Exhibit
10.22(a)
STANDARD INDUSTRIAL LEASE
— NET
AMERICAN INDUSTRIAL
REAL ESTATE ASSOCIATION
1. Parties.
This Lease, dated, for reference purposes only, July 6, 1994,
is made by and between H-K Associates, a California Limited
Partnership (herein called “Lessor”) and
Videonics, Inc. (herein called “Lessee”).
2. Premises.
Lessor hereby leases to Lessee and Lessee leases from Lessor for
the term, at the rental, and upon all of the conditions set forth
herein, that certain real property situated in the County of Santa
Clara State of California commonly known as
1370 Dell Avenue, Campbell California 95008 and described as
Approximately 27,500 square feet of space. APN 424-33-70
Said real property including the land and all improvements therein,
is herein called “the Premises”.
3. Term.
3.1 Term. The
term of this Lease shall be for Five (5) years, commencing on
August 1, 1994 and ending on July 31, 1999 unless
sooner terminated pursuant to any provision hereof.
3.2 Delay in
Possession. Notwithstanding said commencement date, if
for any reason Lessor cannot deliver possession of the Premises to
Lessee on said date, Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease
or the obligations of Lessee hereunder or extend the term hereof,
but in such case, Lessee shall not be obligated to pay rent until
possession of the Premises is tendered to Lessee; provided,
however, that if Lessor shall not have delivered possession of the
Premises within sixty (60) days from said commencement date, Lessee
may, at Lessee’s option, by notion in writing to Lessor
within ten (10) days thereafter, cancel this Lease, in which
event the parties shall be discharged from all obligations
hereunder; provided further, however, that if such written notice
of Lessee is not received by Lessor within said ten (10) day
period, Lessee’s right to cancel this Lease hereunder shall
terminate and be of no further force or effect.
3.3 Early
Possession. If Lessee occupies the Premises prior to
said commencement date, such occupancy shall be subject to all
provisions hereof, such occupancy shall not advance the termination
date and Lessee shall pay rent for such period at the initial
monthly rates set forth below.
4. Rent.
Lessee shall pay to Lessor as rent for the Premises, monthly
payments of $16,500.00**, in advance, on the 1st day of each month
of the term hereof. Lessee shall pay Lessor upon the execution
hereof $14,100.00 as rent for August 1994. **Rent for
the period 8/1/94 to 8/31/94 shall be $14,100.00. Rent for the
period 9/1/94 to 7/31/96 shall be $16,500.00 per month. Rent for
the period 8/1/96 to 7/31/99 shall be $17,875.00 per
month.
Rent for any period
during the term hereof which is for less than one month shall be a
pro rata portion of the monthly installment. Rent shall be payable
in lawful money of the United States to Lessor at the address
stated herein or to such other persons or at such other places as
Lessor may designate in writing.
5. Security
Deposit. Lessee shall deposit with Lessor upon execution
hereof ($10,075.00) On Account as security for Lessee’s
faithful performance of Lessee’s obligations hereunder. If
Lessee fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lease,
Lessor may use, apply or retain all or any portion of said deposit
for the payment of any rent or other charge in default or for the
payment of any other sum to which Lessor may become obligated by
reason of Lessee’s default, or to compensate Lessor for any
loss or damage which Lessor may suffer thereby. If Lessor so uses
or applies all or any portion of said deposit, Lessee shall within
ten (10) days after written demand therefor deposit cash with
Lessor in an amount sufficient to restore said deposit to the full
amount herein above stated and Lessee’s failure to do so
shall be a material breach of this Lease. If the monthly rent
shall, from time to time, increase during the term of this Lease,
Lessee shall thereupon deposit with Lessor additional security
deposit so that the amount of security deposit held by Lessor shall
at all times bear the same proportion to current rent as the
original security deposit bears to the original monthly rent set
forth in paragraph 4 hereof. Lessor shall not be required to keep
said deposit separate from its general accounts. If Lessee performs
all of Lessee’s obligations hereunder, said deposit, or so
much thereof as has not theretofore been applied by Lessor, shall
be returned, without payment of interest or other increment for its
use, to Lessee (or, at Lessor’s option, to the last assignee,
if any, of Lessee’s interest hereunder) at the expiration of
the term hereof, and after Lessee has vacated the Premises. No
trust relationship is created herein between Lessor and Lessee with
respect to said Security Deposit.
6.
Use.
6.1 Use. The
Premises shall be used and occupied only for Office, Research and
Development, Sales, Manufacturing and Warehousing or any other use
which is reasonably comparable and for no other purpose.
6.2 Compliance with
Law.
(a) Lessor
warrants to Lessee that the Premises, in its state existing on the
date that the Lease term commences, but without regard to the use
for which Lessee will use the Premises, does not violate any
Environmental, Health or Safety Laws, covenants or restrictions of
record, or any applicable building code, regulation or ordinance in
effect on such Lease term commencement date. In the event it is
determined that this warranty has been violated, then it shall be
the obligation of the Lessor, after written notice from Lessee, to
promptly, at Lessor’s sole cost and expense, rectify any such
violation.
(b) Except
as provided in paragraph 6.2(a), Lessee shall, at Lessee’s
expense, comply promptly with all applicable statutes, ordinances,
rules, regulations, orders, covenants and restrictions of record,
and requirements in effect during the term or any part of the term
hereof, regulating the use by Lessee of the Premises. Lessee shall
not use nor permit the use of the Premises in any manner that will
tend to create waste or a nuisance or, if there shall be more than
one tenant in the building containing the Premises, shall tend to
disturb such other tenants.
6.3 Condition of
Premises.
(a) Lessor
shall deliver the Premises of Lessee clean and free of debris on
Lease commencement date (unless Lessee is already in possession)
and Lessor further warrants to Lessee that the plumbing, lighting,
air conditioning, heating, and loading doors in the Premises shall
be in good operating condition on the Lease commencement date. In
the event that it is determined that this warranty has been
violated, then it shall be the obligation of Lessor, after receipt
of written notice from Lessee setting forth with specificity the
nature of the violation, to promptly, at Lessor’s sole cost,
rectify such violation. Lessee’s failure to give such written
notice to Lessor within thirty (30) days after the Lease
commencement date shall cause the conclusive presumption that
Lessor has complied with all of Lessor’s obligations
hereunder. The warranty contained in this paragraph
6.3(a) shall be of no force or effect if prior to the date of
this Lease, Lessee was the owner or occupant of the
Premises.
(b) Except
as otherwise provided in this Lease, Lessee hereby accepts the
Premises in their condition existing as of the Lease commencement
date or the date that Lessee takes possession of the Premises,
whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinances and regulating governing and
regulating the use of the Premises, and any covenants or
restrictions of record, and accepts this Lease subject thereto and
to all matters disclosed thereby and by any exhibits attached
hereto. Lessee acknowledges that neither Lessor nor Lessor’s
agent has made any representation or warranty as to the present or
future suitability of the Premises for the conduct of
Lessee’s business.
7.
Maintenance, Repairs and Alterations.
7.1 Lessee’s
Obligations. Lessee shall keep in good order, condition
and repair the Premises and every part thereof, structural and non
structural, (whether or not such portion of the Premises requiring
repair, or the means of repairing the same are reasonably or
readily accessible to Lessee, and whether or not the need for such
repairs occurs as a result of Lessee’s use, any prior use,
the elements or the age of such portion of the Premises) including,
without limiting the generality of the foregoing, all plumbing,
electrical, lighting facilities and equipment within the Premises,
fixtures, walls (interior and exterior), foundations, ceilings,
roofs (interior and exterior), floors, windows, doors, plate glass
and skylights located within the Premises, and all landscaping,
driveways, parking lots, fences and signs located on the Premises
and sidewalks and parkways adjacent to the Premises.
7.2
Surrender. On the last day of the term hereof, or on any
sooner termination, Lessee shall surrender the Premises to Lessor
in the same condition as when received, ordinary wear and tear
excepted, clean and free of debris. Lessee shall repair any damage
to the Premises occasioned
by the installation or
removal of Lessee’s trade fixtures, furnishings and
equipment. Notwithstanding anything to the contrary otherwise
stated in this Lease. Lessee shall leave the air lines, power
panels, electrical distribution systems, lighting fixtures, space
heaters, air conditioning, plumbing and fencing on the premises in
good operating condition.
7.3 Lessor’s
Rights. If Lessee fails to perform Lessee’s
obligations under this Paragraph 7, or under any other paragraph of
this Lease, Lessor may at its option (but shall not be required to)
enter upon the Premises after ten (10) days’ prior
written notice to Lessee (except in the case of an emergency, in
which case no notice shall be required), perform such obligations
on Lessee’s behalf and put the same in good order, condition
and repair, and the cost thereof together with interest thereon at
the maximum rate then allowable by law shall become due and payable
as additional rental to Lessor together with Lessee’s next
rental installment.
7.4 Lessors’
Obligations. Except for the obligations of Lessor
under Paragraph 6.2(a) and 6.3(a) (relating to
Lessor’s warranty), Paragraph 9 (relating to destruction of
the Premises) and under Paragraph 14 (relating to condemnation of
the Premises), it is intended by the parties hereto that Lessor
have no obligation, in any manner whatsoever, to repair and
maintain the Premises nor the building located thereon nor the
equipment therein, whether structural or non structural, all of
which obligations are intended to be that of the Lessee under
Paragraph 7.1 hereof. Lessee expressly waives the benefit of any
statute now or hereinafter in effect which would otherwise afford
Lessee the right to make repairs at Lessor’s expense or to
terminate this Lease because of Lessor’s failure to keep the
premises in good order, condition and repair.
7.5 Alterations and
Additions.
(a) Lessee
shall not, without Lessor’s prior written consent make any
alterations, improvements, additions, or Utility Installations in,
on or about the Premises, except for nonstructural alterations not
exceeding $2,500 in cumulative costs during the term of this Lease.
In any event, whether or not in excess of $2,500 in cumulative
cost, Lessee shall make no change or alteration to the exterior of
the Premises nor the exterior of the building(s) on the
Premises without Lessor’s prior written consent. As used in
this Paragraph 7.5 the term “Utility Installation”
shall mean carpeting, window coverings, air lines, power panels,
electrical distribution systems, lighting fixtures, space heaters,
air conditioning, plumbing, and fencing. Lessor may require that
Lessee remove any or all of said alterations, improvements,
additions or Utility Installations at the expiration of the term,
and restore the Premises to their prior condition. Lessor may
require Lessee to provide Lessor, at Lessee’s sole cost and
expense, a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such improvements, to insure
Lessor against any liability for mechanic’s and
materialmen’s liens and to insure completion of the work.
Should Lessee make any alterations, improvements, additions or
Utility Installations without the prior approval of Lessor, Lessor
may require that Lessee remove any or all of the same.
(b) Any
alterations, improvements, additions or Utility Installations in,
or about the Premises that Lessee shall desire to make and which
requires the consent of the Lessor shall be presented to Lessor in
written form, with proposed detailed plans. If Lessor shall give
its consent, the consent shall be deemed conditioned upon Lessee
acquiring a permit to do so from appropriate governmental agencies,
the furnishing of a copy thereof to Lessor prior to the
commencement of the work and the compliance by Lessee of all
conditions of said permit in a prompt and expeditious
manner.
(c) Lessee
shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any
mechanics’ or materialmen’s lien against the Premises
or any interest therein. Lessee shall give Lessor not less than ten
(10) days’ notice prior to the commencement of any work
in the Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If
Lessee shall, in good faith, contest the validity of any such lien,
claim or demand, then Lessee shall, at its sole expense defend
itself and Lessor against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the
enforcement thereof against the Lessor or the Premises, upon the
condition that if Lessor shall require, Lessee shall furnish to
Lessor a surety bond satisfactory to Lessor in an amount equal to
such contested lien claim or demand indemnifying Lessor against
liability for the same and holding the Premises free from the
effect of such lien or claim. In addition, Lessor may require
Lessee to pay Lessor’s attorneys fees and costs in
participating in such action if Lessor shall decide it is to its
best interest to do so.
(d) Unless
Lessor requires their removal, as set forth in Paragraph 7.5(a),
all alterations, improvements, additions and Utility Installations
(whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made on the Premises, shall
become the property of Lessor and remain upon and be surrendered
with the Premises at the expiration of the term. Notwithstanding
the provisions of this Paragraph 7.5(d), Lessee’s machinery
and equipment, other than that which is affixed to the Premises so
that it cannot be removed without material damage to the Premises,
shall remain the property of Lessee and may be removed by Lessee
subject to the provisions of Paragraph 7.2.
8. Insurance
Indemnity.
8.1 Insuring
Party. As used in this Paragraph 8, the term
“insuring party” shall mean the party who has the
obligation to obtain the Property Insurance required hereunder. The
insuring party shall be designated in Paragraph 46 hereof. In the
event Lessor is the insuring party, Lessor shall also maintain the
liability insurance described in paragraph 8.2 hereof, in addition
to, and not in lieu of, the insurance required to be maintained by
Lessee under said paragraph 8.2, but Lessor shall not be required
to name Lessee as an additional insured on such policy. Whether the
insuring party is the Lessor or the Lessee, Lessee shall, as
additional rent for the Premises, pay the cost of all insurance
required hereunder, except for that portion of the cost
attributable to Lessor’s liability insurance coverage in
excess of $1,000,000 per occurrence. If Lessor is the insuring
party Lessee shall, within ten (10) days following demand by
Lessor, reimburse Lessor for the cost of the insurance so
obtained.
8.2 Liability
Insurance. Lessee shall, at Lessee’s expense
obtain and keep in force during the term of this Lease a policy of
Combined Single Limit, Bodily Injury and Property Damage Insurance
insuring Lessor and Lessee against any liability arising out of the
ownership, use, occupancy or maintenance of the Premises and all
areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than $500,000 per
occurrence. The policy shall insure performance by Lessee of the
indemnity provisions of this Paragraph 8. The limits of said
insurance shall not, however, limit the liability of Lessee
hereunder.
8.3 Property
Insurance.
(a) The
insuring party shall obtain and keep in force during the term of
this Lease a policy or policies of insurance covering loss or
damage to the Premises, in the amount of the full replacement value
thereof, as the same may exist from time to time, which replacement
value is now $1,000,000.00, but in no event less than the total
amount required by lenders having liens on the Premises, against
all perils included within the classification of fire, extended
coverage, vandalism, malicious mischief, flood (in the event same
is required by a lender having a lien on the Premises), and special
extended perils (“all risk” as such term is used in the
insurance industry). Said insurance shall provide for payment of
loss thereunder to Lessor or to the holders of mortgages or deeds
of trust on the Premises. The insuring party shall, in addition,
obtain and keep in force during the term of this Lease a policy of
rental value insurance covering a period of one year, with loss
payable to Lessor, which insurance shall also cover all real estate
taxes and insurance costs for said period. A stipulated value or
agreed amount endorsement deleting the coinsurance provision of the
policy shall be procured with said insurance as well as an
automatic increase in insurance endorsement causing the increase in
annual property insurance coverage by 2% per quarter. If the
insuring party shall fail to procure and maintain said insurance
the other party may, but shall not be required to, procure and
maintain the same, but at the expense of Lessee. If such insurance
coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence, and Lessee shall be liable for such
deductible amount.
(b) If the
Premises are part of a larger building, or if the Premises are part
of a group of buildings owned by Lessor which are adjacent to the
Premises, then Lessee shall pay for any increase in the property
insurance of such other building or buildings if said increase is
caused by Lessee’s acts, omissions, use or occupancy of the
Premises.
(c) If the
Lessor is the insuring party the Lessor will not insure
Lessee’s fixtures, equipment or tenant improvements unless
the tenant improvements have become a part of the Premises under
paragraph 7, hereof. But if Lessee is the insuring party the Lessee
shall insure its fixtures, equipment and tenant
improvements.
8.4 Insurance
Policies. Insurance required hereunder shall be in
companies holding a “General Policyholders Rating” of
at least B plus, or such other rating as may be required by a
tender having a lien on the Premises, as set forth in the most
current issue of “Best’s Insurance Guide”. The
insuring party shall deliver to the other party copies of policies
of such insurance or certificates evidencing the existence and
amounts of such insurance with loss payable clauses as required by
this paragraph 8. No such policy shall be cancellable or subject to
reduction of coverage or other modification except after thirty
(30) days’ prior written notice to Lessor. If Lessee is the
insuring party Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with renewals or
“binders” thereof, or Lessor may order such insurance
and charge the cost thereof to Lessee, which amount shall be
payable by Lessee upon demand. Lessee shall not do or permit to be
done anything which shall invalidate the insurance policies
referred to in Paragraph 8.3. If Lessee does or permits to be done
anything which shall increase the cost of the insurance policies
referred to in Paragraph 8.3, then Lessee shall forthwith upon
Lessor’s demand reimburse Lessor for any additional premiums
attributable to any act or omission or operation of Lessee causing
such increase in the cost of insurance. If Lessor is the insuring
party, and if the insurance policies maintained hereunder cover
other improvements in addition to the Premises, Lessor shall
deliver to Lessee a written statement setting forth the amount of
any such insurance cost increase and showing in reasonable detail
the manner in which it has been computed.
8.5 Waiver of
Subrogation. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against
the other for loss or damage arising out of or incident to the
perils insured against under paragraph 8.3, which perils occur in,
on or about the Premises, whether due to the negligence of Lessor
or Lessee or their agents, employees, contractors and/or invitees.
Lessee and Lessor shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or
carriers that the foregoing mutual waiver of subrogation is
contained in this Lease.
8.6
Indemnity. Lessee shall indemnify and hold
harmless Lessor from and against any and all claims arising from
Lessee’s use of the Premises, or from the conduct of
Lessee’s business or from any activity, work or things done,
permitted or suffered by Lessee in or about the Premises or
elsewhere and shall further indemnify and hold harmless Lessor from
and against any and all claims arising from any breach or default
in the performance of any obligation on Lessee’s part to be
performed under the terms of this Lease, or arising from any
negligence of the Lessee, or any of Lessee’s agents,
contractors, or employees, and from and against all costs,
attorney’s fees, expenses and liabilities incurred in the
defense of any such claim or any action or proceeding brought
thereon; and in case any action or proceeding be brought against
Lessor by reason of any such claim, Lessee upon notice from Lessor
shall defend the same at Lessee’s expense by counsel
satisfactory to Lessor. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to
property or injury to persons, in, upon or about the Premises
arising from any cause and Lessee hereby waives all claims in
respect thereof against Lessor.
8.7 Exemption of Lessor
from Liability. Lessee hereby agrees that Lessor shall
not be liable for injury to Lessee’s business or any loss of
income therefrom or for damage to the goods, wares, merchandise or
other property of Lessee, Lessee’s employees, invitees,
customers, or any other person in or about the Premises, nor shall
Lessor be liable for injury to the person of Lessee. Lessee’s
employees, agents or contractors, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or
rain, or from the breakage, leakage, obstruction or other defects
of pipes, sprinklers, wires, appliances, plumbing, air conditioning
or lighting fixtures, or from any other cause, whether the said
damage or injury results from conditions arising upon the Premises
or upon other portions of the building of which the Premises are a
part, or from other sources or places and regardless of whether the
cause of such damage or injury or the means of repairing the same
is inaccessible to Lessee. Lessor shall not be liable for any
damages arising from any act or neglect of any other tenant, if
any, of the building in which the Premises are located.
2
9.
Damage or Destruction.
9.1
Definitions.
(a)
“Premises Partial Damage” shall herein mean damage or
destruction to the Premises to the extent that the cost of repair
is less than 50% of the then replacement cost of the Premises.
“Premises Building Partial Damage” shall herein mean
damage or destruction to the building of which the Premises are a
part to the extent that the cost of repair is less than 50% of the
then replacement cost of such building as a whole.
(b)
“Premises Total Destruction” shall herein mean damage
or destruction to the Premises to the extent that the cost of
repair is 50% or more of the then replacement cost of the Premises.
“Premises Building Total Destruction” shall herein mean
damage or destruction to the building of which the Premises are a
part to the extent that the cost of repair is 50% or more of the
then replacement cost of such building as a whole.
(c)
“Insured Loss” shall herein mean damage or destruction
which was caused by an event required to be covered by the
insurance described in paragraph 8.
9.2 Partial Damage
— Insured Loss. Subject to the provisions of
paragraphs 9.4, 9.5 and 9.6, if at any time during the term of this
Lease there is damage which is an Insured Loss and which falls into
the classification of Premises Partial Damage or Premises Building
Partial Damage, then Lessor shall, at Lessor’s expense,
repair such damage, but not Lessee’s fixtures, equipment or
tenant improvements unless the same have become a part of the
Premises pursuant to Paragraph 7.5 hereof as soon as reasonably
possible and this Lease shall continue in full force and effect.
Notwithstanding the above, if the Lessee is the insuring party, and
if the insurance proceeds received by Lessor are not sufficient to
effect such repair, Lessor shall give notice to Lessee of the
amount required in addition to the insurance proceeds to effect
such repair. Lessee shall contribute the required amount to Lessor
within ten days after Lessee has received notice from Lessor of the
shortage in the insurance. When Lessee shall contribute such amount
to Lessor, Lessor shall make such repairs as soon as reasonably
possible and this Lease shall continue in full force and effect.
Lessee shall in no event have any right to reimbursement for any
such amounts so contributed.
9.3 Partial Damage
— Uninsured Loss. Subject to the provisions of
Paragraphs 9.4, 9.5 and 9.6, if at any time during the term of this
Lease there is damage which is not an Insured Loss and which falls
within the classification of Premises Partial Damage or Premises
Building Partial Damage, unless caused by a negligent or willful
act of Lessee (in which event Lessee shall make the repairs at
Lessee’s expense). Lessor may at Lessor’s option either
(i) repair such damage as soon as reasonably possible at
Lessor’s expense, in which event this Lease shall continue in
full force and effect, or (ii) give written notice to Lessee
within thirty (30) days after the date of the occurrence of such
damage of Lessor’s intention to cancel and terminate this
Lease, as of the date of the occurrence of such damage. In the
event Lessor elects to give such notice of Lessor’s intention
to cancel and terminate this Lease, Lessee shall have the right
within ten (10) days after the receipt of such notice to give
written notice to Lessor of Lessee’s intention to repair such
damage at Lessee’s expense, without reimbursement from
Lessor, in which event this Lease shall continue in full force and
effect, and Lessee shall proceed to make suc
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