORATION
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
10.20 Lease between Lincoln-Whitehall Realty LLC and SafetyTek
Corporation for the 5696 Stewart Ave. Fremont, CA facility
11.1 Statement of computation of net income per share
27.0 Financial Data Schedule
<PAGE> 11
SIGNATURES
In accordance with requirements of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
SAFETYTEK CORPORATION
Date: May 15 , 1996 By \S\ John F. Glenn
----------------------------
Vice President-Finance
and Chief Financial
Officer
(Principal Financial and
Accounting Officer)
<PAGE> 1
EXHIBIT 10.20
LEASE AGREEMENT
(NET)
BASIC LEASE INFORMATION
LEASE DATE: January 8, 1996
LANDLORD: Lincoln-Whitehall Realty, L.L.C.
LANDLORD'S ADDRESS: c/o Lincoln Property Company Management
Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404-1167
TENANT: Safety Tek, Inc.,
a Delaware corporation
TENANT'S ADDRESS: 49050 Milmont Drive
Fremont, California 94538-7301
PREMISES: Approximately 17,008 rentable square feet as
shown on Exhibit A
PREMISES ADDRESS: 5696 Stewart Avenue
Fremont, California 94538
BUILDING: Approximately 34,016 rentable square
feet
LOT (BUILDING'S TAX PARCEL): Approximately
34,016 rentable square feet
PARK (LINCOLN FREMONT BUSINESS CENTER):
Approximately 191,610 rentable square feet
TERM: April 1, 1996 ("Commencement Date"), through
March 30, 2001 ("Expiration Date")
BASE RENT (P. 3): Nine thousand fourteen and 24/100 Dollars
($9,014.24) NNN a month
ADJUSTMENTS TO BASE RENT: Commencing December 1, 1997, $9,864.64 NNN a
month
Commencing August 1, 1999, $10,715.04 NNN a
month
SECURITY DEPOSIT (P. 4.1): Ten thousand seven hundred fifteen and 00/100
Dollars ($10,715.00)
[CLEANING DEPOSIT (P. 4.2): Dollars ($ )]
---------------------------- --------
*TENANT'S SHARE OF OPERATING EXPENSES (P. 6.1): 8.89% of the Park
*TENANT'S SHARE OF TAX EXPENSES (P. 6.2): 8.89% of the Lot
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (P. 7): 8.89% of the Park
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.
PERMITTED USES: See Section 9 below
UNRESERVED
PARKING SPACES: Fifty-one (51) nonexclusive and undesignated
spaces
BROKER (P. 38): Jeff Black of Grubb and Ellis
Bob Steinbock and Tom Taylor of Bishop Hawk
EXHIBITS: Exhibit A - Premises, Building, Lot and/or Park
Exhibit B - Tenant Improvements
Exhibit C - Rules and Regulations
Exhibit D - Intentionally Omitted
Exhibit E - Hazardous Materials Disclosure
Certificate - Example
Exhibit F - Change of Commencement Date -
Example
Exhibit G - Tenant's Initial Hazardous Materials
Disclosure Certificate
Exhibit H - Hazardous Materials List
ADDENDA: Addendum 1: Option to Extend the Lease
13
13
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
1. PREMISES.................................................................................................. 15
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES................................................ 15
3. RENT...................................................................................................... 15
4. SECURITY DEPOSIT AND CLEANING DEPOSIT..................................................................... 16
5. TENANT IMPROVEMENTS....................................................................................... 16
6. ADDITIONAL RENT........................................................................................... 16
7. UTILITIES................................................................................................. 18
8. LATE CHARGES.............................................................................................. 18
9. USE OF PREMISES........................................................................................... 19
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES...................................................... 19
11. REPAIRS AND MAINTENANCE................................................................................... 20
12. INSURANCE................................................................................................. 21
13. WAIVER OF SUBROGATION..................................................................................... 22
14. LIMITATION OF LIABILITY AND INDEMNITY..................................................................... 22
15. ASSIGNMENT AND SUBLEASING................................................................................. 22
16. AD VALOREM TAXES.......................................................................................... 23
17. SUBORDINATION............................................................................................. 23
18. RIGHT OF ENTRY............................................................................................ 24
19. ESTOPPEL CERTIFICATE...................................................................................... 24
20. TENANT'S DEFAULT.......................................................................................... 24
21. REMEDIES FOR TENANT'S DEFAULT............................................................................. 25
22. HOLDING OVER.............................................................................................. 26
23. LANDLORD'S DEFAULT........................................................................................ 26
24. PARKING................................................................................................... 26
25. SALE OF PREMISES.......................................................................................... 26
26. WAIVER.................................................................................................... 27
27. CASUALTY DAMAGE........................................................................................... 27
28. CONDEMNATION.............................................................................................. 28
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS................................................................. 29
30. FINANCIAL STATEMENTS...................................................................................... 30
31. GENERAL PROVISIONS........................................................................................ 31
32. SIGNS..................................................................................................... 32
33. MORTGAGEE PROTECTION...................................................................................... 32
34. QUITCLAIM................................................................................................. 32
[35. MODIFICATIONS FOR LENDER.................................................................................. 33]
36. WARRANTIES OF TENANT...................................................................................... 33
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT........................................................... 33
38. BROKERAGE COMMISSION...................................................................................... 33
39. QUIET ENJOYMENT........................................................................................... 33
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS............................................ 34
41. TENANT'S COVENANT OF NON-DISCRIMINATION................................................................... 34
</TABLE>
14
14
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
<PAGE> 3
LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date defined on Page
1. The Basic Lease Information set forth on Page 1 and this Lease are
and shall be construed as a single instrument.
1. PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a revocable
license for the right to use, on a non-exclusive basis, parking areas and
ancillary facilities located within the Common Area of the Park, subject to the
terms of this Lease. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage area of the Premises,
the Building, the Lot and the Park shall be deemed to be the number of rentable
square feet set forth in the Basic Lease Information on Page 1. Tenant further
agrees that the number of rentable square feet of the Premises, the Building,
the Lot and the Park may subsequently change after the Lease Date commensurate
with any modifications to any of the foregoing.
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES: [If Landlord
cannot deliver possession of the Premises on the Commencement Date, with the
Tenant Improvements as set forth in Exhibit B hereto having been substantially
completed (excluding punchlist items as reasonably determined by Landlord and
Tenant. Landlord shall not be subject to any liability nor shall the validity of
the Lease be affected; provided the Lease term and the obligation to pay Rent
shall commence on the date possession is tendered and the Expiration Date shall
be extended by a period of time equal to the period computed from the
Commencement Date to the date possession is tendered by Landlord to Tenant.] If
Landlord cannot deliver possession of the Premises with the Tenant Improvements
as set forth on Exhibit B hereto having been substantially completed (excluding
punchlist items as reasonably determined by Landlord and Tenant) on the
Commencement Date, Landlord shall not be subject to any liability nor shall the
validity of the Lease be affected; provided the Lease term and the obligation to
pay Rent shall commence on the date possession is so tendered subject to the
provisions of Exhibit B hereto with regard to Tenant Delays. Notwithstanding the
foregoing, if Landlord does not tender possession of the Premises with all
tenant Improvements Substantially Complete (except for punchlist items as
reasonably determined by Landlord and Tenant) to Tenant within three hundred
thirty (330) calendar days of the full execution of this Lease (the "Outside
Date") (subject to Force Majeure Delays and Tenant Delays, as such terms are
defined in Exhibit B, in which event the Outside Date shall be extended
commensurately by the period of time attributable to such delays), Tenant or
Landlord may terminate this Lease by delivering written notice thereof to the
other party if at all, by no later than the date which is thirty (30) days after
the actual Outside Date. If Tenant or Landlord fails to timely terminate the
Lease as and when provided herein, of it Landlord delivers to Tenant possession
of the Premises with the Tenant Improvements being Substantially Complete at any
time earlier than the Outside Date, then Tenant's and Landlord's foregoing right
to terminate this Lease provided herein shall lapse and be null and void upon
the earlier occurrence of such even and the Lease shall remain in full force and
effect with Tenant or Landlord having no further right to terminate this Lease.
In the event the commencement date and/or the expiration date of this Lease is
other than the Commencement Date and/or Expiration Date provided on Page 1, as
the case may be, Landlord and Tenant shall execute a written amendment to this
Lease, substantially in the form of Exhibit F hereto, wherein the parties shall
specify the actual commencement date, expiration date and the date on which
Tenant is to commence paying Rent. Landlord shall permits Tenant to occupy the
Premises two (2) weeks prior to the Commencement Date, and such occupancy shall
be at Tenant's sole risk and subject to all the provisions of this Lease,
[including,] excluding, [not limited to,] the requirement to pay Rent [and the
Security Deposit, and] including the requirement to obtain the insurance
[required] pursuant to this Lease and to deliver insurance certificates as
required herein, and to pay the Security Deposit. In addition to the foregoing,
Landlord shall have the right to impose such additional conditions on Tenant's
early entry as Landlord shall deem appropriate. By taking possession of the
Premises, Tenant shall be deemed to have accepted the Premises in a good, clean
and completed condition and state of repair, (exclusive of punchlist items as
reasonably determined by Landlord and Tenant) in compliance with all applicable
laws, codes, regulations, administrative orders and ordinances, and subject to
all matters of record. Tenant hereby acknowledges and agrees that neither
Landlord nor Landlord's agents or representatives has made any representations
or warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for any
other purpose, and that neither Landlord nor Landlord's agents or
representatives has agreed to undertake any alterations or construct any Tenant
Improvements to the Premises except as expressly provided in this Lease. [Tenant
agrees that at any time before or during the term of this Lease, Landlord shall
have the right to relocate Tenant from the Premises described herein to other
space within the Park on substantially the same terms and conditions of this
Lease provided the other space is of comparable size.]
3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, [the Cleaning Deposit,] and all insurance
certificates evidencing the insurance required to be obtained by Tenant under
Section 12 of this Lease. Tenant agrees to pay Landlord, without prior notice or
demand, or abatement, offset, deduction or claim, the Base Rent described on
Page 1, payable in advance at Landlord's address shown on Page 1 on the first
day of each month throughout the term of the Lease. In addition to the Base Rent
set forth on Page 1, Tenant shall pay Landlord in advance and on the first (1st)
day of each month throughout the term of this Lease (including any extensions of
such term), as Additional Rent Tenant's share, as set forth on Page 1, of
Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses all in the manner as specified in Sections
6.1, 6.2, 6.3, 6.4 and 7 of this Lease, respectively. Additionally, Tenant shall
pay to Landlord as Additional Rent hereunder, immediately on Landlord's demand
therefor, any and all costs and expenses incurred by Landlord to enforce the
provisions of this Lease, including, but not limited to, costs associated with
any proposed assignment or subletting of all or any portion of the Premises by
Tenant, costs associated with the delivery of notices, delivery and recordation
of notice(s) of default, attorneys' fees, expert fees, court costs and filing
fees (collectively, the "Enforcement Expenses"). The term "Rent" whenever used
herein refers to the aggregate of all these amounts. If Landlord permits Tenant
to occupy the Premises without requiring Tenant to pay rental payments for a
period of time, the waiver of the requirement to pay rental payments shall only
apply to waiver of the Base Rent and Tenant shall otherwise perform all other
obligations of Tenant hereunder, including, but not
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limited to paying to Landlord any and all amounts considered additional rent,
such as Tenant's share of Operating Expenses, Tax Expenses, Common Area Utility
Costs, and Utility Expenses, and Administrative Expenses. If, at any time,
Tenant is in default of or otherwise breaches any term, condition or provision
of this Lease, any such waiver by Landlord of Tenant's requirement to pay rental
payments shall be null and void and Tenant shall immediately pay to Landlord all
rental payments waived by Landlord. The Rent for any fractional part of a
calendar month at the commencement or termination of the Lease term shall be a
prorated amount of the Rent for a full calendar month based upon a thirty (30)
day month. The prorated Rent shall be paid on the Commencement Date and the
first day of the calendar month in which the date of termination occurs, as the
case may be.
4. SECURITY DEPOSIT AND CLEANING DEPOSIT:
4.1 SECURITY DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease, the amount described on Page 1. If Tenant
is in default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord. Concurrently with any increase in the Base Rent, Tenant shall
deliver to Landlord an amount equal to such increase, which amount shall be
added to the Security Deposit being held by Landlord and be deemed a part of
such Security Deposit thereafter. [At any time after Tenant has defaulted
hereunder, Landlord may require an increase in the amount of the Security
Deposit required hereunder for the then balance of the Lease term and Tenant
shall, immediately on demand, pay to Landlord additional sums in the amount of
such increase.] As soon as practicable after the termination of this Lease, but
any event no later than sixty (60) days after such termination. Landlord shall
return the Security Deposit to Tenant, less such amounts as are reasonably
necessary, as determined solely by Landlord in its sole reasonable discretion,
to remedy Tenant's default(s) hereunder or to otherwise restore the Premises to
a clean and safe condition, reasonable wear and tear excepted. If the cost to
restore the Premises exceeds the amount of the Security Deposit, Tenant shall
promptly deliver to Landlord any and all of such excess sums as reasonably
determined by Landlord. Landlord shall not be required to keep the Security
Deposit separate from other funds, and, unless otherwise required by law, Tenant
shall not be entitled to interest on the Security Deposit. In no event or
circumstance shall Tenant have the right to any use of the Security Deposit and,
specifically, Tenant may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.
[4.2 CLEANING DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Cleaning Deposit for the performance by Tenant
of its obligations under this Lease including, but not limited to, Section 11
below, the amount described on Page 1. The Cleaning Deposit is to be used for
purposes relating to cleaning up the Premises and the area adjacent to the
Premises, to the extent such cleaning up is required due to Tenant's or its
representatives, employees, invitees or contractors' use of the area adjacent to
the Premises, to the reasonable satisfaction of Landlord. If Tenant is in
default, Landlord may, but without obligation to do so, use the Cleaning
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Cleaning Deposit so applied or used so as to replenish the amount of the
Cleaning Deposit to increase such deposit to the amount initially deposited with
Landlord. At anytime after Tenant has defaulted hereunder, Landlord may require
an increase in the amount of the Cleaning Deposit required hereunder for the
then balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such increase. As soon as practicable
after the termination of this Lease, Landlord shall return the Cleaning Deposit
to Tenant, less such amounts as are reasonably necessary to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to a clean and safe
condition as determined by Landlord. Landlord shall not be required to keep the
Cleaning Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Cleaning Deposit. In no
event or circumstance shall Tenant have the right to any use of the Cleaning
Deposit and, specifically, Tenant may not use the Cleaning Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof.]
5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in its current "as
is" condition unless otherwise specified in Exhibit B, attached hereto and
incorporated herein by this reference. If so specified in Exhibit B hereto,
Landlord or Tenant, as the case may be, shall install the improvements ("Tenant
Improvements") on the Premises as described and in accordance with the terms,
conditions, criteria and provisions set forth in Exhibit B, attached and
incorporated herein by this reference. Tenant acknowledges that neither Landlord
nor any of Landlord's agents, representatives or employees has made any
representations as to the suitability or fitness of the Premises for the conduct
of Tenant's business, including, without limitation, any storage incidental
thereto, or for any other purpose, and that neither Landlord nor any of
Landlord's agents, representatives or employees has agreed to undertake any
alterations or construct any Tenant Improvements to the Premises except as
expressly provided in Exhibit B to this Lease.
6. ADDITIONAL RENT : The costs and expenses described in this Section 6 and all
other sums, charges, costs and expenses specified in this Lease other than Base
Rent, including, but not limited to, Utility Expenses, Tenant's share of Common
Area Utility Costs, Late Charges and Enforcement Expenses are to be paid by
Tenant to Landlord as additional rent (collectively, "Additional Rent").
6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay its share, which is defined on Page 1, of all
Operating Expenses as Additional Rent. The term "Operating Expenses" as used
herein shall mean the total reasonable and industry-standard amounts paid or
payable by Landlord in connection with the ownership, maintenance, repair and
operation of the Premises, the Building and the Lot, and where applicable, of
the Park referred to on Page 1. The amount of
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Tenant's share of Operating Expenses shall be reviewed from time to time by
Landlord and shall be subject to modification by Landlord as reasonably
determined by Landlord. These Operating Expenses may include, but are not
limited to:
6.1.1 Landlord's cost of repairs to, and maintenance of, the
roof, the roof membrane and the exterior walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Area"
shall mean all areas and facilities within the Park exclusive of the
Premises and the other portions of the Park leased exclusively to other
tenants. The Common Area includes, but is not limited to, interior
lobbies, mezzanines, parking areas, access and perimeter roads,
sidewalks, rail spurs, landscaped areas and similar areas and
facilities;
6.1.3 Landlord's annual cost of insurance insuring against
fire and extended coverage (including, if Landlord elects, "all risk"
coverage) and all other reasonable and industry-standard insurance,
including, but not limited to, earthquake, flood and/or surface water
endorsements for the Building, the Lot and the Park (including the
Common Area), rental value insurance against loss of Rent in an amount
equal to the amount of Rent for a period of at least six (6) months
commencing on the date of loss, and subject to the provisions of Section
27 below, any deductible;
6.1.4 Landlord's cost of modifications to the Building, the
Common Area and/or the Park [occasioned] required by any rules, laws or
regulations effective subsequent to the date on which the Building was
originally constructed;
6.1.5 Landlord's cost of modifications to the Building, the
Common Area and/or the Park [occasioned] required by any rules, laws or
regulations arising from Tenant's use of the Premises regardless of when
such rules, laws or regulations became effective;
6.1.6 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not
limited to, [contracts for elevator systems and] heating, ventilation
and air conditioning systems, lifts for disabled persons, and trash or
refuse collection;
6.1.7 Landlord's cost of security and fire protection
services for the Building and/or the Park, as the case may be, if in
Landlord's sole reasonable discretion such services are provided;
6.1.8 Landlord's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies;
[6.1.9 Landlord's cost for the maintenance and repair of any
rail spur and rail crossing, and for the creation and negotiation of,
and pursuant to, any rail spur or track agreements, licenses, easements
or other similar undertakings;]
6.1.10 Landlord's cost of supplies, equipment, rental
equipment and other similar items used in the direct operation and/or
maintenance of the Park; and
6.1.11 Landlord's cost for the repairs and maintenance items
set forth in Section 11.2 below.
6.2 TAX EXPENSES: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is defined on Page 1, of all real property
taxes applicable to the land and improvements included within the Lot on which
the Premises are situated and one hundred percent (100%) of all personal
property taxes now or hereafter assessed or levied against the Premises or
Tenant's personal property. The amount of Tenant's share of Tax Expenses shall
be reviewed from time to time by Landlord and shall be subject to modification
by Landlord as reasonably determined by Landlord. Tenant shall also pay one
hundred percent (100%) of any increase in real property taxes attributable, in
Landlord's sole discretion, to any and all alterations, Tenant Improvements or
other improvements of any kind, which are above standard improvements
customarily installed for similar buildings located within the Building or the
Park (as applicable), whatsoever placed in, on or about the Premises for the
benefit of, at the request of, or by Tenant. The term "Tax Expenses" shall mean
and include, without limitation, any form of tax and assessment (general,
special, supplemental, ordinary or extraordinary), commercial rental tax,
payments under any improvement bond or bonds, license, rental tax, transaction
tax, levy, or penalty imposed by authority having the direct or indirect power
of tax (including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement district thereof) as
against any legal or equitable interest of Landlord in the Premises, the
Building, the Lot or the Park, as against Landlord's right to rent or other
income therefrom, or as against Landlord's business of leasing the Premises or
the occupancy of Tenant or any other tax, fee, or excise, however described,
including, but not limited to, any value added tax, or any tax imposed in
substitution (partially or totally) of any tax previously included within the
definition of real property taxes, or any additional tax the nature of which was
previously included within the definition of real property taxes. The term "Tax
Expenses" shall not include any franchise, estate, inheritance, net income, or
excess profits tax imposed upon Landlord.
6.3 ADMINISTRATIVE EXPENSES: In addition to the Base Rent set forth in
Section 3 hereof, Tenant shall pay Landlord, without prior notice or demand, on
the first (1st) day of each month throughout the term of this Lease (including
any extensions of such term), as compensation to Landlord for accounting and
management services rendered on behalf of the Building and/or the Park,
one-twelfth (1/12th) of an amount equal to ten percent (10%) of the estimated
amount of the aggregate of the Tenant's share of (i) the total Operating
Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all Common Area Utility Costs for the Park and the
Premises as described in Section 7 below; as such amounts are estimated by
Landlord in accordance with the provisions of Section 6.4 below (collectively,
the "Administrative Expenses"). Tenant's obligations to pay such Administrative
Expenses shall survive the expiration or earlier termination of this Lease.
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6.4 PAYMENT OF EXPENSES: Landlord shall estimate Tenant's share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, on the
first (1st) day of each month and throughout the remaining months of such
calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year and Tenant shall pay one-twelfth (1/12th) of
such estimated amount as Additional Rent hereunder on the first day of each
month during such calendar year and for each ensuing calendar year throughout
the term of this Lease (including any extensions of the term). By April 30th of
each of the following calendar years, or as soon thereafter as reasonably
possible, including the calendar year after the calendar year in which this
Lease terminates or the term expires, Landlord shall endeavor to furnish Tenant
with an a written accounting of actual Operating Expenses and Tax Expenses.
Within thirty (30) days of Landlord's delivery of such accounting, Tenant shall
pay to Landlord the amount of any underpayment. Notwithstanding the foregoing,
failure by Landlord to give such accounting by such date shall not constitute a
waiver by Landlord of its right to collect any of Tenant's underpayment at any
time. Landlord shall credit the amount of any overpayment by Tenant toward the
next estimated monthly installment(s) falling due, or where the term of the
Lease has expired, refund the amount of overpayment to Tenant. Tenant, at its
sole cost and expense through any certified public accountant designated by it,
shall have the right to examine and/or audit the books and records evidencing
such costs and expenses for the previous one (1) calendar year, during
Landlord's reasonable business hours and not more frequently than once during
any calendar year. Tenant's obligations to pay its share of Operating Expenses
and Tax Expenses shall survive the expiration or earlier termination of this
Lease.
6.5 ANNUAL RECONCILIATION: If the term of the Lease expires prior to the
annual reconciliation of expenses, if any, Landlord shall have the right to
reasonably estimate Tenant's share of such expenses, and if Landlord determines
that an underpayment is due, Tenant hereby agrees that Landlord shall be
entitled to deduct such underpayment from Tenant's Security Deposit. If Landlord
reasonably determines that an overpayment has been made by Tenant, Landlord
shall refund said overpayment to Tenant as soon as practicable thereafter, but
in any event, no later than ninety (90) days after such expiration.
Notwithstanding the foregoing, failure of Landlord to accurately estimate
Tenant's share of such expenses or to otherwise perform such reconciliation of
expenses, including, without limitation, Landlord's failure to deduct any
portion of any underpayment from Tenant's Security Deposit, shall not constitute
a waiver of Landlord's right to collect any of Tenant's underpayment at any time
during the term of the Lease or at any time after the expiration or earlier
termination of this Lease.
7. UTILITIES: Utility Expenses, Common Area Utility Costs and all other sums or
charges set forth in this Section 7 are considered part of Additional Rent.
Tenant shall pay the cost of all water, sewer use, sewer discharge fees and
sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone and other utilities billed or metered separately to the
Premises and/or Tenant. Tenant shall also pay its reasonable share of any
assessments or charges for utility or similar purposes included within any tax
bill for the Lot on which the Premises are situated, including, without
limitation, entitlement fees, allocation unit fees, and/or any similar fees or
charges, and any penalties related thereto. For any such utility fees or use
charges that are not billed or metered separately to Tenant, Tenant shall pay to
Landlord, as Additional Rent, without prior notice or demand, on the first (1st)
day of each month throughout the term of this Lease the amount which is
attributable to Tenant's use of the utilities or similar services, as reasonably
estimated and determined by Landlord based upon factors such as size of the
Premises and intensity of use of such utilities by Tenant such that Tenant shall
pay the portion of such charges reasonably consistent with Tenant's use of such
utilities and similar services ("Utility Expenses"). If Tenant disputes any such
estimate or determination, then Tenant shall either pay the estimated amount or
cause the Premises to be separately metered at Tenant's sole expense. In
addition, Tenant shall pay to Landlord its share, which is described on Page 1,
as Additional Rent, without prior notice or demand, on the first (1st) day of
each month throughout the term of this Lease, of any Common Area utility costs,
fees, charges or expenses ("Common Area Utility Costs"). Tenant shall pay to
Landlord one-twelfth (1/12th) of the estimated amount of Tenant's share of the
Common Area Utility Costs in the same manner and time periods as specified in
Section 6.4 above and any reconciliation thereof shall also be in the same
manner as specified in Sections 6.4 and 6.5 above. The amount of Tenant's share
of Common Area Utility Costs shall be reviewed from time to time by Landlord and
shall be subject to modification by Landlord as reasonably determined by
Landlord. Tenant acknowledges that the Premises may become subject to the
rationing of utility services or restrictions on utility use as required by a
public utility company, governmental agency or other similar entity having
jurisdiction thereof. Notwithstanding any such rationing or restrictions on use
of any such utility services, Tenant acknowledges and agrees that its tenancy
and occupancy hereunder shall be subject to such rationing restrictions as may
be imposed upon Landlord, Tenant, the Premises, the Building or the Park, and
Tenant shall in no event be excused or relieved from any covenant or obligation
to be kept or performed by Tenant by reason of any such rationing or
restrictions. Tenant further agrees to timely and faithfully pay, prior to
delinquency, any amount, tax, charge, surcharge, assessment or imposition
levied, assessed or imposed upon the Premises, or Tenant's use and occupancy
thereof, or as a result directly or indirectly of any such rationing or
restrictions.
8. LATE CHARGES: Any and all sums or charges set forth in this Section 8 are
considered part of Additional Rent. Tenant acknowledges that late payment (the
[second]sixth day of each month or anytime thereafter) by Tenant to Landlord of
Base Rent, Tenant's share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, Administrative Expenses or other sums due
hereunder, will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and penalties
due to the late payment of real property taxes on the Premises. Therefore, if
any installment of Rent or any other sum due from Tenant is not received by
Landlord [when due,] within five (5) days of the due date, Tenant shall promptly
pay to Landlord all of the following, as applicable: (a) an additional sum equal
to five percent (5%) of such delinquent amount as a late charge for the first
instance during any calendar year in which Landlord does not receive Rent within
such 5-day period; seven percent (7%) of such delinquent amount as a late charge
for the second instance during any calendar year in which Landlord does not
receive Rent with such 5-day period and ten percent (10%) of such delinquent
amount as a late charge for each and every successive instance during any
calendar year in which Landlord does not receive Rent within said 5-day period,
plus interest on such delinquent amount at the rate equal to the prime rate plus
three percent (3%) for the time period such payments are delinquent as a
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late charge for every month or portion thereof that such sums remain unpaid, (b)
the amount of seventy-five dollars ($75) for each three-day notice prepared for,
or served on, Tenant, (c) the amount of fifty dollars ($50) relating to checks
for which there are not sufficient funds. If Tenant delivers to Landlord a check
for which there are not sufficient funds, Landlord may, at its sole option,
require Tenant to replace such check with a cashier's check for the amount of
such check and all other charges payable hereunder. The parties agree that this
late charge and the other charges referenced above represent a fair and
reasonable estimate of the costs that Landlord will incur by reason of late
payment by Tenant. Acceptance of any late charge or other charges shall not
constitute a waiver by Landlord of Tenant's default with respect to the
delinquent amount, nor prevent Landlord from exercising any of the other rights
and remedies available to Landlord for any other breach of Tenant under this
Lease. If a late charge or other charge becomes payable for any three (3)
installments of Rent within any twelve (12) month period, then Landlord, at
Landlord's sole option, can either require the Rent be paid quarterly in
advance, or be paid monthly in advance by cashier's check or by electronic funds
transfer.
9. USE OF PREMISES:
9.1 PERMITTED USES: Tenant shall only use the Premises for purposes of
office uses and warehouse uses for sale, assembly, light manufacturing, testing,
engineering, research and development and storage of process control
instruments, but only to the extent such uses meet all of the following
criteria: (i) such uses are permitted by the City of Fremont and any and all
entities having jurisdiction over the Premises, the Building and/or the Park;
(ii) such uses are disclosed in the Tenant's Initial HazMat Certificate (defined
below in Section 29) attached hereto; and (iii) such uses are in strict
compliance with all of the provisions of this Section 9 and of Section 29 below.
Tenant and Tenant's Representatives may not, in any event or circumstance, use
any portion of the Premises for purposes of the following: (a) the filling of
gas permeation or other devices; and (b) the use and/or storage of any gas
cylinders used for the filling of gas permeation or other devices at the
Premises or at Tenant's operations conducted at Tenant's other facilities.
9.[1]2 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND
REGULATIONS: The Premises are to be used solely for the uses stated in Section
9.1 above and for no other uses or purposes without Landlord's prior written
consent, which consent may be given or withheld in Landlord's sole discretion.
The use of the Premises by Tenant and its employees, representatives, agents,
invitees, licensees, subtenants, customers or contractors (collectively,
"Tenant's Representatives") shall be subject to, and at all times in compliance
with, (a) any and all applicable laws, ordinances, statutes, orders and
regulations as same exist from time to time (collectively, the "Laws"), (b) any
and all documents, matters or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements
thereto, each of which has already been [or hereafter is] recorded in any
official or public records with respect to the Premises, the Building, the Lot
and/or the Park, or any portion thereof prior to the Commencement Date
(collectively, the "Recorded Matters"), and any Recorded Matters which Landlord
may elect to record after the Commencement Date of this Lease ("Future Recorded
Matters") to the extent Landlord delivers to Tenant prior notice of any such
Future Recorded Matters and Tenant's use of the Premises is not prevented or
substantially impaired by virtue of such Future Recorded Matters, and (c) any
and all rules and regulations set forth in Exhibit C, attached to and made a
part of this Lease, and any other reasonable rules and regulations promulgated
by Landlord now or hereafter enacted relating to parking and the operation of
the Premises, the Building and the Park (collectively, the "Rules and
Regulations"). Tenant agrees to, and does hereby, assume full and complete
responsibility to ensure that the Premises are adequate to fully meet the needs
and requirements of Tenant's intended operations of its business within the
Premises, and Tenant's use of the Premises and that same are in compliance with
all applicable Laws.
9.23 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Area, including, but not limited to, any offensive odors, noises, fumes or
vibrations. Tenant shall not damage or deface or otherwise commit or suffer to
be committed any waste in, upon or about the Premises. Tenant shall not place or
store, nor permit any other person or entity to place or store, any property,
equipment, materials, supplies, personal property or any other items or goods
outside of the Premises for any period of time. Tenant shall not permit any
animals, including, but not limited to, any household pets, to be brought or
kept in or about the Premises. Tenant shall place no loads upon the floors,
walls, or ceilings in excess of the maximum designed load permitted by the
applicable Uniform Building Code or which may damage the Building or outside
areas; nor place any harmful liquids in the drainage systems; nor dump or store
waste materials, refuse or other such materials, or allow such to remain outside
the Building area, except in refuse dumpsters or in any enclosed trash areas
provided. Tenant shall honor the terms of all Recorded Matters and, subject to
the provisions of Section 9.2 above, Future Recorded Matters relating to the
Premises, the Building, the Lot and/or the Park. Tenant shall honor the Rules
and Regulations. [If Tenant fails to comply with such Laws, Recorded Matters,
Rules and Regulations or the provisions of this Lease, Landlord shall have the
right to collect from Tenant a reasonable sum as a penalty, in addition to all
rights and remedies of Landlord hereunder including, but not limited to, the
payment by Tenant to Landlord of all Enforcement Expenses and Landlord's costs
and expenses, if any, to cure any of such failures of Tenant, if Landlord, at
its sole option, elects to undertake such cure.]
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:
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10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord. , which consent
shall not be withheld or delayed unreasonably If any such alteration or addition
is expressly permitted by Landlord, Tenant shall deliver at least [twenty (20)]
ten (10) days prior notice to Landlord, from the date Tenant intends to commence
construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor reasonably approved by Landlord, at Tenant's sole expense in
compliance with all applicable Laws (including, but not limited to, the ADA as
defined herein), Recorded Matters, subject to the provisions of Section 9.2
above, Future Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant. As a condition to Landlord's consent to the
installation of any fixtures, additions or other improvements, Landlord may
require Tenant to post and obtain a completion and indemnity bond for up to one
hundred fifty percent (150%) of the cost of the work.
10.2 SURRENDER OF PREMISES: Upon the termination of this Lease, whether
by forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures, furnishings, additions and
improvements which Landlord has notified Tenant, in writing, that Landlord will
require Tenant not to remove, to Landlord in good condition and repair
including, but not limited to, replacing all light bulbs and ballasts not in
good working condition, excepting for reasonable wear and tear. Reasonable wear
and tear shall not include any damage or deterioration to the floors of the
Premises arising from the use of forklifts in, on or about the Premises
(including, without limitation, any marks or stains of any portion of the
floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such trade fixtures, furniture,
furnishings, additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures, alterations, furniture, furnishings, trade fixtures, additions
and other improvements which Landlord shall require Tenant not to remove from
the Premises. Tenant shall repair any damage caused by the installation or
removal of such signs, trade fixtures, furniture, furnishings, fixtures,
additions and improvements which are to be removed from the Premises by Tenant
hereunder. If Landlord fails to so notify Tenant at least twenty (20) days prior
to such termination of this Lease, then Tenant shall remove all tenant signage,
fixtures, alterations, furniture, furnishings, trade fixtures, additions and
other improvements installed in or about the Premises by, or on behalf of
Tenant. Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.
11. REPAIRS AND MAINTENANCE:
11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and maintain
the Premises and the adjacent areas (including, without limitation, any portion
of the Common Area used by Tenant or Tenant's Representatives) in good, clean
and safe condition and repair to the satisfaction of Landlord including, but not
limited to, repairing any damage caused by Tenant or Tenant's Representatives
and replacing any property so damaged by Tenant or Tenant's Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible for maintaining, repairing and replacing (a) all mechanical systems,
heating, ventilation and air conditioning systems, (b) all plumbing, electrical
wiring and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting serving
the Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, [(g) lifts for disabled persons serving the
Premises,] (h) sprinkler systems, fire protection systems and security systems,
(i) all partitions, fixtures, equipment, interior painting, and interior walls
and floors of the Premises and every part thereof (including, without
limitation, any demising walls contiguous to any portion of the Premises).
Tenant's obligation to keep, maintain, preserve and repair the Premises and the
adjacent area shall specifically extend to the cleanup and removal of any and
all Hazardous Materials (hereafter defined) occurring in, on or about the
Premises. Notwithstanding anything to the contrary contained herein, Landlord
shall cause all mechanical, (including but not limited to heating ventilating,
and air conditioning systems) electrical and plumbing systems to be in good
working order prior to the Commencement Date of this Lease.
11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, and (ii) the repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or
Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, [any rail spur and rail
crossing,] the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors and entrances, exterior window
casements, exterior doors and door closers, exterior painting of the Building
(exclusive of the Premises), and underground utility and sewer pipes outside the
exterior walls of the Building. For purposes of this Section 11.2, the term
"exterior" shall mean exterior to, and not serving the Premises. Unless
otherwise notified by Landlord, in writing, that Landlord has elected to procure
and maintain the following described contract(s), Tenant shall procure and
maintain (a) the heating, ventilation and air conditioning systems preventative
maintenance and repair contract(s); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord, and (b) the fire and
sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services); such
contract(s) to be on a bi-monthly or quarterly basis, as reasonably determined
by Landlord. Landlord reserves the right, but without the obligation to do so,
to procure and maintain at commercially competitive rates (i) the heating,
ventilation and air conditioning systems preventative maintenance and repair
contract(s), and/or (ii) the fire and
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sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services). If Landlord so
elects to procure and maintain any such contract(s), Tenant will reimburse
Landlord for the cost thereof in accordance with the provisions of Section 6
above. If Tenant procures and maintains any of such contract(s), Tenant will
promptly deliver to Landlord a true and complete copy of (x) each such contract
and any and all renewals or extensions thereof, and (y) each service report or
other summary received by Tenant pursuant to or in connection with such
contract(s). Notwithstanding anything to the contrary contained herein, should
Landlord elect to re-paint the exterior of the buildings in the Park, Landlord
shall amortize such cost over a minimum of two (2) calendar years for purposes
of calculating Tenant's Operating Expenses pursuant to Section 6 herein.
11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion.
11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord., which consent shall not be withheld
or delayed unreasonably. If Tenant refuses or neglects to repair and maintain
the Premises and the adjacent areas properly as required herein and to the
reasonable satisfaction of Landlord, Landlord may, but without obligation to do
so, at any time make such repairs and/or maintenance without Landlord having any
liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property, or to Tenant's business by reason
thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. In
the event Landlord makes such repairs and/or maintenance, upon completion
thereof Tenant shall pay to Landlord, as additional rent, the Landlord's
reasonable costs for making such repairs and/or maintenance, plus [twenty (20%)]
ten (10%) percent for overhead, upon presentation of a bill therefor, plus any
Enforcement Expenses. The obligations of Tenant hereunder shall survive the
expiration of the term of this Lease or the earlier termination thereof. Tenant
hereby waives any right to repair at the expense of Landlord under any
applicable Laws now or hereafter in effect respecting the Premises.
12. INSURANCE:
12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and effect
at all times during the term of this Lease, at Tenant's sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a carrier or carriers acceptable to Landlord and
its lender(s) which afford the following coverages: (i) worker's compensation:
statutory limits; (ii) employer's liability, as required by law, with a minimum
limit of $100,000 per employee and $500,000 per occurrence; (iii) commercial
general liability insurance (occurrence form) providing coverage against any and
all claims for bodily injury and property damage occurring in, on or about the
Premises arising out of Tenant's and Tenant's Representatives' use and/or
occupancy of the Premises. Such insurance shall include coverage for blanket
contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights, with deletion of the exclusion for operations
within fifty (50) feet of a railroad track (railroad protective liability), if
applicable. Such insurance shall have a combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) aggregate limit [and excess umbrella insurance in the amount of Two
Million Dollars ($2,000,000).] If Tenant has other locations which it owns or
leases, the policy shall include an aggregate limit per location endorsement. If
necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv) comprehensive automobile liability
insurance: a combined single limit of not less than $2,000,000 per occurrence
and insuring Tenant against liability for claims arising out of the ownership,
maintenance, or use of any owned, hired or non-owned automobiles; (v) "all risk"
property insurance, including without limitation, sprinkler leakage, boiler and
machinery comprehensive form, if applicable, covering damage to or loss of any
personal property, trade fixtures, inventory, fixtures and equipment located in,
on or about the Premises, and in addition, coverage for flood, earthquake, and
business interruption of Tenant, together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this subparagraph (v); and (vi) such other insurance as
Landlord deems necessary and prudent or as may otherwise be required by any of
Landlord's lenders or joint venture partners.
12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "Best's Insurance Reports." Any deductible amounts under any of
the insurance policies required hereunder shall not exceed One Thousand Dollars
($1,000). Tenant shall deliver to Landlord certificates of insurance and true
and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after thirty
(30) days prior written notice to the parties named as additional insureds as
required in this Lease (except for cancellation for nonpayment of premium, in
which event cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms of this
Lease under a blanket insurance policy, provided such blanket policy expressly
affords coverage for the Premises and for Landlord as required by this Lease.
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12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park, and any joint venture partners of Landlord shall
be named as additional insureds under all of the policies required in Section
12.1(iii) above. Additionally, such policies shall provide for severability of
interest. All insurance to be maintained by Tenant shall, except for workers'
compensation and employer's liability insurance, be primary, without right of
contribution from insurance maintained by Landlord. Any umbrella liability
policy or excess liability policy (which shall be in "following form") shall
provide that if the underlying aggregate is exhausted, the excess coverage will
drop down as primary insurance. The limits of insurance maintained by Tenant
shall not limit Tenant's liability under this Lease. It is the parties'
intention that the insurance to be procured and maintained by Tenant as required
herein shall provide coverage for any and all damage or injury arising from or
related to Tenant's operations of its business and/or Tenant's or Tenant's
Representatives' use of the Premises and/or any of the areas within the Park,
whether such events occur within the Premises (as described in Exhibit A hereto)
or in any other areas of the Park. It is not contemplated or anticipated by the
parties that the aforementioned risks of loss be borne by Landlord's insurance
carriers, rather it is contemplated and anticipated by Landlord and Tenant that
such risks of loss be borne by Tenant's insurance carriers pursuant to the
insurance policies procured and maintained by Tenant as required herein.
12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall pay to Landlord, as additional rent, the
amount so paid by Landlord promptly upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain any insurance required in this Lease, Tenant shall be
liable for all losses, damages and costs resulting from such failure.
13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance. The provisions
of this Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.
14. LIMITATION OF LIABILITY AND INDEMNITY: Except for damage resulting from the
[sole active] gross negligence or willful misconduct of Landlord or its
authorized representatives, Tenant agrees to protect, defend (with counsel
acceptable to Landlord) and hold Landlord and Landlord's lender(s), partners,
employees, representatives, legal representatives, successors and assigns
(collectively, the "Indemnitees") harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, judgments, charges and
expenses (including reasonable attorneys' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant's or Tenant's Representatives' use of the Premises,
Building and/or the Park, or the conduct of Tenant's business, or from any
activity, work or thing done, permitted or suffered by Tenant in or about the
Premises, or in any way connected with the Premises or with the improvements or
personal property therein, including, but not limited to, any liability for
injury to person or property of Tenant, Tenant's Representatives, or third party
persons. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.
Except for damage resulting from the [sole active] gross negligence or
willful misconduct of Landlord or its authorized representatives, Landlord shall
not be liable to Tenant for any loss or damage to Tenant or Tenant's property,
for any injury to or loss of Tenant's business or for any damage or injury to
any person from any cause whatsoever, including, but not limited to, any acts,
errors or omissions by or on behalf of any other tenants or occupants of the
Building and/or the Park. Tenant shall not, in any event or circumstance, be
permitted to offset or otherwise credit against any payments of Rent required
herein for matters for which Landlord may be liable hereunder. Landlord and its
authorized representatives shall not be liable for any interference with light
or air, or for any latent defect in the Premises or the Building related to any
improvements made to the Premises or the Building after the original
construction of the Building. To the fullest extent permitted by law, Tenant
agrees that neither Landlord nor any of Landlord's lender(s), partners,
employees, representatives, legal representatives, successors and assigns shall
at any time or to any extent whatsoever be liable, responsible or in any way
accountable for any loss, liability, injury, death or damage to persons or
property which at any time may be suffered or sustained by Tenant or by any
person(s) whomsoever who may at any time be using, occupying or visiting the
Premises, the Building or the Park.
15. ASSIGNMENT AND SUBLEASING:
15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
[unreasonably] withheld or delayed unreasonably. Tenant hereby agrees that
Landlord may withhold its consent to any proposed sublease or assignment if the
proposed sublessee or assignee or its business is subject to compliance with
additional requirements of the ADA (defined below) beyond those requirements
which are applicable to Tenant, unless the proposed sublessee or assignee shall
(a) first deliver plans and specifications for complying with
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such additional requirements and obtain Landlord's written consent thereto, and
(b) comply with all Landlord's conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least [thirty (30)]
twenty (20) days prior to the proposed commencement of the sublease or
assignment (the "Proposed Effective Date") the following: (i) the name of the
proposed assignee or sublessee; (ii) such information as to such assignee's or
sublessee's financial responsibility and standing as Landlord may reasonably
require; and (iii) the aforementioned plans and specifications, if any. Within
ten (10) days after Landlord's receipt of a written request from Tenant that
Tenant seeks to sublet or assign all or any portion of the Premises, Landlord
shall deliver to Tenant a copy of Landlord's standard form of sublease or
assignment agreement (as applicable), which instrument shall be utilized for
each proposed sublease or assignment (as applicable), and such instrument shall
include a provision whereby the assignee or sublessee assumes all of Tenant's
obligations hereunder and agrees to be bound by the terms hereof. As Additional
Rent hereunder, Tenant shall pay to Landlord a fee in the amount of five hundred
dollars ($500) plus Tenant shall reimburse Landlord for actual legal and other
expenses incurred by Landlord in connection with any actual or proposed
assignment or subletting. In the event the sublease (1) by itself or taken
together with prior sublease(s) covers or totals, as the case may be, more than
twenty-five percent (25%) of the rentable square feet of the Premises or (2) is
for a term which by itself or taken together with prior or other subleases is
greater than fifty percent (50%) of the period remaining in the term of this
Lease as of the time of the Proposed Effective Date, then Landlord shall have
the right, to be exercised by giving written notice to Tenant, to recapture the
space described in the sublease. If such recapture notice is given, it shall
serve to terminate this Lease with respect to the proposed sublease space, or,
if the proposed sublease space covers all the Premises, it shall serve to
terminate the entire term of this Lease, in either case as of the Proposed
Effective Date. However, no termination of this Lease with respect to part or
all of the Premises shall become effective without the prior written consent,
where necessary, of the holder of each deed of trust encumbering the Premises or
any part thereof. If this Lease is terminated pursuant to the foregoing with
respect to less than the entire Premises, the Rent shall be adjusted on the
basis of the proportion of square feet retained by Tenant to the square feet
originally demised and this Lease as so amended shall continue thereafter in
full force and effect. Each permitted assignee or sublessee shall assume and be
deemed to assume this Lease and shall be and remain liable jointly and severally
with Tenant for payment of Rent and for the due performance of, and compliance
with all the terms, covenants, conditions and agreements herein contained on
Tenant's part to be performed or complied with, for the term of this Lease. No
assignment or subletting shall affect the continuing primary liability of Tenant
(which, following assignment, shall be joint and several with the assignee), and
Tenant shall not be released from performing any of the terms, covenants and
conditions of this Lease. Tenant hereby acknowledges and agrees that it
understands that Landlord's accounting department may process and accept Rent
payments without verifying that such payments are being made by Tenant, a
permitted sublessee or a permitted assignee in accordance with the provisions of
this Lease. Although such payments may be processed and accepted by such
accounting department personnel, any and all actions or omissions by the
personnel of Landlord's accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions be deemed to be a substitute for the requirement that
Tenant obtain Landlord's prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord's
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any of its rights hereunder nor shall any voluntary relinquishment
of such rights be inferred therefrom. For purposes hereof, in the event Tenant
is a corporation, partnership, joint venture, trust or other entity other than a
natural person, any change in the direct or indirect ownership of Tenant
(whether pursuant to one or more transfers other than any public trading of the
outstanding shares (stock) of Tenant which does not result in a significant
change of the management and control of Tenant) which results in a change of
more than fifty percent (50%) in the direct or indirect ownership of Tenant
shall be deemed to be an assignment within the meaning of this Section 15 and
shall be subject to all the provisions hereof. Any and all options, first rights
of refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly
authorized in writing by Landlord.
15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as additional rent, at the same
time as the monthly installments of Rent are payable hereunder, fifty percent
(50%), (after deducting from the total excess Rent Tenant's reasonable and
industry-standard costs for such subletting, including, but not limited to,
brokerage commissions, advertising fees, and tenant improvements), of the excess
of each such payment of rent or other consideration in excess of the Rent called
for hereunder.
15.3 WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.
16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes ar not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.
17. SUBORDINATION: Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and this Lease shall be subject and subordinate at all times to: (i)
all ground leases or underlying leases which may now exist or hereafter be
executed affecting the Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which the Building, the Lot, ground
leases
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or underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Notwithstanding the foregoing, Landlord or any such
ground lessor, mortgagee, or any beneficiary shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets or defenses which Tenant
might have against any prior lessor; (c) bound by prepayment of more than one
(1) month's Rent; or (d) liable to Tenant for any Security Deposit not actually
received by such successor in interest to the extent any portion or all of such
Security Deposit has not already been forfeited by, or refunded to, Tenant.
Landlord shall be and remain liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord actually transfers such Security Deposit to the successor in interest.
Tenant covenants and agrees to execute (and acknowledge if required by Landlord,
any lender or ground lessor) and deliver, within [five (5)] fifteen (15) days of
a demand or request by Landlord and in the form reasonably requested by
Landlord, ground lessor, mortgagee or beneficiary, any additional reasonable
documents evidencing the priority or subordination of this Lease with respect to
any such ground leases or underlying leases or the lien of any such mortgage or
deed of trust. Tenant's failure to timely execute and deliver such additional
documents shall, at Landlord's option, constitute a material default hereunder.
[It is further agreed that Tenant shall be liable to Landlord, and shall
indemnify Landlord from and against any loss, cost, damage or expense,
incidental, consequential, or otherwise, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such additional documents, together with any and all Enforcement Expenses.]
18. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter the
Premises at all reasonable times with reasonable prior notice for purposes of
inspection, exhibition, posting of notices, repair or alteration. At Landlord's
option, Landlord shall at all times have and retain a key with which to unlock
all the doors in, upon and about the Premises, excluding Tenant's vaults and
safes. It is further agreed that Landlord shall have the right to use any and
all means Landlord deems reasonably necessary to enter the Premises in an
emergency. Landlord shall also have the right to place "for rent" signs on the
outside of the Premises provided that such signs are specifically for the
Premises and/or "for sale" signs [on the outside of the Premises] in the common
area of the Building or Park at any time. Tenant hereby waives any claim from
damages or for any injury or inconvenience to or interference with Tenant's
business, or any other loss occasioned thereby except for any claim for any of
the foregoing arising out of the sole active gross negligence or willful
misconduct of Landlord or its authorized representatives.
19. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required by
any lender or ground lessor) and deliver to Landlord, within not less than [five
(5)] ten (10) calendar days after Landlord provides such to Tenant, a statement
in writing certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification), the date to which
the Rent and other charges are paid in advance, if any, acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder or specifying such defaults as are claimed, and such other matters as
Landlord may reasonably require. Any such statement may be conclusively relied
upon by Landlord and any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon the Tenant that (a) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (b) there are no uncured
defaults in Landlord's performance; and (c) not more than one month's Rent has
been paid in advance, except in those instances when Tenant pays Rent quarterly
in advance pursuant to Section 8 hereof, then not more than three month's Rent
has been paid in advance. [Failure by Tenant to so deliver such certified
estoppel certificate shall be a default of the provisions of this Lease.] Tenant
shall be liable to Landlord, and shall indemnify Landlord from and against any
loss, cost, damage or expense, incidental, consequential, or otherwise, arising
or accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate, together with any
and all Enforcement Expenses.
20. TENANT'S DEFAULT: The occurrence of any one or more of the following events
shall, at Landlord's option, constitute a default and breach of this Lease by
Tenant:
20.1 The [vacation or] abandonment of the Premises by Tenant for a
period of [ten (10)]fourteen (14) consecutive days or the vacation of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse. Tenant agrees to notice and service of notice as provided for
in this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;
20.2 The failure by Tenant to make any payment of Rent, Additional Rent
or any other payment required hereunder [on the date said payment is due] within
five (5) calendar days of the due date. Tenant agrees to notice and service of
notice as provided for in this Lease and waives any right to any other or
further notice or service of notice which Tenant may have under any statute or
law now or hereafter in effect;
20.3 [The failure by Tenant to observe, perform or comply with any of
the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
the time period required under the provisions of this Lease. If such failure is
susceptible of cure but cannot reasonably be cured within the aforementioned
time period (if any), as determined solely by Landlord, Tenant shall promptly
commence the cure of such failure and thereafter diligently prosecute such cure
to completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than fifteen (15) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion);] The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease (except failure to make
any
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payment of Rent and/or Additional Rent) and such failure is not cured within
(i) thirty (30) days of the date on which Landlord delivers written notice of
such failure to Tenant for all failures other than with respect to Hazardous
Materials, and (ii) ten (10) days of the date on which Landlord delivers written
notice of such failure to Tenant for all failures in any way related to
Hazardous Materials. However, Tenant shall not be in default of its obligations
hereunder if such failure cannot reasonably be cured within such thirty (30) or
ten (10) day period, as applicable, and Tenant promptly commences, and
thereafter diligently proceeds with same to completion, all actions necessary to
cure such failure as soon as is reasonably possible, but in no event shall the
completion of such cure be later than forty-five (45) days after the date on
which Landlord delivers to Tenant written notice of such failure, unless
Landlord, acting reasonably and in good faith, otherwise expressly agrees in
writing to a longer period of time based upon the circumstances relating to such
failure as well as the nature of the failure and the nature of the actions
necessary to cure such failure;
20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;
20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below; or
20.6 The making of any material misrepresentation or omission by Tenant
in any materials delivered by or on behalf of Tenant to Landlord pursuant to
this Lease.; or
[20.7 A material adverse change in the financial condition of Tenant or
an affiliated entity of Tenant which may adversely affect Tenant's ability to
perform all or any portion of its obligations under this Lease.]
21. REMEDIES FOR TENANT'S DEFAULT:
21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach of
the Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession of the Premises by Landlord pursuant
to this Section 21 shall be construed as an election to terminate this Lease
unless a written notice of such intention is given to Tenant. If Landlord relets
the Premises or any portion thereof, (i) Tenant shall be liable immediately to
Landlord for all reasonable costs Landlord incurs in reletting the Premises or
any part thereof, including, without limitation, broker's commissions, expenses
of cleaning, redecorating, and further improving the Premises and other similar
costs (collectively, the "Reletting Costs"), and (ii) the rent received by
Landlord from such reletting shall be applied to the payment of, first, any
indebtedness from Tenant to Landlord other than Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, and Utility
Expenses; second, all costs including maintenance, incurred by Landlord in
reletting; and, third, Base Rent, Operating Expenses, Tax Expenses,
Administrative Expenses, Common Area Utility Costs, Utility Expenses, and all
other sums due under this Lease. Any and all of the Reletting Costs shall be
fully chargeable to Tenant and shall not be prorated or otherwise amortized in
relation to any new lease for the Premises or any portion thereof. After
deducting the payments referred to above, any sum remaining from the rental
Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.
21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons the
Premises before the end of the term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default of the Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any the unamortized portion of the
tenant improvements constructed by or on behalf of Tenant pursuant to Exhibit B
hereto, the portion of any broker's or leasing agent's commission incurred with
respect to the leasing of the Premises to Tenant for the balance of the term of
the Lease remaining after the date on which Tenant is in default of its
obligations hereunder, and all Reletting Costs, and the worth at the time of the
award (computed in accordance with paragraph (3) of Subdivision (a) of Section
1951.2 of the California Civil Code) of the amount by which the Rent then unpaid
hereunder for the balance of the Lease term exceeds the amount of such loss of
Rent for the same period which Tenant proves could be reasonably avoided by
Landlord and in such case, Landlord prior to the award, may relet the Premises
for the purpose of mitigating damages suffered by Landlord because of Tenant's
failure to perform its obligations hereunder; provided, however, that even
though Tenant has abandoned the Premises following such breach, this Lease shall
nevertheless continue in full force and effect for as long as Landlord does not
terminate Tenant's right of possession, and until such termination, Landlord
shall have the remedy described in
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Section 1951.4 of the California Civil Code (Landlord may continue this Lease in
effect after Tenant's breach and abandonment and recover Rent as it becomes due,
if Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.
21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant defaults or otherwise
breaches this Lease, any and all Base Rent waived by Landlord under Section 3
above shall be immediately due and payable to Landlord and all options granted
to Tenant hereunder shall automatically terminate, unless otherwise expressly
agreed to in writing by Landlord.
21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default or
breach of any provision of this Lease shall not be deemed or construed a waiver
of any other breach or default by Tenant hereunder or of any subsequent breach
or default of this Lease, except for the default specified in the waiver.
22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.
23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default of
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall
not be in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.
24. PARKING: Tenant shall have a license to use the number of undesignated and
nonexclusive parking spaces set forth on Page 1. Landlord shall exercise
reasonable efforts to insure that such spaces are available to Tenant for its
use, but Landlord shall not be required to enforce Tenant's right to use the
same.
25. SALE OF PREMISES: In the event of any sale of the Premises by Landlord or
the cessation otherwise of Landlord's interest therein, Landlord shall be and is
hereby entirely released from any and all of its obligations to perform or
further perform under this Lease and from all liability hereunder as of the date
of such sale; and the purchaser, at such sale or any subsequent sale of the
Premises shall be deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to
have assumed and agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease including the return, if
applicable, of Tenant's Security Deposit. For purposes of this Section 25, the
term "Landlord" means only the owner and/or agent of the owner as such parties
exist as of the date on which Tenant executes this Lease. A ground lease or
similar long term lease by Landlord of the entire Building, of which the
Premises are a part, shall be deemed a sale within the meaning of this Section
25. Tenant agrees to attorn to such new owner provided such new owner does not
disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long as
Tenant is not in default of any of the provisions of this Lease.
26. WAIVER: No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
breach by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such breach, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.
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27. CASUALTY DAMAGE: [If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged by fire or other casualty
that substantial alteration or reconstruction of the Building shall, in
Landlord's sole opinion, be required (whether or not the Premises shall have
been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of such damage, in which event the Rent shall be
abated as of the date of such damage. If Landlord does not elect to terminate
this Lease and provided insurance proceeds and any contributions from Tenant, if
necessary, are available to fully repair the damage, Landlord shall within
ninety (90) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant or any improvements, alterations or additions
installed by or for the benefit of Tenant under the provisions of this Lease.
Landlord shall not in any event be required to spend for such work an amount in
excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except
that, subject to the provisions of the next sentence, Landlord shall allow
Tenant a fair diminution of Rent during the time and to the extent the Premises
are unfit for occupancy. If the Premises or any other portion of the Building be
damaged by fire or other casualty resulting from the intentional or negligent
acts or omissions of Tenant or any of Tenant's Representatives, the Rent shall
not be diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. In the event the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder. Except as otherwise provided in this Section 27, Tenant
hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of
the California Civil Code.]
27.1 CASUALTY. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall be
damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after receipt by
Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days, from the date of such notice.
27.1.1 MINOR INSURED DAMAGE. If the Premises are damaged only
to such extent that repairs, rebuilding and/or restoration can be reasonably
completed within ninety (90) days, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, Landlord shall
repair the Premises to substantially the same condition that existed prior to
the occurrence of such casualty, except Landlord shall not be required to
rebuild, repair, or replace any alterations or improvements installed by or for
the benefit of Tenant or any part of Tenant's furniture, furnishings or fixtures
and equipment removable by Tenant. The Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Premises only to the extent
rental abatement insurance proceeds are received by Landlord and the Premises
are unfit for occupancy.
27.1.2 INSURED DAMAGE REQUIRING MORE THAN 90 DAYS TO REPAIR.
If the Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date of the occurrence of such damage;
or (b) electing to repair the Premises to substantially the same condition that
existed prior to the occurrence of such casualty, provided insurance proceeds
are available to fully repair the damage (except that Landlord shall not be
required to rebuild, repair, or replace any alterations or improvements
installed by or for the benefit of Tenant or any part of Tenant's furniture,
furnishings or fixtures and equipment removable by Tenant). The Rent payable
hereunder shall be abated proportionately from the date of the occurrence of
such damage only to the extent rental abatement insurance proceeds are received
by Landlord and the Premises are unfit for occupancy. If Landlord should fail to
substantially complete such repairs within one hundred eighty (180) days after
the date on which Landlord is notified by Tenant of the occurrence of such
casualty (such 180-day period to be extended for delays caused by Tenant or any
force majeure events), Tenant may within twenty (20) days after expiration of
such one hundred eighty (180) day period (as same may be extended), terminate
this Lease by delivering written notice to Landlord as Tenant's exclusive
remedy, whereupon all rights of Tenant hereunder shall cease and terminate
twenty (20) days after Landlord's receipt of such notice.
27.1.3 MAJOR INSURED DAMAGE. If the Premises are damaged to
such extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate and the Rent shall be abated from the date Tenant vacates the
Premises. If neither party elects to terminate this Lease, Landlord shall
promptly commence and diligently prosecute to completion the repairs to the
Premises, provided insurance proceeds are available to fully repair the damage
(except that Landlord shall not be required to rebuild, repair, or replace any
alterations or improvements installed by or for the benefit of Tenant or any
part of Tenant's furniture, furnishings or fixtures and equipment removable by
Tenant). During the time when Landlord is prosecuting such repairs to
completion, the Rent payable hereunder shall be abated proportionately from the
date of the occurrence of such damage to the Premises only to the extent rental
abatement insurance proceeds are received by Landlord and only during the time
period that the Premises are unfit for occupancy.
27.1.4 DAMAGE NEAR END OF TERM. Notwithstanding anything to
the contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are damaged or destroyed during the last year of then
applicable term of this Lease, Landlord may, at its option, cancel and terminate
this Lease by giving written notice to Tenant of its election to do so within
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thirty (30) days after receipt by Landlord of notice from Tenant of the
occurrence of such casualty. If Landlord so elects to terminate this Lease, all
rights of Tenant hereunder shall cease and terminate ten (10) days after
Tenant's receipt of such notice.
27.2 TENANT'S OR TENANT'S REPRESENTATIVE'S FAULT. If any portion of the
Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's Representatives,
Rent shall not be diminished during the repair of such damage and Tenant shall
be liable to Landlord for the cost of the repair caused thereby to the extent
such cost is not covered by insurance proceeds.
27.3 UNINSURED CASUALTY. Tenant shall be responsible for and shall pay
to Landlord, as Additional Rent, any deductibles amount under the property
insurance for the Premises and/or the Building. If any portion of the Premises
is damaged and is not fully covered by insurance proceeds received by Landlord
(and Tenant elects not to pay any such difference) or if the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to the other party within
thirty (30) days after the date of notice to Tenant of any such event, whereupon
all rights and obligations shall cease and terminate hereunder, except for those
obligations expressly provided for in this Lease to survive such termination of
the Lease.
27.4 TENANT'S WAIVER. Landlord shall not be liable for any inconvenience
or annoyance to Tenant, injury to the business of Tenant, loss of use of any
part of the Premises by Tenant or loss of Tenant's personal property, resulting
in any way from such damage, destruction or the repair thereof, except that,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are unfit for occupancy as specifically provided above in
this Section 27. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant hereby waives all rights to
terminate this Lease or offset any amounts against Rent pursuant to rights
accorded Tenant by any law currently existing or hereafter enacted, including
but not limited to, all rights pursuant to the provisions of Sections 1932(2.),
1933(4.), 1941 and 1942 of the California Civil Code, as the same may be amended
or supplemented from time to time. Notwithstanding anything to the contrary
contained herein, if the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder, except for those obligations expressly provided for in
this Lease to survive such termination of the Lease.
28. CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), or if less than
twenty five (25%) percent of the Premises is Condemned and such condemnation
materially and substantially prevents Tenant from conducting its normal business
operations within the Premises, the then Tenant or Landlord may terminate this
Lease as of the date when physical possession of the Premises is taken and title
vests in such condemning authority, and Rent shall be adjusted to the date of
termination. Tenant shall not because of such condemnation assert any claim
against Landlord or the condemning authority for any compensation because of
such condemnation, and Landlord shall be entitled to receive the entire amount
of any award without deduction for any estate of interest or other interest of
Tenant., including without limitation, compensation for the diminution in value
of the leasehold created hereunder; provided however, the foregoing provisions
shall not preclude Tenant at Tenants sole cost and expense, from obtaining any
separate award to Tenant for use of or damage to Tenant's trade fixtures and
removable personal property or for damages for cessation or interruption of
Tenant's business, provided that such award is separate from Landlord's award
and provided further such separate award does not diminish nor impair the award
otherwise payable to Landlord. If a substantial portion of the Premises,
Building or the Lot is so Condemned, Landlord at its option may terminate this
Lease. If Landlord does not elect to terminate this Lease, Landlord shall, if
necessary, promptly proceed to restore the Premises or the Building to
substantially its same condition prior to such partial condemnation, allowing
for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as [solely] reasonably determined by
Landlord, for the Rent corresponding to the time during which, and to the part
of the Premises of which, Tenant is deprived on account of such partial
condemnation and restoration. Landlord shall not be required to spend funds for
restoration in excess of the amount received by Landlord as compensation
awarded.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord the Tenant's
initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as Exhibit G E and
incorporated herein by this reference. Tenant covenants, represents and warrants
to Landlord that, to the best of Tenant's knowledge after due inquiry, the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
(the "HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E. Landlord
hereby acknowledges and agrees that as of the date on which both parties execute
and deliver this Lease, Landlord has approved the Initial HazMat Certificate;
however, any such approval by Landlord shall not be construed to relieve Tenant
from its obligations and/or any liabilities under this Section 29.
29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials, and carcinogens; (g) any other material, waste or
substance displaying toxic, reactive, ignitable or corrosive characteristics, as
all such terms are used in their broadest sense, and are defined or become
defined
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by any Environmental Law (defined below); or (h) any materials which cause or
threatens to cause a nuisance upon or waste to any portion of the Premises, the
Building, the Lot, the Park or any surrounding property; or poses or threatens
to pose a hazard to the health and safety of persons on the Premises or any
surrounding property.
29.3 PROHIBITION; ENVIRONMENTAL LAWS: Except for those Hazardous
Materials of the type and in the quantities specified in the Hazardous Materials
List attached hereto as Exhibit H and made a part hereof, Tenant shall not be
entitled to use nor store any Hazardous Materials on, in, or about the Premises,
the Building, the Lot and the Park, or any portion of the foregoing, without, in
each instance, obtaining Landlord's prior written consent thereto, which consent
may be given or withheld in Landlord's sole discretion. Tenant hereby covenants,
represents and warrants that any cylinders of Hazardous Materials stored in, on,
at or about the Premises and/or distributed from the Premises shall be sealed in
leak-proof cylinders using the best available technology. If Landlord consents
to any such usage or storage, then Tenant shall be permitted to use and/or store
only those Hazardous Materials that are necessary for Tenant's business and to
the extent set forth in Exhibit H hereto and disclosed in the HazMat Certificate
and as expressly approved by Landlord in writing, provided that such usage and
storage is only to the extent of the type and quantities of Hazardous Materials
as specified in Exhibit H hereto or the then applicable HazMat Certificate as
expressly approved by Landlord and provided further that such usage and storage
is in full compliance with any and all local, state and federal environmental,
health and/or safety-related laws, statutes, orders, standards, courts'
decisions, ordinances, rules and regulations (as interpreted by judicial and
administrative decisions), decrees, directives, guidelines, permits or permit
conditions, currently existing and as amended, enacted, issued or adopted in the
future which are or become applicable to Tenant or all or any portion of the
Premises (collectively, the "Environmental Laws"). Tenant agrees that any
changes to the type and/or quantities of Hazardous Materials specified in
Exhibit H hereto [the most recent HazMat Certificate] may be implemented only
with the prior written consent of Landlord, which consent may be given or
withheld in Landlord's sole discretion. Tenant shall not be entitled nor
permitted to install any tanks under, on or about the Premises for the storage
of Hazardous Materials without the express written consent of Landlord, which
may be given or withheld in Landlord's sole discretion. Landlord shall have the
right at all times during the term of this Lease to (i) inspect the Premises,
(ii) conduct tests and investigations to determine whether Tenant is in
compliance with the provisions of this Section 29, and (iii) request lists of
all Hazardous Materials used, stored or otherwise located on, under or about the
Premises, the Common Areas and/or the parking lots (to the extent the Common
Areas and/or the parking lots are not considered part of the Premises). The cost
of all such inspections, tests and investigations shall be borne solely by
Tenant, if Landlord reasonably believes they are necessary. The aforementioned
rights granted herein to Landlord and its representatives shall not create (a) a
duty on Landlord's part to inspect, test, investigate, monitor or otherwise
observe the Premises or the activities of Tenant and Tenant's Representatives
with respect to Hazardous Materials, including without limitation, Tenant's
operation, use and any remediation related thereto, or (b) liability on the part
of Landlord and its representatives for Tenant's use, storage, disposal or
remediation of Hazardous Materials, it being understood that Tenant shall be
solely responsible for all liability in connection therewith. Notwithstanding
anything to the contrary contained herein, Tenant and Tenant's Representatives
shall not conduct any gas filling operations in, on, at or about the Premises
nor store any gas cylinders in, on, at or about the Premises which are used in
filling operations as part of Tenant's manufacturing process or operations at
any of Tenant's locations other than the Premises. In addition to the foregoing
Tenant and Tenant's Representatives shall limit the types and amounts of
Hazardous Materials to be stored at the Premises to the types and quantities as
specified in Exhibit H hereto.
29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about the Premises, or in any Common Areas or
parking lots (to the extent such areas are not considered part of the Premises).
Tenant, at its sole cost and expense, covenants and warrants to promptly
investigate, clean up, remove, restore and otherwise remediate (including,
without limitation, preparation of any feasibility studies or reports and the
performance of any and all closures) any spill, release, discharge, disposal,
emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant's
Representatives such that the affected portions of the Park and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on the Premises, the Building, the Lot or the Park, or any
portion of any of the foregoing. Notwithstanding the foregoing, Tenant shall be
entitled to respond immediately to an emergency without first obtaining
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof. If Tenant fails to so promptly
investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.
Notwithstanding anything to the contrary contained herein and in addition to
Tenant's obligations under this Section 29.4 any Hazardous Materials to be
stored at the Premises by Tenant and/or Tenant's Representatives shall be stored
in containers and handled in the manner specified in the Hazardous Material
Management Plan for Tenant's operation at the building located at 49050 Milmont
Drive, Fremont, California, dated 21 July 1994 (the "HMMP") and in strict
accordance with all Environmental Laws. In addition to any other rights and
remedies available to Landlord under the provisions of this Lease, Landlord
shall have the right to immediately terminate this Lease if Hazardous Materials
are stored and/or used in, on, at or about the Premises in quantities, or are of
a type, other than as specified in Exhibit H hereto, or any Hazardous Materials
are handled in any manner which is different from those procedures specified in
the HMMP. In addition to any other requirements imposed upon Tenant and Tenant's
Representatives under this Section 29 or in any other provision of this Lease
Tenant shall give immediate written notice to Landlord of: (a) any enforcement,
remediation, or other regulatory action or order, taken or threatened, by and
agency regarding, or in connection with, the presence, release or threat of
release of any Hazardous Materials in, on, under, about or from the Premises, or
otherwise resulting from Tenant's or Tenant's Representatives' use of the
Premises; (b) all demands or claims made or threatened by any third party
against Tenant or any of Tenant's Representatives and relating to liability,
loss, damage, or injury resulting from the presence, release or threat of
release of any Hazardous Materials in, on, under, about or from any portion of
the Premises, or otherwise arising,
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in any manner whatsoever, from Tenant's or Tenant's Representatives' use of the
Premises; (c) any spill, release, or discharge of Hazardous Materials in, on,
under, about or from the Premises, including without limitation, any such spill,
release, or discharge required to be reported to any agency under any
Environmental Law; and (d) all incidents or matters where Tenant or any of
Tenant's Representatives is required to give notice to any agency pursuant to
any Environmental Laws. Tenant shall post and maintain such notices in, at and
about the Premises as required by any Environmental Laws, including without
limitation, any notices required under Proposition 65. Tenant shall promptly
provide to Landlord true and complete copies of all materials, reports,
technical data, notices, and correspondence relating to the above incidents or
any other matters subject to Landlord notification or notification to other
tenants in the Building or to the general public. Tenant shall also promptly
provide to Landlord true and complete copies, revisions, and/or modifications of
all permits, approvals, and registrations Tenant receives or submits with
respect to its operations on the Premises, including without limitation, any
revisions or modification to its HMMP. Tenant hereby covenants, represents and
warrants that it shall promptly prepare and deliver to Landlord a HMMP with
respect to the Premises.
29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as set
forth hereinabove, Tenant and Tenant's officers and directors agree to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lenders, partners, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses (including,
without limitation, diminution in value of the Premises, the Building, the Lot,
the Park, or any portion of any of the foregoing, damages for the loss of or
restriction on the use of rentable or usable space, and from any adverse impact
of Landlord's marketing of any space within the Building and/or Park), suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising at any time during or after the
term of this Lease in connection with or related to, directly or indirectly, the
use, presence, transportation, storage, disposal, migration, removal, spill,
release or discharge of Hazardous Materials on, in or about the Premises, or in
any Common Areas or parking lots (to the extent such areas are not considered
part of the Premises) as a result (directly or indirectly) of the intentional or
negligent acts or omissions of Tenant or Tenant's Representatives. Neither the
written consent of Landlord to the presence, use or storage of Hazardous
Materials in, on, under or about any portion of the Premises, the Building, the
Lot and the Park, nor the strict compliance by Tenant with all Environmental
Laws shall excuse Tenant and Tenant's officers and directors from its
obligations of indemnification pursuant hereto. To the extent Landlord is
strictly liable under any Environmental Laws, Tenant's obligations to Landlord
under this Section 29 and the indemnity contained herein shall likewise be
without regard to fault on Tenant's part with respect to the violation of any
Environmental Law which results in liability to any of the aforementioned
indemnitees.
29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, the Lot and/or the Park is not
in compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then at Landlord's sole option, Landlord
may require Tenant to hold over possession of the Premises until Tenant can
surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.
30. FINANCIAL STATEMENTS: Tenant, for the reliance of Landlord, any lender
holding or anticipated to acquire a lien upon the Premises, the Building or the
Park or any portion thereof, or any prospective purchaser of the Building or the
Park or any portion thereof, within ten (10) days after Landlord's request
therefor, but not more often than once annually so long as Tenant is not in
default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant (including interim periods following the end of
the last fiscal year for which annual statements are available) which statements
shall be prepared or compiled by a certified public accountant and shall present
fairly the financial condition of Tenant at such dates and the result of its
operations and changes in its financial positions for the periods ended on such
dates. If an audited financial statement has not been prepared, Tenant shall
provide Landlord with an unaudited financial statement and/or such other
information, the type and form of which are acceptable to Landlord in Landlord's
reasonable discretion, which reflects the financial condition of Tenant. If
Landlord so requests, Tenant shall deliver to Landlord [an opinion of a
certified public accountant, including] a balance sheet and profit and loss
statement for the most recent prior year, all prepared in accordance with
generally accepted accounting principles consistently applied. Any and all
options granted to Tenant hereunder shall be subject to and conditioned upon
Landlord's reasonable approval of Tenant's financial condition at the time of
Tenant's exercise of any such option.
31. GENERAL PROVISIONS:
31.1 TIME. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.
31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.
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31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which,
for purposes of this Lease, shall include Landlord and the owner of the Building
if other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners in the Premises or the Building and Tenant agrees to look
solely to the Premises for satisfaction of any liability and shall not look to
other assets of Landlord nor seek any recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord; it being intended that Landlord and the individual partners,
directors, officers, shareholders, agents or employees of Landlord shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease and from all further liabilities and
expenses hereunder upon transfer of Landlord's interest in the Premises or the
Building.
31.5 SEPARABILITY. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.
31.6 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
31.7 ATTORNEYS' FEES. In the event any dispute between the parties
result in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.
31.8 ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.
31.9 WARRANTY OF AUTHORITY. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. [In addition to any other remedies
available to Landlord under this Lease, if there is any breach of the foregoing
warranty, the person(s) executing this Lease on behalf of Tenant shall be
personally liable for all of Tenant's obligations under this Lease, including,
but not limited to, the payment by such person(s) to Landlord of any and all
losses, liabilities, costs, expenses and damages incurred by Landlord
hereunder.]
31.10 NOTICES. Any and all notices and demands required or permitted to
be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age provided that, in this instance, a copy is
also sent to Tenant by United States mail certified and postage prepaid or by
overnight courier; or (iii) by overnight courier, all of which shall be
addressed to Tenant at the Premises; or (iv) by facsimile at the facsimile
number at the Premises, if any, as provided by Tenant on Page 1 of this Lease or
otherwise provided to Landlord. Notice and/or demand shall be deemed given upon
the earlier of actual receipt or the third day following deposit in the United
States mail. Notice and/or demand by facsimile shall be complete upon
transmission over the telephone line. Any notice or requirement of service
required by any statute or law now or hereafter in effect, including, but not
limited to, California Code of Civil Procedure Sections 1161, 1161.1, and 1162,
is hereby waived by Tenant.
31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.
31.12 COVENANTS AND CONDITIONS. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.
31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage.
31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings for
nonpayment of Rent, Additional Rent, or any other sums or amounts due hereunder,
Tenant shall not interpose any counterclaim of whatever nature or description in
any such proceedings, provided, however, nothing contained herein shall be
deemed or construed as a waiver of the Tenant's right to assert such claims in
any separate action brought by Tenant or the right to offset the amount of any
final judgment owed by Landlord to Tenant.
31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.
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32. SIGNS: All signs and graphics of every kind visible in or from public view
or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval, which approval shall not be withheld or delayed
unreasonably, and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's Sign Criteria as
set forth in Exhibit G hereto and made a part hereof. Tenant shall remove all
such signs and graphics prior to the termination of this Lease. Such
installations and removals shall be made in a manner as to avoid damage or
defacement of the Premises; and Tenant shall repair any damage or defacement,
including without limitation, discoloration caused by such installation or
removal. Landlord shall have the right, at its option, to deduct from the
Security Deposit such sums as are reasonably necessary to remove such signs,
including, but not limited to, the costs and expenses associated with any
repairs necessitated by such removal. Notwithstanding the foregoing, in no event
shall any: (a) neon, flashing or moving sign(s) or (b) sign(s) which shall
interfere with the visibility of any sign, awning, canopy, advertising matter,
or decoration of any kind of any other business or occupant of the Building or
the Park be permitted hereunder. Tenant further agrees to maintain any such
sign, awning, canopy, advertising matter, lettering, decoration or other thing
as may be approved in good condition and repair at all times.
33. MORTGAGEE PROTECTION: Upon any breach or default on the part of Landlord,
Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Tenant agrees that each
lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall have
actually received and not refunded the deposit; provided, however, the foregoing
shall not relieve Landlord from its obligations hereunder or under the law with
respect to any such deposit. Tenant agrees to make all payments under this Lease
to the lender with the most senior encumbrance upon receiving a direction, in
writing, to pay said amounts to such lender. Tenant shall comply with such
written direction to pay without determining whether an event of default exists
under such lender's loan to Landlord.
34. QUITCLAIM: Upon any termination of this Lease, Tenant shall, at Landlord's
request, execute, have acknowledged and deliver to Landlord a quitclaim deed of
Tenant's interest in and to the Premises. If Tenant fails to so deliver to
Landlord such a quitclaim deed, Tenant hereby agrees that Landlord shall have
the full authority and right to record such a quitclaim deed signed only by
Landlord and such quitclaim deed shall be deemed conclusive and binding upon
Tenant.
35. MODIFICATIONS FOR LENDER: Intentionally omitted. [If, in connection with
obtaining financing for the Premises or any portion thereof, Landlord's lender
shall request reasonable modification(s) to this Lease as a condition to such
financing, Tenant shall not unreasonably withhold, delay or defer its consent
thereto, provided such modifications do not materially adversely affect Tenant's
rights hereunder or the use, occupancy or quiet enjoyment of Tenant hereunder.]
36. WARRANTIES OF TENANT: Tenant hereby warrants and represents to Landlord, for
the express benefit of Landlord, that Tenant has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further warrants
and represents to Landlord, for the express benefit of Landlord, that in
entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any time
to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant hereby
agree and acknowledge that the Premises, the Building and/or the Park may be
subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and subject to the provisions of the succeeding sentence all costs incurred for
purposes of compliance therewith shall be a part of and included in the costs of
the Tenant Improvements. Notwithstanding the foregoing, any costs incurred for
purposes of compliance with the ADA with respect to any work performed or
necessary to be performed to (i) the interior of the Premises or the exterior
doors used to access the Premises shall be considered part of the work
associated with the Tenant Improvements and included in the costs of the Tenant
Improvements, and (ii) the Common Areas, including any ramps to the Building and
handicapped signage for parking spaces, in conjunction with the performance of
the work associated with the Tenant Improvements shall not be included as part
of the costs of the Tenant Improvements and Landlord shall pay for any such
costs. Tenant shall be solely responsible for conducting its own independent
investigation of this matter and for ensuring that the design of all Tenant
Improvements strictly comply with all requirements of the ADA. Subject to
reimbursement pursuant to Section 6 of the Lease, if any barrier removal work or
other work is required to the Building, the
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Common Area or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant's business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns (collectively, the "Indemnitees")
harmless and indemnify the Indemnitees from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.
38. BROKERAGE COMMISSION: Landlord and Tenant each represents and warrants for
the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Unless expressly agreed to in writing by Landlord and Broker(s), no real estate
brokerage commission or finder's fee shall be owed to, or otherwise payable to,
the Broker(s) for any renewals or other extensions of the initial term of this
Lease or for any additional space leased by Tenant other than the Premises as
same exist as of the date on which Tenant executes this Lease.
39. QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of Rent and
observing and keeping the covenants, agreements and conditions of this Lease on
its part to be kept and during the periods that Tenant is not otherwise in
default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord's lenders, (i) that Tenant shall and may peaceably and
quietly hold, occupy and enjoy the Premises and the Common Areas during the term
of this Lease, and (ii) neither Landlord, nor any successor or assign of
Landlord, shall disturb Tenant's occupancy or enjoyment of the Premises and the
Common Areas.
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owning by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law and Enforcement Expenses.
41. TENANT'S COVENANT OF NON-DISCRIMINATION: The Tenant herein covenants by and
for itself, its heirs, executors, administrators, and assigns, and all persons
claiming under or through it, and this Lease is made and accepted upon and
subject to the following conditions: that there shall be no discrimination
against or segregation of any person or group of persons, on account of race,
color, creed, religion, sex, martial status, national origin, or ancestry, in
the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of
the Premises herein leased, nor shall the Tenant itself, or any person claiming
under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use, or occupancy of tenants, sublessees, subtenants, or vendees in the Premises
herein leased.
IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.
TENANT:
Safety Tek, Inc.,
a Delaware corporation
By:
James B. Hawkins
President
Date:
33
33
<PAGE> 22
LANDLORD:
LINCOLN-WHITEHALL REALTY, L.L.C.
By: Whitehall Street Real Estate Limited
Partnership V, Member
By: WH Advisors, L.P. V,
General Partner
By: WH Advisors, Inc., V,
General Partner
By: ______________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
LINCOLN PROPERTY COMPANY
MANAGEMENT SERVICES, INC.
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
Date: _____________________________________
34
34
<PAGE> 23
EXHIBIT A - PREMISES
PAGE 1 OF 1
LEASE DATED JANUARY 8, 1996, BY AND BETWEEN
SAFETY TEK, INC.,
A DELAWARE CORPORATION
("TENANT"),
AND
LINCOLN-WHITEHALL REALTY, L.L.C.
("LANDLORD")
INITIALS:
TENANT:
LANDLORD:
<PAGE> 24
EXHIBIT B TO LEASE AGREEMENT
TENANT IMPROVEMENTS
This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated January 8, 1996 (the "Lease"), by and
between Lincoln-Whitehall Realty, L.L.C. ("Landlord") and Safety Tek, Inc., a
Delaware corporation, ("Tenant") for the leasing of certain premises located at
5696 Stewart Avenue, Fremont, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT B are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:
1. Tenant Improvements. Subject to the conditions set forth below, Landlord
agrees to construct and install certain improvements ("Tenant Improvements") in
the Building of which the Premises are a part in accordance with the Final
Drawings (defined below) and pursuant to the terms of this EXHIBIT B. In
addition to the Tenant Improvements, Landlord shall, at its sole cost and
expense, perform the following described work in and about the Premises: (i)
install a full-height, 1-hour rated demising wall separating the Premises from
the 17,008 square foot adjacent premises; and (ii) increase the electrical
capacity to be used in the Premises to 277 amp/480 volts.
2. Definition. "Tenant Improvements" as used in this Lease shall include only
those interior portions of the Building which are described below. "Tenant
Improvements" shall specifically not include any alterations, additions or
improvements installed or constructed by Tenant, and any of Tenant's trade
fixtures, equipment, furniture, furnishings, telephone equipment or other
personal property (collectively, "Personal Property"). The Tenant Improvements
shall include any and all interior improvements to be made to the Premises as
specified in the Final Drawings (defined below), as specified and agreed to by
Tenant and Landlord.
3. Tenant's Initial Plans; the Work. Tenant desires Landlord to perform certain
Tenant Improvements in the Premises. Such work, as will be shown in Tenant's
preliminary space plan (the "Initial Plans") and as more fully detailed in the
Final Drawings (as defined and described in Section 4 below), shall be
hereinafter referred to as the "Work". Not later than February 1, 1996, Tenant
and/or Tenant's Representatives shall furnish to Landlord such additional plans,
drawings, specifications and finish details as Landlord may reasonably request
to enable Landlord's architects and engineers, as applicable, to prepare
mechanical, electrical and plumbing plans and to prepare the Final Drawings,
including, but not limited to, a final telephone layout and special electrical
connections, if any. All plans, drawings, specifications and other details
describing the Work which have been, or are hereafter, furnished by or on behalf
of Tenant shall be subject to Landlord's approval, which approval shall not be
unreasonably withheld. Landlord shall not be deemed to have acted unreasonably
if it withholds its approval of any plans, specifications, drawings or other
details or of any Change Request (hereafter defined in Section 11 below)
because, in Landlord's reasonable opinion, the work as described in any such
item, or any Change Request, as the case may be: (a) is likely to adversely
affect Building systems, the structure of the Building or the safety of the
Building and/or its occupants; (b) might impair Landlord's ability to furnish
services to Tenant or other tenants in the Building; (c) would increase the cost
of operating the Building or the Park; (d) would violate any applicable
governmental, administrative body's or agencies' laws, rules, regulations,
ordinances, codes or similar requirements (or interpretations thereof); (e)
contains or uses Hazardous Materials; (f) would adversely affect the appearance
of the Building or the Park; (g) might adversely affect another tenant's
premises or such other tenant's use and enjoyment of such premises; (h) is
prohibited by any ground lease affecting the Building, the Lot and/or the Park,
any Recorded Matters or any mortgage, trust deed or other instrument encumbering
the Building, the Lot and/or the Park; (i) is likely to be substantially delayed
because of unavailability or shortage of labor or materials necessary to perform
such work or the difficulties or unusual nature of such work; (j) is not, at a
minimum, in accordance with Landlord's Building Standards (defined below), or
(k) would increase the Tenant Improvement Costs (defined in Section 9 below) by
more than ten percent (10%) from the cost originally estimated and anticipated
by the parties. The foregoing reasons, however, shall not be the only reasons
for which Landlord may withhold its approval, whether or not such other reasons
are similar or dissimilar to the foregoing. Neither the approval by Landlord of
the Work or the Initial Plans or any other plans, specifications, drawings or
other items associated with the Work nor Landlord's performance, supervision or
monitoring of the Work shall constitute any warranty or covenant by Landlord to
Tenant of the adequacy of the design for Tenant's intended use of the Premises.
Tenant agrees to, and does hereby, assume full and complete responsibility to
ensure that the Work and the Final Drawings are adequate to fully meet the needs
and requirements of Tenant's intended operations of its business within the
Premises and Tenant's use of the Premises.
4. Final Drawings. If necessary for the performance of the Work and to the
extent not already included as part of the Initial Plans attached hereto,
Landlord shall prepare or cause to be prepared final working drawings and
specifications for the Work (the "Final Drawings") based on and consistent with
the Initial Plans and the other plans, specifications, drawings, finish details
or other information furnished by Tenant or Tenant's Representatives to Landlord
and approved by Landlord pursuant to Section 3 above. Tenant shall cooperate
diligently with Landlord and Landlord's architect, engineer and other
representatives and Tenant shall furnish within five (5) days after any request
therefor, all information required by Landlord or Landlord's architect, engineer
or other representatives for completion of the Final Drawings. So long as the
Final Drawings are substantially consistent with the Initial Plans, Tenant shall
approve the Final Drawings within three (3) business days after receipt of same
from Landlord. Landlord and Tenant shall indicate their approval of the Final
Drawings by initialing each sheet of the Final Drawings and delivering to one
another a true and complete copy of such initialed Final Drawings. A true and
complete copy of the approved and initialed Final Drawings shall be attached to
the Lease as EXHIBIT B-1 and shall be made a part thereof. Tenant's failure to
approve or disapprove such Final Drawings within the foregoing three (3)
business day time period, shall be conclusively deemed to be approval of same by
Tenant. If Tenant reasonably disapproves of any matters included in the Final
Drawings because such items are not substantially consistent with the Initial
Plans, Tenant shall, within the aforementioned three (3) business day period,
deliver to Landlord written notice of its disapproval and Tenant shall specify
in such written notice, in sufficient detail as Landlord may reasonably require,
the matters disapproved, the reasons for such disapproval, and the specific
changes or revisions necessary to be made to the Final Drawings to cause such
drawings to substantially conform to the Initial Plans. Any additional costs
associated with such requested changes or revisions shall be paid for solely by
Tenant, as part of the Excess Tenant Improvement Costs (defined in Section 10
below), upon written demand therefor by Landlord.
1
<PAGE> 25
Any changes or revisions requested by Tenant must first be approved by Landlord,
which approval shall not be unreasonably withheld, subject to the provisions of
Section 3 above. If Landlord approves such requested changes or revisions,
Landlord shall cause the Final Drawings to be revised accordingly and Landlord
and Tenant shall initial each sheet of the Final Drawings as revised and attach
a true and complete copy thereof to the Lease as EXHIBIT B-1. Landlord and
Tenant hereby covenant to each other to cooperate with each other and to act
reasonably in the preparation and approval of the Final Drawings.
Notwithstanding anything to the contrary contained herein, if the Final Drawings
are required to be revised due to any blatant and patent error on the part of
Landlord or its authorized representatives, then the costs and expenses
associated with any such revisions shall be borne solely by Landlord and such
costs and expenses shall not be included as part of the Tenant Improvement
Costs.
5. Performance of Work. As soon as practicable after Tenant and Landlord initial
and attach to the Lease as EXHIBIT B-1 a true and complete copy of the Final
Drawings, Landlord shall submit the Final Drawings to the governmental
authorities having rights of approval over the Work and shall apply for the
necessary approvals and building permits. Subject to the satisfaction of all
conditions precedent and subsequent to its obligations under this EXHIBIT B, and
further subject to the provisions of Section 10 hereof, as soon as practicable
after Landlord or its representatives have received all necessary approvals and
building permits, Landlord will put the Final Drawings out for bid to several
licensed, bonded, qualified (in Landlord's discretion) and insured general
contractors. The Tenant Improvements shall be constructed by a the general
contractor which submits (and provides sufficient support therefor, in writing,
if requested to do so by Landlord) the lowest bid, unless otherwise agreed to by
Landlord and Tenant based upon criteria other than price [selected by Landlord]
(the "General Contractor"). Landlord shall commence construction, or cause the
commencement of construction by the General Contractor, of the Tenant
Improvements, as soon as practicable after selection of the General Contractor.
Except as hereinafter expressly provided to the contrary, Landlord shall cause
the performance of the Work using (except as may be stated or otherwise shown in
the Final Drawings) building standard materials, quantities and procedures then
in use by Landlord ("Building Standards").
6. Substantial Completion. Landlord and Tenant shall cause the General
Contractor to Substantially Complete (defined below) the Tenant Improvements in
accordance with the Final Drawings by the Commencement Date of the Lease as set
forth in Section 2 of the Lease (THE "COMPLETION DATE"), subject to delays due
to (a) acts or events beyond its control including, but not limited to, acts of
God, earthquakes, strikes, lockouts, boycotts, casualties, discontinuance of any
utility or other service required for performance of the Work, moratoriums,
governmental agencies and weather, (b) the lack of availability or shortage of
specialized materials used in the construction of the Tenant Improvements, (c)
any matters beyond the reasonable control of Landlord, the General Contractor or
any subcontractors, (d) any changes required by the fire department, building
and/or planning department, building inspectors or any other agency having
jurisdiction over the Building, the Work and/or the Tenant Improvements (except
to the extent such changes are directly attributable to Tenant's use or Tenant's
specialized tenant improvements, in which event such delays are considered
Tenant Delays) (the events and matters set forth in Subsections (a), (b), (c)
and (d) are collectively referred to as "Force Majeure Delays"), or (e) any
Tenant Delays (defined in Section 7 below). The Tenant Improvements shall be
deemed substantially complete on the date that the building officials of the
applicable governmental agency(s) issues its final approval of the construction
of the Tenant Improvements whether in the form of the issuance of a final
permit, certificate of occupancy or the written approval evidencing its final
inspection on the building permit(s), or the date on which Tenant first takes
occupancy of the Premises, whichever first occurs ("Substantial Completion", or
"Substantially Completed, or "Substantially Complete"). If the Work is not
deemed to be Substantially Completed on or before the scheduled COMPLETION DATE,
(i) Landlord agrees to use reasonable efforts to Substantially Complete the Work
as soon as practicable thereafter, (ii) the Lease shall remain in full force and
effect, (iii) Landlord shall not be deemed to be in breach or default of the
Lease or this EXHIBIT B as a result thereof and Landlord shall have no liability
to Tenant as a result of any delay in occupancy (whether for damages, abatement
of all or any portion of the Rent, or otherwise), and (iv) except in the event
of any Tenant Delays, which will not affect the Commencement Date but will
extend the Completion Date without any penalty or liability to Landlord, and
notwithstanding anything to the contrary contained in the Lease, the
Commencement Date and the Expiration Date of the term of the Lease (as defined
in Section 2 of the Lease) shall be extended commensurately by the amount of
time attributable to such Force Majeure Delays, and Landlord and Tenant shall
execute a written amendment to the Lease evidencing such extensions of time,
substantially in the form of Exhibit F to the Lease. Subject to the provisions
of Section 10.2 of the Lease, the Tenant Improvements shall belong to Landlord
and shall be deemed to be incorporated into the Premises for all purposes of the
Lease, unless Landlord, in writing, indicates otherwise to Tenant.
7. Tenant Delays. There shall be no extension of the scheduled Commencement Date
or Expiration Date of the term of the Lease (as otherwise permissibly extended
in accordance with the provisions of Section 6 above) if the Work has not been
Substantially Completed by the scheduled Commencement Date due to any delay
attributable to Tenant and/or Tenant's Representatives or Tenant's intended use
of the Premises (collectively, "Tenant Delays"), including, but not limited to,
any of the following described events or occurrences: (a) delays related to
changes made or requested by Tenant to the Work and/or the Final Drawings; (b)
the failure of Tenant to furnish all or any plans, drawings, specifications,
finish details or other information required under Sections 3 and 4 above; (c)
the failure of Tenant to comply with the requirements of Section 10 below; (d)
Tenant's requirements for special work or materials, finishes, or installations
other than the Building Standards or Tenant's requirements for special
construction or phasing; (e) any changes required by the fire department,
building or planning department, building inspectors or any other agency having
jurisdiction over the Building, the Work and/or the Tenant Improvements if such
changes are directly attributable to Tenant's use or Tenant's specialized tenant
improvements; (f) the performance of any additional work pursuant to a Change
Request (defined below in Section 11) which is requested by Tenant; (g) the
performance of work in or about the Premises by any person, firm or corporation
employed by or on behalf of Tenant, including, without limitation, any failure
to complete or any delay in the completion of such work; or (h) any and all
delays caused by or arising from acts or omissions of Tenant and/or Tenant's
Representatives, in any manner whatsoever, including, but not limited to, any
and all revisions to the Final Drawings. Any delays in the construction of the
Tenant Improvements due to any of the events described above, shall in no way
extend or affect the date on which Tenant is required to commence paying Rent
under the terms of the Lease. It is the intention of the parties that all of
such delays will be considered Tenant Delays for which Tenant shall be wholly
and completely responsible for any and all consequences related to such delays,
including, without limitation, any costs and expenses attributable to increases
in labor or materials.
8. Tenant Improvement Allowance. Landlord and Tenant hereby acknowledge and
agree that the Tenant Improvement Costs (defined in Section 9 below) for the
Tenant Improvements, based upon the Initial Plans approved by Landlord and
Tenant in accordance with the provisions of Section 4 above, are estimated to be
approximately one hundred seventy thousand eighty and 00/100 Dollars
($170,080.00) (the "Estimated TI Costs"). If the actual Tenant Improvement Costs
varies from this estimate by more than twenty-five percent (25%), then
2
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
<PAGE> 26
Landlord may require any of the following, in its sole discretion: (a) changes
be made to the Final Drawings to reduce the cost of the Tenant Improvements and
Landlord may refuse to sign any construction contract or Change Orders to the
construction contract, as the case may be, until such changes are made to the
sole satisfaction of Landlord; (b) Tenant to deposit into a separate escrow
account cash in an amount equal to the Excess Tenant Improvement Costs (defined
in Section 10 below); (c) Tenant to provide to Landlord evidence satisfactory to
Landlord, in its sole discretion, that Tenant has adequate financial resources
to pay for the Excess Tenant Improvement Costs, as solely determined by
Landlord; and/or (d) Tenant to pay all of the Excess Tenant Improvement Costs
before Landlord's contribution of the Tenant Improvement Allowance (defined in
Section 10 below); provided, however, in no event or circumstance shall the
Tenant Improvement Costs exceed the maximum amount of two hundred four thousand
ninety six and 00/100 Dollars ($204,096.00), which amount is based on the amount
of twelve and 00/100 Dollars ($12.00) per rentable square foot for 17,008
rentable square feet of the Premises which is to be improved, as described in
the Initial Plans. Subject to the foregoing, Landlord shall provide an allowance
for the planning and construction of the Tenant Improvements for the Work to be
performed in the Premises, as described in the Initial Plans and the Final
Drawings, in the amount of eighty five thousand forty and 00/100 Dollars
($85,040.00) (the "Tenant Improvement Allowance") based upon an allowance of
five and 00/100 Dollars ($5.00) per rentable square foot for 17,008 rentable
square feet of the Premises which is to be improved, as described in the Initial
Plans and the Final Drawings. Tenant shall not be entitled to any credit,
abatement or payment from Landlord in the event that the amount of the Tenant
Improvement Allowance specified above exceeds the actual Tenant Improvement
Costs. The Tenant Improvement Allowance shall only be used for tenant
improvements typically installed by Landlord in office/R&D and
warehouse/distribution buildings. The Tenant Improvement Allowance shall be the
maximum contribution by Landlord for the Tenant Improvement Costs and shall be
subject to the provisions of Section 10 below.
9. Tenant Improvement Costs. The Tenant Improvements' cost ("Tenant Improvement
Costs") shall mean and include any and all costs and expenses of the Work,
including, without limitation, all of the following:
(a) All costs of preliminary space planning and final architectural and
engineering plans and specifications (including, without limitation, the scope
of work, all plans and specifications, the Initial Plans and the Final Drawings)
for the Tenant Improvements, and architectural fees, engineering costs and fees,
and other costs associated with completion of said plans;
(b) All costs of obtaining building permits and other necessary
authorizations and approvals from the City of Fremont and other applicable
jurisdictions;
(c) All costs of interior design and finish schedule plans and
specifications including as-built drawings;
(d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee for overhead and profit, the cost of all on-site
supervisory and administrative staff, office, equipment and temporary services
rendered by Landlord, Landlord's consultants and the General Contractor in
connection with construction of the Tenant Improvements, and all labor
(including overtime) and materials constituting the Work; and
(e) All fees payable to the General Contractor, architect and
Landlord's engineering firm if they are required by Tenant to redesign any
portion of the Tenant Improvements following Tenant's approval of the Final
Drawings.
In no event shall the Tenant Improvement Costs include any costs of
procuring, constructing or installing in the Premises any of Tenant's Personal
Property. The costs of procuring and/or installing such Personal Property shall
be borne solely by Tenant.
10. Excess Tenant Improvement Costs. Prior to commencing the Work, Landlord
shall submit to Tenant a written statement of the actual Tenant Improvement
Costs (the "Actual TI Costs") (which shall include the amount of any overtime
projected as necessary to Substantially Complete the Work by the Completion
Date) as then known by Landlord, and such statement shall indicate the amount,
if any, by which the Actual TI Costs exceeds the Tenant Improvement Allowance
(the "Excess Tenant Improvement Costs"). The term "Excess Tenant Improvement
Costs" shall also include the costs related to any and all Change Orders. Tenant
agrees, within three (3) days after submission to it of such statement, to
execute and deliver to Landlord, in the form then in use by Landlord, an
authorization to proceed with the Work.
Tenant shall faithfully pay all of the Excess Tenant Improvement Costs to
Landlord in the following manner. A portion of the Excess Tenant Improvement
Costs up to a maximum amount of eighty five thousand forty and 00/100 Dollars
($85,040.00), based on five and 00/100 Dollars ($5.00) per rentable square foot
for 17,008 rentable square feet of the Premises, shall be amortized over the
initial term of the Lease at the rate of eleven percent (11%) per annum and such
amortized amount shall be paid by Tenant with, and as part of, the Rent for the
Premises in accordance with the provisions and requirements of Section 3 of the
Lease (the "Amortized Excess TI Costs"). The portion of the Excess Tenant
Improvement Costs in excess of the Amortized Excess TI Costs shall be paid by
Tenant, in cash, to Landlord concurrently with Tenant's delivery to Landlord of
the aforementioned signed written authorization to proceed. No Work shall be
commenced until Tenant has fully complied with the preceding provisions of this
Section 10. If Tenant fails to remit the sums so demanded by Landlord pursuant
to Section 8 above and this Section 10 within the time periods required,
Landlord may, at its option, declare Tenant in default under the Lease.]
3
<PAGE> 27
11. Change Requests. No changes or revisions to the approved Final Drawings
shall be made by either Landlord or Tenant unless approved in writing by both
parties. Upon Tenant's request and submission by Tenant (at Tenant's sole cost
and expense) of the necessary information and/or plans and specifications for
any changes or revisions to the approved Final Drawings and/or for any work
other than the Work described in the approved Final Drawings ("Change Requests")
and the approval by Landlord of such Change Request(s), which approval Landlord
agrees shall not be unreasonably withheld, Landlord shall perform the additional
work associated with the approved Change Request(s), at Tenant's sole cost and
expense, subject, however, to the following provisions of this Section 11. Prior
to commencing any additional work related to the approved Change Request(s),
Landlord shall submit to Tenant a written statement of the cost of such
additional work and a proposed tenant change order therefor ("Change Order") in
the standard form then in use by Landlord. Tenant shall execute and deliver to
Landlord such Change Order and shall pay the entire cost of such additional work
in the following described manner. Any costs related to such approved Change
Request(s), Change Order and any delays associated therewith, shall be added to
the Tenant Improvement Costs and shall be paid for by Tenant as and with any
Excess Tenant Improvement Costs as set forth in Section 10 above. The billing
for such additional costs to Tenant shall be accompanied by evidence of the
amounts billed as is customarily used in the business. Costs related to approved
Change Requests and Change Orders shall include, without limitation, any
architectural or design fees, Landlord's construction fee for overhead and
profit, the cost of all on-site supervisory and administrative staff, office,
equipment and temporary services rendered by Landlord and/or Landlord's
consultants, and the General Contractor's price for effecting the change. If
Tenant fails to execute or deliver such Change Order, or to pay the costs
related thereto, then Landlord shall not be obligated to do any additional work
related to such approved Change Request(s) and/or Change Orders, and Landlord
may proceed to perform only the Work, as specified in the Final Drawings.
12. Termination. If the Lease is terminated prior to the Completion Date, for
any reason due to the default of Tenant hereunder, in addition to any other
remedies available to Landlord under the Lease, Tenant shall pay to Landlord as
Additional Rent under the Lease, within five (5) days of receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise
paid by Tenant through the date of termination in connection with the Tenant
Improvements to the extent planned, installed and/or constructed as of such date
of termination, including, but not limited to, any costs related to the removal
of all or any portion of the Tenant Improvements and restoration costs related
thereto. Subject to the provisions of Section 10.2 of the Lease, upon the
expiration or earlier termination of the Lease, Tenant shall not be required to
remove the Tenant Improvements it being the intention of the parties that the
Tenant Improvements are to be considered incorporated into the Building.
Notwithstanding anything to the contrary contained herein, Landlord shall have
the right to terminate the Lease, upon written notice to Tenant, if Landlord is
unable to obtain a building permit for the Tenant Improvements within sixty (60)
days from the date the Lease is signed by Tenant.
13. Tenant Access. Landlord, in Landlord's reasonable discretion and upon
receipt of a written request from Tenant, may grant Tenant a license to have
access to the Premises prior to the Completion Date to allow Tenant to do other
work required by Tenant to make the Premises ready for Tenant's use and (the
"Tenant's Pre-Occupancy Work"). It shall be a condition to the grant by Landlord
and continued effectiveness of such license that:
4
<PAGE> 28
(a) Tenant shall give to Landlord a written request to have such access
not less than five (5) business days prior to the date on which such proposed
access will commence (the "Access Notice"). The Access Notice shall contain or
be accompanied by each of the following items, all in form and substance
reasonably acceptable to Landlord: (i) a detailed description of and schedule
for Tenant's Pre-Occupancy Work; (ii) the names and addresses of all
contractors, subcontractors and material suppliers and all other representatives
of Tenant who or which will be entering the Premises on behalf of Tenant to
perform Tenant's Pre-Occupancy Work or will be supplying materials for such
work, and the approximate number of individuals, itemized by trade, who will be
present in the Premises; (iii) copies of all contracts, subcontracts, material
purchase orders, plans and specifications pertaining to Tenant's Pre-Occupancy
Work; (iv) copies of all licenses and permits required in connection with the
performance of Tenant's Pre-Occupancy Work; (v) certificates of insurance (in
amounts satisfactory to Landlord and with the parties identified in, or required
by, the Lease named as additional insureds) and instruments of indemnification
against all claims, costs, expenses, penalties, fines, and damages which may
arise in connection with Tenant's Pre-Occupancy Work; and (vi) assurances of the
ability of Tenant to pay for all of Tenant's Pre-Occupancy Work and/or a letter
of credit or other security deemed appropriate by Landlord securing Tenant's
lien-free completion of Tenant's Pre-Occupancy Work.
(b) Such pre-term access by Tenant and Tenant's employees, agents,
contractors, consultants, workmen, mechanics, suppliers and invitees shall be
subject to scheduling by Landlord.
(c) Tenant's employees, agents, contractors, consultants, workmen,
mechanics, suppliers and invitees shall fully cooperate, work in harmony and
not, in any manner, interfere with Landlord or Landlord's agents or
representatives in performing the Work and any additional work pursuant to
approved Change Orders, Landlord's work in other areas of the Building or the
Park, or the general operation of the Building. If at any time any such person
representing Tenant shall not be cooperative or shall otherwise cause or
threaten to cause any such disharmony or interference, including, without
limitation, labor disharmony, and Tenant fails to immediately institute and
maintain corrective actions as directed by Landlord, then Landlord may revoke
such license upon twenty-four (24) hours' prior written notice to Tenant.
(d) Any such entry into and occupancy of the Premises or any portion
thereof by Tenant or any person or entity working for or on behalf of Tenant
shall be deemed to be subject to all of the terms, covenants, conditions and
provisions of the Lease, excluding only the covenant to pay Rent. Landlord shall
not be liable for any injury, loss or damage which may occur to any of Tenant's
Pre-Occupancy Work made in or about the Premises or to any property placed
therein prior to the commencement of the term of the Lease, the same being at
Tenant's sole risk and liability. Tenant shall be liable to Landlord for any
damage to any portion of the Premises, the Work or the additional work related
to any approved Change Orders caused by Tenant or any of Tenant's employees,
agents, contractors, consultants, workmen, mechanics, suppliers and invitees. In
the event that the performance of Tenant's Pre-Occupancy Work causes extra costs
to be incurred by Landlord or requires the use of other Building services,
Tenant shall promptly reimburse Landlord for such extra costs and/or shall pay
Landlord for such other Building services at Landlord's standard rates then in
effect.
14. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar
as they are applicable, in whole or in part, to this EXHIBIT B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.
INITIALS:
TENANT:
LANDLORD:
5
<PAGE> 29
EXHIBIT C TO LEASE AGREEMENT
RULES & REGULATIONS
This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated January 8, 1996 (the "Lease"), by and
between Lincoln-Whitehall Realty, L.L.C. ("Landlord") and Safety Tek, Inc., a
Delaware corporation ("Tenant") for the leasing of certain premises located at
5696 Stewart Avenue, Fremont, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT C are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent
of Landlord. Landlord shall have the right to remove any such
unapproved item without notice and at Tenant's expense.
2. Tenant shall not regularly park motor vehicles in designated parking
areas after the conclusion of normal daily business activity, except
for company-owned vans and pick-up trucks, not to exceed seven (7) at
any one time.
3. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the prior written consent of
Landlord.
4. All window coverings installed by Tenant and visible from the outside
of the Building require the prior written approval of Landlord.
5. TENANT SHALL NOT USE, KEEP OR PERMIT TO BE USED OR KEPT ANY FOUL OR
NOXIOUS GAS OR SUBSTANCE OR ANY FLAMMABLE OR COMBUSTIBLE MATERIALS ON
OR AROUND THE PREMISES, THE BUILDING OR THE PARK EXCEPT AS SET FORTH IN
TENANT'S INITIAL HAZMAT CERTIFICATE AND IN EXHIBIT H HERETO OR EXCEPT
AS OTHERWISE EXPRESSLY APPROVED BY LANDLORD IN WRITING. TENANT SHALL
NOT FILL GAS PERMEATION OR OTHER DEVICES OR INSTRUMENTS WITH ANY GASES
AT ANY TIME DURING THE LEASE TERM .
6. Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord.
7. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those
periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow within the Park and loading and unloading
areas of other tenants.
8. Tenant shall not disturb, solicit or canvas any occupant of the
Building or Park and shall cooperate to prevent same.
9. No person shall go on the roof, except to perform regular preventative
maintenance service on, or to repair, the heating, ventilating and air
conditioning equipment serving the Premises. without Landlord's
permission.
10. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building, to such a degree as to be objectionable to Landlord or
other Tenants, shall be placed and maintained by Tenant, at Tenant's
expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
11. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and
shall not be left in parking or receiving areas overnight.
12. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks
under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in
the auto parking areas of the Park or on streets adjacent thereto.
13. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
14. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures at locations approved by
Landlord.
15. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the
Premises, the Building, the Park or any of the Common Areas of the
foregoing. No displays or sales of merchandise shall be allowed in the
parking lots or other Common Areas.
16. Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the
Building, the Park or any of the Common Areas of the foregoing.
17. Tenant shall not permit any motor vehicles to be washed on any portion
of the Premises or in the Common Areas of the Park, nor shall Tenant
permit mechanical work or maintenance of motor vehicles to be performed
on any portion of the Premises or in the Common Areas of the Park.
INITIALS:
TENANT:
LANDLORD:
6
<PAGE> 30
EXHIBIT E
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
Landlord:
----------------------------------------------------------
c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404
Attn:
----------------------------------------------
Phone: (415) 571-2200
Name of (Prospective) Tenant:
--------------------------------------------------
Mailing Address:
---------------------------------------------------------------
- --------------------------------------------------------------------------------
Contact Person, Title and Telephone Number(s):
---------------------------------
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
-----------------------------------------------------------
- --------------------------------------------------------------------------------
Address of (Prospective) Premises:
---------------------------------------------
Length of (Prospective) initial Term:
------------------------------------------
- --------------------------------------------------------------------------------
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products
processed, manufactured or assembled services and activities to be
provided or otherwise conducted. Existing tenants should describe any
proposed changes to on-going operations.
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing tenants
should describe any Hazardous Materials which continue to be
used, generated, stored or disposed of in, on or about the
Premises.
Wastes Yes / / No / /
Chemical Products Yes / / No / /
Other Yes / / No / /
If Yes is marked, please explain:
----------------------------
--------------------------------------------------------------
--------------------------------------------------------------
2.2 If Yes is marked in Section 2.1, attach a list of any
Hazardous Materials to be used, generated, stored or disposed
of in, on or about the Premises, including the applicable
hazard class and an estimate of the quantities of such
Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage
(excluding nominal amounts of ordinary household cleaners and
janitorial supplies which are not regulated by any
Environmental Laws); and the proposed location(s) and method
of disposal for each Hazardous Material, including, the
estimated frequency, and the proposed contractors or
subcontractors. Existing tenants should attach a list setting
forth the information requested above and such list should
include actual data from on-going operations and the
identification of any variations in such information from the
prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposed activities.
1
<PAGE> 31
Yes / / No / /
If yes, please explain:
--------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes / / No / /
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
Yes / / No / /
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
storm drain? sewer?
---------- ----------
surface water? no wastewater or other
---------- ---------- wastes discharged.
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
--------------------------------------------------------------
--------------------------------------------------------------
5.2 Will any such wastewater or waste be treated before discharge?
Yes / / No / /
If yes, describe the type of treatment proposed to be
conducted. Existing tenants should describe the actual
treatment conducted.
--------------------------------------------------------------
--------------------------------------------------------------
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be
used in your company's operations in, on or about the Premises
that will discharge into the air; and will such air emissions
be monitored? Existing tenants should indicate whether or not
there are any such air filtration systems or stacks in use in,
on or about the Premises which discharge into the air and
whether such air emissions are being monitored.
Yes / / No / /
If yes, please describe:
-------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment
being operated in, on or about the Premises.
Spray booth(s) Incinerator(s)
---------- ----------
Dip tank(s) Other (Please
---------- ---------- describe)
Drying oven(s) No Equipment Requiring
---------- ---------- Air Permits
If yes, please describe:
-------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan")
pursuant to Fire Department or other governmental or
regulatory agencies' requirements? Existing tenants should
indicate whether or not a Management Plan is required and has
been prepared.
Yes / / No / /
If yes, attach a copy of the Management Plan. Existing tenants
should attach a copy of any required updates to the Management
Plan.
2
<PAGE> 32
7.2 Are any of the Hazardous Materials, and in particular
chemicals, proposed to be used in your operations in, on or
about the Premises regulated under Proposition 65? Existing
tenants should indicate whether or not there are any new
Hazardous Materials being so used which are regulated under
Proposition 65.
Yes / / No / /
If yes, please explain:
--------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees or has your
company received requests for information, notice or demand
letters, or any other inquiries regarding its operations?
Existing tenants should indicate whether or not any such
actions, orders or decrees have been, or are in the process of
being, undertaken or if any such requests have been received.
Yes / / No / /
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns?
Yes / / No / /
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other
documents related thereto as requested by Landlord. Existing
tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the
provisions of Section 29 of the signed Lease Agreement.
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
3
<PAGE> 33
8.3 Have there been any problems or complaints from adjacent
tenants, owners or other neighbors at your company's current
facility with regard to environmental or health and safety
concerns? Existing tenants should indicate whether or not
there have been any such problems or complaints from adjacent
tenants, owners or other neighbors at, about or near the
Premises.
Yes / / No / /
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement.
--------------------------------------------------------------
--------------------------------------------------------------
9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company
with respect to its proposed operations in, on or about the
Premises, including, without limitation, any wastewater
discharge permits, air emissions permits, and use permits or
approvals. Existing tenants should attach copies of any new
permits and licenses as well as any renewals of permits or
licenses previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.
I (print name) , acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.
(PROSPECTIVE) TENANT:
By:
-----------------------------------
Title:
--------------------------------
Date:
---------------------------------
INITIALS:
TENANT:
LANDLORD:
4
<PAGE> 34
EXHIBIT F
FIRST AMENDMENT TO LEASE AGREEMENT
CHANGE OF COMMENCEMENT DATE
This First Amendment to Lease Agreement (the "Amendment") is made and entered
into as of ___________________, by and between ____________________________
("LANDLORD"), AND ________________________ ("TENANT"), with reference to the
following facts:
RECITALS
A. Landlord and Tenant have entered into that certain Lease Agreement dated
___________ (the "Lease"), for the leasing of certain premises located at
____________________________, California (the "Premises") as such Premises
are more fully described in the Lease.
B. Landlord and Tenant wish to amend the Commencement Date of the Lease.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. The Commencement Date of the Lease shall be ________________________.
2. The last day of the Term of the Lease (the "Expiration Date") shall
be ______________.
3. The dates on which the Base Rent will be adjusted are:
for the period _________ to ________ the monthly Base Rent shall be
$_____________;
for the period _________ to ________ the monthly Base Rent shall be
$_____________; and
for the period _________ to ________ the monthly Base Rent shall be
$_____________.
4. Effect of Amendment: Except as modified herein, the terms and
conditions of the Lease shall remain unmodified and continue in full
force and effect. In the event of any conflict between the terms and
conditions of the Lease and this Amendment, the terms and conditions
of this Amendment shall prevail.
5. Definitions: Unless otherwise defined in this Amendment, all terms
not defined in this Amendment shall have the meaning set forth in the
Lease.
6. Authority: Subject to the provisions of the Lease, this Amendment
shall be binding upon and inure to the benefit of the parties hereto,
their respective heirs, legal representatives, successors and
assigns. Each party hereto and the persons signing below warrant that
the person signing below on such party's behalf is authorized to do
so and to bind such party to the terms of this Amendment.
7. The terms and provisions of the Lease are hereby incorporated in this
Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.
[PROPERTY MANAGER: PLEASE PROVIDE TENANT INFORMATION AND WORD PROCESSING WILL
COMPLETE THE SIGNATURE BLOCK]
INITIALS:
TENANT:
LANDLORD:
<PAGE> 35
ADDENDUM 1
OPTION TO EXTEND THE LEASE
This Addendum No. 1 is incorporated as a part of that certain Lease Agreement
dated January 8, 1996 (the "Lease"), by and between SAFETY TEK, INC., A DELAWARE
CORPORATION ("TENANT"), AND LINCOLN-WHITEHALL REALTY, L.L.C. ("LANDLORD"), of
the premises located at 5696 Stewart Avenue, Fremont, California 94538 (the
"Premises"). Any capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed to such terms as set forth in the Lease.
If Tenant has not at any time been, or is currently not, in default beyond the
applicable cure periods as set forth in this Lease, in the performance of any of
its obligations under this Lease and contingent upon review and approval of
Tenant's then current financial condition by Landlord, Tenant shall have the
right at its option to extend the term of the Lease for five (5) years (the
"Extended Term"). The Lease of the Premises during the Extended Term shall be
upon the same terms, covenants and conditions as are set forth in this Lease,
other than the monthly Base Rent and the term of the Lease. If Landlord does not
receive from Tenant written notice of Tenant's exercise of this option on a date
which is not more than three hundred sixty (360) days nor less than two hundred
forty (240) days prior to the end of the initial term of the Lease (the "Option
Notice"), all rights under this option shall automatically lapse and terminate
and shall be of no further force and effect. Time is of the essence herein.
The monthly Base Rent for the Extended Term shall be the then current market
rent for the highest and best use for similar space within the area of the
Premises in Fremont, California (the "Fair Rental Value") agreed upon solely by
and between Landlord and Tenant and their agents appointed for this purpose.
Neither Landlord nor Tenant shall have the right to have a court or any other
third party entity establish the Fair Rental Value. If Landlord and Tenant are
unable to agree on the Fair Rental Value for the Extended Term within [ten (10)]
thirty (30) days after receipt by Landlord of the Option Notice, Landlord and
Tenant being obligated only to act in good faith, this option shall
automatically terminate and the Lease shall terminate at the end of its initial
term.
The "Fair Rental Value" of the Premises shall be defined to mean the fair market
rental value of the Premises as of the commencement of the Extended Term, taking
into consideration all relevant factors, including length of term, the uses
permitted under the Lease, the quality, size, design and location of the
Premises, including the condition and value of existing tenant improvements, and
the monthly base rent paid by tenants for premises comparable to the Premises,
and located in Fremont, California.
In no event shall the monthly Base Rent for any period of the Extended Term be
less than the highest monthly Base Rent charged during the initial term of the
Lease. Upon determination of the monthly Base Rent for the Extended Term,
pursuant to the terms outlined above, the parties shall immediately execute the
new standard lease document stating the minimum monthly Base Rent for the
Extended Term and confirming the dates of the Extended Term. Tenant shall have
no other right to extend the term of the Lease under this Addendum 1 unless
Landlord and Tenant otherwise agree in writing. If Tenant duly exercises this
option, in accordance with the terms contained herein: (1) Tenant shall accept
the Premises in its then "As-Is" condition and, accordingly, Landlord shall not
be required to perform any additional improvements to the Premises; and (2)
Tenant hereby agrees that it will solely be responsible for any and all
brokerage commissions and finder's fees payable to any broker in connection with
the option described herein, and Tenant hereby further agrees that Landlord
shall in no event or circumstance be responsible for the payment of any such
commissions and fees.
This option is personal to Tenant and may not be assigned, voluntarily or
involuntarily, separate from or as part of the Lease. At Landlord's option, all
rights of Tenant under this option shall terminate and be of no force and effect
if any of the following individual events occur or any combination thereof
occur: (1) Tenant has been in default beyond the applicable cure periods as set
forth in this Lease at any time during the initial term of the Lease, or is
currently in default of any provision of the Lease; and/or (2) Tenant has
assigned its rights and obligations under all or part of the Lease or Tenant has
subleased all or part of the Premises; and/or (3) Tenant's financial condition
is unacceptable to Landlord in its reasonable discretion at the time the Option
Notice is delivered to Landlord; and/or (4) Tenant has failed to exercise this
option in a timely manner in accordance with the provisions of this Addendum 1;
and/or (5) Tenant no longer has possession of all or any part of the Premises
under the Lease, or if Lease has been terminated earlier, pursuant to the terms
of the Lease.
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
<PAGE> 36
EXHIBIT 10.20
LEASE AGREEMENT
(NET)
BASIC LEASE INFORMATION
<TABLE>
<S> <C>
LEASE DATE: January 8, 1996
LANDLORD: Lincoln-Whitehall Realty, L.L.C.
LANDLORD'S ADDRESS: c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404-1167
TENANT: Safety Tek, Inc.,
a Delaware corporation
TENANT'S ADDRESS: 49050 Milmont Drive
Fremont, California 94538-7301
PREMISES: Approximately 17,008 rentable square feet as shown on Exhibit A
PREMISES ADDRESS: 5696 Stewart Avenue
Fremont, California 94538
BUILDING: Approximately 34,016 rentable square feet
LOT (BUILDING'S TAX PARCEL): Approximately 34,016 rentable square feet
PARK (LINCOLN FREMONT BUSINESS CENTER): Approximately 191,610 rentable square feet
TERM: April 1, 1996 ("Commencement Date"), through
March 30, 2001 ("Expiration Date")
BASE RENT (P. 3): Nine thousand fourteen and 24/100 Dollars ($9,014.24) NNN a month
ADJUSTMENTS TO BASE RENT: Commencing December 1, 1997, $9,864.64 NNN a month
Commencing August 1, 1999, $10,715.04 NNN a month
SECURITY DEPOSIT (P. 4.1): Ten thousand seven hundred fifteen and 00/100 Dollars ($10,715.00)
[CLEANING DEPOSIT (P. 4.2): Dollars ($ )]
</TABLE>
*TENANT'S SHARE OF OPERATING EXPENSES (P. 6.1): 8.89% of the Park
*TENANT'S SHARE OF TAX EXPENSES (P. 6.2): 8.89% of the Lot
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (P. 7): 8.89% of the Park
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.
<TABLE>
<S> <C>
PERMITTED USES: See Section 9 below
UNRESERVED
PARKING SPACES: Fifty-one (51) nonexclusive and undesignated spaces
BROKER (P. 38): Jeff Black of Grubb and Ellis
Bob Steinbock and Tom Taylor of Bishop Hawk
EXHIBITS: Exhibit A - Premises, Building, Lot and/or Park
Exhibit B - Tenant Improvements
Exhibit C - Rules and Regulations
Exhibit D - Intentionally Omitted
Exhibit E - Hazardous Materials Disclosure Certificate - Example
Exhibit F - Change of Commencement Date - Example
Exhibit G - Tenant's Initial Hazardous Materials Disclosure Certificate
Exhibit H - Hazardous Materials List
ADDENDA: Addendum 1: Option to Extend the Lease
</TABLE>
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
SECTION PAGE
- ------- ----
<S> <C>
1. PREMISES.............................................................................................. 15
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES............................................ 15
3. RENT.................................................................................................. 15
4. SECURITY DEPOSIT AND [CLEANING DEPOSIT]............................................................... 16
5. TENANT IMPROVEMENTS................................................................................... 16
6. ADDITIONAL RENT....................................................................................... 16
7. UTILITIES............................................................................................. 18
8. LATE CHARGES.......................................................................................... 18
9. USE OF PREMISES....................................................................................... 18
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES.................................................. 19
11. REPAIRS AND MAINTENANCE............................................................................... 20
12. INSURANCE............................................................................................. 21
13. WAIVER OF SUBROGATION................................................................................. 21
14. LIMITATION OF LIABILITY AND INDEMNITY................................................................. 21
15. ASSIGNMENT AND SUBLEASING............................................................................. 22
16. AD VALOREM TAXES...................................................................................... 23
17. SUBORDINATION......................................................................................... 23
18. RIGHT OF ENTRY........................................................................................ 23
19. ESTOPPEL CERTIFICATE.................................................................................. 23
20. TENANT'S DEFAULT...................................................................................... 24
21. REMEDIES FOR TENANT'S DEFAULT......................................................................... 24
22. HOLDING OVER.......................................................................................... 25
23. LANDLORD'S DEFAULT.................................................................................... 25
24. PARKING............................................................................................... 25
25. SALE OF PREMISES...................................................................................... 25
26. WAIVER................................................................................................ 26
27. CASUALTY DAMAGE....................................................................................... 26
28. CONDEMNATION.......................................................................................... 27
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS............................................................. 27
30. FINANCIAL STATEMENTS.................................................................................. 29
31. GENERAL PROVISIONS.................................................................................... 29
32. SIGNS................................................................................................. 30
33. MORTGAGEE PROTECTION.................................................................................. 31
34. QUITCLAIM............................................................................................. 31
[35. MODIFICATIONS FOR LENDER............................................................................. 31]
36. WARRANTIES OF TENANT.................................................................................. 31
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT....................................................... 31
38. BROKERAGE COMMISSION.................................................................................. 32
39. QUIET ENJOYMENT....................................................................................... 32
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS........................................ 32
41. TENANT'S COVENANT OF NON-DISCRIMINATION............................................................... 32
</TABLE>
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LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date defined on Page
1. The Basic Lease Information set forth on Page 1 and this Lease are and
shall be construed as a single instrument.
1. PREMISES: Landlord hereby leases the Premises to Tenant upon the terms
and conditions contained herein. Landlord hereby grants to Tenant a revocable
license for the right to use, on a non-exclusive basis, parking areas and
ancillary facilities located within the Common Area of the Park, subject to the
terms of this Lease. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage area of the Premises,
the Building, the Lot and the Park shall be deemed to be the number of rentable
square feet set forth in the Basic Lease Information on Page 1. Tenant further
agrees that the number of rentable square feet of the Premises, the Building,
the Lot and the Park may subsequently change after the Lease Date commensurate
with any modifications to any of the foregoing.
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES: [If
Landlord cannot deliver possession of the Premises on the Commencement Date,
with the Tenant Improvements as set forth in Exhibit B hereto having been
substantially completed (excluding punchlist items as reasonably determined by
Landlord and Tenant. Landlord shall not be subject to any liability nor shall
the validity of the Lease be affected; provided the Lease term and the
obligation to pay Rent shall commence on the date possession is tendered and the
Expiration Date shall be extended by a period of time equal to the period
computed from the Commencement Date to the date possession is tendered by
Landlord to Tenant.] If Landlord cannot deliver possession of the Premises with
the Tenant Improvements as set forth on Exhibit B hereto having been
substantially completed (excluding punchlist items as reasonably determined by
Landlord and Tenant) on the Commencement Date, Landlord shall not be subject to
any liability nor shall the validity of the Lease be affected; provided the
Lease term and the obligation to pay Rent shall commence on the date possession
is so tendered subject to the provisions of Exhibit B hereto with regard to
Tenant Delays. Notwithstanding the foregoing, if Landlord does not tender
possession of the Premises with all tenant Improvements Substantially Complete
(except for punchlist items as reasonably determined by Landlord and Tenant) to
Tenant within three hundred thirty (330) calendar days of the full execution of
this Lease (the "Outside Date") (subject to Force Majeure Delays and Tenant
Delays, as such terms are defined in Exhibit B, in which event the Outside Date
shall be extended commensurately by the period of time attributable to such
delays), Tenant or Landlord may terminate this Lease by delivering written
notice thereof to the other party if at all, by no later than the date which is
thirty (30) days after the actual Outside Date. If Tenant or Landlord fails to
timely terminate the Lease as and when provided herein, of it Landlord delivers
to Tenant possession of the Premises with the Tenant Improvements being
Substantially Complete at any time earlier than the Outside Date, then Tenant's
and Landlord's foregoing right to terminate this Lease provided herein shall
lapse and be null and void upon the earlier occurrence of such even and the
Lease shall remain in full force and effect with Tenant or Landlord having no
further right to terminate this Lease. In the event the commencement date and/or
the expiration date of this Lease is other than the Commencement Date and/or
Expiration Date provided on Page 1, as the case may be, Landlord and Tenant
shall execute a written amendment to this Lease, substantially in the form of
Exhibit F hereto, wherein the parties shall specify the actual commencement
date, expiration date and the date on which Tenant is to commence paying Rent.
Landlord shall permits Tenant to occupy the Premises two (2) weeks prior to the
Commencement Date, and such occupancy shall be at Tenant's sole risk and subject
to all the provisions of this Lease, [including,] excluding, [not limited to,]
the requirement to pay Rent [and the Security Deposit, and] including the
requirement to obtain the insurance [required] pursuant to this Lease and to
deliver insurance certificates as required herein, and to pay the Security
Deposit. In addition to the foregoing, Landlord shall have the right to impose
such additional conditions on Tenant's early entry as Landlord shall deem
appropriate. By taking possession of the Premises, Tenant shall be deemed to
have accepted the Premises in a good, clean and completed condition and state of
repair, (exclusive of punchlist items as reasonably determined by Landlord and
Tenant) in compliance with all applicable laws, codes, regulations,
administrative orders and ordinances, and subject to all matters of record.
Tenant hereby acknowledges and agrees that neither Landlord nor Landlord's
agents or representatives has made any representations or warranties as to the
suitability, safety or fitness of the Premises for the conduct of Tenant's
business, Tenant's intended use of the Premises or for any other purpose, and
that neither Landlord nor Landlord's agents or representatives has agreed to
undertake any alterations or construct any Tenant Improvements to the Premises
except as expressly provided in this Lease. [Tenant agrees that at any time
before or during the term of this Lease, Landlord shall have the right to
relocate Tenant from the Premises described herein to other space within the
Park on substantially the same terms and conditions of this Lease provided the
other space is of comparable size.]
3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver
to Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, [the Cleaning Deposit,] and all insurance
certificates evidencing the insurance required to be obtained by Tenant under
Section 12 of this Lease. Tenant agrees to pay Landlord, without prior notice or
demand, or abatement, offset, deduction or claim, the Base Rent described on
Page 1, payable in advance at Landlord's address shown on Page 1 on the first
day of each month throughout the term of the Lease. In addition to the Base Rent
set forth on Page 1, Tenant shall pay Landlord in advance and on the first (1st)
day of each month throughout the term of this Lease (including any extensions of
such term), as Additional Rent Tenant's share, as set forth on Page 1, of
Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses all in the manner as specified in Sections
6.1, 6.2, 6.3, 6.4 and 7 of this Lease, respectively. Additionally, Tenant shall
pay to Landlord as Additional Rent hereunder, immediately on Landlord's demand
therefor, any and all costs and expenses incurred by Landlord to enforce the
provisions of this Lease, including, but not
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limited to, costs associated with any proposed assignment or subletting of all
or any portion of the Premises by Tenant, costs associated with the delivery of
notices, delivery and recordation of notice(s) of default, attorneys' fees,
expert fees, court costs and filing fees (collectively, the "Enforcement
Expenses"). The term "Rent" whenever used herein refers to the aggregate of all
these amounts. If Landlord permits Tenant to occupy the Premises without
requiring Tenant to pay rental payments for a period of time, the waiver of the
requirement to pay rental payments shall only apply to waiver of the Base Rent
and Tenant shall otherwise perform all other obligations of Tenant hereunder,
including, but not limited to paying to Landlord any and all amounts considered
additional rent, such as Tenant's share of Operating Expenses, Tax Expenses,
Common Area Utility Costs, and Utility Expenses, and Administrative Expenses.
If, at any time, Tenant is in default of or otherwise breaches any term,
condition or provision of this Lease, any such waiver by Landlord of Tenant's
requirement to pay rental payments shall be null and void and Tenant shall
immediately pay to Landlord all rental payments waived by Landlord. The Rent for
any fractional part of a calendar month at the commencement or termination of
the Lease term shall be a prorated amount of the Rent for a full calendar month
based upon a thirty (30) day month. The prorated Rent shall be paid on the
Commencement Date and the first day of the calendar month in which the date of
termination occurs, as the case may be.
4. SECURITY DEPOSIT AND CLEANING DEPOSIT:
4.1 SECURITY DEPOSIT: Upon Tenant's execution of this Lease,
Tenant shall deliver to Landlord, as a Security Deposit for the performance by
Tenant of its obligations under this Lease, the amount described on Page 1. If
Tenant is in default, Landlord may, but without obligation to do so, use the
Security Deposit, or any portion thereof, to cure the default or to compensate
Landlord for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord. Concurrently with any increase in the Base Rent, Tenant shall
deliver to Landlord an amount equal to such increase, which amount shall be
added to the Security Deposit being held by Landlord and be deemed a part of
such Security Deposit thereafter. [At any time after Tenant has defaulted
hereunder, Landlord may require an increase in the amount of the Security
Deposit required hereunder for the then balance of the Lease term and Tenant
shall, immediately on demand, pay to Landlord additional sums in the amount of
such increase.] As soon as practicable after the termination of this Lease, but
any event no later than sixty (60) days after such termination. Landlord shall
return the Security Deposit to Tenant, less such amounts as are reasonably
necessary, as determined solely by Landlord in its sole reasonable discretion,
to remedy Tenant's default(s) hereunder or to otherwise restore the Premises to
a clean and safe condition, reasonable wear and tear excepted. If the cost to
restore the Premises exceeds the amount of the Security Deposit, Tenant shall
promptly deliver to Landlord any and all of such excess sums as reasonably
determined by Landlord. Landlord shall not be required to keep the Security
Deposit separate from other funds, and, unless otherwise required by law, Tenant
shall not be entitled to interest on the Security Deposit. In no event or
circumstance shall Tenant have the right to any use of the Security Deposit and,
specifically, Tenant may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.
[4.2 CLEANING DEPOSIT: Upon Tenant's execution of this Lease,
Tenant shall deliver to Landlord, as a Cleaning Deposit for the performance by
Tenant of its obligations under this Lease including, but not limited to,
Section 11 below, the amount described on Page 1. The Cleaning Deposit is to be
used for purposes relating to cleaning up the Premises and the area adjacent to
the Premises, to the extent such cleaning up is required due to Tenant's or its
representatives, employees, invitees or contractors' use of the area adjacent to
the Premises, to the reasonable satisfaction of Landlord. If Tenant is in
default, Landlord may, but without obligation to do so, use the Cleaning
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Cleaning Deposit so applied or used so as to replenish the amount of the
Cleaning Deposit to increase such deposit to the amount initially deposited with
Landlord. At anytime after Tenant has defaulted hereunder, Landlord may require
an increase in the amount of the Cleaning Deposit required hereunder for the
then balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such increase. As soon as practicable
after the termination of this Lease, Landlord shall return the Cleaning Deposit
to Tenant, less such amounts as are reasonably necessary to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to a clean and safe
condition as determined by Landlord. Landlord shall not be required to keep the
Cleaning Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Cleaning Deposit. In no
event or circumstance shall Tenant have the right to any use of the Cleaning
Deposit and, specifically, Tenant may not use the Cleaning Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof.]
5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in its current
"as is" condition unless otherwise specified in Exhibit B, attached hereto and
incorporated herein by this reference. If so specified in Exhibit B hereto,
Landlord or Tenant, as the case may be, shall install the improvements ("Tenant
Improvements") on the Premises as described and in accordance with the terms,
conditions, criteria and provisions set forth in Exhibit B, attached and
incorporated herein by this reference. Tenant acknowledges that neither Landlord
nor any of Landlord's agents, representatives or employees has made any
representations as to the suitability or fitness of the Premises for the conduct
of Tenant's business, including, without limitation, any storage incidental
thereto, or for any other purpose, and that neither Landlord nor any of
Landlord's agents, representatives or employees has agreed to undertake any
alterations or construct any Tenant Improvements to the Premises except as
expressly provided in Exhibit B to this Lease.
6. ADDITIONAL RENT : The costs and expenses described in this Section 6
and all other sums, charges, costs and expenses specified in this Lease other
than Base Rent, including, but not limited to, Utility Expenses, Tenant's share
of Common Area Utility Costs, Late Charges and Enforcement Expenses are to be
paid by Tenant to Landlord as additional rent (collectively, "Additional Rent").
6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay its share, which is defined on Page 1, of all
Operating Expenses as Additional Rent. The term "Operating Expenses" as used
herein shall mean the total reasonable and industry-standard amounts paid or
payable by Landlord in connection with the ownership, maintenance, repair and
operation of the Premises, the Building and the Lot, and where applicable, of
the Park referred to on Page 1. The amount of
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Tenant's share of Operating Expenses shall be reviewed from time to time by
Landlord and shall be subject to modification by Landlord as reasonably
determined by Landlord. These Operating Expenses may include, but are not
limited to:
6.1.1 Landlord's cost of repairs to, and maintenance of,
the roof, the roof membrane and the exterior walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved
area, landscaping and other common areas for the Park. The term "Common
Area" shall mean all areas and facilities within the Park exclusive of
the Premises and the other portions of the Park leased exclusively to
other tenants. The Common Area includes, but is not limited to,
interior lobbies, mezzanines, parking areas, access and perimeter
roads, sidewalks, rail spurs, landscaped areas and similar areas and
facilities;
6.1.3 Landlord's annual cost of insurance insuring against
fire and extended coverage (including, if Landlord elects, "all risk"
coverage) and all other reasonable and industry-standard insurance,
including, but not limited to, earthquake, flood and/or surface water
endorsements for the Building, the Lot and the Park (including the
Common Area), rental value insurance against loss of Rent in an amount
equal to the amount of Rent for a period of at least six (6) months
commencing on the date of loss, and subject to the provisions of
Section 27 below, any deductible;
6.1.4 Landlord's cost of modifications to the Building, the
Common Area and/or the Park [occasioned] required by any rules, laws or
regulations effective subsequent to the date on which the Building was
originally constructed;
6.1.5 Landlord's cost of modifications to the Building, the
Common Area and/or the Park [occasioned] required by any rules, laws or
regulations arising from Tenant's use of the Premises regardless of
when such rules, laws or regulations became effective;
6.1.6 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not
limited to, [contracts for elevator systems] and heating, ventilation
and air conditioning systems, lifts for disabled persons, and trash or
refuse collection;
6.1.7 Landlord's cost of security and fire protection
services for the Building and/or the Park, as the case may be, if in
Landlord's sole reasonable discretion such services are provided;
6.1.8 Landlord's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies;
[6.1.9 Landlord's cost for the maintenance and repair of
any rail spur and rail crossing, and for the creation and negotiation
of, and pursuant to, any rail spur or track agreements, licenses,
easements or other similar undertakings;]
6.1.10 Landlord's cost of supplies, equipment, rental
equipment and other similar items used in the direct operation and/or
maintenance of the Park; and
6.1.11 Landlord's cost for the repairs and maintenance items
set forth in Section 11.2 below.
6.2 TAX EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay its share, which is defined on Page 1, of all real
property taxes applicable to the land and improvements included within the Lot
on which the Premises are situated and one hundred percent (100%) of all
personal property taxes now or hereafter assessed or levied against the Premises
or Tenant's personal property. The amount of Tenant's share of Tax Expenses
shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. Tenant shall also
pay one hundred percent (100%) of any increase in real property taxes
attributable, in Landlord's sole discretion, to any and all alterations, Tenant
Improvements or other improvements of any kind, which are above standard
improvements customarily installed for similar buildings located within the
Building or the Park (as applicable), whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant. The term "Tax
Expenses" shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
commercial rental tax, payments under any improvement bond or bonds, license,
rental tax, transaction tax, levy, or penalty imposed by authority having the
direct or indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the
Premises, the Building, the Lot or the Park, as against Landlord's right to rent
or other income therefrom, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the nature
of which was previously included within the definition of real property taxes.
The term "Tax Expenses" shall not include any franchise, estate, inheritance,
net income, or excess profits tax imposed upon Landlord.
6.3 ADMINISTRATIVE EXPENSES: In addition to the Base Rent set
forth in Section 3 hereof, Tenant shall pay Landlord, without prior notice or
demand, on the first (1st) day of each month throughout the term of this Lease
(including any extensions of such term), as compensation to Landlord for
accounting and management services rendered on behalf of the Building and/or the
Park, one-twelfth (1/12th) of an amount equal to ten percent (10%) of the
estimated amount of the aggregate of the Tenant's share of (i) the total
Operating Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all Common Area Utility Costs for the Park and the
Premises as described in Section 7 below; as such amounts are estimated by
Landlord in accordance with the provisions of Section 6.4 below (collectively,
the "Administrative Expenses"). Tenant's obligations to pay such Administrative
Expenses shall survive the expiration or earlier termination of this Lease.
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6.4 PAYMENT OF EXPENSES: Landlord shall estimate Tenant's share of
the Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, on the
first (1st) day of each month and throughout the remaining months of such
calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year and Tenant shall pay one-twelfth (1/12th) of
such estimated amount as Additional Rent hereunder on the first day of each
month during such calendar year and for each ensuing calendar year throughout
the term of this Lease (including any extensions of the term). By April 30th of
each of the following calendar years, or as soon thereafter as reasonably
possible, including the calendar year after the calendar year in which this
Lease terminates or the term expires, Landlord shall endeavor to furnish Tenant
with an a written accounting of actual Operating Expenses and Tax Expenses.
Within thirty (30) days of Landlord's delivery of such accounting, Tenant shall
pay to Landlord the amount of any underpayment. Notwithstanding the foregoing,
failure by Landlord to give such accounting by such date shall not constitute a
waiver by Landlord of its right to collect any of Tenant's underpayment at any
time. Landlord shall credit the amount of any overpayment by Tenant toward the
next estimated monthly installment(s) falling due, or where the term of the
Lease has expired, refund the amount of overpayment to Tenant. Tenant, at its
sole cost and expense through any certified public accountant designated by it,
shall have the right to examine and/or audit the books and records evidencing
such costs and expenses for the previous one (1) calendar year, during
Landlord's reasonable business hours and not more frequently than once during
any calendar year. Tenant's obligations to pay its share of Operating Expenses
and Tax Expenses shall survive the expiration or earlier termination of this
Lease.
6.5 ANNUAL RECONCILIATION: If the term of the Lease expires prior
to the annual reconciliation of expenses, if any, Landlord shall have the right
to reasonably estimate Tenant's share of such expenses, and if Landlord
determines that an underpayment is due, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant as soon as practicable
thereafter, but in any event, no later than ninety (90) days after such
expiration. Notwithstanding the foregoing, failure of Landlord to accurately
estimate Tenant's share of such expenses or to otherwise perform such
reconciliation of expenses, including, without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the term of the Lease or at any time after the expiration or
earlier termination of this Lease.
7. UTILITIES: Utility Expenses, Common Area Utility Costs and all other
sums or charges set forth in this Section 7 are considered part of Additional
Rent. Tenant shall pay the cost of all water, sewer use, sewer discharge fees
and sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone and other utilities billed or metered separately to the
Premises and/or Tenant. Tenant shall also pay its reasonable share of any
assessments or charges for utility or similar purposes included within any tax
bill for the Lot on which the Premises are situated, including, without
limitation, entitlement fees, allocation unit fees, and/or any similar fees or
charges, and any penalties related thereto. For any such utility fees or use
charges that are not billed or metered separately to Tenant, Tenant shall pay to
Landlord, as Additional Rent, without prior notice or demand, on the first (1st)
day of each month throughout the term of this Lease the amount which is
attributable to Tenant's use of the utilities or similar services, as reasonably
estimated and determined by Landlord based upon factors such as size of the
Premises and intensity of use of such utilities by Tenant such that Tenant shall
pay the portion of such charges reasonably consistent with Tenant's use of such
utilities and similar services ("Utility Expenses"). If Tenant disputes any such
estimate or determination, then Tenant shall either pay the estimated amount or
cause the Premises to be separately metered at Tenant's sole expense. In
addition, Tenant shall pay to Landlord its share, which is described on Page 1,
as Additional Rent, without prior notice or demand, on the first (1st) day of
each month throughout the term of this Lease, of any Common Area utility costs,
fees, charges or expenses ("Common Area Utility Costs"). Tenant shall pay to
Landlord one-twelfth (1/12th) of the estimated amount of Tenant's share of the
Common Area Utility Costs in the same manner and time periods as specified in
Section 6.4 above and any reconciliation thereof shall also be in the same
manner as specified in Sections 6.4 and 6.5 above. The amount of Tenant's share
of Common Area Utility Costs shall be reviewed from time to time by Landlord and
shall be subject to modification by Landlord as reasonably determined by
Landlord. Tenant acknowledges that the Premises may become subject to the
rationing of utility services or restrictions on utility use as required by a
public utility company, governmental agency or other similar entity having
jurisdiction thereof. Notwithstanding any such rationing or restrictions on use
of any such utility services, Tenant acknowledges and agrees that its tenancy
and occupancy hereunder shall be subject to such rationing restrictions as may
be imposed upon Landlord, Tenant, the Premises, the Building or the Park, and
Tenant shall in no event be excused or relieved from any covenant or obligation
to be kept or performed by Tenant by reason of any such rationing or
restrictions. Tenant further agrees to timely and faithfully pay, prior to
delinquency, any amount, tax, charge, surcharge, assessment or imposition
levied, assessed or imposed upon the Premises, or Tenant's use and occupancy
thereof, or as a result directly or indirectly of any such rationing or
restrictions.
8. LATE CHARGES: Any and all sums or charges set forth in this Section 8
are considered part of Additional Rent. Tenant acknowledges that late payment
(the [second]sixth day of each month or anytime thereafter) by Tenant to
Landlord of Base Rent, Tenant's share of Operating Expenses, Tax Expenses,
Common Area Utility Costs, and Utility Expenses, Administrative Expenses or
other sums due hereunder, will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of such costs being extremely difficult and
impracticable to fix. Such costs include, without limitation, processing and
accounting charges, and late charges that may be imposed on Landlord by the
terms of any note secured by any encumbrance against the Premises, and late
charges and penalties due to the late payment of real property taxes on the
Premises. Therefore, if any installment of Rent or any other sum due from Tenant
is not received by Landlord [when due], within five (5) days of the due date,
Tenant shall promptly pay to Landlord all of the following, as applicable: (a)
an additional sum equal to five percent (5%) of such delinquent amount as a late
charge for the first instance during any calendar year in which Landlord does
not receive Rent within such 5-day period; seven percent (7%) of such delinquent
amount as a late charge for the second instance during any calendar year in
which Landlord does not receive Rent with such 5-day period and ten percent
(10%) of such delinquent amount as a late charge for each and every successive
instance during any calendar year in which Landlord does not receive Rent within
said 5-day period, plus interest on such delinquent amount at the rate equal to
the prime rate plus three percent (3%) for the time period such payments are
delinquent as a
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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late charge for every month or portion thereof that such sums remain unpaid, (b)
the amount of seventy-five dollars ($75) for each three-day notice prepared for,
or served on, Tenant, (c) the amount of fifty dollars ($50) relating to checks
for which there are not sufficient funds. If Tenant delivers to Landlord a check
for which there are not sufficient funds, Landlord may, at its sole option,
require Tenant to replace such check with a cashier's check for the amount of
such check and all other charges payable hereunder. The parties agree that this
late charge and the other charges referenced above represent a fair and
reasonable estimate of the costs that Landlord will incur by reason of late
payment by Tenant. Acceptance of any late charge or other charges shall not
constitute a waiver by Landlord of Tenant's default with respect to the
delinquent amount, nor prevent Landlord from exercising any of the other rights
and remedies available to Landlord for any other breach of Tenant under this
Lease. If a late charge or other charge becomes payable for any three (3)
installments of Rent within any twelve (12) month period, then Landlord, at
Landlord's sole option, can either require the Rent be paid quarterly in
advance, or be paid monthly in advance by cashier's check or by electronic funds
transfer.
9. USE OF PREMISES:
9.1 PERMITTED USES: Tenant shall only use the Premises for
purposes of office uses and warehouse uses for sale, assembly, light
manufacturing, testing, engineering, research and development and storage of
process control instruments, but only to the extent such uses meet all of the
following criteria: (i) such uses are permitted by the City of Fremont and any
and all entities having jurisdiction over the Premises, the Building and/or the
Park; (ii) such uses are disclosed in the Tenant's Initial HazMat Certificate
(defined below in Section 29) attached hereto; and (iii) such uses are in strict
compliance with all of the provisions of this Section 9 and of Section 29 below.
Tenant and Tenant's Representatives may not, in any event or circumstance, use
any portion of the Premises for purposes of the following: (a) the filling of
gas permeation or other devices; and (b) the use and/or storage of any gas
cylinders used for the filling of gas permeation or other devices at the
Premises or at Tenant's operations conducted at Tenant's other facilities.
9.[1]2 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND
REGULATIONS: The Premises are to be used solely for the uses stated in Section
9.1 above and for no other uses or purposes without Landlord's prior written
consent, which consent may be given or withheld in Landlord's sole discretion.
The use of the Premises by Tenant and its employees, representatives, agents,
invitees, licensees, subtenants, customers or contractors (collectively,
"Tenant's Representatives") shall be subject to, and at all times in compliance
with, (a) any and all applicable laws, ordinances, statutes, orders and
regulations as same exist from time to time (collectively, the "Laws"), (b) any
and all documents, matters or instruments, including without limitation, any
declarations of covenants, conditions and restrictions, and any supplements
thereto, each of which has already been [or hereafter is] recorded in any
official or public records with respect to the Premises, the Building, the Lot
and/or the Park, or any portion thereof prior to the Commencement Date
(collectively, the "Recorded Matters"), and any Recorded Matters which Landlord
may elect to record after the Commencement Date of this Lease ("Future Recorded
Matters") to the extent Landlord delivers to Tenant prior notice of any such
Future Recorded Matters and Tenant's use of the Premises is not prevented or
substantially impaired by virtue of such Future Recorded Matters, and (c) any
and all rules and regulations set forth in Exhibit C, attached to and made a
part of this Lease, and any other reasonable rules and regulations promulgated
by Landlord now or hereafter enacted relating to parking and the operation of
the Premises, the Building and the Park (collectively, the "Rules and
Regulations"). Tenant agrees to, and does hereby, assume full and complete
responsibility to ensure that the Premises are adequate to fully meet the needs
and requirements of Tenant's intended operations of its business within the
Premises, and Tenant's use of the Premises and that same are in compliance with
all applicable Laws.
9.[2]3 PROHIBITION ON USE: Tenant shall not use the Premises or
permit anything to be done in or about the Premises nor keep or bring anything
therein which will in any way conflict with any of the requirements of the Board
of Fire Underwriters or similar body now or hereafter constituted or in any way
increase the existing rate of or affect any policy of fire or other insurance
upon the Building or any of its contents, or cause a cancellation of any
insurance policy. No auctions may be held or otherwise conducted in, on or about
the Premises, the Building, the Lot or the Park without Landlord's written
consent thereto, which consent may be given or withheld in Landlord's sole
discretion. Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of
Landlord, other tenants or occupants of the Building, other buildings in the
Park, or other persons or businesses in the area, or injure or annoy other
tenants or use or allow the Premises to be used for any unlawful or
objectionable purpose, as determined by Landlord, in its reasonable discretion,
for the benefit, quiet enjoyment and use by Landlord and all other tenants or
occupants of the Building or other buildings in the Park; nor shall Tenant
cause, maintain or permit any private or public nuisance in, on or about the
Premises, Building, Park and/or the Common Area, including, but not limited to,
any offensive odors, noises, fumes or vibrations. Tenant shall not damage or
deface or otherwise commit or suffer to be committed any waste in, upon or about
the Premises. Tenant shall not place or store, nor permit any other person or
entity to place or store, any property, equipment, materials, supplies, personal
property or any other items or goods outside of the Premises for any period of
time. Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises. Tenant shall
place no loads upon the floors, walls, or ceilings in excess of the maximum
designed load permitted by the applicable Uniform Building Code or which may
damage the Building or outside areas; nor place any harmful liquids in the
drainage systems; nor dump or store waste materials, refuse or other such
materials, or allow such to remain outside the Building area, except in refuse
dumpsters or in any enclosed trash areas provided. Tenant shall honor the terms
of all Recorded Matters and, subject to the provisions of Section 9.2 above,
Future Recorded Matters relating to the Premises, the Building, the Lot and/or
the Park. Tenant shall honor the Rules and Regulations. [If Tenant fails to
comply with such Laws, Recorded Matters, Rules and Regulations or the provisions
of this Lease, Landlord shall have the right to collect from Tenant a reasonable
sum as a penalty, in addition to all rights and remedies of Landlord hereunder
including, but not limited to, the payment by Tenant to Landlord of all
Enforcement Expenses and Landlord's costs and expenses, if any, to cure any of
such failures of Tenant, if Landlord, at its sole option, elects to undertake
such cure.]
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord. , which consent
shall not be withheld or delayed unreasonably If any such alteration or addition
is expressly permitted by Landlord, Tenant shall deliver at least twenty (20)
ten (10) days prior notice to Landlord, from the date Tenant intends to commence
construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor reasonably approved by Landlord, at Tenant's sole expense in
compliance with all applicable Laws (including, but not limited to, the ADA as
defined herein), Recorded Matters, subject to the provisions of Section 9.2
above, Future Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant. As a condition to Landlord's consent to the
installation of any fixtures, additions or other improvements, Landlord may
require Tenant to post and obtain a completion and indemnity bond for up to one
hundred fifty percent (150%) of the cost of the work.
10.2 SURRENDER OF PREMISES: Upon the termination of this Lease,
whether by forfeiture, lapse of time or otherwise, or upon the termination of
Tenant's right to possession of the Premises, Tenant will at once surrender and
deliver up the Premises, together with the fixtures, furnishings, additions and
improvements which Landlord has notified Tenant, in writing, that Landlord will
require Tenant not to remove, to Landlord in good condition and repair
including, but not limited to, replacing all light bulbs and ballasts not in
good working condition, excepting for reasonable wear and tear. Reasonable wear
and tear shall not include any damage or deterioration to the floors of the
Premises arising from the use of forklifts in, on or about the Premises
(including, without limitation, any marks or stains of any portion of the
floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such trade fixtures, furniture,
furnishings, additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures, alterations, furniture, furnishings, trade fixtures, additions
and other improvements which Landlord shall require Tenant not to remove from
the Premises. Tenant shall repair any damage caused by the installation or
removal of such signs, trade fixtures, furniture, furnishings, fixtures,
additions and improvements which are to be removed from the Premises by Tenant
hereunder. If Landlord fails to so notify Tenant at least twenty (20) days prior
to such termination of this Lease, then Tenant shall remove all tenant signage,
fixtures, alterations, furniture, furnishings, trade fixtures, additions and
other improvements installed in or about the Premises by, or on behalf of
Tenant. Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.
11. REPAIRS AND MAINTENANCE:
11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and maintain
the Premises and the adjacent areas (including, without limitation, any portion
of the Common Area used by Tenant or Tenant's Representatives) in good, clean
and safe condition and repair to the satisfaction of Landlord including, but not
limited to, repairing any damage caused by Tenant or Tenant's Representatives
and replacing any property so damaged by Tenant or Tenant's Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible for maintaining, repairing and replacing (a) all mechanical systems,
heating, ventilation and air conditioning systems, (b) all plumbing, electrical
wiring and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting serving
the Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, [(g) lifts for disabled persons serving the
Premises,] (h) sprinkler systems, fire protection systems and security systems,
(i) all partitions, fixtures, equipment, interior painting, and interior walls
and floors of the Premises and every part thereof (including, without
limitation, any demising walls contiguous to any portion of the Premises).
Tenant's obligation to keep, maintain, preserve and repair the Premises and the
adjacent area shall specifically extend to the cleanup and removal of any and
all Hazardous Materials (hereafter defined) occurring in, on or about the
Premises. Notwithstanding anything to the contrary contained herein, Landlord
shall cause all mechanical, (including but not limited to heating ventilating,
and air conditioning systems) electrical and plumbing systems to be in good
working order prior to the Commencement Date of this Lease.
11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to
the provisions of Sections 6 and 9 of this Lease and except for (i) the
obligations of Tenant set forth in Section 11.1 above, and (ii) the repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, [any rail spur and rail
crossing,] the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors and entrances, exterior window
casements, exterior doors and door closers, exterior painting of the Building
(exclusive of the Premises), and underground utility and sewer pipes outside the
exterior walls of the Building. For purposes of this Section 11.2, the term
"exterior" shall mean exterior to, and not serving the Premises. Unless
otherwise notified by Landlord, in writing, that Landlord has elected to procure
and maintain the following described contract(s), Tenant shall procure and
maintain (a) the heating, ventilation and air conditioning systems preventative
maintenance and repair contract(s); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord, and (b) the fire and
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services); such
contract(s) to be on a bi-monthly or quarterly basis, as reasonably determined
by Landlord. Landlord reserves the right, but without the obligation to do so,
to procure and maintain at commercially competitive rates (i) the heating,
ventilation and air conditioning systems preventative maintenance and repair
contract(s), and/or (ii) the fire and sprinkler protection services and
preventative maintenance and repair contract(s) (including, without limitation,
monitoring services). If Landlord so elects to procure and maintain any such
contract(s), Tenant will reimburse Landlord for the cost thereof in accordance
with the provisions of Section 6 above. If Tenant procures and maintains any of
such contract(s), Tenant will promptly deliver to Landlord a true and complete
copy of (x) each such contract and any and all renewals or extensions thereof,
and (y) each service report or other summary received by Tenant pursuant to or
in connection with such contract(s). Notwithstanding anything to the contrary
contained herein, should Landlord elect to re-paint the exterior of the
buildings in the Park, Landlord shall amortize such cost over a minimum of two
(2) calendar years for purposes of calculating Tenant's Operating Expenses
pursuant to Section 6 herein.
11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for
repairs rendered necessary by the intentional or negligent acts or omissions of
Tenant or Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion.
11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE
OBLIGATIONS: Except for normal maintenance and repair of the items described
above, Tenant shall have no right of access to or right to install any device on
the roof of the Building nor make any penetrations of the roof of the Building
without the express prior written consent of Landlord., which consent shall not
be withheld or delayed unreasonably. If Tenant refuses or neglects to repair and
maintain the Premises and the adjacent areas properly as required herein and to
the reasonable satisfaction of Landlord, Landlord may, but without obligation to
do so, at any time make such repairs and/or maintenance without Landlord having
any liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property, or to Tenant's business by reason
thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. In
the event Landlord makes such repairs and/or maintenance, upon completion
thereof Tenant shall pay to Landlord, as additional rent, the Landlord's
reasonable costs for making such repairs and/or maintenance, plus [twenty (20%)]
ten (10%) percent for overhead, upon presentation of a bill therefor, plus any
Enforcement Expenses. The obligations of Tenant hereunder shall survive the
expiration of the term of this Lease or the earlier termination thereof. Tenant
hereby waives any right to repair at the expense of Landlord under any
applicable Laws now or hereafter in effect respecting the Premises.
12. INSURANCE:
12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and
effect at all times during the term of this Lease, at Tenant's sole cost and
expense, for the protection of Tenant and Landlord, as their interests may
appear, policies of insurance issued by a carrier or carriers acceptable to
Landlord and its lender(s) which afford the following coverages: (i) worker's
compensation: statutory limits; (ii) employer's liability, as required by law,
with a minimum limit of $100,000 per employee and $500,000 per occurrence; (iii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for bodily injury and property damage occurring in,
on or about the Premises arising out of Tenant's and Tenant's Representatives'
use and/or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights, with deletion of the exclusion for operations
within fifty (50) feet of a railroad track (railroad protective liability), if
applicable. Such insurance shall have a combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) aggregate limit [and excess umbrella insurance in the amount of Two
Million Dollars ($2,000,000)]. If Tenant has other locations which it owns or
leases, the policy shall include an aggregate limit per location endorsement. If
necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv) comprehensive automobile liability
insurance: a combined single limit of not less than $2,000,000 per occurrence
and insuring Tenant against liability for claims arising out of the ownership,
maintenance, or use of any owned, hired or non-owned automobiles; (v) "all risk"
property insurance, including without limitation, sprinkler leakage, boiler and
machinery comprehensive form, if applicable, covering damage to or loss of any
personal property, trade fixtures, inventory, fixtures and equipment located in,
on or about the Premises, and in addition, coverage for flood, earthquake, and
business interruption of Tenant, together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this subparagraph (v); and (vi) such other insurance as
Landlord deems necessary and prudent or as may otherwise be required by any of
Landlord's lenders or joint venture partners.
12.2 INSURANCE POLICIES: Insurance required to be maintained by
Tenant shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "Best's Insurance Reports." Any deductible amounts under any of
the insurance policies required hereunder shall not exceed One Thousand Dollars
($1,000). Tenant shall deliver to Landlord certificates of insurance and true
and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after thirty
(30) days prior written notice to the parties named as additional insureds as
required in this Lease (except for cancellation for nonpayment of premium, in
which event cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms of this
Lease under a blanket insurance policy, provided such blanket policy expressly
affords coverage for the Premises and for Landlord as required by this Lease.
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property
management company and/or agent of Landlord for the Premises, the Building, the
Lot or the Park, any lender(s) of Landlord having a lien against the Premises,
the Building, the Lot or the Park, and any joint venture partners of Landlord
shall be named as additional insureds under all of the policies required in
Section 12.1(iii) above. Additionally, such policies shall provide for
severability of interest. All insurance to be maintained by Tenant shall, except
for workers' compensation and employer's liability insurance, be primary,
without right of contribution from insurance maintained by Landlord. Any
umbrella liability policy or excess liability policy (which shall be in
"following form") shall provide that if the underlying aggregate is exhausted,
the excess coverage will drop down as primary insurance. The limits of insurance
maintained by Tenant shall not limit Tenant's liability under this Lease. It is
the parties' intention that the insurance to be procured and maintained by
Tenant as required herein shall provide coverage for any and all damage or
injury arising from or related to Tenant's operations of its business and/or
Tenant's or Tenant's Representatives' use of the Premises and/or any of the
areas within the Park, whether such events occur within the Premises (as
described in Exhibit A hereto) or in any other areas of the Park. It is not
contemplated or anticipated by the parties that the aforementioned risks of loss
be borne by Landlord's insurance carriers, rather it is contemplated and
anticipated by Landlord and Tenant that such risks of loss be borne by Tenant's
insurance carriers pursuant to the insurance policies procured and maintained by
Tenant as required herein.
12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the
event Tenant does not purchase the insurance required in this Lease or keep the
same in full force and effect throughout the term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall pay to Landlord, as additional rent, the
amount so paid by Landlord promptly upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain any insurance required in this Lease, Tenant shall be
liable for all losses, damages and costs resulting from such failure.
13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance. The provisions
of this Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.
14. LIMITATION OF LIABILITY AND INDEMNITY: Except for damage resulting from
the [sole active] gross negligence or willful misconduct of Landlord or its
authorized representatives, Tenant agrees to protect, defend (with counsel
acceptable to Landlord) and hold Landlord and Landlord's lender(s), partners,
employees, representatives, legal representatives, successors and assigns
(collectively, the "Indemnitees") harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, judgments, charges and
expenses (including reasonable attorneys' fees, costs of court and expenses
necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant's or Tenant's Representatives' use of the Premises,
Building and/or the Park, or the conduct of Tenant's business, or from any
activity, work or thing done, permitted or suffered by Tenant in or about the
Premises, or in any way connected with the Premises or with the improvements or
personal property therein, including, but not limited to, any liability for
injury to person or property of Tenant, Tenant's Representatives, or third party
persons. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.
Except for damage resulting from the [sole active] gross negligence or
willful misconduct of Landlord or its authorized representatives, Landlord shall
not be liable to Tenant for any loss or damage to Tenant or Tenant's property,
for any injury to or loss of Tenant's business or for any damage or injury to
any person from any cause whatsoever, including, but not limited to, any acts,
errors or omissions by or on behalf of any other tenants or occupants of the
Building and/or the Park. Tenant shall not, in any event or circumstance, be
permitted to offset or otherwise credit against any payments of Rent required
herein for matters for which Landlord may be liable hereunder. Landlord and its
authorized representatives shall not be liable for any interference with light
or air, or for any latent defect in the Premises or the Building related to any
improvements made to the Premises or the Building after the original
construction of the Building. To the fullest extent permitted by law, Tenant
agrees that neither Landlord nor any of Landlord's lender(s), partners,
employees, representatives, legal representatives, successors and assigns shall
at any time or to any extent whatsoever be liable, responsible or in any way
accountable for any loss, liability, injury, death or damage to persons or
property which at any time may be suffered or sustained by Tenant or by any
person(s) whomsoever who may at any time be using, occupying or visiting the
Premises, the Building or the Park.
15. ASSIGNMENT AND SUBLEASING:
15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
[unreasonably] withheld or delayed unreasonably. Tenant hereby agrees that
Landlord may withhold its consent to any proposed sublease or assignment if the
proposed sublessee or assignee or its business is subject to compliance with
additional requirements of the ADA (defined below) beyond those requirements
which are applicable to Tenant, unless the proposed sublessee or assignee shall
(a) first deliver plans and specifications for complying with
[Language indicated as being shown by strike-out in the typeset document
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such additional requirements and obtain Landlord's written consent thereto, and
(b) comply with all Landlord's conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least [thirty (30)]
twenty (20) days prior to the proposed commencement of the sublease or
assignment (the "Proposed Effective Date") the following: (i) the name of the
proposed assignee or sublessee; (ii) such information as to such assignee's or
sublessee's financial responsibility and standing as Landlord may reasonably
require; and (iii) the aforementioned plans and specifications, if any. Within
ten (10) days after Landlord's receipt of a written request from Tenant that
Tenant seeks to sublet or assign all or any portion of the Premises, Landlord
shall deliver to Tenant a copy of Landlord's standard form of sublease or
assignment agreement (as applicable), which instrument shall be utilized for
each proposed sublease or assignment (as applicable), and such instrument shall
include a provision whereby the assignee or sublessee assumes all of Tenant's
obligations hereunder and agrees to be bound by the terms hereof. As Additional
Rent hereunder, Tenant shall pay to Landlord a fee in the amount of five hundred
dollars ($500) plus Tenant shall reimburse Landlord for actual legal and other
expenses incurred by Landlord in connection with any actual or proposed
assignment or subletting. In the event the sublease (1) by itself or taken
together with prior sublease(s) covers or totals, as the case may be, more than
twenty-five percent (25%) of the rentable square feet of the Premises or (2) is
for a term which by itself or taken together with prior or other subleases is
greater than fifty percent (50%) of the period remaining in the term of this
Lease as of the time of the Proposed Effective Date, then Landlord shall have
the right, to be exercised by giving written notice to Tenant, to recapture the
space described in the sublease. If such recapture notice is given, it shall
serve to terminate this Lease with respect to the proposed sublease space, or,
if the proposed sublease space covers all the Premises, it shall serve to
terminate the entire term of this Lease, in either case as of the Proposed
Effective Date. However, no termination of this Lease with respect to part or
all of the Premises shall become effective without the prior written consent,
where necessary, of the holder of each deed of trust encumbering the Premises or
any part thereof. If this Lease is terminated pursuant to the foregoing with
respect to less than the entire Premises, the Rent shall be adjusted on the
basis of the proportion of square feet retained by Tenant to the square feet
originally demised and this Lease as so amended shall continue thereafter in
full force and effect. Each permitted assignee or sublessee shall assume and be
deemed to assume this Lease and shall be and remain liable jointly and severally
with Tenant for payment of Rent and for the due performance of, and compliance
with all the terms, covenants, conditions and agreements herein contained on
Tenant's part to be performed or complied with, for the term of this Lease. No
assignment or subletting shall affect the continuing primary liability of Tenant
(which, following assignment, shall be joint and several with the assignee), and
Tenant shall not be released from performing any of the terms, covenants and
conditions of this Lease. Tenant hereby acknowledges and agrees that it
understands that Landlord's accounting department may process and accept Rent
payments without verifying that such payments are being made by Tenant, a
permitted sublessee or a permitted assignee in accordance with the provisions of
this Lease. Although such payments may be processed and accepted by such
accounting department personnel, any and all actions or omissions by the
personnel of Landlord's accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions be deemed to be a substitute for the requirement that
Tenant obtain Landlord's prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord's
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any of its rights hereunder nor shall any voluntary relinquishment
of such rights be inferred therefrom. For purposes hereof, in the event Tenant
is a corporation, partnership, joint venture, trust or other entity other than a
natural person, any change in the direct or indirect ownership of Tenant
(whether pursuant to one or more transfers other than any public trading of the
outstanding shares (stock) of Tenant which does not result in a significant
change of the management and control of Tenant) which results in a change of
more than fifty percent (50%) in the direct or indirect ownership of Tenant
shall be deemed to be an assignment within the meaning of this Section 15 and
shall be subject to all the provisions hereof. Any and all options, first rights
of refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly
authorized in writing by Landlord.
15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the
event of any sublease or assignment of all or any portion of the Premises where
the rent or other consideration provided for in the sublease or assignment
either initially or over the term of the sublease or assignment exceeds the Rent
or pro rata portion of the Rent, as the case may be, for such space reserved in
the Lease, Tenant shall pay the Landlord monthly, as additional rent, at the
same time as the monthly installments of Rent are payable hereunder, fifty
percent (50%), (after deducting from the total excess Rent Tenant's reasonable
and industry-standard costs for such subletting, including, but not limited to,
brokerage commissions, advertising fees, and tenant improvements), of the excess
of each such payment of rent or other consideration in excess of the Rent called
for hereunder.
15.3 WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.
16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes ar not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.
17. SUBORDINATION: Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and this Lease shall be subject and subordinate at all times to: (i)
all ground leases or underlying leases which may now exist or hereafter be
executed affecting the Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which the Building, the Lot, ground
leases
[Language indicated as being shown by strike-out in the typeset document
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or underlying leases, or Landlord's interest or estate in any of said items is
specified as security. Notwithstanding the foregoing, Landlord or any such
ground lessor, mortgagee, or any beneficiary shall have the right to subordinate
or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. If any ground lease or underlying lease terminates for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in
lieu of foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant's use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets or defenses which Tenant
might have against any prior lessor; (c) bound by prepayment of more than one
(1) month's Rent; or (d) liable to Tenant for any Security Deposit not actually
received by such successor in interest to the extent any portion or all of such
Security Deposit has not already been forfeited by, or refunded to, Tenant.
Landlord shall be and remain liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord actually transfers such Security Deposit to the successor in interest.
Tenant covenants and agrees to execute (and acknowledge if required by Landlord,
any lender or ground lessor) and deliver, within [five (5)] fifteen (15) days of
a demand or request by Landlord and in the form reasonably requested by
Landlord, ground lessor, mortgagee or beneficiary, any additional reasonable
documents evidencing the priority or subordination of this Lease with respect to
any such ground leases or underlying leases or the lien of any such mortgage or
deed of trust. Tenant's failure to timely execute and deliver such additional
documents shall, at Landlord's option, constitute a material default hereunder.
[It is further agreed that Tenant shall be liable to Landlord, and shall
indemnify Landlord from and against any loss, cost, damage or expense,
incidental, consequential, or otherwise, arising or accruing directly or
indirectly, from any failure of Tenant to execute or deliver to Landlord any
such additional documents, together with any and all Enforcement Expenses.]
18. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter
the Premises at all reasonable times with reasonable prior notice for purposes
of inspection, exhibition, posting of notices, repair or alteration. At
Landlord's option, Landlord shall at all times have and retain a key with which
to unlock all the doors in, upon and about the Premises, excluding Tenant's
vaults and safes. It is further agreed that Landlord shall have the right to use
any and all means Landlord deems reasonably necessary to enter the Premises in
an emergency. Landlord shall also have the right to place "for rent" signs on
the outside of the Premises provided that such signs are specifically for the
Premises and/or "for sale" signs [on the outside of the Premises] in the common
area of the Building or Park at any time. Tenant hereby waives any claim from
damages or for any injury or inconvenience to or interference with Tenant's
business, or any other loss occasioned thereby except for any claim for any of
the foregoing arising out of the sole active gross negligence or willful
misconduct of Landlord or its authorized representatives.
19. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required
by any lender or ground lessor) and deliver to Landlord, within not less than
[five (5)] ten (10) calendar days after Landlord provides such to Tenant, a
statement in writing certifying that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification), the date
to which the Rent and other charges are paid in advance, if any, acknowledging
that there are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder or specifying such defaults as are claimed, and such other
matters as Landlord may reasonably require. Any such statement may be
conclusively relied upon by Landlord and any prospective purchaser or
encumbrancer of the Premises. Tenant's failure to deliver such statement within
such time shall be conclusive upon the Tenant that (a) this Lease is in full
force and effect, without modification except as may be represented by Landlord;
(b) there are no uncured defaults in Landlord's performance; and (c) not more
than one month's Rent has been paid in advance, except in those instances when
Tenant pays Rent quarterly in advance pursuant to Section 8 hereof, then not
more than three month's Rent has been paid in advance. [Failure by Tenant to so
deliver such certified estoppel certificate shall be a default of the provisions
of this Lease.] Tenant shall be liable to Landlord, and shall indemnify Landlord
from and against any loss, cost, damage or expense, incidental, consequential,
or otherwise, arising or accruing directly or indirectly, from any failure of
Tenant to execute or deliver to Landlord any such certified estoppel
certificate, together with any and all Enforcement Expenses.
20. TENANT'S DEFAULT: The occurrence of any one or more of the following
events shall, at Landlord's option, constitute a default and breach of this
Lease by Tenant:
20.1 The [vacation or] abandonment of the Premises by Tenant for a
period of [ten (10)]fourteen (14) consecutive days or the vacation of the
Premises by Tenant which would cause any insurance policy to be invalidated or
otherwise lapse. Tenant agrees to notice and service of notice as provided for
in this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;
20.2 The failure by Tenant to make any payment of Rent, Additional
Rent or any other payment required hereunder [on the date said payment is due]
within five (5) calendar days of the due date. Tenant agrees to notice and
service of notice as provided for in this Lease and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect;
20.3 [The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
the time period required under the provisions of this Lease. If such failure is
susceptible of cure but cannot reasonably be cured within the aforementioned
time period (if any), as determined solely by Landlord, Tenant shall promptly
commence the cure of such failure and thereafter diligently prosecute such cure
to completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than fifteen (15) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion);] The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease (except failure to make
any
[Language indicated as being shown by strike-out in the typeset document
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payment of Rent and/or Additional Rent) and such failure is not cured within
(i) thirty (30) days of the date on which Landlord delivers written notice of
such failure to Tenant for all failures other than with respect to Hazardous
Materials, and (ii) ten (10) days of the date on which Landlord delivers written
notice of such failure to Tenant for all failures in any way related to
Hazardous Materials. However, Tenant shall not be in default of its obligations
hereunder if such failure cannot reasonably be cured within such thirty (30) or
ten (10) day period, as applicable, and Tenant promptly commences, and
thereafter diligently proceeds with same to completion, all actions necessary to
cure such failure as soon as is reasonably possible, but in no event shall the
completion of such cure be later than forty-five (45) days after the date on
which Landlord delivers to Tenant written notice of such failure, unless
Landlord, acting reasonably and in good faith, otherwise expressly agrees in
writing to a longer period of time based upon the circumstances relating to such
failure as well as the nature of the failure and the nature of the actions
necessary to cure such failure;
20.4 The making of a general assignment by Tenant for the benefit
of creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;
20.5 Tenant's use or storage of Hazardous Materials in, on or about
the Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below; or
20.6 The making of any material misrepresentation or omission by
Tenant in any materials delivered by or on behalf of Tenant to Landlord pursuant
to this Lease.; [or]
[20.7 A material adverse change in the financial condition of Tenant
or an affiliated entity of Tenant which may adversely affect Tenant's ability to
perform all or any portion of its obligations under this Lease.]
21. REMEDIES FOR TENANT'S DEFAULT:
21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach
of the Lease, Landlord may terminate Tenant's right to possession of the
Premises by any lawful means in which case upon delivery of written notice by
Landlord this Lease shall terminate on the date specified by Landlord in such
notice and Tenant shall immediately surrender possession of the Premises to
Landlord. In addition, the Landlord shall have the immediate right of re-entry
whether or not this Lease is terminated, and if this right of re-entry is
exercised following abandonment of the Premises by Tenant, Landlord may consider
any personal property belonging to Tenant and left on the Premises to also have
been abandoned. No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 21 shall be construed as an election to terminate this
Lease unless a written notice of such intention is given to Tenant. If Landlord
relets the Premises or any portion thereof, (i) Tenant shall be liable
immediately to Landlord for all reasonable costs Landlord incurs in reletting
the Premises or any part thereof, including, without limitation, broker's
commissions, expenses of cleaning, redecorating, and further improving the
Premises and other similar costs (collectively, the "Reletting Costs"), and (ii)
the rent received by Landlord from such reletting shall be applied to the
payment of, first, any indebtedness from Tenant to Landlord other than Base
Rent, Operating Expenses, Tax Expenses, Administrative Expenses, Common Area
Utility Costs, and Utility Expenses; second, all costs including maintenance,
incurred by Landlord in reletting; and, third, Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, Utility
Expenses, and all other sums due under this Lease. Any and all of the Reletting
Costs shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental Landlord receives from reletting shall be held by Landlord and applied in
payment of future Rent as Rent becomes due under this Lease. In no event shall
Tenant be entitled to any excess rent received by Landlord. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice to Tenant shall terminate this Lease.
Acts of maintenance, efforts to relet the Premises or the appointment of a
receiver on Landlord's initiative to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to possession. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.
21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and
abandons the Premises before the end of the term, or if Tenant's right to
possession is terminated by Landlord because of a breach or default of the
Lease, then in either such case, Landlord may recover from Tenant all damages
suffered by Landlord as a result of Tenant's failure to perform its obligations
hereunder, including, but not limited to, the cost of [any] the unamortized
portion of the tenant improvements constructed by or on behalf of Tenant
pursuant to Exhibit B hereto, the portion of any broker's or leasing agent's
commission incurred with respect to the leasing of the Premises to Tenant for
the balance of the term of the Lease remaining after the date on which Tenant is
in default of its obligations hereunder, and all Reletting Costs, and the worth
at the time of the award (computed in accordance with paragraph (3) of
Subdivision (a) of Section 1951.2 of the California Civil Code) of the amount by
which the Rent then unpaid hereunder for the balance of the Lease term exceeds
the amount of such loss of Rent for the same period which Tenant proves could be
reasonably avoided by Landlord and in such case, Landlord prior to the award,
may relet the Premises for the purpose of mitigating damages suffered by
Landlord because of Tenant's failure to perform its obligations hereunder;
provided, however, that even though Tenant has abandoned the Premises following
such breach, this Lease shall nevertheless continue in full force and effect for
as long as Landlord does not terminate Tenant's right of possession, and until
such termination, Landlord shall have the remedy described in
[Language indicated as being shown by strike-out in the typeset document
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Section 1951.4 of the California Civil Code (Landlord may continue this Lease in
effect after Tenant's breach and abandonment and recover Rent as it becomes due,
if Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.
21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and
remedies of Landlord are not exclusive; they are cumulative in addition to any
rights and remedies now or hereafter existing at law, in equity by statute or
otherwise, or to any equitable remedies Landlord may have, and to any remedies
Landlord may have under bankruptcy laws or laws affecting creditor's rights
generally. In addition to all remedies set forth above, if Tenant defaults or
otherwise breaches this Lease, any and all Base Rent waived by Landlord under
Section 3 above shall be immediately due and payable to Landlord and all options
granted to Tenant hereunder shall automatically terminate, unless otherwise
expressly agreed to in writing by Landlord.
21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default or
breach of any provision of this Lease shall not be deemed or construed a waiver
of any other breach or default by Tenant hereunder or of any subsequent breach
or default of this Lease, except for the default specified in the waiver.
22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.
23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default
of this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall
not be in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.
24. PARKING: Tenant shall have a license to use the number of undesignated
and nonexclusive parking spaces set forth on Page 1. Landlord shall exercise
reasonable efforts to insure that such spaces are available to Tenant for its
use, but Landlord shall not be required to enforce Tenant's right to use the
same.
25. SALE OF PREMISES: In the event of any sale of the Premises by Landlord
or the cessation otherwise of Landlord's interest therein, Landlord shall be and
is hereby entirely released from any and all of its obligations to perform or
further perform under this Lease and from all liability hereunder as of the date
of such sale; and the purchaser, at such sale or any subsequent sale of the
Premises shall be deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to
have assumed and agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease including the return, if
applicable, of Tenant's Security Deposit. For purposes of this Section 25, the
term "Landlord" means only the owner and/or agent of the owner as such parties
exist as of the date on which Tenant executes this Lease. A ground lease or
similar long term lease by Landlord of the entire Building, of which the
Premises are a part, shall be deemed a sale within the meaning of this Section
25. Tenant agrees to attorn to such new owner provided such new owner does not
disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long as
Tenant is not in default of any of the provisions of this Lease.
26. WAIVER: No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
breach by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such breach, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.
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27. CASUALTY DAMAGE: If the Premises or any part thereof shall be damaged
by fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged by fire or other casualty
that substantial alteration or reconstruction of the Building shall, in
Landlord's sole opinion, be required (whether or not the Premises shall have
been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of such damage, in which event the Rent shall be
abated as of the date of such damage. If Landlord does not elect to terminate
this Lease and provided insurance proceeds and any contributions from Tenant, if
necessary, are available to fully repair the damage, Landlord shall within
ninety (90) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant or any improvements, alterations or additions
installed by or for the benefit of Tenant under the provisions of this Lease.
Landlord shall not in any event be required to spend for such work an amount in
excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except
that, subject to the provisions of the next sentence, Landlord shall allow
Tenant a fair diminution of Rent during the time and to the extent the Premises
are unfit for occupancy. If the Premises or any other portion of the Building be
damaged by fire or other casualty resulting from the intentional or negligent
acts or omissions of Tenant or any of Tenant's Representatives, the Rent shall
not be diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. In the event the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder. Except as otherwise provided in this Section 27, Tenant
hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of
the California Civil Code.
27.1 CASUALTY. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall be
damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after receipt by
Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days, from the date of such notice.
27.1.1 MINOR INSURED DAMAGE. If the Premises are damaged
only to such extent that repairs, rebuilding and/or restoration can be
reasonably completed within ninety (90) days, this Lease shall not terminate
and, provided that insurance proceeds are available to fully repair the damage,
Landlord shall repair the Premises to substantially the same condition that
existed prior to the occurrence of such casualty, except Landlord shall not be
required to rebuild, repair, or replace any alterations or improvements
installed by or for the benefit of Tenant or any part of Tenant's furniture,
furnishings or fixtures and equipment removable by Tenant. The Rent payable
hereunder shall be abated proportionately from the date Tenant vacates the
Premises only to the extent rental abatement insurance proceeds are received by
Landlord and the Premises are unfit for occupancy.
27.1.2 INSURED DAMAGE REQUIRING MORE THAN 90 DAYS TO REPAIR.
If the Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date of the occurrence of such damage;
or (b) electing to repair the Premises to substantially the same condition that
existed prior to the occurrence of such casualty, provided insurance proceeds
are available to fully repair the damage (except that Landlord shall not be
required to rebuild, repair, or replace any alterations or improvements
installed by or for the benefit of Tenant or any part of Tenant's furniture,
furnishings or fixtures and equipment removable by Tenant). The Rent payable
hereunder shall be abated proportionately from the date of the occurrence of
such damage only to the extent rental abatement insurance proceeds are received
by Landlord and the Premises are unfit for occupancy. If Landlord should fail to
substantially complete such repairs within one hundred eighty (180) days after
the date on which Landlord is notified by Tenant of the occurrence of such
casualty (such 180-day period to be extended for delays caused by Tenant or any
force majeure events), Tenant may within twenty (20) days after expiration of
such one hundred eighty (180) day period (as same may be extended), terminate
this Lease by delivering written notice to Landlord as Tenant's exclusive
remedy, whereupon all rights of Tenant hereunder shall cease and terminate
twenty (20) days after Landlord's receipt of such notice.
27.1.3 MAJOR INSURED DAMAGE. If the Premises are damaged to
such extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate and the Rent shall be abated from the date Tenant vacates the
Premises. If neither party elects to terminate this Lease, Landlord shall
promptly commence and diligently prosecute to completion the repairs to the
Premises, provided insurance proceeds are available to fully repair the damage
(except that Landlord shall not be required to rebuild, repair, or replace any
alterations or improvements installed by or for the benefit of Tenant or any
part of Tenant's furniture, furnishings or fixtures and equipment removable by
Tenant). During the time when Landlord is prosecuting such repairs to
completion, the Rent payable hereunder shall be abated proportionately from the
date of the occurrence of such damage to the Premises only to the extent rental
abatement insurance proceeds are received by Landlord and only during the time
period that the Premises are unfit for occupancy.
27.1.4 DAMAGE NEAR END OF TERM. Notwithstanding anything to
the contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are damaged or destroyed during the last year of then
applicable term of this Lease, Landlord may, at its option, cancel and terminate
this Lease by giving written notice to Tenant of its election to do so within
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thirty (30) days after receipt by Landlord of notice from Tenant of the
occurrence of such casualty. If Landlord so elects to terminate this Lease, all
rights of Tenant hereunder shall cease and terminate ten (10) days after
Tenant's receipt of such notice.
27.2 TENANT'S OR TENANT'S REPRESENTATIVE'S FAULT. If any portion of
the Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's Representatives,
Rent shall not be diminished during the repair of such damage and Tenant shall
be liable to Landlord for the cost of the repair caused thereby to the extent
such cost is not covered by insurance proceeds.
27.3 UNINSURED CASUALTY. Tenant shall be responsible for and shall
pay to Landlord, as Additional Rent, any deductibles amount under the property
insurance for the Premises and/or the Building. If any portion of the Premises
is damaged and is not fully covered by insurance proceeds received by Landlord
(and Tenant elects not to pay any such difference) or if the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to the other party within
thirty (30) days after the date of notice to Tenant of any such event, whereupon
all rights and obligations shall cease and terminate hereunder, except for those
obligations expressly provided for in this Lease to survive such termination of
the Lease.
27.4 TENANT'S WAIVER. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by Tenant or loss of Tenant's personal property,
resulting in any way from such damage, destruction or the repair thereof, except
that, Landlord shall allow Tenant a fair diminution of Rent during the time and
to the extent the Premises are unfit for occupancy as specifically provided
above in this Section 27. With respect to any damage or destruction which
Landlord is obligated to repair or may elect to repair, Tenant hereby waives all
rights to terminate this Lease or offset any amounts against Rent pursuant to
rights accorded Tenant by any law currently existing or hereafter enacted,
including but not limited to, all rights pursuant to the provisions of Sections
1932(2.), 1933(4.), 1941 and 1942 of the California Civil Code, as the same may
be amended or supplemented from time to time. Notwithstanding anything to the
contrary contained herein, if the holder of any indebtedness secured by the
Premises requires that the insurance proceeds be applied to such indebtedness,
then Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder, except for those obligations expressly provided for in
this Lease to survive such termination of the Lease.
28. CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), or if less than
twenty five (25%) percent of the Premises is Condemned and such condemnation
materially and substantially prevents Tenant from conducting its normal business
operations within the Premises, the then Tenant or Landlord may terminate this
Lease as of the date when physical possession of the Premises is taken and title
vests in such condemning authority, and Rent shall be adjusted to the date of
termination. Tenant shall not because of such condemnation assert any claim
against Landlord or the condemning authority for any compensation because of
such condemnation, and Landlord shall be entitled to receive the entire amount
of any award without deduction for any estate of interest or other interest of
Tenant., including without limitation, compensation for the diminution in value
of the leasehold created hereunder; provided however, the foregoing provisions
shall not preclude Tenant at Tenants sole cost and expense, from obtaining any
separate award to Tenant for use of or damage to Tenant's trade fixtures and
removable personal property or for damages for cessation or interruption of
Tenant's business, provided that such award is separate from Landlord's award
and provided further such separate award does not diminish nor impair the award
otherwise payable to Landlord. If a substantial portion of the Premises,
Building or the Lot is so Condemned, Landlord at its option may terminate this
Lease. If Landlord does not elect to terminate this Lease, Landlord shall, if
necessary, promptly proceed to restore the Premises or the Building to
substantially its same condition prior to such partial condemnation, allowing
for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as [solely] reasonably determined by
Landlord, for the Rent corresponding to the time during which, and to the part
of the Premises of which, Tenant is deprived on account of such partial
condemnation and restoration. Landlord shall not be required to spend funds for
restoration in excess of the amount received by Landlord as compensation
awarded.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing
this Lease, Tenant has completed, executed and delivered to Landlord the
Tenant's initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as Exhibit G E and
incorporated herein by this reference. Tenant covenants, represents and warrants
to Landlord that, to the best of Tenant's knowledge after due inquiry, the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
(the "HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E. Landlord
hereby acknowledges and agrees that as of the date on which both parties execute
and deliver this Lease, Landlord has approved the Initial HazMat Certificate;
however, any such approval by Landlord shall not be construed to relieve Tenant
from its obligations and/or any liabilities under this Section 29.
29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the
term Hazardous Materials shall mean and include (a) any hazardous or toxic
wastes, materials or substances, and other pollutants or contaminants, which are
or become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials, and carcinogens; (g) any other material, waste or
substance displaying toxic, reactive, ignitable or corrosive characteristics, as
all such terms are used in their broadest sense, and are defined or become
defined
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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by any Environmental Law (defined below); or (h) any materials which cause or
threatens to cause a nuisance upon or waste to any portion of the Premises, the
Building, the Lot, the Park or any surrounding property; or poses or threatens
to pose a hazard to the health and safety of persons on the Premises or any
surrounding property.
29.3 PROHIBITION; ENVIRONMENTAL LAWS: Except for those Hazardous
Materials of the type and in the quantities specified in the Hazardous Materials
List attached hereto as Exhibit H and made a part hereof, Tenant shall not be
entitled to use nor store any Hazardous Materials on, in, or about the Premises,
the Building, the Lot and the Park, or any portion of the foregoing, without, in
each instance, obtaining Landlord's prior written consent thereto, which consent
may be given or withheld in Landlord's sole discretion. Tenant hereby covenants,
represents and warrants that any cylinders of Hazardous Materials stored in, on,
at or about the Premises and/or distributed from the Premises shall be sealed in
leak-proof cylinders using the best available technology. If Landlord consents
to any such usage or storage, then Tenant shall be permitted to use and/or store
only those Hazardous Materials that are necessary for Tenant's business and to
the extent set forth in Exhibit H hereto and disclosed in the HazMat Certificate
and as expressly approved by Landlord in writing, provided that such usage and
storage is only to the extent of the type and quantities of Hazardous Materials
as specified in Exhibit H hereto or the then applicable HazMat Certificate as
expressly approved by Landlord and provided further that such usage and storage
is in full compliance with any and all local, state and federal environmental,
health and/or safety-related laws, statutes, orders, standards, courts'
decisions, ordinances, rules and regulations (as interpreted by judicial and
administrative decisions), decrees, directives, guidelines, permits or permit
conditions, currently existing and as amended, enacted, issued or adopted in the
future which are or become applicable to Tenant or all or any portion of the
Premises (collectively, the "Environmental Laws"). Tenant agrees that any
changes to the type and/or quantities of Hazardous Materials specified in
Exhibit H hereto [the most recent HazMat Certificate] may be implemented only
with the prior written consent of Landlord, which consent may be given or
withheld in Landlord's sole discretion. Tenant shall not be entitled nor
permitted to install any tanks under, on or about the Premises for the storage
of Hazardous Materials without the express written consent of Landlord, which
may be given or withheld in Landlord's sole discretion. Landlord shall have the
right at all times during the term of this Lease to (i) inspect the Premises,
(ii) conduct tests and investigations to determine whether Tenant is in
compliance with the provisions of this Section 29, and (iii) request lists of
all Hazardous Materials used, stored or otherwise located on, under or about the
Premises, the Common Areas and/or the parking lots (to the extent the Common
Areas and/or the parking lots are not considered part of the Premises). The cost
of all such inspections, tests and investigations shall be borne solely by
Tenant, if Landlord reasonably believes they are necessary. The aforementioned
rights granted herein to Landlord and its representatives shall not create (a) a
duty on Landlord's part to inspect, test, investigate, monitor or otherwise
observe the Premises or the activities of Tenant and Tenant's Representatives
with respect to Hazardous Materials, including without limitation, Tenant's
operation, use and any remediation related thereto, or (b) liability on the part
of Landlord and its representatives for Tenant's use, storage, disposal or
remediation of Hazardous Materials, it being understood that Tenant shall be
solely responsible for all liability in connection therewith. Notwithstanding
anything to the contrary contained herein, Tenant and Tenant's Representatives
shall not conduct any gas filling operations in, on, at or about the Premises
nor store any gas cylinders in, on, at or about the Premises which are used in
filling operations as part of Tenant's manufacturing process or operations at
any of Tenant's locations other than the Premises. In addition to the foregoing
Tenant and Tenant's Representatives shall limit the types and amounts of
Hazardous Materials to be stored at the Premises to the types and quantities as
specified in Exhibit H hereto.
29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to
Landlord immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about the Premises, or in any Common Areas or
parking lots (to the extent such areas are not considered part of the Premises).
Tenant, at its sole cost and expense, covenants and warrants to promptly
investigate, clean up, remove, restore and otherwise remediate (including,
without limitation, preparation of any feasibility studies or reports and the
performance of any and all closures) any spill, release, discharge, disposal,
emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant's
Representatives such that the affected portions of the Park and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on the Premises, the Building, the Lot or the Park, or any
portion of any of the foregoing. Notwithstanding the foregoing, Tenant shall be
entitled to respond immediately to an emergency without first obtaining
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof. If Tenant fails to so promptly
investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.
Notwithstanding anything to the contrary contained herein and in addition to
Tenant's obligations under this Section 29.4 any Hazardous Materials to be
stored at the Premises by Tenant and/or Tenant's Representatives shall be stored
in containers and handled in the manner specified in the Hazardous Material
Management Plan for Tenant's operation at the building located at 49050 Milmont
Drive, Fremont, California, dated 21 July 1994 (the "HMMP") and in strict
accordance with all Environmental Laws. In addition to any other rights and
remedies available to Landlord under the provisions of this Lease, Landlord
shall have the right to immediately terminate this Lease if Hazardous Materials
are stored and/or used in, on, at or about the Premises in quantities, or are of
a type, other than as specified in Exhibit H hereto, or any Hazardous Materials
are handled in any manner which is different from those procedures specified in
the HMMP. In addition to any other requirements imposed upon Tenant and Tenant's
Representatives under this Section 29 or in any other provision of this Lease
Tenant shall give immediate written notice to Landlord of: (a) any enforcement,
remediation, or other regulatory action or order, taken or threatened, by and
agency regarding, or in connection with, the presence, release or threat of
release of any Hazardous Materials in, on, under, about or from the Premises, or
otherwise resulting from Tenant's or Tenant's Representatives' use of the
Premises; (b) all demands or claims made or threatened by any third party
against Tenant or any of Tenant's Representatives and relating to liability,
loss, damage, or injury resulting from the presence, release or threat of
release of any Hazardous Materials in, on, under, about or from any portion of
the Premises, or otherwise arising,
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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in any manner whatsoever, from Tenant's or Tenant's Representatives' use of the
Premises; (c) any spill, release, or discharge of Hazardous Materials in, on,
under, about or from the Premises, including without limitation, any such spill,
release, or discharge required to be reported to any agency under any
Environmental Law; and (d) all incidents or matters where Tenant or any of
Tenant's Representatives is required to give notice to any agency pursuant to
any Environmental Laws. Tenant shall post and maintain such notices in, at and
about the Premises as required by any Environmental Laws, including without
limitation, any notices required under Proposition 65. Tenant shall promptly
provide to Landlord true and complete copies of all materials, reports,
technical data, notices, and correspondence relating to the above incidents or
any other matters subject to Landlord notification or notification to other
tenants in the Building or to the general public. Tenant shall also promptly
provide to Landlord true and complete copies, revisions, and/or modifications of
all permits, approvals, and registrations Tenant receives or submits with
respect to its operations on the Premises, including without limitation, any
revisions or modification to its HMMP. Tenant hereby covenants, represents and
warrants that it shall promptly prepare and deliver to Landlord a HMMP with
respect to the Premises.
29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations
as set forth hereinabove, Tenant and Tenant's officers and directors agree to,
and shall, protect, indemnify, defend (with counsel acceptable to Landlord) and
hold Landlord and Landlord's lenders, partners, property management company (if
other than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses (including,
without limitation, diminution in value of the Premises, the Building, the Lot,
the Park, or any portion of any of the foregoing, damages for the loss of or
restriction on the use of rentable or usable space, and from any adverse impact
of Landlord's marketing of any space within the Building and/or Park), suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising at any time during or after the
term of this Lease in connection with or related to, directly or indirectly, the
use, presence, transportation, storage, disposal, migration, removal, spill,
release or discharge of Hazardous Materials on, in or about the Premises, or in
any Common Areas or parking lots (to the extent such areas are not considered
part of the Premises) as a result (directly or indirectly) of the intentional or
negligent acts or omissions of Tenant or Tenant's Representatives. Neither the
written consent of Landlord to the presence, use or storage of Hazardous
Materials in, on, under or about any portion of the Premises, the Building, the
Lot and the Park, nor the strict compliance by Tenant with all Environmental
Laws shall excuse Tenant and Tenant's officers and directors from its
obligations of indemnification pursuant hereto. To the extent Landlord is
strictly liable under any Environmental Laws, Tenant's obligations to Landlord
under this Section 29 and the indemnity contained herein shall likewise be
without regard to fault on Tenant's part with respect to the violation of any
Environmental Law which results in liability to any of the aforementioned
indemnitees.
29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, the Lot and/or the Park is not
in compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then at Landlord's sole option, Landlord
may require Tenant to hold over possession of the Premises until Tenant can
surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.
30. FINANCIAL STATEMENTS: Tenant, for the reliance of Landlord, any lender
holding or anticipated to acquire a lien upon the Premises, the Building or the
Park or any portion thereof, or any prospective purchaser of the Building or the
Park or any portion thereof, within ten (10) days after Landlord's request
therefor, but not more often than once annually so long as Tenant is not in
default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant (including interim periods following the end of
the last fiscal year for which annual statements are available) which statements
shall be prepared or compiled by a certified public accountant and shall present
fairly the financial condition of Tenant at such dates and the result of its
operations and changes in its financial positions for the periods ended on such
dates. If an audited financial statement has not been prepared, Tenant shall
provide Landlord with an unaudited financial statement and/or such other
information, the type and form of which are acceptable to Landlord in Landlord's
reasonable discretion, which reflects the financial condition of Tenant. If
Landlord so requests, Tenant shall deliver to Landlord [an opinion of a
certified public accountant, including] a balance sheet and profit and loss
statement for the most recent prior year, all prepared in accordance with
generally accepted accounting principles consistently applied. Any and all
options granted to Tenant hereunder shall be subject to and conditioned upon
Landlord's reasonable approval of Tenant's financial condition at the time of
Tenant's exercise of any such option.
31. GENERAL PROVISIONS:
31.1 TIME. Time is of the essence in this Lease and with respect to
each and all of its provisions in which performance is a factor.
31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.3 RECORDATION. Tenant shall not record this Lease or a short
form memorandum hereof without the prior written consent of the Landlord.
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord
(which, for purposes of this Lease, shall include Landlord and the owner of the
Building if other than Landlord) to Tenant for any default by Landlord under the
terms of this Lease shall be limited to the actual interest of Landlord and its
present or future partners in the Premises or the Building and Tenant agrees to
look solely to the Premises for satisfaction of any liability and shall not look
to other assets of Landlord nor seek any recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord; it being intended that Landlord and the individual partners,
directors, officers, shareholders, agents or employees of Landlord shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease and from all further liabilities and
expenses hereunder upon transfer of Landlord's interest in the Premises or the
Building.
31.5 SEPARABILITY. Any provisions of this Lease which shall prove
to be invalid, void or illegal shall in no way affect, impair or invalidate any
other provisions hereof and such other provision shall remain in full force and
effect.
31.6 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
31.7 ATTORNEYS' FEES. In the event any dispute between the parties
result in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.
31.8 ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.
31.9 WARRANTY OF AUTHORITY. On the date that Tenant executes this
Lease, Tenant shall deliver to Landlord an original certificate of status for
Tenant issued by the California Secretary of State or statement of partnership
for Tenant recorded in the county in which the Premises are located, as
applicable, and such other documents as Landlord may reasonably request with
regard to the lawful existence of Tenant. Each person executing this Lease on
behalf of a party represents and warrants that (1) such person is duly and
validly authorized to do so on behalf of the entity it purports to so bind, and
(2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into
this Lease and perform all of its obligations hereunder. [In addition to any
other remedies available to Landlord under this Lease, if there is any breach of
the foregoing warranty, the person(s) executing this Lease on behalf of Tenant
shall be personally liable for all of Tenant's obligations under this Lease,
including, but not limited to, the payment by such person(s) to Landlord of any
and all losses, liabilities, costs, expenses and damages incurred by Landlord
hereunder.]
31.10 NOTICES. Any and all notices and demands required or permitted
to be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age provided that, in this instance, a copy is
also sent to Tenant by United States mail certified and postage prepaid or by
overnight courier; or (iii) by overnight courier, all of which shall be
addressed to Tenant at the Premises; or (iv) by facsimile at the facsimile
number at the Premises, if any, as provided by Tenant on Page 1 of this Lease or
otherwise provided to Landlord. Notice and/or demand shall be deemed given upon
the earlier of actual receipt or the third day following deposit in the United
States mail. Notice and/or demand by facsimile shall be complete upon
transmission over the telephone line. Any notice or requirement of service
required by any statute or law now or hereafter in effect, including, but not
limited to, California Code of Civil Procedure Sections 1161, 1161.1, and 1162,
is hereby waived by Tenant.
31.11 JOINT AND SEVERAL. If Tenant consists of more than one person
or entity, the obligations of all such persons or entities shall be joint and
several.
31.12 COVENANTS AND CONDITIONS. Each provision to be performed by
Tenant hereunder shall be deemed to be both a covenant and a condition.
31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby
do waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other on any matters whatsoever arising
out of or in any way related to this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, the Building or the Park,
and/or any claim of injury, loss or damage.
31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings
for nonpayment of Rent, Additional Rent, or any other sums or amounts due
hereunder, Tenant shall not interpose any counterclaim of whatever nature or
description in any such proceedings, provided, however, nothing contained herein
shall be deemed or construed as a waiver of the Tenant's right to assert such
claims in any separate action brought by Tenant or the right to offset the
amount of any final judgment owed by Landlord to Tenant.
31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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32. SIGNS: All signs and graphics of every kind visible in or from public
view or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval, which approval shall not be withheld or delayed
unreasonably, and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's Sign Criteria as
set forth in Exhibit G hereto and made a part hereof. Tenant shall remove all
such signs and graphics prior to the termination of this Lease. Such
installations and removals shall be made in a manner as to avoid damage or
defacement of the Premises; and Tenant shall repair any damage or defacement,
including without limitation, discoloration caused by such installation or
removal. Landlord shall have the right, at its option, to deduct from the
Security Deposit such sums as are reasonably necessary to remove such signs,
including, but not limited to, the costs and expenses associated with any
repairs necessitated by such removal. Notwithstanding the foregoing, in no event
shall any: (a) neon, flashing or moving sign(s) or (b) sign(s) which shall
interfere with the visibility of any sign, awning, canopy, advertising matter,
or decoration of any kind of any other business or occupant of the Building or
the Park be permitted hereunder. Tenant further agrees to maintain any such
sign, awning, canopy, advertising matter, lettering, decoration or other thing
as may be approved in good condition and repair at all times.
33. MORTGAGEE PROTECTION: Upon any breach or default on the part of
Landlord, Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Tenant agrees that each
lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall have
actually received and not refunded the deposit; provided, however, the foregoing
shall not relieve Landlord from its obligations hereunder or under the law with
respect to any such deposit. Tenant agrees to make all payments under this Lease
to the lender with the most senior encumbrance upon receiving a direction, in
writing, to pay said amounts to such lender. Tenant shall comply with such
written direction to pay without determining whether an event of default exists
under such lender's loan to Landlord.
34. QUITCLAIM: Upon any termination of this Lease, Tenant shall, at
Landlord's request, execute, have acknowledged and deliver to Landlord a
quitclaim deed of Tenant's interest in and to the Premises. If Tenant fails to
so deliver to Landlord such a quitclaim deed, Tenant hereby agrees that Landlord
shall have the full authority and right to record such a quitclaim deed signed
only by Landlord and such quitclaim deed shall be deemed conclusive and binding
upon Tenant.
35. MODIFICATIONS FOR LENDER: Intentionally omitted. [If, in connection
with obtaining financing for the Premises or any portion thereof, Landlord's
lender shall request reasonable modification(s) to this Lease as a condition to
such financing, Tenant shall not unreasonably withhold, delay or defer its
consent thereto, provided such modifications do not materially adversely affect
Tenant's rights hereunder or the use, occupancy or quiet enjoyment of Tenant
hereunder.]
36. WARRANTIES OF TENANT: Tenant hereby warrants and represents to
Landlord, for the express benefit of Landlord, that Tenant has undertaken a
complete and independent evaluation of the risks inherent in the execution of
this Lease and the operation of the Premises for the use permitted hereby, and
that, based upon said independent evaluation, Tenant has elected to enter into
this Lease and hereby assumes all risks with respect thereto. Tenant hereby
further warrants and represents to Landlord, for the express benefit of
Landlord, that in entering into this Lease, Tenant has not relied upon any
statement, fact, promise or representation (whether express or implied, written
or oral) not specifically set forth herein in writing and that any statement,
fact, promise or representation (whether express or implied, written or oral)
made at any time to Tenant, which is not expressly incorporated herein in
writing, is hereby waived by Tenant.
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant
hereby agree and acknowledge that the Premises, the Building and/or the Park may
be subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and subject to the provisions of the succeeding sentence all costs incurred for
purposes of compliance therewith shall be a part of and included in the costs of
the Tenant Improvements. Notwithstanding the foregoing, any costs incurred for
purposes of compliance with the ADA with respect to any work performed or
necessary to be performed to (i) the interior of the Premises or the exterior
doors used to access the Premises shall be considered part of the work
associated with the Tenant Improvements and included in the costs of the Tenant
Improvements, and (ii) the Common Areas, including any ramps to the Building and
handicapped signage for parking spaces, in conjunction with the performance of
the work associated with the Tenant Improvements shall not be included as part
of the costs of the Tenant Improvements and Landlord shall pay for any such
costs. Tenant shall be solely responsible for conducting its own independent
investigation of this matter and for ensuring that the design of all Tenant
Improvements strictly comply with all requirements of the ADA. Subject to
reimbursement pursuant to Section 6 of the Lease, if any barrier removal work or
other work is required to the Building, the
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
32
<PAGE> 56
Common Area or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant's business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns (collectively, the "Indemnitees")
harmless and indemnify the Indemnitees from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.
38. BROKERAGE COMMISSION: Landlord and Tenant each represents and warrants
for the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Unless expressly agreed to in writing by Landlord and Broker(s), no real estate
brokerage commission or finder's fee shall be owed to, or otherwise payable to,
the Broker(s) for any renewals or other extensions of the initial term of this
Lease or for any additional space leased by Tenant other than the Premises as
same exist as of the date on which Tenant executes this Lease.
39. QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of
Rent and observing and keeping the covenants, agreements and conditions of this
Lease on its part to be kept and during the periods that Tenant is not otherwise
in default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord's lenders, (i) that Tenant shall and may peaceably and
quietly hold, occupy and enjoy the Premises and the Common Areas during the term
of this Lease, and (ii) neither Landlord, nor any successor or assign of
Landlord, shall disturb Tenant's occupancy or enjoyment of the Premises and the
Common Areas.
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owning by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law and Enforcement Expenses.
41. TENANT'S COVENANT OF NON-DISCRIMINATION: The Tenant herein covenants by
and for itself, its heirs, executors, administrators, and assigns, and all
persons claiming under or through it, and this Lease is made and accepted upon
and subject to the following conditions: that there shall be no discrimination
against or segregation of any person or group of persons, on account of race,
color, creed, religion, sex, martial status, national origin, or ancestry, in
the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of
the Premises herein leased, nor shall the Tenant itself, or any person claiming
under or through it establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use, or occupancy of tenants, sublessees, subtenants, or vendees in the Premises
herein leased.
IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.
TENANT:
Safety Tek, Inc.,
a Delaware corporation
By:
James B. Hawkins
President
Date:
33
<PAGE> 57
LANDLORD:
LINCOLN-WHITEHALL REALTY, L.L.C.
By: Whitehall Street Real Estate Limited
Partnership V, Member
By: WH Advisors, L.P. V,
General Partner
By: WH Advisors, Inc., V,
General Partner
By: ______________________________
Name: ______________________________
Title: ______________________________
Date: ______________________________
LINCOLN PROPERTY COMPANY
MANAGEMENT SERVICES, INC.
By: _____________________________________
Name: _____________________________________
Title: _____________________________________
Date: _____________________________________
34
<PAGE> 58
EXHIBIT A - PREMISES
PAGE 1 OF 1
LEASE DATED JANUARY 8, 1996, BY AND BETWEEN
SAFETY TEK, INC.,
A DELAWARE CORPORATION
("TENANT"),
AND
LINCOLN-WHITEHALL REALTY, L.L.C.
("LANDLORD")
INITIALS:
TENANT:
LANDLORD:
<PAGE> 59
EXHIBIT B TO LEASE AGREEMENT
TENANT IMPROVEMENTS
This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated January 8, 1996 (the "Lease"), by and
between Lincoln-Whitehall Realty, L.L.C. ("Landlord") and Safety Tek, Inc., a
Delaware corporation, ("Tenant") for the leasing of certain premises located at
5696 Stewart Avenue, Fremont, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT B are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:
1. Tenant Improvements. Subject to the conditions set forth below,
Landlord agrees to construct and install certain improvements ("Tenant
Improvements") in the Building of which the Premises are a part in accordance
with the Final Drawings (defined below) and pursuant to the terms of this
EXHIBIT B. In addition to the Tenant Improvements, Landlord shall, at its sole
cost and expense, perform the following described work in and about the
Premises: (i) install a full-height, 1-hour rated demising wall separating the
Premises from the 17,008 square foot adjacent premises; and (ii) increase the
electrical capacity to be used in the Premises to 277 amp/480 volts.
2. Definition. "Tenant Improvements" as used in this Lease shall include
only those interior portions of the Building which are described below. "Tenant
Improvements" shall specifically not include any alterations, additions or
improvements installed or constructed by Tenant, and any of Tenant's trade
fixtures, equipment, furniture, furnishings, telephone equipment or other
personal property (collectively, "Personal Property"). The Tenant Improvements
shall include any and all interior improvements to be made to the Premises as
specified in the Final Drawings (defined below), as specified and agreed to by
Tenant and Landlord.
3. Tenant's Initial Plans; the Work. Tenant desires Landlord to perform
certain Tenant Improvements in the Premises. Such work, as will be shown in
Tenant's preliminary space plan (the "Initial Plans") and as more fully detailed
in the Final Drawings (as defined and described in Section 4 below), shall be
hereinafter referred to as the "Work". Not later than February 1, 1996, Tenant
and/or Tenant's Representatives shall furnish to Landlord such additional plans,
drawings, specifications and finish details as Landlord may reasonably request
to enable Landlord's architects and engineers, as applicable, to prepare
mechanical, electrical and plumbing plans and to prepare the Final Drawings,
including, but not limited to, a final telephone layout and special electrical
connections, if any. All plans, drawings, specifications and other details
describing the Work which have been, or are hereafter, furnished by or on behalf
of Tenant shall be subject to Landlord's approval, which approval shall not be
unreasonably withheld. Landlord shall not be deemed to have acted unreasonably
if it withholds its approval of any plans, specifications, drawings or other
details or of any Change Request (hereafter defined in Section 11 below)
because, in Landlord's reasonable opinion, the work as described in any such
item, or any Change Request, as the case may be: (a) is likely to adversely
affect Building systems, the structure of the Building or the safety of the
Building and/or its occupants; (b) might impair Landlord's ability to furnish
services to Tenant or other tenants in the Building; (c) would increase the cost
of operating the Building or the Park; (d) would violate any applicable
governmental, administrative body's or agencies' laws, rules, regulations,
ordinances, codes or similar requirements (or interpretations thereof); (e)
contains or uses Hazardous Materials; (f) would adversely affect the appearance
of the Building or the Park; (g) might adversely affect another tenant's
premises or such other tenant's use and enjoyment of such premises; (h) is
prohibited by any ground lease affecting the Building, the Lot and/or the Park,
any Recorded Matters or any mortgage, trust deed or other instrument encumbering
the Building, the Lot and/or the Park; (i) is likely to be substantially delayed
because of unavailability or shortage of labor or materials necessary to perform
such work or the difficulties or unusual nature of such work; (j) is not, at a
minimum, in accordance with Landlord's Building Standards (defined below), or
(k) would increase the Tenant Improvement Costs (defined in Section 9 below) by
more than ten percent (10%) from the cost originally estimated and anticipated
by the parties. The foregoing reasons, however, shall not be the only reasons
for which Landlord may withhold its approval, whether or not such other reasons
are similar or dissimilar to the foregoing. Neither the approval by Landlord of
the Work or the Initial Plans or any other plans, specifications, drawings or
other items associated with the Work nor Landlord's performance, supervision or
monitoring of the Work shall constitute any warranty or covenant by Landlord to
Tenant of the adequacy of the design for Tenant's intended use of the Premises.
Tenant agrees to, and does hereby, assume full and complete responsibility to
ensure that the Work and the Final Drawings are adequate to fully meet the needs
and requirements of Tenant's intended operations of its business within the
Premises and Tenant's use of the Premises.
4. Final Drawings. If necessary for the performance of the Work and to the
extent not already included as part of the Initial Plans attached hereto,
Landlord shall prepare or cause to be prepared final working drawings and
specifications for the Work (the "Final Drawings") based on and consistent with
the Initial Plans and the other plans, specifications, drawings, finish details
or other information furnished by Tenant or Tenant's Representatives to Landlord
and approved by Landlord pursuant to Section 3 above. Tenant shall cooperate
diligently with Landlord and Landlord's architect, engineer and other
representatives and Tenant shall furnish within five (5) days after any request
therefor, all information required by Landlord or Landlord's architect, engineer
or other representatives for completion of the Final Drawings. So long as the
Final Drawings are substantially consistent with the Initial Plans, Tenant shall
approve the Final Drawings within three (3) business days after receipt of same
from Landlord. Landlord and Tenant shall indicate their approval of the Final
Drawings by initialing each sheet of the Final Drawings and delivering to one
another a true and complete copy of such initialed Final Drawings. A true and
complete copy of the approved and initialed Final Drawings shall be attached to
the Lease as EXHIBIT B-1 and shall be made a part thereof. Tenant's failure to
approve or disapprove such Final Drawings within the foregoing three (3)
business day time period, shall be conclusively deemed to be approval of same by
Tenant. If Tenant reasonably disapproves of any matters included in the Final
Drawings because such items are not substantially consistent with the Initial
Plans, Tenant shall, within the aforementioned three (3) business day period,
deliver to Landlord written notice of its disapproval and Tenant shall specify
in such written notice, in sufficient detail as Landlord may reasonably require,
the matters disapproved, the reasons for such disapproval, and the specific
changes or revisions necessary to be made to the Final Drawings to cause such
drawings to substantially conform to the Initial Plans. Any additional costs
associated with such requested changes or revisions shall be paid for solely by
Tenant, as part of the Excess Tenant Improvement Costs (defined in Section 10
below), upon written demand therefor by Landlord.
1
<PAGE> 60
Any changes or revisions requested by Tenant must first be approved by Landlord,
which approval shall not be unreasonably withheld, subject to the provisions of
Section 3 above. If Landlord approves such requested changes or revisions,
Landlord shall cause the Final Drawings to be revised accordingly and Landlord
and Tenant shall initial each sheet of the Final Drawings as revised and attach
a true and complete copy thereof to the Lease as EXHIBIT B-1. Landlord and
Tenant hereby covenant to each other to cooperate with each other and to act
reasonably in the preparation and approval of the Final Drawings.
Notwithstanding anything to the contrary contained herein, if the Final Drawings
are required to be revised due to any blatant and patent error on the part of
Landlord or its authorized representatives, then the costs and expenses
associated with any such revisions shall be borne solely by Landlord and such
costs and expenses shall not be included as part of the Tenant Improvement
Costs.
5. Performance of Work. As soon as practicable after Tenant and Landlord
initial and attach to the Lease as EXHIBIT B-1 a true and complete copy of the
Final Drawings, Landlord shall submit the Final Drawings to the governmental
authorities having rights of approval over the Work and shall apply for the
necessary approvals and building permits. Subject to the satisfaction of all
conditions precedent and subsequent to its obligations under this EXHIBIT B, and
further subject to the provisions of Section 10 hereof, as soon as practicable
after Landlord or its representatives have received all necessary approvals and
building permits, Landlord will put the Final Drawings out for bid to several
licensed, bonded, qualified (in Landlord's discretion) and insured general
contractors. The Tenant Improvements shall be constructed by a the general
contractor which submits (and provides sufficient support therefor, in writing,
if requested to do so by Landlord) the lowest bid, unless otherwise agreed to by
Landlord and Tenant based upon criteria other than price [selected by Landlord]
(the "General Contractor"). Landlord shall commence construction, or cause the
commencement of construction by the General Contractor, of the Tenant
Improvements, as soon as practicable after selection of the General Contractor.
Except as hereinafter expressly provided to the contrary, Landlord shall cause
the performance of the Work using (except as may be stated or otherwise shown in
the Final Drawings) building standard materials, quantities and procedures then
in use by Landlord ("Building Standards").
6. Substantial Completion. Landlord and Tenant shall cause the General
Contractor to Substantially Complete (defined below) the Tenant Improvements in
accordance with the Final Drawings by the Commencement Date of the Lease as set
forth in Section 2 of the Lease (THE "COMPLETION DATE"), subject to delays due
to (a) acts or events beyond its control including, but not limited to, acts of
God, earthquakes, strikes, lockouts, boycotts, casualties, discontinuance of any
utility or other service required for performance of the Work, moratoriums,
governmental agencies and weather, (b) the lack of availability or shortage of
specialized materials used in the construction of the Tenant Improvements, (c)
any matters beyond the reasonable control of Landlord, the General Contractor or
any subcontractors, (d) any changes required by the fire department, building
and/or planning department, building inspectors or any other agency having
jurisdiction over the Building, the Work and/or the Tenant Improvements (except
to the extent such changes are directly attributable to Tenant's use or Tenant's
specialized tenant improvements, in which event such delays are considered
Tenant Delays) (the events and matters set forth in Subsections (a), (b), (c)
and (d) are collectively referred to as "Force Majeure Delays"), or (e) any
Tenant Delays (defined in Section 7 below). The Tenant Improvements shall be
deemed substantially complete on the date that the building officials of the
applicable governmental agency(s) issues its final approval of the construction
of the Tenant Improvements whether in the form of the issuance of a final
permit, certificate of occupancy or the written approval evidencing its final
inspection on the building permit(s), or the date on which Tenant first takes
occupancy of the Premises, whichever first occurs ("Substantial Completion", or
"Substantially Completed, or "Substantially Complete"). If the Work is not
deemed to be Substantially Completed on or before the scheduled COMPLETION DATE,
(i) Landlord agrees to use reasonable efforts to Substantially Complete the Work
as soon as practicable thereafter, (ii) the Lease shall remain in full force and
effect, (iii) Landlord shall not be deemed to be in breach or default of the
Lease or this EXHIBIT B as a result thereof and Landlord shall have no liability
to Tenant as a result of any delay in occupancy (whether for damages, abatement
of all or any portion of the Rent, or otherwise), and (iv) except in the event
of any Tenant Delays, which will not affect the Commencement Date but will
extend the Completion Date without any penalty or liability to Landlord, and
notwithstanding anything to the contrary contained in the Lease, the
Commencement Date and the Expiration Date of the term of the Lease (as defined
in Section 2 of the Lease) shall be extended commensurately by the amount of
time attributable to such Force Majeure Delays, and Landlord and Tenant shall
execute a written amendment to the Lease evidencing such extensions of time,
substantially in the form of Exhibit F to the Lease. Subject to the provisions
of Section 10.2 of the Lease, the Tenant Improvements shall belong to Landlord
and shall be deemed to be incorporated into the Premises for all purposes of the
Lease, unless Landlord, in writing, indicates otherwise to Tenant.
7. Tenant Delays. There shall be no extension of the scheduled
Commencement Date or Expiration Date of the term of the Lease (as otherwise
permissibly extended in accordance with the provisions of Section 6 above) if
the Work has not been Substantially Completed by the scheduled Commencement Date
due to any delay attributable to Tenant and/or Tenant's Representatives or
Tenant's intended use of the Premises (collectively, "Tenant Delays"),
including, but not limited to, any of the following described events or
occurrences: (a) delays related to changes made or requested by Tenant to the
Work and/or the Final Drawings; (b) the failure of Tenant to furnish all or any
plans, drawings, specifications, finish details or other information required
under Sections 3 and 4 above; (c) the failure of Tenant to comply with the
requirements of Section 10 below; (d) Tenant's requirements for special work or
materials, finishes, or installations other than the Building Standards or
Tenant's requirements for special construction or phasing; (e) any changes
required by the fire department, building or planning department, building
inspectors or any other agency having jurisdiction over the Building, the Work
and/or the Tenant Improvements if such changes are directly attributable to
Tenant's use or Tenant's specialized tenant improvements; (f) the performance of
any additional work pursuant to a Change Request (defined below in Section 11)
which is requested by Tenant; (g) the performance of work in or about the
Premises by any person, firm or corporation employed by or on behalf of Tenant,
including, without limitation, any failure to complete or any delay in the
completion of such work; or (h) any and all delays caused by or arising from
acts or omissions of Tenant and/or Tenant's Representatives, in any manner
whatsoever, including, but not limited to, any and all revisions to the Final
Drawings. Any delays in the construction of the Tenant Improvements due to any
of the events described above, shall in no way extend or affect the date on
which Tenant is required to commence paying Rent under the terms of the Lease.
It is the intention of the parties that all of such delays will be considered
Tenant Delays for which Tenant shall be wholly and completely responsible for
any and all consequences related to such delays, including, without limitation,
any costs and expenses attributable to increases in labor or materials.
8. Tenant Improvement Allowance. Landlord and Tenant hereby acknowledge
and agree that the Tenant Improvement Costs (defined in Section 9 below) for the
Tenant Improvements, based upon the Initial Plans approved by Landlord and
Tenant in accordance with the provisions of Section 4 above, are estimated to be
approximately one hundred seventy thousand eighty and 00/100 Dollars
($170,080.00) (the "Estimated TI Costs"). If the actual Tenant Improvement Costs
varies from this estimate by more than twenty-five percent (25%), then
[Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.]
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Landlord may require any of the following, in its sole discretion: (a) changes
be made to the Final Drawings to reduce the cost of the Tenant Improvements and
Landlord may refuse to sign any construction contract or Change Orders to the
construction contract, as the case may be, until such changes are made to the
sole satisfaction of Landlord; (b) Tenant to deposit into a separate escrow
account cash in an amount equal to the Excess Tenant Improvement Costs (defined
in Section 10 below); (c) Tenant to provide to Landlord evidence satisfactory to
Landlord, in its sole discretion, that Tenant has adequate financial resources
to pay for the Excess Tenant Improvement Costs, as solely determined by
Landlord; and/or (d) Tenant to pay all of the Excess Tenant Improvement Costs
before Landlord's contribution of the Tenant Improvement Allowance (defined in
Section 10 below); provided, however, in no event or circumstance shall the
Tenant Improvement Costs exceed the maximum amount of two hundred four thousand
ninety six and 00/100 Dollars ($204,096.00), which amount is based on the amount
of twelve and 00/100 Dollars ($12.00) per rentable square foot for 17,008
rentable square feet of the Premises which is to be improved, as described in
the Initial Plans. Subject to the foregoing, Landlord shall provide an allowance
for the planning and construction of the Tenant Improvements for the Work to be
performed in the Premises, as described in the Initial Plans and the Final
Drawings, in the amount of eighty five thousand forty and 00/100 Dollars
($85,040.00) (the "Tenant Improvement Allowance") based upon an allowance of
five and 00/100 Dollars ($5.00) per rentable square foot for 17,008 rentable
square feet of the Premises which is to be improved, as described in the Initial
Plans and the Final Drawings. Tenant shall not be entitled to any credit,
abatement or payment from Landlord in the event that the amount of the Tenant
Improvement Allowance specified above exceeds the actual Tenant Improvement
Costs. The Tenant Improvement Allowance shall only be used for tenant
improvements typically installed by Landlord in office/R&D and
warehouse/distribution buildings. The Tenant Improvement Allowance shall be the
maximum contribution by Landlord for the Tenant Improvement Costs and shall be
subject to the provisions of Section 10 below.
9. Tenant Improvement Costs. The Tenant Improvements' cost ("Tenant
Improvement Costs") shall mean and include any and all costs and expenses of the
Work, including, without limitation, all of the following:
(a) All costs of preliminary space planning and final
architectural and engineering plans and specifications (including, without
limitation, the scope of work, all plans and specifications, the Initial Plans
and the Final Drawings) for the Tenant Improvements, and architectural fees,
engineering costs and fees, and other costs associated with completion of said
plans;
(b) All costs of obtaining building permits and other necessary
authorizations and approvals from the City of Fremont and other applicable
jurisdictions;
(c) All costs of interior design and finish schedule plans and
specifications including as-built drawings;
(d) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee for overhead and profit, the cost of all on-site
supervisory and administrative staff, office, equipment and temporary services
rendered by Landlord, Landlord's consultants and the General Contractor in
connection with construction of the Tenant Improvements, and all labor
(including overtime) and materials constituting the Work; and
(e) All fees payable to the General Contractor, architect and
Landlord's engineering firm if they are required by Tenant to redesign any
portion of the Tenant Improvements following Tenant's approval of the Final
Drawings.
In no event shall the Tenant Improvement Costs include any costs of
procuring, constructing or installing in the Premises any of Tenant's Personal
Property. The costs of procuring and/or installing such Personal Property shall
be borne solely by Tenant.
10. Excess Tenant Improvement Costs. Prior to commencing the Work, Landlord
shall submit to Tenant a written statement of the actual Tenant Improvement
Costs (the "Actual TI Costs") (which shall include the amount of any overtime
projected as necessary to Substantially Complete the Work by the Completion
Date) as then known by Landlord, and such statement shall indicate the amount,
if any, by which the Actual TI Costs exceeds the Tenant Improvement Allowance
(the "Excess Tenant Improvement Costs"). The term "Excess Tenant Improvement
Costs" shall also include the costs related to any and all Change Orders. Tenant
agrees, within three (3) days after submission to it of such statement, to
execute and deliver to Landlord, in the form then in use by Landlord, an
authorization to proceed with the Work.
Tenant shall faithfully pay all of the Excess Tenant Improvement Costs to
Landlord in the following manner. A portion of the Excess Tenant Improvement
Costs up to a maximum amount of eighty five thousand forty and 00/100 Dollars
($85,040.00), based on five and 00/100 Dollars ($5.00) per rentable square foot
for 17,008 rentable square feet of the Premises, shall be amortized over the
initial term of the Lease at the rate of eleven percent (11%) per annum and such
amortized amount shall be paid by Tenant with, and as part of, the Rent for the
Premises in accordance with the provisions and requirements of Section 3 of the
Lease (the "Amortized Excess TI Costs"). The portion of the Excess Tenant
Improvement Costs in excess of the Amortized Excess TI Costs shall be paid by
Tenant, in cash, to Landlord concurrently with Tenant's delivery to Landlord of
the aforementioned signed written authorization to proceed. No Work shall be
commenced until Tenant has fully complied with the preceding provisions of this
Section 10. If Tenant fails to remit the sums so demanded by Landlord pursuant
to Section 8 above and this Section 10 within the time periods required,
Landlord may, at its option, declare Tenant in default under the Lease.]
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11. Change Requests. No changes or revisions to the approved Final Drawings
shall be made by either Landlord or Tenant unless approved in writing by both
parties. Upon Tenant's request and submission by Tenant (at Tenant's sole cost
and expense) of the necessary information and/or plans and specifications for
any changes or revisions to the approved Final Drawings and/or for any work
other than the Work described in the approved Final Drawings ("Change Requests")
and the approval by Landlord of such Change Request(s), which approval Landlord
agrees shall not be unreasonably withheld, Landlord shall perform the additional
work associated with the approved Change Request(s), at Tenant's sole cost and
expense, subject, however, to the following provisions of this Section 11. Prior
to commencing any additional work related to the approved Change Request(s),
Landlord shall submit to Tenant a written statement of the cost of such
additional work and a proposed tenant change order therefor ("Change Order") in
the standard form then in use by Landlord. Tenant shall execute and deliver to
Landlord such Change Order and shall pay the entire cost of such additional work
in the following described manner. Any costs related to such approved Change
Request(s), Change Order and any delays associated therewith, shall be added to
the Tenant Improvement Costs and shall be paid for by Tenant as and with any
Excess Tenant Improvement Costs as set forth in Section 10 above. The billing
for such additional costs to Tenant shall be accompanied by evidence of the
amounts billed as is customarily used in the business. Costs related to approved
Change Requests and Change Orders shall include, without limitation, any
architectural or design fees, Landlord's construction fee for overhead and
profit, the cost of all on-site supervisory and administrative staff, office,
equipment and temporary services rendered by Landlord and/or Landlord's
consultants, and the General Contractor's price for effecting the change. If
Tenant fails to execute or deliver such Change Order, or to pay the costs
related thereto, then Landlord shall not be obligated to do any additional work
related to such approved Change Request(s) and/or Change Orders, and Landlord
may proceed to perform only the Work, as specified in the Final Drawings.
12. Termination. If the Lease is terminated prior to the Completion Date,
for any reason due to the default of Tenant hereunder, in addition to any other
remedies available to Landlord under the Lease, Tenant shall pay to Landlord as
Additional Rent under the Lease, within five (5) days of receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise
paid by Tenant through the date of termination in connection with the Tenant
Improvements to the extent planned, installed and/or constructed as of such date
of termination, including, but not limited to, any costs related to the removal
of all or any portion of the Tenant Improvements and restoration costs related
thereto. Subject to the provisions of Section 10.2 of the Lease, upon the
expiration or earlier termination of the Lease, Tenant shall not be required to
remove the Tenant Improvements it being the intention of the parties that the
Tenant Improvements are to be considered incorporated into the Building.
Notwithstanding anything to the contrary contained herein, Landlord shall have
the right to terminate the Lease, upon written notice to Tenant, if Landlord is
unable to obtain a building permit for the Tenant Improvements within sixty (60)
days from the date the Lease is signed by Tenant.
13. Tenant Access. Landlord, in Landlord's reasonable discretion and upon
receipt of a written request from Tenant, may grant Tenant a license to have
access to the Premises prior to the Completion Date to allow Tenant to do other
work required by Tenant to make the Premises ready for Tenant's use and (the
"Tenant's Pre-Occupancy Work"). It shall be a condition to the grant by Landlord
and continued effectiveness of such license that:
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(a) Tenant shall give to Landlord a written request to have such access
not less than five (5) business days prior to the date on which such proposed
access will commence (the "Access Notice"). The Access Notice shall contain or
be accompanied by each of the following items, all in form and substance
reasonably acceptable to Landlord: (i) a detailed description of and schedule
for Tenant's Pre-Occupancy Work; (ii) the names and addresses of all
contractors, subcontractors and material suppliers and all other representatives
of Tenant who or which will be entering the Premises on behalf of Tenant to
perform Tenant's Pre-Occupancy Work or will be supplying materials for such
work, and the approximate number of individuals, itemized by trade, who will be
present in the Premises; (iii) copies of all contracts, subcontracts, material
purchase orders, plans and specifications pertaining to Tenant's Pre-Occupancy
Work; (iv) copies of all licenses and permits required in connection with the
performance of Tenant's Pre-Occupancy Work; (v) certificates of insurance (in
amounts satisfactory to Landlord and with the parties identified in, or required
by, the Lease named as additional insureds) and instruments of indemnification
against all claims, costs, expenses, penalties, fines, and damages which may
arise in connection with Tenant's Pre-Occupancy Work; and (vi) assurances of the
ability of Tenant to pay for all of Tenant's Pre-Occupancy Work and/or a letter
of credit or other security deemed appropriate by Landlord securing Tenant's
lien-free completion of Tenant's Pre-Occupancy Work.
(b) Such pre-term access by Tenant and Tenant's employees, agents,
contractors, consultants, workmen, mechanics, suppliers and invitees shall be
subject to scheduling by Landlord.
(c) Tenant's employees, agents, contractors, consultants, workmen,
mechanics, suppliers and invitees shall fully cooperate, work in harmony and
not, in any manner, interfere with Landlord or Landlord's agents or
representatives in performing the Work and any additional work pursuant to
approved Change Orders, Landlord's work in other areas of the Building or the
Park, or the general operation of the Building. If at any time any such person
representing Tenant shall not be cooperative or shall otherwise cause or
threaten to cause any such disharmony or interference, including, without
limitation, labor disharmony, and Tenant fails to immediately institute and
maintain corrective actions as directed by Landlord, then Landlord may revoke
such license upon twenty-four (24) hours' prior written notice to Tenant.
(d) Any such entry into and occupancy of the Premises or any portion
thereof by Tenant or any person or entity working for or on behalf of Tenant
shall be deemed to be subject to all of the terms, covenants, conditions and
provisions of the Lease, excluding only the covenant to pay Rent. Landlord shall
not be liable for any injury, loss or damage which may occur to any of Tenant's
Pre-Occupancy Work made in or about the Premises or to any property placed
therein prior to the commencement of the term of the Lease, the same being at
Tenant's sole risk and liability. Tenant shall be liable to Landlord for any
damage to any portion of the Premises, the Work or the additional work related
to any approved Change Orders caused by Tenant or any of Tenant's employees,
agents, contractors, consultants, workmen, mechanics, suppliers and invitees. In
the event that the performance of Tenant's Pre-Occupancy Work causes extra costs
to be incurred by Landlord or requires the use of other Building services,
Tenant shall promptly reimburse Landlord for such extra costs and/or shall pay
Landlord for such other Building services at Landlord's standard rates then in
effect.
14. Lease Provisions; Conflict. The terms and provisions of the Lease,
insofar as they are applicable, in whole or in part, to this EXHIBIT B, are
hereby incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.
INITIALS:
TENANT:
LANDLORD:
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EXHIBIT C TO LEASE AGREEMENT
RULES & REGULATIONS
This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated January 8, 1996 (the "Lease"), by and
between Lincoln-Whitehall Realty, L.L.C. ("Landlord") and Safety Tek, Inc., a
Delaware corporation ("Tenant") for the leasing of certain premises located at
5696 Stewart Avenue, Fremont, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT C are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent
of Landlord. Landlord shall have the right to remove any such
unapproved item without notice and at Tenant's expense.
2. Tenant shall not regularly park motor vehicles in designated parking
areas after the conclusion of normal daily business activity, except
for company-owned vans and pick-up trucks, not to exceed seven (7) at
any one time.
3. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the prior written consent of
Landlord.
4. All window coverings installed by Tenant and visible from the outside
of the Building require the prior written approval of Landlord.
5. TENANT SHALL NOT USE, KEEP OR PERMIT TO BE USED OR KEPT ANY FOUL OR
NOXIOUS GAS OR SUBSTANCE OR ANY FLAMMABLE OR COMBUSTIBLE MATERIALS ON
OR AROUND THE PREMISES, THE BUILDING OR THE PARK EXCEPT AS SET FORTH IN
TENANT'S INITIAL HAZMAT CERTIFICATE AND IN EXHIBIT H HERETO OR EXCEPT
AS OTHERWISE EXPRESSLY APPROVED BY LANDLORD IN WRITING. TENANT SHALL
NOT FILL GAS PERMEATION OR OTHER DEVICES OR INSTRUMENTS WITH ANY GASES
AT ANY TIME DURING THE LEASE TERM .
6. Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord.
7. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those
periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow within the Park and loading and unloading
areas of other tenants.
8. Tenant shall not disturb, solicit or canvas any occupant of the
Building or Park and shall cooperate to prevent same.
9. No person shall go on the roof, except to perform regular preventative
maintenance service on, or to repair, the heating, ventilating and air
conditioning equipment serving the Premises. without Landlord's
permission.
10. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building, to such a degree as to be objectionable to Landlord or
other Tenants, shall be placed and maintained by Tenant, at Tenant's
expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
11. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and
shall not be left in parking or receiving areas overnight.
12. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks
under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in
the auto parking areas of the Park or on streets adjacent thereto.
13. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
14. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures at locations approved by
Landlord.
15. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the
Premises, the Building, the Park or any of the Common Areas of the
foregoing. No displays or sales of merchandise shall be allowed in the
parking lots or other Common Areas.
16. Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the
Building, the Park or any of the Common Areas of the foregoing.
17. Tenant shall not permit any motor vehicles to be washed on any portion
of the Premises or in the Common Areas of the Park, nor shall Tenant
permit mechanical work or maintenance of motor vehicles to be performed
on any portion of the Premises or in the Common Areas of the Park.
INITIALS:
TENANT:
LANDLORD:
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EXHIBIT E
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
Landlord: ____________________________________________________________
c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404
Attn:__________________________________________________
Phone: (415) 571-2200
Name of (Prospective) Tenant:_________________________________________________
Mailing Address:______________________________________________________________
______________________________________________________________________________
Contact Person, Title and Telephone Number(s):________________________________
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):__________________________________________________________
______________________________________________________________________________
Address of (Prospective) Premises:____________________________________________
Length of (Prospective) initial Term:_________________________________________
______________________________________________________________________________
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products
processed, manufactured or assembled services and activities to be
provided or otherwise conducted. Existing tenants should describe any
proposed changes to on-going operations.
_____________________________________________________________________
_____________________________________________________________________
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing tenants
should describe any Hazardous Materials which continue to be
used, generated, stored or disposed of in, on or about the
Premises.
Wastes Yes / / No / /
Chemical Products Yes / / No / /
Other Yes / / No / /
If Yes is marked, please explain:___________________________
____________________________________________________________
____________________________________________________________
2.2 If Yes is marked in Section 2.1, attach a list of any
Hazardous Materials to be used, generated, stored or disposed
of in, on or about the Premises, including the applicable
hazard class and an estimate of the quantities of such
Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage
(excluding nominal amounts of ordinary household cleaners and
janitorial supplies which are not regulated by any
Environmental Laws); and the proposed location(s) and method
of disposal for each Hazardous Material, including, the
estimated frequency, and the proposed contractors or
subcontractors. Existing tenants should attach a list setting
forth the information requested above and such list should
include actual data from on-going operations and the
identification of any variations in such information from the
prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposed activities.
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Yes / / No / /
If yes, please explain:_____________________________________
____________________________________________________________
____________________________________________________________
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes / / No / /
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
Yes / / No / /
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
______storm drain? ______sewer?
______surface water? ______no wastewater or other
wastes discharged.
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
____________________________________________________________
____________________________________________________________
5.2 Will any such wastewater or waste be treated before discharge?
Yes / / No / /
If yes, describe the type of treatment proposed to be
conducted. Existing tenants should describe the actual
treatment conducted.
____________________________________________________________
____________________________________________________________
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be
used in your company's operations in, on or about the Premises
that will discharge into the air; and will such air emissions
be monitored? Existing tenants should indicate whether or not
there are any such air filtration systems or stacks in use in,
on or about the Premises which discharge into the air and
whether such air emissions are being monitored.
Yes / / No / /
If yes, please describe:____________________________________
____________________________________________________________
____________________________________________________________
6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment
being operated in, on or about the Premises.
______Spray booth(s) ______Incinerator(s)
______Dip tank(s) ______Other (Please describe)
______Drying oven(s) ______No Equipment Requiring Air Permits
If yes, please describe:____________________________________
____________________________________________________________
____________________________________________________________
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan")
pursuant to Fire Department or other governmental or
regulatory agencies' requirements? Existing tenants should
indicate whether or not a Management Plan is required and has
been prepared.
Yes / / No / /
If yes, attach a copy of the Management Plan. Existing tenants
should attach a copy of any required updates to the Management
Plan.
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7.2 Are any of the Hazardous Materials, and in particular
chemicals, proposed to be used in your operations in, on or
about the Premises regulated under Proposition 65? Existing
tenants should indicate whether or not there are any new
Hazardous Materials being so used which are regulated under
Proposition 65.
Yes / / No / /
If yes, please explain:______________________________________
_____________________________________________________________
_____________________________________________________________
8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees or has your
company received requests for information, notice or demand
letters, or any other inquiries regarding its operations?
Existing tenants should indicate whether or not any such
actions, orders or decrees have been, or are in the process of
being, undertaken or if any such requests have been received.
Yes / / No / /
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health
and safety concerns?
Yes / / No / /
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other
documents related thereto as requested by Landlord. Existing
tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the
provisions of Section 29 of the signed Lease Agreement.
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
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8.3 Have there been any problems or complaints from adjacent
tenants, owners or other neighbors at your company's current
facility with regard to environmental or health and safety
concerns? Existing tenants should indicate whether or not
there have been any such problems or complaints from adjacent
tenants, owners or other neighbors at, about or near the
Premises.
Yes / / No / /
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement.
____________________________________________________________
____________________________________________________________
9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company
with respect to its proposed operations in, on or about the
Premises, including, without limitation, any wastewater
discharge permits, air emissions permits, and use permits or
approvals. Existing tenants should attach copies of any new
permits and licenses as well as any renewals of permits or
licenses previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.
I (print name)__________________, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.
(PROSPECTIVE) TENANT:
By: _________________________________
Title: _________________________________
Date: _________________________________
INITIALS:
TENANT:
LANDLORD:
4
<PAGE> 69
EXHIBIT F
FIRST AMENDMENT TO LEASE AGREEMENT
CHANGE OF COMMENCEMENT DATE
This First Amendment to Lease Agreement (the "Amendment") is made and entered
into as of ___________________, by and between ____________________________
("LANDLORD"), AND ________________________ ("TENANT"), with reference to the
following facts:
RECITALS
A. Landlord and Tenant have entered into that certain Lease Agreement dated
___________ (the "Lease"), for the leasing of certain premises located at
____________________________, California (the "Premises") as such Premises
are more fully described in the Lease.
B. Landlord and Tenant wish to amend the Commencement Date of the Lease.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. The Commencement Date of the Lease shall be ________________________.
2. The last day of the Term of the Lease (the "Expiration Date") shall
be ______________.
3. The dates on which the Base Rent will be adjusted are:
for the period _________ to ________ the monthly Base Rent shall be
$_____________; for the period _________ to ________ the monthly Base
Rent shall be $_____________; and for the period _________ to
________ the monthly Base Rent shall be $_____________.
4. Effect of Amendment: Except as modified herein, the terms and
conditions of the Lease shall remain unmodified and continue in full
force and effect. In the event of any conflict between the terms and
conditions of the Lease and this Amendment, the terms and conditions
of this Amendment shall prevail.
5. Definitions: Unless otherwise defined in this Amendment, all terms
not defined in this Amendment shall have the meaning set forth in
the Lease.
6. Authority: Subject to the provisions of the Lease, this Amendment
shall be binding upon and inure to the benefit of the parties hereto,
their respective heirs, legal representatives, successors and
assigns. Each party hereto and the persons signing below warrant that
the person signing below on such party's behalf is authorized to do
so and to bind such party to the terms of this Amendment.
7. The terms and provisions of the Lease are hereby incorporated in
this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.
[PROPERTY MANAGER: PLEASE PROVIDE TENANT INFORMATION AND WORD PROCESSING WILL
COMPLETE THE SIGNATURE BLOCK]
INITIALS:
TENANT:
LANDLORD:
<PAGE> 70
ADDENDUM 1
OPTION TO EXTEND THE LEASE
This Addendum No. 1 is incorporated as a part of that certain Lease Agreement
dated January 8, 1996 (the "Lease"), by and between SAFETY TEK, INC., A DELAWARE
CORPORATION ("TENANT"), AND LINCOLN-WHITEHALL REALTY, L.L.C. ("LANDLORD"), of
the premises located at 5696 Stewart Avenue, Fremont, California 94538 (the
"Premises"). Any capitalized terms used herein and not otherwise defined herein
shall have the meaning ascribed to such terms as set forth in the Lease.
If Tenant has not at any time been, or is currently not, in default beyond the
applicable cure periods as set forth in this Lease, in the performance of any of
its obligations under this Lease and contingent upon review and approval of
Tenant's then current financial condition by Landlord, Tenant shall have the
right at its option to extend the term of the Lease for five (5) years (the
"Extended Term"). The Lease of the Premises during the Extended Term shall be
upon the same terms, covenants and conditions as are set forth in this Lease,
other than the monthly Base Rent and the term of the Lease. If Landlord does not
receive from Tenant written notice of Tenant's exercise of this option on a date
which is not more than three hundred sixty (360) days nor less than two hundred
forty (240) days prior to the end of the initial term of the Lease (the "Option
Notice"), all rights under this option shall automatically lapse and terminate
and shall be of no further force and effect. Time is of the essence herein.
The monthly Base Rent for the Extended Term shall be the then current market
rent for the highest and best use for similar space within the area of the
Premises in Fremont, California (the "Fair Rental Value") agreed upon solely by
and between Landlord and Tenant and their agents appointed for this purpose.
Neither Landlord nor Tenant shall have the right to have a court or any other
third party entity establish the Fair Rental Value. If Landlord and Tenant are
unable to agree on the Fair Rental Value for the Extended Term within ten (10)
thirty (30) days after receipt by Landlord of the Option Notice, Landlord and
Tenant being obligated only to act in good faith, this option shall
automatically terminate and the Lease shall terminate at the end of its initial
term.
The "Fair Rental Value" of the Premises shall be defined to mean the fair market
rental value of the Premises as of the commencement of the Extended Term, taking
into consideration all relevant factors, including length of term, the uses
permitted under the Lease, the quality, size, design and location of the
Premises, including the condition and value of existing tenant improvements, and
the monthly base rent paid by tenants for premises comparable to the Premises,
and located in Fremont, California.
In no event shall the monthly Base Rent for any period of the Extended Term be
less than the highest monthly Base Rent charged during the initial term of the
Lease. Upon determination of the monthly Base Rent for the Extended Term,
pursuant to the terms outlined above, the parties shall immediately execute the
new standard lease document stating the minimum monthly Base Rent for the
Extended Term and confirming the dates of the Extended Term. Tenant shall have
no other right to extend the term of the Lease under this Addendum 1 unless
Landlord and Tenant otherwise agree in writing. If Tenant duly exercises this
option, in accordance with the terms contained herein: (1) Tenant shall accept
the Premises in its then "As-Is" condition and, accordingly, Landlord shall not
be required to perform any additional improvements to the Premises; and (2)
Tenant hereby agrees that it will solely be responsible for any and all
brokerage commissions and finder's fees payable to any broker in connection with
the option described herein, and Tenant hereby further agrees that Landlord
shall in no event or circumstance be responsible for the payment of any such
commissions and fees.
This option is personal to Tenant and may not be assigned, voluntarily or
involuntarily, separate from or as part of the Lease. At Landlord's option, all
rights of Tenant under this option shall terminate and be of no force and effect
if any of the following individual events occur or any combination thereof
occur: (1) Tenant has been in default beyond the applicable cure periods as set
forth in this Lease at any time during the initial term of the Lease, or is
currently in default of any provision of the Lease; and/or (2) Tenant has
assigned its rights and obligations under all or part of the Lease or Tenant has
subleased all or part of the Premises; and/or (3) Tenant's financial condition
is unacceptable to Landlord in its reasonable discretion at the time the Option
Notice is delivered to Landlord; and/or (4) Tenant has failed to exercise this
option in a timely manner in accordance with the provisions of this Addendum 1;
and/or (5) Tenant no longer has possession of all or any part of the Premises
under the Lease, or if Lease has been terminated earlier, pursuant to the terms
of the Lease.
<PAGE> 1
Exhibit 11.1
SAFETYTEK CORPORATION STATEMENT OF COMPUTATION OF NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 690,800 939,300 2,371,900 2,334,700
========== ========= ========= =========
Computation of weighted
common and common equivalent
shares outstanding:
Common stock 3,221,327 3,187,098 3,213,412 3,183,914
Common stock
equivalents 234,503 215,742 247,775 191,439
---------- ---------- ---------- ---------
Weighted common and common
equivalent shares used
in the calculation of
income per share 3,455,830 3,402,840 3,461,187 3,375,353
========= ========= ========= =========
Net income per common share $ .20 .28 .69 .69
=========== ========= ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 203
<SECURITIES> 0
<RECEIVABLES> 7,033
<ALLOWANCES> 218
<INVENTORY> 5,792
<CURRENT-ASSETS> 13,761
<PP&E> 5,510
<DEPRECIATION> 2,858
<TOTAL-ASSETS> 22,042
<CURRENT-LIABILITIES> 6,066
<BONDS> 0
0
0
<COMMON> 3
<OTHER-SE> 15,069
<TOTAL-LIABILITY-AND-EQUITY> 22,042
<SALES> 7,905
<TOTAL-REVENUES> 7,905
<CGS> 3,877
<TOTAL-COSTS> 3,877
<OTHER-EXPENSES> 2,990
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28
<INCOME-PRETAX> 1,047
<INCOME-TAX> 356
<INCOME-CONTINUING> 691
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 691
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
