ATTACHMENT I
MASTER LEASE
LEASE AGREEMENT
BY AND BETWEEN
AETNA LIFE INSURANCE COMPANY,
A CONNECTICUT CORPORATION
AS LANDLORD
AND
NAVIO COMMUNICATION'S, INC.,
A DELAWARE CORPORATION
AND
NETSCAPE COMMUNICATIONS CORPORATION,
A DELAWARE CORPORATION
COLLECTIVELY AS TENANT
DATED NOVEMBER 4, 1996
LEASE AGREEMENT
BY AND BETWEEN
AETNA LIFE INSURANCE COMPANY,
A CONNECTICUT CORPORATION
AS LANDLORD
AND
NAVIO COMMUNICATION'S, INC.,
A DELAWARE CORPORATION
AND
NETSCAPE COMMUNICATIONS CORPORATION,
A DELAWARE CORPORATION
COLLECTIVELY AS TENANT
DATED NOVEMBER 4, 1996
TABLE OF CONTENTS
Page
Basic Lease Information ............................................iv
1. Demise ...........................................................1
2. Premises .........................................................1
3. Term .............................................................2
4. Rent .............................................................3
5. Utility Expenses .................................................9
6. Late Charge .....................................................10
7. Security Deposit ................................................11
8. Possession ......................................................11
9. Use Of Premises .................................................12
10. Acceptance Of Premises .........................................14
11. Surrender ......................................................14
12. Alterations And Additions ......................................15
13. Maintenance and Repairs Of Premises ............................17
14. Landlord's Insurance ...........................................18
15. Tenant's Insurance..............................................19
16. Indemnification ................................................20
17. Subrogation ....................................................21
18. Signs ..........................................................21
19. Free From Liens ................................................22
20. Entry By Landlord ..............................................22
21. Destruction And Damage..........................................23
22. Condemnation ...................................................25
23. Assignment And Subletting ......................................26
24. Tenant's Default ...............................................29
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25. Landlord's Remedies ............................................31
26. Landlord's Right to Perform Tenant's Obligations ...............34
27. Attorney's Fees ................................................35
28. Taxes ..........................................................35
29. Effect Of Conveyance ...........................................35
30. Tenant's Estoppel Certificate ..................................36
31. Subordination ..................................................36
32. Environmental Covenants ........................................37
33. Notices ........................................................41
34. Waiver .........................................................41
35. Holding Over ...................................................41
36. Successors And Assigns .........................................42
37. Time ...........................................................42
38. Brokers ........................................................42
39. Limitation Of Liability ........................................42
40. Financial Statements ...........................................43
41. Rules And Regulations...........................................43
42. Mortgagee Protection ...........................................43
43. Right Of First Negotiation .....................................44
44. Entire Agreement ...............................................45
45. Interest .......................................................45
46. Construction ...................................................45
47. Representations And Warranties .................................45
48. Security .......................................................46
49. Jury Trial Waiver ..............................................47
50. Joint and Several Liability ....................................47
ii
Exhibit
A Diagram of the Initial Premises and Subsequent Premises
B Commencement and Expiration Date Memorandum
C Rules and Regulations
D Sign Criteria
E Hazardous Materials Disclosure Certificate
F Negotiation Space
iii
BASIC LEASE INFORMATION
Lease Date: November 4, 1996
Landlord: AETNA LIFE INSURANCE COMPANY,
a Connecticut corporation
Landlord's Address: c/o Allegis Realty Investors LLC
1740 Technology Drive, Suite 600
San Jose, California 95110
All notices sent to Landlord under this Lease shall
be sent to the above address, with copies to:
Insignia/O'Donnell Commercial Group
160 West Santa Clara Street
Suite 1350
San Jose, California 95113
Tenant: NAVIO COMMUNICATIONS, Inc.,
a Delaware corporation
and
NETSCAPE COMMUNICATIONS CORPORATION,
a Delaware corporation
Tenant's Contact Person: Nancy Hilker,
Vice President and Corporate Controller
Tenant's Address and 870 W. Maude
Telephone Number: Sunnyvale, California 94086
(408) 328-0630
Premises Square Footage:
Initial Premises: Approximately Thirty One Thousand Six Hundred
Ninety-Nine (31,699) rentable square feet
Subsequent Premises: Approximately Thirteen Thousand Four Hundred
Nineteen (13,419) rentable square feet
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Premises Address: 870 West Maude Avenue
Sunnyvale, California 94086
Project: 870 West Maude Avenue - 490 Potrero Avenue,
Sunnyvale, California, together with the land on
which the Project is situated and all Common Areas
Building (if not the same
as the Project): Same as the Project
Tenant's Proportionate
Share of Project:
Initial Premises: 57.45%
Subsequent Premises: 24.32%
Tenant's Proportionate
Share of Building:
Initial Premises: 57.45%
Subsequent Premises: 24.32%
Length of Term:
Initial Premises: Sixty (60) months
Subsequent Premises: Fifty-Nine (59) months
Estimated Commencement
Date:
Initial Premises: December 1, 1996
Subsequent Premises: January 1, 1997
Estimated Expiration Date: November 30, 2001
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Monthly Base Rent:
Monthly Monthly
Period Sq. Ft. Base Rate Base Rent
December 1, 1996- 31,699 x $1.35 =$42,793.65
December 31, 1996
January 1, 1997- 45,118 x $1.35 =$60,909.30
November 30, 1997
December 1, 1997- Monthly Base Rent to be increased in
November 30, 2001 accordance with the Consumer Price
Index Price (see Paragraph 4(a) of
the Lease)
Prepaid Base Rent: Forty Two Thousand Seven Hundred Ninety-Three and
65/100 Dollars ($42,793.65)
Month to which Prepaid
Base Rent and Additional
Rent will be Applied: First (1st) month of the Term following the
Initial Premises Commencement Date
Security Deposit: Seventy One Thousand Two Hundred Fifty-Five
and 27/100 Dollars ($71,255.27)
Permitted Use: General office use for software development
Unreserved Parking
Spaces:
Prior to occupancy of One hundred eighteen (118) nonexclusive and
Subsequent Premises: undesignated parking spaces
From and after occupancy One hundred sixty-eight (168) nonexclusive and
of Subsequent Premises: undesignated parking spaces
Brokers: Randy Arfillaga and Mark Daschbach of Cornish & Carey Commercial (Landlord's Broker)
Phil Mahoney and Terry Haught of Cornish & Carey
Commercial (Tenant's Broker)
vi
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between Landlord and
Tenant on the Lease Date. The defined terms used in this Lease which are defined
in the Basic Lease information attached to this Lease Agreement ("Basic Lease
Information") shall have the meaning and definition given them in the Basic
Lease information. The Basic Lease Information, the exhibits, the addendum or
addenda described in the Basic Lease Information, and this Lease Agreement are
and shall be construed as a single instrument and are referred to herein as the
"Lease".
1. DEMISE
In consideration for the rents and all other charges and payments payable
by Tenant, and for the agreements, terms and conditions to be performed by
Tenant in this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES
HEREBY HIRE AND TAKE FROM LANDLORD, the Initial Premises and the Subsequent
Premises (individually or collectively, as applicable, the "Premises"), upon the
agreements, terms and conditions of this Lease for the Term hereinafter stated.
2. PREMISES
The Premises demised by this Lease is located in that certain building
(the "Building") specified in the Basic Lease Information, which Building is
located in that certain real estate development (the "Project") specified in the
Basic Lease Information. The Premises has the address and contains the square
footage specified in the Basic Lease Information. The location and dimensions of
the Initial Premises and the Subsequent Premises are depicted on Exhibit A,
which is attached hereto and incorporated herein by this reference. Tenant shall
have the non-exclusive right (in common with the other tenants, Landlord and any
other person granted use by Landlord) to use the Common Areas (as hereinafter
defined), excluding, however, the parking areas, together with a license to use
the number of non-exclusive and undesignated parking spaces set forth in the
Basic Lease Information in the Building or Project's parking areas; provided,
however, that Landlord shall not be required to enforce Tenant's right to use
such parking spaces; and, provided further, that the number of parking spaces
allocated to Tenant hereunder shall be reduced on a proportionate basis in the
event any of the parking spaces in the Building or Project's parking areas are
taken or otherwise eliminated as a result of any Condemnation (as hereinafter
defined) or casualty event affecting such parking areas. No easement for light
or air is incorporated in the Premises. For purposes of this Lease, the term
"Common Areas" shall mean all areas and facilities outside the Premises and
within the exterior boundary line of the Project that are provided and
designated by Landlord for the non-exclusive use of Landlord, Tenant and other
tenants of the Project and their respective employees, guests and invitees.
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Landlord has the right, in its sole discretion, from time to time, to (a)
make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of driveways, entrances, parking spaces,
parking areas, ingress, egress, direction of driveways, entrances, corridors and
walkways; (b) close temporarily any of the Common Areas for maintenance purposes
so long as reasonable access to the Premises remains available; (c) add
additional buildings and improvements to the Common Areas or remove existing
buildings or improvements therefrom; (d) use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Project or any
portion thereof; and (e) do and perform any other acts or make any other
changes in, to or with respect to the Common Areas and the Project as Landlord
may, in its sole discretion, deem to be appropriate. Notwithstanding the
foregoing, in no event shall such changes (i) materially reduce parking
available to Tenant or Tenant's customers, (ii) materially interfere with
Tenant's use of the Premises, (iii) unreasonably and materially impair customer
access to or visibility of the Premises.
3. TERM
The term of this Lease (the "Term") with respect to each of the Initial
Premises and the Subsequent Premises shall commence on the date (the
"Commencement Date") Landlord delivers possession of the respective Premises to
Tenant for the commencement or business operations; provided, however, that
Tenant shall not be deemed to have commenced business operations in the Initial
Premises for purposes of this Paragraph 3 if Tenant enters upon the Initial
Premises for the sole purpose of installing its fixtures and equipment and
preparing the Initial Premises for Tenant's business operations in accordance
with Paragraph 8(c) below.
The date on which the Term commences with respect to the Initial Premises
shall be hereinafter referred to as the "initial Premises Commencement Date."
The date on which the Term commences with respect to the Subsequent Premises
shall be hereinafter referred to as the "Subsequent Premises Commencement Date."
In the event the actual Commencement Date of this Lease with respect to either
the Initial Premises or the Subsequent Premises, as determined pursuant to the
foregoing, is a date other than the Estimated Commencement Date for the
respective Premises specified in the Basic Lease Information, then Landlord and
Tenant shall promptly execute a Commencement and Expiration Date Memorandum in
the form attached hereto as Exhibit B, wherein the parties shall specify the
Commencement Date of the respective Premises and the Expiration Date. The Term
shall expire with respect to the Initial Premises and the Subsequent Premises on
the fifth (5th) anniversary of the Initial Premises Commencement Date (the
"Expiration Date").
2
4. RENT
(a) Base Rent. Tenant shall pay to Landlord, in advance on the first day
of each month, without further notice or demand and without offset or deduction,
the monthly installments of rent specified in the Basic Lease Information (the
"Base Rent").
The Base Rent under this Paragraph 4(a) shall be adjusted, as stated
below, on each anniversary of the Commencement Date of this Lease to reflect
percentage increases in the cost of living. The Consumer Price Index (U.S.
Department of Labor Consumer Price Index (all items) for Urban Wage Earners and
Clerical Workers, San Francisco Bay Area (1982-1984= 100), hereinafter referred
to as the "Index") published for the month immediately preceding such adjustment
date ("Adjustment Index") and the Index published for the month immediately
preceding the Commencement Date of this Lease ("Base Index") Shall be compared
and the percentage difference between the Adjustment Index and the Base Index
shall be determined. The initial Base Rent specified in the Basic Lease
Information shall be increased by adding to said initial Base Rent the
percentage amount of said initial Base Rent equal to the percentage difference
between the Base Index and the Adjustment Index; provided, however, in no event
shall the initial Base Rent hereunder be increased by less than four percent
(4%) or more than seven percent (7%) for any one year. When the adjusted Base
Rent is determined after each adjustment date, Landlord shall give Tenant
written notice indicating the amount thereof and the method of computation. If
the Consumer Price Index is changed or discontinued, Landlord shall substitute
an official index published by the Bureau of Labor Statistics or its successor
or similar governmental agency as may then be in existence and shall be most
nearly equivalent thereto.
Upon execution of this Lease, Tenant shall pay to Landlord the
Prepaid Base Rent specified in the Basic Lease Information and first monthly
installment of estimated Additional Rent (as hereinafter defined) to be applied
toward Base Rent and Additional Rent for the month of the Term specified in the
Basic Lease Information.
(b) Additional Rent. This Lease is intended to be a triple-net Lease with
respect to Landlord; and subject to Paragraph 13(b) below, the Base Rent owing
hereunder is (1) to be paid by Tenant absolutely net of all costs and expenses
relating to Landlord's ownership and operation of the Project and the Building,
and (2) not to be reduced, offset or diminished, directly or indirectly, by any
cost, charge or expense payable hereunder by Tenant or by others in connection
with the Premises, the Building and/or the Project or any part thereof. The
provisions of this Paragraph 4(b) for the payment of Tenant's Proportionate
Share(s) of Expenses (as hereinafter defined) are intended to pass on to Tenant
its share of all such costs and expenses. In addition to the Base Rent, Tenant
shall pay to Landlord, in accordance with this Paragraph 4, Tenant's
Proportionate Share(s) of all costs and expenses paid or incurred by Landlord in
connection with the ownership, operation, maintenance, management and repair of
the Premises, the Building and/or the Project or any part thereof, except as
expressly provided for herein (collectively, the
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"Expenses"), including, without limitation, all the following items (the
"Additional Rent"):
(1) Taxes and Assessments. All real estate taxes and assessments,
which shall include any form of tax, assessment, fee, license fee, business
license fee, levy, penalty (only if a result of Tenant's delinquency), or tax
(other than net income, estate, succession, inheritance, transfer or franchise
taxes), imposed by any authority having the direct or indirect power to tax, or
by any city, county, state or federal government or any improvement or other
district or division thereof, whether such tax is (i) determined by the area of
the Premises, the Building and/or the Project or any part thereof, or the Rent
and other sums payable hereunder by Tenant or by other tenants, including, but
not limited to, any gross income or excise tax levied by any of the foregoing
authorities with respect to receipt of Rent and/or other sums clue under this
Lease; (ii) upon any legal or equitable interest of Landlord in the Premises,
the Building and/or the Project or any part thereof; (iii) upon this-transaction
or any document to which Tenant is a party creating or transferring any interest
in the Premises, the Building and/or the Project; (iv) levied or assessed in
lieu of, in substitution for, or in addition to, existing or additional taxes
against the Premises, the Building and/or the Project, whether or not now
customary or within the contemplation of the parties; or (v) surcharged against
the parking area. Tenant and Landlord acknowledge that Proposition 13 was
adopted by the voters of the State of California in the June, 1978 election and
that assessments, taxes, fees, levies and charges may be imposed by
governmental agencies for such purposes as fire protection, street, sidewalk,
road, utility construction and maintenance, refuse removal and for other
governmental services which may formerly have been provided without charge to
property owners or occupants. It is the intention of the parties that all new
and increased assessments, taxes, fees, levies and charges due to any cause
whatsoever are to be included within the definition of real property taxes for
purposes of this Lease. "Taxes and assessments" shall also include legal and
consultants fees, costs and disbursements incurred in connection with
proceedings to contest, determine or reduce taxes, Landlord specifically
reserving the right, but not the obligation, to contest by appropriate legal
proceedings the amount or validity of any taxes. Notwithstanding the foregoing,
the following shall not constitute "Taxes and assessments" for the purposes of
this Lease, and nothing contained herein shall be deemed to require Tenant to
pay any of the following: (i) any state, local, federal, personal or corporate
income tax measured by the income of Landlord; (ii) any estate or inheritance
taxes, (iii) any franchise, succession or transfer taxes; or (iv) interest on
taxes or penalties resulting from Landlord's failure to pay taxes, except to the
extent such failure is due to Tenant's failure to pay such taxes to Landlord
when provided under this Lease. If any assessments affecting the Premises are
payable in installments and Landlord should prepay such assessments in advance
of the date such installments would become due, Tenant shall be solely
responsible for the portion of such assessment that would have normally come
clue as an installment, unless consented to by Tenant in writing.
4
(2) Insurance. All insurance premiums for the Building and/or the
Project or any part thereof, including premiums for "all risk (special form)"
fire and extended coverage insurance, commercial general liability insurance,
including, without limitation, commercial general liability insurance covering
the acts of Landlord and its Agents, rent loss or abatement insurance in an
amount equal to the Rent due hereunder for up to twelve (12) months, earthquake
insurance, flood or surface water coverage, and other insurance as Landlord
deems prudent in its sole discretion, and any deductibles paid under policies of
any such insurance. Notwithstanding the foregoing, in the event of any insured
casualty to the Building and/or the Project or any part thereof during the Term
for which the deductible under any applicable policy of casualty insurance
exceeds an amount equal to one (1) month of Base Rent payable hereunder at the
time of such casualty, then the portion of such deductible equal to one (1)
month's Base Rent shall be payable hereunder immediately as Additional Rent
pursuant to this Paragraph 4(b), and the balance of such deductible shall be
amortized by Landlord and payable by Tenant, together with interest thereon at
the rate of eight percent (8%) per annum, in equal monthly installments over the
remaining Term of this Lease; provided, however, that if this Lease shall
terminate for any reason prior to the scheduled expiration thereof, the unpaid
balance of such deductible and all accrued and unpaid interest thereon shall
immediately become due and payable in full.
(3) Utilities. The cost of all Utilities (as hereinafter defined)
serving the Premises, the Building and the Project that are not separately
metered to Tenant, any assessments or charges for Utilities or similar purposes
included within any tax bill for the Building or the Project, including without
limitation, entitlement fees, allocation unit fees. and/or any similar fees or
charges and any penalties (if a result of Tenant's delinquency) related thereto,
and any amounts, taxes, charges, surcharges, assessments or impositions levied,
assessed or imposed upon the Premises, the Building or the Project or any part
thereof, or upon Tenant's use and occupancy thereof, as a result of any
rationing of Utility services or restriction on Utility use affecting the
Premises, the Building and/or the Project, as contemplated in Paragraph 5 below
(collectively, "Utility Expenses").
(4) Common Area Expenses. All costs to operate, maintain, repair,
replace, supervise, insure and administer the Common Areas, including supplies,
materials, labor and equipment used in or related to the operation and
maintenance of the Common Areas, including parking areas (including, without
limitation, all costs of resurfacing and restriping parking areas), signs and
directories on the Building and/or the Project, landscaping (including
maintenance contracts and fees payable to landscaping consultants), amenities,
sprinkler systems, sidewalks, walkways, driveways, curbs, lighting systems and
security services, if any, provided by Landlord for the Common Areas, and any
charges, assessments, costs or fees levied by any association or entity of which
the Project or any part thereof is a member or to which the Project or any part
thereof is subject.
5
(5) Parking Charges. Any parking charges or other costs levied,
assessed or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by any governmental
authority or insurer in connection with the use or occupancy of the Building or
the Project.
(6) Maintenance and Repair Costs. Except for costs which are the
responsibility of Landlord pursuant to Paragraph 13(b) below, all costs to
maintain, repair, and replace the Premises, the Building and/or the Project or
any part thereof, including without limitation, (i) all costs paid under
maintenance, management and service agreements such as contracts for janitorial,
security and refuse removal, (ii) all costs to maintain, repair and replace the
roof coverings of the Building or the Project or any part thereof, (iii) all
costs to maintain, repair and replace the heating, ventilating, air
conditioning, plumbing, sewer, drainage, electrical, fire protection, life
safety and security systems and other mechanical, electrical and communications
systems and equipment serving the Premises, the Building and/or the Project or
any part thereof (collectively, the "Systems").
(7) Life Safety Costs. All costs to install, maintain, repair and
replace all life safety systems, including, without limitation, all fire alarm
systems, serving the Premises, the Building and/or the Project or any part
thereof (including all maintenance contracts and fees payable to life safety
consultants) whether such systems are or shall be required by Landlord's
insurance carriers, Laws (as hereinafter defined) or otherwise.
(8) Management and Administration. All costs for management and
administration of the Premises, the Building and/or the Project or any part
thereof, including, without limitation, a property management fee not to exceed
on an annual basis five percent (5%) of the gross income of the Building,
accounting, auditing, billing, postage, salaries and benefits for clerical and
supervisory employees, whether located on the Project or off-site, payroll taxes
and legal and accounting costs and fees for licenses and permits related to the
ownership and operation of the Project.
Notwithstanding the foregoing, the following shall not constitute
Expenses for the purposes of this Lease, and nothing contained herein shall be
deemed to require Tenant to pay any of the following: (i) legal fees, brokerage
commissions, advertising costs and other related expenses incurred in connection
with the leasing of the Building or Project; (ii) damage and repairs
attributable to condemnation, fire or other casualty; (iii) damage and repairs
covered under any warranty or insurance policy carded by Landlord in connection
with the Building or Project, but solely to the extent of proceeds actually
collected by Landlord under such warranty or policy; (iv) executive salaries of
Landlord at or above the level of senior vice president; (v) salaries of service
personnel to the extent that such service personnel perform services not solely
in connection with the management, operation, repair or maintenance of the
Building, Project or Common Areas (in which case the salaries of such personnel
shall be allocated by Landlord to the Building, Project or Common Areas, on the
one hand, and the other properties serviced
6
by such personnel, on the other hand, based upon the relative proportion of the
time of such personnel devoted to the Building. Project or Common Areas and such
other properties, and only the portion of the salaries of such personnel devoted
to the Building, Project or Common Areas shall be considered "Expenses" for
purposes of this Lease); (vi) Landlord's general overhead expenses not related
to the Building; (vii) payments of principal or interest on any mortgage or
other encumbrance including ground lease payments and points, commissions and
legal fees associated with financing; (viii) depreciation; (ix) legal fees,
accountants fees and other expenses incurred in connection with disputes with
Tenant or other tenants or occupants of the Building or Project or associated
with the enforcement of any leases or defense of Landlord's title to or interest
in the Building or any part thereof; (x) costs (including permit, license and
inspection fees) incurred in renovating or otherwise improving, decorating,
painting or altering space for other tenants or other occupants or vacant space
(excluding the Common Areas) in the Building or Project; (xi) costs incurred due
to violation by any other tenant in the Building of the terms and conditions of
any lease; (xii) costs incurred as a result of Landlord's gross negligence or
willful misconduct in the operation of the Property; (xiii) the cost of any
service provided to Tenant or other occupants of the Building or Project for
which Landlord is entitled to be reimbursed, but solely to the extent of the
actual reimbursement received by Landlord; (xiv) charitable or political
contributions; (xv) any cost or expense related to the testing for, removal,
transportation or storage of Hazardous Materials from the Project, Building or
Premises, except to the extent of any testing performed at the request of Tenant
(in which case Tenant shall be solely responsible for the costs of such tests);
and (xvi) interest, penalties or other costs arising out of Landlord's failure
to make timely payments of its obligations (except to the extent such failure is
due to Tenant's failure to pay sums due under Lease to Landlord). Nothing
contained in this paragraph shall be deemed to limit the payment obligations of
Tenant under any other provision of this Lease, except for the obligations
arising under Paragraph 4(b).
Landlord shall not collect in excess of one hundred percent (100%)
of Expenses, or any item of cost more than once.
Notwithstanding anything in this Section 4(b) to the contrary, with
respect to all sums payable by Tenant as Additional Rent under this Section 4(b)
for the repair or replacement of any item or the construction of any new item in
connection with the physical operation of the Premises, the Building or the
Project (i,e., HVAC, roof membrane or coverings and parking area) which is a
capital item the repair or replacement of which properly would be capitalized
Under generally accepted accounting principles, Tenant shall be required to pay
only the prorata share of the cost of the item falling due within the Term based
upon the amortization of the same over the useful life of such item, as
reasonably determined by Landlord.
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(c) Payment of Additional Rent.
(1) Prior to the Initial Premises Commencement Date, Landlord shall
submit to Tenant an estimate of monthly Additional Rent for the Initial Premises
for the period between the Initial Premises Commencement Date and the following
December 31 and Tenant shall pay such estimated Additional Rent on a monthly
basis, in advance, on the first day of each month. Prior to the Subsequent
Premises Commencement Date, Landlord shall submit to Tenant an estimate of
monthly Additional Rent for the Subsequent Premises for the period between the
Subsequent Premises Commencement Date and the following December 31 and Tenant
shall pay such estimated Additional Rent on a monthly basis, in advance, on the
first day of each month. Tenant shall continue to make said monthly payments
until notified by Landlord of a change therein. By April 1 of each calendar
year, Landlord shall endeavor to provide to Tenant a statement showing in
reasonable detail the actual Additional Rent due to Landlord for the prior
calendar year, to be prorated during the first year from the respective
Commencement Date(s). If the total of the monthly payments of Additional Rent
that Tenant has made for the prior calendar year is less than the actual
Additional Rent chargeable to Tenant for such prior calendar year, then Tenant
shall pay the difference in a lump sum within ten (10) business days after
receipt Of such statement from Landlord. Any overpayment by Tenant of Additional
Rent for the prior calendar year shall be credited towards the Additional Rent
next due or, in the case such overpayment is determined subsequent to the
expiration or earlier termination of this Lease, paid to Tenant promptly upon
discovery thereof.
(2) Landlord's then-current annual operating and capital budgets for
the Building and the Project or the pertinent part thereof shall be used for
purposes of calculating Tenant's monthly payment of estimated Additional Rent
for the current year, subject to adjustment as provided above. Landlord shall
make the final determination of Additional Rent for the year in which this Lease
terminates as soon as possible after termination of such year. Even though the
Term has expired and Tenant has vacated the Premises, Tenant shall remain liable
for payment of any amount due to Landlord in excess of the estimated Additional
Rent previously paid by Tenant, and, conversely, Landlord shall promptly return
to Tenant any overpayment. Failure of Landlord to submit statements as called
for herein shall not be deemed a waiver of Tenant's obligation to pay Additional
Rent as herein provided.
(3) With respect to Expenses which Landlord allocates to the
Building, Tenant's "Proportionate Share" shall be the percentage set forth in
the Basic Lease Information as Tenant's Proportionate Share of the Building, as
adjusted by Landlord from time to time for a remeasurement of or changes in the
physical size of the Premises or the Building, whether such changes in size are
due to an addition to or a sale or conveyance of a portion of the Building or
otherwise. With respect to Expenses which Landlord allocates to the Project as a
whole or to only a portion of the Project, Tenant's "Proportionate Share" shall
be, with respect to Expenses which Landlord allocates to the
8
Project as a whole, the percentage set forth in the Basic Lease Information as
Tenant's Proportionate Share of the Project and, with respect to Expenses which
Landlord allocates to only a portion of the Project, a percentage calculated by
Landlord from time to time in its sole discretion and furnished to Tenant in
writing, in either case as adjusted by Landlord from time to time for a
remeasurement of or changes in the physical size of the Premises or the Project,
whether such changes in size are due to an addition to or a sale or conveyance
of a portion of the Project or otherwise. Notwithstanding the foregoing,
Landlord may equitably adjust Tenant's Proportionate Share(s) for all or part of
any item of expense or cost reimbursable by Tenant that relates to a repair,
replacement, or service that benefits only the Premises or only a portion of the
Building and/or the Project or that varies with the occupancy of the Building
and/or the Project. Without limiting the generality of the foregoing, Tenant
understands and agrees that Landlord shall have the right to adjust Tenant's
Proportionate Share(s) of any Utility Expenses based upon Tenant's use of the
Utilities or similar services as reasonably estimated and determined by Landlord
based upon factors such as size of the Premises and intensity of use of such
Utilities by Tenant such that Tenant shall pay the portion of such charges
reasonably consistent with Tenant's use of such Utilities and similar services.
If Tenant disputes any such estimate or determination of Utility Expenses, then
Tenant shall either pay the estimated amount or cause the Premises to be
separately metered at Tenant's sole expense.
(d) General Payment Terms. The Base Rent, Additional Rent and all other
sums payable by Tenant to Landlord hereunder, including, without limitation, any
late charges assessed pursuant to Paragraph 6 below and any interest assessed
pursuant to Paragraph 45 below, are referred to as the "Rent". All Rent shall be
paid without deduction, offset or abatement in lawful money of the United States
of America. Checks are to be made payable to Moffett Park Properties Company
#317 and shall be mailed to ALIC SA87 IODCG AAF REI 3261, Moffett Park
Properties, Lock Box 66268, El Monte, California 91735-6268 or to such other
person or place as Landlord may, from time to time, designate to Tenant in
writing. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month.
5. UTILITY EXPENSES
(a) Tenant shall pay the cost of all water, sewer use, sewer discharge
fees and permit costs and sewer connection fees, gas, heat, electricity, refuse
pick-up, janitorial service, telephone and all materials and services or other
utilities (collectively, "Utilities") billed or metered separately to the
Premises and/or Tenant, together with all taxes, assessments, charges and
penalties (but solely to the extent such penalties are attributable to Tenant's
failure to timely pay sums due hereunder) added to or included within such cost.
Promptly after the execution of this Lease by Landlord and Tenant, Landlord
shall cause all Utilities furnished to the Premises to be separately metered to
the extent commercially practicable. Tenant acknowledges that the Premises, the
Building
9
and/or the Project may become subject to the rationing of Utility services or
restrictions on Utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof. Tenant
acknowledges and agrees that its tenancy and occupancy hereunder shall be
subject to such rationing or restrictions as may be imposed upon Landlord by
such utility company, governmental agency or other entity, Tenant, the Premises,
the Building and/or the Project, and Tenant shall in no event be excused or
relieved from any covenant or obligation to be kept or performed by Tenant by
reason of any such rationing or restrictions. Tenant agrees to comply with
energy conservation programs reasonably implemented by Landlord by reason of
rationing, restrictions or Laws.
(b) Landlord shall not be liable for any loss, injury or damage to
property caused by or resulting from any variation, interruption, or failure of
Utilities, or from failure to make any repairs or perform any maintenance,
unless such loss, injury or damage is caused by Landlord's gross negligence or
willful misconduct. No temporary interruption or failure of such services
incident to the making of repairs, alterations, improvements, or due to
accident, strike, or conditions or other events shall be deemed an eviction of
Tenant or relieve Tenant from any of its obligations hereunder. In no event
shall Landlord be liable to Tenant for any damage to the Premises or for any
loss, damage or injury to any property therein or thereon occasioned by
bursting, rupture, leakage or overflow of any plumbing or other pipes
(including, without limitation, water, steam, and/or refrigerant lines),
sprinklers, tanks, drains, drinking fountains or washstands, or other similar
cause in, above, upon or about the Premises, the Building, or the Project,
unless caused by Landlord's gross negligence or willful misconduct.
6. LATE CHARGE
Notwithstanding any other provision of this Lease, Tenant hereby
acknowledges that late payment to Landlord of Rent, or other amounts due
hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. If any Rent or
other sums due from Tenant are not received by Landlord or by Landlord's
designated agent within five (5) days after their due date, then Tenant shall
pay to Landlord a late charge equal to five percent (5%) of such overdue amount,
plus any costs and attorneys' fees incurred by Landlord by reason of Tenant's
failure to pay Rent and/or other charges when due hereunder. Landlord and Tenant
hereby agree that such late charges represent a fair and reasonable estimate of
the cost that Landlord will incur by reason of Tenant's late payment and shall
not be construed as a penalty. Landlord's acceptance of such late charges shall
not constitute a waiver of Tenant's default with respect to such overdue amount
or estop Landlord from exercising any of the other rights and remedies granted
under this Lease.
Initials: Landlord [Illegible] Tenant [Illegible]
10
7. SECURITY DEPOSIT
Concurrently with Tenant's execution of the Lease, Tenant shall deposit
with Landlord the Security Deposit specified in the Basic Lease Information as
security for the full and faithful performance of each and every term, covenant
and condition of this Lease. Landlord may use, apply or retain the whole or any
part of the Security Deposit as may be reasonably necessary (a) to remedy
Tenant's default in the payment of any Rent, (b) to repair damage to the
Premises caused by Tenant, (c) to clean the Premises upon termination of this
Lease, (d) to reimburse Landlord for the payment of any amount which Landlord
may reasonably spend or be required to spend by reason of Tenant's default, or
(e) to compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default. Should Tenant faithfully and fully comply
with all of the terms, covenants and conditions of this Lease, within thirty
(30) days following the expiration of the Term, the Security Deposit or any
balance thereof shall be returned to Tenant or, at the option of Landlord, to
the last assignee of Tenant's interest in this Lease. Landlord shall not be
required to keep the Security Deposit separate from its general funds and Tenant
shall not be entitled to any interest on such deposit. If Landlord so uses or
applies all or any portion of said deposit, within ten (10) business days after
written demand therefor Tenant shall deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to the full extent of the above
amount, and Tenant's failure to do so shall be a default under this Lease. In
the event Landlord transfers its interest in this Lease, Landlord shall transfer
the then remaining amount of the Security Deposit to Landlord's successor in
interest, and thereafter Landlord shall have no further liability to Tenant with
respect to such Security Deposit.
8. POSSESSION
(a) Tenant's Right of Possession. Subject to Paragraph 8(b), Tenant shall
be entitled to possession of the Initial Premises upon the Initial Premises
Commencement Date and the Subsequent Premises upon the Subsequent Premises
Commencement Date. Tenant shall lease the Initial Premises and the Subsequent
Premises in their "as is" condition on the Initial Premises Commencement Date
and the Subsequent Premises Commencement Date, respectively, and Landlord shall
have no obligation to improve, remodel or otherwise alter the Premises either
prior to or after the commencement of the Term.
(b) Delay in Delivering Possession. If for any reason whatsoever, Landlord
cannot deliver possession of the Initial Premises or the Subsequent Premises to
Tenant on or before the respective Estimated Commencement Date specified in the
Basic Lease Information, then except as expressly provided in Paragraph 8(d)
below, this Lease shall not be void or voidable, nor shall Landlord, or
Landlord's agents, advisors, employees, partners, shareholders, directors,
invitees or independent contractors (collectively, "Landlord's Agents"), be
liable to Tenant for any loss or damage resulting therefrom. Tenant shall not be
liable for Rent for the Initial Premises or the Subsequent Premises
11
until Landlord delivers possession of the particular Premises to Tenant. The
Expiration Date shall be extended by the same number of days that Tenant's
possession of the Initial Premises was delayed beyond the Estimated Initial
Premises Commencement Date specified in the Basic Lease Information.
(c) Early Occupancy. Notwithstanding anything to the contrary contained
in Paragraph 8(a), and subject to the vacation of the Initial Premises by the
existing tenant thereof, Tenant shall have the right to enter upon the Initial
Premises at such times as shall be reasonably acceptable to Landlord during the
period between November 4, 1996 and the Initial Premises Commencement Date for
the sole purpose of installing Tenant's fixtures and equipment and preparing the
Initial Premises for its business operations, provided, however, that such entry
shall be subject to all of the terms and provisions of this Lease, excepting
only the obligation to pay Rent and, provided further, that Tenant shall not
conduct business in the Initial Premises during such period.
(d) Late Delivery. Notwithstanding anything in this Paragraph 8 to the
contrary, if possession of the Initial Premises is not delivered to Tenant on or
before February 15, 1997 or possession of the Subsequent Premises is not
delivered to Tenant on or before May 1, 1997, then Tenant may, in either case
within ten (10) days of the relevant deadline, as Tenant's sole remedy,
terminate this Lease by providing written notice thereof to Landlord. In such
case Landlord shall immediately deliver to Tenant the Security Deposit and any
and all prepaid Rent or other amounts prepaid by Tenant to Landlord.
9. USE OF PREMISES
(a) Permitted Use. The use of the Premises by Tenant and Tenant's agents,
advisors, employees, partners, shareholders, directors, invitees and independent
contractors (collectively, "Tenant's Agents") shall be solely for the Permitted
Use specified in the Basic Lease Information and for no other use. Tenant shall
not permit any objectionable or unpleasant odor, smoke, dust, gas, noise or
vibration to emanate from or near the Premises. The Premises shall not be used
to create any nuisance or trespass, for any illegal purpose, for any purpose not
permitted by Laws, for any purpose that would invalidate the insurance or
increase the premiums for insurance on the Premises, the Building or the Project
or for any purpose or in any manner that would interfere with other tenant's use
or occupancy of the Project. Tenant agrees to pay to Landlord, as Additional
Rent, any increases in premiums on policies resulting from Tenant's Permitted
Use or any other use or action by Tenant or Tenant's Agents which increases
Landlord's premiums or requires additional coverage by Landlord to insure the
Premises. Tenant agrees not to overload the floor(s) of the Building.
(b) Compliance With Governmental Regulations and Private Restrictions.
Tenant and Tenant's Agents shall, at Tenant's expense, faithfully observe and
comply with (1) all municipal, state and federal laws, statutes, codes, rules,
regulations, ordinances,
12
requirements, and orders (collectively, "Laws"), now in force or which may
hereafter be in force pertaining to the Premises or Tenant's use of the
Premises, the Building or the Project, whether substantial in cost or otherwise,
provided, however, that except as provided in Paragraph 9(c) below, Tenant shall
not be required to make or, except as provided in Paragraph 4 above, pay for,
structural changes to the Premises or the Building, including, without
limitation, the installation of fire sprinkler systems, seismic reinforcement
and related alterations, and, except as provided in Paragraph 32 below, the
removal of asbestos or other Hazardous Materials (as hereinafter defined), not
related to Tenant's specific use of the Premises unless the requirement for such
changes is imposed as a result of any improvements or additions made or proposed
to be made at Tenant's request; (2) all recorded covenants, conditions and
restrictions affecting the Project ("Private Restrictions") now in force or
which may hereafter be in force; and (3) any and all rules and regulations set
forth in Exhibit D and any other rules and regulations now or hereafter
promulgated by Landlord related to parking or the operation of the Premises, the
Building and/or the Project (collectively, the "Rules and Regulations"). The
judgment of any court of competent jurisdiction, or the admission of Tenant in
any action or proceeding against Tenant, whether Landlord be a party thereto or
not, that Tenant has violated any such Laws or Private Restrictions, shall be
conclusive of that fact as between Landlord and Tenant.
(c) Compliance with Americans with Disabilities Act. Landlord and Tenant
hereby agree and acknowledge that the Premises, the Building and/or the Project
may be subject to, among other Laws, the requirements of the Americans with
Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq., including,
but not limited to Title III thereof, and all regulations and guidelines related
thereto, together with any and all laws, rules, regulations, ordinances, codes
and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the "ADA"). Subject
to reimbursement pursuant to Paragraph 4 above, if any barrier removal work or
other work is required to the Building, the Common Areas or the Project under
the ADA, then such work shall be the responsibility of Landlord; provided, if
such work is required under the ADA as a result of Tenant's use of the Premises
or any work or Alteration (as hereinafter defined) made to the Premises by or on
behalf of Tenant, then such work shall be performed by contractors selected by
Landlord (the "ADA Contractors") at the sole cost and expense of Tenant.
Landlord shall consult with Tenant concerning the selection of the ADA
Contractors, provided, however, that in the event of any dispute between
Landlord and Tenant concerning such selection, the final decision shall be made
by Landlord. Except as otherwise expressly provided in this provision, Tenant
shall be responsible at its sole cost and expense for fully and faithfully
complying with all applicable requirements of the ADA, including without
limitation, not discriminating against any disabled persons in the operation of
Tenant's business in or about the Premises, and offering or otherwise providing
auxiliary aids and services as, and when, required by the ADA. Within ten (10)
days after Tenant's receipt thereof, Tenant shall
13
advise Landlord in writing, and provide Landlord with copies of (as applicable),
any notices alleging violation of the ADA relating to any portion of the
Premises, the Building or the Project; any claims made or threatened orally or
in writing regarding noncompliance with the ADA and relating to any portion of
the Premises, the Building, or the Project (excluding any claim made orally
which are reasonably determined by Tenant to be frivolous and which are not
reasonably likely to result in any action being taken by the party making such
claim); or any governmental or regulatory actions or investigations instituted
or threatened regarding noncompliance with the ADA and relating to any portion
of the Premises, the Building or the Project.
10. ACCEPTANCE OF PREMISES
Landlord shall cause the HVAC, electrical and plumbing systems serving the
Initial Premises and the Subsequent Premises to be in good working order and the
roof on the Initial Premises and the Subsequent Premises to be in good condition
on the Initial Premises Commencement Date and the Subsequent Premises
Commencement Date, respectively. Subject to the foregoing, by entry hereunder,
Tenant accepts the Premises as suitable for Tenant's intended use and as being
in good and sanitary operating order, condition and repair, AS IS, and without
representation or warranty by Landlord as to the condition, use or occupancy
which may be made thereof. Any exceptions to the foregoing must be by written
agreement executed by Landlord and Tenant.
11. SURRENDER
Tenant agrees that on the last day of the Term, or on the sooner
termination of this Lease, Tenant shall surrender the Premises to Landlord (a)
in good condition and repair (damage by acts of God, fire, acts of Landlord or
Landlord's Agents, and normal wear and tear excepted), but with all interior
walls painted or cleaned so they appear painted, any carpets cleaned, all floors
cleaned and waxed, all non-working light bulbs and ballasts replaced and all
roll-up doors and plumbing fixtures in good condition and working order, and (b)
otherwise in accordance with Paragraph 32(h). Normal wear and tear shall not
include any damage or deterioration to the floors of the Premises arising from
the use of forklifts in, on or about the Premises (including, without
limitation, any marks or stains on any portion of the floors), and any damage or
deterioration that would have been prevented by proper maintenance by Tenant, or
Tenant otherwise performing all of its obligations under this Lease. On or
before the expiration or sooner termination of this Lease, (i) Tenant shall
remove all of Tenant's Property (as hereinafter defined) and Tenant's signage
from the Premises, the Building and the Project and repair any damage caused by
such removal, and (ii) Landlord may, by notice to Tenant given not later than
ninety (90) days prior to the Expiration Date (except in the event of a
termination of this Lease prior to the scheduled Expiration Date, in which event
no advance notice shall be required), require Tenant at Tenant's expense to
remove any or all Alterations (as hereinafter defined) and to repair any damage
caused by such removal. Any of Tenant's Property not so removed by Tenant as
required herein shall be deemed abandoned and
14
may be stored, removed, and disposed of by Landlord at Tenant's expense, and
Tenant waives all claims against Landlord for any damages resulting from
Landlord's retention and disposition of such property; provided, however, that
Tenant shall remain liable to Landlord for all costs incurred in storing and
disposing of such abandoned property of Tenant. All Alterations except those
which Landlord requires Tenant to remove shall remain in the Premises as the
property of Landlord. If the Premises are not surrendered at the end of the Term
or sooner termination of this Lease, and in accordance with the provisions of
this Paragraph 11 and Paragraph 32(h) below, Tenant shall continue to be
responsible for the payment of Rent (as the same may be increased pursuant to
Paragraph 35 below) until the Premises are so surrendered in accordance with
said Paragraphs, and Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all loss or liability resulting from delay by Tenant in
so surrendering the Premises including, without limitation, any loss or
liability resulting from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses
to Landlord due to lost opportunities to lease any portion of the Premises to
any such succeeding tenant or prospective tenant, together with, in each case,
actual attorneys' fees and costs. In furtherance of the foregoing, Tenant agrees
to give Landlord at least sixty (60) days' prior notice of its intention to
vacate the Premises so that Landlord will have an opportunity to perform an
inspection of the Premises and surrounding areas as contemplated under Paragraph
32(f) below prior to such vacation.
12. ALTERATIONS AND ADDITIONS
(a) Tenant shall not make, or permit to be made, any alteration, addition
or improvement (hereinafter referred to individually as an "Alteration" and
collectively as the "Alterations") to the Premises or any part thereof without
the prior written consent of Landlord, which consent shall not be unreasonably
withheld; provided, however, that Landlord shall have the right in its sole and
absolute discretion to consent or to withhold its consent to any Alteration
which affects the structural portions of the Premises, the Building or the
Project or the Systems serving the Premises, the Building and/or the Project or
any portion thereof. Notwithstanding anything to the contrary in this Section
12, Tenant shall have the right, without the prior written consent of Landlord,
to make Alterations which (i) do not affect the Systems or the structural
components of the Building, and (ii) cost less than Five Thousand Dollars
($5,000) on an individual basis or for a series of related alterations and do
not exceed Twenty-Five Thousand Dollars ($25,000) in the aggregate over the Term
of this Lease (collectively, "Permitted Alterations"), provided that each such
Permitted Alteration is otherwise performed in accordance with the provisions of
Sections 12(b) through (f) of the Lease.
(b) Any Alteration to the Premises shall be at Tenant's sole cost and
expense, in compliance with all applicable Laws and all requirements reasonably
requested by Landlord, including, without limitation, the requirements of any
insurer providing coverage for the Premises or the Project or any part thereof,
and in accordance with plans
15
and specifications approved in writing by Landlord, and shall be constructed and
installed by a contractor approved in writing by Landlord. Before Alterations
may begin, valid building permits or other permits or licenses required must be
furnished to Landlord, and, once the Alterations begin, Tenant will diligently
and continuously pursue their completion. Landlord may monitor construction of
the Alterations and Tenant shall reimburse Landlord for its reasonable
out-of-pocket costs (including, without limitation, the costs of any third party
construction manager retained by Landlord) in reviewing plans and documents and
in monitoring construction. Tenant shall maintain during the course of
construction, at its sole cost and expense, builders risk insurance for the
amount of the completed value of the Alterations on an all-risk non-reporting
form covering all improvements under construction, including building materials,
and other insurance in amounts and against such risks as Landlord shall
reasonably require in connection with the Alterations. In addition to and
without limitation on the generality of the foregoing, Tenant shall ensure that
its contractor(s) procure and maintain in full force and effect during the
course of construction a "broad form" commercial general liability and property
damage policy of insurance naming Landlord, Tenant and Landlord's lenders as
additional insureds. The minimum limit of coverage of the aforesaid policy shall
be in the amount of not less than Two Million Dollars ($2,000,000.00) for injury
or death of one person in any one accident or occurrence and in the amount of
not less than Two Million Dollars ($2,000,000.00) for injury or death of more
than one person in any one accident or occurrence, and shall contain a
severability of interest clause or a cross liability endorsement. Such insurance
shall further insure Landlord and Tenant against liability for property damage
of at least One Million Dollars ($1,000,000.00).
(c) All Alterations, including, but not limited to, heating, lighting,
electrical, air conditioning, fixed partitioning, drapery, wall covering and
paneling, built-in cabinet work and carpeting installations made by Tenant,
together with all property that has become an integral part of the Premises or
the Building, shall at once be and become the property of Landlord, and shall
not be deemed trade fixtures or Tenant's Property. If requested by Landlord,
Tenant will pay, prior to the commencement of construction, an amount determined
by Landlord necessary to cover the costs of demolishing such Alterations and/or
the cost of returning the Premises and any damage resulting from such removal
repaired.
(d) No private telephone systems and/or other related computer or
telecommunications equipment or lines may be installed without Landlord's prior
written consent. If Landlord gives such consent, all equipment must be installed
within the Premises and, at the request of Landlord made at any time prior to
the expiration of the Term, removed upon the expiration or sooner termination of
this Lease and the Premises restored to the same condition as before such
installation.
(e) Notwithstanding anything herein to the contrary, before installing any
equipment or lights which generate an undue amount of heat in the Premises, or
if Tenant plans to use any high-power usage equipment in the Premises, Tenant
shall obtain the
16
written permission of Landlord. Landlord may refuse to grant such permission
unless Tenant agrees to pay the costs to Landlord for installation of
supplementary air conditioning capacity or electrical systems necessitated by
such equipment.
(f) Tenant agrees not to proceed to make any Alterations, notwithstanding
consent from Landlord to do so, until Tenant notifies Landlord in writing of the
date Tenant desires to commence construction or installation of such Alterations
and Landlord has approved such date in writing, in order that Landlord may post
appropriate notices to avoid any liability to contractors or material suppliers
for payment for Tenant's improvements. Tenant will at all times permit such
notices to be posted and to remain posted until the completion of work.
13. MAINTENANCE AND REPAIRS OF PREMISES
(a) Maintenance by Tenant. Throughout the Term, Tenant shall, at its sole
expense, (1) keep and maintain in good order and condition the Premises, and
repair and replace every part thereof, including glass, windows, interior
doors, interior door frames and interior door closers, interior lighting
(including, without limitation, light bulbs and ballasts), Tenant's signage,
interior demising walls and partitions, equipment, interior painting and
interior walls and floors (excepting only those portions of the Building or the
Project to be maintained by Landlord, as provided in Paragraph 13(b) below), (2)
furnish all expendables, including light bulbs, paper goods and soaps, used in
the Premises, and (3) keep and maintain in good order and condition, repair and
replace all of Tenant's security systems in or about or serving the Premises.
Tenant shall not do nor shall Tenant allow Tenant's Agents to do anything to
cause any damage, deterioration or unsightliness to the Premises, the Building
or the Project. In no event shall Tenant's obligation to repair under this
subsection extend to (i) damage caused in whole or in part by the gross
negligence or willful misconduct of Landlord or Landlord's Agents, (ii) repairs
covered under Expenses or Taxes, or (iii) damage by fire and other casualties or
acts of God and the elements. In the event of any damage to the Premises which
Tenant is required to repair under this Paragraph 13(a) and which is not covered
by any insurance required to be maintained by Tenant under this Lease, but which
is covered by insurance required to be maintained by Landlord hereunder.
Landlord shall make a claim on the applicable insurance policy and shall use the
proceeds, if any, actually received to reimburse Tenant for the actual
reasonable costs and expenses incurred by Tenant in repairing such damage,
subject to Landlord's review and approval of invoices and other data documenting
such costs and expenses.
(b) Maintenance by Landlord. Subject to the provisions of Paragraphs
13(a), 22 and 23, and further subject to Tenant's obligation under Paragraph 4
to reimburse Landlord, in the form of Additional Rent, for Tenant's
Proportionate Share(s) of the cost and expense of the following items, Landlord
agrees to repair and maintain the following items: the roof coverings (provided
that Tenant installs no additional air conditioning or other equipment on the
roof that damages the roof coverings, in which event Tenant shall
17
pay all costs resulting from the presence of such additional equipment); window
frames, window casements, skylights, exterior doors, exterior door frames and
exterior door closers; master the Systems serving the Premises and the Building;
the parking areas, pavement, landscaping, sprinkler systems, sidewalks,
driveways, curbs, and lighting systems in the Common Areas; and the roll-up
doors, ramps and dock equipment, including, without limitation, dock bumpers,
dock plates, dock seals, dock levelers and dock lights located in or on the
Premises. Subject to the provisions of Paragraphs 13(a), 22 and 23, Landlord, at
its own cost and expense, agrees to repair and maintain the following items: the
structural portions of the roof (specifically excluding the roof coverings), the
foundation, the footings, the floor slab, the load bearing walls and exterior
walls of the Building (excluding any glass and any routine maintenance,
including, without limitation, any painting, sealing, patching and waterproofing
of such walls), the structural supports, the subfloors and floors (specifically
excluding the floor coverings), and any damage to the Premises caused by the
willful act or the gross negligence of the Landlord or its Agents.
Notwithstanding anything in this Paragraph 13 to the contrary, Landlord shall
have the right to either repair or to require Tenant to repair any damage to any
portion of the Premises, the Building and/or the Project caused by or created
due to any act, omission, negligence or willful misconduct of Tenant or Tenant's
Agents and to restore the Premises, the Building and/or the Project as
applicable, to the condition existing prior to the occurrence of such damage;
provided, however, that in the event Landlord elects to perform such repair and
restoration work, Tenant shall reimburse Landlord upon demand for all costs and
expenses incurred by Landlord in connection therewith. Landlord's obligation
hereunder to repair and maintain is subject to the condition precedent that
Landlord shall have received written notice of the need for such repairs and
maintenance and a reasonable time to perform such repair and maintenance. Tenant
shall promptly report in writing to Landlord any defective condition which
Landlord is required to repair, and failure to so report such defects shall make
Tenant responsible to Landlord for the costs and expenses of repairing any
additional damage or deterioration occurring after the date Tenant obtains
knowledge of such defective condition and any liability incurred by Landlord by
reason of Tenant's failure to notify Landlord of such defective condition in a
timely manner as provided herein.
(c) Tenant's Waiver of Rights. Tenant hereby expressly waives all rights
to make repairs at the expense of Landlord or to terminate this Lease, as
provided for in California Civil Code Sections 1941 and 1942, and 1932(1),
respectively, and any similar or successor statute or law in effect or any
amendment thereof during the Term.
14. LANDLORD'S INSURANCE
Landlord shall purchase and keep in force fire, extended coverage and "all
risk" insurance covering the Building and the Project. Tenant shall, at its sole
cost and expense, comply with any and all reasonable requirements pertaining to
the Premises, the Building and the Project of any insurer necessary for the
maintenance of reasonable fire and commercial general liability insurance,
covering the Building and the Project.
18
Landlord, at Tenant's cost, may maintain "Loss of Rents" insurance, insuring
that the Rent will be paid in a timely manner to Landlord for a period of up to
twelve (12) months if the Premises, the Building or the Project or any portion
thereof are destroyed or rendered unusable or inaccessible by any cause insured
against under this Lease.
15. TENANT'S INSURANCE
(a) Commercial General Liability Insurance. Tenant shall, at Tenant's
expense, secure and keep in force a "broad form" commercial general liability
insurance and property damage policy covering the Premises, insuring Tenant, and
naming Landlord and its lenders as additional insureds, against any liability
arising out of the ownership, use, occupancy or maintenance of the Premises. The
minimum limit of coverage of such policy shall be in the amount of not less than
Two Million Dollars ($2,000,000.00) for injury or death of one person in any one
accident or occurrence and in the amount of not less than Two Million Dollars
($2,000,000.00) for injuries or death of more than one person in any one
accident or occurrence, shall include an extended liability endorsement
providing contractual liability coverage (which shall include coverage for
Tenant's indemnification obligations in this Lease), and shall contain a
severability of interest clause or a cross liability endorsement. Such insurance
shall further insure Landlord and Tenant against liability for property damage
of at least Two Million Dollars ($2,000,000.00). Landlord may from time to time
require reasonable increases in any such limits if Landlord believes that
additional coverage is necessary or desirable. The limit of any insurance shall
not limit the liability of Tenant hereunder. No policy maintained by Tenant
under this Paragraph 15(a) shall contain a deductible greater than Two Thousand
Five Hundred Dollars ($2,500.00). No policy shall be cancelable or subject to
reduction of coverage without ten (10) days prior written notice to Landlord,
and loss payable clauses shall be subject to Landlord's approval. Such policies
of insurance shall be issued as primary policies and not contributing with or in
excess of coverage that Landlord may carry, by an insurance company authorized
to do business in the State of California for the issuance of such type of
insurance coverage and rated A:XIII or better in Best's Key Rating Guide.
(b) Personal Property Insurance. Tenant shall maintain in full force and
effect on all of its personal property, furniture, furnishings, trade or
business fixtures and equipment (collectively, "Tenant's Property") on the
Premises, a policy or policies of fire and extended coverage insurance with
standard coverage endorsement to the extent of the full replacement cost
thereof. No such policy shall contain a deductible greater than Two Thousand
Five Hundred Dollars ($2,500.00). During the term of this Lease the proceeds
from any such policy or policies of insurance shall be used for the repair or
replacement of the fixtures and equipment so insured. Landlord shall have no
interest in the insurance upon Tenant's equipment and fixtures and will sign all
documents reasonably necessary in connection with the settlement of any claim or
loss by Tenant. Landlord will not carry insurance on Tenant's Property.
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(c) Worker's Compensation Insurance; Employer's Liability Insurance.
Tenant shall, at Tenant's expense, maintain in full force and effect worker's
compensation insurance with not less than the minimum limits required by law,
and employer's liability insurance with a minimum limit of coverage of One
Million Dollars ($1,000,000).
(d) Evidence of Coverage. Tenant shall deliver to Landlord certificates of
insurance and true and complete copies of any and all endorsements required
herein for all insurance required to be maintained by Tenant hereunder at the
time of execution of this Lease by Tenant. Tenant shall, at least fifteen (15)
days prior to expiration of each policy, furnish Landlord with certificates of
renewal or "binders" thereof. Each certificate shall expressly provide that such
policies shall not be cancelable or otherwise subject to modification except
after ten (10) days prior written notice to Landlord and the other parties named
as additional insureds as required in this Lease.
16. INDEMNIFICATION
(a) Of Landlord. Tenant shall indemnify and hold harmless Landlord and
Landlord's Agents against and from any and all damages, claims, losses,
liabilities, penalties, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys' fees) arising from (1) the
use of the Premises, the Building or the Project by Tenant or Tenant's Agents,
or from any activity done, permitted or suffered by Tenant or Tenant's Agents in
or about the Premises, the Building or the Project, and (2) any act, neglect,
fault, willful misconduct or omission of Tenant or Tenant's Agents, or from any
breach or default in the terms of this Lease by Tenant or Tenant's Agents, and
(3) any violation or alleged violation of the ADA by Tenant or Tenant's Agents,
and (4) any action or proceeding brought on account of any matter in items (l),
(2) or (3). If any action or proceeding is brought against Landlord by reason of
any such claim, upon notice from Landlord, Tenant shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord. Notwithstanding
the foregoing, nothing herein shall be deemed to require Tenant to indemnify or
hold harmless Landlord or Landlord's Agents from claims, liabilities, judgments,
costs, demands, causes of action or expenses arising from the negligence or
willful misconduct of Landlord or Landlord's Agents. As a material part of the
consideration to Landlord, Tenant hereby releases Landlord and Landlord's Agents
from responsibility for, waives its entire claim of recovery for and assumes all
risk of (i) damage to property or injury to persons in or about the Premises,
the Building or the Project from any cause whatsoever (except that which is
caused by the gross negligence or willful misconduct of Landlord or Landlord's
Agents or by the failure of Landlord to observe any of the terms and conditions
of this Lease, if such failure has persisted for an unreasonable period of time
after written notice of such failure), or (ii) loss resulting from business
interruption or loss of income at the Premises. The obligations of Tenant under
this Paragraph 16(a) shall survive any termination of this Lease.
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(b) Of Tenant. Landlord shall indemnify and hold harmless Tenant and
Tenant's Agents against and from any and all damages, claims, losses,
liabilities, penalties, judgments, costs, demands, causes of action and expenses
(including, without limitation, reasonable attorneys' fees) arising from the (1)
gross negligence or willful misconduct of Landlord or the property manager of
the Building, and (2) failure of Landlord to observe any of the terms and
conditions of this Lease, if such failure has persisted for an unreasonable
period of time after written notice of such failure, or any breach of any
representation or warranty of Landlord contained in Paragraph 47(b) below, and
(3) any action or proceeding brought on account of any matter in items (1) and
(2). If any action or proceeding is brought against Tenant by reason of any such
claim, upon notice from Tenant, Landlord shall defend the same at Landlord's
expense by counsel reasonably satisfactory to Tenant. The obligations of
Landlord under this Paragraph 16(b) shall survive any termination of this Lease.
(c) No Impairment of Insurance. The foregoing indemnities shall not
relieve any insurance carrier of its obligations under any policies required to
be carried by either party pursuant to this Lease, to the extent that such
policies cover the peril or occurrence that results in the claim that is subject
to the foregoing indemnity.
17. SUBROGATION
Landlord and Tenant hereby mutually waive any claim against the other and
its Agents for any loss or damage to any of their property located on or about
the Premises, the Building or the Project that is caused by or results from
perils covered by property insurance carried by the respective parties, to the
extent of the proceeds of such insurance actually received with respect to such
loss or damage, whether or not due to the negligence of the other party or its
Agents. Because the foregoing waivers will preclude the assignment of any claim
by way of subrogation to an insurance company or any other person, each party
now agrees to immediately give to its insurer written notice of the terms of
these mutual waivers and shall have their insurance policies endorsed to prevent
the invalidation of the insurance coverage because of these waivers. Nothing in
this Paragraph 17 shall relieve a party of liability to the other for failure to
carry insurance required by this Lease.
18. SIGNS
Tenant shall not place or permit to be placed in, upon, or about the
Premises, the Building or the Project any exterior lights, decorations,
balloons, flags, pennants, banners, advertisements or notices, or erect or
install any signs, windows or door lettering, placards, decorations, or
advertising media of any type which can be viewed from the exterior the Premises
without obtaining Landlord's prior written consent or without complying with
Landlord's signage criteria specified on Exhibit D hereto, as the same may be
modified by Landlord from time to time (the "Signage Criteria"), nor conduct, or
permit to be conducted, any sale by auction on the Premises or otherwise on the
Project;
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provided, however, that Tenant shall have the right to install identification
signage on the Building's monument sign located on West Maude Avenue, provided
that Landlord shall have the right to approve the size, design and style of such
identification signage and such identification signage shall comply with the
Signage Criteria and all applicable laws. Tenant shall remove any sign,
advertisement or notice placed on the Premises, the Building or the Project by
Tenant upon the expiration of the Term or sooner termination of this Lease, and
Tenant shall repair any damage or injury to the Premises, the Building or the
Project caused thereby, all at Tenant's expense. If any signs are not removed,
or necessary repairs not made, Landlord shall have the right to remove the signs
and repair any damage or injury to the Premises, the Building or the Project at
Tenant's sole cost and expense.
19. FREE FROM LIENS
Tenant shall keep the Premises, the Building and the Project free from any
liens arising out of any work performed, material furnished or obligations
incurred by or for Tenant. In the event that Tenant shall not, within ten (10)
days following the imposition of any such lien, cause the lien 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 same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid by
Landlord and all expenses incurred by it in connection therewith (including,
without limitation, attorneys' fees) shall be payable to Landlord by Tenant upon
demand. Landlord shall have the right at all times to post and keep posted on
the Premises any notices permitted or required by law or that Landlord shall
deem proper for the protection of Landlord, the Premises, the Building and the
Project, from mechanics' and materialmen's liens. Tenant shall give to Landlord
at least five (5) business days' prior written notice of commencement of any
repair or construction on the Premises.
20. ENTRY BY LANDLORD
Tenant shall permit Landlord and Landlord's Agents to enter into and upon
the Premises at all reasonable times, upon notice reasonably in advance (except
in the case of an emergency, for which no notice shall be required), and subject
to Tenant's reasonable security arrangements, for the purpose of inspecting the
same or showing the Premises to prospective purchasers, lenders or tenants or to
alter, improve, maintain and repair the Premises or the Building as required or
permitted of Landlord under the terms hereof, or for any other business purpose,
without any rebate of Rent and without any liability to Tenant for any loss of
occupation or quiet enjoyment of the Premises thereby occasioned (except for
actual damages resulting from the gross negligence or willful misconduct of
Landlord or the property manager of the Building); and Tenant shall permit
Landlord to post notices of non-responsibility and ordinary "for sale" or "for
lease" signs, provided, however, that said "for lease" signs shall be posted on
the Premises only during the last twelve (12) months of the Term. No such entry
shall be construed to be a forcible or
22
unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises. Landlord may temporarily close entrances, doors, corridors,
elevators or other facilities without liability to Tenant by reason of such
closure in the case of an emergency and when Landlord otherwise deems such
closure necessary.
21. DESTRUCTION AND DAMAGE
(a) If the Premises are damaged by fire or other perils covered by
extended coverage insurance, Landlord shall, at Landlord's option:
(1) In the event of total destruction (which shall mean destruction
or damage in excess of thirty-three percent (33%) of the full insurable value
thereof) of the Premises, elect either to commence promptly to repair and
restore the Premises and prosecute the same diligently to completion, in which
event this Lease shall remain in full force and effect; or not to repair or
restore the Premises, in which event this Lease shall terminate. Landlord shall
give Tenant written notice of its intention within sixty (60) days after the
date (the "Casualty Discovery Date") Landlord obtains actual knowledge of such
destruction. If Landlord elects not to restore the Premises, this Lease shall be
deemed to have terminated as of the date of such total destruction.
(2) In the event of a partial destruction (which shall mean
destruction or damage to an extent not exceeding thirty-three percent (33%) of
the full insurable value thereof) of the Premises for which Landlord will
receive insurance proceeds sufficient to cover the cost to repair and restore
such partial destruction and, if the damage thereto is such that the Premises
may be substantially repaired or restored to its condition existing immediately
prior to such damage or destruction within two hundred seventy (270) days from
the Casualty Discovery Date, Landlord shall commence and proceed diligently with
the work of repair and restoration, in which event the Lease shall continue in
full force and effect. If such repair and restoration requires longer than two
hundred seventy (270) days or if the insurance proceeds therefor (plus any
amounts Tenant may elect or is obligated to contribute) are not sufficient to
cover the cost of such repair and restoration, Landlord may elect either to so
repair and restore, in which event the Lease shall continue in full force and
effect, or not to repair or restore, in which event the Lease shall terminate.
In either case, Landlord shall give written notice to Tenant of its intention
within sixty (60) days after the Casualty Discovery Date. If Landlord elects not
to restore the Premises, this Lease shall be deemed to have terminated as of the
date of such partial destruction.
(3) Notwithstanding anything to the contrary contained in this
Paragraph, in the event of damage to the Premises occurring during the last
twelve (12) months of the Term which will take more than thirty (30) days to
repair, either party may elect to terminate this Lease by written notice of
such election given to the other party within thirty (30) days after the
Casualty Discovery Date.
23
(b) If the Premises are damaged by any peril not covered by extended
coverage insurance, and the cost to repair such damage exceeds any amount Tenant
may agree to contribute, Landlord may elect either to commence promptly to
repair and restore the Premises and prosecute the same diligently to completion,
in which event this Lease shall remain in full force and effect; or not to
repair or restore the Premises, in which event this Lease shall terminate.
Landlord shall give Tenant written notice of its intention within sixty (60)
days after the Casualty Discovery Date. If Landlord elects not to restore the
Premises, this Lease shall be deemed to have terminated as of the date on which
Tenant surrenders possession of the Premises to Landlord, except that if the
damage to the Premises materially impairs Tenant's ability to continue its
business operations in the Premises, then this Lease shall be deemed to have
terminated as of the date such damage occurred.
(c) Notwithstanding anything to the contrary in this Paragraph 22,
Landlord shall have the option to terminate this Lease, exercisable by notice to
Tenant within sixty (60) days after the Casualty Discovery Date, in each of the
following instances:
(1) If more than twenty-five percent (25%) of the full insurable
value of the Building or the Project is damaged or destroyed, regardless of
whether or not the Premises are destroyed.
(2) If the Building or the Project or any portion thereof is damaged
or destroyed and the repair and restoration of such damage requires longer than
two hundred seventy (270) days from the Casualty Discovery Date.
(3) If the Building or the Project or any portion thereof is damaged
or destroyed and the insurance proceeds therefor are not sufficient to cover the
costs of repair and restoration.
(d) If the Premises is damaged or destroyed to the extent that the
Premises cannot with reasonable diligence be fully repaired or restored by
Landlord within two hundred seventy (270) days after the Casualty Discovery
Date, Tenant may terminate this Lease immediately upon notice thereof to
Landlord, which notice shall be given, if at all, not later than fifteen (15)
days after Landlord notifies Tenant of Landlord's estimate of the period of time
required to repair such damage or destruction.
(e) In the event of repair and restoration as herein provided, the monthly
installments of Base Rent shall be abated proportionately in the ratio which
Tenant's use of the Premises is impaired during the period of such repair or
restoration; provided, however, that Tenant shall not be entitled to such
abatement to the extent that such damage or destruction resulted from the acts
or inaction of Tenant or Tenant's Agents and rental abatement insurance proceeds
are not available therefor. Except as expressly provided in the immediately
preceding sentence with respect to abatement of Base Rent, Tenant shall have no
claim against Landlord for, and hereby releases Landlord and Landlord's Agents
from responsibility for and waives its entire claim of recovery for any
24
cost, loss or expense suffered or incurred by Tenant as a result of any damage
to or destruction of the Premises, the Building or the Project or the repair or
restoration thereof, including, without limitation, any cost, loss or expense
resulting from any loss of use of the whole or any part of the Premises, the
Building or the Project and/or any inconvenience or annoyance occasioned by such
damage, repair or restoration.
(f) If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall have no obligation to repair Tenant's Alterations, if
any, and Tenant shall promptly repair and restore, at Tenant's expense, such
Alterations.
(g) Tenant hereby waives the provisions of California Civil Code Section
1932(2) and Section 1933(4) which permit termination of a lease upon destruction
of the leased premises, and the provisions of any similar law now or hereinafter
in effect, and the provisions of this Paragraph 22 shall govern exclusively in
case of such destruction.
22. CONDEMNATION
(a) If twenty-five percent (25%) or more of either the Premises, the
Building or the Project or the parking areas for the Building or the Project is
taken for any public or quasi-public purpose by any lawful governmental power or
authority, by exercise of the right of appropriation, inverse condemnation,
condemnation or eminent domain, or sold to prevent such taking (each such event
being referred to as a "Condemnation"), Landlord may, at its option, terminate
this Lease as of the date title vests in the condemning party. If twenty-five
percent (25%) or more of the Premises is taken, Tenant shall have the right to
terminate this Lease as of the date title vests in the condemning party. If
either party elects to terminate this Lease as provided herein, such election
shall be made by written notice to the other party given within thirty (30) days
after the nature and extent of such Condemnation have been finally determined.
If neither Landlord nor Tenant elects to terminate this Lease to the extent
permitted above, Landlord shall promptly proceed to restore the Premises, to the
extent of any Condemnation award received by Landlord, to substantially the same
condition as existed prior to such Condemnation, allowing for the reasonable
effects of such Condemnation, and a proportionate abatement shall be made to the
Base Rent corresponding to the time during which, and to the portion of the
floor area of the Premises (adjusted for any increase thereto resulting from any
reconstruction) of which, Tenant is deprived on account of such Condemnation and
restoration, as reasonably determined by Landlord. Except as expressly provided
in the immediately preceding sentence with respect to abatement of Base Rent,
Tenant shall have no claim against Landlord for, and hereby releases Landlord
and Landlord's Agents from responsibility for and waives its entire claim of
recovery for any cost, loss or expense suffered or incurred by Tenant as a
result of any Condemnation or the repair or restoration of the Premises, the
Building or the Project or the parking areas for the Building or the Project
following such Condemnation, including, without limitation, any cost, loss or
expense resulting from any loss of use of the whole or any part of the Premises,
the Building, the Project or the parking areas and/or any inconvenience or
25
annoyance occasioned by such Condemnation, repair or restoration. The provisions
of California Code of Civil Procedure Section 1265.130, which allows either
party to petition the Superior Court to terminate the Lease in the event of a
partial taking of the Premises, the Building, or the Project or the parking
areas for the Building or the Project, and any other applicable law now or
hereafter enacted, are hereby waived by Tenant.
(b) Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection with any Condemnation, and Tenant shall have no claim against
Landlord for the value of any unexpired term of this Lease or otherwise;
provided, however, that Tenant shall be entitled to receive any award separately
allocated by the condemning authority to Tenant for (i) Tenant's relocation
expenses, (ii) the value of Tenant's Property (specifically excluding fixtures,
Alterations and other components of the Premises which under this Lease or by
law are or at the expiration of the Term will become the property of Landlord),
(iii) Tenant's loss of goodwill, and (iv) Tenant's loss of business and business
interruption.
23. ASSIGNMENT AND SUBLETTING
(a) Except as expressly set forth below, Tenant shall not voluntarily or
by operation of law, (1) mortgage, pledge, hypothecate or encumber this Lease or
any interest herein, (2) assign or transfer this Lease or any interest herein,
sublease the Premises or any part thereof, or any right or privilege appurtenant
thereto, or allow any other person (the employees, contractors and invitees of
Tenant excepted) to occupy or use the Premises, or any portion thereof, without
first obtaining the written consent of Landlord, which consent shall not be
withheld unreasonably provided that (i) Tenant is not then in Default under this
Lease nor is any event then occurring which with the giving of notice or the
passage of time, or both, would constitute a Default hereunder, and (ii) Tenant
has not previously assigned or transferred this Lease or any interest herein or
subleased the Premises or any part thereof. When Tenant requests Landlord's
consent to such assignment or subletting, it shall notify Landlord in writing of
the name and address of the proposed assignee or subtenant and the nature and
character of the business of the proposed assignee or subtenant and shall
provide current and prior financial statements for the proposed assignee or
subtenant prepared in accordance with generally accepted accounting principles
("GAAP Financials") or, if GAAP Financials are not available for such assignee
or subtenant, financial statements in an alternate form approved by Landlord.
Tenant shall also provide Landlord with a copy of the proposed sublease or
assignment agreement, including all material terms and conditions thereof.
Except in the case of an assignment or sublease to a Tenant Affiliate (as
hereinafter defined), Landlord shall have the option, to be exercised as soon as
reasonably practicable, but in no event more than twenty (20) days of receipt of
the foregoing, to (1) terminate this Lease as of the commencement date stated in
the proposed sublease or assignment; provided, however, that in the case of a
sublease, Landlord shall have the right to terminate this Lease under this
clause (l) only if Tenant proposes to sublease fifty percent (50%) or
26
more of the Premises (taking into account the aggregate of the premises to be
covered by such sublease and all other subleases entered into by Tenant and then
in effect), (2) sublease or take an assignment, as the case may be, from Tenant
of the interest, or any portion thereof, in this Lease and/or the Premises that
Tenant proposes to assign or sublease, on the same terms and conditions as
stated in the proposed sublet or assignment agreement, (3) consent to the
proposed assignment or sublease, or (4) refuse its consent to the proposed
assignment or sublease, providing that such consent shall not be unreasonably
withheld so long as Tenant is not then in Default under this Lease nor is any
event then occurring which with the giving of notice or the passage of time, or
both, would constitute a Default hereunder. In the event Landlord elects to
terminate this Lease or sublease or take an assignment from Tenant of the
interest, or portion thereof, in the Lease and/or the Premises that Tenant
proposes to assign or sublease as provided in the foregoing clauses (1) and (2),
respectively, then Landlord shall have the additional right to negotiate
directly with Tenant's proposed assignee or subtenant and to enter into a direct
lease or occupancy agreement with such party on such terms as shall be
acceptable to Landlord in its sole and absolute discretion, and Tenant hereby
waives any claims against Landlord related thereto, including, without
limitation, any claims for any compensation or profit related to such lease or
occupancy agreement.
(b) Notwithstanding anything to the contrary contained in Paragraph 23(a)
above, Tenant shall have the right with the consent of Landlord, which consent
shall not be unreasonably withheld, to assign this Lease or to sublease the
Premises or any part thereof to a Tenant Affiliate. In the event Tenant proposes
to enter into an assignment or sublease with a Tenant Affiliate, then Tenant
shall provide Landlord with the information required to be delivered pursuant to
said Paragraph 23(a). Landlord shall have the option, to be exercised as soon as
reasonably practicable, but in no event more than twenty (20) days of receipt of
the foregoing, to (1) consent to the proposed assignment or sublease, or (2)
refuse its consent to the proposed assignment or sublease, providing that such
consent shall not be unreasonably withheld. For purposes of this Paragraph 23, a
"Tenant Affiliate" shall mean an entity that controls, is controlled by or is
under common control with, Tenant; and a party shall be deemed to "control"
another party for purposes of the aforesaid definition only if the first party
owns more than fifty percent (50%) of the stock or other beneficial interests of
the second party.
(c) Without otherwise limiting the criteria upon which Landlord may
withhold its consent under Paragraphs 23(a) and (b) above, Landlord shall be
entitled to consider all reasonable criteria including, but not limited to, the
following: (1) whether or not the proposed subtenant or assignee is engaged in a
business which, and the use of the Premises will be in a manner which, is in
keeping with the then character and nature of all other tenancies in the
Project, (2) whether the use to be made of the Premises by the proposed
subtenant or assignee will conflict with any so called "exclusive" use then in
favor of any other tenant of the Building or the Project, and whether such use
would be prohibited by any other portion of this Lease, including, but not
limited to, any rules and regulations then in effect, or under applicable Laws,
and whether such use imposes an
27
unacceptable load upon the Premises and the Building and Project services, as
reasonably determined by Landlord, (3) the business reputation of the proposed
individuals who will be managing and operating the business operations of the
assignee or subtenant, and the long-term financial and competitive business
prospects of the proposed assignee or subtenant, and (4) the creditworthiness
and financial stability of the proposed assignee or subtenant in light of the
responsibilities involved. In any event, Landlord may withhold its consent to
any assignment or sublease, if (i) the actual use proposed to be conducted in
the Premises or portion thereof conflicts with the provisions of Paragraph 9(a)
or (b) above or with any other lease which restricts the use to which any space
in the Building or the Project may be put, or (ii) the proposed assignment or
sublease requires Alterations to the Premises or portions thereof except for
Permitted Alterations and Alterations which are approved by Landlord in
accordance with Paragraph 12 above. In the event that Landlord withholds its
consent to an assignment or sublease, it shall notify Tenant of the criteria
upon which such consent was withheld.
(d) If Landlord approves an assignment or subletting as herein provided,
Tenant shall pay to Landlord, as Additional Rent, the difference, if any,
between (1) the Base Rent plus Additional Rent allocable to that part of the
Premises affected by such assignment or sublease pursuant to the provisions of
this Lease, and (2) the rent and any additional rent payable by the assignee or
sublessee to Tenant, less reasonable legal fees and customary market-based
leasing commissions, if any, incurred by Tenant in connection with such
assignment or sublease. The assignment or sublease agreement, as the case may
be, after approval by Landlord, shall not be amended without Landlord's prior
written consent, and shall contain a provision directing the assignee or
subtenant to pay the rent and other sums due thereunder directly to Landlord
upon receiving written notice from Landlord that Tenant is in default under this
Lease with respect to the payment of Rent. In the event that, notwithstanding
the giving of such notice, Tenant collects any rent or other sums from the
assignee or subtenant, then Tenant shall hold such sums in trust for the benefit
of Landlord and shall immediately forward the same to Landlord. Landlord's
collection of such rent and other sums shall not constitute an acceptance by
Landlord of attornment by such assignee or subtenant. A consent to one
assignment, subletting, occupation or use shall not be deemed to be a consent to
any other or subsequent assignment, subletting, occupation or use, and consent
to any assignment or subletting shall in no way relieve Tenant of any liability
under this Lease. Any assignment or subletting without Landlord's consent shall
be void, and shall, at the option of Landlord, constitute a Default under this
Lease.
(e) Notwithstanding any assignment or subletting, Tenant and any guarantor
or surety of Tenant's obligations under this Lease shall at all times remain
fully responsible and liable for the payment of the Rent and for compliance with
all of Tenant's other obligations under this Lease (regardless of whether
Landlord's approval has been obtained for any such assignment or subletting).
28
(f) Tenant shall pay Landlord's reasonable fees (including. without
limitation, the fees of Landlord's counsel), incurred in connection with
Landlord's review and processing of documents regarding any proposed assignment
or sublease.
(g) Notwithstanding anything in this Lease to the contrary, in the event
Landlord consents to an assignment or subletting by Tenant in accordance with
the terms of this Paragraph 24, Tenant's assignee or subtenant shall have no
right to further assign this Lease or any interest therein or thereunder or to
further sublease all or any portion of the Premises. In furtherance of the
foregoing, Tenant acknowledges and agrees on behalf of itself and any assignee
or subtenant claiming under it (and any such assignee or subtenant by accepting
such assignment or sublease shall be deemed to acknowledge and agree) that no
sub-subleases or further assignments of this Lease shall be permitted at any
time.
(h) Tenant acknowledges and agrees that the restrictions, conditions and
limitations imposed by this Paragraph 23 on Tenant's ability to assign or
transfer this Lease or any interest herein, to sublet the Premises or any part
thereof, to transfer or assign any right or privilege appurtenant to the
Premises, or to allow any other person to occupy or use the Premises or any
portion thereof, are, for the purposes of California Civil Code Section 1951.4,
as amended from time to time, and for all other purposes, reasonable at the time
that the Lease was entered into, and shall be deemed to be reasonable at the
time that Tenant seeks to assign or transfer this Lease or any interest herein,
to sublet the Premises or any part thereof, to transfer or assign any right or
privilege appurtenant to the Premises, or to allow any other person to occupy or
use the Premises or any portion thereof.
24. TENANT'S DEFAULT
The occurrence of any one of the following events shall constitute an
event of default on the part of Tenant ("Default"):
(a) The vacation or abandonment of the Premises by Tenant for a period of
fifteen (15) consecutive days or any vacation or abandonment of the Premises by
Tenant which would cause any insurance policy to be invalidated or otherwise
lapse, or the failure of Tenant to continuously operate Tenant's business in the
Premises for a period of fifteen (15) consecutive days, in each of the foregoing
cases irrespective of whether or not Tenant is then in monetary default under
this Lease. Tenant agrees to notice and service of notice as provided for in
this Lease and waives any right to any other or further notice or service of
notice which Tenant may have under any statute or law now or hereafter in
effect;
(b) Failure to pay any installment of Rent or any other monies due and
payable hereunder, said failure continuing for a period of five (5) business
days after the same is due;
29
(c) A general assignment by Tenant or Guarantor (as hereinafter defined)
for the benefit of creditors;
(d) The filing of a voluntary petition in bankruptcy by Tenant or
Guarantor, the filing by Tenant or Guarantor of a voluntary petition for an
arrangement, the filing by or against Tenant or Guarantor of a petition,
voluntary or involuntary, for reorganization, or the filing of an involuntary
petition by the creditors of Tenant or Guarantor, said involuntary petition
remaining undischarged for a period of sixty (60) days;
(e) Receivership, attachment, or other judicial seizure of substantially
all of Tenant's assets on the Premises, such attachment or other seizure
remaining undismissed or undischarged for a period of sixty (60) days after the
levy thereof;
(f) The failure by Tenant to maintain its legal existence, if Tenant is a
corporation, partnership, limited liability company, trust or other legal
entity;
(g) Failure of Tenant to execute and deliver to Landlord any estoppel
certificate, subordination agreement, or lease amendment within the time periods
and in the manner required by Paragraphs 30 or 31 or 42;
(h) An assignment or sublease of this Lease or the Premises by Tenant
contrary to the provision of Paragraph 23, unless such assignment or sublease is
expressly conditioned upon Tenant having received Landlord's consent thereto;
(i) Failure of Tenant to restore the Security Deposit to the amount and
within the time period provided in Paragraph 7 above;
(j) Failure in the performance of any of Tenant's covenants, agreements or
obligations hereunder (except those failures specified as events of Default in
subparagraphs (b), (1) or (m) above or any other subparagraphs of this Paragraph
24, which shall be governed by such other Paragraphs), which failure continues
for thirty (30) days after written notice thereof from Landlord to Tenant,
provided that, if Tenant has exercised reasonable diligence to cure such failure
and such failure cannot be cured within such thirty (30) day period despite
reasonable diligence, Tenant shall not be in default under this subparagraph so
long as Tenant thereafter diligently and continuously prosecutes the cure to
completion and actually completes such cure within ninety (90) days after the
giving of the aforesaid written notice;
(k) Chronic delinquency by Tenant in the payment of Rent, or any other
periodic payments required to be paid by Tenant under this Lease. "Chronic
delinquency" shall mean failure by Tenant to pay Rent, or any other payments
required to be paid by Tenant under this Lease within three (3) days after
written notice thereof for any three (3) months (consecutive or nonconsecutive)
during any period of twelve (12) months. In the event of a Chronic Delinquency,
in addition to Landlord's other remedies for Default provided in
30
this Lease, at Landlord's option, Landlord shall have the right to require that
Rent be paid by Tenant quarterly, in advance;
(l) Chronic overuse by Tenant or Tenant's Agents of the number of
undesignated parking spaces set forth in the Basic Lease Information. "Chronic
Overuse" shall mean use by Tenant or Tenant's Agents of a number of parking
spaces greater than the number of parking spaces set forth in the Basic Lease
Information more than three (3) times during the Term after written notice by
Landlord;
(m) Any insurance required to be maintained by Tenant pursuant to this
Lease shall be canceled or terminated or shall expire or be reduced or
materially changed, except as permitted in this Lease; provided, however, that
if such insurance is canceled or terminated for reasons outside of the control
of, and not as a result of any act or omission on the part of, Tenant, then
Tenant shall not be in Default hereunder provided that Tenant obtains
replacement insurance acceptable to Landlord within five (5) days after the
cancellation or termination of the aforesaid coverage; and
(n) Any failure by Tenant to discharge any lien or encumbrance placed on
the Project or any part thereof in violation of this Lease within ten (10) days
after the date such lien or encumbrance is filed or recorded against the Project
or any part thereof.
Tenant agrees that any notice given by Landlord pursuant to Paragraph
24(j), (k) or (l) above shall satisfy the requirements for notice under
California Code of Civil Procedure Section 1161, and Landlord shall not be
required to give any additional notice in order to be entitled to commence an
unlawful detainer proceeding.
25. LANDLORD'S REMEDIES
(a) Termination. In the event of any Default by Tenant, then in addition
to any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(1) the worth at the time of award of any unpaid Rent and any other
sums clue and payable which have been earned at the time of such termination;
plus
(2) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable which would have been earned after
termination until the time of award exceeds the amount of such rental loss
Tenant proves could have been reasonably avoided; plus
(3) the worth at the time of award of the amount by which the unpaid
Rent and any other sums due and payable for the balance of the term of this
Lease after the time of
31
award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided; plus
(4) any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course would be likely to result
therefrom, including, without limitation, (A) any costs or expenses incurred by
Landlord (1) in retaking possession of the Premises; (2) in maintaining,
repairing, preserving, restoring, replacing, cleaning, altering, remodeling or
rehabilitating the Premises or any affected portions of the Building or the
Project, including such actions undertaken in connection with the reletting or
attempted reletting of the Premises to a new tenant or tenants; (3) for leasing
commissions, advertising costs and other expenses of reletting the Premises; or
(4) in carrying the Premises, including taxes, insurance premiums, utilities and
security precautions; (B) any unearned brokerage commissions paid in connection
with this Lease; (C) reimbursement of any previously waived or abated Base Rent
or Additional Rent or any free rent or reduced rental rate granted hereunder;
and (D) any concession made or paid by Landlord to the benefit of Tenant in
consideration of this Lease including, but not limited to, any moving
allowances, contributions or assumptions by Landlord of any of Tenant's previous
lease obligations; plus
(5) such reasonable attorneys' fees incurred by Landlord as a result
of a Default, and costs in the event suit is filed by Landlord to enforce such
remedy; and plus
(6) at Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.
As used in subparagraphs (1) and (2) above, the "worth at the time of award" is
computed by allowing interest at an annual rate equal to ten percent (10%) per
annum or the maximum rate permitted by law, whichever is less. As used in
subparagraph (3) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%). Tenant waives redemption
or relief from forfeiture under California Code of Civil Procedure Sections 1174
and 1179, or under any other pertinent present or future Law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
Default of Tenant hereunder.
(b) Continuation of Lease. In the event of any Default by Tenant, then in
addition to any other remedies available to Landlord at law or in equity and
under this Lease, Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
Default and abandonment and recover Rent as it becomes due, provided Tenant has
the right to sublet or assign, subject only to reasonable limitations). In such
event, Landlord shall not be liable in any way whatsoever for its failure or
refusal to relet the Premises. For purposes of this
32
Paragraph 25(b), the following acts by Landlord will not constitute the
termination of Tenant's right to possession of the Premises:
(1) Acts of maintenance or preservation or efforts to relet the
Premises, including, but not limited to, alterations, remodeling, redecorating,
repairs, replacements and/or painting as Landlord shall consider advisable for
the purpose of reletting the Premises or any, part thereof; or
(2) The appointment of a receiver upon the initiative of Landlord to
protect Landlord's interest under this Lease or in the Premises.
(c) Re-entry. In the event of any Default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, in compliance with
applicable law, to re-enter the Premises and remove all persons and property
from the Premises; such property may be removed and stored in a public warehouse
or elsewhere at the cost of and for the account of Tenant.
(d) Reletting. In the event of the abandonment of the Premises by Tenant
or in the event that Landlord shall elect to re-enter as provided in Paragraph
25(c) or shall take possession of the Premises pursuant to legal proceeding or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in Paragraph 25(a). Landlord may from time to
time, without terminating this Lease, relet the Premises or any part thereof for
such term or terms and at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises in Landlord's sole discretion.
In the event that Landlord shall elect to so relet, then rentals received by
Landlord from such reletting shall be applied in the following order: (1) to
reasonable attorneys' fees incurred by Landlord as a result of a Default and
costs in the event suit is filed by Landlord to enforce such remedies; (2) to
the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord; (3) to the payment of any costs of such reletting; (4) to the payment
of the costs of any alterations and repairs to the Premises; (5) to the payment
of Rent due and unpaid hereunder; and (6) the residue, if any, shall be held by
Landlord and applied in payment of future Rent and other sums payable by Tenant
hereunder as the same may become due and payable hereunder. Should that portion
of such rentals received from such reletting during any month, which is applied
to the payment of Rent hereunder, be less than the Rent payable during the month
by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.
(e) Termination. No re-entry or taking of possession of the Premises by
Landlord pursuant to this Paragraph 25 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant or unless the termination
33
thereof is decreed by a court of competent jurisdiction, Notwithstanding any
reletting without termination by Landlord because of any Default by Tenant,
Landlord may at any time after such reletting elect to terminate this Lease for
any such Default.
(f) Cumulative Remedies. The remedies herein provided are not exclusive
and Landlord shall have any and all other remedies provided herein or by law or
in equity.
(g) No Surrender. No act or conduct of Landlord, whether consisting of the
acceptance of the keys to the Premises, or otherwise, shall be deemed to be or
constitute an acceptance of the surrender of the Premises by Tenant prior to the
expiration of the Term, and such acceptance by Landlord of surrender by Tenant
shall only flow from and must be evidenced by a written acknowledgment of
acceptance of surrender signed by Landlord. The surrender of this Lease by
Tenant, voluntarily or otherwise, shall not work a merger unless Landlord
elects in writing that such merger take place, but shall operate as an
assignment to Landlord of any and all existing subleases, or Landlord may, at
its option, elect in writing to treat such surrender as a merger terminating
Tenant's estate under this Lease, and thereupon Landlord may terminate any or
all such subleases by notifying the sublessee of its election so to do within
five (5) days after such surrender.
26. LANDLORD'S RIGHT TO PERFORM TENANT'S OBLIGATIONS
(a) Without limiting the rights and remedies of Landlord contained in
Paragraph 25 above, if Tenant shall be in Default in the performance of any of
the terms, provisions, covenants or conditions to be performed or complied with
by Tenant pursuant to this Lease, then Landlord may at Landlord's option,
without any obligation to do so, and without notice to Tenant perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant or any of
Tenant's Agents. In the event Landlord performs any obligations of Tenant under
this Lease pursuant to this Paragraph 26(a), Landlord shall endeavor to provide
notice thereof to Tenant promptly after such performance by Landlord, provided,
however, that Landlord shall have no liability for any failure to provide such
notice to Tenant.
(b) Without limiting the rights of Landlord under Paragraph 26(a) above,
Landlord shall have the right at Landlord's option, without any obligation to do
so, to perform any of Tenant's covenants or obligations under this Lease without
notice to Tenant in the case of an emergency, as determined by Landlord in its
sole and absolute judgment, or if Landlord otherwise determines in its sole
discretion that such performance is necessary or desirable for the proper
management and operation of the Building or the Project or for the preservation
of the rights and interests or safety of other tenants of the Building or the
Project.
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(c) If Landlord performs any of Tenant's obligations hereunder in
accordance with this Paragraph 26, the full amount of the cost and expense
incurred or the payment so made or the amount of the loss so sustained shall
immediately be owing by Tenant to Landlord, and Tenant shall promptly pay to
Landlord upon demand, as Additional Rent, the full amount thereof with interest
thereon from the date of payment by Landlord at the lower of (l) ten percent
(10%) per annum, or (2) the highest rate permitted by applicable law.
27. ATTORNEY'S FEES
(a) If either party hereto fails to perform any of its obligations under
this Lease or if any dispute arises between the parties hereto concerning the
meaning or interpretation of any provision of this Lease, then the defaulting
party or the party not prevailing in such dispute, as the case may be, shall pay
any and all costs and expenses incurred by the other party on account of such
default and/or in enforcing or establishing its rights hereunder, including,
without limitation, court costs and reasonable attorneys' fees and
disbursements. Any such attorneys' fees and other expenses incurred by either
party in enforcing a judgment in its favor under this Lease shall be recoverable
separately from and in addition to any other amount included in such judgment,
and such attorneys' fees obligation is intended to be severable from the other
provisions of this Lease and to survive and not be merged into any such
judgment.
(b) Without limiting the generality of Paragraph 27(a) above, if Landlord
utilizes the services of an attorney for the purpose of collecting any Rent due
and unpaid by Tenant or in connection with any other breach of this Lease by
Tenant, Tenant agrees to pay Landlord actual attorneys' fees as determined by
Landlord for such services, regardless of the fact that no legal action may be
commenced or filed by Landlord.
28. TAXES
Tenant shall be liable for and shall pay, prior to delinquency, all taxes
levied against Tenant's Property. If any Alteration installed by Tenant pursuant
to Paragraph 12 or any of Tenant's Property is assessed and taxed with the
Project or Building, Tenant shall pay such taxes to Landlord within ten (10)
business days after delivery to Tenant of a statement therefor.
29. EFFECT OF CONVEYANCE
The term "Landlord" as used in this Lease means, from time to time, the
then current owner of the Building or the Project containing the Premises, so
that, in the event of any sale of the Building or the Project, Landlord shall be
and hereby is entirely freed and relieved of all covenants and obligations of
Landlord hereunder, and it shall be deemed and construed, without further
agreement between the parties and the purchaser at any
35
such sale that the purchaser of the Building or the Project has assumed and
agreed to carry out any and all covenants and obligations of Landlord hereunder.
30. TENANT'S ESTOPPEL CERTIFICATE
From time to time, upon written request of Landlord, Tenant shall execute,
acknowledge and deliver to Landlord or its designee, a written certificate
stating (a) the date this Lease was executed, the Initial Premises Commencement
Date and the Subsequent Premises Commencement Date and the Expiration Date; (b)
the date Tenant entered into occupancy of the Initial Premises and the
Subsequent Premises; (c) the amount of Rent and the date to which such Rent has
been paid; (d) that this Lease is in full force and effect and has not been
assigned, modified, supplemented or amended in any way (or, if assigned,
modified, supplemented or amended, specifying the date and terms of any
agreement so affecting this Lease); (e) that this Lease represents the entire
agreement between the parties with respect to Tenant's right to use and occupy
the Premises (or specifying such other agreements, if any); (f) that all
obligations under this Lease to be performed by Landlord as of the date of such
certificate have been satisfied (or specifying those as to which Tenant claims
that Landlord has yet to perform); (g) that all required contributions by
Landlord to Tenant on account of Tenant's improvements have been received (or
stating exceptions thereto); (h) that on such date there exist no defenses or
offsets that Tenant has against the enforcement of this Lease by Landlord (or
stating exceptions thereto); (i) that no Rent or other sum payable by Tenant
hereunder has been paid more than one (1) month in advance (or stating
exceptions thereto); (j) that security has been deposited with Landlord, stating
the original amount thereof and any increases thereto; and (k) any other matters
evidencing the status of this Lease that may be reasonably required either by a
lender making a loan to Landlord to be secured by a deed of trust covering the
Building or the Project or by a purchaser of the Building or the Project. Any
such certificate delivered pursuant to this Paragraph 30 may be relied upon by a
prospective purchaser of Landlord's interest or a mortgagee of Landlord's
interest or assignee of any mortgage upon Landlord's interest in the Premises.
If Tenant shall fail to provide such certificate within fifteen (15) days of
receipt by Tenant of a written request by Landlord as herein provided, such
failure shall, at Landlord's election, constitute a Default under this Lease,
and Tenant shall be deemed to have given such certificate as above provided
without modification and shall be deemed to have admitted the accuracy of any
information supplied by Landlord to a prospective purchaser or mortgagee.
31. SUBORDINATION
Landlord shall have the right to cause this Lease to be and remain subject
and subordinate to any and all mortgages, deeds of trust and ground leases, if
any ("Encumbrances") that are now or may hereafter be executed covering the
Premises, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms
36
and provisions thereof; provided only that in the event of termination of any
such ground lease or upon the foreclosure of any such mortgage or deed of trust,
so long as Tenant is not in Default, the holder thereof ("Holder") shall agree
to recognize Tenant's rights under this Lease as long as Tenant shall pay the
Rent and observe and perform all the provisions of this Lease to be observed and
performed by Tenant. Within fifteen (15) days after Landlord's written request,
Tenant shall execute, acknowledge and deliver any and all reasonable documents
required by Landlord or the Holder to effectuate such subordination. If Tenant
fails to do so, such failure shall constitute a Default by Tenant under this
Lease. Notwithstanding anything to the contrary set forth in this Paragraph 31,
Tenant hereby attorns and agrees to attorn to any person or entity purchasing or
otherwise acquiring the Premises at any sale or other proceeding or pursuant to
the exercise of any other rights, powers or remedies under such Encumbrance.
32. ENVIRONMENTAL COVENANTS
(a) Prior to executing this Lease, Tenant has completed, executed and
delivered to Landlord a Hazardous Materials Disclosure Certificate ("Initial
Disclosure Certificate"), a fully completed copy of which is attached hereto as
Exhibit E and incorporated herein by this reference. Tenant represents and
warrants to Landlord that the information on the Initial Disclosure Certificate
is true and correct and accurately describes the Hazardous Materials which will
be manufactured, treated, used or stored on or about the Premises by Tenant or
Tenant's Agents. Tenant shall, on each anniversary of the Commencement Date and
at such other times as Tenant desires to manufacture, treat, use or store on or
about the Premises new or additional Hazardous Materials which were not listed
on the Initial Disclosure Certificate, complete, execute and deliver to Landlord
an updated Disclosure Certificate (each, an "Updated Disclosure Certificate")
describing Tenant's then current and proposed future uses of Hazardous Materials
on or about the Premises, which Updated Disclosure Certificates shall be in the
same format as that which is set forth in Exhibit E or in such updated format as
Landlord may require from time to time. Tenant shall deliver an Updated
Disclosure Certificate to Landlord not less than thirty (30) days prior to the
date Tenant intends to commence the manufacture, treatment, use or storage of
new or additional Hazardous Materials on or about the Premises, and Landlord
shall have the right to approve or disapprove such new or additional Hazardous
Materials in its sole and absolute discretion. Tenant shall make no use of
Hazardous Materials on or about the Premises except as described in the Initial
Disclosure Certificate or as otherwise approved by Landlord in writing in
accordance with this Paragraph 32(a).
(b) As used in this Lease, the term "Hazardous Materials" shall mean and
include any substance that is or contains (1) any "hazardous substance" as now
or hereafter defined in ss. 101(14) of the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended ("CERCLA") (42 U.S.C. ss.
9601 et seq.) or any regulations promulgated under CEPCLA; (2) any "hazardous
waste" as now or hereafter defined in the Resource Conservation and Recovery
Act, as amended ("RCRA") (42 U.S.C. ss. 6901 et seq.) or any regulations
promulgated under RCRA; (3) any
37
substance now or hereafter regulated by the Toxic Substances Control Act, as
amended ("TSCA") (15 U.S.C. ss. 2601 et seq.) or any regulations promulgated
under TSCA; (4) petroleum, petroleum by-products, gasoline, diesel fuel, or
other petroleum hydrocarbons; (5) asbestos and asbestos-containing material, in
any form, whether friable or non-friable; (6) polychlorinated biphenyls; (7)
lead and lead-containing materials; or (8) any additional substance, material or
waste (A) the presence of which on or about the Premises (i) requires reporting,
investigation or remediation under any Environmental Laws (as hereinafter
defined), (ii) causes or threatens to cause a nuisance on the Premises or any
adjacent area or property or poses or threatens to pose a hazard to the health
or safety of persons on the Premises or any adjacent area or property, or (iii)
which, if it emanated or migrated from the Premises, could constitute a
trespass, or (B) which is now or is hereafter classified or considered to be
hazardous or toxic under any Environmental Laws.
(c) As used in this Lease, the term "Environmental Laws" shall mean and
include (1) CERCLA, RCRA and TSCA; and (2) any other federal, state or local
laws, ordinances, statutes, codes, rules, regulations, orders or decrees now or
hereinafter in effect relating to (A) pollution, (B) the protection or
regulation of human health, natural resources or the environment, (C) the
treatment, storage or disposal of Hazardous Materials, or (D) the emission,
discharge, release or threatened release of Hazardous Materials into the
environment.
(d) Tenant agrees that during its use and occupancy of the Premises it
will (1) not (A) permit Hazardous Materials to be present on or about the
Premises except in a manner and quantity necessary for the ordinance performance
of Tenant's business or (B) release, discharge or dispose of any Hazardous
Materials on, in, at, under, or emanating from, the Premises, the Building or
the Project; provided, however, that Tenant shall have the right to use and
dispose of (and to permit Tenant's employees and independent contractors
providing janitorial services to the Premises to use and dispose of) de minimis
amounts of cleaning materials, toner fluids and other office and janitorial
supplies, provided that the same are necessary for the conduct of Tenant's
business operations in the Premises and are used and disposed of at all times in
full compliance with all Environmental Laws; (2) comply with all Environmental
Laws relating to the Premises and the use of Hazardous Materials on or about the
Premises and not engage in or permit others to engage in any activity at the
Premises in violation of any Environmental Laws; and (3) immediately notify
Landlord, upon gaining actual knowledge, of (A) any inquiry, test, investigation
or enforcement proceeding by any governmental agency or authority against
Tenant, Landlord or the Premises, Building or Project relating to any Hazardous
Materials or under any Environmental Laws or (B) the occurrence of any event or
existence of any condition that would cause a breach of any of the covenants set
forth in this Paragraph 32.
(e) If Tenant's use of Hazardous Materials on or about the Premises
results in a release, discharge or disposal of Hazardous Materials on, in, at,
under, or emanating from,
38
the Premises, the Building or the Project, Tenant agrees to investigate, clean
up, remove or remediate such Hazardous Materials in full compliance with (1) the
requirements of (A) all Environmental Laws and (B) any governmental agency or
authority responsible for the enforcement of any Environmental Laws; and (2) any
additional requirements of Landlord that are reasonably necessary to protect the
value of the Premises, the Building or the Project.
(f) Upon reasonable notice to Tenant, Landlord may inspect the Premises
and surrounding areas for the purpose of determining whether there exists on or
about the Premises any Hazardous Material or other condition or activity that is
in violation of the requirements of this Lease or of any Environmental Laws.
Such inspections may include, but are not limited to, entering the Premises or
adjacent property with drill rigs or other machinery for the purpose of
obtaining laboratory samples. Landlord shall not be limited in the number of
such inspections during the Term of this Lease. In the event (1) such
inspections reveal the presence of any such Hazardous Material or other
condition or activity in violation of the requirements of this Lease or of any
Environmental Laws, or (2) Tenant or its Agents contribute or knowingly consent
to the presence of any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project or exacerbate the condition of or the
conditions caused by any Hazardous Materials in, on, under, through or about the
Premises, the Building or the Project, Tenant shall reimburse Landlord for the
cost of such inspections within ten (l0) days of receipt of a written statement
therefor. Tenant will supply to Landlord such historical and operational
information regarding the Premises and surrounding areas as may be reasonably
requested to facilitate any such inspection and will make available for meetings
appropriate personnel having knowledge of such matters. The right granted to
Landlord herein to perform inspections shall not create a duty on Landlord's
part to inspect the Premises, or liability on the part of Landlord for Tenant's
use, storage, treatment or disposal of Hazardous Materials, it being understood
that Tenant shall be solely responsible for all liability in connection
therewith.
(g) Landlord shall have the right, but not the obligation, prior or
subsequent to a Default, without in any way limiting Landlord's other rights and
remedies under this Lease, to enter upon the Premises, or to take such other
actions as it deems necessary or advisable, to investigate, clean up, remove or
remediate any Hazardous Materials or contamination by Hazardous Materials
present on, in, at, under, or emanating from, the Premises, the Building or the
Project in violation of Tenant's obligations under this Lease or under any
Environmental Laws. Notwithstanding any other provision of this Lease, Landlord
shall also have the right, at its election, in its own name or as Tenant's
agent, to negotiate, defend, approve and appeal, at Tenant's expense, any action
taken or order issued by any governmental agency or authority with regard to any
such Hazardous Materials or contamination by Hazardous Materials. All costs and
expenses paid or incurred by Landlord in the exercise of the rights set forth in
this Paragraph 32 shall be payable by Tenant upon demand.
39
(h) Tenant shall surrender the Premises to Landlord upon the expiration or
earlier termination of this Lease free of debris, waste or Hazardous Materials
placed on, about or near the Premises by Tenant or Tenant's Agents. and in a
condition which complies with all Environmental Laws and any additional
requirements of Landlord that are reasonably necessary to protect the value of
the Premises, the Building or the Project, including, without limitation, the
obtaining of any closure permits or other governmental permits or approvals
related to Tenant's use of Hazardous Materials in or about the Premises.
Tenant's obligations and liabilities pursuant to the provisions of this
Paragraph 32 shall survive the expiration or earlier termination of this Lease.
If it is determined by Landlord that the condition of all or any portion of the
Premises, the Building, and/or the Project is not in compliance with the
provisions of this Lease with respect to Hazardous Materials, including, without
limitation, all Environmental Laws, at the expiration or earlier termination of
this Lease, then at Landlord's sole option, Landlord may require Tenant to hold
over possession of the Premises until Tenant can surrender the Premises to
Landlord in the condition in which the Premises existed as of the Commencement
Date and prior to the appearance of such Hazardous Materials except for normal
wear and tear, including, without limitation, the conduct or performance of any
closures as required by any Environmental Laws. The burden of proof hereunder
shall be upon Tenant. For purposes hereof, the term "normal wear and tear" shall
not include any deterioration in the condition or diminution of the value of any
portion of the Premises, the Building, and/or the Project in any manner
whatsoever related to directly, or indirectly, Hazardous Materials. Any such
holdover by Tenant will be with Landlord's consent, will not be terminable by
Tenant in any event or circumstance and will otherwise be subject to the
provisions of Paragraph 35 of this Lease.
(i) Tenant agrees to indemnify and hold harmless Landlord from and against
any and all claims, losses (including, without limitation, loss in value of the
Premises, the Building or the Project, liabilities and expenses (including
attorney's fees)) sustained by Landlord attributable to (1) any Hazardous
Materials placed on or about the Premises, the Building or the Project by Tenant
or Tenant's Agents, or (2) Tenant's breach of any provision of this Paragraph
32.
(j) Notwithstanding anything in this Paragraph 32 to the contrary, Tenant
shall not be responsible for the clean up or remediation of, and shall not
required to indemnify Landlord against, any costs or liabilities attributable
to, Hazardous Materials placed on or about the Premises (i) prior to the
Commencement Date by third parties not related to Tenant or its Agents, or (ii)
by Landlord at any time, except in either case to the extent that Tenant or its
Agents have contributed to or exacerbated the presence of such Hazardous
Materials.
(k) The provisions of this Paragraph 32 shall survive the expiration or
earlier termination of this Lease.
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33. NOTICES
All notices and demands which are required or may be permitted to be given
to either party by the other hereunder shall be in writing and shall be sent by
United States mail, postage prepaid, certified, or by personal delivery or
overnight courier, addressed to the addressee at Tenant's Address or Landlord's
Address as specified in the Basic Lease Information, or to such other place as
either party may from time to time designate in a notice to the other party
given as provided herein. Copies of all notices and demands given to Landlord
shall additionally be sent to Landlord's property manager at the address
specified in the Basic Lease Information or at such other address as Landlord
may specify in writing from time to time. Notice shall be deemed given upon
actual receipt (or attempted delivery if delivery is refused ), if personally
delivered, or one (1) business day following deposit with a reputable overnight
courier that provides a receipt, or on the third (3rd) day following deposit in
the United States mail in the mariner described above.
34. WAIVER
The waiver of any breach of any term, covenant or condition of this Lease
shall not be deemed to be a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition herein
contained. The subsequent acceptance of Rent by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant, other than the failure of Tenant
to pay the particular rental so accepted, regardless of Landlord's knowledge of
such preceding breach at the time of acceptance of such Rent. No delay or
omission in the exercise of any right or remedy of Landlord in regard to any
Default by Tenant shall impair such a right or remedy or be construed as a
waiver. Any waiver by Landlord of any Default must be in writing and shall not
be a waiver of any other Default concerning the same or any other provisions of
this Lease. No delay or omission in the exercise of any right or remedy of
Tenant in regard to any default by Landlord shall impair such a right or remedy
or be construed as a waiver. Any waiver by Tenant of any default by Landlord
must be in writing and shall not be a waiver of any other default concerning the
same or any other provisions of this Lease.
35. HOLDING OVER
Any holding over after the expiration of the Term, without the express
written consent of Landlord, shall constitute a Default and, without limiting
Landlord's remedies provided in this Lease, such holding over shall be construed
to be a tenancy at sufferance, at a rental rate of one hundred fifty percent
(150%) of the Base Rent last due in this Lease, plus Additional Rent, and shall
otherwise be on the terms and conditions herein specified, so far as applicable;
provided, however, in no event shall any renewal or expansion option or other
similar right or option contained in this Lease be deemed applicable to any such
tenancy at sufferance. If the Premises are not surrendered at the
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end of the Term or sooner termination of this Lease, and in accordance with the
provisions of Paragraphs 11 and 32(h). Tenant shall indemnify, defend and hold,
Landlord harmless from and against any and all, loss or liability resulting from
delay by Tenant in so surrendering the Premises including, without limitation,
any loss or liability resulting from any claim against Landlord made by any
succeeding tenant or prospective tenant founded on or resulting from such delay
and losses to Landlord due to lost opportunities to lease any portion of the
Premises to any such succeeding tenant or prospective tenant, together with, in
each case, actual attorneys' fees and costs.
36. SUCCESSORS AND ASSIGNS
The terms, covenants and conditions of this Lease shall, subject to the
provisions as to assignment, apply to and bind the heirs, successors, executors,
administrators and assigns of all of the parties hereto. If Tenant shall consist
of more than one entity or person, the obligations of Tenant under this Lease
shall be joint and several.
37. TIME
Time is of the essence of this Lease and each and every term, condition
and provision herein.
38. BROKERS
Landlord and Tenant each represents and warrants to the other that neither
it nor its officers or agents nor anyone acting on its behalf has dealt with any
real estate broker except the Broker(s) specified in the Basic Lease Information
in the negotiating or making of this Lease, and each party agrees to indemnify
and hold harmless the other from any claim or claims, and costs and expenses,
including attorneys' fees, incurred by the indemnified party in conjunction with
any such claim or claims of any other broker or brokers to a commission in
connection with this Lease as a result of the actions of the indemnifying party.
Landlord shall pay a brokerage commission to Landlord's Broker specified in the
Basic Lease Information with respect to this Lease pursuant to a separate
written agreement between Landlord and Landlord's Broker, and Tenant shall have
no responsibility for such commission. Landlord's Broker shall pay a brokerage
commission to Tenant's Broker specified in the Basic Lease Information with
respect to this Lease pursuant to a separate agreement between those parties,
and neither Landlord nor Tenant shall have any responsibility for such
commission.
39. LIMITATION OF LIABILITY
Tenant agrees that, in the event of any default or breach by Landlord with
respect to any of the terms of the Lease to be observed and performed by
Landlord (a) Tenant shall look solely to the then-current landlord's interest in
the Project for the satisfaction of Tenant's remedies for the collection of a
judgment (or other judicial process) requiring
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the payment of money by Landlord; (b) no other property or assets of Landlord,
its partners, shareholders, officers, directors or any successor in interest
shall be subject to levy, execution or other enforcement procedure for the
satisfaction of Tenant's remedies; (c) no personal liability shall at any time
be asserted or enforceable against Landlord's partners or successors in interest
(except to the extent permitted in (a) above), or against Landlord's
shareholders, officers or directors, or their respective partners, shareholders,
officers, directors or successors in interest; and (d) no judgment shall be
taken against any partner, shareholder, officer or director of Landlord. The
provisions of this section shall apply only to the Landlord and the parties
herein described, and shall not be for the benefit of any insurer nor any other
third party.
40. FINANCIAL STATEMENTS
Within ten (10) days after Landlord's request, Tenant shall deliver to
Landlord the then current financial statements of Tenant (including interim
periods following the end of the last fiscal year for which annual statements
are available), including a balance sheet and profit and loss statement for the
most recent prior year, all prepared in accordance with generally accepted
accounting principles consistently applied. Such financial statements shall not
be required to be prepared or compiled by a certified public accountant,
provided, however, that if Tenant does retain a certified public accountant to
prepare or compile such statements, then Landlord shall have the right to review
such statements. Landlord shall keep Tenant's financial statements confidential,
except that Landlord shall have the right to disclose such statements to
Landlord's partners, lenders, consultants and advisors, including accountants
and attorneys, and otherwise as required by law or legal process.
41. RULES AND REGULATIONS
Tenant agrees to comply with such reasonable rules and regulations as
Landlord may adopt from time to time for the orderly and proper operation of the
Building and the Project, provided that the terms of such rules and regulations
do not contradict the terms of this Lease. Such rules may include but shall not
be limited to the following: (a) restriction of employee parking to a limited,
designated area or areas; and (b) regulation of the removal, storage and
disposal of Tenant's refuse and other rubbish at the sole cost and expense of
Tenant. The then current rules and regulations shall be binding upon Tenant upon
delivery of a copy of them to Tenant. Landlord shall not be responsible to
Tenant for the failure of any other person to observe and abide by any of said
rules and regulations. Landlord's current rules and regulations are attached to
this Lease as Exhibit C.
42. MORTGAGEE PROTECTION
(a) Modifications for Lender. If, in connection with obtaining financing
for the Project or any portion thereof, Landlord's lender shall request
reasonable modifications to
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this Lease as a condition to such financing. Tenant shall not unreasonably
withhold, delay or defer its consent to such modifications, provided such
modifications do not adversely affect Tenant's rights or increase Tenant's
obligations under this Lease, in the reasonable opinion of Tenant.
(b) Rights to Cure. Tenant agrees to give to any trust deed or mortgage
holder ("Holder"), by registered mail, at the same time as it is given to
Landlord, a copy of any notice of default given to Landlord, provided that prior
to such notice Tenant has been notified, in writing, (by way of notice of
assignment of rents and leases, or otherwise) of the address of such Holder.
Tenant further agrees that if Landlord shall have failed to cure such default
within the time provided for in this Lease, then the Holder shall have an
additional twenty (20) days after expiration of such period, or after receipt of
such notice from Tenant (if such notice to the Holder is required by this
Paragraph 42(b)), whichever shall last occur within which to cure such default
or if such default cannot be cured within that time, then such additional time
as may be necessary if within such twenty (20) days, any Holder has commenced
and is diligently pursuing the remedies necessary to cure such default
(including but not limited to commencement of foreclosure proceedings, if
necessary to effect such cure), in which event this Lease shall not be
terminated.
43. RIGHT OF FIRST NEGOTIATION
During the Term of this Lease, Landlord shall not lease the portion of the
Building currently occupied by Konica Technology, Inc., a California corporation
("Konica") and consisting of approximately 10,060 rentable square feet, as more
particularly shown on Exhibit F hereto (the "Negotiation Space"), except as
provided in this Paragraph 43. Subject to the current rights of Konica, and
provided that Tenant is not then in Default under this Lease (nor is any event
then occurring which with the giving of notice or the passage of time, or both,
would constitute a Default hereunder), if during the Term of this Lease the
Konica lease terminates and Konica vacates the Negotiation Space and Landlord
determines to lease the Negotiation Space to a third party or to market the
Negotiation Space for lease to third parties generally, Landlord shall notify
Tenant of the availability of the Negotiation Space. Tenant shall have a period
of ten (10) days after the delivery of such notice (the "Negotiation Period") to
negotiate with Landlord for the lease of the Negotiation Space by Tenant. In the
event Landlord and Tenant reach agreement during the Negotiation Period on the
terms and conditions on which Tenant shall lease the Negotiation Space from
Landlord (including, without limitation, the duration of the term and any
renewal options, the Base Rent and Additional Rent payable by Tenant and the
amount of any improvement allowance) (collectively, the "Relevant Terms"), then
the parties shall immediately execute an amendment to this Lease stating the
addition of the Negotiation Space to the Premises on the Relevant Terms. If for
any reason whatsoever Landlord and Tenant, each in the exercise of its sole and
absolute discretion, fail to agree on the Relevant Terms during the Negotiation
Period, then Tenant's rights hereunder with respect to the Negotiation Space
shall terminate and Landlord shall thereafter have the right to lease the
Negotiation Space to any party on
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terms and conditions deemed acceptable by Landlord in its sole and absolute
discretion. The right granted to Tenant under this Paragraph 43 shall be a
one-time right effective during the Term only upon the termination of the Konica
lease and the vacation of the Negotiation Space by Konica.
44. ENTIRE AGREEMENT
This Lease, including the Exhibits and any Addenda attached hereto, which
are hereby incorporated herein by this reference, contains the entire agreement
of the parties hereto, and no representations, inducements, promises or
agreements, oral or otherwise, between the parties, not embodied herein or
therein, shall be of any force and effect.
45. INTEREST
Any installment of Rent and any other sum due from Tenant under this Lease
which is not received by Landlord within ten (10) days from when the same is due
shall bear interest from the date such payment was originally due under this
Lease until paid at a rate equal to the prime rate then established by Wells
Fargo Bank plus two percent (2%) per annum. Payment of such interest shall not
excuse or cure any Default by Tenant. In addition, Tenant shall pay all costs
and attorneys' fees incurred by Landlord in collection of such amounts.
46. CONSTRUCTION
This Lease shall be construed and interpreted in accordance with the laws
of the State of California. The parties acknowledge and agree that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Lease, including
the Exhibits and any Addenda attached hereto. All captions in this Lease are for
reference only and shall not be used in the interpretation of this Lease.
Whenever required by the context of this Lease, the singular shall include the
plural, the masculine shall include the feminine, and vice versa. If any
provision of this Lease shall be determined to be illegal or unenforceable, such
determination shall not affect any other provision of this Lease and all such
other provisions shall remain in full force and effect.
47. REPRESENTATIONS AND WARRANTIES
(a) Tenant hereby makes the following representations and warranties, each
of which is material and being relied upon by Landlord, is true in all respects
as of the date of this Lease, and shall survive the expiration or termination of
the Lease.
(1) Each Tenant which is an entity represents and warrants that it
is duly organized, validly existing and in good standing under the laws of the
state of its organization and the persons executing this Lease on its behalf
have the full right and
45
authority to execute this Lease on its behalf and to bind it without the consent
or approval of any other person or entity. Each Tenant represents and warrants
that it has full power, capacity, authority and legal right to execute and
deliver this Lease and to perform all of its obligations hereunder and that this
Lease is a legal, valid and binding obligation, enforceable in accordance with
its terms.
(2) Each Tenant represents that it has not (A) made a general
assignment for the benefit of creditors, (B) filed any voluntary petition in
bankruptcy or suffered the filing of an involuntary petition by any creditors,
(C) suffered the appointment of a receiver to take possession of all or
substantially all of its assets, (D) suffered the attachment or other judicial
seizure of all or substantially all of its assets, (E) admitted in writing its
inability to pay its debts as they come due, or (F) made an offer of settlement,
extension or composition to its creditors generally.
(b) Landlord hereby makes the following representations and warranties,
each of which is material and being relied upon by Tenant, is true in all
respects as of the date of this Lease, and shall survive the expiration or
termination of the Lease.
(1) If Landlord is an entity, Landlord is duly organized, validly
existing and in good standing under the laws of the state of its organization
and the persons executing this Lease on behalf of Landlord have the full right
and authority to execute this Lease on behalf of Landlord and to bind Landlord
without the consent or approval of any other person or entity. Landlord has full
power, capacity, authority and legal right to execute and deliver this Lease and
to perform all of its obligations hereunder. This Lease is a legal, valid and
binding obligation of Landlord, enforceable in accordance with its terms.
(2) Landlord has not (A) made a general assignment for the benefit
of creditors, (B) filed any voluntary petition in bankruptcy or suffered the
filing of an involuntary petition by any creditors, (C) suffered the appointment
of a receiver to take possession of all or substantially all of its assets, (D)
suffered the attachment or other judicial seizure of all or substantially all of
its assets, (E) admitted in writing its inability to pay its debts as they come
due, or (F) made an offer of settlement, extension or composition to its
creditors generally.
48. SECURITY
(a) Tenant acknowledges and agrees that, while Landlord may engage
security personnel to patrol the Building or the Project, Landlord is not
providing any security services with respect to the Premises, the Building or
the Project and that Landlord shall not be liable to Tenant for, and Tenant
waives any claim against Landlord with respect to, any loss by theft or any
other damage suffered or incurred by Tenant in connection with any unauthorized
entry into the Premises or any other breach of security with respect to the
Premises, the Building or the Project.
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(b) Tenant hereby agrees to the exercise by Landlord and Landlord's
Agents, within their sole discretion, of such security measures as, but not
limited to, the evacuation of the Premises, the Building or the Project for
cause, suspected cause or for drill purposes, the denial of any access to the
Premises, the Building or the Project and other similarly related actions that
it deems necessary to prevent any threat of property damage or bodily injury.
The exercise of such security measures by Landlord and Landlord's Agents, and
the resulting interruption of service and cessation of Tenant's business, if
any, shall not be deemed an eviction or disturbance of Tenant's use and
possession of the Premises, or any part thereof, or, except for damages caused
by the gross negligence or willful misconduct of Landlord or Landlord's Agents,
render Landlord or Landlord's Agents liable to Tenant for any resulting damages
or relieve Tenant from Tenant's obligations under this Lease.
49. JURY TRIAL WAIVER
Landlord and Tenant each hereby waive any right to trial by jury with
respect to any action or proceeding (i) brought by Landlord or Tenant or any
other party, relating to (A) this Lease and/or any understandings or prior
dealings between the parties hereto, or (B) the Premises, the Building or the
Project or any part thereof, or (ii) to which Landlord is a party. Landlord and
Tenant each hereby agree that this Lease constitutes a written consent to waiver
of trial by jury pursuant to the provisions of California Code of Civil
Procedure Section 631.
50. JOINT AND SEVERAL LIABILITY
In the event more than one party is named as Tenant hereunder, each such
party shall be jointly and severally liable for the obligations of the Tenant.
Landlord and Tenant have executed and delivered this Lease as of the Lease
Date specified in the Basic Lease Information.
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LANDLORD: TENANT:
AETNA LIFE INSURANCE COMPANY, NAVIO COMMUNICATIONS,
a Connecticut corporation a Delaware corporation
By: Allegis Realty Investors LLC
Its Investment Advisor By: /s/ Wei Yen
--------------------------------
Print Name: Wei Yen
------------------------
Its: President & CEO
-------------------------------
By: /s/ Cynthia Stevinin
--------------------
Cynthia Stevinin
Vice President
By:
-------------------------
Print Name:
------------------------
Its:
-------------------------------
NETSCAPE COMMUNICATIONS
CORPORATION,
a Delaware corporation
By: /s/ Peter Currie
-------------------------
Print Name: Peter Currie
------------------------
Its: Vice President & CFO
-------------------------------
By:
-------------------------
Print Name:
------------------------
Its:
-------------------------------
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