\n 01-12 29,840 x $1.30 = $38,792.00
\n 13-24 29,840 x $1.34 = $39,985.60
\n 25-36 29,840 x $1.38 = $41,179.20
\n 37-48 29,840 x $1.42 = $42,372.80
\n 49-60 29,840 x $1.46 = $43,566.40
\n 61-72 29,840 x $1.50 = $44,760.00
\n 73-84 29,840 x $1.54 = $45,953.60
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n 16<\/p>\n
Month to which Prepaid Base
\nRent and Additional Rent will
\n be Applied: First (1st) month of the Term<\/p>\n
Security Deposit: Forty five thousand nine hundred fifty three
\n and 60\/100 dollars ($45,953.60)<\/p>\n
Permitted Use: General office and administration,
\n telecommunications, computers, software,
\n electronic and biomedical research and
\n development, light manufacturing and
\n assembly of components, but only to the
\n extent permitted by the City of Fremont
\n and all agencies and governmental
\n authorities having jurisdiction thereof.<\/p>\n
Unreserved Parking Spaces: One hundred nineteen (119) nonexclusive and
\n undesignated parking spaces<\/p>\n
Broker(s): Bishop Hawk for Tenant
\n LPC MS, Inc. for Landlord<\/p>\n
Tenant Improvements Twenty nine thousand eight hundred forty and
\n Allowance: 00\/100 dollars ($29,840.00)<\/p>\n
Architect: N\/A<\/p>\n
-5-
\n 17<\/p>\n
LEASE AGREEMENT<\/p>\n
This Lease Agreement is made and entered into by and between Landlord
\nand Tenant on the Lease Date. The defined terms used in this Lease which are
\ndefined in the Basic Lease Information set forth on page 1 of this Lease
\nAgreement (“Basic Lease Information”) shall have the meaning and definition
\ngiven them in the Basic Lease Information. The Basic Lease Information, the
\nexhibit(s), the addendum or addenda described in the Basic Lease Information,
\nand this Lease Agreement are and shall be construed as a single instrument and
\nare referred to herein as the “Lease”.<\/p>\n
1. DEMISE
\nIn consideration for the rents and all other charges and payments payable by
\nTenant, and for the agreements, terms and conditions to be performed by Tenant
\nin this Lease, LANDLORD DOES HEREBY LEASE TO TENANT, AND TENANT DOES HEREBY HIRE
\nAND TAKE FROM LANDLORD, the Premises described below (the “Premises”), upon the
\nagreements, terms and conditions of this Lease for the Term hereinafter stated.<\/p>\n
2. PREMISES
\nThe Premises demised by this Lease is the square footage of space specified in
\nthe Basic Lease Information and has the address specified in the Basic Lease
\nInformation. The Premises are a part of and are contained in the Building
\nspecified in the Basic Lease Information. The location and dimensions of the
\nPremises are depicted on Exhibit A, which is attached hereto and incorporated
\nherein by this reference. Tenant shall have the nonexclusive right to use the
\nparking and other common areas on the real property on which the Building is
\nsituated (the “Property”). No easement for light or air is incorporated in the
\nPremises.<\/p>\n
The Premises demised by this Lease shall also include the Tenant Improvements
\n(as that term is defined in Exhibit B, attached hereto and incorporated herein
\nby this reference) to be constructed by Landlord within the interior of the
\nPremises. Landlord shall construct the Tenant Improvements on the terms and
\nconditions set forth in Exhibit B. Landlord and Tenant agree to and shall be
\nbound by the terms and conditions of Exhibit B.<\/p>\n
3. TERM
\nThe term of this Lease (the “Term”) shall be for the period of months specified
\nin the Basic Lease Information, commencing on the earliest to occur of the
\nfollowing dates (the “Commencement Date”):<\/p>\n
(a) The date the Tenant Improvements are approved by the appropriate
\n governmental agency as being in accordance with its building code and the
\n building permit issued for such improvements, as evidenced by the issuance
\n of a final building inspection approval; or<\/p>\n
(b) The date Landlord’s architect and general contractor have both
\n certified in writing to Tenant that the Tenant Improvements have been
\n substantially completed in accordance with the plans and specifications
\n therefor, or<\/p>\n
(c) The date Tenant commences occupancy of the Premises;<\/p>\n
when the Commencement Date has been determined pursuant to the foregoing,
\nLandlord and Tenant shall promptly execute a Commencement Date Memorandum in the
\nform attached hereto as Exhibit C.<\/p>\n
4. RENT
\n (a) BASE RENT. Tenant shall pay to Landlord, in advance on the first day
\n of each month, without further notice or demand and without offset or
\n deduction, the monthly installments of rent specified in the Basic Lease
\n Information (the “Base Rent”).<\/p>\n
Upon execution of this Lease, Tenant shall pay to Landlord the Prepaid
\n Rent specified in the Basic Lease Information to be applied toward Base
\n Rent for the month of the Term specified in the Basic Lease Information.<\/p>\n
18<\/p>\n
(b) ADDITIONAL RENT. In addition to the Base Rent, Tenant shall pay to
\n Landlord, in accordance with this Paragraph 4, Tenant’s proportionate share
\n (which is hereby agreed to be Tenant’s Proportionate Share as specified in
\n the Basic Lease Information) of the following items related to the
\n Building, the Property, and\/or the Outside Areas (as defined in Paragraph
\n 4(b)(3)) (the “Additional Rent”):<\/p>\n
(1) TAXES AND ASSESSMENTS. All real estate taxes and assessments
\n shall include any form of assessment, license, fee, tax, levy, penalty
\n (if a result of Tenant’s delinquency), or tax (other than net income,
\n estate, succession, inheritance, transfer or Real estate taxes and
\n franchise taxes), imposed by any authority having the direct or indirect
\n power to tax, or by any city, county, state or federal government or any
\n improvement or other district or division thereof, whether such tax is
\n (i) determined by the area of the Premises, the Building or the
\n Property, or any part thereof, or the Rent and other sums payable
\n hereunder by Tenant or by other tenants, including, but not limited to,
\n any gross income or excise tax levied by any of the foregoing
\n authorities with respect to receipt of Rent or other sums due under this
\n Lease; (ii) upon any legal or equitable interest of Landlord in the
\n Premises, the Building or the Property, or any part thereof; (iii) upon
\n this transaction or any document to which Tenant is a party creating or
\n transferring any interest in the Premises, the Building or the Property;
\n (iv) levied or assessed in lieu of, in substitution for, or in addition
\n to, existing or additional taxes against the Premises, the Building or
\n the Property, whether or not now customary or within the contemplation
\n of the parties; or (v) surcharged against the parking area. Tenant and
\n Landlord acknowledge that Proposition 13 was adopted by the voters of
\n the State of California in the June, 1978 election and that assessments,
\n taxes, fees, levies and charges may be imposed by governmental agencies
\n for such purposes as fire protection, street, sidewalk, road, utility
\n construction and maintenance, refuse removal and for other governmental
\n services which may formerly have been provided without charge to
\n property owners or occupants. It is the intention of the parties that
\n all new and increased assessments, taxes, fees, levies and charges due
\n to Proposition 13 or any other cause are to be included within the
\n definition of real property taxes for purposes of this Lease.<\/p>\n
(2) INSURANCE. All insurance premiums, including premiums for “all
\n risk,” fire and extended coverage (including earthquake endorsements)
\n insurance for the Building, public liability insurance, other insurance
\n as Landlord reasonably deems necessary, and any deductibles paid under
\n policies of any such insurance.<\/p>\n
(3) OUTSIDE AREAS EXPENSES. All reasonable costs to maintain,
\n repair, replace, supervise, insure (including provision of public
\n liability insurance) and administer the areas outside of the Building
\n (“Outside Areas”), including parking areas, landscaping (including
\n maintenance contracts), sprinkler systems, sidewalks, driveways, curbs,
\n lighting systems, and utilities for Outside Areas.<\/p>\n
(4) PARKING CHARGES. Any parking charges or other costs levied,
\n assessed or imposed by, or at the direction of, or resulting from
\n statutes or regulations, or interpretations thereof, promulgated by any
\n governmental authority or insurer (not affiliated with Landlord) in
\n connection with the use or occupancy of the Building, the Outside Areas
\n and\/or the Property.<\/p>\n
(5) MAINTENANCE AND REPAIR OF BUILDING. All reasonable costs to
\n maintain, repair, and replace, the roof coverings, the floor slab, and
\n the painting of the exterior walls of the Building, the heating,
\n ventilation, and air conditioning (“HVAC”) systems serving the Building
\n and\/or the Premises (including the cost of maintenance contracts), and
\n all reasonable costs to maintain, repair and replace all utility and
\n plumbing systems, fixtures and equipment located outside the Building.
\n Notwithstanding the foregoing, Tenant shall be responsible for the cost
\n of replacement of capital expenditures described in this subparagraph
\n 4(b)(5) only on a pro rata basis corresponding to the portion of the
\n useful life of the capital expenditure that will be exhausted during the
\n remainder of the Term.<\/p>\n
(6) MANAGEMENT AND ADMINISTRATION. All reasonable costs for
\n management and administration of the Building and the Property,
\n including a property management fee, accounting, auditing, billing,
\n postage, employee benefits, payroll taxes, etc.<\/p>\n
-2-
\n 19<\/p>\n
(c) PAYMENT OF ADDITIONAL RENT.<\/p>\n
(1) Upon commencement of this Lease, Landlord shall submit to
\n Tenant an estimate of monthly Additional Rent for the period between the
\n Commencement Date and the following December 31 and Tenant shall pay
\n such estimated Additional Rent on a monthly basis concurrently with the
\n payment of the Base Rent. Tenant shall continue to make said monthly
\n payments until notified by Landlord of a change therein. By March 1 of
\n each calendar year, Landlord shall endeavor to provide to Tenant a
\n statement showing the actual Additional Rent due to Landlord for the
\n prior calendar year, prorated from the Commencement Date during the
\n first year. If the total of the monthly payments of Additional Rent that
\n Tenant has made for the prior calendar year (or portion thereof during
\n which this Lease was in effect) is less than the actual Additional Rent
\n chargeable to Tenant for such prior calendar year, then Tenant shall pay
\n the difference in a lump sum within ten (10) business days after receipt
\n of such statement from Landlord. Any overpayment by Tenant of Additional
\n Rent for the prior calendar year shall be credited towards the
\n Additional Rent next due.<\/p>\n
(2) The actual Additional Rent for the prior calendar year shall be
\n used for purposes of calculating Tenant’s monthly payment of estimated
\n Additional Rent for the current year, subject to adjustment as provided
\n above, except that in any year in which resurfacing of the parking area
\n or material roof repairs are planned, Landlord may include the estimated
\n cost of such work in the estimated monthly Additional Rent. Landlord
\n shall make the final determination of Additional Rent for the year in
\n which this Lease terminates as soon as possible after termination of
\n such year. Tenant shall remain liable for payment of any amount due to
\n Landlord in excess of the estimated Additional Rent previously paid by
\n Tenant, and, conversely, Landlord shall promptly return to Tenant any
\n overpayment, even though the Term has expired and Tenant has vacated the
\n Premises. Failure of Landlord to submit statements as called for herein
\n shall not be deemed a waiver of Tenant’s obligation to pay Additional
\n Rent as herein provided.<\/p>\n
(d) GENERAL PAYMENT TERMS. The Base Rent, Additional Rent and all other
\n sums payable by Tenant to Landlord hereunder are referred to as the “Rent”.
\n All Rent shall be paid without deduction, offset or abatement in lawful
\n money of the United States of America. Checks are to be made payable to
\n AEtna Property Services and shall be mailed to: AEtna Property Services,
\n Kodak Center, 1740 Technology Drive, #600, San Jose, California 95110, or
\n to such other person or place as Landlord may, from time to time, designate
\n to Tenant in writing. Rent for any partial month during the Term shall be
\n prorated for the portion thereof falling due within the Term.<\/p>\n
5. LATE CHARGE
\nNotwithstanding any other provision of this Lease, Tenant hereby acknowledges
\nthat late payment to Landlord of Rent, or other amounts due hereunder will cause
\nLandlord to incur costs not contemplated by this Lease, the exact amount of
\nwhich will be extremely difficult to ascertain. If any Rent or other sums due
\nfrom Tenant are not received by Landlord or by Landlord’s designated agent
\nwithin ten (10) days after their due date, then Tenant shall pay to Landlord a
\nlate charge equal to five percent (5%) of such overdue amount, plus any
\nreasonable attorneys’ fees incurred by Landlord by reason of Tenant’s failure to
\npay Rent and\/or other charges when due hereunder. Landlord and Tenant hereby
\nagree that such late charges represent a fair and reasonable estimate of the
\ncost that Landlord will incur by reason of Tenant’s late payment. Landlord’s
\nacceptance of such late charges shall not constitute a waiver of Tenant’s
\ndefault with respect to such overdue amount or estop Landlord from exercising
\nany of the other rights and remedies granted under this Lease.<\/p>\n
6. SECURITY DEPOSIT
\nConcurrently with Tenant’s execution of the Lease, Tenant shall deposit with
\nLandlord the Security Deposit specified in the Basic Lease Information as
\nsecurity for the full and faithful performance of each and every term, covenant
\nand condition of this Lease. Landlord may use, apply or retain the whole or any
\npart of the Security Deposit as may be reasonably necessary (a) to remedy
\nTenant’s default in the payment of any Rent, (b) to repair damage to the
\nPremises caused by Tenant, (c) to clean the Premises upon termination of this
\nLease, (d) to reimburse Landlord for the payment of any amount which Landlord
\nmay reasonably spend or be required to spend by reason of Tenant’s default, or
\n(e) to compensate Landlord for any other loss or damage which Landlord may
\nsuffer by<\/p>\n
-3-
\n 20
\nreason of Tenant’s default. Should Tenant faithfully and fully comply with all
\nof the terms, covenants and conditions of this Lease, within twenty (20) days
\nfollowing the expiration of the Term, the Security Deposit or any balance
\nthereof shall be returned to Tenant or, at the option of Landlord, to the last
\nassignee of Tenant’s interest in this Lease. Landlord shall not be required to
\nkeep the Security Deposit separate from its general funds and Tenant shall not
\nbe entitled to any interest on such deposit. If Landlord so uses or applies all
\nor any portion of said deposit, within five (5) days after written demand
\ntherefor Tenant shall deposit cash with Landlord in an amount sufficient to
\nrestore the Security Deposit to the full extent of the above amount, and
\nTenant’s failure to do so shall be a default under this Lease. In the event
\nLandlord transfers its interest in this Lease, Landlord shall transfer the then
\nremaining amount of the Security Deposit to Landlord’s successor in interest,
\nand thereafter Landlord shall have no further liability to Tenant with respect
\nto such Security Deposit.<\/p>\n
7. POSSESSION
\n (a) TENANT’S RIGHT OF POSSESSION. Subject to Paragraph 7(b), Tenant
\n shall be entitled to possession of the Premises upon commencement of the
\n Term.<\/p>\n
(b) DELAY IN DELIVERING POSSESSION. If for any reason whatsoever,
\n Landlord cannot deliver possession of the Premises to Tenant at the
\n commencement of the Term, this Lease shall not be void or voidable, nor
\n shall Landlord, or Landlord’s agents, be liable to Tenant for any loss or
\n damage resulting therefrom. Tenant shall not be liable for Rent until
\n Landlord delivers possession of the Premises to Tenant. The expiration date
\n of the Term shall be extended by the same number of days that Tenant’s
\n possession of the Premises was delayed.<\/p>\n
8. USE OF PREMISES
\n (a) PERMITTED USES. The Premises shall be used for the Permitted Uses
\n specified in the Basic Lease Information and no other. The Premises shall
\n not be used to create any nuisance or trespass, for any illegal purpose,
\n for any purpose not permitted by applicable laws and regulations, or for
\n any purpose that would vitiate the insurance or increase the premiums for
\n insurance on the Premises or the Building. Tenant agrees not to overload
\n the floor(s) of the Building.<\/p>\n
(b) COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at Tenant’s
\n expense, faithfully observe and comply with all Municipal, State and
\n Federal statutes, rules, regulations, ordinances, requirements. and orders,
\n now in force or which may hereafter be in force pertaining to the Premises
\n or Tenant’s use thereof, including without limitation, any statutes, rules,
\n regulations, ordinances, requirements, or orders requiring, as a result of
\n Tenant’s use of the Premises, installation of fire sprinkler systems,
\n seismic reinforcement and related alterations, whether substantial in cost
\n or otherwise, and all recorded covenants, conditions and restrictions
\n affecting the Property (“Private Restrictions”) now in force or which may
\n hereafter be in force; provided, however, that Tenant shall not be required
\n to make structural changes to the Premises or Building not related to
\n Tenant’s specific use of the Premises unless the requirement for such
\n changes is imposed as a result of any improvements or additions made or
\n proposed to be made at Tenant’s request. The judgment of any court of
\n competent jurisdiction, or the admission of Tenant in any action or
\n proceeding against Tenant, whether Landlord be a party thereto or not, that
\n Tenant has violated any such rule, regulation, ordinance, statute or
\n Private Restrictions, shall be conclusive of that fact as between Landlord
\n and Tenant.<\/p>\n
9. ACCEPTANCE OF PREMISES
\nBy entry hereunder, Tenant accepts the Premises as suitable for Tenant’s
\nintended use and as being in good and sanitary operating order, condition and
\nrepair, AS IS, and without representation or warranty by Landlord as to the
\ncondition, use or occupancy which may he made thereof. Any exceptions to the
\nforegoing must be by written agreement executed by Landlord and Tenant.<\/p>\n
10. SURRENDER
\nTenant agrees that on the last day of the Term, or on the sooner termination of
\nthis Lease, Tenant shall surrender the Premises to Landlord (a) in good
\ncondition and repair (damage by Acts of God, fire, and normal wear and tear
\nexcepted), but with all interior walls cleaned so they appear painted, any
\ncarpets cleaned, and with all floors cleaned, together with all alterations,
\nadditions and improvements which may have been made in or on the Premises;
\nexcept that Tenant shall remove trade fixtures put in at the expense of Tenant
\nand any<\/p>\n
-4-
\n 21<\/p>\n
improvements as to which Landlord has, prior to the date of surrender, consented
\nto or requested removal; and (b) otherwise in accordance with Paragraph 32(f).
\nTenant shall repair all damage caused by such removal and otherwise restore the
\nPremises in accordance with the preceding sentence at Tenant’s sole cost and
\nexpense. On or before the expiration or sooner termination of this Lease, Tenant
\nshall remove all of Tenant’s personal property from the Premises. All property
\nof Tenant not so removed, unless such non-removal is consented to by Landlord,
\nshall be deemed abandoned by Tenant, provided that in such event Tenant shall
\nremain liable to Landlord for all costs incurred in storing and disposing of
\nsuch abandoned property of Tenant. If the Premises are not surrendered at the
\nend of the Term or sooner termination of this Lease, and in accordance with the
\nprovisions of this Paragraph 10 and of Paragraph 32(f), Tenant hereby
\nindemnifies Landlord against loss or liability resulting from delay by Tenant in
\nso surrendering the Premises including, without limitation, any claims made by
\nany succeeding tenant founded on such delay.<\/p>\n
11. ALTERATIONS AND ADDITIONS
\n (a) Tenant shall not make, or permit to be made, any alteration or
\n addition to the Premises, or any part thereof, without the prior written
\n consent of Landlord, such consent not to be unreasonably withheld,
\n provided, however, Tenant without Landlord’s consent, shall be entitled to
\n make interior, non-structural alterations or additions to the Premises not
\n requiring any permits which separately or in the aggregate over each twelve
\n (12) month period of the Term do not exceed five thousand dollars
\n ($5,000.00).<\/p>\n
(b) Any alteration or addition to the Premises shall be at Tenant’s sole
\n cost and expense, in compliance with all applicable laws and requirements
\n requested by Landlord, and in accordance with plans and specifications
\n approved in writing by Landlord.<\/p>\n
(c) In the event Landlord consents to a proposed alteration or addition,
\n such consent shall include Landlord’s advice in writing, whether or not
\n such proposed alteration or addition shall be required to be removed at the
\n expiration or termination of this Lease. If Landlord fails so to advise
\n Tenant regarding whether or not a proposed alteration or addition may be
\n removed at the expiration or termination of this Lease, then Tenant, may,
\n at Tenant’s option, remove the alteration or addition, or surrender the
\n alteration or addition to Landlord with the Premises, without compensation
\n to Tenant, at the expiration or termination of this Lease. All additions,
\n alterations or improvements, including, but not limited to, heating,
\n lighting, electrical, air conditioning, fixed partitioning, drapery, wall
\n covering and paneling, built-in cabinet work and carpeting installations
\n made by Tenant, together with all property that has become an integral part
\n of the Building, shall at once be and become the property of Landlord, and
\n shall not be deemed trade fixtures.<\/p>\n
(d) Tenant agrees not to proceed to make such alterations or additions,
\n notwithstanding consent from Landlord to do so, until five (5) days after
\n Tenant’s receipt of such consent, in order that Landlord may post
\n appropriate notices to avoid any liability to contractors or material
\n suppliers for payment for tenant’s improvements. Tenant will at all times
\n permit such notices to be posted and to remain posted until the completion
\n of work.<\/p>\n
12. MAINTENANCE OF PREMISES
\n (a) MAINTENANCE BY TENANT. Throughout the Term, Tenant shall, at its
\n sole expense, (1) keep and maintain in good order and condition, repair,
\n and replace the Premises, and every part thereof, including glass, windows,
\n window frames, skylights, interior and exterior doors and door frames, and
\n the interior of the Premises, (excepting only those portions of the
\n Building to be maintained by Landlord, as provided in Paragraph 12(c)
\n below), (2) keep and maintain in good order and condition, repair, and
\n replace all utility and plumbing systems, fixtures and equipment, including
\n without limitation, electricity, gas, water, and sewer, located in or on
\n the Premises. Tenant shall be responsible for these costs of replacement
\n only on a pro rata basis corresponding to the portion of the useful life of
\n the capital expenditure that will be exhausted during the remainder of the
\n Term, (3) furnish all expendables, including light bulbs, paper goods and
\n soaps, used in the Premises, (4) repair all damage to the Premises, the
\n Building or the Outside Areas caused by the negligence or willful
\n misconduct of Tenant or its agents, employees, contractors or invitees.
\n Tenant shall not do anything to cause any damage, deterioration or
\n unsightliness to the Building and the Outside Areas.<\/p>\n
-5-
\n 22<\/p>\n
(b) LANDLORD’S RIGHT TO MAINTAIN AND REPAIR AT TENANT’S EXPENSE.
\n Notwithstanding the foregoing, Landlord shall have the right, but not the
\n obligation, at Tenant’s expense, to enter the Premises and perform Tenant’s
\n maintenance, repair and replacement work. Within ten (10) days after
\n invoice therefor from Landlord, Tenant shall pay all reasonable costs and
\n expenses incurred by Landlord in connection with such maintenance, repair
\n and replacement work.<\/p>\n
(c) MAINTENANCE BY LANDLORD. Subject to the provisions of Paragraphs
\n 12(a), 22 and 23, and further subject to Tenant’s obligation under
\n Paragraph 4 to reimburse Landlord, in the form of Additional Rent, for
\n Tenant’s Proportionate Share of the cost and expense of the following
\n items, Landlord agrees to repair and maintain the following items: the
\n structural portions of the roof and the roof coverings (provided that
\n Tenant installs no additional air conditioning or other equipment on the
\n roof that damages structural portions of the roof or the roof coverings),
\n the foundation, the floor slab, the load bearing walls, and the exterior
\n walls (excluding any glass therein but including the painting thereof) of
\n the Building; the HVAC systems serving the Building and\/or the Premises;
\n the utility and plumbing systems, fixtures, and equipment located outside
\n the Building; and the parking areas, landscaping, sprinkler systems,
\n sidewalks, driveways, curbs, and lighting systems in the Outside Areas.
\n Landlord shall not be required to repair or maintain conditions created due
\n to any act, negligence or omission of Tenant or its agents, contractors,
\n employees or invitees. Landlord’s obligation hereunder to repair and
\n maintain is subject to the condition precedent that Landlord shall have
\n received written notice of the need for such repairs and maintenance.
\n Tenant shall promptly report in writing to Landlord any defective condition
\n known to it which Landlord is required to repair, and failure to so report
\n such defects shall make Tenant responsible to Landlord for any liability
\n incurred by Landlord by reason of such condition.<\/p>\n
(d) TENANT’S WAIVER OF RIGHTS. Tenant hereby expressly waives all rights
\n to make repairs at the expense of Landlord or to terminate this Lease, as
\n provided for in California Civil Code Sections 1941 and 1942, and 1932(1),
\n respectively, and any similar or successor statute or law in effect or any
\n amendment thereof during the Term.<\/p>\n
13. LANDLORD’S INSURANCE
\nLandlord shall purchase and keep in force fire, extended coverage and “all risk”
\ninsurance covering the Building in an amount equal to eighty percent (80%) of
\nthe replacement cost of the Building. Tenant shall, at its sole cost and
\nexpense, comply with any and all reasonable requirements pertaining to the
\nPremises of any insurer necessary for the maintenance of reasonable fire and
\npublic liability insurance, covering the Building and appurtenances. Landlord,
\nat Tenant’s Cost, may maintain “Loss of Rents” insurance, insuring that the Rent
\nwill be paid in a timely manner to Landlord for a period of at least twelve (12)
\nmonths if the Premises are destroyed or rendered unusable or inaccessible by any
\ncause insured against under this Lease.<\/p>\n
14. TENANT’S INSURANCE<\/p>\n
(a) PUBLIC LIABILITY INSURANCE. Tenant shall, at Tenant’s expense,
\n secure and keep in force a “broad form” public liability insurance and
\n property damage policy covering the Premises and the Outside Areas,
\n insuring Tenant, and naming Landlord and its lenders as additional
\n insureds, against any liability arising out of the ownership, use,
\n occupancy or maintenance of the Premises and all Outside Areas. The minimum
\n limit of coverage of such policy shall be in the amount of not less than
\n Two Million Dollars ($2,000,000.00) for injury or death of one person in
\n any one accident or occurrence and in the amount of not less than Two
\n Million Dollars ($2,000,000.00) for injury or death of more than one person
\n in any one accident or occurrence, shall include an extended liability
\n endorsement providing contractual liability coverage (which shall include
\n coverage for Tenant’s indemnification obligations in this Lease), and shall
\n contain a severability of interest clause or a cross liability endorsement.
\n Such insurance shall further insure Landlord and Tenant against liability
\n for property damage of at least One Million Dollars ($1,000,000.00). The
\n limit of any insurance shall not limit the liability of Tenant hereunder.
\n No policy shall be cancelable or subject to reduction of coverage, and loss
\n payable clauses shall be subject to Landlord’s approval. Such policies of
\n insurance shall be issued as primary policies and not contributing with or
\n in excess of coverage that Landlord may carry, by an insurance company
\n authorized to do business in the State of California for the issuance of
\n such type of insurance coverage and rated A:XIII or better in Best’s Key
\n Rating Guide. A copy of<\/p>\n
-6-
\n 23<\/p>\n
said policy or a certificate evidencing to Landlord’s reasonable
\n satisfaction that such insurance is in effect shall be delivered to
\n Landlord upon commencement of the Term, and thereafter whenever Landlord
\n shall reasonably request.<\/p>\n
(b) PERSONAL PROPERTY INSURANCE. Tenant shall maintain in full force and
\n effect on all of its fixtures and equipment on the Premises, a policy or
\n policies of fire and extended coverage insurance with standard coverage
\n endorsement to the extent of the full replacement cost thereof. During the
\n term of this Lease the proceeds from any such policy or policies of
\n insurance shall be used for the repair or replacement of the fixtures and
\n equipment so insured. Landlord shall have no interest in the insurance upon
\n Tenant’s equipment and fixtures and will sign all documents reasonably
\n necessary in connection with the settlement of any claim or loss by Tenant.
\n Landlord will not carry insurance on Tenant’s possessions. Tenant shall
\n furnish Landlord with a certificate evidencing to Landlord’s reasonable
\n satisfaction that such insurance is in effect, and whenever required, shall
\n satisfy Landlord that such policy is in full force and effect.<\/p>\n
15. INDEMNIFICATION
\n (a) OF LANDLORD. Tenant shall indemnify and hold harmless Landlord and
\n agents, employees, partners, shareholders, directors, invitees, and
\n independent contractors (collectively “Agents”) of Landlord against and
\n from any and all claims, liabilities, judgments, costs, demands, causes of
\n action and expenses (including, without limitation, reasonable attorneys’
\n fees) arising from (1) Tenant’s use of the Premises or from any activity
\n done, permitted or suffered by Tenant in or about the Premises, the
\n Building or the Property, and (2) any act, neglect, fault, willful
\n misconduct or omission of Tenant, or Tenant’s Agents or from any breach or
\n default in the terms of this Lease by Tenant, and (3) any action or
\n proceeding brought on account of any matter in items (1) or (2), except to
\n the extent caused by the sole active negligence or willful misconduct by
\n Landlord or its agents. If any action or proceeding is brought against
\n Landlord by reason of any such claim, upon notice from Landlord, Tenant
\n shall defend the same at Tenant’s expense by counsel reasonably
\n satisfactory to Landlord. As a material part of the consideration to
\n Landlord, Tenant hereby assumes all risk of damage to property or injury to
\n persons in or about the Premises from any cause whatsoever (except that
\n which is caused by the sole active negligence or willful misconduct by
\n Landlord or its Agents or by the failure of Landlord to observe any of the
\n terms and conditions of this Lease, if such failure has persisted for an
\n unreasonable period of time after written notice of such failure), and
\n Tenant hereby waives all claims in respect thereof against Landlord. The
\n obligations of Tenant under this Paragraph 15 shall survive any termination
\n of this Lease.<\/p>\n
(b) NO IMPAIRMENT OF INSURANCE. The foregoing indemnity shall not
\n relieve any insurance carrier of its obligations under any policies
\n required to be carried by either party pursuant to this Lease, to the
\n extent that such policies cover the peril or occurrence that results in the
\n claim that is subject to the foregoing indemnity.<\/p>\n
16. SUBROGATION
\nLandlord and Tenant hereby mutually waive any claim against the other for any
\nloss or damage to any of their property located on or about the Premises, the
\nBuilding or the Property that is caused by or results from perils covered by
\nproperty insurance carried by the respective parties, to the extent of the
\nproceeds of such insurance actually received with respect to such loss or
\ndamage, whether or not due to the negligence of the other party or its agents.
\nBecause the foregoing waivers will preclude the assignment of any claim by way
\nof subrogation to an insurance company or any other person, each party now
\nagrees to immediately give to its insurer written notice of the terms of these
\nmutual waivers and shall have their insurance policies endorsed to prevent the
\ninvalidation of the insurance coverage because of these waivers. Nothing in this
\nParagraph 16 shall relieve a party of liability to the other for failure to
\ncarry insurance required by this Lease.<\/p>\n
17. ABANDONMENT
\nTenant shall not abandon the Premises at any time during the Term. In the event
\nof abandonment, the rights and remedies of Tenant and Landlord shall be
\ndetermined in accordance with the applicable California statutes in effect at
\nthe time of abandonment.<\/p>\n
-7-
\n 24<\/p>\n
18. FREE FROM LIENS
\nTenant shall keep the Premises and the Property, free from any liens arising out
\nof any work performed, materials furnished, or obligations incurred by or for
\nTenant.<\/p>\n
19. ADVERTISEMENTS AND SIGNS
\nTenant shall not place or permit to be placed in, upon, or about the Premises or
\nthe Property any signs, advertisements or notices without obtaining Landlord’s
\nprior written consent, which consent shall not be unreasonably withheld, or
\nwithout complying with applicable law, and will not conduct, or permit to be
\nconducted, any sale by auction on the Premises or otherwise on the Property.
\nTenant shall remove any sign, advertisement or notice placed on the Premises by
\nTenant upon the expiration of the Term or sooner termination of this Lease, and
\nTenant shall repair any damage or injury to the Premises or the Property caused
\nthereby, all at Tenant’s expense. If any signs are not removed, or necessary
\nrepairs not made, Landlord shall have the right to remove the signs and repair
\nany damage or injury to the Premises at Tenant’s sole cost and expense.<\/p>\n
20. UTILITIES
\nTenant shall pay for all water, gas, heat, light, power, telephone service and
\nall other materials and services supplied to the Premises. If Tenant fails to
\npay for any of the foregoing when due, Landlord may pay the same and add such
\namount to the Rent.<\/p>\n
21. ENTRY BY LANDLORD
\nTenant shall permit Landlord and its Agents to enter into and upon the Premises
\nat all reasonable times, upon reasonable notice (except in the case of an
\nemergency, for which no notice shall be required), and subject to Tenant’s
\nreasonable security arrangements, for the purpose of inspecting the same or
\nshowing the Premises to prospective purchasers, lenders or tenants or to alter,
\nimprove, maintain and repair the Premises as required or permitted of Landlord
\nunder the terms hereof, without any rebate of Rent and without any liability to
\nTenant for any loss of occupation or quiet enjoyment of the Premises thereby
\noccasioned (except for actual damages resulting from the negligence or willful
\nmisconduct of Landlord or its agents); and Tenant shall permit Landlord to post
\nnotices of non-responsibility and ordinary “for sale” or “for lease” signs,
\nprovided that Landlord may post such “for lease” signs and exhibit the Premises
\nto prospective tenants only during the six (6) months prior to termination of
\nthis Lease. No such entry shall be construed to be a forcible or unlawful entry
\ninto, or a detainer of, the Premises, or an eviction of Tenant from the
\nPremises.<\/p>\n
22. DESTRUCTION AND DAMAGE
\n (a) If the Building is damaged by fire or other perils covered by
\n extended coverage insurance, Landlord shall, at Landlord’s option:<\/p>\n
(1) In the event of total destruction (which shall mean destruction
\n or damage in excess of twenty-five percent (25%) of the full insurable
\n value thereof) of the Premises, elect either to commence promptly to
\n repair and restore the Premises and prosecute the same diligently to
\n completion, in which event this Lease shall remain in full force and
\n effect; or not to repair or restore the Premises, in which event this
\n Lease shall terminate. Landlord shall give Tenant written notice of its
\n intention within sixty (60) days after the date (the “Casualty Discovery
\n Date”) Landlord obtains actual knowledge of such destruction. If
\n Landlord elects not to restore the Premises, this Lease shall be deemed
\n to have terminated as of the date of such total destruction.<\/p>\n
(2) In the event of a partial destruction (which shall mean
\n destruction or damage to an extent not exceeding twenty-five percent
\n (25%) of the full insurable value thereof) of the Premises for which
\n Landlord will receive insurance proceeds sufficient to cover the cost to
\n repair and restore such partial destruction and, if the damage thereto
\n is such that the Premises may be substantially repaired or restored to
\n its condition existing immediately prior to such damage or destruction
\n within one hundred eighty (180) days from the Casualty Discovery Date,
\n Landlord shall commence and proceed diligently with the work of repair
\n and restoration, in which event the Lease shall continue in full force
\n and effect. If such repair and restoration requires longer than one
\n hundred eighty (180) days or if the insurance proceeds therefor (plus
\n any amounts Tenant may elect or is obligated to contribute) are not
\n sufficient to cover the cost of such<\/p>\n
-8-
\n 25<\/p>\n
repair and restoration, Landlord may elect either to so repair and
\n restore, in which event the Lease shall continue in full force and
\n effect, or not to repair or restore, in which event the Lease shall
\n terminate. In either case, Landlord shall give written notice to Tenant
\n of its intention within sixty (60) days after the Casualty pursuant to
\n the provisions of this Lease, and (2) the rent and any additional rent
\n payable by the assignee or sublessee to Tenant, after deducting the
\n costs incurred by Tenant in connection with any such assignment or
\n sublease. The assignment or sublease agreement, as the case may be,
\n after approval by Landlord, shall not be amended without Landlord’s
\n prior written consent, and shall contain a provision directing the
\n assignee or subtenant to pay the rent and other sums due thereunder
\n directly to Landlord upon receiving written notice from Landlord that
\n Tenant is in default under this Lease with respect to the payment of
\n Rent. Landlord’s collection of such rent and other sums shall not
\n constitute an acceptance by Landlord of attornment by such assignee or
\n subtenant. A consent to one assignment, subletting, occupation or use
\n shall not be deemed to be a consent to any other or subsequent
\n assignment, subletting, occupation or use, and consent to any assignment
\n or subletting shall in no way relieve Tenant of any liability under this
\n Lease. Any assignment or subletting without Landlord’s consent shall be
\n void, and shall, at the option of Landlord, constitute a Default under
\n this Lease.<\/p>\n
(d) Tenant shall pay Landlord’s reasonable fees, not to exceed Five
\n Hundred Dollars ($500) per transaction, incurred in connection with
\n Landlord’s review and processing of documents regarding any proposed
\n assignment or sublease.<\/p>\n
(e) Tenant acknowledges and agrees that the restrictions,
\n conditions and limitations imposed by this Paragraph 24 on Tenant’s
\n ability to assign or transfer this Lease or any interest herein, to
\n sublet the Premises or any part thereof, to transfer or assign any right
\n or privilege appurtenant to the Premises, or to allow any other person
\n to occupy or use the Premises or any portion thereof, are, for the
\n purposes of California Civil Code Section 1951.4, as amended from time
\n to time, and for all other purposes, reasonable at the time that the
\n Lease was entered into, and shall be deemed to be reasonable at the time
\n that Tenant seeks to assign or transfer this Lease or any interest
\n herein, to sublet the Premises or any part thereof, to transfer or
\n assign any right or privilege appurtenant to the Premises, or to allow
\n any other person to occupy or use the Premises or any portion thereof.<\/p>\n
Discovery Date. If Landlord elects not to restore the Premises, this
\n Lease shall be deemed to have terminated as of the date of such partial
\n destruction.<\/p>\n
(3) Notwithstanding anything to the contrary contained in this
\n Paragraph 22, in the event of damage to the Premises occurring during
\n the last twelve (12) months of the Term, Landlord may elect to terminate
\n this Lease by written notice of such election given to Tenant within
\n thirty (30) days after the Casualty Discovery Date. Tenant at is option
\n shall have up to 120 days to vacate, from date of Landlord’s notice;
\n provided, however, that Tenant shall pay the full scheduled monthly base
\n rent without offset, except for those portions of the Premises that
\n Landlord is occupying or making unusable to Tenant as a result of
\n Landlord’s reconstruction or repair of the Premises, while Tenant is in
\n occupancy of the Premises.<\/p>\n
(b) If the Premises is damaged by any peril not covered by extended
\n coverage insurance, and the cost to repair such damage exceeds any
\n Amount Tenant may agree to contribute, Landlord may elect either to
\n commence promptly to repair and restore the Premises and prosecute the
\n same diligently to completion, in which event this Lease shall remain in
\n full force and effect; or not to repair or restore the Premises, in
\n which event this Lease shall terminate. Landlord shall give Tenant
\n written notice of its intention within sixty (60) days after the
\n Casualty Discovery Date. If Landlord elects not to restore the Premises,
\n this Lease shall be deemed to have terminated as of the date on which
\n Tenant surrenders possession of the Premises to Landlord, except that if
\n the damage to the Premises materially impairs Tenant’s ability to
\n continue its business operations in the Premises, then this Lease shall
\n he deemed to have terminated as of the date such damage occurred.<\/p>\n
-9-
\n 26<\/p>\n
(e) Notwithstanding anything to the contrary in this Paragraph 22,
\n Landlord shall have the option to terminate this Lease, exercisable by
\n notice to Tenant within sixty (60) days after the Casualty Discovery
\n Date, in each of the following instances:<\/p>\n
(1) If more than twenty-five percent (25%) of the full
\n insurable value of the Building or the Project is damaged or destroyed,
\n regardless of whether or not the Premises are destroyed.<\/p>\n
(2) If the Building or the Project or any portion thereof is
\n damaged or destroyed and the repair and restoration of such damage
\n requires longer than one hundred eighty (180) days from the Casualty
\n Discovery Date.<\/p>\n
(3) If the Building or the Project or any portion thereof is
\n damaged or destroyed and the insurance proceeds therefor are not
\n sufficient to cover the costs of repair and restoration.<\/p>\n
(4) If the Building or the Project or any portion thereof is
\n damaged or destroyed during the last twelve (12) months of the Term.<\/p>\n
(d) In the event of repair and restoration as herein provided, the
\n monthly installments of Base Rent shall be abated proportionately in the
\n ratio which Tenant’s use of the Premises is impaired during the period
\n of such repair or restoration, provided, however, that Tenant shall not
\n be entitled to such abatement to the extent that such damage or
\n destruction resulted from the acts or inaction of Tenant or Tenant’s
\n Agents. Except as expressly provided in the immediately preceding
\n sentence with respect to abatement of Base Rent, Tenant shall have no
\n claim against Landlord for, and hereby releases Landlord and Landlord’s
\n Agents from responsibility for and waives its entire claim of recovery
\n for any cost, loss or expense suffered or incurred by Tenant as a result
\n of any damage to or destruction of the Premises, the Building or the
\n Project or the repair or restoration thereof, including, without
\n limitation, any cost, loss or expense resulting from any loss of use of
\n the whole or any part of the Premises, the Building or the Project
\n and\/or any inconvenience or annoyance occasioned by such damage, repair
\n or restoration, however, that Tenant shall not be entitled to any
\n compensation or damages for loss of use of the whole or any part of the
\n Premises and\/or any inconvenience or annoyance occasioned by such
\n damage, repair or restoration.<\/p>\n
(e) If Landlord is obligated to or elects to repair or restore as
\n herein provided, Landlord shall repair or restore only the initial
\n tenant investments, if any, constructed by Landlord in the Premises
\n pursuant to the terms of this Lease, substantially to their condition
\n existing immediately prior to the occurrence of the damage or
\n destruction; and Tenant shall promptly repair and restore, at Tenant’s
\n expense. Tenant’s Alterations which were not constructed by Landlord.<\/p>\n
(f) Tenant hereby waives the provisions of California Civil Code
\n Section 1932(2) and Section 1933(4) which permit termination of a lease
\n upon destruction of the leased premises, and the provisions of any
\n similar law now or hereinafter in effect, and the provisions of this
\n Paragraph 22 shall govern exclusively in case of such destruction.<\/p>\n
Notwithstanding anything to the contrary contained in the Lease:<\/p>\n
A. If the Premises are substantially damaged or impaired by fire
\n (25% or more) or other casualty as reasonably determined by Landlord,
\n and the Premises cannot be restored within two hundred ten (210) days
\n after the date of such damage, Tenant may terminate this Lease.<\/p>\n
B. If this Lease is not terminated by Landlord as provided herein,
\n Landlord shall restore the Premises and all Tenant Improvements
\n installed by Landlord to the condition in which they existed immediately
\n prior to the casualty.<\/p>\n
-10-
\n 27<\/p>\n
23. CONDEMNATION
\nIf twenty-five percent (25%) or more of the Building or the parking area for the
\nPremises is taken for any public or quasi-public purpose by any lawful
\ngovernmental power or authority, by exercise of the right of appropriation,
\ninverse condemnation, condemnation, or eminent domain, or sold to prevent such
\ntaking (each such event being referred to as a “Condemnation”), Landlord may, at
\nits option, terminate this Lease as of the date title vests In the condemning
\nparty. If the Building after any Condemnation and any repairs by Landlord would
\nbe untenantable for the conduct of Tenant’s business operations, Tenant shall
\nhave the right to terminate this Lease as of the date title vests in the
\ncondemning party. If either party elects to terminate this Lease as provided
\nherein, such election shall be made by written notice to the other party given
\nwithin thirty (30) days after the nature and extent of such Condemnation have
\nbeen finally determined. Tenant shall not because of such taking assert any
\nclaim against Landlord. Landlord shall be entitled to receive the proceeds of
\nall Condemnation awards, and Tenant hereby assigns to Landlord all of its
\ninterest in such awards. If less than twenty-five percent (25%) of the Building
\nor the parking area is taken, Landlord at its option may terminate this Lease.
\nIf neither Landlord nor Tenant elects to terminate this Lease to the extent
\npermitted above, Landlord shall promptly proceed to restore the Premises, to the
\nextent of any Condemnation award received by Landlord, to substantially their
\nsame condition as existed prior to such Condemnation, allowing for the
\nreasonable effects of such Condemnation, and a proportionate abatement shall be
\nmade to the Base Rent corresponding to the time during which, and to the portion
\nof the floor area of the Building (adjusted for any increase thereto resulting
\nfrom any reconstruction) of which, Tenant is deprived on account of such
\nCondemnation and restoration. The provisions of California Code of Civil
\nProcedure Section 1265.130, which allows either party to petition the Superior
\nCourt to terminate the Lease in the event of a partial taking of the Premises,
\nand any other applicable law now or hereafter enacted, are hereby waived by
\nLandlord and Tenant<\/p>\n
24. ASSIGNMENT AND SUBLETTING
\n (a) Tenant shall not voluntarily or by operation of law, (1) mortgage,
\npledge, hypothecate or encumber this Lease or any interest herein, (2) assign or
\ntransfer this Lease or any interest herein, sublet the Premises or any part
\nthereof, or any right or privilege appurtenant hereto, or allow any other person
\n(the employees, agents and invitees of Tenant excepted) to occupy or use the
\nPremises, or any portion thereof, without first obtaining the written consent of
\nLandlord, which consent shall not be withheld unreasonably. When Tenant requests
\nLandlord’s consent to such assignment or subletting, it shall notify Landlord in
\nwriting of the name and address of the proposed assignee or subtenant and the
\nnature and character of the business of the proposed assignee or subtenant and
\nshall provide current financial statements for the proposed assignee or
\nsubtenant prepared in accordance with generally accepted accounting principles.
\nTenant shall also provide Landlord with a copy of the proposed sublet or
\nassignment agreement, including all material terms and conditions thereof.
\nLandlord shall have the option, to be exercised within thirty (30) days of
\nreceipt of the foregoing, to (1) cancel this Lease as of the commencement date
\nstated in the proposed sublease or assignment, (2) acquire from Tenant the
\ninterest, or any portion thereof, in this Lease and\/or the Premises that Tenant
\nproposes to assign or sublease, on the same terms and conditions as stated in
\nthe proposed sublet or assignment agreement, (3) consent to the proposed
\nassignment or sublease, or (4) refuse its consent to the proposed assignment or
\nsublease, providing that such consent shall not be unreasonably withheld.<\/p>\n
(b) Without otherwise limiting the criteria upon which Landlord may
\nwithhold its consent, Landlord may take into account the reputation and credit
\nworthiness of the proposed assignee or subtenant, the character of the business
\nproposed to be conducted in the Premises or portion thereof sought to be
\nsubleased, and the potential impact of the proposed assignment or sublease on
\nthe economic value of the Premises. In any event, Landlord may reasonably
\nwithhold its consent to any assignment or sublease, if (l) the actual use
\nproposed to be conducted in the Premises or portion thereof conflicts with the
\nprovisions of Paragraph 8(a), unless such actual use proposed is consented to by
\nLandlord, which consent shall not be withheld unreasonably, or 8(b) above or
\nwith any other lease which restricts the use to which may space in the Building
\nmay be put, or (2) the proposed assignment or sublease requires alterations,
\nimprovements or additions to the Premises or portions thereof, which Landlord
\ndoes not consent to, which consent shall not be unreasonably withheld.<\/p>\n
(c) If Landlord approves an assignment or subletting as herein provided,
\nTenant shall pay to Landlord, as Additional Rent, seventy-five percent (75%) of
\nthe difference, if any, between (1) the Base<\/p>\n
25. TENANT’S DEFAULT
\nThe occurrence of any one of the following events shall constitute an event of
\ndefault on the part of Tenant (“Default”):<\/p>\n
-11-
\n 28<\/p>\n
(a) The abandonment of the Premises by Tenant;<\/p>\n
(b) Failure to pay any installment of Rent or any other monies due and
\n payable hereunder, said failure continuing for a period of three (3) days
\n after written notice that said Rent or other monies have not been paid;
\n however, said notice shall constitute the Three-Day Notice to Pay Rent or
\n Quit required under California Law;<\/p>\n
(c) A general assignment by Tenant for the benefit of creditors:<\/p>\n
(d) The filing of a voluntary petition in bankruptcy by Tenant, the
\n filing of a voluntary petition for an arrangement, the filing of a
\n petition, voluntary or involuntary, for reorganization, or the filing of an
\n involuntary petition by Tenant’s creditors, said involuntary petition
\n remaining undischarged for a period of sixty (60) days;<\/p>\n
(e) Receivership, attachment, or other judicial seizure of substantially
\n all of Tenant’s assets on the Premises, such attachment or other seizure
\n remaining undisguised or undischarged for a period of sixty (60) days after
\n the levy thereof;<\/p>\n
(f) Failure of Tenant to execute and deliver to Landlord any estoppel
\n certificate, subordination agreement, or lease amendment within the time
\n periods and in the manner required by Paragraph 30 or 31 or 42;<\/p>\n
(g) An assignment or sublease, or attempted assignment or sublease, of
\n this Lease or the Premises by Tenant contrary to the provision of Paragraph
\n 24, unless such assignment or sublease is expressly conditioned upon Tenant
\n having received Landlord’s consent thereto;<\/p>\n
(h) Failure of Tenant to restore the Security Deposit to the amount and
\n within the time period provided in Paragraph 6 above;<\/p>\n
(i) Failure in the performance of any of Tenant’s covenants, agreements
\n or obligations hereunder (except those failures specified as events of
\n Default in other Paragraphs of this Paragraph 25, which shall be governed
\n by such other Paragraphs), which failure continues for ten (10) days after
\n written notice thereof from Landlord to Tenant provided that, if Tenant has
\n exercised reasonable diligence to cure such failure and such failure cannot
\n be cured within such ten (10) day period despite reasonable diligence,
\n Tenant shall not be in default under this subparagraph unless Tenant fails
\n thereafter diligently and continuously to prosecute the cure to completion;
\n and<\/p>\n
(j) Chronic delinquency by Tenant in the payment of Rent, or any other
\n periodic payments required to be paid by Tenant under this Lease. “Chronic
\n delinquency” shall mean failure by Tenant to pay Rent, or any other
\n payments required to be paid by Tenant under this Lease for any three (3)
\n months (consecutive or nonconsecutive) during any twelve (12) month period.
\n In the event of a Chronic Delinquency, in addition to Landlord’s other
\n remedies for Default provided in this Lease, at Landlord’s option, Landlord
\n shall have the right to require that Rent be paid by Tenant quarterly, in
\n advance.<\/p>\n
Tenant agrees that any notice given by Landlord pursuant to Paragraph
\n 25(b), (i) or (j) above shall satisfy the requirements for notice under
\n California Code of Civil Procedure Section 1161, and Landlord shall not be
\n required to give any additional notice in order to be entitled to commence
\n an unlawful detainer proceeding.<\/p>\n
26. LANDLORD’S REMEDIES
\n (a) TERMINATION. In the event of any Default by Tenant, then in addition
\n to any other remedies available to Landlord at law or in equity and under
\n this Lease, Landlord shall have the immediate option to terminate this
\n Lease and all rights of Tenant hereunder by giving written notice of such
\n intention to terminate. In the event that Landlord shall elect to so
\n terminate this Lease then Landlord may recover from Tenant:<\/p>\n
-12-
\n 29<\/p>\n
(1) the worth at the time of award of any unpaid Rent and any other
\n sums due and payable which have been earned at the time of such
\n termination; plus<\/p>\n
(2) the worth at the time of award of the amount by which the
\n unpaid Rent and any other sums due and payable which would have been
\n earned after termination until the time of award exceeds the amount of
\n such rental loss Tenant proves could have been reasonably avoided; plus<\/p>\n
(3) the worth at the time of award of the amount by which the
\n unpaid Rent and any other sums due and payable for the balance of the
\n term of this Lease after the time of award exceeds the amount of such
\n rental loss that Tenant proves could be reasonably avoided; plus<\/p>\n
(4) any other amount necessary to compensate Landlord for all the
\n detriment proximately caused by Tenant’s failure to perform its
\n obligations under this Lease or which in the ordinary course would be
\n likely to result therefrom, including, without limitation, any costs or
\n expenses incurred by Landlord (i) in retaking possession of the
\n Premises; (ii) in maintaining, repairing, preserving, restoring,
\n replacing, cleaning, altering or rehabilitating the Premises or any
\n portion thereof, including such acts for reletting to a new tenant or
\n tenants; (iii) for leasing commissions; or (iv) for any other costs
\n necessary or appropriate to relet the Premises; plus<\/p>\n
(5) such reasonable attorneys’ fees incurred by Landlord as a
\n result of a Default, and costs in the event suit is filed by Landlord to
\n enforce such remedy; and plus<\/p>\n
(6) at Landlord’s election, such other amounts in addition to or in
\n lieu of the foregoing as may be permitted from time to time by
\n applicable law.<\/p>\n
As used in subparagraphs (1) and (2) above, the “worth at the time of award” is
\ncomputed by allowing interest at an annual rate equal to twelve percent (12%)
\nper annum or the maximum rate permitted by law, whichever is less. As used in
\nsubparagraph (3) above, the “worth at the time of award” is computed by
\ndiscounting such amount at the discount rate of the Federal Reserve Bank of San
\nFrancisco at the time of award, plus one percent (1%). Tenant waives redemption
\nor relief from forfeiture under California Code of Civil Procedure Sections 1174
\nand 1179, or under any other present or future law, in the event Tenant is
\nevicted or Landlord takes possession of the Premises by reason of any Default of
\nTenant hereunder.<\/p>\n
(b) CONTINUATION OF LEASE. In the event of any Default by Tenant, then
\n in addition to any other remedies available to Landlord at law or in equity
\n and under this Lease, Landlord shall have the remedy described in
\n California Civil Code Section 1951.4 (Landlord may continue this Lease in
\n effect after Tenant’s Default and abandonment and recover Rent as it
\n becomes due, provided Tenant has the right to sublet or assign, subject
\n only to reasonable limitations).<\/p>\n
(c) RE-ENTRY. In the event of any Default by Tenant, Landlord shall also
\n have the right, with or without terminating this Lease, in compliance with
\n applicable law, to re-enter the Premises and remove all persons and
\n property from the Premises; such property may be removed and stored in a
\n public warehouse or elsewhere at the cost of and for the account of Tenant.<\/p>\n
(d) RELETTING. In the event of the abandonment of the Premises by Tenant
\n or in the event that Landlord shall elect to re-enter as provided in
\n Paragraph 26(c) or shall take possession of the Premises pursuant to legal
\n proceeding or pursuant to any notice provided by law, then if Landlord does
\n not elect to terminate this Lease as provided in Paragraph 26(a), Landlord
\n may from time to time, without terminating this Lease, relet the Premises
\n or any part thereof for such term or terms and at such rental or rentals
\n and upon such other terms and conditions as Landlord in its sole discretion
\n may deem advisable with the right to make alterations and repairs to the
\n Premises. In the event that Landlord shall elect to so relet, then rentals
\n received by Landlord from such reletting shall be applied in the following
\n order: (1) reasonable attorneys’ fees incurred by Landlord as a result of a
\n Default and costs in the event suit is filed by Landlord to enforce such
\n remedies; (2) to the payment of any indebtedness other than Rent due
\n hereunder from Tenant to Landlord; (3) to the payment of any costs<\/p>\n
-13-
\n 30<\/p>\n
of such reletting; (4) to the payment of the costs of any alterations and
\n repairs to the Premises; (5) to the payment of Rent due and unpaid
\n hereunder; and (6) the residue, if any, shall be held by Landlord and
\n applied in payment of future Rent and other sums payable by Tenant
\n hereunder as the same may become due and payable hereunder. Should that
\n portion of such rentals received from such reletting during any month,
\n which is applied to the payment of Rent hereunder, be less than the Rent
\n payable during the month by Tenant hereunder, then Tenant shall pay such
\n deficiency to Landlord. Such deficiency shall be calculated and paid
\n monthly. Tenant shall also pay to Landlord, as soon as ascertained, any
\n costs and expenses incurred by Landlord in such reletting or in making such
\n alterations and repairs not covered by the rentals received from such
\n reletting.<\/p>\n
(e) TERMINATION. No re-entry or taking of possession of the Premises by
\n Landlord pursuant to this Paragraph 26 shall be construed as an election to
\n terminate this Lease unless a written notice of such intention is given to
\n Tenant or unless the termination thereof is decreed by a court of competent
\n jurisdiction. Notwithstanding any reletting without termination by Landlord
\n because of any Default by Tenant, Landlord may at any time after such
\n reletting elect to terminate this Lease for any such Default.<\/p>\n
(f) CUMULATIVE REMEDIES. The remedies herein provided are not exclusive
\n and Landlord shall have any and all other remedies provided herein or by
\n law or in equity.<\/p>\n
(g) NO SURRENDER. No act or conduct of Landlord, whether consisting of
\n the acceptance of the keys to the Premises, or otherwise, shall be deemed
\n to be or constitute an acceptance of the surrender of the Premises by
\n Tenant prior to the expiration of the Term, and such acceptance by Landlord
\n of surrender by Tenant shall only flow from and must be evidenced by a
\n written acknowledgment of acceptance of surrender signed by Landlord. The
\n surrender of this Lease by Tenant, voluntarily or otherwise, shall not work
\n a merger unless Landlord elects in writing that such merger take place, but
\n shall operate as an assignment to Landlord of any and all existing
\n subleases, or Landlord may, at its option, elect in writing to treat such
\n surrender as a merger terminating Tenant’s estate under this Lease, and
\n thereupon Landlord may terminate any or all such subleases by notifying the
\n sublessee of its election so to do within five (5) days after such
\n surrender.<\/p>\n
27. ATTORNEY’S FEES
\nIn the event any legal action or proceeding, including arbitration and
\ndeclaratory relief, is commenced for the purpose of enforcing any rights or
\nremedies pursuant to this Lease, the prevailing party shall be entitled to
\nrecover from the non-prevailing party reasonable attorneys’ fees, as well as
\ncosts of suit, in said action or proceeding, whether or not such action is
\nprosecuted to judgment.<\/p>\n
28. TAXES
\nTenant shall be liable for and shall pay, prior to delinquency, all taxes levied
\nagainst personal property and trade or business fixtures of Tenant. If any
\nalteration, addition or improvement installed by Tenant pursuant to Paragraph
\n11, or any personal property, trade fixture or other property of Tenant, is
\nassessed and taxed with the Property, Tenant shall pay such taxes to Landlord
\nwithin ten (10) days after delivery to Tenant of a statement therefor.<\/p>\n
29. EFFECT OF CONVEYANCE
\nThe term “Landlord” as used in this Lease, means only the owner for the time
\nbeing of the Property containing the Building, so that, in the event of any sale
\nof the Property or the Building. Landlord shall be and hereby is entirely freed
\nand relieved of all covenants and obligations of Landlord hereunder accruing
\nfrom and after the transfer, and it shall be deemed and construed, without
\nfurther agreement between the parties and the purchaser at any such sale, that
\nthe purchaser of the Property or the Building has assumed and agreed to carry
\nout any and all covenants and obligations of Landlord hereunder.<\/p>\n
30. TENANT’S ESTOPPEL CERTIFICATE
\nFrom time to time, upon written request of Landlord, Tenant shall execute,
\nacknowledge and deliver to Landlord or its designee, a written certificate
\nstating (a) the date this Lease was executed, the Commencement Date of the Term
\nand the date the Term expires; (b) the date Tenant entered into occupancy of the
\nPremises; (c) the amount of Rent and the date to which such Rent has been
\npaid; (d) that this lease is in full force and effect and has not been<\/p>\n
-14-
\n 31<\/p>\n
assigned, modified, supplemented or amended in any way (or, if assigned,
\nmodified, supplemented or amended, specifying the date and terms of any
\nagreement so affecting this lease); (e) that this lease represents the entire
\nagreement between the parties with respect to Tenant’s right to use and occupy
\nthe Premises (or specifying such other agreements, if any); (f) that all
\nobligations under this Lease to be performed by Landlord as of the date of such
\ncertificate have been satisfied (or specifying those as to which Tenant claims
\nthat Landlord has yet to perform); (g) that all required contributions by
\nLandlord to Tenant on account of Tenant’s improvements have been received (or
\nstating exceptions thereto); (h) that on such date there exist no defenses or
\noffsets that Tenant has against the enforcement of this Lease by Landlord (or
\nstating exceptions thereto); (i) that no Rent or other sum payable by Tenant
\nhereunder has been paid more than one (1) month in advance (or stating
\nexceptions thereto); (j) that security has been deposited with Landlord, stating
\nthe amount thereof, and (k) any other matters evidencing the status of this
\nLease that may be required either by a lender making a loan to Landlord to be
\nsecured by a deed of trust covering the Premises or by a purchaser of the
\nPremises. Any such certificate delivered pursuant to this Paragraph 30 may be
\nrelied upon by a prospective purchaser of Landlord’s interest or a mortgagee of
\nLandlord’s interest or assignee of any mortgage upon Landlord’s interest in the
\nPremises. If Tenant shall fail to provide such certificate within ten (10) days
\nof receipt by Tenant of a written request by Landlord as herein provided, such
\nfailure shall, at Landlord’s election, constitute a Default under this Lease,
\nand Tenant shall be deemed to have given such certificate as above provided
\nwithout modification and shall be deemed to have admitted the accuracy of any
\ninformation supplied by Landlord to a prospective purchaser or mortgagee.<\/p>\n
31. SUBORDINATION
\nLandlord shall have the right to cause this Lease to be and remain subject and
\nsubordinate to any and all mortgages, deeds of trust and ground leases, if any
\n(“Encumbrances”) that are now or may hereafter be executed covering the
\nPremises, or any renewals, modifications, consolidations, replacements or
\nextensions thereof, for the full amount of all advances made or to be made
\nthereunder and without regard to the time or character of such advances,
\ntogether with interest thereon and subject to all the terms and provisions
\nthereof; provided only, that in the event of termination of any such ground
\nlease or upon the foreclosure of any such mortgage or deed of trust, so long as
\nTenant is not in default, the holder thereof (“Holder”) shall agree to recognize
\nTenant’s rights under this Lease as long as Tenant shall pay the Rent and
\nobserve and perform all the provisions of this Lease to be observed and
\nperformed by Tenant. Within ten (10) days after Landlord’s written request,
\nTenant shall execute, acknowledge and deliver any and all reasonable documents
\nrequired by Landlord or the Holder to effectuate such subordination. If Tenant
\nfails to do so, such failure shall constitute a Default by Tenant under this
\nLease. Notwithstanding anything to the contrary set forth in this Paragraph 31,
\nTenant hereby attorns and agrees to attorn to any person or entity purchasing or
\notherwise acquiring the Premises at any sale or other proceeding or pursuant to
\nthe exercise of any other rights, powers or remedies under such Encumbrance.<\/p>\n
32. ENVIRONMENTAL COVENANTS
\n (a) As used herein, the term “Hazardous Material” shall mean any
\n substance or material which has been determined by any state, federal or
\n local governmental authority to be capable of posing a risk of injury to
\n health, safety or property, including all of those materials and substances
\n designated as hazardous or toxic by the city in which the Premises are
\n located, the U.S. Environmental Protection Agency, the Consumer Product
\n Safety Commission, the Food and Drug Administration, the California Water
\n Resources Control Board, the Regional Water Quality Control Board, San
\n Francisco Bay Region, the California Air Resources Board, CAL\/OSHA
\n Standards Board, Division of Occupational Safety and Health, the California
\n Department of Food and Agriculture, the California Department of Health
\n Services, and any federal agencies that have overlapping jurisdiction with
\n such California agencies, or any other governmental agency now or hereafter
\n authorized to regulate materials and substances in the environment. Without
\n limiting the generality of the foregoing, the term “Hazardous Material”
\n shall include all of those materials and substances defined as “hazardous
\n materials” or “hazardous waste” in Sections 66680 through 66685 of Title 22
\n of the California Administrative Code, Division 4, Chapter 30, as the same
\n shall be amended from time to time, petroleum, petroleum-related substances
\n and the by-products, fractions, constituents and sub-constituents of
\n petroleum or petroleum-related substances, asbestos, and any other
\n materials requiring remediation now or in the future under federal, state
\n or local statutes, ordinances, regulations or policies.<\/p>\n
-15-
\n 32<\/p>\n
(b) Tenant represents, warrants and covenants (i) that it will use and
\n store in, on or about the Premises, only those Hazardous Materials that are
\n necessary for Tenant to conduct its business activities on the Premises,
\n (ii) that, with respect to any such Hazardous Materials, Tenant shall
\n comply with all applicable federal, state and local laws, rules,
\n regulations, policies and authorities relating to the storage, use,
\n disposal or cleanup of Hazardous Materials, including, but not limited to,
\n the obtaining of proper permits, and (iii) that it will not dispose of any
\n Hazardous Materials in, on or about the Premises under any circumstances.<\/p>\n
(c) Tenant shall immediately notify Landlord of any inquiry, test,
\n investigation or enforcement proceeding by or against Tenant, Landlord or
\n the Premises concerning a Hazardous Material. Tenant acknowledges that
\n Landlord, as the owner of the Premises, shall have the right, as its
\n election, in its own name or as Tenant’s agent, to negotiate, defend,
\n approve and appeal, at Tenant’s expense, any action taken or order issued
\n with regard to a Hazardous Material by an applicable governmental
\n authority.<\/p>\n
(d)If Tenant’s storage, use or disposal of any Hazardous Material in,
\n on or adjacent to the Premises results in any contamination of the
\n Premises, the soil or surface or groundwater (1) requiring remediation
\n under federal, state or local statutes, ordinances, regulations, or
\n policies, or (2) at levels which are unacceptable to Landlord, in
\n Landlord’s reasonable judgment, Tenant agrees to clean up said
\n contamination. Tenant further agrees to indemnify, defend and hold Landlord
\n harmless from and against any claims, liabilities, losses, suits, causes of
\n action, costs, expenses or fees, including attorneys’ fees and costs,
\n arising out of or in connection with any remediation, cleanup work, inquiry
\n or enforcement proceeding in connection therewith, and any Hazardous
\n Materials currently or hereafter used, stored or disposed of by Tenant or
\n its agents, employees, contractors or invitees in, on or adjacent to the
\n Premises.<\/p>\n
(e) Notwithstanding any other right of entry granted to Landlord under
\n this Lease, Landlord shall have the right to enter the Premises or to have
\n consultants enter the Premises throughout the term of this Lease, at
\n reasonable times and upon reasonable notice, for the purpose of (1)
\n determining whether the Premises are in conformity with federal, state and
\n local statutes, regulations, ordinances, and policies including those
\n pertaining to the environmental condition of the Premises, (2) conducting
\n an environmental audit or investigation of the Premises for purposes of
\n sale, transfer, conveyance or financing, (3) determining whether Tenant has
\n complied with this Paragraph 32, and (4) determining the corrective
\n measures, if any, required of Tenant to ensure the safe use, storage and
\n disposal of Hazardous Materials, or to remove Hazardous Materials (except
\n to the extent used. stored or disposed of by Tenant or its agents,
\n employees, contractors or invitees in compliance with applicable law).
\n Tenant agrees to provide access and reasonable assistance for such
\n inspections. Such inspections may include, but are not limited to, entering
\n the Premises or adjacent property with drill rigs or other machinery for
\n the purpose of obtaining laboratory samples. Landlord shall not be limited
\n in the number of such inspections during the term of this Lease. To the
\n extent such inspections disclose the presence of Hazardous Materials used,
\n stored or disposed of by Tenant or its agents, employees, contractors or
\n invitees, Tenant shall reimburse Landlord for the cost of such inspections
\n within ten (10) days of receipt of a written statement thereof. If such
\n consultants determine that the Premises are contaminated with Hazardous
\n Materials used, stored or disposed of by Tenant or its agents, employees
\n contractors or invitees, Tenant shall, in a timely manner, at its expense,
\n remove such Hazardous Materials or otherwise comply with the
\n recommendations of such consultants to the reasonable satisfaction of
\n Landlord and any applicable governmental agencies. The right granted to
\n Landlord herein to inspect the Premises shall not create a duty on
\n Landlord’s part to inspect the Premises, or liability of Landlord for
\n Tenant’s use, storage or disposal of Hazardous Materials, it being
\n understood that Tenant shall be solely responsible for all liability in
\n connection therewith.<\/p>\n
(f) Tenant shall surrender the Premises to Landlord upon the expiration
\n or earlier termination of this Lease free of debris, waste and Hazardous
\n Materials used, stored or disposed of by Tenant or its agents, employees,
\n contractors or invitees, and in a condition which complies with all
\n governmental statutes, ordinances, regulations and policies,
\n recommendations of consultants hired by Landlord, and such other reasonable
\n requirements as may be imposed by Landlord.<\/p>\n
(g) Tenant’s obligations under this Paragraph 32 shall survive
\n termination of this Lease.<\/p>\n
-16-
\n 33<\/p>\n
(h) Landlord hereby discloses to Tenant that the Premises and the
\n Property are or may be in an area in which contamination of soils or
\n groundwater by Hazardous Materials may exist. If Tenant desires more
\n definite information regarding the existence or possible existence of
\n contamination by Hazardous Materials of soils or groundwater of or beneath
\n the Premises, the Property, or other real property in the general area of
\n the Property, then Tenant shall investigate such matters.<\/p>\n
(i) Landlord will not charge Tenant for, and Tenant shall not be
\n obligated to Landlord under any provision of this lease with respect to (i)
\n any claim, remediation obligation, investigation obligation, liability,
\n cause of action, penalty, attorneys’ fee, consultants’ cost, expense or
\n damage owing or alleged to be owing with respect to any Hazardous Material
\n present in, on or about the Premises or the Building, or the soil,
\n groundwater or surface water thereof, prior to the Commencement Date; or
\n (ii) the removal, investigation, monitoring or remediation of any Hazardous
\n Material present on or about the Premises or the Building, or the soil,
\n groundwater or surface water thereof, caused by any source, including third
\n parties other than Tenant, prior to the Commencement Date as a result of or
\n in connection with the acts or omissions of persons other than Tenant or
\n its parent, subsidiaries, affiliates, divisions, directors, officers,
\n agents, employees, contractors, customers, invitees, subtenants or assigns
\n (all such parties collectively hereinafter referred to in this subparagraph
\n as “Tenant”); provided, however, Tenant shall be fully obligated to
\n Landlord under the provisions of this Lease for all claims incurred by
\n Landlord to the extent that (a) Tenant contributes to the presence of such
\n Hazardous Materials or Tenant exacerbates the conditions of the conditions
\n caused by such Hazardous Materials, or (b) Tenant allows or permits such
\n persons to cause such Hazardous Materials to be present in, on, under,
\n through or about the Premises or the Property.<\/p>\n
33. NOTICE
\nAll notices and demands which may or are to be required or permitted to be given
\nto either party by the other hereunder shall be in writing and shall be sent by
\nUnited States mail, postage prepaid, certified, or by personal delivery or
\novernight courier, addressed to the addressee at the address for such addressee
\nas specified in the Basic Lease Information, or to such other place as such
\nparty may from time to time designate in a notice to the other party given as
\nprovided herein, or by telex or telecopy at the number therefor designated by
\nthe addressee in a written notice given as provided herein. Notice shall be
\ndeemed given upon the earlier of actual receipt or the third day following
\ndeposit in the United States mail in the manner described above.<\/p>\n
34. WAIVER
\nThe waiver of any breach of any term, covenant or condition of this Lease shall
\nnot be deemed to be a waiver of such term, covenant or condition or any
\nsubsequent breach of the same or any other term, covenant or condition herein
\ncontained. The subsequent acceptance of Rent by Landlord shall not be deemed to
\nbe a waiver of any preceding breach by Tenant, other than the failure of Tenant
\nto pay the particular rental so accepted, regardless of Landlord’s knowledge of
\nsuch preceding breach at the time of acceptance of such Rent. No delay or
\nomission in the exercise of any right or remedy of Landlord on any Default by
\nTenant shall impair such a right or remedy or be construed as a waiver. Any
\nwaiver by Landlord of any Default must be in writing and shall not be a waiver
\nof any other Default concerning the same or any other provisions of this Lease.<\/p>\n
35. HOLDING OVER
\nAny holding over after the expiration of the Term, without the express written
\nconsent of Landlord, shall constitute a Default and, without limiting Landlord’s
\nremedies provided in this Lease, such holding over shall be construed to be a
\ntenancy at sufferance, at a rental rate of one hundred fifty thirty-five percent
\n(150%) (135%) of the Base Rent last due in this Lease, plus Additional Rent, and
\nshall otherwise be on the terms and conditions herein specified, so far as
\napplicable.<\/p>\n
36. SUCCESSORS AND ASSIGNS
\nThe terms, covenants and conditions of this Lease shall, subject to the
\nprovisions as to assignment. apply to and bind the heirs, successors, executors,
\nadministrators and assigns of all of the parties hereto. If Tenant shall consist
\nof more than one entity or person, the obligations of Tenant under this Lease
\nshall be joint and several.<\/p>\n
37. TIME<\/p>\n
-17-
\n 34<\/p>\n
Time is of the essence of this Lease and each and every term, condition and
\nprovision herein.<\/p>\n
38. BROKERS
\nLandlord and Tenant each represents and warrants to the other that neither it
\nnor its officers or agents nor anyone acting on its behalf has dealt with any
\nreal estate broker except the Broker(s) specified in the Basic Lease Information
\nin the negotiating or making of this Lease, and each party agrees to indemnify
\nand hold harmless the other from any claim or claims, and costs and expenses,
\nincluding attorneys’ fees, incurred by the indemnified party in conjunction with
\nany such claim or claims of any other broker or brokers to a commission in
\nconnection with this Lease as a result of the actions of the indemnifying party.<\/p>\n
39. LIMITATION OF LIABILITY
\nTenant agrees that, in the event of any default or breach by Landlord with
\nrespect to any of the terms of the Lease to be observed and performed by
\nLandlord (a) Tenant shall look solely to the estate and property of Landlord or
\nany a successor in interest in the Property and the Building, for the
\nsatisfaction of Tenant’s remedies for the collection of a judgment (or other
\njudicial process) requiring the payment of money by Landlord; (b) no other
\nproperty or assets of Landlord, its partners, shareholder, officers, directors
\nor any successor in interest shall be subject to levy, execution or other
\nenforcement procedure for the satisfaction of Tenant’s remedies; (c) no personal
\nliability shall at any time be asserted or enforceable against Landlord’s
\npartners or successors in interest (except to the extent permitted in (a)
\nabove), or against Landlord’s shareholders, officers or directors, or their
\nrespective partners, shareholders, officers, directors or successors in
\ninterest; and (d) no judgment will be taken against any partner, shareholder,
\nofficer or director of Landlord. The provisions of this section shall apply only
\nto the Landlord and the parties herein described, and shall not be for the
\nbenefit of any insurer nor any other third party.<\/p>\n
40. FINANCIAL STATEMENTS
\nWithin thirty (30) days after Landlord’s request, but not more than once in any
\ncalendar year, Tenant shall deliver to Landlord the then current financial
\nstatements of Tenant (including interim periods following the end of the last
\nfiscal year for which annual statements are available), prepared or compiled by
\na certified public accountant, including a balance sheet and profit and loss
\nstatement for the most recent prior year, all prepared in accordance with
\ngenerally accepted accounting principles consistently applied.<\/p>\n
41. RULES AND REGULATIONS
\nTenant agrees to comply with such reasonable rules and regulations as Landlord
\nmay adopt from time to time for the orderly and proper operating of the Building
\nand parking and other common areas. Such rules may include but shall not be
\nlimited to the following: (a) restriction of employee parking to a limited,
\ndesignated area or areas, and (b) regulation of the removal, storage and
\ndisposal of Tenant’s refuse and other rubbish at the sole cost and expense of
\nTenant. The rules and regulations shall be binding upon Tenant upon delivery of
\na copy of them to Tenant. Landlord shall not be responsible to Tenant for the
\nfailure of any other person to observe and abide by any of said rules and
\nregulations.<\/p>\n
42. MORTGAGEE PROTECTION
\n (a) Modifications for Lender. If, in connection with obtaining financing
\n for the Premises or any portion thereof, Landlord’s lender shall request
\n reasonable modifications to this Lease as a condition to such financing,
\n Tenant shall not unreasonably withhold, delay or defer its consent to such
\n modifications, provided such modifications do not adversely affect Tenant’s
\n rights or increase Tenant’s obligations under this Lease.<\/p>\n
(b) Rights to Cure. Tenant agrees to give to any trust deed or mortgage
\n holder (“Holder”), by registered mail, at the same time as it is given to
\n Landlord, a copy of any notice of default given to Landlord, provided that
\n prior to such notice Tenant has been notified, in writing, (by way of
\n notice of assignment of rents and leases, or otherwise) of the address of
\n such Holder. Tenant further agrees that if Landlord shall have failed to
\n cure such default within the time provided for in this Lease, then the
\n Holder shall have an additional twenty (20) days after expiration of such
\n period, or after receipt of such notice from Tenant (if such notice to the
\n Holder is required by this Paragraph 42(b)), whichever shall last occur,
\n within which to cure such default or if such default cannot be cured within
\n that time, then such additional time as may be necessary if within such<\/p>\n
-18-
\n 35<\/p>\n
twenty (20) days, any Holder has commenced and is diligently pursuing the
\n remedies necessary to cure such default (including but not limited to
\n commencement of foreclosure proceedings, if necessary to effect such cure),
\n in which event this Lease shall not be terminated.<\/p>\n
43. ENTIRE AGREEMENT
\nThis Lease, including the-Exhibits and any Addenda attached hereto, which are
\nhereby incorporated herein by this reference, contains the entire agreement of
\nthe parties hereto, and no representations, inducements, promises or agreements,
\noral or otherwise, between the parties, not embodied herein or therein, shall be
\nof any force and effect.<\/p>\n
44. INTEREST
\nAny installment of Rent and any other sum due from Tenant under this Lease which
\nis not received by Landlord within ten (10) days from when the same is due shall
\nbear interest from such tenth (10th) day until paid at an annual rate equal to
\nthe maximum rate of interest permitted by law. Payment of such interest shall
\nnot excuse or cure any Default by Tenant. In addition, Tenant shall pay all
\ncosts and attorneys’ fees incurred by Landlord in collection of such amounts.<\/p>\n
45. CONSTRUCTION
\nThis Lease shall be construed and interpreted in accordance with the laws of the
\nState of California. The parties acknowledge and agree that no rule of
\nconstruction to the effect that any ambiguities are to be resolved against the
\ndrafting party shall be employed in the interpretation of this Lease, including
\nthe Exhibits and any Addenda attached hereto. All captions in this Lease are for
\nreference only and shall not be used in the interpretation of this Lease.
\nWhenever required by the context of this Lease, the singular shall include the
\nplural, the masculine shall include the feminine, and vice versa. If any
\nprovision of this Lease shall he determined to be illegal or unenforceable, such
\ndetermination shall not affect any other provision of this Lease and all such
\nother provisions shall remain in full force and effect.<\/p>\n
46. REPRESENTATIONS AND WARRANTIES OF TENANT
\nTenant hereby makes the following representations and warranties, each of which
\nis material and being relied upon by Landlord, is true in all respects as of the
\ndate of this Lease, and shall survive the expiration or termination of the
\nLease.<\/p>\n
(a) If Tenant is an entity, Tenant is duly organized, validly existing
\n and in good standing under the laws of the state of its organization and
\n the persons executing this Lease on behalf of Tenant have the full right
\n and authority to execute this Lease on behalf of Tenant and to bind Tenant
\n without the consent or approval of any other person or entity. Tenant has
\n full power, capacity, authority and legal right to execute and deliver this
\n Lease and to perform all of its obligations hereunder. This Lease is a
\n legal, valid and binding obligation of Tenant, enforceable in accordance
\n with its terms.
\n (b) Tenant has not (1) made a general assignment for the benefit of
\n creditors, (2) filed any voluntary petition in bankruptcy or suffered the
\n filing of an involuntary petition by any creditors, (3) suffered the
\n appointment of a receiver to take possession of all or substantially all of
\n its assets, (4) suffered the attachment or other judicial seizure of all or
\n substantially all of its assets, (5) admitted in writing its inability to
\n pay its debts as they come due, or (6) made an offer of settlement,
\n extension or composition to its creditors generally.<\/p>\n
Landlord and Tenant have executed and delivered this Lease as of the Lease
\nDate specified in the Basic Lease Information.<\/p>\n
TENANT:<\/p>\n
Premisys Communications, Inc.,
\na Delaware Corporation<\/p>\n
By: \/s\/ Nicholas J. Williams
\n ——————————<\/p>\n
-19-
\n 36<\/p>\n
Date: 6\/26\/98
\n ——————————<\/p>\n
LANDLORD:<\/p>\n
AETNA LIFE INSURANCE COMPANY,
\na Connecticut corporation<\/p>\n
By: Allegis Realty Investors, LLC
\n Its Investment Advisor<\/p>\n
By: \/s\/ Syliva Milikian
\n ——————————<\/p>\n
Date: 8\/20\/98
\n ——————————<\/p>\n
-20-
\n 37<\/p>\n
EXHIBIT A<\/p>\n
DIAGRAM OF THE PREMISES<\/p>\n
38<\/p>\n
EXHIBIT B TO LEASE AGREEMENT
\n TENANT IMPROVEMENTS<\/p>\n
This exhibit, entitled “Tenant Improvements”, is and shall constitute EXHIBIT B
\nto that certain Lease Agreement dated June 4, 1998 (the “Lease”), by and between
\nAEtna Life Insurance Company, a Connecticut corporation (“Landlord”), and
\nPremisys Communications, Inc., a Delaware corporation (“Tenant”), for the
\nleasing of certain premises located at 48634 Milmont Drive, Fremont, California
\n(the “Premises”). The terms, conditions and provisions of this EXHIBIT B are
\nhereby incorporated into and are made a part of the Lease. Any capitalized terms
\nused herein and not otherwise defined herein shall have the meaning ascribed to
\nsuch terms as set forth in the Lease:<\/p>\n
1. TENANT TO CONSTRUCT TENANT IMPROVEMENTS. Subject to the provisions
\nbelow, Tenant shall be solely responsible for the planning, construction and
\ncompletion of the interior tenant improvements (“Tenant Improvements”) to the
\nPremises in accordance with the terms and conditions of this Exhibit B. The
\nTenant Improvements shall not include any of Tenant’s personal property, trade
\nfixtures, furnishings, equipment or similar items.<\/p>\n
2. TENANT IMPROVEMENT PLANS.<\/p>\n
A. PRELIMINARY PLANS AND SPECIFICATIONS. Promptly after execution
\nof the Lease, Tenant shall retain a licensed and insured architect (“Architect”)
\nto prepare preliminary working architectural and engineering plans and
\nspecifications (“Preliminary Plans and Specifications”) for the Tenant
\nImprovements. Tenant shall deliver the Preliminary Plans and Specifications to
\nLandlord. The Preliminary Plans and Specifications shall be in sufficient detail
\nto show locations, types and requirements for all heat loads, people loads,
\nfloor loads, power and plumbing, regular and special HVAC needs, telephone
\ncommunications, telephone and electrical outlets, lighting, lighting fixtures
\nand related power, and electrical and telephone switches. Landlord shall
\nreasonably approve or disapprove the Preliminary Plans and Specifications within
\nfive (5) days after Landlord receives the Preliminary Plans and Specifications
\nand, if disapproved, Landlord shall return the Preliminary Plans and
\nSpecifications to Tenant, who shall make all necessary revisions within ten (10)
\ndays after Tenant’s receipt thereof. This procedure shall be repeated until
\nLandlord approves the Preliminary Plans and Specifications. The approved
\nPreliminary Plans and Specifications, as modified, shall be deemed the “Final
\nPreliminary Plans and Specifications”.<\/p>\n
B. FINAL PLANS AND SPECIFICATIONS. After the Final Preliminary
\nPlans and Specifications are approved by Landlord and are deemed to be the Final
\nPreliminary Plans and Specifications, Tenant shall cause the Architect to
\nprepare in twenty (20) days following Landlord’s approval of the Final
\nPreliminary Plans and Specifications the final working architectural and
\nengineering plans, specifications and drawings, (“Final Plans and
\nSpecifications”) for the Tenant Improvements. Tenant shall then deliver the
\nFinal Plans and Specifications to Landlord. Landlord shall reasonably approve or
\ndisapprove the Final Plans and Specifications within five (5) days after
\nLandlord receives the Final Plans and Specifications and, if disapproved,
\nLandlord shall return the Final Plans and Specifications to Tenant who shall
\nmake all necessary revisions within ten (10) days after Tenant’s receipt
\nthereof. This procedure shall be repeated until Landlord approves, in writing,
\nthe Final Plans and Specifications. The approved Final Plans and Specifications,
\nas modified, shall be deemed the “Construction Documents”.<\/p>\n
C. MISCELLANEOUS. All deliveries of the Preliminary Plans and
\nSpecifications, the Final Preliminary Plans and Specifications, the Final Plans
\nand Specifications, and the Construction Documents shall be delivered by
\nmessenger service, by personal hand delivery or by overnight parcel service.
\nWhile Landlord has the right to approve the Preliminary Plans and
\nSpecifications, the Final Preliminary Plans and Specifications, the Final Plans
\nand Specifications, and the Construction Documents, Landlord’s interest in doing
\nso is to protect the Premises, the Building and Landlord’s interest.
\nAccordingly, Tenant shall not rely upon Landlord’s approvals and Landlord shall
\nnot be the guarantor of, nor responsible for, the adequacy and correctness or
\naccuracy of the Preliminary Plans and Specifications, the Final Preliminary
\nPlans and Specifications, the Final Plans and Specifications, and the
\nConstruction Documents, or the compliance thereof with applicable laws, and
\nLandlord shall incur no liability of any kind by reason of granting such
\napprovals.<\/p>\n
39<\/p>\n
D. BUILDING STANDARD WORK. The Construction Documents shall
\nprovide that the Tenant Improvements to be constructed in accordance therewith
\nmust be at least equal, in quality, to Landlord’s building standard materials,
\nquantities and procedures then in use by Landlord (“Building Standards”)
\nattached hereto as Exhibit B-2, and shall consist of improvements which are
\ngeneric in nature.<\/p>\n
E. CONSTRUCTION AGREEMENT. Tenant hereby covenants and agrees
\nthat a provision shall be included in each and every agreement made with the
\nArchitect and the Contractor with respect to the Tenant Improvements specifying
\nthat Landlord shall be a third party beneficiary thereof, including without
\nlimitation, a third party beneficiary of all covenants, representations,
\nindemnities and warranties made by the Architect and\/or Contractor.<\/p>\n
3. PERMITS. Tenant at its sole cost and expense (subject to the
\nprovisions of Paragraph 5 below) shall obtain all governmental approvals of the
\nConstruction Documents to the full extent necessary for the issuance of a
\nbuilding permit for the Tenant Improvements based upon such Construction
\nDocuments. Tenant at its sole cost and expense shall also cause to be obtained
\nall other necessary approvals and permits from all governmental agencies having
\njurisdiction or authority for the construction and installation of the Tenant
\nImprovements in accordance with the approved Construction Documents. Tenant at
\nits sole cost and expense (subject to the provisions of Paragraph 5 below) shall
\nundertake all steps necessary to insure that the construction of the Tenant
\nImprovements is accomplished in strict compliance with all statutes, laws,
\nordinances, codes, rules, and regulations applicable to the construction of the
\nTenant Improvements and the requirements and standards of any insurance
\nunderwriting board, inspection bureau or insurance carrier insuring the Premises
\nand\/or the Building.<\/p>\n
4. CONSTRUCTION.<\/p>\n
A. Tenant shall be solely responsible for the construction,
\ninstallation and completion of the Tenant Improvements in accordance with the
\nConstruction Documents approved by Landlord and is solely responsible for the
\npayment of all amounts when payable in connection therewith without any cost or
\nexpense to Landlord, except for Landlord’s obligation to contribute the Tenant
\nImprovement Allowance in accordance with the provisions of Paragraph 5 below.
\nTenant shall diligently proceed with the construction, installation and
\ncompletion of the Tenant Improvements in accordance with the Construction
\nDocuments and the completion schedule reasonably approved by Landlord. No
\nmaterial changes shall be made to the Construction Documents and the completion
\nschedule approved by Landlord without Landlord’s prior written consent, which
\nconsent shall not be unreasonably withheld or delayed.<\/p>\n
B. Tenant at its sole cost and expense (subject to the provisions
\nof Paragraph 5 below) shall employ a licensed, insured and bonded general
\ncontractor (“Contractor”) to construct the Tenant Improvements in accordance
\nwith the Construction Documents. The construction contracts between Tenant and
\nthe Contractor and between the Contractor and subcontractors shall be subject to
\nLandlord’s prior written approval, which approval shall not be unreasonably
\nwithheld or delayed. Proof that the Contractor is licensed in California, is
\nbonded as required under California law, and has the insurance specified in
\nExhibit B-1, attached hereto and incorporated herein by this reference, shall be
\nprovided to Landlord at the time that Tenant requests approval of the Contractor
\nfrom Landlord. Tenant shall comply with or cause the Contractor to comply with
\nall other terms and provisions of Exhibit B-1.<\/p>\n
C. Prior to the commencement of the construction and installation
\nof the Tenant Improvements, Tenant shall provide the following to Landlord, all
\nof which shall be to Landlord’s reasonable satisfaction:<\/p>\n
(i) An estimated budget and cost breakdown for the Tenant
\nImprovements.<\/p>\n
(ii) Estimated completion schedule for the Tenant
\nImprovements.<\/p>\n
(iii) Copies of all required approvals and permits from
\ngovernmental agencies having jurisdiction or authority for the construction and
\ninstallation of the Tenant Improvements; provided,<\/p>\n
-2-
\n 40<\/p>\n
however, if prior to commencement of the construction and installation of Tenant
\nImprovements Tenant has not received the electrical, plumbing or mechanical
\npermits, Tenant shall only be required to provide Landlord with evidence that
\nTenant has made application therefor, and, upon receipt by Tenant of such
\npermits, Tenant shall promptly provide Landlord with copies thereof.<\/p>\n
(iv) Evidence of Tenant’s procurement of insurance
\nrequired to be obtained pursuant to the provisions of Paragraphs 4~B and 4.G.<\/p>\n
D. Landlord shall at all reasonable times have a right to inspect
\nthe Tenant Improvements (provided Landlord does not materially interfere with
\nthe work being performed by the Contractor or its subcontractors) and Tenant
\nshall immediately cease work upon written notice from Landlord if the Tenant
\nImprovements are not in compliance with the Construction Documents approved by
\nLandlord. If Landlord shall give notice of faulty construction or any other
\ndeviation from the Construction Documents, Tenant shall cause the Contractor to
\nmake corrections promptly. However, neither the privilege herein granted to
\nLandlord to make such inspections, nor the making of such inspections by
\nLandlord, shall operate as a waiver of any rights of Landlord to require good
\nand workmanlike construction and improvements constructed in accordance with the
\nConstruction Documents.<\/p>\n
E. Subject to Landlord complying with its obligations in
\nParagraph 5 below, Tenant shall pay and discharge promptly and fully all claims
\nfor labor done and materials and services furnished in connection with the
\nTenant Improvements. The Tenant Improvements shall not be commenced until five
\n(5) business days after Landlord has received notice from Tenant stating the
\ndate the construction of the Tenant Improvements is to commence so that Landlord
\ncan post and record any appropriate Notice of Nonresponsibility.<\/p>\n
F. Tenant acknowledges and agrees that the agreements and
\ncovenants of Tenant in Sections 10 and 37 of the Lease shall be fully applicable
\nto Tenant’s construction of the Tenant Improvements.<\/p>\n
G. Tenant shall maintain, and cause to be maintained, during the
\nconstruction of the Tenant Improvements, at its sole cost and expense, insurance
\nof the types and in the amounts specified in Exhibit B-1 and in Section 12 of
\nthe Lease, together with builders’ risk insurance for the amount of the
\ncompleted value of the Tenant Improvements on an all-risk non-reporting form
\ncovering all improvements under construction, including building materials, and
\nother insurance in amounts and against such risks as the Landlord shall
\nreasonably require in connection with the Tenant Improvements.<\/p>\n
H. No materials, equipment or fixtures shall be delivered to or
\ninstalled upon the Premises pursuant to any agreement by which another party has
\na security interest or rights to remove or repossess such items, without the
\nprior written consent of Landlord, which consent shall not be unreasonably
\nwithheld.<\/p>\n
I. Landlord reserves the right to establish reasonable rules and
\nregulations for the use of the Building during the course of construction of the
\nTenant Improvements, including, but not limited to, construction parking,
\nstorage of materials, hours of work, use of elevators, and clean-up of
\nconstruction related debris.<\/p>\n
J. Upon completion of the Tenant Improvements, Tenant shall
\ndeliver to Landlord the following, all of which shall be to Landlord’s
\nreasonable satisfaction:<\/p>\n
(i) A cost breakdown itemizing all expenses for the Tenant
\nImprovements, together with invoices and receipts for the same or other evidence
\nof payment.<\/p>\n
(ii) Final and unconditional mechanic’s lien waivers for
\nall the Tenant improvements.<\/p>\n
(iii) A true and complete copy of all as-built plans and
\ndrawings for the Tenant improvements.<\/p>\n
-3-
\n 41<\/p>\n
5. TENANT IMPROVEMENT ALLOWANCE.<\/p>\n
A. Subject to Tenant’s compliance with the provisions of this
\nExhibit B, Landlord shall provide to Tenant an allowance in the amount of twenty
\nnine thousand eight hundred forty and 00\/100 dollars and ($29,840.00) (the
\n“Tenant Improvement Allowance”) to construct and install only the Tenant
\nImprovements. The Tenant Improvement Allowance shall be used to design, prepare,
\nplan, obtain the approval of, construct and install the Tenant Improvements and
\nfor no other purpose. Except as otherwise expressly provided herein, Landlord
\nshall have no obligation to contribute the Tenant Improvement Allowance unless
\nand until the Construction Documents have been approved by Landlord and Tenant
\nhas complied with all requirements set forth in Paragraph 4.C. of this Exhibit
\nB. The costs to be paid out of the Tenant Improvement Allowance shall include
\nall reasonable costs and expenses associated with the design, preparation,
\napproval, planning, construction and installation of the Tenant Improvements
\n(the “Tenant Improvement Costs”), including all of the following:<\/p>\n
(i) All costs of the Preliminary Plans and Specifications,
\nthe Final Plans and Specifications, and the Construction Documents, and
\nengineering costs associated with completion of the State of California energy
\nutilization calculations under Title 24 legislation;<\/p>\n
(ii) All costs of obtaining building permits and other
\nnecessary authorizations from local governmental authorities;<\/p>\n
(iii) All costs of interior design and finish schedule
\nplans and specifications including as-built drawings, if applicable;<\/p>\n
(iv) All direct and indirect costs of procuring,
\nconstructing and installing the Tenant Improvements in the Premises, including,
\nbut not limited to, the construction fee for overhead and profit and the cost of
\nall on-site supervisory and administrative staff, office, equipment and
\ntemporary services rendered by the Contractor in connection with the
\nconstruction of the Tenant Improvements; provided, however, that the
\nconstruction fee for overhead and profit, the cost of all on-site supervisory
\nand administrative staff, office, equipment and temporary services shall not
\nexceed amounts which are reasonable and customary for such items in the local
\nconstruction industry;<\/p>\n
(v) All fees payable to the Architect and any engineer if
\nthey are required to redesign any portion of the Tenant Improvements following
\nTenant’s and Landlord’s approval of the Construction Documents;<\/p>\n
(vi) Utility connection fees;<\/p>\n
(vii) Inspection fees and filing fees payable to local
\ngovernmental authorities, if any;<\/p>\n
(viii) All costs of all permanently affixed equipment and
\nnon-trade fixtures provided for in the Construction Documents, including the
\ncost of installation; and,<\/p>\n
The Tenant Improvement Allowance shall be the maximum contribution by Landlord
\nfor the Tenant Improvement Costs, and the disbursement of the Tenant Improvement
\nAllowance is subject to the terms contained herein below.<\/p>\n
Landlord will make payments to Tenant from the Tenant Improvement Allowance to
\nreimburse Tenant for Tenant Improvement Costs paid or incurred by Tenant.
\nPayment of the CM Fee shall be the first payment from the Tenant Improvement
\nAllowance and shall be made by means of a deduction or credit against the Tenant
\nImprovement Allowance. All other payments of the Tenant Improvement Allowance
\nshall be by progress payments not more frequently than once per month and only
\nafter satisfaction of the following conditions precedent: (a) receipt by
\nLandlord of conditional mechanics’ lien releases for the work completed and to
\nbe paid by said progress payment, conditioned only on the payment of the sums
\nset forth in the mechanics’ lien release, executed by the Contractor and all
\nsubcontractors, labor suppliers and materialmen; (b) receipt by Landlord of
\nunconditional mechanics’ lien releases from the Contractor and all
\nsubcontractors, labor suppliers and materialmen for all work other than that<\/p>\n
-4-
\n 42<\/p>\n
being paid by the current progress payment previously completed by the
\nContractor, subcontractors, labor suppliers and materialmen and for which Tenant
\nhas received funds from the Tenant Improvement Allowance to pay for such work;
\n(c) receipt by Landlord of any and all documentation reasonably required by
\nLandlord detailing the work that has been completed and the materials and
\nsupplies used as of the date of Tenant’s request for the progress payment,
\nincluding, without limitation, invoices, bills, or statements for the work
\ncompleted and the materials and supplies used; and (d) completion by Landlord or
\nLandlord’s agents of any inspections of the work completed and materials and
\nsupplies used as deemed reasonably necessary by Landlord. Except for the CM Fee
\npayment (credit), Tenant Improvement Allowance progress payments shall be paid
\nto Tenant within fourteen (14) days from the satisfaction of the conditions set
\nforth in the immediately preceding sentence. The preceding notwithstanding, all
\nTenant Improvement Costs paid or incurred by Tenant prior to Landlord’s approval
\nof the Construction Documents in connection with the design and planning of the
\nTenant Improvements by Architect shall be paid from the Tenant Improvement
\nAllowance, without any retention, within fourteen (14) days following Landlord’s
\nreceipt of invoices, bills or statements from Architect evidencing such costs.
\nNotwithstanding the foregoing to the contrary, Landlord shall be entitled to
\nwithhold and retain five percent (5%) of the Tenant Improvement Allowance or of
\nany Tenant Improvement Allowance progress payment until the lien-free expiration
\nof the time for filing of any mechanics’ liens claimed or which might be filed
\non account of any work ordered by Tenant or the Contractor or any subcontractor
\nin connection with the construction and installation of the Tenant Improvements.<\/p>\n
B. Landlord shall not be obligated to pay any Tenant Improvement
\nAllowance progress payment or the Tenant Improvement Allowance retention if on
\nthe date Tenant is entitled to receive the Tenant Improvement Allowance progress
\npayment or the Tenant Improvement Allowance retention Tenant is in default of
\nthis Lease. Such payments shall resume upon Tenant curing any such default
\nwithin the time periods which may be provided for in the Lease.<\/p>\n
C. Should the total cost of constructing the Tenant Improvements
\nbe less than the Tenant Improvement Allowance, the Tenant Improvement Allowance
\nshall be automatically reduced to the amount equal to said actual cost.<\/p>\n
6. TERMINATION. If the Lease is terminated prior to the date on which
\nthe Tenant Improvements are completed, for any reason due to the default of
\nTenant hereunder, in addition to any other remedies available to Landlord under
\nthe Lease, Tenant shall pay to Landlord as Additional Rent under the Lease,
\nwithin five (5) days of receipt of a statement therefor, any and all costs
\nincurred by Landlord and not reimbursed or otherwise paid by Tenant through the
\ndate of termination in connection with the Tenant Improvements to the extent
\nplanned, installed and\/or constructed as of such date of termination, including,
\nbut not limited to, any costs related to the removal of all or any portion of
\nthe Tenant Improvements and restoration costs related thereto. Subject to the
\nprovisions of Section 10.2 of the Lease, upon the expiration or earlier
\ntermination of the Lease, Tenant shall not be required to remove the Tenant
\nImprovements it being the intention of the parties that the Tenant Improvements
\nare to be considered incorporated into the Building.<\/p>\n
7. LEASE PROVISIONS, CONFLICT. The terms and provisions of the Lease,
\ninsofar as they are applicable, in whole or in part, to this EXHIBIT B, are
\nhereby incorporated herein by reference, and specifically including all of the
\nprovisions of Section 31 of the Lease. In the event of any conflict between the
\nterms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
\nprevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
\nbe Additional Rent under the Lease and, upon any default in the payment of same,
\nLandlord shall have all rights and remedies available to it as provided for in
\nthe Lease.<\/p>\n
-5-
\n 43<\/p>\n
EXHIBIT B-1
\n CONSTRUCTION INSURANCE REQUIREMENTS<\/p>\n
Before commencing work, the contractor shall procure and maintain at its sole
\ncost and expense until completion and final acceptance of the work, at least the
\nfollowing minimum levels of insurance.<\/p>\n
A. Workers’ Compensation in statutory amounts and Employers Liability
\n Insurance in the minimum amounts of $100,000 each accident for bodily
\n injury by accident and $100,000 each employee for bodily injury by disease
\n with a $500,000 policy limit, covering each and every worker used in
\n connection with the contract work.<\/p>\n
B. Comprehensive General Liability Insurance on an occurrence basis including,
\n but not limited to, protection for Premises\/Operations Liability, Broad
\n Form Contractual Liability, Owner’s and Contractor’s Protective, and
\n Products\/Completed Operations Liability*, in the following minimum limits
\n of liability.<\/p>\n
Bodily Injury, Property Damage, and
\n Personal Injury Liability $2,000,000\/each occurrence
\n $3,000,000\/aggregate<\/p>\n
* Products\/Completed Operations Liability Insurance is to be provided for a
\n period of at least one (1) year after completion of work.<\/p>\n
Coverage should include protection for Explosion, Collapse and Underground
\nDamage.<\/p>\n
C. Comprehensive Automobile Liability Insurance with the following minimum
\n limits of liability.<\/p>\n
Bodily Injury and Property $1,000,000\/each occurrence
\n Damage Liability $2,000,000\/aggregate<\/p>\n
This insurance will apply to all owned, non-owned or hired automobiles to
\n be used by the Contractor in the completion of the work.<\/p>\n
D. Umbrella Liability Insurance in a minimum amount of five million dollars
\n ($5,000,000), providing excess coverage on a following-form basis over the
\n Employer’s Liability limit in Paragraph A and the liability coverages
\n outlined in Paragraphs B and C.<\/p>\n
E. Equipment and Installation coverages in the broadest form available
\n covering Contractor’s tools and equipment and material not accepted by
\n Tenant. Tenant will provide Builders Risk Insurance on all accepted and
\n installed materials.<\/p>\n
All policies of insurance, duplicates thereof or certificates evidencing
\ncoverage shall be delivered to Landlord prior to commencement of any work and
\nshall name Landlord, and its partners and lenders as additional insureds as
\ntheir interests may appear. All insurance policies shall (1) be issued by a
\ncompany or companies licensed to be business in the state of California, (2)
\nprovide that no cancellation, non-renewal or material modification shall be
\neffective without thirty (30) days prior written notice provided to Landlord,
\n(3) provide no deductible greater than $15,000 per occurrence, (4) contain a
\nwaiver to subrogation clause in favor of Landlord, and its partners and lenders,
\nand (5) comply with the requirements of Sections 12.2, 12.3 and I 2,4 of the
\nLease to the extent such requirements are applicable.<\/p>\n
44<\/p>\n
EXHIBIT B-2
\n BUILDING STANDARDS<\/p>\n
OUTLINE SPECIFICATION FOR
\n NEW OFFICE BUILD-OUT IN R & D BUILDINGS<\/p>\n
OFFICE AREA<\/p>\n
DEMISING PARTITION AND CORRIDOR WALLS:<\/p>\n
Note: One hr. rated walls where required based on occupancy group.<\/p>\n
A. 6″ 20-gage metal studs at 24″ O.C. (or as required by code based on roof
\n height) framed full height from finish floor to surface above.<\/p>\n
B. One (1) LAYER 5\/8″ drywall Type “X” both sides of wall, fire taped only.<\/p>\n
INTERIOR PARTITIONS:<\/p>\n
A. 3 5\/8″ 25 gage metal studs at 24″ O.C. to bottom of T-Bar ceiling grid
\n approximately 9′ 0′ high.<\/p>\n
B. One (1) layer 5\/8″ drywall both sides of wall, smooth ready for paint.<\/p>\n
C. 3 5\/8″ metal studs including all lateral bracing as required by code.<\/p>\n
PERIMETER DRYWALL (AT OFFICE AREAS):<\/p>\n
A. 3 5\/8″ metal studs @ 24″ O.C. to 12’0″ above finished floor. (or as
\n required by Title-24 for full height envelope then use demising wall spec.)<\/p>\n
B. One (1) layer 5\/8″ Type “X” drywall taped smooth and ready for paint.<\/p>\n
COLUMN FURRING:<\/p>\n
A. Furring channel all sides of 2 1\/2″ metal studs per details.<\/p>\n
B. One (1) layer 5\/8″ drywall taped smooth and ready for paint.<\/p>\n
C. Columns within walls shall be furred-out.<\/p>\n
ACOUSTICAL CEILINGS:<\/p>\n
Note: Gyp. Bd. ceiling at all restrooms Typ.<\/p>\n
A. 2′ X 4″ standard white T-Bar grid system as manufactured by Chicago
\n Metallic of equal.<\/p>\n
B. 2′ X 4″ X 5\/8″ white, no-directional acoustical tile to be regular second
\n look as manufactured by Armstrong or equal.<\/p>\n
PAINTING:<\/p>\n
A. Sheetrock walls within office to receive two (2) coats of interior latex
\n paint as manufactured by Kelly Moore or equal. Some portions of second coat
\n to be single accent color.<\/p>\n
45<\/p>\n
B. Semigloss paint all restrooms and lunch rooms.<\/p>\n
WINDOW COVERING:<\/p>\n
A. 1″ aluminum mini-blinds as manufactured by Levelor, Bali or equal, color to
\n be selected by L.P.C. (brushed aluminum or white).<\/p>\n
B. Blinds to be sized to fit window module.<\/p>\n
VCT:<\/p>\n
A. VCT to be 1\/8″ x 12″ x 12″ as manufactured by Armstrong -Excelon Series or
\n equal.<\/p>\n
B. Slabs shall be water proofed per manufacturer recommendations, at sheet
\n vinyl or VCT areas.<\/p>\n
LIGHT FIXTURES:<\/p>\n
A. 2″ X 4″ T-bar lay in 3-tube energy efficient fixture with cool white
\n fluorescent tubes with parabolic lens as manufactured by Lithonia or equal.
\n (Approximately 50 F.C.)<\/p>\n
LIGHT SWITCHES:<\/p>\n
A. Switching as required by Title 24.<\/p>\n
B. Switch assembly to be Levinton or equal, color – White.<\/p>\n
ELECTRICAL OUTLET:<\/p>\n
A. 110V duplex outlet in demising or interior partitions only, as manufactured
\n by Leviton or equal, color to be White.<\/p>\n
B. Maximum eight (8) outlets per circuit, spacing to meet code or minimum 2
\n per office, conference room, reception and 2 dedicated over cabinet at
\n lunch room junction boxes above ceiling for large open area with furniture
\n partitions.<\/p>\n
C. Transformers to be a minimum of 20% or over required capacity.<\/p>\n
D. Contractors to inspect electric room and to include all necessary metering
\n cost.<\/p>\n
E. No aluminum wiring is acceptable.<\/p>\n
TELEPHONE\/DATA OUTLET:<\/p>\n
A. One (l) single outlet box in wall with pullwire from outlet box to area
\n above T-bar ceiling per office.<\/p>\n
B. Cover plate for phone outlets by telephone\/data vendors.<\/p>\n
FIRE SPRINKLERS:<\/p>\n
As required by fire codes.<\/p>\n
TOPSET BASE:<\/p>\n
A. 4″ rubber base as manufactured by Burke or equal, standard colors only.<\/p>\n
-2-
\n 46<\/p>\n
B. 4″ rubber base at VCT areas.<\/p>\n
TOILET AREAS:<\/p>\n
Wet walls to receive Duraboard or Wonder Board and ceramic tile up to 48″.
\nFloors to receive ceramic tile with self coved base as required by code.<\/p>\n
CARPET:<\/p>\n
Note any of the following carpets are acceptable.<\/p>\n
Designweave: Alumni 28 oz., Windswept Classic 30 oz. or Stratton Design Series
\nIII 30 oz, Structure II 28 oz.<\/p>\n
WOOD DOORS:<\/p>\n
Shall be 3′ 0″ x 9′ 0″ x 13\/4″ (unless otherwise specified) solid core,
\nprefinished harmony (rotary N. birch).<\/p>\n
DOOR FRAMES:<\/p>\n
Shall be ACI or equal, 3 3\/4″ or 4 7\/8″ throat, brushed, standard aluminum,
\nsnap-on trim.<\/p>\n
HARDWARE:<\/p>\n
1 1\/2 pr. butts F179 Stanley, Latchset D10S Rhodes Schlage, Lockset D53PD Rhodes
\nSchlage, Dome Type floor stop Gylnn Johnson FBI 3, Closer 4110LCN (where
\nrequired) brushed chrome.<\/p>\n
INSULATION:<\/p>\n
By Title 24 insulation.<\/p>\n
PLUMBING:<\/p>\n
A. Shall comply with all local codes and handicapped code requirements.
\n Fixtures shall be either “American Standard”, “Kohler” or “Norris”. All
\n toilet accessories and grab bars shall be “Bobrick” or equal and approved
\n by owner.<\/p>\n
B. Plumbing bid shall include 5 gallon minimum hot water heater, or insta hot
\n with mixer valve including all connections.<\/p>\n
TOILET PARTITIONS:<\/p>\n
Shall be as manufactured by Fiat, global or equal if approved by owner. Color to
\nbe white or gray.<\/p>\n
HVAC:<\/p>\n
HVAC units per specifications.<\/p>\n
Five (5) year warranty provided on all HVAC compressor units. All penetrations
\nincluding curbs and sleepers to be hot moped to LPC standard.<\/p>\n
WAREHOUSE AREAS:<\/p>\n
Floor – seal concrete with water base clear acrylic sealer. Fire Extinguishers –
\n2A 10 BC surface mount by code x by S.F.<\/p>\n
-3-
\n 47<\/p>\n
400 W metal halide lighting at warehouse minimum 5-7 foot candles.<\/p>\n
Note: All high pile storage requirements are excluded for standard building T.l.<\/p>\n
48<\/p>\n
EXHIBIT C<\/p>\n
COMMENCEMENT AND EXPIRATION DATE MEMORANDUM<\/p>\n
LANDLORD: AETNA LIFE INSURANCE COMPANY, a Connecticut corporation
\n TENANT: Premisys Communications, Inc., a Delaware corporation
\n LEASE DATE: June 4, 1998
\n PREMISE: Located at 48634 Milmont Drive, Fremont, California 94538
\n Tenant hereby accepts the Premises as being in
\n the condition required under the Lease, with
\n all Tenant Improvements completed (except for
\n minor punchlist items which Landlord agrees to
\n complete).<\/p>\n
The Commencement Date of the Lease is hereby established as
\n_________________________________ and the Expiration Date is
\n_________________________________.<\/p>\n
TENANT: Premisys Communications, Inc.,
\n a Delaware corporation<\/p>\n
By:
\n ————————————-
\n Print Name:
\n —————————–
\n Its:
\n ————————————<\/p>\n
Approved and Agreed:<\/p>\n
LANDLORD:
\n AETNA LIFE INSURANCE COMPANY,
\n a Connecticut corporation<\/p>\n
By: Allegis Realty Investors, LLC
\n Its Investment Advisor<\/p>\n
By:
\n —————————–<\/p>\n
Date:
\n —————————–<\/p>\n
49<\/p>\n
EXHIBIT D – RULES & REGULATIONS<\/p>\n
Page 1 of 2<\/p>\n
Industrial Lease Agreement dated June 4, 1998, between<\/p>\n
Premisys Communications, Inc.,
\n a Delaware Corporation
\n (“Tenant”),
\n and
\n AEtna LIFE INSURANCE COMPANY,
\n a Connecticut corporation
\n (“Landlord”)<\/p>\n
1. No advertisement, picture or sign of any sort shall be displayed on or
\n outside the Premises without the prior written consent of Lessor, which
\n shall not be unreasonably withheld. Lessor shall have the right to
\n remove any such unapproved item without notice and at Lessee’s expense.<\/p>\n
2 Lessee shall not regularly park motor vehicles in designated parking
\n areas after the conclusion of daily business activity.<\/p>\n
3. Lessee shall not use any method of heating or air conditioning other
\n than that supplied by Lessor without the consent of Lessor.<\/p>\n
4. All window coverings installed by Lessee and visible from the outside of
\n the building require the prior written approval of Lessor.<\/p>\n
5. Lessee shall not use, keep or permit to be used or kept any foul or
\n noxious gas or substance or any flammable or combustible materials on or
\n around the Premises.<\/p>\n
6. Lessee shall not alter any lock or install any new locks or bolts on any
\n door at the Premises without the prior consent of Lessor.<\/p>\n
7. Lessee shall park motor vehicles in those general parking areas as
\n designated by Lessor except for loading and unloading. During those
\n periods of loading and unloading, Lessee shall not unreasonably
\n interfere with traffic flow within the Project and loading and unloading
\n areas of other Lessees.<\/p>\n
8. Lessee shall not disturb, solicit or canvas any occupant of the Building
\n or Project and shall cooperate to prevent same.<\/p>\n
9. No person shall go on the roof without Lessor’s permission.<\/p>\n
10. Business machines and mechanical equipment belonging to Lessee which
\n cause noise or vibration that may be transmitted to the structure of the
\n Building, to such a degree as to be objectionable to Lessor or other
\n Lessees, shall be placed and maintained by Lessee, at Lessee’s expense,
\n on vibration eliminators or other devices sufficient to eliminate noise
\n or vibration.<\/p>\n
11. All goods including material used to store goods, delivered to the
\n Premises of Lessee shall be Immediately moved into the Premises and
\n shall not be left in parking or receiving areas overnight.<\/p>\n
12. Tractor trailers which must be unhooked or parked with dolly wheels
\n beyond the concrete loading areas must use steel plates or wood blocks
\n under the dolly wheels to prevent damage to the asphalt paving<\/p>\n
50<\/p>\n
surfaces. No parking or storing of such trailers will be permitted in
\n the auto parking areas of the Project or on streets adjacent thereto.<\/p>\n
13. Forklifts which operate on asphalt paving areas shall not have solid
\n rubber tires and shall only use tires that do not damage the asphalt.<\/p>\n
14. Lessee is responsible for the storage and removal of all trash and
\n refuse. All such trash and refuse shall be contained in suitable
\n receptacles stored behind screened enclosures at locations approved by
\n Lessor.<\/p>\n
l5. Lessee shall not store or permit the storage or placement of goods or
\n merchandise in or around the common areas surrounding the Premises. No
\n displays or sales or merchandise shall be allowed in the parking lots or
\n other common areas.<\/p>\n
-2-
\n 51<\/p>\n
EXHIBIT F<\/p>\n
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE<\/p>\n
Your cooperation in this matter is appreciated. Initially, the
\ninformation provided by you in this Hazardous Materials Disclosure Certificate
\nis necessary for the Landlord to evaluate your proposed uses of the premises
\n(the “Premises”) and to determine whether to enter into a lease agreement with
\nyou as tenant. If a lease agreement is signed by you and the Landlord (the
\n“Lease Agreement”), on an annual basis in accordance with the provisions of
\nParagraph 32 of the Lease Agreement, you are to provide an update to the
\ninformation initially provided by you in this certificate. Any questions
\nregarding this certificate should be directed to, and when completed, the
\ncertificate should be delivered to:<\/p>\n
Landlord: c\/o Allegis Realty Investors LLC
\n 455 Market Street., Suite 1540
\n San Francisco, California 94105
\n Attention: Rod Chu
\n Phone: (415) 538-4800<\/p>\n
Name of (Prospective) Tenant: Premisys Communications, Inc., a Delaware
\n corporation<\/p>\n
Mailing Address: 48664 Milmont Drive, Fremont, California 94538<\/p>\n
Contact Person, Title and Telephone Number(s):
\n ————————-<\/p>\n
Contact Person for Hazardous Waste Materials Management and Manifests
\n and Telephone Number(s):
\n ———————————————–
\n ———————————————————————–<\/p>\n
Address of (Prospective) Premises: 48634 Milmont Drive, Fremont,
\n California 94538<\/p>\n
Length of (Prospective) initial Term: Eighty four (84) months<\/p>\n
1. GENERAL INFORMATION:<\/p>\n
Describe the proposed operations to take place in, on, or about the
\n Premises, including, without limitation, principal products processed,
\n manufactured or assembled, and services and activities to be provided or
\n otherwise conducted. Existing tenants should describe any proposed
\n changes to on-going operations.<\/p>\n
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS<\/p>\n
2.1 Will any Hazardous Materials (as hereinafter defined) be used,
\n generated, treated, stored or disposed of in, on or about the
\n Premises? Existing tenants should describe any Hazardous Materials
\n which continue to be used, generated, treated, stored or disposed of
\n in, on or about the Premises.<\/p>\n
Wastes Yes [ ] No [ ]<\/p>\n
Chemical Products Yes [ ] No [ ]<\/p>\n
Other Yes [ ] No [ ]<\/p>\n
If Yes is marked, please explain:
\n ———————————-
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
52<\/p>\n
2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
\n Materials to be used, generated, treated, stored or disposed of in,
\n on or about the Premises, including the applicable hazard class and
\n an estimate of the quantities of such Hazardous Materials to be
\n present on or about the Premises at any given time; estimated annual
\n throughput; the proposed location(s) and method of storage
\n (excluding nominal amounts of ordinary household cleaners and
\n janitorial supplies which are not regulated by any Environmental
\n Laws, as hereinafter defined); and the proposed location(s) and
\n method(s) of treatment or disposal for each Hazardous Material,
\n including, the estimated frequency, and the proposed contractors or
\n subcontractors. Existing tenants should attach a list setting forth
\n the information requested above and such list should include actual
\n data from on-going operations and the identification of any
\n variations in such information from the prior year’s certificate.<\/p>\n
3. STORAGE TANKS AND SUMPS<\/p>\n
3.1 Is any above or below ground storage or treatment of gasoline,
\n diesel, petroleum, or other Hazardous Materials in tanks or sumps
\n proposed in, on or about the Premises? Existing tenants should
\n describe any such actual or proposed activities.<\/p>\n
Yes [ ] No [ ]<\/p>\n
If Yes, please explain:
\n ——————————————–
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
4. WASTE MANAGEMENT<\/p>\n
4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
\n Number? Existing tenants should describe any additional
\n identification numbers issued since the previous certificate.<\/p>\n
Yes [ ] No [ ]<\/p>\n
4.2 Has your company filed a biennial or quarterly reports as a
\n hazardous waste generator? Existing tenants should describe any new
\n reports filed.<\/p>\n
Yes [ ] No [ ]<\/p>\n
If yes, attach a copy of the most recent report filed.<\/p>\n
5. WASTEWATER TREATMENT AND DISCHARGE<\/p>\n
5.1 Will your company discharge wastewater or other wastes to:<\/p>\n
_____ storm drain? _____ sewer?<\/p>\n
_____ surface water? _____ no wastewater or other wastes
\n discharged.<\/p>\n
Existing tenants should indicate any actual discharges. If so,
\n describe the nature of any proposed or actual discharge(s).<\/p>\n
——————————————————————-
\n ——————————————————————-<\/p>\n
-2-
\n 53<\/p>\n
5.2 Will any such wastewater or waste be treated before discharge?<\/p>\n
Yes [ ] No [ ]<\/p>\n
If yes, describe the type of treatment proposed to be conducted.
\n Existing tenants should describe the actual treatment conducted.<\/p>\n
——————————————————————-
\n ——————————————————————-<\/p>\n
6. AIR DISCHARGES<\/p>\n
6.1 Do you plan for any air filtration systems or stacks to be used in
\n your company’s operations in, on or about the Premises that will
\n discharge into the air; and will such air emissions be monitored?
\n Existing tenants should indicate whether or not there are any such
\n air filtration systems or stacks in use in, on or about the Premises
\n which discharge into the air and whether such air emissions are
\n being monitored.<\/p>\n
Yes [ ] No [ ]<\/p>\n
If Yes, please explain:
\n ——————————————–
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
6.2 Do you propose to operate any of the following types of equipment,
\n or any other equipment requiring an air emissions permit? Existing
\n tenants should specify any such equipment being operated in, on or
\n about the Premises.<\/p>\n
_____ Spray booth(s) _____ Incinerator(s)<\/p>\n
______ Dip tank(s) _____ Other (Please describe)<\/p>\n
_____ Drying oven(s) _____ No Equipment Requiring Air
\n Permits<\/p>\n
If Yes, please explain:
\n ——————————————–
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
6.3 Please describe (and submit copies of with this Hazardous Materials
\n Disclosure Certificate) any reports you have filed in the past
\n [thirty-six] months with any governmental or quasi-governmental
\n agencies or authorities related to air discharges or clean air
\n requirements and any such reports which have been issued during such
\n period by any such agencies or authorities with respect to you or
\n your business operations.<\/p>\n
7. HAZARDOUS MATERIALS DISCLOSURES<\/p>\n
7.1 Has your company prepared or will it be required to prepare a
\n Hazardous Materials management plan (“Management Plan”) or Hazardous
\n Materials Business Plan and Inventory (“Business Plan”) pursuant to
\n Fire Department or other governmental or regulatory agencies’
\n requirements? Existing tenants should indicate whether or not a
\n Management Plan is required and has been prepared.<\/p>\n
Yes [ ] No [ ]<\/p>\n
-3-
\n 54<\/p>\n
If yes, attach a copy of the Management Plan or Business Plan.
\n Existing tenants should attach a copy of any required updates to the
\n Management Plan or Business Plan.<\/p>\n
7.2 Are any of the Hazardous Materials, and in particular chemicals,
\n proposed to be used in your operations in, on or about the Premises
\n listed or regulated under Proposition 65? Existing tenants should
\n indicate whether or not there are any new Hazardous Materials being
\n so used which are listed or regulated under Proposition 65.<\/p>\n
Yes [ ] No [ ]<\/p>\n
If Yes, please explain:
\n ——————————————–
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
8. ENFORCEMENT ACTIONS AND COMPLAINTS<\/p>\n
8.1 With respect to Hazardous Materials or Environmental Laws, has your
\n company ever been subject to any agency enforcement actions,
\n administrative orders, or consent decrees or has your company
\n received requests for information, notice or demand letters, or any
\n other inquiries regarding its operations? Existing tenants should
\n indicate whether or not any such actions, orders or decrees have
\n been, or are in the process of being, undertaken or if any such
\n requests have been received.<\/p>\n
Yes [ ] No [ ]<\/p>\n
If yes, describe the actions, orders or decrees and any continuing
\n compliance obligations imposed as a result of these actions, orders
\n or decrees and also describe any requests, notices or demands, and
\n attach a copy of all such documents. Existing tenants should
\n describe and attach a copy of any new actions, orders, decrees,
\n requests, notices or demands not already delivered to Landlord
\n pursuant to the provisions of Paragraph 32 of the Lease Agreement.<\/p>\n
——————————————————————-
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
8.2 Have there ever been, or are there now pending, any lawsuits against
\n your company regarding any environmental or health and safety
\n concerns?<\/p>\n
Yes [ ] No [ ]<\/p>\n
If yes, describe any such lawsuits and attach copies of the
\n complaint(s), cross-complaint(s), pleadings and other documents
\n related thereto as requested by Landlord. Existing tenants should
\n describe and attach a copy of any new complaint(s),
\n cross-complaint(s), pleadings and other related documents not
\n already delivered to Landlord pursuant to the provisions of
\n Paragraph 32 of the Lease Agreement.<\/p>\n
——————————————————————-
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
8.3 Have there been any problems or complaints from adjacent tenants,
\n owners or other neighbors at your company’s current facility with
\n regard to environmental or health and safety concerns? Existing
\n tenants should indicate whether or not there have been any such
\n problems or complaints from <\/p>\n
-4-
\n 55<\/p>\n
adjacent tenants, owners or other neighbors at, about or near the
\n Premises and the current status of any such problems or complaints.<\/p>\n
Yes [ ] No [ ]<\/p>\n
If yes, please describe. Existing tenants should describe any such
\n problems or complaints not already disclosed to Landlord under the
\n provisions of the signed Lease Agreement and the current status of
\n any such problems or complaints.<\/p>\n
——————————————————————-
\n ——————————————————————-
\n ——————————————————————-<\/p>\n
9. PERMITS AND LICENSES<\/p>\n
9.1 Attach copies of all permits and licenses issued to your company
\n with respect to its proposed operations in, on or about the
\n Premises, including, without limitation, any Hazardous Materials
\n permits, wastewater discharge permits, air emissions permits, and
\n use permits or approvals. Existing tenants should attach copies of
\n any new permits and licenses as well as any renewals of permits or
\n licenses previously issued.<\/p>\n
As used herein, “Hazardous Materials” shall mean and include any
\nsubstance that is or contains (a) any “hazardous substance” as now or hereafter
\ndefined in Section 101(14) of the Comprehensive Environmental Response,
\nCompensation, and Liability Act of 1980, as amended (“CERCLA”) (42 U.S.C.
\nSection 9601 et seq.) or any regulations promulgated under CERCLA; (b) any
\n“hazardous waste” as now or hereafter defined in the Resource Conservation and
\nRecovery Act, as amended (“RCRA”) (42 U.S.C. Section 6901 et seq.) or any
\nregulations promulgated under RCRA; (c) any substance now or hereafter regulated
\nby the Toxic Substances Control Act, as amended (“TSCA”) (15 U.S.C. Section 2601
\net seq.) or any regulations promulgated under TSCA; (d) petroleum, petroleum
\nby-products, gasoline, diesel fuel, or other petroleum hydrocarbons; (e)
\nasbestos and asbestos-containing material, in any form, whether friable or
\nnon-friable; (f) polychlorinated biphenyls; (g) lead and lead-containing
\nmaterials; or (h) any additional substance, material or waste (A) the presence
\nof which on or about the Premises (i) requires reporting, investigation or
\nremediation under any Environmental Laws (as hereinafter defined), (ii) causes
\nor threatens to cause a nuisance on the Premises or any adjacent property or
\nposes or threatens to pose a hazard to the health or safety of persons on the
\nPremises or any adjacent property, or (iii) which, if it emanated or migrated
\nfrom the Premises, could constitute a trespass, or (B) which is now or is
\nhereafter classified or considered to be hazardous or toxic under any
\nEnvironmental Laws; and “Environmental Laws” shall mean and include (a) CERCLA,
\nRCRA and TSCA; and (b) any other federal, state or local laws, ordinances,
\nstatutes, codes, rules, regulations, orders or decrees now or hereinafter in
\neffect relating to (i) pollution, (ii) the protection or regulation of human
\nhealth, natural resources or the environment, (iii) the treatment, storage or
\ndisposal of Hazardous Materials, or (iv) the emission, discharge, release or
\nthreatened release of Hazardous Materials into the environment.<\/p>\n
The undersigned hereby acknowledges and agrees that this Hazardous
\nMaterials Disclosure Certificate is being delivered to Landlord in connection
\nwith the evaluation of a Lease Agreement and, if such Lease Agreement is
\nexecuted, will be attached thereto as an exhibit. The undersigned further
\nacknowledges and agrees that if such Lease Agreement is executed, this hazardous
\nMaterials Disclosure Certificate will be updated from time to time in accordance
\nwith Paragraph 32 of the Lease Agreement. The undersigned further acknowledges
\nand agrees that the Landlord and its partners, lenders and representatives may,
\nand will, rely upon the statements, representations, warranties, and
\ncertifications made herein and the truthfulness thereof in entering into the
\nLease Agreement and the continuance thereof throughout the term, and any
\nrenewals thereof, of the Lease Agreement. I [print name] ______________________
\nacting with full authority to bind the (proposed) Tenant and on behalf of the
\n(proposed) Tenant, certify, represent and warrant that the information contained
\nin this certificate is true and correct.<\/p>\n
(PROSPECTIVE) TENANT:<\/p>\n
-5-
\n 56<\/p>\n
By:
\n ————————
\nTitle:
\n ————————<\/p>\n
Date:
\n ————————<\/p>\n
-6-
\n 57<\/p>\n
ADDENDUM 1<\/p>\n
OPTION TO EXTEND THE LEASE<\/p>\n
This Addendum l (“Addendum”) is incorporated as a part of that certain
\nLease Agreement dated June 4, 1998 (the “Lease”), by and between Premisys
\nCommunications, Inc., a Delaware corporation (“Tenant”), and AEtna Life
\nInsurance Company, a Connecticut corporation (“Landlord”), for the leasing of
\nthose certain premises located at 48634 Milmont Drive, Fremont, California 94538
\nas more particularly described in Exhibit A to the Lease (the “Premises”). Any
\ncapitalized terms used herein and not otherwise defined herein shall have the
\nmeaning ascribed to such terms as set forth in the Lease.<\/p>\n
1. GRANT OF EXTENSION OPTION. Subject to the provisions, limitations and
\nconditions set forth in Paragraph 5 below, Tenant shall have an Option
\n(“Option”) to extend the term of the Lease for five (5) years (the “Extended
\nTerm”).<\/p>\n
2. TENANT’S OPTION NOTICE. If Landlord does not receive written notice
\nfrom Tenant of its exercise of this Option on a date which is not more than
\nthree hundred sixty (360) days nor less than two hundred forty (240) days prior
\nto the end of the initial term of the Lease (the “Option Notice”), all rights
\nunder this Option shall automatically terminate and shall be of no further force
\nor effect.<\/p>\n
3. ESTABLISHING THE INITIAL MONTHLY BASE RENT FOR THE EXTENDED TERM. The
\ninitial monthly Base Rent for the Extended Term shall be the then current market
\nrent for similar space within the competitive market area of the Premises (the
\n“Fair Rental Value”). “Fair Rental Value” of the Premises means the fair market
\nrental value of the Premises as of the commencement of the Extended Term, taking
\ninto consideration all relevant factors, including length of term, the uses
\npermitted under the Lease, the quality, size, design and location of the
\nPremises, including the condition and value of existing tenant improvements, and
\nthe monthly base rent paid by tenants for premises comparable to the Premises,
\nand located within the competitive market area of the Premises as reasonably
\ndetermined by Landlord.<\/p>\n
Neither Landlord nor Tenant shall have the right to have a court or any
\nother third party entity establish the Fair Rental Value. If Landlord and Tenant
\nare unable to agree on the Fair Rental Value for the Extended Term within ten
\n(10) business days of receipt by Landlord of the Option Notice, Landlord and
\nTenant being obligated only to act in good faith, this Option shall
\nautomatically terminate and the Lease shall terminate at the end of its initial
\nterm.<\/p>\n
In no event shall the monthly Base Rent for any period of the Extended
\nTerm be less than the highest monthly Base Rent charged during the initial term
\nof the Lease. Upon determination of the initial monthly Base Rent for the
\nExtended Term in accordance with the terms outlined above, Landlord and Tenant
\nshall immediately execute, at Landlord’s sole option, either the standard lease
\nagreement then in use by Landlord, or an amendment to this Lease. Such new<\/p>\n
58<\/p>\n
lease agreement or amendment, as the case may be, shall set forth among other
\nthings, the initial monthly Base Rent for the Extended Term and the actual
\ncommencement date and expiration date of the Extended Term. Tenant shall have no
\nother right to extend the term of the Lease under this Addendum unless Landlord
\nand Tenant otherwise agree in writing.<\/p>\n
4. CONDITION OF PREMISES AND BROKERAGE COMMISSIONS FOR THE EXTENDED
\nTERM. If Tenant timely and properly exercises this Option, in strict accordance
\nwith the terms contained herein: (1) Tenant shall accept the Premises in its
\nthen “As-Is” condition and, accordingly, Landlord shall not be required to
\nperform any additional improvements to the Premises; and (2) Tenant hereby
\nagrees that it will be solely responsible for any and all brokerage commissions
\nand finder’s fees payable to any broker now or hereafter procured or hired by
\nTenant or who otherwise claims a commission based on any act or statement of
\nTenant (“Tenant’s Broker”) in connection with the Option; and Tenant hereby
\nfurther agrees that Landlord shall in no event or circumstance be responsible
\nfor the payment of any such commissions and fees to Tenant’s Broker.<\/p>\n
5. LIMITATIONS ON, AND CONDITIONS TO, EXTENSION OPTION. This Option is
\npersonal to Tenant and may not be assigned, voluntarily or involuntarily,
\nseparate from or as part of the Lease. At Landlord’s option, all rights of
\nTenant under this Option shall terminate and be of no force or effect if any of
\nthe following individual events occur or any combination thereof occur: (1)
\nTenant has been in default at any time during the initial term of the Lease, or
\nis currently in default of any provision of the Lease; and\/or (2) Tenant has
\nassigned its rights and obligations under all or part of the Lease or Tenant has
\nsubleased all or part of the Premises; and\/or (3) Tenant’s financial condition
\nis unacceptable to Landlord at the time the Option Notice is delivered to
\nLandlord; and\/or (4) Tenant has failed to properly exercise this Option in a
\ntimely manner in strict accordance with the provisions of this Addendum; and\/or
\n(5) Tenant no longer has possession of all or any part of the Premises under the
\nLease, or if the Lease has been terminated earlier, pursuant to the terms of the
\nLease.<\/p>\n
6. TIME IS OF THE ESSENCE. Time is of the essence with respect to each
\nand every time period described in this Addendum.<\/p>\n
-2-
\n 59<\/p>\n
CHANGE OF COMMENCEMENT DATE<\/p>\n
This First Amendment to Lease Agreement (the “Amendment”) is made and entered
\ninto to be effective as of July 20, 1998, by and between AEtna Life Insurance
\nCompany, a Connecticut corporation (“Landlord”), and Premisys Communications,
\nInc., a Delaware corporation (“Tenant”), with reference to the following facts:<\/p>\n
RECITALS<\/p>\n
A. Landlord and Tenant have entered into that certain Lease Agreement dated
\n June 4, 1998 (the “Lease”), for the leasing of certain premises
\n containing approximately 29,840 rentable square feet of space located at
\n 48634 Milmont Drive, Fremont, California (the “Premises”) as such
\n Premises are more fully described in the Lease.<\/p>\n
B. Landlord and Tenant wish to amend the Commencement Date of the Lease.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and for other good and
\nvaluable consideration, the receipt and adequacy of which are hereby
\nacknowledged, Landlord and Tenant hereby agree as follows:<\/p>\n
1. Recitals: Landlord and Tenant agree that the above recitals are true and
\n correct.<\/p>\n
2. The Commencement Date of the Lease shall be August 1, 1998.<\/p>\n
3. The last day of the Term of the Lease (the “Expiration Date”) shall be
\n December 31, 2005.<\/p>\n
4. The dates on which the Base Rent will be adjusted are:<\/p>\n
for the period August 1, 1998 to July 31, 1999 the monthly Base Rent
\n shall be $38,792.00; for the period August 1, 1999 to July 31, 2000 the
\n monthly Base Rent shall be $39,985.60; for the period August 1, 2000 to
\n July 31, 2001 the monthly Base Rent shall be $41,179.20; for the period
\n August 1, 2001 to July 31, 2002 the monthly Base Rent shall be
\n $42,372.80; for the period August 1, 2002 to July 31, 2003 the monthly
\n Base Rent shall be $43,566.40; for the period August 1, 2003 to July 31,
\n 2004 the monthly Base Rent shall be $44,760.00; for the period August 1,
\n 2004 to July 31, 2005 the monthly Base Rent shall be $45,953.60; and for
\n the period August 1, 2005 to December 31, 2005 the monthly Base Rent
\n shall be $47,147.20.<\/p>\n
5. Effect of Amendment: Except as modified herein, the terms and conditions
\n of the Lease shall remain unmodified and continue in full force and
\n effect. In the event of any conflict between the terms and conditions of
\n the Lease and this Amendment, the terms and conditions of this Amendment
\n shall prevail.<\/p>\n
6. Definitions: Unless otherwise defined in this Amendment, all terms not
\n defined in this Amendment shall have the meaning set forth in the Lease.<\/p>\n
-3-
\n 60<\/p>\n
7. Authority: Subject to the provisions of the Lease. this Amendment shall
\n be binding upon and inure to the benefit of the parties hereto, their
\n respective heirs, legal representatives, successors and assigns. Each
\n party hereto and the persons signing below warrant that the person
\n signing below on such party’s behalf is authorized to do so and to bind
\n such party to the terms of this Amendment.<\/p>\n
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
\nyear first above written.<\/p>\n
TENANT:<\/p>\n
Premisys Communications, Inc.,
\na Delaware corporation<\/p>\n
By:
\n —————————-
\nIts:
\n —————————-<\/p>\n
Date:
\n —————————-<\/p>\n
By:
\n —————————-
\nIts:
\n —————————-<\/p>\n
Date:
\n —————————-<\/p>\n
LANDLORD:<\/p>\n
AEtna Life Insurance Company,
\na Connecticut corporation<\/p>\n
By: Allegis Realty Investors, LLC,
\n Its Investment Advisor<\/p>\n
By: \/s\/ Sylvia Milikian
\n —————————
\n Date: 8\/20\/98
\n ————————–<\/p>\n
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