REDWOOD BUSINESS PARK
NET LEASE
BASIC LEASE INFORMATION
1. DATE 2/27/98
2. LANDLORD G & W/Copley Redwood Business Park, L.P.
3. TENANT Ubiquity Communication, Inc.,
a California corporation
4. PREMISES REFERENCE
a. Project Sequoia Court Paragraph 1
b. Building Building C
c. Address 1367 Redwood Way
d. Assessor's Parcel # 137-160-011 thru 014
e. Suite
f. Usable Sq. Ft. 3,315
g. Rentable Sq. Ft. 3,315
5. TERM Paragraph 2
a. Estimated Commencement Date March 15, 1998
b. Length of Term 2 years
6. BASE RENT Paragraph 3
a. Monthly Base Rent See Addendum
b. Advanced Base Rent $1,050
(Paid Upon Lease Execution)
c. Adjustment Date of Monthly Month 4
Base Rent
7. PROPERTY TAXES AND OPERATING EXPENSES Paragraph 4
a. Initial Monthly Allocation per
rentable Sq. Ft. $0.21
b. Premises v. Building Sq. Ft. Ratio
3315/16382 = 20%
c. Premises v. Project Sq. Ft. Ratio
3315/87713 = 3.8%
8. SECURITY DEPOSIT $6,962 Paragraph 16
9. TENANT IMPROVEMENTS Turn-key up to $10/sf Exhibit B
10. USE General office Paragraph 6
11. TENANT'S ADDRESS FOR NOTICES Paragraph 20
1367 Redwood Way
Petaluma, CA 94954
12. LANDLORD'S ADDRESS FOR NOTICES Paragraph 20
G & W/Copley Redwood Business Park, L.P.
c/o G&W Management Co.
P.O. Box 808030
Petaluma, CA 94975-8030
1318 Redwood Way, Suite 140
Petaluma, CA 94954
With a Copy to:
13. REAL ESTATE BROKERS Paragraph 23
Keegan & Coppin
G & W Management Co.
EXHIBITS AND ADDENDUM
Exhibit A: Diagram of Premises
Exhibit A-1: Diagram of the Project
Exhibit B: Work Letter Agreement
Exhibit B-1: Space Plan
Exhibit C: Rules and Regulations
Exhibit D: Hazardous Materials List
Exhibit E: Tenant's Financial Statement
REDWOOD BUSINESS PARK
NET LEASE
THIS LEASE, dated February 27, 1998, is made and entered into by and between G & W/Copley Redwood Business Park, L.P. ('Landlord'), and Ubiquity Communication,
Inc., a California corporation ('Tenant').
1. Premises.
Landlord leases to Tenant, and Tenant hereby leases from Landlord for the
term of this Lease ('Term') and at the rent and upon the conditions set forth
below, the Premises described in the Basic Lease Information and identified on
the floor plan attached hereto as Exhibit A. The Premises are located within the
Building described in the Basic Lease Information, and constitute part of the
Project described in the Basic Lease Information and as shown in Exhibit A-1
attached hereto, at the Redwood Business Park, located in Petaluma, California.
All areas and facilities outside the Buildings and within the exterior
boundaries of the Project that are provided and designated by Landlord from time
to time for the general nonexclusive use and convenience of the tenants of the
Project shall be known as 'Common Areas'.
2. Term.
(a) The Term shall commence upon the date ('Commencement Date') which is
the earlier of: (i) substantial completion of the Premises, as the term
'substantial completion' is defined in the WorkLetter Agreement, attached hereto
as Exhibit B; or (ii) the date substantial completion would have occurred but
for Tenant Delays (as the term is defined in the Work Letter Agreement). The
Estimated Commencement Date is set forth in the Basic Lease Information, which
date may be postponed due to a delay in delivering the Premises as provided in
Paragraph 2(b) below. A 'Lease Year' is a period of twelve (12) consecutive
calendar months. A 'Lease Month' is a calendar month. The initial Term of this
Lease shall be determined as follows:
(1) If the Commencement Date of this Lease occurs on the first calendar day
of a calendar month, the Term shall be for a period of Lease Years and Months as
specified in the Basic Lease Information, unless terminated sooner as provided
in this Lease.
(2) If the Commencement Date of this Lease occurs on other than the first
calendar day of a calendar month, the Term shall be for a period of Lease Years
and Months as specified in the Basic Lease Information, plus the number of days
remaining in the calendar month in which the Commencement Date occurs, unless
terminated sooner as provided in this Lease.
(b) Subject to the provisions of Paragraph 22 below, in the event the
Premises are not substantially completed (in accordance with the Work Letter
Agreement) on or within six (6) months after the Estimated Commencement Date,
then Tenant may, at Tenant's option, by notice in writing to Landlord within ten
(10) days thereafter, cancel this Lease, in which event, (i) this Lease shall be
deemed null and void and have no further force or effect, (ii) all security or
other
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deposits made herewith shall be promptly returned to Tenant, and (iii) the
parties shall have no further obligation to each other; provided further,
however, that if such written notice of Tenant is not received by Landlord
within said 10-day period, Tenant's right to cancel this Lease hereunder shall
terminate and be of no further force or effect.
3. Rent.
(a) For purposes of this Lease, the term 'Rent' shall mean the Base Rent,
Advanced Base Rent, all additional rent, and all of the other monetary
obligations of Tenant under this Lease. Upon execution of this Lease, Tenant
shall pay to Landlord the Advanced Base Rent set forth in the Basic Lease
Information. Tenant shall pay to Landlord the Base Rent specified in the Basic
Lease Information, payable on or before the first day of each and every
successive calendar month following the Commencement Date. If the Term commences
on other than the first day of a calendar month, the first payment of Base Rent
shall be appropriately prorated, on the basis of a 30-day month. Tenant's
payment of any Advanced Base Rent (excluding that portion attributable to last
month's rent, if any) shall be credited against Tenant's obligation to pay Base
Rent beginning as of the Commencement Date.
(b) Tenant shall pay, as additional rent, all amounts of money required to
be paid to Landlord by Tenant under this Lease in addition to monthly Base Rent,
whether or not the same be designated 'additional rent.' If such amounts are not
paid at the time provided in this Lease, they shall nevertheless be collectable
as additional rent with the next installment of monthly Base Rent thereafter
falling due, but nothing herein contained shall be deemed to suspend or delay
the payment of any amount of money at the time the same becomes due and payable
hereunder, or limit any other remedy of Landlord.
(c) Tenant acknowledges that late payment by Tenant to Landlord of Rent
after the expiration of any applicable grace period will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any trust deed covering the Premises. Accordingly, if
any installment of Rent or any other sums due from Tenant shall not be received
by Landlord when due, Tenant shall pay to Landlord a late charge equal to six
percent (6%) of such overdue amount. The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant's default with respect to such
overdue amount, nor prevent Landlord from exercising any of the other rights and
remedies granted hereunder.
(d) Any amount due to Landlord, if not paid when due, shall bear interest
from the date due until paid at the rate of ten percent (10%) per annum. Payment
of interest shall not excuse or cure any default hereunder by Tenant.
(e) All payments due from Tenant to Landlord hereunder shall be made to
Landlord without deduction or offset, in lawful money of the United States of
America at Landlord's address for notices hereunder, or to such other person or
at such other place as Landlord may from time to time designate in writing to
Tenant.
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4. Taxes and Operating Expenses.
(a) In addition to the Base Rent, Tenant shall pay (i) Tenant's Percentage
Share of Property Taxes (according to the percentage set forth in the Basic
Lease Information) relating to those Property Taxes (as the term is defined
under Paragraph 4(a)(1) below) which are assessed during the Term, and (ii)
Tenant's Percentage Share of Operating Expenses (according to the percentage set
forth in the Basic Lease Information) relating to those Operating Expenses (as
the term is defined under Paragraph 4(a)(2) below) which are paid or incurred by
Landlord during the Term.
(1) 'Property Taxes' shall mean all real property taxes, bonds and
assessments and governmentally imposed fees or charges (and any tax levied
wholly or partly in lieu thereof) levied, assessed, confirmed, imposed or which
have become a lien against the Building (which for the purposes of defined
'Property Taxes' shall include the tax parcel of which the Building is a part)
and Common Areas.
(2) 'Operating Expenses' shall mean the following: (A) all costs of
management, operation, maintenance and repair of the Building and Common Areas,
including, without limitation, property management expenses, maintenance and
repair materials, supplies and equipment; (B) all costs of water, power,
electricity, refuse collection, parking lot sweeping, landscaping, and other
services relating to the Common Areas; (C) all costs of alterations or
improvements to the Building or Common Areas made to achieve compliance with
federal, state and local law including, without limitation, the Americans with
Disabilities Act (42 U.S.C. Section 12101 et seq.), which costs will be
amortized over the useful life of each alteration or improvement; (D) all costs
of public liability and casualty insurance maintained by Landlord with respect
to the Building and Common Areas; (E) all costs incurred by Landlord for making
any capital improvements, structural repairs or modifications to the Building or
Common Areas or making any improvements or modifications to reduce the operating
expenses, which costs will be amortized over the useful life of each capital
improvement, structural repair or modification; (F) all costs of maintaining
machinery, equipment and directional signage or other markers; and (G) the share
allocable to the Building of dues and assessments payable under any reciprocal
easement or common area maintenance agreements or declarations or by any owners'
associations affecting the Building. That portion of the Operating Expenses
relating to the property management expenses for the Building and Common Areas
which shall be charged to Tenant shall be four percent (4%) of both Tenant's
annual Base Rent and the subtotal of Tenant's share of Operating Expenses of the
Building. In the event that Landlord calculates the Operating Expenses based
upon the Project instead of the Building, as indicated on the Basic Lease
Information, then the term 'Project' shall be substituted in the place of all
references to the term 'Building' in this paragraph.
(b) The Property Taxes to be paid by Tenant shall be determined by
multiplying the total amount of the Property Taxes by Tenant's Percentage Share
of Property Taxes (which percentage is determined by multiplying 100% by a
fraction, the numerator of which is the rentable area of the Premises and the
denominator of which is the total rentable area of all improvements located
within the tax parcel of which the Premises are a part). Landlord may cause the
Common Areas of the Project to be separately assessed from other areas and
buildings of the Project. In such case, Tenant's Percentage Share of Property
Taxes attributable to the Common Areas shall be
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determined by the ratio that the total rentable square feet in the Premises
bears to the total number of square feet of rentable area which is included in
the property subject to the assessment.
(c) Operating Expenses for each calendar year shall be adjusted to equal
Landlord's reasonable estimate of Operating Expenses as though ninety-five
percent (95%) of the total rentable area of the Building had been occupied. When
the Building is one hundred percent (100%) occupied, the Operating Expenses
shall be adjusted to reflect a 100% occupied building. The Operating Expenses to
be paid by Tenant shall be determined by multiplying the total amount of the
Operating Expenses as adjusted above by Tenant's Percentage Share of Operating
Expenses (which percentage is determined by multiplying 100% by a fraction, the
numerator of which is the rentable area of the Premises and the denominator of
which is the total rentable area located within the Building, if the Operating
Expenses are calculated for the Building, or within the Project, if the
Operating Expenses are calculated for the Project).
(d) Tenant shall pay to Landlord each month at the same time and in the
same manner as monthly Base Rent one-twelfth (1/12th) of Landlord's estimate of
the amount of Property Taxes and one- twelfth (1/12th) of Landlord's estimate of
Operating Expenses payable by Tenant for the then- current calendar year. The
initial monthly amount shall be as set forth in the Basic Lease Information.
Within one hundred twenty (120) days after the close of each calendar year, or
as soon after such 120-day period as practicable, Landlord shall deliver to
Tenant a statement in reasonable detail of the actual amount of Property Taxes
and Operating Expenses payable by Tenant in accordance with this Paragraph 4 for
such calendar year. Tenant may request further information if desired.
Landlord's failure to provide such statement to Tenant within the 120-day period
shall not act as a waiver and shall not excuse Tenant or Landlord from making
the adjustments to reflect actual costs as provided herein. If on the basis of
such statement Tenant owes an amount that is less than the estimated payments
for such calendar year previously made by Tenant, Landlord shall credit such
excess to Tenant against future additional rent due under this Paragraph 4. If
on the basis of such statement Tenant owes an amount that is more than the
estimated payments for such calendar year previously made by Tenant, Tenant
shall pay the deficiency to Landlord within fifteen (15) days after delivery of
the statement. The obligations of Landlord and Tenant under this Paragraph 4(d)
with respect to the reconciliation between the estimated and actual amounts of
Property Taxes and Operating Expenses payable by Tenant for the last year of the
Term shall survive the termination of the Lease. When the final determination is
made of the actual amounts of Property Taxes and Operating Expenses payable by
Tenant for the year in which this Lease terminates, Tenant shall immediately pay
any increase due over the estimated payments and, conversely, any overpayment
made by Tenant shall be immediately reimbursed to Tenant by Landlord.
5. Other Taxes.
In addition to Tenant's obligations under Paragraph 4 above, Tenant shall
pay or reimburse Landlord for (i) any taxes upon, measured by or reasonably
attributable to the cost or value of Tenant's equipment, furniture, fixtures,
and other personal property located in the Premises or leasehold improvements
made in or to the Premises at Tenant's expense, (ii) for taxes, if any, measured
by or reasonably attributable to tenant improvements paid for by Tenant, and
(iii) for
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any taxes, assessments, fees, or charges imposed by any public authority or
private community maintenance association upon or by reason of the development,
possession, use or occupancy of the Premises or the parking facilities used by
Tenant in connection with the Premises. On request by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of payment of Tenant's business
personal property taxes and deliver copies of such business personal property
tax bills to Landlord.
6. Use.
6.1 Prohibited Uses.
(a) The Premises shall be used and occupied by Tenant solely for the use
set forth in the Basic Lease Information. Tenant shall, at Tenant's expense,
comply promptly with all applicable federal, state and local laws, regulations,
ordinances, rules, orders, and requirements in effect during the Term relating
to the condition, use or occupancy of the Premises. Tenant shall not use or
permit the use of the Premises in any manner that will tend to create waste or a
nuisance, or that unreasonably disturbs other tenants of the Building or
Project, nor shall Tenant place or maintain any signs, antennas, awnings,
lighting or plumbing fixtures, loudspeakers, exterior decoration or similar
devises on or visible from the exterior of the Premises, without Landlord's
prior written consent, which may be withheld in Landlord's sole discretion.
Tenant shall not use any corridors, sidewalks, stairs, elevators, or other areas
outside of the Premises for storage or any purpose other than access to the
Premises. Tenant shall not use, keep, or permit to be used or kept on the
Premises any foul or noxious gas or substance, nor shall Tenant do or permit to
be done anything in and about the Premises, either in connection with activities
hereunder expressly permitted or otherwise, which would cause an increase in
premiums for or a cancellation of any policy of insurance (including fire
insurance) maintained by Landlord in connection with the Premises or the
Building or which would violate the terms of any covenants, conditions, or
restrictions, or the design guidelines, or the sign guidelines affecting the
Building or the land on which it is located, or the Rules (as the term is
defined under Paragraph 6.3(b) below).
(b) Tenant shall not attach any signage to or on any part of the outside of
the Premises, the Building or the Project, or in the halls, lobbies, windows or
elevator banks of the Building without Landlord's prior written consent, which
consent may be withheld in Landlord's sole discretion. Any signage so permitted
shall be subject to prior approval of and conformance with the requirements of
the design review committee of the Project and the design review agency of the
city. At Tenant's expense, Tenant shall (i) maintain all permitted signage, and
(ii) upon the expiration or termination of this Lease, remove such signage and
repair any damage caused by their removal. If Tenant fails to do so, Landlord
may maintain, repair or remove such signage without notice to Tenant and at
Tenant's expense, the cost of which shall be payable by Tenant as additional
rent in accordance with Paragraph 14(b)(2) below.
6.2 Suitability. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the Premises or
the Building or with respect to the suitability or fitness of either for the
conduct of Tenant's business or for any other purpose. Nor has Landlord agreed
to undertake any modification, alteration or improvement to the Premises except
as provided in this Lease. Tenant acknowledges that the Premises are located in
a 100-
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year flood zone and that the finished floor elevations of the Building are
designed to be at least one (1) foot above the federal government's estimate of
the 100-year flood level at the time of initial construction.
6.3 Use of Common Areas.
(a) Landlord gives Tenant and its authorized employees, agents, customers,
representatives, and invitees the nonexclusive right to use the Common Areas,
with others who are entitled to use the Common Areas, subject to Landlord's
rights as set forth in this Paragraph 6.3.
(b) All Common Areas shall be subject to the exclusive control and
management of Landlord and Landlord shall have the right to establish, modify,
amend, and enforce reasonable rules and regulations with respect to the Common
Areas. Tenant acknowledges receipt of a copy of the current rules and
regulations, attached hereto as Exhibit C, and agrees that they may, from time
to time, be modified or amended by Landlord in a commercially reasonable manner
(the 'Rules'). Tenant agrees to abide by and conform with such Rules; to cause
its concessionaires and its and their employees and agents to abide by such
Rules; and to use its best efforts to cause its customers, invitees, and
licensees to abide by such Rules.
(c) Landlord shall have the right to close temporarily any portion of the
Common Areas for the purpose of discouraging use by parties who are not tenants
or customers of tenants; to use portions of the Common Areas while engaged in
making additional improvements or repairs or alterations to the Property; to use
or permit the use of the Common Areas by others to whom Landlord may grant or
have granted such rights; and to do and perform such acts in, to, and with
respect to, the Common Areas as in the use of good business judgment Landlord
shall determine to be appropriate for the Project.
(d) Landlord shall have the unqualified right to increase or reduce the
Common Areas, provided the Project meets the parking requirement under Paragraph
6.5 below.
(e) Tenant shall cooperate with Landlord and other tenants in the Project
in recycling waste paper, cardboard, or such other materials identified under
any trash recycling program that may be established in order to reduce trash
collection costs.
6.4 Environmental Matters.
(a)(1) The term 'Hazardous Materials' as used herein means any petroleum
products, asbestos, polychlorinated biphenyls, P.C.B.'s, chemicals, compounds,
materials, mixtures or substances that are now or hereafter defined or listed
in, or otherwise classified as a 'hazardous substance', 'hazardous material',
'hazardous waste', 'extremely hazardous waste', 'infectious waste', 'toxic
substance', 'toxic pollutant' or any other formulation intended to define, list
or classify substances by reason of deleterious properties such asignitability,
corrosivity, reactivity, carcinogenicity or toxicity pursuant to any federal,
state or local environmental law, regulation, ordinance, resolution, order or
decree relating to industrial hygiene, environmental protection or the use,
analysis, generation, manufacture, storage, release, disposal or transportation
of the same ('Hazardous Materials Laws').
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(2) Except for ordinary office supplies and janitorial cleaning materials
which in common business practice are customarily and lawfully used, stored and
disposed of in small quantities, and except for those Hazardous Materials listed
on Exhibit D attached hereto, Tenant shall not use, manufacture, store, release,
dispose or transport any Hazardous Materials in, on, under or about the
Premises, the Building or the Project without giving prior written notice to
Landlord and obtaining Landlord's prior written consent, which consent Landlord
may withhold in its sole discretion. Subject to Landlord's prior written
consent, Hazardous Materials may be added to Exhibit D on an annual review
basis; any such amendments to Exhibit D shall be signed by each party and
attached hereto. Tenant shall at its own expense procure, maintain in effect,
and comply with all conditions of any and all permits, licenses, and other
governmental and regulatory approvals required in connection with Tenant's
generation, use, storage, disposal and transportation of Hazardous Materials.
Except as discharged into the sanitary sewer in strict accordance and conformity
with all applicable Hazardous Materials Laws, Tenant shall cause any and all
Hazardous Materials removed from the Premises to be removed and transported
solely by duly licensed haulers to duly licensed facilities for final disposal
of such materials and wastes. Regardless whether permitted under the Hazardous
Material Laws, Tenant shall not maintain in, on, under, or about the Premises,
the Building or the Project any above or below ground storage tanks, clarifiers,
or sumps, nor shall any wells for the monitoring of ground water, soils, or
subsoils be allowed.
(3) Tenant shall immediately notify Landlord in writing of: (a) any
enforcement, cleanup, removal or other governmental or regulatory action
instituted, completed or threatened pursuant to any Hazardous Materials Law; (b)
any claim made or threatened by any person or entity against Tenant or the
Premises relating to damage, contribution, cost, recovery, compensation, loss or
injury resulting from or claimed to result from any Hazardous Materials; and (c)
any reports, information, inquiries or demands made, ordered, or received by or
on behalf of Tenant which arise out of or in connection with the existence or
potential existence of any Hazardous Materials in, on, under or about the
Premises, the Building, or the Project, including, without limitation, any
complaints, notices, warnings, asserted violations, or mandatory or voluntary
informational filings with any governmental agency in connection therewith, and
immediately supply Landlord with copies thereof.
(b) Tenant shall indemnify, defend (by counsel reasonably acceptable to
Landlord), protect, and hold Landlord, and each of Landlord's partners,
officers, directors, partners, employees, affiliates, joint ventures, members,
trustees, owners, shareholders, principals, agents, representatives, attorneys,
successors and assigns, free and harmless from and against any and all claims,
liabilities, damages, fines, penalties, forfeitures, losses, cleanup and
remediation costs or expenses (including attorneys' fees) or death of or injury
to any person or damage to any property whatsoever, arising from or caused in
whole or in part, directly or indirectly, by (i) Tenant's use, analysis,
generation, manufacture, storage, release, disposal, or transportation of
Hazardous Materials by Tenant, Tenant's agents, employees, contractors,
licensees or invitees to, in, on, under, about or from the Premises, the
Building, or the Project, or (ii) Tenant's failure to comply with any Hazardous
Materials Law. Tenant's obligations hereunder shall include, without limitation,
and whether foreseeable or unforeseeable, all costs of any required or necessary
repair, cleanup, detoxification or decontamination of the Premises, the
Building, or the Project and the
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preparation and implementation of any closure, remedial action or other required
plans in connection therewith, and shall survive the expiration or earlier
termination of this Lease.
(c) Landlord shall have the right to enter the Premises during regular
business hours upon reasonable prior notice at all times for the purposes of
ascertaining compliance by Tenant with all applicable Hazardous Materials Laws,
provided, however, that in the instance of any emergency Landlord's entry onto
the Premises shall not be restricted to regular business hours nor shall notice
be required.
(d) Landlord shall have the option to declare a default of this Lease for
the release or discharge of Hazardous Materials by Tenant's employees, agents,
contractors, or invitees on the Premises, Building or Project or in violation of
law or in deviation from prescribed procedures in Tenant's use or storage of
Hazardous Materials. If Tenant fails to comply with any of the provisions under
this Paragraph 6.4, Landlord shall have the right (but not the obligation) to
remove or otherwise cleanup any Hazardous Materials from the Premises, the
Building or the Project. In such case, the costs of any Hazardous Materials
investigation, removal or other clean up (including, without limitation,
transportation, storage, disposal and attorneys' fees and costs) will be
additional rent due under this Lease, whether or not a court has ordered the
cleanup, and will become due and payable on demand by Landlord.
6.5 Parking. Landlord grants to Tenant and Tenant's customers, suppliers,
employees and invitees a nonexclusive license to use unassigned and unreserved
parking spaces in the Common Areas for the use of motor vehicles during the Term
subject to rights reserved to Landlord as specified in this Paragraph 6.5.
Landlord reserves the right to grant similar nonexclusive and unassigned and
unreserved use to other tenants; to promulgate rules and regulations relating to
the use of the Common Areas including parking by tenants and employees of
tenants; to make changes in the parking layout from time to time; and to do and
perform any other acts in and to these areas and improvements as Landlord
determines to be advisable. Tenant agrees not to overburden the parking
facilities and to abide by and conform with the rules and regulations and to
cause its employees and agents to abide by and conform to the rules and
regulations. Upon request, Tenant shall provide Landlord with license plate
numbers of all vehicles driven by its employees and to cause Tenant's employees
to park only in spaces specifically designated for tenant parking. Landlord
shall have the unqualified right to rearrange or reduce the number of
parkingspaces; provided, however, the ratio of the number of parking spaces
available to Tenant will be no less than four (4) spaces per 1,000 usable square
feet of the Premises.
7. Services.
(a) Tenant shall pay for all water, sewer, gas, electricity, heat, cooling,
telephone, refuse collection, and other utility-type services furnished to
Tenant or the Premises, together with all related installation or connection
charges or deposits. Wherever it is practical to do so such services shall be
separately metered or charged to Tenant by the provider thereof and paid for
directly by Tenant. To the extent any of the foregoing services are provided by
Landlord, Tenant shall reimburse Landlord for all costs incurred by Landlord in
connection with the provision of such services based on Landlord's reasonable
estimate of the level of Tenant's use or consumption of such services. Landlord
shall bill Tenant on a monthly or other periodic basis for
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such services and payment shall be made by Tenant within ten (10) days after
submittal of Landlord's statement.
(b) Landlord shall not be in default hereunder or be liable for any damages
or personal injuries to any person directly or indirectly resulting from nor
shall there be any Rent abatement by reason of, any interruption or curtailment
whatsoever in utility services.
8. Maintenance, Repairs and Alterations.
(a) Tenant shall, at Tenant's expense, maintain every part of the Premises
in good order, condition and repair, including without limitation, (i) all
interior surfaces, ceilings, walls, door frames, window frames, floors, carpets,
draperies, window coverings and fixtures, (ii) all windows, doors, locks and
closing devices, entrances, plate glass, and signs, (iii) all plumbing and
sewage pipes, fixtures and fittings, (iv) all phone lines, electrical wiring,
equipment, switches, outlets, and light bulbs, (v) any fire detection, fire
sprinkler or extinguisher equipment, (vi) all of Tenant's personal property,
improvements and alterations, and (vii) all other fixtures and special items
installed by or for the benefit of, or at the expense of Tenant. Tenant shall,
at its expense, cause to be maintained in good operating condition and repair,
all heating, ventilating, and air conditioning equipment installed in, or on the
roof of the Premises. Tenant shall keep in force a preventive maintenance
contract with a qualified maintenance company covering all heating, ventilating
and air conditioning equipment and shall annually provide Landlord with a copy
of this contract. Tenant shall not enter onto the roof area of the Building,
except for the purpose of maintaining the heating, ventilating, and air
conditioning equipment and provided that Tenant shall repair any damage to the
roof area caused by its entry. Tenant shall be responsible for its own
janitorial service. Landlord shall incur no expense (nor have any obligation) of
any kind whatsoever in connection with the maintenance of the Premises.
(b) Landlord shall keep in good condition and repair the foundation, roof
structure, exterior walls and other structural parts of the Building, and all
other portions of the Building not the obligation of Tenant or any other tenant
in the Building. Tenant expressly waives the benefits of any statute, including
Civil Code Sections 1941 and 1942, which would afford Tenant the right to make
repairs at Landlord's expense or to terminate this Lease due to Landlord's
failure to keep the Building in good order, condition and repair. Landlord shall
have no liability to Tenant for any damage, inconvenience, or interference with
the use of the Premises by Tenant as the result of Landlord performing any such
maintenance and repair work.
(c) In the event Tenant fails to perform Tenant's obligations under this
Paragraph 8, Landlord may, but shall not be required to, give Tenant notice to
do such acts as are reasonably required to so maintain the Premises. If Tenant
shall fail to commence such work and diligently prosecute it to completion, then
Landlord shall have the right (but not the obligation) to do such acts and
expend such funds at the expenses of Tenant as are reasonably required to
perform such work. Any amounts so expended by Landlord will be additional rent
due under this Lease, and such amounts will become due and payable on demand by
Landlord. Landlord shall have no liability to Tenant for any such damages,
inconvenience, or interference with the use of the Premises by Tenant as a
result of performing such work.
9
(d) Upon the expiration or earlier termination of this Lease, Tenant shall
surrender the Premises in good condition and repair, only ordinary wear and tear
excepted. Tenant, at its sole cost and expense, agrees to repair any damages to
the Premises caused by or in connection with the removal of any articles of
personal property, business or trade fixtures, signs, machinery, equipment,
cabinetwork, furniture, moveable partitions, or permanent improvements or
additions, including, without limitation thereto, repairing the floor and
patching and painting the walls where required by Landlord, to Landlord's
reasonable satisfaction. Tenant shall indemnify Landlord against any loss or
liability resulting from delay by Tenant in so surrendering the Premises,
including without limitation, any claims made by any succeeding tenant resulting
from such delay.
(e) Tenant shall not make any alterations, improvements, or additions in,
on, or about the Premises without Landlord's prior written consent, except that
Tenant may make alterations, improvements, or additions without Landlord's prior
written consent where (i) the reasonably estimated cost does not exceed $2,500,
and (ii) such alterations, improvements, or additions do not affect or involve
the structural integrity, roof membrane, exterior areas, building systems, or
water-tight nature of the Premises, the Building or the Project. In requesting
Landlord's consent, Tenant shall, at Tenant's sole cost, submit to Landlord
complete drawings and specifications describing such work and the identity of
the proposed contractor at least ten (10) business days prior to the
commencement of any work.
With respect to any alterations, improvements or additions made to the
Premises by Tenant:
(1) Before commencing any work relating to alterations, additions, or
improvements affecting the Premises, Tenant shall notify Landlord of the
expected date of commencement thereof and of the anticipated cost thereof.
Landlord shall then have the right at any time and from time to time to
post and maintain on the Premises such notices as Landlord reasonably deems
necessary to protect the Premises and Landlord from mechanics' liens or any
other liens.
(2) Tenant shall pay when due all claims for labor or materials
furnished to Tenant for use in the Premises. Tenant shall not permit any
mechanics' liens or any other liens to be levied against the Premises for
any labor or materials furnished to Tenant in connection with work
performed on the Premises by or at the direction of Tenant. Tenant shall
indemnify, hold harmless and defend Landlord (by counsel reasonably
satisfactory to Landlord) from any liens and encumbrances arising out of
any work performed or materials furnished by, or at the direction of
Tenant. In the event that Tenant shall not, within twenty (20) days
following the imposition of any such lien, cause such 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 by law, the right, but not
the obligation, to cause the same to be released by such means as it shall
deem proper, including payment of the claim giving rise to such lien. All
such sums paid by Landlord and all expenses incurred by it in connection
therewith, including attorneys' fees and costs, shall be payable to
Landlord by Tenant on demand with interest at the rate of ten percent (10%)
per annum.
(3) All alterations, improvements or additions in or about the
Premises performed by or on behalf of Tenant shall be done in a
first-class, workmanlike manner, shall not unreasonably lessen the value of
leasehold improvements in the Premises, and shall be completed in
compliance with all
10
applicable laws, ordinances, regulations and orders of any governmental
authority having jurisdiction thereover, as well as the requirements of
insurers of the Premises and the Building.
(4) Upon Landlord's request, Tenant shall remove any contractor,
subcontractor or material supplier from the Premises and the Building if
the work or presence of such person or entity results in labor disputes in
or about the Building or Project or damage to the Premises, Building or
Project.
(5) Landlord, at Landlord's sole discretion, may refuse to grant
Tenant permission for alterations, improvements or additions which require,
because of application of Americans with Disabilities Act or other laws,
substantial improvements or alterations to be made to the Common Areas.
(6) Landlord may, up to sixty (60) days prior to the expiration of the
Term, require that Tenant, at Tenant's expense, remove any such
alterations, improvements or additions prior to or upon the expiration of
this Lease, and restore the Premises to their condition prior to such
alterations, improvements or additions.
(7) Unless Landlord requires their removal, as set forth above, all
alterations, improvements, or additions made to the Premises shall become
the property of Landlord and remain upon and be surrendered with the
Premises upon the expiration of this Lease; provided, however, that
Tenant's machinery, equipment, and trade fixture, other than any which may
be affixed to the Premises so that they cannot be removed without material
damage to the Premises, shall remain the property of Tenant and may be
removed by Tenant subject to the provisions of Paragraph 8(d) above.
9. Construction of Tenant Improvements.
Landlord shall be responsible for constructing the tenant improvements
('Tenant Improvements') in the Premises, as provided in the Work Letter
Agreement, attached hereto as Exhibit B.
10. Insurance and Indemnity.
10.1 Insurance.
(a) Tenant shall obtain and maintain during the Term commercial general
liability insurance with a combined single limit for personal injury and
property damage in an amount of not less than $2,000,000 (in a form, with a
deductible amount, and with carriers reasonably acceptable to Landlord) and
employer's liability and workers' compensation insurance as required by law. The
insurance carrier shall be authorized to do business in the State of California,
with a policyholders and financial rating of at least A:IX Class status as rated
in the most recent edition of Best's Key-Rating guide. Tenant's comprehensive
general liability insurance policy shall be endorsed to provide that (i) it may
not be canceled or altered in such a manner as to adversely affect the coverage
afforded thereby without thirty (30) days' prior written notice to Landlord,
(ii) Landlord is designated as an additional insured, (iii) the insurer
acknowledges acceptance of the mutual waiver of claims by Landlord and Tenant
pursuant to Paragraph 10.2(b) below, and (iv)
11
such insurance is primary with respect to Landlord and that any other insurance
maintained by Landlord is excess and noncontributing with such insurance. If, in
the opinion of Landlord's lender or in the commercially reasonable opinion of
Landlord's insurance adviser, the specified amounts of coverage are no longer
adequate, such coverage shall, within 30 days written notice to Tenant, be
appropriately increased. Prior to the commencement of the Term, Tenant shall
deliver to Landlord a duplicate of such policy or a certificate thereof to
Landlord for retention by it, with endorsements. At least thirty (30) days prior
to the expiration of such policy or any renewal or modification thereof, Tenant
shall deliver to Landlord a replacement or renewal binder, followed by a
duplicate policy or certificate within a reasonable time thereafter. If Tenant
fails to obtain such insurance or to furnish Landlord any such duplicate policy
or certificate as herein required, Landlord may, at its election, without notice
to Tenant and without any obligation to do so, procure and maintain such
coverage and Tenant shall reimburse Landlord on demand as additional rent for
any premium so paid by Landlord.
(b) Landlord waives all claims against Tenant, and Tenant's officers,
directors, partners, employees, agents and representatives for loss or damage to
the extent that such loss or damage is insured against under any valid and
collectable insurance policy insuring Landlord or would have been insured
against but for any deductible amount under any such policy. Tenant waives all
claims against Landlord, and Landlord's officers, directors, partners,
employees, affiliates, joint venturers, members, trustees, owners, shareholders,
principals, agents, representatives, successors and assigns, for loss or damage
to the extent such loss or damage is insured against under any valid and
collectable insurance policy insuring Tenant or required to be maintained by
Tenant under this Leased, or would have been insured against but for any
deductible amount under any such policy. The insuring party shall, upon
obtaining the policies of insurance required under this Lease, give notice to
the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this Lease. Tenant agrees that in the event of a
sale, assignment or transfer of the Premises by Landlord, this waiver of
subrogation shall continue in favor of the original Landlord and any subsequent
Landlord.
(c) Tenant shall at its own cost maintain on all its personal property,
Tenant's improvements, and alterations, in, on, or about the Premises, a policy
of standard fire and extended coverage insurance, with vandalism and malicious
mischief endorsements, to the extent of at least one hundred percent (100%) of
their full replacement value. The proceeds from any such policy shall be used by
Tenant for the replacement of personal property and the restoration of Tenant's
improvements or alterations. Notwithstanding any other provisions of the Lease,
Landlord shall have no liability for damage to or destruction of Tenant's
personal property, regardless of whether the damage or destruction results from
the acts or omissions of Landlord.
(d) During the Term, Landlord shall keep the Building, and improvements
within which the Premises are located, insured against loss or damage by (i)
fire, with extended coverage and vandalism, malicious mischief and special
extended perils (all risk) endorsements or their equivalents, in amounts not
less than one hundred percent (100%) of the replacement cost of the Building and
structures insured, and (ii) flood, in the maximum amount provided for by FEMA
under its flood loss insurance program, with loss payable thereunder to Landlord
and to any authorized encumbrancer of Landlord (with standard mortgagee loss
payable clause) in accordance with their respective interests. Landlord may
maintain rent insurance, for the benefit
12
of Landlord, equal to at least one year's Base Rent hereunder. If the Lease is
terminated as a result of damage by fire, casualty or earthquake as set forth in
this Paragraph 10, all insurance proceeds shall be paid to and retained by
Landlord, subject to the rights of any authorized encumbrancer of Landlord.
(e) Tenant acknowledges that Landlord does not, at the time of the signing
of this Lease, insure the Building for earthquake damage. Landlord may, when
Landlord deems the premiums to be reasonable, insure the Building fully or
partially for earthquake damage. At such time, the premium for earthquake
insurance will be added to the Operating Expenses for purposes of determining
additional rent.
10.2 Indemnity.
(a) Tenant waives all claims against Landlord for damage to any property or
injury to or death of any person in, on, or about the Premises, the Building, or
any other portion of the Project arising at any time and from any cause, unless
caused by the active negligence or willful misconduct of Landlord, its agents,
employees, or contractors. Tenant shall indemnify, defend (by counsel reasonably
satisfactory to Landlord) and hold harmless Landlord, and Landlord's officers,
directors, partners, employees, affiliates, joint venturers, members, trustees,
owners, shareholders, principals, agents, representatives, successors and
assigns, from and against all claims, costs, damages, actions, indebtedness and
liabilities (except such as may arise from the active negligence or willful
misconduct of Landlord, and Landlord's officers, directors, partners, employees,
affiliates, joint venturers, members, trustees, owners, shareholders,
principals, agents, representatives, successors and assigns) arising by reason
of any death, bodily injury, personal injury, property damage or any other
injury or damage in connection with (i) any condition or occurrence in or about
or resulting from any condition or occurrence in or about the Premises during
the Term, or (ii) any act or omission of Tenant, or Tenant's agents,
representatives, officers, directors, shareholders, partners, employees,
successors and assigns, wherever it occurs. The foregoing indemnity obligation
of Tenant shall include reasonable attorneys' fees, and all other reasonable
costs and expenses incurred by Landlord from the first notice that any claim or
demand is to be made. The provisions of this Paragraph 10.2 shall survive the
termination or expiration of this Lease with respect to any damage, injury, or
death occurring prior to such expiration or termination.
(b) Neither party shall be liable to the other for any unauthorized or
criminal entry of third parties into the Premises, Building, Project, Common
Areas, or parking facilities, or for any damage to person or property, or loss
of property in and about the Premises, Building, Project, Common Areas, parking
facilities and the approaches, entrances, streets, sidewalks, stairs, elevators,
restrooms, or corridors thereto, by or from any unauthorized or criminal acts of
third parties, regardless of any breakdown, malfunction or insufficiency of any
security measures, practices or equipment provided by Landlord or Tenant. Tenant
shall immediately notify Landlord in writing of any breakdown or malfunction of
any security measures, practices or equipment provided by Landlord as to which
Tenant has knowledge.
13
(c) Any diminution or interference with light, air or view by any structure
which may be erected on land adjacent to the Building or resulting from any
other cause shall in no way alter this Lease or impose any liability on
Landlord.
(d) Tenant agrees that in no event shall Landlord be liable for
consequential damages, including injury to Tenant's business or any loss of
income therefrom.
(e) In the event that Landlord or any successor owner of the Building sells
or conveys the Building, then all liabilities and obligations of Landlord or the
successor owner under this Lease accruing after the sale or conveyance shall
terminate and become binding on the new owner, and Tenant shall release Landlord
from all liability under this Lease (including, without limitation, the Security
Deposit, as defined under Paragraph 16 (below), except for acts or omissions of
Landlord occurring prior to such sale or conveyance.
(f) Tenant expressly agrees that so long as Landlord is a corporation,
limited liability company, trust, partnership, joint venture, unincorporated
association or other form of business entity, (i) the obligations of Landlord
shall not constitute personal obligations of the officers, directors, partners,
employees, affiliates, joint ventures, members, trustees, owners, shareholders,
or other principals, agents or representatives of such business entity ('Member
of Landlord'), and (ii) Tenant shall have recourse only to the interest of such
business entity in the Building of which the Premises are a part of the
satisfaction of such obligations and not against the assets of such Member of
Landlord other than to the extent of their respective interests in the Building.
In this regard, Tenant agrees that in the event of any actual or alleged
failure, breach or default by Landlord of its obligations under this Lease, that
(i) no Member of Landlord shall be sued or named as a party in any suit or
action (except as any be necessary to secure jurisdiction of Landlord), (ii) no
judgment will be taken against any Member of Landlord, and any judgment taken
against any Member of Landlord may be vacated and set aside at any time without
hearing, (iii) no writ or execution will ever be levied against the assets of
any Member of Landlord, and (iv) these agreements by Tenant are enforceable both
by Landlord and by any Member of Landlord.
11. Damage or Destruction.
(a) Subject to the provisions of Paragraph 11(b) and 11(c) below, if,
during the Term, the Premises are totally or partially destroyed from any
insured casualty, Landlord shall, within ninety (90) days after the destruction,
commence to restore the Premises to substantially the same condition as they
were in immediately before the destruction and prosecute the same diligently to
completion. Such destruction shall not terminate this Lease. Landlord's
obligation shall not include repair or replacement of Tenant's alterations or
Tenant's equipment, furnishings, fixtures and personal property. If the existing
laws do not permit the Premises to be restored to substantially the same
condition as they were in immediately before destruction, and Landlord is unable
to get a variance to such laws to permit the commencement of restoration of the
Premises within the 90-day period, then either party may terminate this Lease by
giving written notice to the other party within thirty (30) days after
expiration of the 90-day period.
14
(b) Despite the provisions of Paragraph 11(a) above, Landlord may decide
within ninety (90) days after such destruction to demolish the Building rather
than rebuild it, in which case this Lease will terminate as of the date of the
destruction. Landlord shall give Tenant written notice of its intention within
ninety (90) days after the destruction.
(c) If any destruction occurs to the Premises during the last six (6)
months of the initial Term or during the last six (6) months of any extension
period, regardless of the nature and extent of the destruction, either party can
elect to terminate this Lease within thirty (30) days after the destruction
occurs. If this Lease does not terminate pursuant to this Paragraph 11(c), the
provisions of Paragraph 11(a) above shall apply.
(d) If the Premises are damaged from any uninsured casualty to any extent
whatsoever, Landlord may within ninety (90) days following the date of such
damage: (i) commence to restore the Premises to substantially the same condition
as they were in immediately before the destruction and prosecute the same
diligently to completion, in which event this Lease shall continue in full force
and effect; or (ii) within the 90-day period Landlord may elect not to so
restore the Premises, in which event this Lease shall cease and terminate. In
either such event, Landlord shall give Tenant written notice of its intention
within the 90-day period.
(e) In the event of destruction or damage to the Premises which materially
interferes with Tenant's use of the Premises, if this Lease is not terminated as
above provided, there shall be an abatement or reduction of Base Rent between
the date of destruction and the date Landlord substantially completes its
reconstruction obligations, based upon the extent to which the destruction
materially interferes with Tenant's use of the Premises. All other obligations
of Tenant under this Lease shall remain in full force and effect. Except for
abatement of Base Rent, Tenant shall have no claim against Landlord for any loss
suffered by Tenant due to damage or destruction of the Premises or any work of
repair undertaken as herein provided.
(f) the provisions of California Civil Code Sections 1932(2) and 1933(4),
and any successor statutes, are inapplicable with respect to any destruction of
the Premises, such sections providing that a lease terminates upon the
destruction of the Premises unless otherwise agreed between the parties to the
contrary.
12. Eminent Domain.
(a) If all or any part of the Premises shall be taken as a result of the
exercise of the power of eminent domain, this Lease shall terminate as to the
part so taken as of the date of taking. In the case of a partial taking of
greater than fifty percent (50%) of the rentable area of the Premises, either
Landlord or Tenant shall have the right to terminate this Lease as to the
balance of the Premises by notice to the other within thirty (30) days after the
date of the taking. In the event of a partial taking of the Premises which does
not result in a termination of this Lease, the monthly Base Rent thereafter to
be paid shall be equitably reduced on a square footage basis. If the continued
occupancy of Tenant is materially interfered with for any time during the
partial taking, notwithstanding the partial taking does not terminate this Lease
as to the part not so taken, the Base Rent shall proportionately abate so long
as Tenant is not able to continuously occupy the part remaining and not so
taken.
15
(b) All compensation awarded or paid upon a total or partial taking of the
fee title shall belong to Landlord whether such compensation be awarded or paid
as compensation for diminution in value of the leasehold or of the fee except:
Tenant shall retain and have a claim for the following, to the extent
specifically designated by the condemning authority: (i) the unamortized value
over the Term of Tenant's leasehold improvements (to the extent Landlord has not
contributed to the cost thereof); (ii) that portion (if any) of the award made
to Landlord as a result of removing fixtures, removable by Tenant herein, under
the terms of this Lease but which are required to be taken by the condemnor or
are so acquired by the condemnor; and (iii) all relocation assistance, moving
and relocation expenses to the extent (if any) provided by the condemning
authority directly to Tenant.
13. Assignment and Subletting.
(a) Tenant shall not assign, sublet or hypothecate this Lease or any
interest herein or sublet the Premises or any part thereof or permit the use of
the Premises by any party other than Tenant without the prior written consent of
Landlord, which consent shall not be unreasonably withheld. Any of the foregoing
acts without Landlord's consent shall be void and shall, at the option of
Landlord, terminate this Lease. In connection with each consent requested by
Tenant, Tenant shall submit to Landlord the terms of the proposed transaction,
the identity of the parties to the transaction, the proposed documentation for
the transaction, current financial statements of any proposed assignee or
sublessee and all other information reasonably requested by Landlord concerning
the proposed transaction and the parties involved therein.
(b) As used in this Paragraph 13, the term 'assign' or 'assignment' shall
include, without limitation, any sale, transfer, or other disposition of all or
any portion of Tenant's estate under this Lease, whether voluntary or
involuntary, and whether by operation of law or otherwise, including any of the
following:
(1) if Tenant is a corporation or a limited liability company: (A) any
dissolution, merger, consolidation, or other reorganization of Tenant; or
(B) a sale or other transfer of more than fifty percent (50%) of the value
of the assets of Tenant; or (C) if Tenant is a corporation with fewer than
500 shareholders, a sale or other transfer of a controlling percentage of
the capital stock of Tenant; or (D) if Tenant is a limited liability
company, a sale or other transfer of a controlling percentage of the
interest in Tenant. The phrase 'controlling percentage' means the ownership
of, and the right to vote, stocks or interests possessing at least fifty
percent (50%) of the total combined voting power of the limited liability
company or, in the case of a corporation, of all classes of Tenant's stock
issues, outstanding and permitted to vote for the election of directors of
the corporation;
(2) if Tenant is a trust, the transfer of more than fifty percent
(50%) of the beneficial interest of Tenant, or the dissolution of the
trust;
(3) if Tenant is a partnership or joint venture, the withdrawal, or
the transfer of the interest, of any general partner or joint venturer or
the dissolution of the partnership or joint venture; and
16
(4) if Tenant is composed of tenants-in-common, the transfer of
interest of any cotenants or the partition or dissolution of the cotenancy.
(c) No sublessee shall have a right further to sublet, and any assignment
by a sublessee of its sublease shall be subject to Landlord's prior written
consent in the same manner as if Tenant were entering into a new sublease.
(d) Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation, or alter the primary liability of Tenant
to pay the Rent and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of Rent by Landlord from any other person shall not be
deemed to be a waiver by Landlord of any provisions hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting. In the event of default by any assignee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such assignee or successor.
(e) In the event Tenant shall assign or sublet the Premises or request the
consent of Landlord to any assignment or subletting, then Tenant shall reimburse
Landlord for reasonable costs and attorney's fees incurred in connection
therewith in an amount not to exceed $1,000.00.
14. Default by Tenant.
(a) The following events shall constitute events of default under this
Lease:
(1) a failure by Tenant to pay any Rent or to deliver an estoppel
certificate (as provided in Paragraph 17 below) where such failure
continues for five (5) days after written notice by Landlord to Tenant;
(2) the bankruptcy or insolvency of Tenant, any transfer by Tenant to
defraud creditors, any assignment by Tenant for the benefit of creditors,
or the commencement of any proceedings of any kind by or against Tenant
under any provision of the Federal Bankruptcy Act or under any
other insolvency, bankruptcy or reorganization act unless, in the event any
such proceedings are involuntary, Tenant is discharged from the same within
sixty (60) days thereafter; the appointment of a receiver for a substantial
part of the assets of Tenant; or the levy upon this Lease or any estate of
Tenant hereunder by any attachment or execution;
(3) the abandonment or vacation of the Premises;
(4) the discovery by Landlord that any financial statement given to
Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant, any
successor in interest of Tenant or any guarantor of Tenant's obligation
hereunder, and any of them, was materially false; and
(5) a failure by Tenant to perform any of the terms, covenants,
agreements or conditions of this Lease to be observed or performed by
Tenant (excluding any event of default under Paragraph 14(a)(1) above),
where such failure continues for thirty (30) days after written notice
thereof by Landlord to Tenant; provided, however, that if the nature of the
default is such that the same
17
cannot reasonably be cured within the 30-day period, Tenant shall not be
deemed to be in default if Tenant shall within such period commence such
cure and thereafter diligently prosecute the same to completion.
(b) In the event of any material default or breach by Tenant, Landlord may
at any time thereafter, without limiting Landlord in the exercise of any right
or remedy at law or in equity which Landlord may have by reason of such default
or breach:
(1) Pursue the remedy described in California Civil Code Section
1951.4 whereby Landlord may continue this Lease in full force and effect
after Tenant's breach and abandonment and recover the Rent and any other
monetary charges as they become due, without terminating Tenant's right to
sublet or assign this Lease, subject only to reasonable limitations as
herein provided. During the period Tenant is in default, Landlord shall
have the right to do all acts necessary to preserve and maintain the
Premises as Landlord deems reasonable and necessary, including removal of
all persons and property from the Premise, and Landlord can enter the
Premises and relet them, or any part of them, to third parties for Tenant's
account. Tenant shall be liable immediately to Landlord for all costs
Landlord incurs in reletting the Premises, including, without limitation,
brokers' commissions, expenses of remodeling the Premises required by the
reletting, and like costs. Reletting can be for a period shorter or longer
than the remaining Term.
(2) Pay or perform such obligation due (but shall not be obligated to
do so), if Tenant fails to pay or perform any obligations when due under
this Lease within the time permitted for their payment or performance. In
such case, the costs incurred by Landlord in connection with the
performance of any such obligation will be additional rent due under this
Lease and will become due and payable on demand by Landlord.
(3) Terminate Tenant's rights to possession by any lawful means, in
which case this Lease shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event Landlord
shall be entitled to recover from Tenant all damages incurred by Landlord
by reason of Tenant's default, including, without limitation, the
following: (A) the worth at the time of award of any unpaid Rent which had
been earned at the time of such termination; plus (B) the worth at the time
of award of the amount by which the unpaid Rent which would have been
earned after termination until the time of award exceeds the amount of such
Rent loss that is proved could have been reasonably avoided; plus (C) the
worth at the time of award of the amount by which the unpaid Rent for the
balance of the Term after the time of award exceeds the amount of such Rent
loss that is proved could be reasonably avoided; plus (D) 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 of events would be likely to result therefrom; plus (E)
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 State law.
Upon any such termination of Tenant's possessory interest in and to the
Premises, Tenant (and at Landlord's sole election, Tenant's sublessees)
shall no longer have any interest in the Premises, and Landlord shall have
the right to make any reasonable repairs, alterations or modifications to
the Premises which Landlord in its sole discretion deems reasonable and
necessary. The 'worth at the time of award' of the amounts referred to in
subparagraphs (A) and (B) above is computed by allowing interest at the
maximum rate an individual is permitted by
18
law to charge. The worth at the time of award of the amount referred to in
subparagraph (C) above 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%).
(4) Pursue any other legal or equitable remedy available to Landlord.
Unpaid installments of Rent and other unpaid monetary obligations of Tenant
under the terms of this Lease shall bear interest from the date due at the
rate of ten percent (10%) per annum.
(c) In the event Tenant is evicted or Landlord takes possession of the
Premises by reason of any default by Tenant hereunder, Tenant hereby waives any
right of redemption or relief from forfeiture as provided by law.
(d) Even though Tenant has breached this Lease and abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord may enforce all its rights and
remedies under this Lease, including the right to recover Rent as it becomes due
under this Lease. Acts of maintenance or preservation, efforts to relet the
Premises, or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease, shall not constitute a termination
of Tenant's right to possession.
(e) In the event Tenant is in material default under any provision of this
Lease then, at Landlord's sole election: (i) Tenant shall not have the right to
exercise any available right, option or election under this Lease ('Tenant's
Exercise Rights') if at such time Tenant is in default hereunder, (ii) Tenant
shall not have the right to consummate any transaction or event triggered by the
exercise of any of Tenant's Exercise Rights if at such time Tenant is in default
hereunder, and (iii) Landlord shall not be obligated to give Tenant any required
notices or information relating to the exercise of any of Tenant's Exercise
Rights hereunder.
15. Default by Landlord, Notice to Mortgagee.
Landlord shall not be in default unless Landlord, or the holder of any
mortgage, deed of trust or ground lease covering the Premises, fails to perform
obligations required of Landlord within a reasonable time, but in no event later
than thirty (30) days after written notice by Tenant to Landlord certified mail,
postage prepaid, and to the holder of any first mortgage, deed of trust or
ground lease covering the Premises whose name and address shall have been
furnished to Tenant in writing, specifying wherein Landlord has failed to
perform such obligations; provided, however, that if the nature of Landlord's
obligation is such that more than thirty (30) days are required for performance
then Landlord shall not be in default if Landlord or the holder of any such
mortgage, deed of trust or ground lease commences performance within such 30-day
period and thereafter diligently prosecutes the same to completion. In no event
shall Tenant be entitled to terminate this Lease by reason of Landlord's
default, and Tenant's remedies shall be limited to an action for monetary
damages at law.
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16. Security Deposit.
On execution of this Lease, Tenant shall deposit with Landlord the sum
specified in the Basic Lease Information (the 'Security Deposit'). The Security
Deposit shall be held by Landlord as security for the performance by Tenant of
all of the provisions of this Lease. If Tenant fails to pay Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Lease, Landlord may use, apply, or retain all or any portion of the
Security Deposit for the payment of any Rent or other charge in default, or the
payment of any other sum to which Landlord may become obligated by reason of
Tenant's default, or to compensate Landlord for any loss or damage which
Landlord may suffer thereby. If Landlord so uses or applies all or any portion
of the Security Deposit, then within ten (10) days after demand therefor Tenant
shall deposit cash with Landlord in an amount sufficient to restore the deposit
to the full amount thereof, and Tenant's failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep the Security
Deposit separate from its general accounts. If Tenant performs all of Tenant's
obligations hereunder, the Security Deposit, or so much thereof as has not
theretofore been applied by Landlord, shall be returned, without payment of
interest for its use, to Tenant (or, at Landlord's option to the last assignee,
if any, of Tenant's interest hereunder) at the expiration of the Term, and after
Tenant has vacated the Premises. No trust relationship is created herein between
Landlord and Tenant with respect to the Security Deposit.
17. Estoppel Certificate.
(a) Tenant shall within ten (10) days of notice from Landlord execute,
acknowledge and deliver to Landlord a statement certifying (i) that this Lease
is unmodified and in full force and effect (or, if modified, stating the nature
of such modification and certifying that this Lease, as so modified, is in full
force and effect), (ii) amount of the Security Deposit, (iii) the date to which
the Rent has been paid, (iv) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any are claimed, and (v) such other matters as may reasonably
be requested by Landlord. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Building.
(b) Tenants failure to deliver such statement within such time shall be
conclusive upon Tenant, (i) that this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) that there are no
uncured defaults in Landlord's performance, and (iii) that not more than one
month's Base Rent has been paid in advance.
(c) If Landlord desires to finance or refinance the Building, Tenant agrees
to deliver to any lender designated by Landlord such financial statements of
Tenant as may be reasonably required by such lender. All such financial
statements shall be received by Landlord in confidence and shall be used for the
purposes herein set forth.
18. Subordination
This Lease, at Landlord's sole option, shall be subordinate to any ground
lease, mortgage, deed of trust, or any other hypothecation for security now or
hereafter placed upon the Building and to any and all advances made on the
security thereof and to all renewals, modifications,
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consolidations, replacements, refinancings and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the Rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
mortgagee, trustee, or ground lessor shall elect to have this Lease prior to the
lien of its mortgage, dead of trust or ground lease, and shall give notice
thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of
trust, or ground lease, whether this Lease is dated prior to or subsequent to
the date of said mortgage, deed of trust or ground lease or the date of
recording thereof. If any mortgage or deed of trust to which this Lease is
subordinate is foreclosed or a deed in lieu of foreclosure is given to the
mortgagee or beneficiary, Tenant shall attorn to the purchaser at the
foreclosure sale or to the grantee under the deed in lieu of foreclosure; if any
ground lease to which this Lease is subordinate is terminated, Tenant shall
attorn to the ground lessor. Tenant agrees to execute any documents required to
effectuate such subordination or to make this Lease prior to the lien of any
mortgage, deed of trust or ground lease, as the case may be, or to evidence such
attornment. Any such document of attornment shall also provide that the
successor shall not disturb Tenant in its use of the Premises in accordance with
this Lease.
19. Attorneys.
In the event legal action is initiated by either party, the prevailing
party shall be entitled to recover all costs and expenses incurred in such
action, including, without limitation, reasonable attorneys' fees and costs,
including attorneys' fees incurred at trial and on appeal, if any.
20. Notices.
All notices, consents, demands, and other communications from one party to
the other given pursuant to the terms of this Lease shall be in writing and
shall be personally delivered, delivered by courier service, sent via facsimile
(confirmation receipt required), or deposited in the United States mail,
certified or registered, postage prepaid, and addressed as follows: To Tenant at
the address specified in the Basic Lease Information or to such other place as
Tenant may from time to time designate in a notice to Landlord; to Landlord at
the address specified in the Basic Lease Information, or to such other place and
to such other parties as Landlord may from time to time designate in a notice to
Tenant. All notices shall be effective upon delivery or refusal of delivery.
21. General Provisions.
(a) This Lease shall be governed by and construed in accordance with the
internal laws of the State of California, notwithstanding any choice of law
statutes, regulations, provisions or requirements to the contrary.
(b) The invalidity of any provision of this Lease, as determined by a court
of competent jurisdiction, shall in no way affect the validity of any other
provision hereof.
(c) This Lease including attached Exhibits, Addenda, and Basic Lease
Information contains all agreements and understandings of the parties and
supersedes and cancels any and all prior or contemporaneous written or oral
agreements, instruments, understandings and communications
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of the parties with respect to the subject matter herein. This Lease, including
the attached Exhibits, Addenda, and Basic Lease Information, may be modified
only in a writing signed by each of the parties.
(d) No waiver of any provision hereof by either party shall be deemed by
the other party to be a waiver of any other provision, or of any subsequent
breach of the same provision. Landlord's or Tenant's consent to, or approval of,
any act shall not be deemed to render unnecessary the obtaining of Landlord's or
Tenant's consent to, or approval of, any subsequent act by the other party.
(e) If Tenant remains in possession, with the expressed consent of
Landlord, of all or any part of the Premises after the expiration of the Term,
such tenancy shall be from month to month only, and not a renewal hereof or an
extension for any further term, and in such case, Rent shall be payable in the
amount of the last month's Base Rent and all other charges under the Lease and
such month-to-month tenancy shall be subject to every other term, covenant and
agreement contained herein.
(f) Subject to the provisions of this Lease restricting assignment or
subletting by Tenant, this Lease shall bind the parties, their personal
representatives, successors, and assigns.
(g) Upon reasonable prior notice to Tenant (which notice shall not be
required in the event of an emergency), Landlord and Landlord's representatives
and agents shall have the right to enter the Premises during regular business
hours for the purpose of inspecting the same, showing the same to prospective
purchasers or lenders, and making such alterations, repairs, improvements, or
additions to the Premises, the Building or the Common Areas as Landlord may deem
necessary or desirable. Landlord may at any time during the last one hundred
twenty (120) days of the Term place on or about the Premises any ordinary 'For
Lease' sign. Landlord may at any time place on or about the Premises any
ordinary 'For Sale' sign.
(h) The voluntary or other surrender of this Lease by Tenant, the mutual
cancellation thereof or the termination of this Lease by Landlord as a result of
Tenant's default shall, at the option of Landlord, terminate all or any existing
subtenancies or may at the option of Landlord, operate as an assignment to
Landlord of any or all of such subtenancies.
(i) If Tenant is a corporation, limited liability company or partnership,
each individual executing this Lease on behalf of Tenant represents and warrants
that he is duly authorized to execute and deliver this Lease on behalf of the
corporation, company or partnership in accordance with, where applicable, a duly
adopted resolution of the board of directors of the corporation, the vote of the
members of the limited liability company or the vote of the partners within the
partnership, and that this Lease is binding upon the corporation, company or
partnership in accordance with its respective articles of incorporation and
bylaws, operating agreement or partnership agreement.
(j) Time is expressly declared to be of the essence of this Lease and of
each and every covenant, term, condition, and provision hereof, except as to the
conditions relating to the delivery of possession of the Premises to Tenant.
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(k) If there is more than one party comprising Tenant, the obligations
imposed on Tenant shall be joint and several.
(l) The language in all parts of this Lease shall be in all cases construed
as a whole according to its fair meaning and not strictly for nor against either
Landlord or Tenant.
(m) As used in this Lease and whenever required by the context thereof,
each number, both singular and plural, shall include all numbers and in each
gender shall include all genders. Landlord and Tenant, as used in this Lease or
in any other instrument referred to in or made a part of this Lease, shall
likewise include both the singular and the plural, a corporation, limited
liability company, partnership, individual or person acting in any fiduciary
capacity as executor, administrator, trustee or in any other representative
capacity.
(n) The Exhibits and Addendum if any, specified in the Basic Lease
Information are attached to this Lease and by this reference made a part hereof.
22. Force Majeure.
Any delay in construction, repairs, or rebuilding any building, improvement
or other structure herein shall be excused and the time limit extended to the
extent that the delay is occasioned by reason of acts of God, labor troubles,
laws or regulations of general applicability, acts of Tenant or Tenant Delays
(as the term is defined in the Work Letter Agreement attached hereto as Exhibit
B), or other occurrences beyond the reasonable control of Landlord.
Accordingly, Landlord's obligation to perform shall be excused for the
period of the delay and the period for performance shall be extended for a
period equal to the period of such delay.
23. Broker's Fee.
Each party represents that it has not had dealings with any real estate
broker, finder, or other person, with respect to this Lease in any manner,
except the brokerage firm(s) specified in the Basic Lease information. Each
party shall hold harmless the other party from all damages resulting from any
claim that may be asserted against the other party by any broker, finder, or
other person with whom the other party has or purportedly had dealt. Landlord
shall pay any commissions of fees that are payable to the broker or finder
specified in the Basic Lease Information, with respect to this Lease in
accordance with the provisions of a separate commission contract.
24. Financial Statement.
It is acknowledged by all parties hereto that the attached financial
declaration of Tenant is incorporated as a pat of this Lease as Exhibit E, that
the information contained therein is true and correct in all material respects,
and that the accuracy of the information is a significant fact upon which
Landlord has relied in the granting of this Lease.
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TENANT: LANDLORD:
Ubiquity Communication, Inc. G & W/Copley Redwood Business Park, L.P.
a California corporation a limited partnership
By: G & W Management Co.
Its: Manager
By: /s/ Joseph J. Tavormina
--------------------------------
Joseph J. Tavormina
Its: President and CEO
By: /s/ William C. White
-------------------------------
William C. White, President
G & W Management Co.
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Redwood Business Park (Petaluma, CA) Lease - G&W/Copley Redwood Business Park LP and Ubiquity Communication Inc.
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