BASIC LEASE INFORMATION
OFFICE NET
LEASE DATE: August 19, 1998
TENANT: Heuristic Physics Laboratories, Inc., a California
corporation
TENANT'S NOTICE ADDRESS: 2033 Gateway Place, Suite 400, San Jose, CA 95110
TENANT'S BILLING ADDRESS: 2033 Gateway Place, Suite 400, San Jose, CA 95110
TENANT CONTACT: David Y. Lepejian PHONE NUMBER: 408-263-1466
FAX NUMBER: 408-263-1584
LANDLORD: Spieker Properties, L.P., a California limited partnership
LANDLORD'S NOTICE ADDRESS: 2077 Gateway Place, Suite 100, San Jose, CA 95110
LANDLORD'S REMITTANCE ADDRESS: Spieker Properties, Dept. 11661, P. 0. Box 45587,
San Francisco, CA 94145-0587
Project Description: San Jose Gateway, San Jose, CA
Building Description: Building known as 2033 Gateway Place, San Jose
Premises: Approximately 12,516 rentable square feet, Suite 400
Permitted Use: General Office and Administrative
Occupancy Density: 50 people
Parking Density: 4/1000 sq.ft.
Scheduled Term Commencement Date: November 1, 1998
Scheduled Length of Term: 84 months
Scheduled Term Expiration Date: October 31, 2005
Rent:
Base Rent: See Addendum 1 attached hereto and made a part hereof
Estimated First Year Operating Expenses: See Addendum 1 attached hereto and made a part hereof
Security Deposit: $77,098.00
Tenant's Proportionate Share:
Of Building: 10.14% of 123,400 total square fed
Of Project: N/A
The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.
LANDLORD TENANT
Spieker Properties, L.P., Heuristic Physics Laboratories, Inc.
a California limited partnership a California corporation
By: Spieker Properties, Inc.
a Maryland corporation, By: /s/ DAVID Y. LEPEJIAN
its general partner ------------------------------
David Y. Lepejian
Its: President & CEO
By: /s/ JOSEPH D. RUSSELL, JR.
----------------------------------
Joseph D. Russell, Jr.
Its: Regional Senior Vice President
TABLE OF CONTENTS
PAGE
1. Premises....................................................................................................1
2. Possession and Lease Commencement...........................................................................1
3. Term........................................................................................................2
4. Use.........................................................................................................2
5. Rules and Regulations.......................................................................................5
6. Rent........................................................................................................5
7. Operating Expenses..........................................................................................6
8. Insurance and Indemnification..............................................................................12
9. Waiver of Subrogation......................................................................................15
10. Landlord's Repairs and Maintenance.........................................................................15
11. Tenant's Repairs and Maintenance...........................................................................16
12. Alterations................................................................................................16
13. Signs......................................................................................................18
14. Inspection/Posting Notices.................................................................................18
15. Services and Utilities.....................................................................................19
16. Subordination..............................................................................................21
17. Financial Statements.......................................................................................22
18. Estoppel Certificate.......................................................................................22
19. Security Deposit...........................................................................................23
20. Limitation of Tenants Remedies.............................................................................23
21. Assignment and Subletting..................................................................................24
22. Authority..................................................................................................27
23. Condemnation...............................................................................................27
24. Casualty Damage............................................................................................28
25. Holding Over...............................................................................................30
26. Default....................................................................................................31
27. Liens......................................................................................................34
28. Substitution...............................................................................................34
29. Transfers by Landlord......................................................................................35
30. Right of Landlord to Perform Tenants Covenants.............................................................35
31. Waiver.....................................................................................................35
32. Notices....................................................................................................36
33. Attorneys' Fees............................................................................................37
34. Successors and Assigns.....................................................................................37
35. Force Majeure..............................................................................................37
36. Surrender of Premises......................................................................................37
37. Parking....................................................................................................38
38. Miscellaneous..............................................................................................39
39. Additional Provisions......................................................................................41
40. Jury Trial Waiver..........................................................................................42
Signatures.................................................................................................19
Addendum...................................................................................................20
Exhibits:
Exhibit A.................................................................................Rules and Regulations
Exhibit B.......................................................................Site Plan, Property Description
Exhibit C...........................................................................Lease Improvement Agreement
Additional Exhibits as Required
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LEASE
THIS LEASE is made as of the 19th day of August, 1998, by and between
Spieker Properties, L.P., a California limited partnership (hereinafter called
"Landlord"), and Heuristic Physics Laboratories, Inc., a California corporation
(hereinafter called "Tenant").
1. PREMISES
Landlord leases to Tenant and Tenant leases from Landlord, upon the
terms and conditions hereinafter set forth, those premises (the "Premises")
outlined in red on Exhibit B and described in the Basic Lease Information. The
Premises shall be all or part of a building (the "Building") and of a project
(the "Project"), which may consist of more than one building and additional
facilities, as described in the Basic Lease Information. The Building and
Project are outlined in blue and green respectively on Exhibit B. Subject to
Paragraph 38.E. Landlord and Tenant acknowledge that physical changes may occur
from time to time in the Premises, Building or Project, and that the number of
buildings and additional facilities which constitute the Project may change from
time to time, which may result in an adjustment in Tenant's Proportionate Share,
as defined in the Basic Lease Information, as provided in Paragraph 7.A.
2. POSSESSION AND LEASE COMMENCEMENT
A. CONSTRUCTION OF IMPROVEMENTS. Landlord shall deliver possession of the
Premises to Tenant in broom-clean condition, free of debris and with the roof
in good repair and all electrical, HVAC, plumbing, sewer, water, gas and
other Building systems in good working condition. If during the first thirty
(30) days of the Term, any Building system or the roof is not in the
condition required hereby or any repair as aforesaid has not been properly
completed, Tenant shall notify Landlord in writing during such thirty (30)
day period, of the need for repair, and the repair shall be completed by
Landlord at no cost to Tenant in accordance with Landlord's repair obligation
per Paragraph 10 of this Lease, except to the extent that Tenant caused such
need for repair. If this Lease pertains to a Building to be constructed or
improvements to be constructed within a Building, the provisions of this
Paragraph 2.B. shall apply in lieu of the provisions of Paragraph 2.A. above
and the term commencement date ("Term Commencement Date") shall be the
earlier of the date on which: (1) Tenant takes possession of some or all of
the Premises; or (2) the improvements to be constructed or performed in the
Premises by Landlord (if any) shall have been substantially completed as
defined on Exhibit C and Tenant's taking of possession of the Premises or any
part thereof shall constitute Tenant's confirmation of substantial completion
for all purposes hereof, whether or not substantial completion of the
Building or Project shall have occurred. If for any reason Landlord cannot
deliver possession of the Premises to Tenant on the scheduled Term
Commencement Date, Landlord shall not be subject to any liability therefor,
nor shall Landlord be in default hereunder nor shall such failure affect the
validity of this Lease, and Tenant agrees to accept possession of the
Premises at such time as such improvements have been substantially completed,
as defined in the Lease Improvement Agreement which date shall then be deemed
the Term Commencement Date. Notwithstanding anything to the contrary
contained in the preceding sentence, if Landlord has not delivered possession
of the Premises to Tenant through no fault of Tenant and in the absence of
force majeure, with the Tenant Improvements substantially completed, by April
1, 1999, Tenant shall have the right to terminate this Lease and to receive a
refund of all monies previously tendered by Landlord which right Tenant must
exercise in writing prior to April 15, 1999. In the event Tenant fails to
exercise its right pursuant to this paragraph, Tenant shall have waived its
right to terminate this Lease. Tenant shall not be liable for any Rent for
any period prior to the Term Commencement Date (but without affecting any
obligations of Tenant under any improvement agreement appended to this
Lease). In the event of any dispute as to substantial completion of work
performed or required to be performed by Landlord, the certificate of
Landlord's architect or general contractor shall be conclusive. Substantial
completion shall have occurred notwithstanding Tenant's submission of a
punchlist to Landlord, which Tenant shall submit, if at all, within ten (10)
business days after the Term Commencement Date or otherwise in accordance
with any improvement agreement appended to this Lease. Upon Landlord's
request, following substantial completion, Tenant shall promptly execute and
return to Landlord a "Start-Up Letter" in which Tenant shall agree, among
other things, to acceptance of the Premises and to the determination of the
Term Commencement Date, in accordance with the terms of this Lease but
Tenant's failure or refusal to do so shall not negate Tenant's acceptance of
the Premises or affect determination of the Term Commencement Date.
3. TERM
The term of this Lease (the "Term") shall commence on the Term
Commencement Date and continue in full force and effect for the number of
months specified as the Length of Term in the Basic Lease Information or
until this Lease is terminated as otherwise provided herein. If the Term
Commencement Date is a date other than the first day of the calendar month,
the Term shall be the number of months of the Length of Term in addition to
the remainder of the calendar month following the Term Commencement Date.
Landlord agrees to permit Tenant to have access to the premises fourteen (14)
days prior to the Commencement Date for purposes of installing its telephone
and computer cabling, with all terms and conditions of the Lease in full
force and effect, except payment of Base Rent.
4. USE
A. GENERAL. Tenant shall use the Premises for the permitted use specified in the
Basic Lease Information ("Permitted Use") and for no other use or purpose.
Tenant shall control Tenant's employees, agents, customers, visitors, invitees,
licensees, contractors, assignees and subtenants (collectively, "Tenant's
Parties") in such a manner that Tenant and Tenant's Parties cumulatively do not
exceed the occupant density (the "Occupancy Density") or the parking density
(the "Parking Density") specified in the Basic Lease Information
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at any time. So long as Tenant is occupying the Premises, Tenant and Tenant's
Parties shall have the nonexclusive right to use, in common with other
parties occupying the Building or Project, the parking areas, driveways and
other common areas of the Building and Project, subject to the terms of this
Lease and such reasonable rules and regulations as Landlord may from time to
time prescribe. Landlord reserves the right, without notice or liability to
Tenant, and without the same constituting an actual or constructive eviction,
to alter or modify the common areas from time to time, including the location
and configuration thereof, and the amenities and facilities which Landlord
may determine to provide from time to time.
B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas, substances,
noise or vibrations to emanate from the Premises or from any portion of the
common area as a result of Tenant's or any Tenant's Party's use thereof, nor
take any action which would constitute a nuisance or would unreasonably disturb,
obstruct or endanger any other tenants or occupants of the Building or Project
or elsewhere, or interfere with their use of their respective premises or common
area. Storage outside the Premises of materials, vehicles or any other items is
prohibited. Tenant shall not use or allow the Premises to be used for any
immoral, improper or unlawful purpose, nor shall Tenant cause or maintain or
permit any nuisance in, on or about the Premises. Tenant shall not commit or
suffer the commission of any waste in, on or about the Premises. Tenant shall
not allow any sale by auction upon the Premises, or place any loads upon the
floors, walls or ceilings which could endanger the structure, or place any
harmful substances in the drainage system of the Building or Project. No waste,
materials or refuse shall be dumped upon or permitted to remain outside the
Promises. Landlord shall not be responsible to Tenant for the non-compliance by
any other tenant or occupant of the Building or Project with any of the
above-referenced rules or any other terms or provisions of such tenant's or
occupant's lease or other contract.
C. COMPLIANCE WITH REGULATIONS. Subject to the other provisions of the Lease, by
entering the Premises to take possession, Tenant accepts the Premises in the
condition existing as of the date of such entry. Tenant shall at its sole cost
and expense strictly comply with all existing or future applicable municipal,
state and federal and other governmental statutes, rules, requirements,
regulations, laws and ordinances, including zoning ordinances and regulations,
and covenants, easements and restrictions of record governing and relating to
Tenant's and Tenant's Parties' use, occupancy or possession of the Premises, to
Tenant's use of the common areas, or to Tenant's and Tenant's Parties' use,
storage, generation or disposal of Hazardous Materials (hereinafter defined)
(collectively "Regulations"). Tenant shall at its sole cost and expense obtain
any and all licenses or permits necessary for Tenant's use of the Premises.
Tenant shall at its sole cost and expense promptly comply with the requirements
of any board of fire underwriters or other similar body now or hereafter
constituted. Tenant shall not do or permit anything to be done in, on, under or
about the Project or bring or keep anything which will in any way increase the
rate of any insurance upon the Premises, Building or Project or upon any
contents therein or cause a cancellation of said insurance or otherwise affect
said insurance in any manner. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord), protect and hold Landlord harmless from and
against any loss, cost, expense, damage, attorneys' fees or liability arising
out of the failure of Tenant to comply with any Regulation. Tenant's obligations
pursuant to the foregoing indemnity shall survive the expiration or earlier
termination of this Lease.
D. HAZARDOUS MATERIALS. As used in this Lease, "Hazardous Materials" shall
include, but not be limited to, hazardous, toxic and radioactive materials
and those substances defined as "hazardous substances," "hazardous
materials," "hazardous wastes" "toxic substances," or other similar
designations in any Regulation. Tenant shall not cause, or allow any of
Tenant's Parties to cause, any Hazardous Materials to be handled, used,
generated, stored, released or disposed of in, on, under or about the
Premises, the Building or the Project or surrounding land or environment in
violation of any Regulations. Tenant must obtain Landlord's written consent
prior to the introduction of any Hazardous Materials onto the Project.
Notwithstanding the foregoing, Tenant may handle, store, use and dispose of
products containing small quantities of Hazardous Materials for "general
office purposes" (such as toner for copiers) to the extent customary and
necessary for the Permitted Use of the Premises; provided that Tenant shall
always handle, store, use, and dispose of any such Hazardous Materials in a
safe and lawful manner and never allow such Hazardous Materials to
contaminate the Premises, Building, or Project or surrounding land or
environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which
Tenant becomes aware, whether or not caused by Tenant. Landlord shall have
the right at all reasonable times to inspect the Premises and to conduct
tests and investigations to determine whether Tenant is in compliance with
the foregoing provisions, the costs of all such inspections, tests and
investigations to be borne by Tenant if Landlord has reasonable grounds to
believe that Tenant is in violation of the foregoing provisions of this
Paragraph 4D. Tenant shall indemnify, defend (by counsel reasonably
acceptable to Landlord), protect and hold Landlord harmless from and against
any and all claims, liabilities, losses, costs, loss of rents, liens,
damages, injuries or expenses (including attorneys' and consultants' fees and
court costs), demands, causes of action, or judgments directly or indirectly
arising out of or related to the use, generation, storage, release, or
disposal of Hazardous Materials by Tenant or any of Tenant's Parties in, on,
under or about the Premises, the Building or the Project or surrounding land
or environment, which indemnity shall include, without limitation, damages
for personal or bodily injury, property damage, damage to the environment or
natural resources occurring on or off the premises, losses attributable to
diminution in value or adverse effects on marketability, the cost of any
investigation, monitoring, government oversight, repair, removal,
remediation, restoration, abatement, and disposal, and the preparation of any
closure or other required plans, whether such action is required or necessary
prior to or following the expiration or earlier termination of this Lease.
Neither the consent by Landlord to the use, generation, storage, release or
disposal of Hazardous Materials nor the strict compliance by Tenant with all
laws pertaining to Hazardous Materials shall excuse Tenant from Tenant's
obligation of indemnification pursuant to this Paragraph 4.D. Tenant's
obligations pursuant to the foregoing indemnity shall survive the expiration
or earlier termination of this Lease.
Landlord shall indemnify, defend and hold Tenant, its affiliates, their
respective directors, officers, employees and agents harmless from and against
any and all claims, penalties, fines, costs, liabilities or losses and
attorneys' fees arising out of any Hazardous Material in, on or about the
Project or the Premises which was created, handled, placed, stored, used,
transported or disposed of by Landlord, excluding, however, any Hazardous
Material whose presence was caused by Tenant or its affiliates or their
respective agents.
5. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as Exhibit A and any other reasonable rules and
regulations and any modifications or additions thereto which Landlord may from
time to time prescribe in writing for the purpose of maintaining the proper
care, cleanliness, safety, traffic flow and general order of the premises or the
Building or Project. Tenant shall cause Tenant's Parties to comply with such
rules and regulations. Landlord shall not be responsible to Tenant for the
non-compliance by any other tenant or occupant of the Building or project with
any of such rules and regulations, any other tenant's or occupant's lease or any
Regulations. Landlord shall enforce the rules and regulations in a
non-discriminatory manner.
6. RENT
A. BASE RENT. Tenant shall pay to Landlord and Landlord shall receive, without
notice or demand throughout the Term, Base Rent as specified in the Basic Lease
Information, payable in monthly installments in advance on or before the first
day of each calendar month, in lawful money of the United States, without
deduction or offset whatsoever, at the Remittance Address specified in the Basic
Lease Information or to such other place as Landlord may from time to time
designate in writing. If the obligation for payment of Base Rent commences on a
day other than
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the first day of a month, then Base Rent shall be prorated and the prorated
installment shall be paid on the first day of the calendar month next
succeeding the Term Commencement Date. The Base Rent payable by Tenant
hereunder is subject to adjustment as provided elsewhere in this Lease, as
applicable. As used herein, the term "Base Rent" shall mean the Base Rent
specified in the Basic Lease Information as it may be so adjusted from time
to time.
B. ADDITIONAL RENT. All monies other than Base Rent required to be paid by
Tenant hereunder, including. but not limited to. Tenant's Proportionate Share of
Operating Expenses, as specified in Paragraph 7 of this Lease, charges to be
paid by Tenant under Paragraph 15, the interest and late charge described in
Paragraphs 26.C. and D., and any monies spent by Landlord pursuant to Paragraph
30, shall be considered additional rent ("Additional Rent"). "Rent" shall mean
Base Rent and Additional Rent.
7. OPERATING EXPENSES
A. OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share
of the Building and/or Project (as applicable), as defined in the Basic Lease
Information, of Operating Expenses (defined below) in the manner set forth
below. Tenant shall pay the applicable Tenant's Proportionate Share of each
such Operating Expenses. Subject to Paragraph 38.E., Landlord and Tenant
acknowledge that if the number of buildings which constitute the Project
increases or decreases, or if physical changes are made to the Premises,
Building or Project or the configuration of any thereof, Landlord may at its
discretion reasonably adjust Tenant's Proportionate Share of the Building or
Project to reflect the change. Landlord's determination of Tenant's
Proportionate Share of the Building and of the Project shall be conclusive so
long as it is reasonably and consistently applied. "Operating Expenses" shall
mean all expenses and costs of every kind and nature which Landlord shall pay
or become obligated to pay, because of or in connection with the ownership,
management, maintenance, repair, preservation. replacement and operation of
the Building or Project and its supporting facilities and such additional
facilities now and in subsequent years as may be determined by Landlord to be
necessary or desirable to the Building and/or Project (as determined in a
reasonable manner) other than those expenses and costs which are specifically
attributable to Tenant or which are expressly made the financial
responsibility of Landlord or specific tenants of the Building or Project
pursuant to this Lease. Operating Expenses shall include, but are not limited
to, the following:
(1) TAXES. All real property taxes and assessments, possessory interest
taxes, sales taxes, personal property taxes, business or license taxes
or fees, gross receipts taxes, service payments in lieu of such taxes or
fees, annual or periodic license or use fees. excises, transit charges,
and other impositions, general and special, ordinary and extraordinary,
unforeseen as well as foreseen, of any kind (including fees "in-lieu" of
any such tax or assessment) which we now or hereafter assessed, levied,
charged, confirmed, or imposed by any public authority upon the Building
or Project, its operations or the Rent (or any portion or component
thereof), or any tax, assessment or fee imposed in substitution,
partially or totally, of any of the above. Operating Expenses shall also
include any taxes, assessments, reassessments, or other fees or
impositions with respect to the development. leasing, management,
maintenance, alteration, repair, use or occupancy of the Premises.
Building or Project or any portion thereof, including, without
limitation, by or for Tenant, and all increases therein or reassessments
thereof whether the increases or reassessments result from increased
rate and/or valuation (whether upon a transfer of the Building or
Project or any portion thereof or any interest therein or for any other
reason). Operating Expenses shall not include inheritance or estate
taxes imposed upon or assessed against the interest of any person in the
Project, or taxes computed upon the basis of the net income of any
owners of any interest in the Project. If it shall not be lawful for
Tenant to reimburse Landlord for all or any part of such taxes, the
monthly rental payable to Landlord under this Lease shall be revised to
net Landlord the same net rental after imposition of any such taxes by
Landlord as would have been payable to Landlord prior to the payment of
any such taxes.
(2) INSURANCE. All insurance premiums and costs, including, but not
limited to, any deductible amounts, premiums and other costs of
insurance incurred by Landlord, including for the insurance coverage set
forth in Paragraph 8.A. herein.
(3) COMMON AREA MAINTENANCE.
(a) Repairs, replacements, and general maintenance of and for the
Building and Project and public and common areas and facilities of
and comprising the Building and Project, including, but not limited
to, the roof and roof membrane, windows, elevators, restrooms,
conference rooms, health club facilities, lobbies, mezzanines,
balconies, mechanical rooms, building exteriors, alarm systems,
pest extermination, landscaped areas parking and service areas,
driveways, sidewalks, loading areas, fire sprinkler systems,
sanitary and storm sewer lines, utility services,
heating/ventilation/air conditioning systems, electrical,
mechanical or other systems, telephone equipment and wiring
servicing, plumbing, lighting, and any other item or areas which
affect the operation or appearance of the Building or Project,
which determination shall be at Landlord's discretion. except for:
those items expressly made the financial responsibility of Landlord
pursuant to Paragraph 10 hereof; those items to the extent paid for
by the proceeds of insurance; and those items attributable solely
or jointly to specific tenants of the Building or Project.
(b) Repairs, replacements, and general maintenance shall include
the cost of any capital improvements made to or capital assets
acquired for the Project or Building that in Landlord's discretion
may reduce any other Operating Expenses, including present or
future repair work, are reasonably necessary for the health and
safety of the occupants of the Building or Project, or are required
to comply with any Regulation, such costs or allocable portions
thereof to be amortized over such reasonable period as Landlord
shall determine, together with interest on the unamortized balance
at the publicly announced "prime rate" charged by Wells Fargo Bank,
NA. (San Francisco) or its successor at the time such improvements
or capital asset are constructed or acquired, plus two (2)
percentage points, or in the absence of such prime rate, then at
the U.S. Treasury six-month market note (or bond, if so designated)
rate as published by any national financial publication selected by
Landlord, plus four (4) percentage points, but in no event more
than the maximum rate permitted by law, plus reasonable financing
charges.
(c) Payment under or for any easement, license, permit, operating
agreement, declaration, restrictive covenant or instrument relating
to the Building or Project.
(d) All expenses and rental related to services and costs of
supplies, materials and equipment used in operating, managing and
maintaining the Premises, Building and Project, the equipment
therein and the adjacent sidewalks, driveways, parking and service
areas, including, without limitation, expenses related to service
agreements regarding security, fire and other alarm systems,
janitorial services, window cleaning, elevator maintenance,
building exterior maintenance, landscaping and expenses related to
the administration, management and operation of the Project,
including without limitation salaries, wages and benefits and
management office rent.
(e) The cost of supplying any services and utilities which benefit
all or a portion of the Premises, Building or Project, including
without limitation services and utilities provided pursuant to
Paragraph 15 hereof.
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(f) Legal expenses and the cost of audits by certified public
accountants; provided, however, that legal expenses chargeable as
Operating Expenses shall not include the cost of negotiating
leases, collecting rents, evicting tenants nor shall it include
costs incurred in legal proceedings with or against any tenant or
to enforce the provisions of any lease.
(g) A management and accounting cost recovery fee equal to five
percent (50/6) of the sum of the Project's base rents and Operating
Expenses (other than such management and accounting fee).
If the rentable area of the Building and/or Project is not fully
occupied during any fiscal year of the Term as determined by Landlord, an
adjustment shall be made in Landlord's discretion in computing the Operating
Expenses for such year so that Operating Expenses shall be computed as though
the Building had been one hundred percent (100%) occupied. Tenant pays an
equitable portion of all variable items (e.g., utilities, janitorial services
and other component expenses at are affected by variations in occupancy
levels) of Operating Expenses, as reasonably determined by Landlord;
provided, however, that in no event shall Landlord be entitled to collect in
excess of one hundred percent (1001%) of the total Operating Expenses from
all of the tenants in the Building or Project, as the case may be.
Operating Expenses shall not include the cost of providing tenant
improvements or other specific costs incurred for the account of, separately
billed to and paid by specific tenants of the Building or Project, the
initial construction cost of the Building, or debt service on any mortgage or
dead of trust recorded with respect to the Project other than pursuant to
Paragraph 7.A.(3)(b) above. Notwithstanding anything herein to the contrary,
in any instance wherein Landlord, in Landlord's sole discretion, deems Tenant
to be responsible for any amounts greater than Tenant's Proportionate Share,
Landlord shall have the right to allocate costs in any manner Landlord
reasonably deems appropriate.
Notwithstanding anything in the definition of Operating, Expenses in
this Lease to the contrary, Operating Expenses shall not include the
following, except to the extent specifically permitted by a specific
exception to the following:
(i) Any ground lease rental;
(ii) Costs of capital improvements, replacements or equipment and
any depreciation or amortization expenses thereon, except as specifically set
forth in the definition of Operating Expenses in Paragraph 7.A of the Lease;
(iii) Rentals for items (except when needed in connection with
normal repairs and maintenance of permanent systems) which if purchased,
rather than rented. would constitute a capital improvement which is
specifically excluded in Subsection (ii) above (excluding, however, equipment
not affixed to the Building or Project which is used in providing janitorial
or similar services);
(iv) Costs incurred by Landlord for the repair of damage to the
Building or Project. to the extent that Landlord is reimbursed by insurance
proceeds;
(v) Costs, including permit, license and inspection costs. incurred
with respect to the installation of tenant or other occupant improvements
made for tenants or other occupants in the Building or the Project or
incurred in renovating or otherwise improving, decorating, painting or
redecorating vacant space for or the premises of other tenants or other
occupants of the Building;
(vi) Marketing costs, including leasing commissions, attorneys'
fees in connection with the negotiation and preparation of letters, deal
memos, letters of intent, leases, subleases and/or assignments, space
planning costs, and other costs and expenses incurred in connection with
lease, sublease and/or assignment negotiations and transactions with present
or Prospective tenants or other occupants of the Building or the Project;
(vii) Costs incurred by Landlord due to the violation by Landlord
of the terms and conditions of any lease of space in the Building or the
Project;
(viii) Interest, principal, points and fees on debt or amortization
payments on any mortgage or dead of trust or any other debt instrument
encumbering the Building or Project or the land on which the Building or
Project is situated;
(ix) Except for making repairs or keeping permanent systems in
operation while repairs are being made, rentals and other related expenses
incurred in leasing air conditioning systems, elevators or other equipment
ordinarily considered to be of a capital nature, except equipment not affixed
to the Building which is used in providing janitorial or similar services;
(x) Advertising and promotional expenditures (except for retail
property promotions);
(xi) Costs incurred in connection with upgrading the Building or
Project to comply with disability, life, fire and safety codes in effect
prior to the issuance of the temporary certificate of occupancy for the
Building;
(xii) Interest, fines or penalties incurred as a result of
Landlord's failure to make payments when due unless such failure is
commercially reasonable under the circumstances;
(xiii) Costs arising from Landlord's charitable or political
contributions;
(xiv) Costs for acquisition of sculpture, paintings or other
objects of art in common areas;
(xv) The depreciation of the Building and other real property
structures in the Project;
(xvi) Landlord's general corporate overhead and general
administrative expenses not related to the operation of the Project, except
as specifically set forth in Paragraph 7.A;
(xvii) Any bad debt loss, rent loss or reserves for b ad debts or
rent loss, or reserves for equipment or capital replacement;
6
The above enumeration of services and facilities shall not be deemed to
impose an obligation on Landlord to make available or provide such services
or facilities except to the extent if any that Landlord has specifically
agreed elsewhere in this Lease to make the same available or provide the
same. Without limiting the generality of the foregoing. Tenant acknowledges
and agrees that it shall be responsible for providing adequate security for
its use of the Premises, the Building and the Project and that Landlord shall
have no obligation or liability with respect thereto except to the extent if
that Landlord provide the same.
B. PAYMENT OF ESTIMATED OPERATING EXPENSES. Estimated Operating Expenses" for
any particular year shall mean Landlord's estimate of the Operating Expenses for
such fiscal year made with respect to such fiscal year as hereinafter provided.
Landlord shall have the right from time to time to revise its fiscal year and
interim accounting periods so long as the periods as so revised are reconciled
with prior periods in a reasonable manner. During the last month of each fiscal
year during the Term, or as soon thereafter as practicable, Landlord shall give
Tenant written notice of the Estimated Operating Expenses for the ensuing fiscal
year. Tenant shall pay Tenant's Proportionate Share of the Estimated Operating
Expenses with installments of Base Rent for the fiscal year to which the
Estimated Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. Such payment shall be
construed to be Additional Rent for all purposes hereunder. If at any time
during the course of the fiscal year, Landlord determines that Operating
Expenses are projected to vary from the then Estimated Operating Expenses by
more than five percent (5%). Landlord may, by written notice to Tenant, revise
the Estimated Operating Expenses for the balance of such fiscal year, and
Tenant's monthly installments for the remainder of such year shall be adjusted
so that by the end of such fiscal year Tenant has paid to Landlord Tenant's
Proportionate Share of the revised Estimated Operating Expenses for such year,
such Additional Rent for all purposes hereunder.
C. COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "Operating Expense Adjustment"
"I mean the difference between Estimated Operating Expenses and actual Operating
Expenses for any fiscal year determined as hereinafter provided. Within one
hundred twenty (120) days after the end of each fiscal year, or as soon
thereafter as practicable, Landlord shall deliver to Tenant a statement of
actual Operating Expenses for the fiscal year just ended, accompanied by a
computation of Operating Expense Adjustment. If such statement shows that
Tenant's payment based upon Estimated Operating Expenses is less than Tenant's
Proportionate Share of Operating Expenses, then Tenant shall pay to Landlord the
difference within twenty (20) days after receipt of such statement, such payment
to constitute Additional Rent for all purposes hereunder. If such statement
shows that Tenant's payments of Estimated Operating Expenses exceed Tenant's
Proportionate Share of Operating Expenses, then (provided that Tenant is not in
default under this Lease) Landlord shall pay to Tenant the difference within
twenty (20) days after delivery of such statement to Tenant. If this Lease has
been terminated or the Term hereof has expired prior to the date of such
statement, then the Operating Expense Adjustment shall be paid by the
appropriate party within twenty (20) days after the date of delivery of the
statement. Should this Lease commence or terminate at any time other than the
first day of the fiscal year, Tenant's Proportionate Share of the Operating
Expense Adjustment shall be prorated based on a month of 30 days and the number
of calendar months during such fiscal year that this Lease is in effect.
Notwithstanding anything to the contrary contained in Paragraph 7.A or 7.B,
Landlord's failure to provide any notices or statements within the time periods
specified in those paragraphs shall in no way excuse Tenant from its obligation
to pay Tenant's Proportionate Share of Operating Expenses.
D. NET LEASE. This shall be a triple net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses, except as specifically
provided to the contrary in this Lease. The provisions for payment of Operating
Expenses and the Operating Expense Adjustment are intended to pass on to Tenant
and reimburse Landlord for all costs and expenses of the nature described in
Paragraph 7.A. incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building
and/or Project and its supporting facilities and such additional facilities now
and in subsequent years as may be determined by Landlord to be necessary or
desirable to the Building and/or Project.
E. TENANT AUDIT. If Tenant shall dispute the amount set forth in any statement
provided by Landlord under Paragraph 7.B. or 7.C. above, Tenant shall have the
right, not later than sixty (60) days following receipt of such statement and
upon the condition that Tenant shall first deposit with Landlord the full amount
in dispute, to cause Landlord's books and records with respect to Operating
Expenses for such fiscal year to be audited by certified public accountants
selected by Tenant and subject to Landlord's reasonable right of approval. The
Operating Expense Adjustment shall be appropriately adjusted on the basis of
such audit. If such audit discloses a liability for a refund in excess of ten
percent (100%) of Tenant's Proportionate Share of the Operating Expenses
previously reported, the cost of such audit shall be home by Landlord; otherwise
the cost of such audit shall be paid by Tenant. If Tenant shall not request an
audit in accordance with the provisions of this Paragraph 7.E. within 60 days
after receipt of Landlord's statement provided pursuant to Paragraph 7.B. or
7.C., such statement shall be final and binding for all purposes hereof.
8. INSURANCE AND INDEMNIFICATION
A. LANDLORD'S INSURANCE. All insurance maintained by Landlord shall be for the
sole benefit of Landlord and under Landlord's sole control.
(1) PROPERTY INSURANCE. Landlord agrees to maintain property insurance
insuring the Building against damage or destruction due to risk
including fire, vandalism, and malicious mischief in an amount not less
than the replacement cost thereof. in the form and with deductibles and
endorsements as selected by Landlord. At its election, Landlord may
instead (but shall have no obligation to) obtain "All Risk" coverage,
and may also obtain earthquake, pollution, and/or flood insurance in
amounts selected by Landlord.
(2) OPTIONAL INSURANCE. Landlord, at Landlord's option, may also (but
shall have no obligation to) carry insurance against loss of rent, in an
amount equal to the amount of Base Rent and Additional Rent that
Landlord could be required to abate to all Building tenants in the event
of condemnation or casualty damage for a period of twelve (12) months.
Landlord may also (but shall have no obligation to) carry such other
insurance as Landlord may deem prudent or advisable, including, without
limitation, liability insurance in such amounts and on such terms as
Landlord shall determine. Landlord shall not e obligated to insure, and
shall have no responsibility whatsoever for any damage to, any
furniture, machinery, goods, inventory or supplies, or other personal
property or fixtures which Tenant may keep or maintain in the Premises,
or any leasehold improvements, additions or alterations within the
Premises.
B. TENANT'S INSURANCE.
(1) PROPERTY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term, insurance on all personal property and
fixtures of Tenant and all improvements, additions or alterations made
by or for Tenant to the Premises on an "All Risk" basis, insuring such
property for the full replacement value of such property.
(2) LIABILITY INSURANCE. Tenant shall procure at Tenant's sole cost and
expense and keep in effect from the date of this Lease and at all times
until the end of the Term Commercial General Liability insurance
covering bodily injury and property damage liability occurring in or
about the Premises or arising out of the use and occupancy of the
Premises and the Project, and
7
any part of either, and any areas adjacent thereto, and the business
operated by Tenant or by any other occupant of the Premises. Such
insurance shall include contractual liability insurance coverage
insuring all of Tenant's indemnity obligations under this Lease. Such
coverage shall have a minimum combined single limit of liability of at
least Two Million Dollars ($2.000,000.00). and a minimum general
aggregate limit of Three Million Dollars ($3,000.000.00), with an
"Additional Insured - Managers or Lessors of Premises Endorsement" All
such policies shall be written to apply to all bodily injury (including
death). property damage or loss, personal and advertising injury and
other covered loss, however occasioned, occurring during the policy
term. shall be endorsed to add Landlord and any party holding an
interest to which this Lease may be subordinated as an additional
insured, and shall provide that such coverage shall be "primary" and
non-contributing with any insurance maintained by Landlord, which shall
be excess insurance only. Such coverage shall also contain endorsements
including employees as additional insureds if not covered by Tenant's
Commercial General Liability Insurance. All such insurance shall provide
for the severability of interests of insureds; and shall be written on
an "occurrence" basis, which shall afford coverage for all claims based
on acts, omissions, injury and damage, which occurred or arose (or the
onset of which occurred or arose) in whole or in part during the policy
period.
(3) WORKERS' COMPENSATION AND EMPLOYERS' LIABILITY INSURANCE. Tenant
shall carry Workers* Compensation Insurance as required by any
Regulation, throughout the Term at Tenant's sole cost and expense.
Tenant shall also carry Employers' Liability Insurance in amounts not
less than One Million Dollars ($1,000,000) each accident for bodily
injury by accident; One Million Dollars ($1,000,000) policy limit for
bodily injury by disease; and One Million Dollars (S 1,000.000) each
employee for bodily injury by disease, throughout the Term at Tenant's
sole cost and expense.
(4) GENERAL INSURANCE REQUIREMENTS. All coverages described in this
Paragraph 8.B. shall be endorsed to (i) provide Landlord with thirty
(30) days' notice of cancellation or change in terms; and (ii) waive all
rights of subrogation by the insurance carrier against Landlord. If at
any time during the Term the amount or coverage of insurance which
Tenant is required to carry under this Paragraph 8.13. is, in Landlord's
reasonable judgment, materially less than the amount or type of
insurance coverage typically carried by owners or tenants of properties
located in the general area in which the Premises are located which are
similar to and operated for similar purposes as the Premises or if
Tenant's use of the Premises should change with or without Landlord's
consent, Landlord shall have the right to require Tenant to increase the
amount or change the types of insurance coverage required under this
Paragraph 8.13. All insurance policies required to be carried by Tenant
under this Lease shall be written by companies rated A X or better in
"Best's Insurance Guide" and authorized to do business in the State of
California. In any event deductible amounts under all insurance policies
required to be carried by Tenant under this Lease shall not exceed Five
Thousand Dollars ($5,000.00) per occurrence. Tenant shall deliver to
Landlord on or before the Term Commencement Date, and thereafter at
least thirty (30) days before the expiration dates of the expired
policies, certified copies of Tenant's insurance policies, or a
certificate evidencing the same issued by the insurer thereunder, and,
if Tenant shall fail to procure such insurance. or to deliver such
policies or certificates, Landlord may, at Landlord's option and in
addition to Landlord's other remedies in the event of a default by
Tenant hereunder, procure the same for the account of Tenant, and the
cost thereof shall be paid to Landlord as Additional Rent.
C. INDEMNIFICATION. Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord, protect and hold Landlord harmless from and against
any and all claims, liabilities, losses, costs, loss of rents. liens,
damages, injuries or expenses, including reasonable attorneys' and
consultants' fees and court costs, demands, causes of action, or judgments,
directly or indirectly arising out of or related to: (1) claims of injury to
or death of persons or damage to property occurring or resulting directly or
indirectly from the use or occupancy of the Premises. Building or Project by
Tenant or Tenant's Parties, or from activities or failures to act of Tenant
or Tenant's Parties; (2) claims arising from work or labor performed, or for
materials or supplies furnished to or at the request or for the account or
Tenant in connection with performance of any work done for the account of
Tenant within the Premises or Project, (3) claims arising from any breach or
default on the part of Tenant in the performance of any covenant contained in
this Lease; and (4) claims arising from the negligence or intentional acts or
omissions of Tenant or Tenant's Parties. The foregoing indemnity by Tenant
shall not be applicable to claims to the extent arising from the gross
negligence or willful misconduct of Landlord. Landlord shall not be liable to
Tenant and Tenant hereby waives all claims against Landlord for any injury or
damage to any person or property in or about the Premises. Building or
Project by or from any cause whatsoever (other than Landlord's gross
negligence or willful misconduct) and. without limiting the generality of the
foregoing, whether caused by water leakage of any character from the roof,
walls. basement or other portion of the Premises, Building or Project, or
caused by gas, fire, oil or electricity in, on or about the Premises,
Building or Project. The provisions of this Paragraph shall survive the
expiration or earlier termination of this Lease.
9. WAIVER OF SUBROGATION
To the extent permitted by law and without affecting Ac coverage
provided by insurance to be maintained hereunder or any other rights or
remedies, Landlord and Tenant each waive any right to recover against the other
for: (a) damages for injury to or death of persons. (b) damages to property,
including personal property; (c) damages to the Premises or any part thereof.
and (d) claims arising by reason or the foregoing due to hazards covered by
insurance maintained or required to be maintained pursuant to this Lease to the
extent of proceeds recovered therefrom, or proceeds which would have been
recoverable therefrom in the case of the failure of any party to maintain any
insurance coverage required to be maintained by such party pursuant to this
Lease. This provision is intended to waive fully. any rights and/or claims
arising by reason of the foregoing, but only to the extent that any of the
foregoing damages and/or claims referred to above arc covered or would be
covered, and only to the extent of such coverage, by insurance actually carried
or required to be maintained pursuant to this Lease by either Landlord or Tenant
This provision is also intended to waive fully, and for the benefit of each
party, any rights and/or claims which might give rise to a right of subrogation
on any insurance carrier. Subject to all qualifications of this Paragraph 9.
Landlord waives its rights as specified in this Paragraph 9 with respect to any
subtenant that it has approved pursuant to Paragraph 21 but only in "change for
the written waiver of such rights to be given by such subtenant to Landlord upon
such subtenant taking possession of the Premises or a portion thereof. Each
party shall cause each insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation against
either party in connection with any damage covered by any policy.
10. LANDLORD'S REPAIRS AND MAINTENANCE
Landlord shall at Landlord's expense maintain in good repair, reasonable
wear and tear excepted, the structural soundness of the roof, foundations,
and exterior walls of the Building. The term "exterior walls" as used herein
shall not include windows. glass or plate glass, doors, special store fronts
or office entries. Any damage caused by or repairs necessitated by any
negligence or act of Tenant or Tenant's Parties may be repaired by Landlord
at Landlord's option and Tenant's expense. Tenant shall immediately give
Landlord written notice of any defect or need of repairs in such components
of the Building for which Landlord is responsible, upon Tenant becoming
actually or constructively aware thereof, after which Landlord shall have a
reasonable opportunity and the right to enter the Premises at all reasonable
times to repair same. Landlord's liability with respect to any defects,
repairs, or maintenance for which Landlord is responsible under any of the
provisions of this Lease shall be limited to the cost of such repairs or
maintenance, and there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of repairs, alterations or improvements in or to any
portion of the Premises, the Building or the Project or to fixtures,
appurtenances or equipment in the Building, except as provided in Paragraph
24. By taking possession of the Premises, Tenant accepts them "as is," as
being in good
8
order, condition and repair and the condition in which Landlord
is obligated to deliver them and suitable for the Permitted Use Find Tenant's
intended operations in the Premises, whether or not any notice of acceptance
is given.
11. TENANT'S REPAIRS AND MAINTENANCE
Tenant shall at all times during the Tam at Tenant's expense maintain
all parts of the Premises and such portions of the Building as are within the
exclusive control of Tenant thereto, except for such repairs and replacements
to be made by Landlord at its sole cost and expense pursuant to Paragraph 10,
in a first-class, good, clean and secure condition and promptly make all
necessary repairs and replacements, as determined by Landlord, with materials
and workmanship of the same character, kind and quality as the original.
Notwithstanding anything to the contrary contained herein, Tenant shall, at
its expense, promptly repair any damage to the Premises or the Building or
Project resulting from or caused by any negligence or act of Tenant or
Tenant's Parties.
12. ALTERATIONS
A. Except for cosmetic alterations, Tenant shall not make, or allow to be made,
any alterations, physical additions, improvements or partitions, including
without limitation the attachment of any fixtures or equipment, in, about or to
the Premises ("Alterations") without obtaining the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed with
respect to proposed Alterations which: (a) comply with all applicable
Regulations; (b) are, in Landlord's opinion, compatible with the Building or the
Project and its mechanical, plumbing, electrical, heating/ventilation/air
conditioning system and will not cause the Building or Project or such systems
to be required to be modified to comply with any Regulations (including. without
limitation, the Americans With Disabilities Act); and (c) will not unreasonably
interfere with the use and occupancy of any other portion of the Building or
Project by any other tenant or its invitees. Specifically, but-without limiting
the generality or the foregoing, Landlord shall have the right of written
consent for all plans and specifications for the proposed Alterations,
construction means and methods, all appropriate permits and licenses, any
contractor or subcontractor to be employed on the work of Alterations, and the
time for performance of such work, and may impose rules and regulations for
contractors and subcontractors performing such work. Landlord shall not require
Tenant to post any payment or performance bonds unless the cost of the proposed
Alterations exceeds $15,000.00. Tenant shall also supply to Landlord any
documents and information reasonably requested by Landlord in connection with
Landlord's consideration of a request for approval hereunder. Tenant shall cause
all Alterations to be accomplished in a first-class, good and workmanlike
manner, and to comply with all applicable Regulations and Paragraph 27 hereof
Tenant shall at Tenant's sole expense, perform any additional work required
under applicable Regulations due to the Alterations hereunder. No review or
consent by Landlord of or to any proposed Alteration or additional work shall
constitute a waiver of Tenant's obligations under this Paragraph 12, nor
constitute any warranty or representation that the same complies with all
applicable Regulations, for which Tenant shall at all times be solely
responsible. Tenant shall reimburse Landlord for all costs which Landlord may
incur in connection with granting approval to Tenant for any such Alterations,
including any costs or expenses which Landlord may incur in electing to have
outside architects and engineers review said plans and specifications. and shall
pay Landlord an administration fee of fifteen percent (15%) of the cost of the
Alterations as Additional Rent hereunder, provided that the Alteration work is
performed by contractors engaged by Landlord on Tenant's behalf. All such
Alterations shall remain the property of Tenant until the expiration or earlier
termination of this Lease, at which time they shall be and become the property
of Landlord; provided, however. that Landlord may, at Landlord's option, require
that Tenant, at Tenant's expense, remove any or all Alterations made by Tenant
and restore the Premises by the expiration or earlier termination of this Lease,
to their condition existing prior to the construction of any such Alterations.
All such removals and restoration shall be accomplished in a first-class and
good and workmanlike manner so as not to cause any damage to the Premises or
Project whatsoever. If Tenant fails to remove such Alterations or Tenant's trade
fixtures or furniture or other personal property, Landlord my keep and use them
or remove any of them and cause them to be stored or sold in accordance with
applicable law, at Tenant's sole expense. In addition to and wholly apart from
Tenant's obligation to pay Tenant's Proportionate Share of Operating Expenses,
but not in duplication thereof. Tenant shall be responsible for and shall pay
prior to delinquency any taxes or governmental service fees, possessory interest
taxes, fees or Ones in lieu of any such taxes, capital levies. or other charges
imposed upon, levied with respect to or assessed against its fixtures or
personal property, on the value of Alterations within the Premises, and on
Tenant's interest pursuant to this Lease, or any increase in any of the
foregoing based on such Alterations. To the extent that any such taxes arc not
separately assessed or billed to Tenant, Tenant shall pay the amount thereof as
invoiced to Tenant by Landlord.
Landlord will not require Tenant to remove the original Tenant
Improvements constructed Prior to commencement upon expiration of the Lease
or sooner termination thereof.
B. In compliance with Paragraph 27 hereof at least ten (10) business days before
beginning construction of any Alteration, Tenant shall give Landlord written
notice of the expected commencement date of that construction to permit Landlord
to post and record a notice of non-responsibility. Upon substantial completion
of construction, if the law so provides, Tenant "I cause a timely notice of
completion to be recorded in the office of the recorder of the county in which
the Building is located.
13. SIGNS
Tenant shall not place, install, affix, paint or maintain any signs,
notices, graphics or banners whatsoever or any window decor which is visible
in or from public view or corridors, the common areas or the exterior of the
Premises or the Building. in or on any exterior window or window fronting
upon any common areas or service area without Landlord's prior written
approval which Landlord shall have the right to withhold in its absolute and
sole discretion; provided that Tenant's name shall be included in any
Building-standard door and directory signage, if any, in accordance with
Landlord's Building signage program, including without limitation, payment by
Tenant of any reasonable fee charged by Landlord for maintaining such signage
which fee shall constitute Additional Rent hereunder. Any installation of
signs, notices, graphics or banners on or about the Premises or Project
approved by Landlord shall be subject to any Regulations and to any other
requirements imposed by Landlord. Tenant shall remove all such signs or
graphics by the expiration or any earlier termination of this Lease. Such
installations and removals shall be made in such manner as to avoid injury to
or defacement of the Premises, Building or Project and any other improvements
contained therein, and Tenant shall repair any injury or defacement including
without limitation discoloration caused by such installation or removal.
14. INSPECTION/POSTING NOTICES
After reasonable notice, except in emergencies where no such notice
shall be required, Landlord and Landlord's agents and representatives, shall
have the right to enter the Premises to inspect the same, to clean, to perform
such work as may be permitted or required hereunder. to make repairs,
improvements or alterations to die Premises, Building or Project or to other
tenant spaces therein, to deal with emergencies, to post such notices as may be
permitted or required by law to prevent the perfection of liens against
Landlord's
9
interest in the Project or to exhibit the Premises in the last nine (9)
months of the Lease term to prospective tenants, purchasers, encumbrancers or
to others, or for any other purpose as Landlord may deem reasonably necessary
or desirable; provided, however. that Landlord shall use reasonable efforts
not to unreasonably interfere with Tenant's business operations. Landlord
shall use good faith efforts to abide by any safety or security precautions
of Tenant. provided that Landlord shall not incur any monetary costs and that
Landlord's access to the Premises as provided in this Lease shall not be
impeded Tenant shall not be entitled to any abatement of Rent by reason of
the exercise of any such right of entry. Tenant waives any claim for damages
for any injury or inconvenience to or interference with Tenant's business.
any loss of occupancy or quiet enjoyment of the Premises, and any other loss
occasioned thereby. excluding only losses due to Landlord's negligence or
willful misconduct. Landlord shall at all times have and retain a key with
which to unlock all of the doors in, upon and about the Premises, excluding
Tenant's vaults and sates or special security areas (designated in advance).
and Landlord shall have the right to use any and all means which Landlord may
deem necessary or proper to open said doors in an emergency, in order to
obtain entry to any portion of the Premises, and any entry to the Premises or
portions thereof obtained by Landlord by any of said means, or otherwise,
shall not be construed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction, actual or constructive, of Tenant from the
Premises or any portions thereof. At any time within six (6) months prior to
the expiration of the Term or following any earlier termination of this Lease
or agreement to terminate this Lease, Landlord shall have the right to erect
on the Premises. Building and/or Project a suitable sign indicating that the
Premises are available for lease.
15. SERVICES AND UTILITIES
A. Provided Tenant "I not be in default hereunder beyond any applicable cure
period, and subject to the provisions elsewhere herein contained and to the
rules and regulations of the Building, Landlord shall furnish to the-Premises
during ordinary business hours of generally recognized business days, to be
determined by Landlord (but exclusive, in any event, of Saturdays, Sundays and
legal holidays), water for lavatory and drinking purposes and electricity, hem
and air conditioning as usually furnished or supplied for use of the Premises
for reasonable and normal office use as of the date Tenant takes possession of
the Premises as determined by Landlord (but not including above-standard or
continuous cooling for excessive heat-generating machines, excess lighting or
equipment), janitorial services during the times and in the manner that such
services or, in Landlord's judgment, customarily furnished in comparable office
buildings in the immediate market area, and elevator service, which shall mean
service either by nonattended automatic elevators or elevators with attendants,
or both, at the option of Landlord. Tenant acknowledges that Tenant has
inspected and accepts the water. electricity, heat and air conditioning and
other utilities and services being supplied or furnished to the Premises as of
the date Tenant takes possession of the Premises, as being sufficient for use of
the Premises for reasonable and normal office use in their present condition,
"as is," and suitable for the Permitted Use, and for Tenant's intended
operations in the Premises. Landlord shall have no obligation to provide
additional or after-hours heating or air conditioning, but if Landlord elects to
provide such services at Tenant's request, Tenant shall pay to Landlord a
reasonable charge for such services as determined by Landlord. Landlord shall
provide after-hours electricity provided that service providers do and are able
to deliver after-hours electricity to Premises building. Tenant agrees to keep
and cause to be kept closed all window covering when necessary because of the
sun's position, and Tenant also-agrees at all times to cooperate fully with
Landlord and to abide by all of the regulations and requirements which Landlord
may prescribe for the proper functioning and protection of electrical, heating,
ventilating and air conditioning systems. Wherever heat-generating machines,
excess lighting or equipment are used in the Premises which affect the
temperature otherwise maintained by the air conditioning system, Landlord
reserves the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation and the cost
of operation and maintenance thereof, shall be paid by Tenant to Landlord upon
demand by Landlord. Subject to the foregoing, Tenant shall have access to the
Premises seven (7) days a week and 24 hours per day.
B. Tenant shall not without written consent of Landlord use any apparatus,
equipment or device in the Premises. including without limitation, computers,
electronic data processing machines, copying machines, and other machines, using
excess lighting or using electric current, water, or any other resource in
excess of or which will in any way increase the amount of electricity, water. or
any other resource being furnished or supplied for the use of the Premises for
reasonable and normal office use, in each case as of the date Tenant takes
possession of the Premises as determined by Landlord, or which will require
additions or alterations to or interfere with the Building power distribution
systems; nor connect with electric current except through existing electrical
outlets in the Premises or water pipes, any apparatus, equipment or device for
the purpose of using electrical current, water, or any other resource. If Tenant
shall require water or electric current or any other resource in excess of that
being furnished or supplied for the use of the Premises as of the date Tenant
takes possession of the Premises as determined by Landlord, Tenant shall first
procure the written consent of Landlord which Landlord may refuse, to the use
thereof, and Landlord may cause a special meter to be installed in the Premises
so as to measure the amount of water. electric current or other resource
consumed for any such other use. Tenant "I pay directly to Landlord as an
addition to and separate from payment of Operating Expenses the cost of all such
additional resources. energy, utility service and meters (and of installation.
maintenance and repair thereof and of any additional circuits or other equipment
necessary to furnish such additional resources. energy. utility or service).
Landlord may add to the separate or metered charge a recovery of reasonable
additional expense incurred in keeping account of the excess water, electric
current or other resource so consumed. Landlord shall not be liable for any
damages directly or indirectly resulting from nor shall the Rent or any monies
owed Landlord under this Lease herein reserved be abated by reason of: (a) the
installation, use or interruption of use of any equipment used in connection
with the furnishing of any such utilities or services, or any change in the
character or means of supplying or providing any such utilities or services or
any supplier thereof, (b) the failure to furnish or delay in furnishing any such
utilities or services when such failure or delay is caused by acts of God or the
elements, labor disturbances of any character, or any other accidents or other
conditions beyond the reasonable control of Landlord or because of any
interruption of service due to Tenant's use of water, electric current or other
resource in excess of that being supplied or furnished for the use of the
Premises as of the date Tenant takes possession of the Promises; (c) the
inadequacy, limitation, curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any other service or utility
whatsoever serving the Premises or Project, whether by Regulation or otherwise;
or (d) the partial or total unavailability of any such utilities or services to
the Premises or the Building, whether by Regulation or otherwise; nor shall any
such occurrence constitute an actual or constructive eviction of Tenant.
Landlord shall take good faith efforts to cause any such utilities or services
which may be interrupted or curtailed to be promptly reinstated to full
capacity, provided that Landlord shall not incur any monetary costs and that
Landlord's access to the Premises as provided in this Lease shall not be
impeded. Landlord shall further have no obligation to protect or preserve any
apparatus, equipment or device installed by Tenant in the Premises. including
without limitation by providing additional or after-hours heating or air
conditioning, unless the same is paid for by Tenant. Landlord shall be entitled
to cooperate voluntarily and in a reasonable manner with the efforts of
national. state or local governmental agencies or utility suppliers in reducing
energy or other resource consumption. The obligation to make services available
hereunder shall be subject to the limitations of any such voluntary, reasonable
program. In addition. Landlord reserves the right to change the supplier or
provider of any such utility or service from time to time. Tenant shall have no
right to contract with or otherwise obtain any electrical or other such service
for or with respect to the Premises or Tenant's operations therein from any
supplier or provider of any such service. Tenant shall cooperate with Landlord
and any supplier or provider of such services designated by Landlord from time
to time to facilitate the delivery of such services to Tenant at the Premises
and to the Building and Project, including without limitation allowing Landlord
and Landlord's suppliers or providers, and their respective agents and
contractors. reasonable access to the Premises for the purpose of installing.
maintaining, repairing, replacing or upgrading such service or any equipment or
machinery associated therewith.
C. Tenant shall pay, upon demand, for all utilities furnished to the Premises,
or if not separately billed to or metered to Tenant, Tenant's Proportionate
Share of all charges jointly serving the Project in accordance with Paragraph 7.
All sums payable under this Paragraph 15 shall constitute Additional Rent
hereunder.
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16. SUBORDINATION
Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, this Lease shall be and
is hereby declared to be subject and subordinate at all times to: (a) all
ground leases or underlying leases which may now exist or hereafter be
executed affecting the Premises and/or the land upon which the Premises and
Project are situated, or both. and (b) any mortgage or deed of hug which may
now exist or be placed upon the Building, the Project and/or the land upon
which the Premises or the Project are situated, or said ground leases or
underlying leases, or Landlord's interest or estate in any of said items
which is specified as security. Notwithstanding the foregoing, Landlord shall
have the fight 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, attorn to and become
the Tenant of the successor in interest to Landlord provided that Tenant
shall not be disturbed in it-. possession under this Lease by such successor
in interest so long as Tenant is not in default under this Lease beyond any
applicable cure periods. Within ten (10) days after request by Landlord,
Tenant shall execute and deliver any additional documents evidencing Tenant's
attornment or the subordination of this Lease with respect to any such ground
leases or underlying leases or any such mortgage or deed of trust. in the
form requested by Landlord or by any ground landlord, mortgagee, or
beneficiary under a deed of trust, subject to such nondisturbance
requirement. If requested in writing by Tenant, Landlord shall use
commercially reasonable efforts to obtain a subordination. nondisturbance and
attornment agreement for the benefit of Tenant reflecting the foregoing from
any present or future ground landlord, mortgagee or beneficiary. at Tenant's
expense, subject to such other terms and conditions as the ground landlord,
mortgagee or beneficiary may require.
17. FINANCIAL STATEMENTS
At the request of Landlord from time to time, Tenant shall provide to
Landlord Tenant's and any guarantor's current financial statements or other
information discussing financial worth of Tenant and any guarantor, which
Landlord shall use solely for purposes of this Lease and in connection with
the ownership, management, financing and disposition of the Project. Tenant
shall be obligated to provide such financial statements to Landlord no more
than twice per calendar year. Landlord shall use commercially reasonable
efforts to maintain the confidentiality of such statements with respect to
third parties, except that disclosure is permitted to landlord's lenders and
prospective purchasers and to others as may be required to be disclosed by
law.
18. ESTOPPEL CERTIFICATE
Tenant agrees from time to time, within ten (10) days after request of
Landlord, to deliver to Landlord, or Landlord's designee, an estoppel
certificate stating that this Lease is in full force and effect, that this
Lease has not been modified (or stating all modifications, written or oral,
to this Lease), the date to which Rent has been paid, the unexpired portion
of this Lease, that there are no current defaults by Landlord or Tenant under
this Lease (or specifying any such defaults), that the leasehold estate
granted by this Lease is the sole interest of Tenant in the Premises and/or
the land at which the Premises are situated, and such other matters
pertaining to this Lease as may be reasonably requested by Landlord or any
mortgagee, beneficiary, purchaser or prospective purchaser of the Building or
Project or any interest therein. Failure by Tenant to execute and deliver
such certificate shall constitute an acceptance: of the Premises and
acknowledgment by Tenant that the statements included are true and correct
without exception. Tenant agrees that if Tenant fails to execute and deliver
such certificate within such ten (10) day period. Landlord may execute and
deliver such certificate on Tenant's behalf and that such certificate shall
be binding on Tenant. Landlord and Tenant intend that any statement delivered
pursuant to this Paragraph may be relied upon by any mortgagee, beneficiary,
purchaser or prospective purchaser of the Building or Project or any interest
therein. The parties agree that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement for Landlord's
execution of this Lease, and shall be an event of default (without any cure
period that might be provided under Paragraph 26.A(3) of this Lease) if
Tenant fails to fully comply or makes any material misstatement in any such
certificate.
19. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord upon execution of this Lease, a
security deposit as stated in the Basic Lease Information (the "Security
Deposit"), which sum shall be held and owned by Landlord, without obligation
to pay interest, as security for the performance of Tenant's covenants and
obligations under this Lease. The Security Deposit is not an advance rental
deposit or a measure of damages incurred by Landlord in cast of Tenant's
default. Upon the occurrence of any event of default by Tenant, beyond any
applicable cure periods, Landlord may from time to time, without prejudice to
any other remedy provided herein or by law, use such fund as a credit to the
extent necessary to credit against any arrears of Rent or other payments due
to Landlord hereunder. and any other damage, injury. expense or liability
caused by such event of default, and Tenant "I pay to Landlord. on demand,
the amount so applied in order to restore the Security Deposit to its
original amount. Although the Security Deposit shall be deemed the property
of Landlord, any remaining balance of such deposit shall be returned by
Landlord to Tenant at such time after termination of this Lease that all of
Tenant's obligations under this Lease have been fulfilled, reduced by such
amounts as may be required by Landlord to remedy defaults on the part of
Tenant in the payment of Rent or other obligations of Tenant under this
Lease, to repair damage to the Premises, Building or Project caused by Tenant
or any Tenant's Parties and to clean the Premises. Landlord may use and
commingle the Security Deposit with other funds of Landlord.
20. LIMITATION OF TENANTS REMEDIES
The obligations and liability of Landlord to Tenant for any default by
Landlord under the tam of this Lease am not personal obligations of Landlord
or of the individual or other partners of Landlord or its or their partners,
directors, officers, or shareholders. and Tenant agrees to look solely to
Landlord's interest in the Project for the recovery of any amount from
Landlord. and shall not look to other assets of Landlord nor seek recourse
against the assets of the individual or other partners of Landlord or its or
their partners, directors, officers or shareholders. Any lien obtained to
enforce any such judgment and any levy of execution thereon shall be subject
and subordinate to any lien, mortgage or deed of bug on the Project. Under no
circumstances "I Tenant have the right to offset against or recoup Rent or
other payments due and to become due to Landlord hereunder except as
expressly provided in Paragraph 23.B. below, which Rent and other payments
shall be absolutely due and payable hereunder in accordance with the terms
hereof.
21. ASSIGNMENT AND SUBLETTING
A. (1) GENERAL. This Lease has been negotiated to be and is granted as an
accommodation to Tenant. Accordingly, this Lease is personal to Tenant,
and Tenant's rights granted hereunder do not include the right to assign
this Lease or sublease the Premises, or to receive any excess, either in
installments or lump sum, over the Rent which is expressly reserved by
Landlord as hereinafter provided, except as otherwise expressly
hereinafter provided. Tenant shall not assign or pledge this Lease or
sublet the Premises or any part thereof, whether voluntarily or by
operation of law, or permit the use or occupancy of the Premises or any
part thereof by anyone other than Tenant, or suffer or permit any such
assignment, pledge, subleasing or occupancy, without Landlord's prior
written consent except as provided herein. If Tenant desires to assign
this Lease or sublet any or all of the Premises, Tenant shall give
Landlord written notice (the "Transfer Notice") at least thirty (30)
days prior to the anticipated effective date of the proposed assignment
or sublease, which shall contain all of the information reasonably
requested by Landlord to address Landlord's decision criteria specified
hereinafter. Landlord shall then have a period of fifteen (15)
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days following receipt of the Transfer Notice to notify Tenant in writing
that Landlord elects either: (i) to terminate this Lease as to the space
so affected as of the date so requested by Tenant, provided that
cumulative fifty percent (50%) or more of the Premises is proposed to be
sublet; or (ii) to consent to the Proposed assignment or sublease,
subject, however, to Landlord's prior written consent of the proposed
assignee or subtenant and of any related documents or agreements
associated with the assignment or sublease. If Landlord should fail to
notify Tenant in writing of such election within said period, Landlord
shall be deemed to have waived option (i) above, but written consent by
Landlord of the proposed assignee or subtenant shall still be required.
If Landlord does not exercise option (i) above, Landlord's consent to a
proposed assignment or sublease shall not be unreasonably withheld.
Consent to any assignment or subletting shall not constitute consent to
any subsequent transaction to which this Paragraph 21 applies.
Notwithstanding anything to the contrary contained in this Lease, if
Landlord notifies Tenant of the exercise of its recapture right pursuant
to this Paragraph 21.A., Tenant shall have the right, within five (5)
business days after receipt of Landlord's notice, to rescind in writing,
its request for Landlord's consent to the transfer, in which case this
Lease shall continue in full force and effect.
(2) CONDITIONS OF LANDLORD'S CONSENT. Without limiting the other
instances in which it may be reasonable for Landlord to withhold
Landlord's consent to an assignment or subletting, Landlord and Tenant
acknowledge that it -hall be reasonable for Landlord to withhold
Landlord's consent in the following instances: if the proposed assignee
does not agree to be bound by and assume the obligations of Tenant under
this Lease in form and substance-reasonably satisfactory to Landlord.
the use of the Premises by such proposed assignee or subtenant would not
be a Permitted Use or would violate any exclusivity or other arrangement
which Landlord has with any other tenant or occupant or any Regulation
or would increase the Occupancy Density or Parking Density of the
Building or Project, or would otherwise result in an undesirable tenant
mix for the Project as determined by Landlord; the proposed assignee or
subtenant is not of sound financial condition as determined by Landlord
in Landlord's sole discretion; the proposed assignee or subtenant is a
governmental agency; the proposed assignee or subtenant does not have a
good reputation as a tenant of property or a good business reputation;
the proposed assignee or subtenant is a person with whom Landlord is
negotiating to lease space in the Project or is a present tenant of the
Project and Landlord then has space which will reasonably satisfy the
proposed transferee's space needs the assignment or subletting would
entail any Alterations which would lessen the value of the leasehold
improvements in the Premises or use of any Hazardous Materials or other
noxious use or use which may unreasonably disturb other tenants of the
Project; or Tenant is in default of any obligation of Tenant under this
Lease, beyond any applicable cure periods, or Tenant has defaulted under
this Lease on three (3) or more occasions during any twelve (12) months
preceding the date that Tenant "I request consent. Failure by or refusal
of Landlord to consent to a proposed assignee or subtenant shall not
cause a termination of this Lease. Upon a termination tinder Paragraph
21.A.(1)(i), Landlord may lease the Promises to any party, including
parties with whom Tenant has negotiated an assignment or sublease.
without incurring any liability to Tenant. At the option of Landlord, a
surrender and termination of this Lease shall operate as an assignment
to Landlord of some or all subleases or subtenancies. Landlord shall
exercise this option by giving notice of that assignment to such
subtenants on or before the effective date of the surrender and
termination. in connection with each request for assignment or
subletting. Tenant shall pay to Landlord Landlord's standard fee for
approving such requests, as well as all costs incurred by Landlord or
any mortgagee or ground lessor in approving each such request and
effecting any such transfer, including, without limitation, reasonable
attorneys' fees. All such costs shall not exceed actual costs incurred
by Landlord, plus an administration fee not to exceed $500.00 per
transaction.
B. BONUS RENT. Any Rent or other consideration realized by Tenant under any
such sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission and the cost of any tenant
improvements which Tenant is required to make under the proposed sublease or
assignment agreement amortized over the term of the proposed sublease or
assignment as the case may be, excluding any furniture, fixtures or equipment
leased or sold to the prospective tenant, incurred by Tenant. shall be
divided and paid, ten percent (10%) to Tenant, ninety percent (90%) to
Landlord. In any subletting or assignment undertaken by Tenant. Tenant shall
diligently seek to obtain the maximum rental amount available in the
marketplace for comparable space available for primary Leasing.
C. CORPORATION. If Tenant is a corporation, a transfer of corporate shares by
sale, assignment, bequest, inheritance, operation of law or other disposition
(including such a transfer to or by a receiver or trustee in federal or state
bankruptcy, insolvency or other proceedings) resulting in a change in the
present control of such corporation or any of its parent corporations by the
person or persons owning a majority of said corporate shares, shall constitute
an assignment for purposes of this Lease. The transfer of outstanding capital
stock or other listed equity interests, or the purchase of equity interests
issued in an initial public offering of stock, by persons or parties other than
"insiders" within the meaning or the Securities Exchange Act of 1934, as
amended, through "over-the-counter" market to any recognized national or
international securities exchange shall not be included in determining whether
Control (as defined below) has been transferred. "Control" shall mean direct or
indirect ownership of fifty percent (50%) or more of the voting stock of a
corporation of fifty percent (50%) or more of the legal or equitable interest in
any other business entity, or the power to direct the operations of any entity
(by equity ownership, contract or otherwise).
Notwithstanding the provisions of this Paragraph 21, Tenant may assign
this Lease or sublet the entire Premises to any corporation which controls,
is controlled by or is under common control with, Tenant (each a "Permitted
Tenant Affiliate"), provided that the Permitted Tenant Affiliate assumes, in
full, the obligations off Tenant under this Lease and has a net worth at
least equal to the net worth of Tenant as of the date of this Lease. If
Tenant is a corporation, a dissolution of the corporation or a transfer (by
one (1) or more transactions) of a majority of the voting stock of Tenant
shall be deemed to be an assignment of this Lease subject to the provisions
of this Paragraph 21; provided, however, that the provisions of this sentence
shall not apply to transactions with a corporation into or with which Tenant
is merged or consolidated or to which substantially all of Tenant's assets
are transferred (each a "surviving corporation") where (i) the surviving
corporation is a Permitted Tenant Affiliate, (ii) the surviving. corporation
has a net worth at least equal to the net worth of Tenant as of the date of
this Lease and (iii) the surviving corporation assumes, in full, the
obligations of Tenant under this Lease.
D. UNINCORPORATED ENTITY. If Tenant is a partnership, joint venture,
unincorporated limited liability company or other unincorporated business form,
a transfer of the interest of persons, firms or entities responsible for
managerial control of Tenant by sale.
E. LIABILITY. No assignment or subletting by Tenant, permitted or otherwise,
shall relieve Tenant of any obligation under this Lease or alter the primary
liability of the Tenant named herein for the payment of Rent or for the
performance of any other obligations to be performed by Tenant, including
obligations contained in Paragraph 25 with respect to any assignee or subtenant.
Landlord may collect rent or other amounts or any portion thereof from any
assignee, subtenant or other occupant of the Premises, permitted or otherwise,
and apply the net rent collected to the Rent payable hereunder, but no such
collection shall be deemed to be a waiver of this Paragraph 21, or the
acceptance of the assignee, subtenant or occupant as tenant, or a release of
Tenant from the further performance by Tenant of the obligations of Tenant under
this Lease. Any assignment or subletting which conflicts with the provisions
hereof shall be void.
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22. AUTHORITY
Landlord represents and warrants that it has full right and authority to
enter into this Lease and to perform all of Landlord's obligations hereunder
and that all persons signing this Lease on its behalf are authorized to do.
Tenant and the person or persons, if any, signing on behalf of Tenant,
jointly and severally represent and warrant that Tenant has full right and
authority to enter into this Lease, and to perform all of Tenant's
obligations hereunder, and that all persons signing this Lease on its behalf
are authorized to do so.
23. CONDEMNATION
A. CONDEMNATION RESULTING IN TERMINATION. If the whole or any substantial part
of the Premises should be taken or condemned for any public use under any
Regulation, or by right of eminent domain, or by private purchase in lieu
thereof, and the taking would prevent or materially interfere with the Permitted
Use of the Premises, either party shall have the right to terminate this Lease
at its option. If any material portion of the Building or Project is taken or
condemned for any public use under any Regulation, or by right of eminent
domain, or by private purchase in lieu thereof, Landlord may terminate this
Lease at its option. In either of such events, the Rent shall be abated during
the unexpired portion of this Lease, effective when the physical taking of said
Premises shall have occurred.
B. CONDEMNATION NOT RESULTING IN TERMINATION. If a portion of the Project of
which the Premises are a part should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking prevents or materially interferes with the
Permitted Use of the Premises, and this Lease is not terminated as provided in
Paragraph 23.A. above, the Rent payable hereunder during the unexpired portion
of this Lease shall be reduced, beginning on the date when the physical taking
shall have occurred, to such amount as may be fair and reasonable under all of
the circumstances, but only after giving Landlord credit for all sums received
or to be received by Tenant by the condemning authority. Notwithstanding
anything to the contrary contained in this Paragraph, if the temporary use or
occupancy of any part of the Premises shall be taken or appropriated under power
of eminent domain during the Term, this Lease shall be and remain unaffected by
such taking or appropriation and Tenant shall continue to pay in full all Rent
payable hereunder by Tenant during the Term; in the event of any such temporary
appropriation or taking, Tenant shall be entitled to receive that portion of any
award which represents compensation for the use of or occupancy of the Premises
during the Term, and Landlord shall be entitled to receive that portion of any
award which represents the cost of restoration of the Premises and the use and
occupancy of the Premises. If the temporary taking or appropriation under the
power of eminent domain does not exceed two hundred forty (240) days and such
taking shall prevent or materially interfere with the Permitted Use of the
Premises, Tenant shall have the right to terminate this Lease.
C. AWARD. Landlord shall be entitled to (and Tenant shall assign to Landlord)
any or all payment, income, rent, award or any interest therein whatsoever which
may be paid or made in connection with such taking or conveyance and Tenant
shall have no claim against Landlord or otherwise for any sums paid by virtue of
such proceedings, whether or not attributable to the value of any unexpired
portion of this Lease, except as expressly provided in this Lease.
Notwithstanding the foregoing, any compensation specifically and separately
awarded Tenant for Tenant's personal property and moving costs, shall be and
remain the property of Tenant.
D. WAIVER OF CCP SS. 1265.130. Each party waives the provisions of California
Civil Code Procedure Section 1265.130 allowing either party to petition the
superior court to terminate this Lease as a result of a partial taking.
24. CASUALTY DAMAGE
A. GENERAL. If the Premises or Building should be damaged or destroyed by fire,
tornado, or other casualty (collectively, "Casualty"), Tenant shall give
immediate written notice thereof to Landlord. Within thirty (30) days after
Landlord's receipt of such notice Landlord shall notify Tenant whether in
Landlord's estimation material restoration of the Premises can reasonably be
made within one hundred eighty (180) days from the date of Landlord's notice and
receipt of required permits for such restoration. Landlord's determination shall
be binding on Tenant.
B. WITHIN 180 DAYS. If the Premises or Building should be damaged by Casualty to
such extent that material restoration can in Landlord's estimation be reasonably
completed within one hundred eighty (180) days after the date of Landlord's
notice and, receipt of required permits for such restoration, this Lease shall
not terminate. Provided that insurance proceeds are received by Landlord to
fully repair the damage, Landlord shall proceed to rebuild and repair the
Premises in the manner determined by Landlord, except that Landlord shall not be
required to rebuild, repair or replace any part of the Alterations which may
have been placed on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately, but only to the extent of rental abatement insurance proceeds
received by Landlord during the time and to the extent the Premises are unfit
for occupancy.
C. GREATER THAN 180 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that rebuilding or repairs cannot in Landlord's
estimation be reasonably completed within one hundred eighty (180) days after
the date of such notice and receipt of required permits for such rebuilding or
repair, then Landlord shall have the option of either (1) terminating this Lease
effective upon the date of the occurrence of such damage, in which event the
Rent shall be abated during the unexpired portion of this Lease; or (2) electing
to rebuild or repair the Premises diligently and in the manner determined by
Landlord. Landlord shall notify Tenant of its election within thirty (30) days
after Landlord's receipt of notice of the damage or destruction. Notwithstanding
the above, Landlord shall not be required to rebuild, repair or replace any part
of any Alterations which may have been placed, on or about the Premises by
Tenant. If the Premises are untenantable in whole or in part following such
damage, the Rent payable hereunder during the period in which they are
untenantable shall be abated proportionately, but only to the extent of rental
abatement insurance proceeds received by Landlord during the time and to the
extent the Premises are unfit for occupancy.
D. TENANT'S FAULT. Notwithstanding anything herein to the contrary, if the
Premises or any other portion of the Building are damaged by Casualty resulting
from the fault, negligence, or breach of this Lease by Tenant or any of Tenant's
Parties, Base Rent and Additional 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 the Building caused thereby to the extent such
cost and expense is not covered by insurance proceeds.
E. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, if the
Premises or Building are damaged or destroyed and are not fully covered by the
insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness then in either case 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
Landlord that said damage or destruction is not fully covered by insurance or
such requirement is made by any such holder, as the case may be, whereupon this
Lease shall terminate.
F. WAIVER. This Paragraph 24 shall be Tenant's sole and exclusive remedy in the
event of damage or destruction to the Premises or the Building. As a material
enhancement to Landlord entering into this Lease, Tenant hereby waives any
rights it may have under Sections 1932, 1933(4), 1941 or 1942 of the Civil Code
of California with respect to my destruction of the Premises, Landlord's
obligation for
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tenantability of the Premises and Tenant's right to make repairs and deduct
the expenses of such repairs, or under any similar law, statute or ordinance
now or hereafter in effect.
G. TENANT'S PERSONAL PROPERTY. In the event of any damage or destruction of the
Premises or the Building, under no circumstances shall Landlord be required to
repair any injury or damage to, or make any repairs to or replacements of,.
Tenant's personal property.
H. TENANT'S RIGHT TO TERMINATE. If all or a substantial part of the Premises are
rendered unusable for the Permitted Use by damage to all or any part of the
Project from fire or other casualty, and Landlord does not elect to terminate
the Lease as provided in Paragraph 24.C., then Tenant may elect to terminate
this Lease if Landlord's estimate of the time required to complete Landlord's
repair obligations under this Lease is greater than two hundred ten (210) days
after commencement of the repair or restoration work.
25. HOLDING OVER
Unless Landlord expressly consents in writing to Tenant's holding over,
Tenant shall be unlawfully and illegally in possession of the Premises,
whether or not Landlord accepts any rent from Tenant or any other person
while Tenant remains in possession of the Premises without Landlord's written
consent. If Tenant shall retain possession of the Premises or any portion
thereof without Landlord's consent following the expiration of this Lease or
sooner termination for any reason, then Tenant shall pay to Landlord for each
day of such retention triple the amount of daily rental as of the last month
prior to the date of expiration or earlier termination. Tenant shall also
indemnify, defend, protect and hold Landlord harmless from any loss,
liability or cost, including consequential and incidental damages and
reasonable attorneys' fees, incurred by Landlord resulting from delay by
Tenant in surrendering the Premises, including, without limitation, any
claims made by the succeeding tenant founded on such delay. Acceptance of
Rent by Landlord following expiration or earlier termination of this Lease,
or following demand by Landlord for possession of the Premises, shall not
constitute a renewal of this Lease, and nothing contained in this Paragraph
25 shall waive Landlord's right of reentry or any other right. Additionally,
if upon expiration or earlier termination of this Lease, or following demand
by Landlord for possession of the Premises, Tenant has not fulfilled its
obligation with respect to repairs and cleanup of the Premises or any other
Tenant obligations as set forth in this Lease, then Landlord shall have the
right to perform any such obligations as it deems necessary at Tenant's sole
cost and expense, and any time required by Landlord to complete such
obligations shall be considered a period of holding over and the terms of
this Paragraph 25 shall apply. The provisions of this Paragraph 25 shall
survive any expiration or earlier termination of this Lease.
26. DEFAULT
A. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an event of default on the part of Tenant:
(1) ABANDONMENT. Abandonment or vacation of the Premises for a
continuous period in excess of five (5) days. Tenant waives any right to
notice Tenant may have under Section 1951.3 of the Civil Code of the
State of California, the terms of this Paragraph 26.A. being deemed such
notice to Tenant as required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or any
other amount due and payable hereunder within three (3) days after the
date when said payment is due, as to which time is of the essence.
(3) OTHER OBLIGATIONS. Failure to perform any obligation, agreement or
covenant under this Lease other than those matters specified in
subparagraphs (1) and (2) of this Paragraph 26A., such failure
continuing for fifteen (15) days after written notice of such failure,
as to which time is of the essence provided that Tenant shall not be in
default hereunder if Tenant commences the cure within the fifteen (15)
day period and thereafter diligently prosecutes the cure to completion
with an additional fifteen (15) days.
(4) GENERAL ASSIGNMENT. A general assignment by Tenant for the benefit
of creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant's creditors,
which involuntary petition remains undischarged for a period of thirty
(30) days. If under applicable law, the trustee in bankruptcy or Tenant
has the right to affirm this Lease and continue to perform the
obligations of Tenant hereunder, such trustee or Tenant shall, in such
time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of
the date of the affirmance of this Lease and provide to Landlord such
adequate assurances as may be necessary to ensure Landlord of the
continued performance of Tenant's obligations under this Lease.
(6) RECEIVERSHIP. The employment of a receiver to take possession of
substantially all of Tenant's assets or Tenant's leasehold of the
Premises, if such appointment remains undismissed or undischarged for a
period of thirty (30) days after the order therefor.
(7) ATTACHMENT. The attachment, execution or other judicial seizure of
all or substantially all of Tenant's assets or Tenant's leasehold of the
Premises, if such attachment or other seizure remains undismissed or
undischarged for a period of thirty (30) days after the levy thereof.
(8) INSOLVENCY. The admission by Tenant in writing of its inability to
pay its debts as they become due.
B. REMEDIES UPON DEFAULT
(1) TERMINATION. In the event of the occurrence of any event of default,
Landlord shall have the right to give a written termination notice to
Tenant, and on the day specified in such notice, Tenant's right to
possession shall terminate, and this Lease shall terminate unless on or
before such date all Rent in arrears and all costs and expenses incurred
by or on behalf of Landlord hereunder shall have been paid by Tenant and
all other events of default of this Lease by Tenant at the time existing
shall have been fully remedied to the satisfaction of Landlord. At any
time after such termination, Landlord may recover possession of the
Premises or any part thereof and expel and remove therefrom Tenant and
any other person occupying the same, including any subtenant or
subtenants notwithstanding Landlord's consent to any sublease, by any
lawful means, and again repossess and enjoy the Premises without
prejudice to any of the remedies that Landlord may have under this
Lease, or at law or equity by any reason of Tenant's default or of such
termination. Landlord hereby reserves the right, but shall not have the
obligation to recognize the continued possession of any subtenant. The
delivery or surrender to Landlord by or on behalf of Tenant of keys,
entry codes or other means to bypass security at the Premises shall not
terminate this Lease.
(2) CONTINUATION AFTER DEFAULT. Even though an event of default may have
occurred, this Lease shall continue in effect for so long as Landlord
does not terminate Tenant's right to possession under Paragraph 26.B.(1)
hereof, and Landlord may enforce all of Landlord's rights and remedies
under this Lease and at law or in equity, including without limitation,
the right to recover Rent as it becomes due, and Landlord, without
terminating this Lease, may exercise all of the rights and remedies of a
14
landlord under Section 1951.4 of the Civil Code of the State of
California or any successor code section. Acts of maintenance,
preservation or efforts to lease the Premises or the appointment of a
receiver under application of Landlord to protect Landlord's interest
under this Lease or other entry by Landlord upon the Premises shall not
constitute an election to terminate Tenant's right to possession.
(3) INCREASED SECURITY DEPOSIT. If Tenant is in default under Paragraph
26.A.(2) hereof and such default remains uncured for ten (10) days after
such occurrence or beyond any applicable cure periods, whichever is late
or such default occurs more than three times in any twelve (12) month
period, Landlord may require that Tenant increase the Security Deposit
to the amount of three times the current month's Rent at the time of the
most recent default.
C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to
the provisions of Paragraph 26.B.(i) hereof, Landlord shall have the rights
and remedies of a Landlord provided by Section 1951.2 of the Civil Code of
the State of California, or any successor code sections. Upon such
termination, in addition to any other rights and remedies to which Landlord
may be entitled under applicable law or at equity, Landlord shall be entitled
to recover from Tenant: (1) the worth at the time of award of the unpaid Rent
and other amounts which had been earned at the time of termination, (2) the
worth at the time of award of the amount by which the unpaid Rent and other
amounts that would have been earned after the date of termination until the
time of award exceeds the amount of such Rent loss that Tenant proves could
have been reasonably avoided; (3) the worth at the time of award of the
amount by which the unpaid Rent and other amounts for the balance of the Term
after the time of award exceeds the amount of such Rent loss that the Tenant
proves could be reasonably avoided; and (4) any other amount and court costs
necessary to compensate Landlord for all detriment proximately caused by
Tenant's failure to perform Tenant's obligations under this Lease or which,
in the ordinary course of things, would be likely to result therefrom. The
"worth at the time of award" as used in (1) and (2) above shall be computed
at the Applicable Interest Rate (defined below). The "worth at the time of
award" as used in (3) above shall be computed by discounting such amount at
the Federal Discount Rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%). If this Lease provides for any periods
during the Term during which Tenant is not required to pay Base Rent or if
Tenant otherwise receives a Rent concession, then upon the occurrence of an
event of default, Tenant shall owe to Landlord the full amount of such Base
Rent or value of such Rent concession, plus interest at the Applicable
Interest Rate, calculated from the date of such Base Rent or Rent concession
would have been payable.
D. LATE CHARGE. In addition to its other remedies, Landlord shall have the
right without notice or demand to add to the amount of any payment required
to be made by Tenant hereunder, and which is not paid and received by
Landlord on or before the third day of each calendar month, an amount equal
to ten percent (10%) of the delinquency for each month or portion thereof
that the delinquency remains outstanding to compensate Landlord for the loss
of the use of the amount not paid and the administrative costs caused by the
delinquency, the parties agreeing that Landlord's damage by virtue of such
delinquencies would be extremely difficult and impracticable to compute and
the amount stated herein represents a reasonable estimate thereof. Any waiver
by Landlord of any late charges or failure to claim the same shall not
constitute a waiver of other late charges or any other remedies available to
Landlord.
E. INTEREST. Interest shall accrue on all sums not paid when due hereunder at
the lesser of eighteen percent (18%) per annum or the maximum interest rate
allowed by law ("Applicable Interest Rate") from the due date until paid.
F. REMEDIES CUMULATIVE. All rights, privileges and elections or remedies of the
parties are cumulative and not alternative, to the extent permitted by law and
except as otherwise provided herein.
27. LIENS
Tenant shall at all times keep the Premises and the Project free from
liens arising out of or related to work or services performed, materials or
supplies furnished or obligations incurred by or on behalf of Tenant or in
connection with work made, suffered or done by or on behalf of Tenant in or
on the Premises or Project. If Tenant shall not, within ten (10) days
following the imposition of any such lien, cause the same to be released of
record by payment or posting of a proper bond, Landlord shall have, in
addition to all other remedies provided herein and by law, the right, but not
the obligation, to cause the same to be released by such means as Landlord
shall deem proper, including payment of the claim giving rise to such lien.
All sums paid by Landlord on behalf of Tenant and all expenses incurred by
Landlord in connection therefor shall be payable to Landlord by Tenant on
demand with interest at the Applicable Interest Rate as Additional Rent.
Landlord shall have the right at all times to post and keep posted on the
Premises any notices permitted or required by law, or which Landlord shall
deem proper, for the protection of Landlord, the Premises, the Project and
any other party having an interest therein, from mechanics' and materialmen's
liens, and Tenant shall give Landlord not less than ten (10) business days
prior written notice or the commencement of any work in the Premises or
Project which could lawfully give rise to a claim for mechanics' or
materialmen's liens to permit Landlord to post and record a timely notice of
non-responsibility, as Landlord may elect to proceed or as the law may from
lime to time provide, in accordance with the entry provisions set forth in
Paragraph 14, or which purpose, if Landlord shall so determine, Landlord may
enter the Premises. Tenant shall not remove any such notice posted by
Landlord without Landlord's consent, and in any event not before completion
of the work which could lawfully give rise to a claim for mechanics' or
materialmen's liens.
28. SUBSTITUTION
A. At any time after execution and commencement of this Lease, landlord may
substitute for the Premises other premises in the Project or owned by
Landlord in the vicinity of the Project (the "New Premises") upon not less
than sixty (60) days prior written notice, in which event the New Premises
shall be deemed to be the Premises for all purposes hereunder and this Lease
shall be deemed modified accordingly to reflect the new location and shall
remain in full force and effect as so modified, provided that:
(1) The New Premises shall be similar in area and in function for
Tenant's purposes; and
(2) If Tenant is occupying the Premises at the time of such
substitution, Landlord shall pay the expense of physically moving Tenant,
Tenant's property and equipment to the New Premises and shall at
Landlord's sole cost, improve the New Premises with improvements
substantially similar to those the Landlord has committed to provide or
has provided in the Premises.
29. TRANSFERS BY LANDLORD
In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express
or implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's successor-in-interest. In
such event, Tenant agrees to look solely to the responsibility of the
successor-in-interest of Landlord under this Lease with respect to the
performance of the covenants and duties of "Landlord" to be performed after
the passing of title to Landlord's successor-in-interest. This Lease shall
not be affected by any such sale and Tenant agrees to attorn to the purchaser
or assignee. Landlord's successor(s)-in-interest shall not have liability to
Tenant with respect to the failure to perform any of the obligations of
"Landlord," to the extent required to be performed prior to the date such
successor(s)-in-interest became the owner of the Building, except that such
successor shall be responsible for the proper disposition of the security
deposit made by Tenant hereunder, but only to the extent that such successor
has actually received the security deposit.
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30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any
sum of money, other than Base Rent, required to be paid by Tenant hereunder
or shall fail to perform any other act on Tenant's part to be performed
hereunder, including Tenant's obligations under Paragraph 11 hereof, and such
failure shall continue for fifteen (15) days after notice thereof by
Landlord, in addition to the other rights and remedies of Landlord, Landlord
may make any such payment and perform any such act on Tenant's part. In the
case of an emergency, no prior notification by Landlord shall be required.
Landlord may take such actions without any obligation and without releasing
Tenant from any of Tenant's obligations. All sums so paid by Landlord and all
incidental costs incurred by Landlord and interest thereon at the Applicable
Interest Rate, from the date of payment by Landlord, shall be paid to
Landlord on demand as Additional Rent.
31. WAIVER
If either Landlord or Tenant waives the performance of any term,
covenant or condition contained in this Lease, such waiver shall not be
deemed to be a waiver of any subsequent breach of the same or any other term
covenant or condition contained herein, or constitute a course of dealing
contrary to the expressed terms of this Lease. The acceptance of Rent by
Landlord shall not constitute a waiver of any preceding breach by Tenant of
any term, covenant or condition of this Lease, regardless of Landlord's
knowledge of such preceding breach at the time Landlord accepted such Rent.
Failure by Landlord to enforce any of the terms, covenants or conditions of
this Lease for any length of time shall not be deemed to waive or decrease
the right of Landlord to insist thereafter upon strict performance by Tenant.
Waiver by Landlord of any term, covenant or condition contained in this Lease
may only be made by a written document signed by Landlord, based upon full
knowledge of the circumstances.
32. NOTICES
Each provision of this Lease or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to sending,
mailing, or delivery of any notice or the making of any payment by Landlord
or Tenant to the other shall be deemed to be complied with when and if the
following steps are taken:
A. RENT. All Rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at Landlord's Remittance Address set
forth in the Basic Lease Information, or at such other address as Landlord may
specify from time to time by written notice delivered in accordance herewith.
Tenant's obligation to pay Rent and any other amounts to Landlord under the
terms of this Lease shall not be deemed satisfied until such Rent and other
amounts have been actually received by Landlord.
B. OTHER. All notices, demands, consents and approvals which may or are required
to be given by either party to the other hereunder shall be in writing and
either personally delivered, sent by commercial overnight courier, mailed,
certified or registered, postage prepaid or sent by facsimile with confirmed
receipt (and with an original sent by commercial overnight courier), and in each
case addressed to the party to be notified at the Notice Address for such party
as specified in the Basic Lease Information or to such other place as the party
to be notified may from time to time designate by at least fifteen (15) days
notice to the notifying party. Notices shall be deemed served upon receipt or
refusal to accept delivery. Tenant appoints as its agent to receive the service
of all default notices and notice of commencement of unlawful detainer
proceedings the person in charge of or apparently in charge of occupying the
Premises at the time, and, if there is no such person, then such service may be
made by attaching the same on the main entrance of the Premises.
C. REQUIRED NOTICES. Tenant shall immediately notify Landlord in writing of any
notice of a violation or a potential or alleged violation of any Regulation that
relates to the Premises or the Project, or of any inquiry, investigation,
enforcement or other action that is instituted or threatened by any governmental
or regulatory agency against Tenant or any other occupant of the Premises, or
any claim that is instituted or threatened by any third party that relates to
the Premises or the Project, of which Tenant has actual or constructive
knowledge.
33. ATTORNEYS' FEES
If Landlord places the enforcement of this Lease, or any part thereof,
or the collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable attorneys' fees and court costs,
whether incurred without trial, at trial, appeal or review. In any action
which Landlord or Tenant brings to enforce its respective rights hereunder,
the unsuccessful party shall pay all costs incurred by the prevailing party
including reasonable attorneys' fees, to be fixed by the court, and said
costs incurred by the prevailing party including reasonable attorneys' fees,
to be fixed by the court, and said costs and attorney's fees shall be a part
of the judgment in said action.
34. SUCCESSORS AND ASSIGNS
This Lease shall be binding upon and inure to the benefit of Landlord,
its successors and assigns, and shall be binding upon and inure to the
benefit of Tenant, its successors, and to the extent assignment is approved
by Landlord as provided hereunder, Tenant's assigns.
35. FORCE MAJEURE
If performance by a party of any portion of this Lease is made
impossible by any prevention, delay, or stoppage caused by strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes for those items, government actions,
civil commotions, fire or other casualty, or other causes beyond the
reasonable control of the party obligated to perform. performance by that
party for a period equal to the period of that prevention, delay, or stoppage
is excused. Tenant's obligation to pay Rent, however, is not excused by this
Paragraph 35.
36. SURRENDER OF PREMISES
Tenant shall, upon expiration or sooner termination of this Lease,
surrender the Premises to Landlord in the same condition as existed on the
date Tenant originally took possession thereof, reasonable wear and tear
excepted, including, but not limited to, all interior walls cleaned, all
interior painted surfaces repainted in the original color, all holes in the
walls repaired, all carpets shampooed and cleaned, and all floors cleaned,
waxed, and free of any Tenant-introduced marking or painting, all to the
reasonable satisfaction of Landlord. Tenant shall remove all of its debris
from the Project. At or before the time of surrender, Tenant shall comply
with the terms of Paragraph 12.A. hereof with respect to Alterations to the
Premises and all other matters addressed in such Paragraph. If the Premises
are not so surrendered at the expiration or sooner termination of this Lease,
the provisions of Paragraph 25 hereof shall apply. All keys to the Premises
or any part thereof shall be surrendered to Landlord upon expiration or
sooner termination of the Term. Tenant shall give written notice to Landlord
at least thirty (30) days prior to vacating the Premises and shall meet with
Landlord for a joint inspection of the Premises at the time of vacating, but
nothing contained herein shall be construed as an extension of the Term or as
a consent by Landlord to any holding over by Tenant. In the event of Tenant's
failure to give such notice or participate in such joint inspection,
Landlord's inspection at or after Tenant's vacating the Premises shall
conclusively be deemed correct for purposes of determining Tenant's
responsibility for repairs and
16
restoration. Any delay caused by Tenant's failure to carry out its
obligations under this Paragraph 36 beyond the term hereof, shall constitute
unlawful and illegal possession of Premises under Paragraph 25 hereof.
37. PARKING
So long as Tenant is occupying the Premises, Tenant and Tenant's Parties
shall have the right to use up to the number of parking spaces, if any,
specified in the Basic Lease Information on an unreserved, nonexclusive,
first come, first served basis, for passenger-size automobiles, in the
parking areas in the Project designated from time to time by Landlord for use
in common by tenants of the Building.
Tenant may request additional parking spaces from time to time and if
Landlord in its sole discretion agrees to make such additional spaces
available for use by Tenant, such spaces shall be provided on a
month-to-month unreserved and nonexclusive basis (unless otherwise agreed in
writing by Landlord), and subject to such parking charges as Landlord shall
determine, and shall otherwise be subject to such terms and conditions as
Landlord may require.
Tenant shall at all times comply and shall cause all Tenant's Parties
and visitors to comply with all Regulations and any rules and regulations
established from time to time by Landlord relating to parking at the Project,
including any keycard, sticker or other identification or entrance system,
and hours of operation, as applicable.
Landlord shall have no liability for any damage to property or other
item located in the parking areas of the Project nor for any personal
injuries or death arising out of the use of parking area in the Project by
Tenant or any Tenant's Parties. Without limiting the foregoing, if Landlord
arranges for the parking areas to be operated by an independent contractor
not affiliated with Landlord, Tenant acknowledges that Landlord shall have no
liability for claims arising through acts or omissions of such independent
contractor. In all events, Tenant agrees to look first to its insurance
carrier and to require that Tenant's Parties look first to their respective
insurance carriers for payment of any losses sustained in connection with any
use of the parking areas.
Landlord reserves the right in a non-discriminatory manner, to assign
specific space, and to reserve spaces for visitors, small cars, disabled
persons or for other tenants or guests, and Tenant shall not park and shall
not allow Tenant's Parties to park in any such assigned or reserved spaces.
Tenant may validate visitor parking by such method as Landlord may approve,
at the validation rate from time to time generally applicable to visitor
parking. Landlord also reserves the right to alter, modify, relocate or close
all or any portion of the parking areas in order to make repairs or perform
maintenance service, or to restripe or renovate the parking areas, or if
required by casualty, condemnation, act of God, Regulations or for any other
reason deemed reasonable by Landlord.
Landlord reserves the right to impose a charge for parking at a future
time, such charge not to exceed fifty dollars ($50.00) per parking space per
month.
38. MISCELLANEOUS
A. GENERAL. The term "Tenant" or any pronoun used in place thereof shall
indicate and include the masculine or feminine, the singular or plural number,
individuals, firms or corporations, and their respective successors, executors,
administrators and permitted assigns, according to the context hereof.
B. TIME. Time is of the essence regarding this Lease and all of its provisions.
C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws of
the State of California.
D. ENTIRE AGREEMENT. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.
E. MODIFICATION. This Lease may not be modified except by a written instrument
signed by the parties hereto. Tenant accepts the area of the Premises as
specified in the Basic Lease Information as the approximate area of the Premises
for all purposes under this Lease, and acknowledges and agrees that no other
definition of the area (rentable, usable or otherwise) of the Premises shall
apply. Tenant shall in no event be entitled to a recalculation of the square
footage of the Premises, rentable, usable or otherwise, and no recalculation, if
made, irrespective of its purpose, shall reduce Tenant's obligations under this
Lease in any manner, including without limitation the amount of Base Rent
payable by Tenant or Tenant's Proportionate Share of the Building and of the
Project. Unless required by any Regulation, no alteration, addition, repair or
modification of or to the Premises, Building or Project shall materially
decrease the size of the Premises.
F. SEVERABILITY. If, for any reason whatsoever, any of the provisions hereof
shall be unenforceable or ineffective, all of the other provisions shall be and
remain in full force and effect.
G. RECORDATION. Tenant shall not record this Lease or a short form memorandum
hereof.
H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not constitute
an option or offer to lease and this Lease is not effective otherwise until
execution and delivery by both Landlord and Tenant.
I. ACCORD AND SATISFACTION. No payment by Tenant of a lesser amount than the
total Rent due nor any endorsement on any check or letter accompanying any check
or payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to Landlord's right
to recover the balance of such Rent or to pursue other remedies. All offers by
or on behalf of Tenant of accord and satisfaction are hereby rejected in
advance.
J. EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent; provided that no
such grant or dedication shall materially interfere with Tenant's Permitted Use
of the Premises. Upon Landlord's request, Tenant shall execute, acknowledge and
deliver to Landlord documents, instruments, maps and plats necessary to
effectuate Tenant's covenants hereunder.
K. DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that this
Lease has been agreed to by both the parties, that both Landlord and Tenant have
consulted with attorneys with respect to the terms of this Lease and that no
presumption shall be created against Landlord because Landlord drafted this
Lease. Except as otherwise specifically set forth in this Lease, with respect to
any consent, determination or estimation of Landlord required or allowed in this
Lease or requested of Landlord, Landlord's consent,
17
determination or estimation shall be given or made solely by Landlord in
Landlord's good faith opinion, whether or not objectively reasonable. If
Landlord fails to respond to any request for its consent within the time
period, if any, specified in this Lease, Landlord shall be deemed to have
disapproved such request.
L. EXHIBITS. The Basic Lease Information, and the Exhibits, addenda and
attachments attached hereto are hereby incorporated herein by this reference and
made a part of this Lease as though fully set forth herein.
M. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of light, air
or view by any structure which may be erected on lands adjacent to or in the
vicinity of the Building shall in no way affect this Lease or impose any
liability on Landlord.
N. NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and Tenant
and nothing herein is intended to create any third party benefit.
O. QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the observance
and performance of all of the other covenants, terms and conditions on Tenant's
part to be observed and performed, Tenant shall peaceably and quietly hold and
enjoy the Premises for the term hereby demised without hindrance or interruption
by Landlord or any other person or persons lawfully or equitably claiming by,
through or under Landlord, subject, nevertheless, to all of the other terms and
conditions of this Lease. Landlord shall not be liable for any hindrance,
interruption, interference or disturbance by other tenants or third persons, nor
shall Tenant be released from any obligations under this Lease because of such
hindrance, interruption, interference or disturbance.
P. COUNTERPARTS. This Lease may be executed in any number of counterparts, each
of which shall be deemed an original.
Q. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.
R. PRORATIONS. Any Rent or other amounts payable to Landlord by Tenant hereunder
for any fractional month shall be prorated based on a month of 30 days. As used
herein, the term "fiscal year" shall mean the calendar year or such other fiscal
year as Landlord may deem appropriate.
S. BROKERS. Landlord shall pay the fee or commission of NL Associates ("Broker")
based on Landlord's Published commission schedule, which shall not exceed five
dollars ($5.00) per rentable square foot. Landlord and Tenant each represent and
warrant to the other that they have had no dealings with any real estate broker
or agent in connection with the negotiation of this Lease excepting only the
Broker, and that they know of no other real estate broker or agent who is
entitled to a commission in connection with this Lease. Each party agrees to
indemnify and defend the other party against and hold the other party harmless
from any and all claims, demands, losses, liabilities, lawsuits, judgments,
costs and expenses with respect to any leasing commission or equivalent
compensation alleged to be owing on account of any dealings with any real estate
broker or agent other than the Broker, occurring by, through or under the
indemnifying party.
39. ADDITIONAL PROVISIONS
A. CANCELLATION FOR LARGER PREMISES. It is hereby agreed and understood that in
the event Tenant requires additional space and intends to vacate the herein
demised Premises, and Landlord and Tenant execute a new lease agreement for a
larger space in the Project that is at least 30,000 square feet, this Lease will
be canceled as of the commencement date of the new lease covering the larger
space, provided that Tenant is not, and has not been more than onetime per Year,
in default of the terms of the Lease beyond any a applicable cure periods and
provided that on the commencement date of the new lease, Tenant delivers the
herein demised Premises to Landlord in the condition required by this Lease
Agreement. Upon such cancellation, both parties shall be released from any
obligations accrued prior to such cancellation. The terms and conditions of the
new lease shall be at the same rental and terms and conditions as is offered
other tenants for comparable space in the Project as determined by Landlord. Any
security deposit or prepaid rental Tenant may be entitled to shall be credited
to Tenant under the new lease.
B. ADDITIONAL AIR CONDITIONING UNIT. Tenant shall, as part of Exhibit C, have
the right to install an additional air conditioning unit in the Premises. Tenant
shall be responsible for all costs of said unit including installation, repair
and maintenance, and removal upon expiration of this Lease. This unit shall have
a separate electrical meter, installed and paid for by Tenant, and all
electrical usage shall be paid for by Tenant.
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40. JURY TRIAL WAIVER
EACH PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE,. SUCCESSOR HEIR OR
PERSONAL REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY
WAIVES TRIAL BY JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE
COUNTY IN WHICH THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL
JURISDICTION OF THE COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IN
ANY ACTION OR PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST
THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS LEASE. THE RELATIONSHIP OF LANDLORD AND TENANT, TENANTS USE OR
OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE
ENFORCEMENT OF ANY REMEDY UNDER ANY STATUTE, EMERGENCY OR OTHERWISE, WHETHER
ANY OF THE FOREGOING IS BASED ON THIS LEASE OR ON TORT LAW. EACH PARTY
REPRESENTS THAT IT HAS HAD THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL
CONCERNING THE EFFECT OF THIS PARAGRAPH 40. THE PROVISIONS OF THIS PARAGRAPH
40 SHALL SURVIVE THE EXPIRATION OR EARLIER TERMINATION OF THIS LEASE.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the day and the year first above written.
LANDLORD
Spieker Properties, L.P.
a California limited partnership
By: Spieker Properties, Inc.,
a Maryland corporation,
its general partner
By: /s/ JOSEPH D. RUSSELL, JR.
-----------------------------------
Joseph D. Russell, Jr.
Its: Regional Senior Vice President
Date: August 25, 1998
TENANT
Heuristic Physics Laboratories, Inc.
a California corporation
By: /s/ DAVID Y. LEPEJIAN
-----------------------------------
David Y. Lepejian
Its: President and CEO
Date: August 20, 1998
19
ADDENDUM TO LEASE AGREEMENT DATED AUGUST 19, 1998, BETWEEN SPIEKER
PROPERTIES, L.P., A CALIFORNIA LIMITED PARTNERSHIP, AS LANDLORD, AND
HEURISTIC PHYSICS LABORATORIES, INC., A CALIFORNIA CORPORATION, AS TENANT FOR
AN APPROXIMATELY 12,516 RENTABLE SQUARE FOOT PREMISES KNOWN AS SUITE 400,
2033 GATEWAY PLACE, SAN JOSE, CALIFORNIA.
ADDENDUM 1 - PARAGRAPH 6 - RENT. Rent for the Premises is as follows:
Months 01 - 12 $29,788.00 per month plus operating expenses per
Paragraph 7 of this Lease Agreement. Operating
expenses through December 1998 are estimated to be
$8,761.00 per month. Direct operating expenses are
estimated a year in advance and collected on a
monthly basis. Any increases or decreases necessary
will be made at the end of the operating year.
Months 13 - 24: $31,330.00 per month plus operating expenses per
Paragraph 7 of this Lease Agreement.
Months 25 - 36: $32,934.00 per month plus operating expenses per
Paragraph 7 of this Lease Agreement.
Months 37 - 48: $34,601.00 per month plus operating expenses per
Paragraph 7 of this Lease Agreement.
Months 49 - 60: $36,336.00 per month plus operating expenses per
Paragraph 7 of this Lease Agreement.
Months 61 - 72: $38,140.00 per mouth plus operating expenses per
Paragraph 7 of this Lease Agreement.
Months 73 - 84: $40,016.00 per month plus operating expenses per
Paragraph 7 of this Lease Agreement.
20
EXHIBIT A
RULES AND REGULATIONS
1. Driveways, sidewalks, halls, passages, exits, entrances, elevators,
escalators and stairways shall not be obstructed by tenants or used by
tenants for any purpose other than for ingress to and egress from their
respective premises. The driveways, sidewalks, halls, passages, exits,
entrances, elevators and stairways are not for the use of the general
public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence; in the judgment of
Landlord, shall be prejudicial to the safety, character, reputation and
interests of the Building, the Project and its tenants, provided that
nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of
such tenant's business unless such persons are engaged in illegal
activities. No tenant, and no employees or invitees of any tenant, shall
go upon the roof of any Building, except as authorized by Landlord. No
tenant, and no employees or invitees of any tenant shall move any common
area furniture without Landlord's consent.
2. No sign, placard, banner, picture, name, advertisement or notice visible
from the exterior of the Premises or the Building or the common areas of
the Building shall be inscribed, painted, affixed, installed or
otherwise displayed by Tenant either on its Premises or any part of the
Building or Project without the prior written consent of Landlord in
Landlord's sole and absolute discretion. Landlord shall have the right
to remove any such sign, placard, banner, picture, name, advertisement,
or notice without notice to and at the expense of Tenant, which were
installed or displayed in violation of this rule. If Landlord shall have
given such consent to Tenant at any time, whether before or after the
execution of Tenant's Lease, such consent shall in no way operate as a
waiver or release of any of the provisions hereof or of the Lease, and
shall be deemed to relate only to the particular sign, placard, banner,
picture, name, advertisement or notice so consented to by Landlord and
shall not be construed as dispensing with the necessity of obtaining the
specific written consent of Landlord with respect to any other such
sign, placard, banner, picture, name, advertisement or notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant by a person or
vendor approved by Landlord and shall be removed by Tenant at the time of
vacancy at Tenant's expense.
3. The directory of the Building or Project will be provided exclusively for
the display of the name and location of tenants only and Landlord reserves
the right to charge for the use thereof and to exclude any other names
therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung
or placed in, or used in connection with, any window or door on the
Premises without the prior written consent of Landlord. In any event
with the prior written consent of Landlord, all such items shall be
installed inboard of Landlord's standard window covering and shall in no
way be visible from the exterior of the Building. All electrical ceiling
fixtures hung in offices or spaces along the perimeter of the Building
must be fluorescent or of a quality, type, design, and bulb color
approved by Landlord. No articles shall be placed or kept on the window
sills so as to be visible from the exterior of the Building. No articles
shall be placed against glass partitions or doors which Landlord
considers unsightly from outside Tenant's Premises.
5. Landlord reserves the right to exclude from the Building and the Project,
between the hours of 6 p.m. and 8 am. and at all hours on Saturdays,
Sundays and legal holidays , all persons who are not tenants or their
accompanied guests in the Building. Each tenant shall be responsible for
all persons for whom it allows to enter the Building or the Project and
shall be liable to Landlord for all acts of such persons.
Landlord and its agents shall M be liable for damages for any error
concerning the admission to, or exclusion from the Building or the Project
of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in Landlord's opinion,
Landlord reserves the right (but shall not be obligated) to prevent access
to the Building and the Project during the continuance of that event by any
means it considers appropriate for the safety of tenants and protection of
the Building, property in the Building and the Project.
6. All cleaning and janitorial services for the Building and the Premises
shall be provided exclusively through Landlord. Except with the written
consent of Landlord, no person or persons other than dim approved by
Landlord shall be permitted to enter the Building for the purpose of
cleaning the same. Tenant shall not cause any unnecessary labor by reason
of Tenant's carelessness or indifference in the preservation of good order
and cleanliness of its Premises. Landlord shall in no way be responsible to
Tenant for any loss of property on the Premises, however occurring, or for
any damage done to Tenant's property by the janitor or any other employee
or any other person.
7. Tenant shall see that all doors of its Promises are closed and securely
locked and must observe strict care and caution that all water faucets or
water apparatus, coffee pots or other heat-generating devices are entirely
shut off before Tenant or its employees leave the Premises, and that all
utilities shall likewise be carefully shut off, so as to prevent waste or
damage. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or Project or by Landlord for
noncompliance with this rule. On multiple-tenancy floors, all tenants shall
keep the door or doors to the Building corridors closed at all times except
for ingress and egress.
8. Tenant shall- not use any method of heating or air-conditioning other than
that supplied by Landlord. As more specifically provided in Tenant's lease
of the premises, Tenant shall not wane electricity, water or
air-conditioning and agrees to cooperate fully with Landlord to assure the
most effective operation of the Building's heating and air-conditioning,
and shall refrain from attempting to adjust any controls other than room
thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door in
the Premises. Landlord may make a reasonable charge for any additional
keys, and Tenant shall not make or have made additional keys. Tenant shall
not alter any lock or access device or install a new or additional lock or
seem device or bolt on any door of its Premises, without the prior written
consent of Landlord. If Landlord shall give its consent, Tenant shall in
each case furnish Landlord with a key for any such lock. Tenant, upon the
termination of its tenancy, shall deliver to Landlord the keys for all
doors which have been furnished to Tenant, and in the event of loss of any
keys so furnished, "I pay Landlord therefor.
Exhibit A - Page 1
10. The restrooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed and
no foreign substance of any kind whatsoever shall be thrown into them. The
expense of any breakage, stoppage, or damage resulting from violation of
this rule shall be borne by the tenant who, or whose employees or invitees,
shall have caused the breakage, stoppage, or damage.
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline. or inflammable or combustible fluid or
material.
12. Tenant shall not use, keep or permit to be used or kept in its Premises any
foul or noxious gas or substance. Tenant shall not allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building by reason of noise, odors and/or vibrations
or interfere in any way with other tenants or those having business
therein, nor shall any animals or birds be brought or kept in or about the
Premises, the Building. or die Project.
13. No cooking shall be done or permitted by any tenant on die Premises, except
that use by die tenant of Underwriters' Laboratory (UL) approved equipment,
refrigerators and microwave ovens may be used in the Premises for die
preparation of coffee, tea. hot chocolate and similar beverages, storing
and heating food for tenants and their employees shall be permitted. All
uses must be in accordance with all applicable federal, state and city
laws, codes, ordinances, rules and regulations and the Lease.
14. Except with the prior written consent of Landlord, Tenant shall not sell
or permit the sale, at retail. of newspapers, magazines. periodicals,
theater tickets or any other goods or merchandise in or on the Premises,
nor shall Tenant carry on, or permit or allow any employee or other
person to carry on, the business of stenography, typewriting or any
similar business in or from the Premises for the service or
accommodation of occupants of any other portion of the Building, nor
shall the Premises be used for the storage of merchandise or for
manufacturing of any kind, or the business of a public barber shop,
beauty parlor, nor shall die Premises be used for any illegal improper,
immoral or objectionable purpose, or any business or activity other than
that specifically provided for in such Tenant's Lease. Tenant shall not
accept hairstyling, barbering, shoeshine, nail, massage or similar
services in the Premises or common areas except as authorized by
Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing. burglar alarm or similar services, it shall first obtain, and
comply with, Landlord's instructions in their installation. The cost of
purchasing. installation and maintenance of such services shall be borne
solely by Tenant
16. Landlord will direct electricians as to where and how telephone, telegraph
and electrical wires are to be introduced or installed. No boring or
cutting for wires will be allowed without the prior written consent of
Landlord. The location of burglar alarms. telephone call boxes and other
office equipment affixed to the Premises shall be subject to the prior
written approval of Landlord.
17. Tenant shall not install any radio or television antenna, satellite dish,
loudspeaker or any other device on the exterior walls or the roof of the
Building, without Landlord's consent. Tenant shall wt interfere with radio
or television broadcasting or reception from or in the Building, the
Project or elsewhere.
18. Tenant shall not mark or drive nails, screws or drill into the
partitions, woodwork or drywall or in any way deface the Premises or any
part thereof without Landlord's consent. Tenant may install nails and
screws in areas of the Premises that have been identified for those
purposes to Landlord by Tenant at the time those walls or partitions
were installed in the Premises. Tenant shall not lay linoleum, tile,
carpet or any other floor covering so that the same shall be affixed to
the floor of its Premises in any manner except as approved in writing by
Landlord. The expense: of repairing any damage resulting from a
violation of this rule or the removal of any floor covering shall be
borne by the tenant by whom, or by whose contractors, employees or
invitees, the damage shall have been caused
19. No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or carried
up or down the elevators except between such hours and in such elevators as
shall be designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which exceeds
the load per square foot which such floor was designed to carry or which is
allowed by law. Landlord shall have the right to prescribe the weight, size
and position of all safes, furniture or other heavy equipment brought to
the Building. Safes or other heavy objects shall, if considered necessary
by Landlord, stand on wood strips of such thickness as determined by
Landlord to be necessary to properly distribute the weight thereof.
Landlord will not be responsible for loss of or damage to any such safe,
equipment or property from any cause, and all damage done to the Building
by moving or maintaining any such safe, equipment or other property shall
be repaired at the expense of Tenant.
Business machines and mechanical equipment belonging to Tenant which came
noise or vibration dud may be transmitted to the structure of the Building
or to any space therein to such a degree as to be objectionable to Landlord
or to any tenants in the Building shall be placed and maintained by Tenant,
at Tenant's expense, on vibration eliminators or other devices sufficient
to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord.
20. Tenant "I not install, maintain or operate upon its Premises any vending
machine without die written consent of Landlord.
21. There shall-not be used in any space, or in the public areas of the Project
either by Tenant or others, any hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve. Tenants using hand trucks shall be required to use
the freight elevator, or such elevator as Landlord shall designate. No
other vehicles of any kind shall be brought by Tenant into or kept in or
about its Premises.
22. Each tenant shall store all its a-Ash and garbage within the interior of
the Premises. Tenant shall not place in the trash boxes or receptacles any
personal trash or any material that my not or cannot be disposed of in the
ordinary and customary manner of removing and disposing of trash and
garbage in the city, without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only
through entry-ways and elevators provided for such purposes and at such
times as Landlord shall designate. If the Building has implemented a
building-wide recycling program for tenants, Tenant shall use good faith
efforts to participate in said program.
Exhibit A - Page 2
23. Canvassing. soliciting, distribution of handbills or any other written
material peddling in the Building and the Project are prohibited and each
tenant shall cooperate to prevent the same. No tenant shall make
room-to-room solicitation of business from other tenants in the Building or
the Project, without the written consent of Landlord.
24. Landlord "I have the right exercisable without notice and without liability
to any tenant, to change the name and address of the Building and the
Project.
25. Landlord reserves the right to exclude or expel from the Project any person
who, in Landlord's judgment, is under the influence of alcohol or drugs: or
who commits any act in violation of any of these Rules and Regulations.
26. Without the prior written consent of Landlord, Tenant shall not use the
name of die Building or the Project or any photograph or other likeness of
the Building or the Project in connection with. or in promoting or
advertising, Tenant's business except that Tenant may include the Building
or Project's name in Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes any and all responsibility for protecting its Premises from
theft, robbery and pilferage, which includes keeping doors locked and other
means of entry to the Premises closed.
29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside of
their regular duties unless under special instructions from Landlord, mid
no employees of Landlord will admit any person (tenant or otherwise) to any
office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces
on the Project. Tenant or Tenant's guests shall park between designated
parking lines only, and shall not occupy two parking spaces with one
car. Parking spaces shall be for passenger vehicles only; no boats,
bucks, trailers, recreational vehicles or other types of vehicles may be
parked in the parking areas (except that trucks may be loaded and
unloaded in designated loading areas). Vehicles in violation of the
above shall be subject to tow-away, at vehicle owner's expense. Vehicles
parked on the Project overnight without prior written consent of the
Landlord shall be deemed abandoned and shall be subject to tow-away at
vehicle owner's expense. No tenant of the Building shall park in visitor
or reserved parking areas. Any tenant found parking in such designated
visitor or reserved parking areas or unauthorized areas shall be subject
to tow-away at vehicle owner's expense The parking shall not be used to
provide car wash, oil changes, detailing, automotive repair or other
services unless otherwise approved or furnished by Landlord. Tenant will
from time to time, upon the request of Landlord, supply Landlord with a
list of license plate numbers of vehicles owned or operated by its
employees or agents.
31. No smoking of any kind shall be permitted anywhere within the-Building,
including. without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area as
Landlord elects. Smoking in the Project is only permitted in smoking
identified by Landlord, which may be relocated from time to time.
32. If the Building furnishes common area conferences rooms for tenant usage,
Landlord shall have the right to control each tenant's usage of the
conference rooms, including limiting tenant usage so that the rooms are
equally available to all tenants in the Building. Any common area amenities
or facilities shall be provided from time to time at Landlord's discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.
34. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients, customers,
invitees and guest.
35. These Rules and Regulations we in addition to, and shall not be construed
to in any way modify, alter or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Project.
36. Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenant or tenants, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of
any other tenant or tenants, nor prevent Landlord from thereafter enforcing
any such Rules and Regulations against any or all tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for safety
and security, for care and cleanliness of the Building and the Project and
for the preservation of good order therein. Tenant agrees to abide by all
such Rules and Regulations herein stated and any additional rules and
regulations which are adopted.
Exhibit A - Page 3
[GRAPHIC OMITTED]
PROPERTY DESCRIPTION
That certain property situated in the City of San Jose, County of Santa
Clara, State of California, described as follows:
ALL OF PARCELS A and B, as shown upon that certain Parcel Map entitled "Being
all of Parcel 3 as shown on the Parcel Map recorded in Book 451 of Maps at
pages 17 and 18 and lying within the City of San Jose, California", which Map
was filed for record in the Office of the Recorder of the County of Santa
Clara, State of California on December 2, 1982 in Map Book 506 at pages 45
and 46, Santa Clara County Records.
EXHIBIT B
[GRAPHIC OMITTED]
EXHIBIT B CONT.
EXHIBIT C
LEASE IMPROVEMENT AGREEMENT
This Lease Improvement Agreement ("Improvement Agreement") sets forth
the terms and conditions relating to construction of the initial tenant
improvements described in the Plans to be prepared and approved as provided
below (the "Tenant Improvements") in the Premises. Capitalized terms used but
not otherwise defined herein shall have the meanings set forth in the Lease
(the "Lease") to which this Improvement Agreement is attached and forms a
part.
1. BASE BUILDING WORK. The "Base Building Work" described on Schedule 1 to
this Exhibit C, if any, has been or will be performed by Landlord at
Landlord's sole cost and expense.
2. PLANS AND SPECIFICATIONS.
2.1. Landlord shall retain the services of the space planner/architect
designated by Landlord (the "Space Planner") to prepare: a detailed space
plan (the "Space Plan") mutually satisfactory to Landlord and Tenant for the
construction of the Tenant Improvements in the Premises. Tenant shall approve
or disapprove the Space Plan and any proposed revisions thereto in writing
within three (3) business days after receipt thereof, which approval shall
not be unreasonably withheld. The Space Plan shall be prepared in accordance
with the information provided by Tenant describing the improvements which
Tenant desires to have constructed.
2.2. Based on the approved Space Plan, Landlord "I cause the Spam
Planner to prepare detailed plans. specifications and working drawings for
the construction of the Tenant Improvements (the "Plans-). Landlord and
Tenant shall diligently pursue the preparation of the Plum Tenant shall
approve or disapprove the Plans and any proposed revisions thereto. including
the estimated cost of the Tenant Improvements. in writing within duce (3)
business days after receipt thereof If Tenant fails to approve or disapprove
the Space Plan or Plans or any revisions thereto within the time limits
specified herein, Tenant shall be deemed to have approved the same. Landlord
and Tenant shall use diligent efforts to cause the final Plans and the cost
estimate to be prepared and approved no later than thirty (30) days after the
execution of the Lease.
2.3. Notwithstanding Landlord's preparation, review and approval of the
Space Plan and the Plans and any revisions thereto, Landlord shall have no
responsibility or liability whatsoever for any errors or omissions contained
in the Space Plan or Plans, or to verify dimensions or conditions, or for the
quality, design or compliance with applicable Regulation of any improvements
described therein or constructed in accordance therewith. Landlord hereby
assigns to Tenant all warranties and guarantees by the Space Planner or the
contractor who constructs the Tenant Improvements relating to the Tenant
Improvements, and Tenant hereby waives all claims against Landlord relating
to, or arising out of the design or construction of, the Tenant Improvements.
Landlord shall make a good faith effort to cooperate with Tenant to enforce
any such warranties as may be reasonably required by Tenant, provided that
Landlord does not incur any monetary costs.
3. Specifications for Standard Tenant Improvements.
3.1. Specifications and quantities of standard building components which
will comprise and be used in the construction of the Tenant Improvements
("Standards") we set forth in Schedule 2 to this Exhibit C. As used herein,
"Standards" or "Building Standards" shall mean the standards for a particular
item selected from time to time by Landlord for the Building, including those
set forth on Schedule 2 of this Exhibit C or such other standards of equal or
better quality as may be mutually agreed between Landlord and Tenant in
writing.
3.2. No deviations from die Standards we permitted.
4. Tenant Improvement
4.1. The cost of the Tenant Improvement shall be paid for by Tenant,
including, without limitation. the cost of. Standards; space plans and
studies; architectural and engineering fees; permits, approvals and other
governmental fees; labor, material, equipment and supplies; construction fees
and other amounts payable to contractors or subcontractors; taxes; off-site
improvements; remediation and preparation of the Premises for construction of
the Tenant Improvements; taxes; filing and recording fees; premiums for
insurance and bonds; attorneys' fees; financing costs; and all other costs
expended or to be expended in the construction of the Tenant Improvements,
including those costs incurred for construction of elements of the Tenant
Improvements in the Premises, which construction was performed by Landlord
prior to the execution of the Lease or for materials comprising the Tenant
Improvements which were purchased by Landlord prior to the execution of the
Lease; and an administration fee of eight percent (8%) of the total cost of
the Tenant Improvements. Notwithstanding anything to the contrary contained
in this Lease, the cost of the Tenant Improvements subject to the Tenant
Improvement. Allowance shall not include (and Tenant shall have no
responsibility or) the following: (i) Costs for material improvements which
are not shown on or described in the approved final Plans unless otherwise
approved by Tenant in writing or which are part of a change order; (ii) Costs
incurred to remove Hazardous Materials in the Premises or the surrounding
area to the extent such materials exist prior to the completion date unless
the presence of such materials was caused by Tenant or the Tenant's Parties
in violation of Hazardous Materials laws; (iii) costs incurred as a
consequence of delay if such delay materially affects the progress of the
construction of Tenant Improvement or delays due to force majeure (unless the
delay is caused by Tenant or the Tenant's Parties) or pre existing
construction defects; (iv) Costs recovered by Landlord upon account of
warranties or insurance; (v) Penalties and late charges attributable to the
failure to pay construction costs in accordance with this Lease except to the
extent such penalties and late charges arise due to delays caused by Tenant
or Tenant's Parties.
4.2. Provided Tenant is not in default under the Lease beyond any
applicable cum periods, including this Improvement Agreement, Landlord shall
contribute a one-time tenant improvement allowance not to exceed $350,448.00
("Tenant Improvement Allowance") to be credited by Landlord toward the cost
of the initial Tenant Improvements. If the cost of the Tenant Improvements
exceeds the Tenant Improvement Allowance, Tenant shall pay Landlord such
excess cost within five business days after Landlord's notice to Tenant of
such excess cost. No credit "I be given to Tenant if the cost of the Ten-ant
Improvements is less than the Tenant Improvement Allowance.
4.3. If the cost of the Tenant Improvements increases after the Tenant's
approval of the Plans due to the requirements of any governmental agency or
applicable Regulation or any other reason, Tenant shall pay Landlord the
amount of such increase within five (5) business days after notice from
Landlord of such increase.
C-1
4.4. If Tenant requests any change(s) in the Plans after approval of the
estimate of the cost of the Tenant Improvements and any such requested
changes are approved by Landlord in writing in Landlord's sole discretion,
Landlord shall advise Tenant promptly of any cost increases and/or delays
such approved change(s) will cause in the construction of the Tenant
Improvements. Tenant shall approve or disapprove any or all such change(s)
within three (3) business days after notice from Landlord of such cost
increases and/or delays. To the extent Tenant disapproves any such cost
increases and/or delay attributable thereto, Landlord shall have the right,
in its sole discretion, to disapprove Tenant's request for any changes to the
approved Plans. If the cost of the Tenant Improvements increases due to any
changes in the Plan(s) requested by Tenant, Tenant shall pay Landlord the
amount of such increase within three (3) business days after notice from
Landlord of such increase and Tenant's approval thereof in accordance with
this Paragraph 4.4.
5. CONSTRUCTION OF TENANT IMPROVEMENTS.
5.1. Upon Tenant's approval of the Plans including the estimate of the
cost of the Tenant Improvements and Landlord's receipt of payment of any such
estimated cost exceeding the amount of the Tenant Improvement Allowance,
Landlord shall cause its contractor to proceed to secure a building permit
and commence construction of the Tenant Improvements provided that Tenant
shall cooperate with Landlord in executing permit applications and performing
other actions reasonably necessary to enable Landlord to obtain any required
permits or certificates of occupancy; and provided further that the Building
has in Landlord's discretion reached the stage of construction where it is
appropriate to commence construction of the Tenant Improvements in the
Promises. Landlord shall cause the Tenant Improvements to be constructed in
accordance with the approved final Plans, in compliance with all applicable
Regulations, ordinances and building codes, in a good and workmanlike manner,
without defects and using new materials and equipment of good quality.
5.2. Without limiting the provisions of Paragraph 35 of the Lease,
Landlord shall not be liable for any direct or indirect damages suffered by
Tenant as a result of delays in construction beyond Landlord's reasonable
control, including, but not limited to, delays due to strikes or
unavailability of materials or labor, or delays caused by Tenant (including
delays by the Spacc Planner, the contractor or anyone else performing
services on behalf of Landlord or Tenant).
5.3. If any work is to be performed on the Premises by Tenant or
Tenant's contractor or agents:
(a) Such work shall proceed upon Landlord's written approval
of Tenant's contractor, public liability and property damage insurance
carried by Tenant's contractor, and detailed plans and specifications for
such work, shall be at Tenant's sole cost and expense and shall further be
subject to the provisions of Paragraphs 12 and 27 of the Lease.
(b) All work shall be done in conformity with a valid building
permit when required, a copy of which shall be furnished to Landlord before
such work is commenced, and in any case, all such work shall be performed in
accordance with all applicable Regulations. Notwithstanding any failure by
Landlord to object to any such work, Landlord shall have no responsibility
for Tenant's failure to comply with all applicable Regulations.
(c) If required by Landlord or any lender of Landlord, all
work by Tenant or Tenant's contractor or agents shall be done with union
labor in accordance with all union law agreements applicable to the trades
being employed.
(d) All work by Tenant or Tenant's contractor or agents shall
be scheduled through Landlord.
(e) Tenant or Tenant's contractor or agents shall arrange for
necessary utility, hoisting and elevator service with Landlord's contractor
and shall pay such reasonable charges for such services as may be charged by
Tenant's or Landlord's contractor.
(f) Tenant's entry to the Premises for any purpose, including,
without limitation, inspection or performance of Tenant construction by
Tenant's agents prior to the date Tenant's obligation to pay rent commences
shall be subject to all the term and conditions of the Lease except the
payment of Rent. Tenant's entry shall mean entry by Tenant, its officers,
contractors, licensees, agents, servants, employees, guests, invitees, or
visitors.
(g) Tenant shall promptly reimburse Landlord upon demand for
any reasonable expense actually incurred by the Landlord by reason of faulty
work done by Tenant or its contractors or by reason of any delays caused by
such work, or by reason of inadequate clean-up.
6. Completion and Rental Commencement Date
6.1. Except to the extent caused by any Tenant delays or force majeure,
the Commencement Date of the Lease shall not occur, and Tenant shall not be
obligated to pay Base Rent under the Lease until the Tenant Improvements are
substantially complete. For purposes hereof, the Tenant Improvements shall be
deemed substantially complete ("Substantial Completion", or "Substantially
Completed" or "Substantially Complete") on the date by which all of the
following have occurred: (i) the Tenant Improvements have been substantially
completed in accordance with the Plans such that Tenant may use and occupay
the Premises for the Permitted Use hereunder;. (ii) Landlord has delivered
possession of the Premises to Tenant, and (iii) Landlord has obtained
approvals and permits from the appropriate governmental authorities required
for the occupancy of the Premises and the completion of the Tenant
Improvements. Within ten (10) business days after the Commencement Date,
Tenant shall have the right to submit a written punch list to Landlord,
setting forth any defective item of construction, and Landlord shall promptly
cause such items to be corrected. However:
(a) If Tenant delays in preparing or approving the Space Plans or
the Plans, or fails to approve or disapprove the estimate of the cost of the
Tenant Improvements or any other matter requiring Tenant's approval, or to
pay the excess cost of Tenant Improvements, in each case within the time
limits specified herein; or
(b) If the construction period is extended because Tenant requests
any changes in construction, or modifies the approved Plans or if the same do
not comply with applicable Regulations (provided such events or occurrences
actually result in a delay); or
(c) If Landlord is otherwise delayed in the construction of the
Tenant Improvements for any act or omission of or breach by Tenant or anyone
performing services on behalf of Tenant or on account of any work performed
on the Premises by Tenant or Tenant's contractors or agents,
then the date described in Paragraph 2 of the Lease shall be deemed to be
accelerated by the total number of days of Tenant delays described in (a)
through (c) above (each, a "Tenant Delay"), calculated in accordance with the
provisions of Paragraph 6.2 below.
C-2
6.2. If the Term of the Lease has not already commenced pursuant to the
provisions of Paragraph 2 of the Lease and substantial completion of the
Tenant Improvements has been delayed on account of any Tenant Delays, then
upon actual substantial completion of the Tenant Improvements (as defined
herein), Landlord shall notify Tenant in writing of the date substantial
completion of the Tenant Impiovements d have occurred but for such Tenant
Delays, and such date shall thereafter be deemed to be the Term Commencement
Date for all purposes under the Lease. Tenant shall pay to Landlord, within
three (3) business days after receipt of such written notice (which notice
shall include a summary of Tenant Delays), the per diem Base Rent times the
number of days between the date the Term Commencement Date would have
otherwise occurred but for the Tenant Delays (as determined by the Space
Planner or Landlord's contractor), and the date of actual substantial
completion of the Tenant Improvements.
6.3. Promptly after substantial completion of the Tenant Improvements,
Tenant shall conduct an inspection of the Premises with a representative of
Landlord and develop with such representative of Landlord a punchlist of
items of the Tenant Improvements that are not complete or that require
corrections. Upon receipt of such punchlist, Landlord shall proceed
diligently to remedy such items; at Landlord's cost and expense provided such
items are part of the Tenant Improvements to be constructed by Landlord
hereunder and are otherwise consistent with Landlord's obligations under this
Improvement Agreement and provided Tenant has fully paid Landlord for the
cost of the Tenant Improvements exceeding the Tenant Improvement Allowance
(with any dispute between Landlord and Tenant pertaining thereto to be
resolved by the Space Planner or Landlord's general contractor). Substantial
completion shall not be delayed notwithstanding delivery of any such
punchlist.
6.4. A defauft under this Improvement Agreement shall constitute a
default under the Lease, and the parties shall be entitled to all rights and
remedies under the Law in the event of a default hereunder by the other party
(notwithstanding that the Term thereof has not commenced).
C-3
SCHEDULE 1
TO EXHIBIT C
SPIEKER PROPERTIES, GATEWAY III
BASE BUILDING WORK
AREAS TO BE INCLUDED IN BASE BUILDING WORK:
A) Water-tight Shell
B) Main Building Lobby
C) Elevator Lobbies, Floors 1 through 6
D) Elevator Cabs
E) Building Stairs
F) Building Mail/Telephone Room, Ground Floor
G) Building Mechanical Equipment Room
H) Building Electrical Rooms, Floors 1 through 6
I) Building Telephone Closets, Floors 2 through 6
J) Common Area Restrooms, Floors 1 through 6
K) Common Area Drinking Fountains, Floors 1 through 6
L) Common Area Corridors, Floors 1 through 6
M) Common Area Janitor's Closets, Floors 1 through 6
N) Building Balconies, Floors 4 through 6
BUILD-OUT IN THESE AREAS TO INCLUDE:
A) Floor covering
B) Finished Ceiling
C) Lighting
D) Fire Sprinklers and Fire Protection System
E) Partitions - Partitions are "ready-for-finish" on Tenant side
F) HVAC main supply loop
G) Main power distribution - brought to each floor only
C-4
SPIEKER PROPERTIES, GATEWAY III
SUMMARY OF TENANT STANDARDS
FIRE PROTECTION
Fire Sprinkler Heads: Sprinkler heads to be Viking Horizon Mirage Model B-2.
concealed pendant automatic and quick response sprinklers.
Escutcheons to be micromatic adjustable, #E-1.
Color to be Navajo white
FLOOR COVERING:
Carpet: 39 oz. weight cut pile, Designweave, Sabre Classic,
installed over pad. All standard colors available.
Tile: Armstrong, Standard Excelon vinyl composition tile.
All standard colors available.
Base: Burke, 4" rubber base, topset over VCT and straight cut
over carpet. All standard colors available.
WINDOW COVERING
Blinds: 1" aluminum Levelor "Riviera" blinds, Color:
Black/alabaster. Sized to fit within aluminum mulion
module.
C-6
ADDENDUM TO
LEASE AGREEMIENT
RE: LEASE OF PREMISES AT
2033 GATEWAY PLACE, SUITE 400, SAN JOSE, CALIFORNIA
(THE "PREMISES")
NOTWITHSTANDING anything to the contrary contained in the Lease
Agreement (the "Lease'), between Spieker Properties, L.P., a California
limited partnership ("Lessor"), and Heuristic Physics Laboratories, Inc., a
California corporation, ("Lessee"), the following provisions of this Addendum
to Lease Agreement (this "Addendum") shall be incorporated into and be a part
of the Lease and shall supersede any inconsistent provisions of the Lease.
1. GRANT OF LICENSE. Landlord hereby grants Tenant a nonexclusive license
to install on the roof of the building one (1) antenna which is no more
than 60" x 1 V4" in tubular height with a mast no more than 18" x 30" in
size which is to be mounted by brackets on the inside wall adjacent to
the boiler exhaust fans located on top of the penthouse wall and does
not exceed five pounds (5 lbs.) installed, and the nonexclusive right to
run connecting lines to such antenna from the Premises (such antenna and
such connecting lines and equipment herein referred to as the
"Equipment'). Tenant shall not penetrate the roof in connection with any
installation or reinstallation of the Equipment without Landlord's prior
written consent, which may be withheld in Landlord's sole discretion.
The plans and specifications for all the Equipment shall be delivered by
Tenant to Landlord for Landlord's review and approval. Such plans and
specifications shall be approved by Landlord in writing prior to any
installation. Prior to the commencement of any installation or other
work performed on or about the Building, Landlord shall approve all
contractors and subcontractors which shall perform such work. Tenant
shall be responsible for any damage to the roof or conduit systems as a
result of Tenant's installation, maintenance and/or removal of the
Equipment. In the event that Tenant fails to repair and maintain the
Equipment in accordance with this Addendum and the Lease, Landlord may,
but shall not be obligated to, make any such repairs or perform any
maintenance to the Equipment and Tenant shall reimburse Landlord upon
demand for all costs and expenses incurred by Landlord in connection
therewith, plus a reasonable administrative fee.
2. RENT. Tenant shall pay to Landlord, as "Additional Rent", one hundred
dollars ($100.00) per month for the use of the roof and roof space to
accommodate Tenant's Equipment. Additional Rent is due and payable on
the first day of each month and is subject to the same terms and
conditions under Paragraph 6.B. of the Lease.
3. LOCATION. The location of the Equipment shall be subject to Landlord's
prior written approval, which approval may be withheld in Landlord's
sole discretion. Tenant shall not change the location of, or alter or
install additional Equipment or paint the antenna or the other Equipment
without Landlord's prior written consent. Tenant agrees that Landlord
shall direct the placement of the antenna inside the roof well, other
than locations that are scheduled to accommodate building equipment or
services.
4. COMPLIANCE WITH LAW. Tenant, at Tenant's sole expense, shall comply with
all laws, rules, orders and regulations regarding the installation,
construction, operation, maintenance and removal of the Equipment and
shall be solely responsible for obtaining and maintaining in force all
permits, licenses and approvals necessary for such operations.
5. TAXES. Tenant shall be responsible for and promptly shall pay all taxes,
assessments, charges, fees and other governmental impositions levied or
assessed on the Equipment or based on the operation thereof
6. RELOCATION. Landlord may require Tenant, at Tenant's sole cost and
expense, to relocate the Equipment during the term of the Lease to a
location approved by Tenant, which approval shall not be unreasonably
withheld, conditioned or delayed.
7. TERMINATION. Landlord reserves the right to terminate Tenant's right
pursuant to this Addendum with thirty (30) days prior written notice to
Tenant. This Addendum will terminate immediately should Tenant be in
default of the Lease and/or any related sublease. This Addendum shall
automatically terminate upon the expiration or earlier termination of
the Lease.
8. INTERFERENCE. Operation of the Equipment shall not interfere in any
manner with equipment systems or utility systems of other tenants,
including without limitation, telephones, dictation equipment, lighting,
heat and air conditioning, computers, electrical systems and elevators.
If operation of the Equipment causes such interference, as determined by
Landlord in Landlord's reasonable discretion, Tenant immediately shall
suspend operation of the Equipment until Tenant eliminates such
interference.
9. MAINTENANCE AND REPAIR. Tenant shall maintain the Equipment in good
condition and repair, at Tenant's sole cost and expense. Landlord may
from time to time require that Tenant repaint the antenna at Tenant's
expense to keep the same in an attractive condition. In the event that
Tenant fails to repair and maintain the Equipment in accordance with
this Paragraph 9, Landlord may, but shall not be obligated to, make any
such repairs or perform any maintenance to the Equipment and Tenant
shall reimburse Landlord upon demand for all costs and expenses incurred
by Landlord in connection therewith, plus a reasonable administrative
fee. I
10. ACCESS. Tenant may access the roof for repair and maintenance of the
satellite dish, only during normal business hours, on not less than 24
hours prior written notice to Landlord. Should Tenant request roof
access during normal business hours with less than 24 hours prior
written notice, Landlord will use best efforts to provide Tenant roof
access. Tenant shall designate in writing to Landlord all persons whom
Tenant authorizes to have access to the roof for such purposes. Upon
such designation and prior identification to Landlords' building
security personnel, such authorized persons shall be granted access to
the roof by Landlord's building engineer. Tenant shall be responsible
for all costs and expenses incurred by Landlord in connection with
Tenant's access to the roof pursuant to this Paragraph 10. Landlord or
Landlord's agent may accompany Tenant during such access.
11. INDEMNITY AND INSURANCE. Tenant shall indemnify, defend, protect and
hold harmless Landlord from and against any and all claims related to
the Equipment or operation of the same as if the Equipment were located
wholly within the Premises. Tenant shall provide evidence satisfactory
to Landlord that Tenant's property and liability insurance policies
required under the Lease include coverage for the Equipment and any
claim, loss, damage, or liability relating to the Equipment. Paragraph
10 of the Lease shall apply to the Equipment and Tenant's use thereof.
12. NO LANDLORD RESPONSIBILITY. Landlord shall have no responsibility or
liability whatsoever relating to (i) maintenance or repair of the
Equipment, (ii) damage to the Equipment; (iii) damage to persons or
property relating to the Equipment or the operation thereof-, or (iv)
interference with use of the Equipment arising out of utility
interruption or any other cause, except for injury to persons or damage
to property caused solely by the negligence or intentional misconduct of
Landlord, its agents or any other parties related to Landlord. In no
event shall Landlord be responsible for consequential damages. Upon
installation of the Equipment, Tenant shall accept the area where the
Equipment is located in its "as is" condition. Tenant acknowledges that
the roof location of the Equipment is suitable for Tenant's needs, and
acknowledges that Landlord shall have no obligation whatsoever to
improve, maintain or repair the area in which the Equipment will be
installed.
13. USE. Tenant shall use the Equipment solely for the operations associated
with the Permitted Use and within Tenant's Premises and shall not use or
allow use of the Equipment. for consideration or otherwise, for the
benefit of other tenants in the building or any other person or entity.
14. REMOVAL. Tenant shall, at Tenant's sole expense, remove the antenna and
such other portions of the Equipment as Landlord may designate, and
restore the affected areas to their condition
prior to installation of the Equipment (i) if Tenant fails to perform any
of its obligations under this Addendum within five (5) days after request
of Landlord, or immediately in the event of emergency, (ii) immediately
if such removal is required by any governmental agency having
jurisdiction over the Equipment, and (iii) in any event, no later than
thirty (30) days after expiration or earlier termination of the Lease;
provided, however, that Tenant shall continue to pay the Rent described
in Paragraph 2 hereof during such thirty (30) day removal period. If
Tenant fails to remove the Equipment when and as required under this
Addendum, Landlord reserves the right to do so, and the expense of the
same shall be immediately due and payable from Tenant to Landlord as
Additional Rent, together with interest and late charges as provided in
the Lease.
15. SURVIVAL. The covenants, obligations and indemnities under this
Addendum shall survive expiration or earlier termination of the Lease
for any reason.
Except as expressly modified above, all terms and conditions of the
Lease remain in full force and effect and are hereby ratified and confirmed.
LANDLORD: TENANT:
Spieker Properties, L.P., Heuristic Physics Laboratories, Inc.,
a California limited partnership a California corporation
By: Spieker Properties, Inc. By: /s/ DAVID Y. LEPEIJIAN
a Maryland corporation ---------------------------------
its General Partner David Y. Lepeijian
Its: President & CEO
By: /s/ JOHN W. PETERSEN
--------------------------- Date: May 18, 1999
-------------------------------
John W. Petersen
Its: Vice President
---------------------
Date: May 20, 1999
--------------------