EXHIBIT 10.10
RECEIVED JAN 14 2000
Xxxxx/Xxxxxxxxx
January 5, 2000
Xx. Xxxxxxxx X. Xxxxxx
Optical Networks, Inc.
000 Xxxxxxxxx Xxxxxxx
Xxx Xxxx, XX 00000
RE: COMMENCEMENT OF LEASE
Gentlemen:
This letter will confirm our agreement relative to the Commencement Date of the
Lease Agreement dated September 29, 1999 by and between the Xxxx Xxxxxxxxx
Survivor's Trust and the Xxxxxxx X. Xxxxx Separate Property Trust, as Landlord,
and Optical Networks, Inc., a California corporation, as Tenant, for
approximately 58,780+ square feet of space located at 000 X. Xxxxxx Xxxxx, Xxx
Xxxx, Xxxxxxxxxx,
Notwithstanding anything to the contrary contained in said Lease Agreement, it
is agreed that said Xxxxx shall commence effective January 1, 2000 and terminate
seven years later on December 31, 2006. Because of the change in Commencement
Date, your Basic Monthly Rent Schedule as shown in Paragraph 43 of the Lease
shall be changed as follows:
Total Rent No. of Rent Due
Period Per Month Mos. for Period
01/01/00-12/31/00 $118,959.52 12 $1,427,5114.24
01/01/01-12/31/01 $124,837.52 12 $ 1,498,050-24
01/01/02-12/31/02 $130,715.52 12 $ 1,568,586.24
01/01/03-12/31/03 $136,593.52 12 $ 1,639,122.24
01/01/04-12/31/04 $142,471.53 12 $ 1,709,658.36
01/01/05-12/31/05 $148,349.53 12 $ 1,780,194.36
01/01/06-12/31/06 $154,227.53 12 $ 1,850,730.36
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84 $11,473,856.04 Aggregate
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Please execute this letter in the space provided below, indicating your
agreement with the foregoing, and return all copies to us for our execution,
together with your check in the
Initial:
amount of $118,959.52 representing the prorated Basic Rent for the month of
January, 2000. We will return a fully executed original of this document for
your records.
Respectfully yours,
XXXXX/ARRELLAGA
By /s/ Xxxx Xxxxxxxxx
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Xxxx Xxxxxxxxx
AGREEMENT:
OPTICAL NETWORKS, INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxxxxx X. Xxxxxx
Title: CFO
-----------------------------
Initial: /s/TJS /s/ JA
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BLDG: Baypointe 4
OWNER: 1
PROP: 0007
UNIT: 1
TENANT: OPTIO2
LEASE: 0007-OPTI02-01
LEASE AGREEMENT
THIS LEASE, made this____ 29th day of September, 1999 between XXXX XXXXXXXXX,
Trustee, or his Successor Trustee, UTA dated 7/20/77 (XXXX XXXXXXXXX SURVIVOR'S
TRUST) as amended, mid XXXXXXX X. XXXXX; Trustee, or his Successor Trustee, UTA
dated 7/20/77 (XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST) as amended, hereinafter
called Landlord and Optical Networks, inc. a California corporation, hereinafter
called Tenant.
WITNESSETH:
Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord those certain premises (the "Premises") outlined in red on Exhibit "N',
attached hereto and incorporated herein by this reference thereto more
particularly described as follows:
All of that certain 58,780+ square foot, one-story building located at 000 X.
Xxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx 00000. Said Premises is more particularly
shown within the area outlined in Red on Exhibit A attached hereto. The entire
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parcel, of which the Premises is a part, and exclusive parking appurtenant
thereto, is shown within the area outlined in Green on Exhibit A attached. The
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Premises shall be improved by Landlord as shown on Exhibit B to be attached
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hereto, and is leased on an "as-is" basis, in its present condition, and in the
configuration as shown in Red on Exhibit B to be attached hereto.
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The word "Premises" as used throughout this lease is hereby defined to include
the nonexclusive use of landscaped areas, sidewalks and driveways in front of or
adjacent to the Premises, and the nonexclusive use of the area directly
underneath or over such sidewalks and driveways. The gross leasable area of the
building shall be measured from outside of exterior walls to outside of exterior
walls, and shall include any atriums, covered entrances or egresses and covered
loading areas. Said letting and hiring is upon and subject to the terms,
covenants and conditions hereinafter set forth and Tenant covenants as a
material part of the consideration for this Lease to perform and observe each
and all of said terms, covenants and conditions. This Lease is made upon the
conditions of such performance and observance.
1. USE Tenant shall use the Premises only in conformance with applicable
governmental laws, regulations, rules and ordinances for the purpose of general
office, light manufacturing, research and development, and storage and other
uses necessary for Tenant to conduct Tenant's business, provided that such uses
shall be in accordance with all applicable governmental laws and ordinances, and
for no other purpose. Tenant shall not do or permit to be done in or about the
Premises nor bring or keep or permit to be brought or kept in or about the
Premises anything which is prohibited by or will in any way increase the
existing rate of (or otherwise affect) fire or any insurance covering the
Premises or any part thereof, or any of its contents, or will cause a
cancellation of any insurance covering the Premises or any part thereof, or any
of its contents. Tenant shall not do or permit to be done anything in, on or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Premises or neighboring premises or injure
or annoy them, or use or allow the Premises to be used for any improper,
immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or
permit any nuisance in, on or about the Premises. No sale by auction shall be
permitted on the Promises. Tenant shall not place any loads upon the floors,
walls, or coiling which endanger the structure, or place any harmful fluids or
other materials in the drainage system of the building, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Promises or outside of
the building in which the Premises are a part, except in trash containers placed
inside exterior enclosures designated by Landlord for that purpose or inside of
the building proper where designated by Landlord. No materials, supplies,
equipment, finished products or semifinished products, raw materials or articles
of any nature shall be stored upon or permitted to remain outside the Premises.
Tenant shall not place anything or allow anything to be placed near the glass of
any window, door partition or wall which may appear unsightly from outside the
Premises. No loudspeaker or other device, system or apparatus which can be heard
outside the Premises shall be used in or at the Premises without the prior
written consent of Landlord. Tenant shall not commit or suffer to be committed
any waste in or upon the Premises. Tenant shall indemnity, defend and hold
Landlord harmless against any loss, expense, damage, reasonable attorneys' fees,
or liability arising out of failure of Tenant to comply with any applicable law.
Tenant shall comply with any covenant, condition, or restriction ("CCR's")
affecting the Promises. The provisions of this paragraph are for the benefit of
Landlord only and shall not be construed to be for the benefit of any tenant or
occupant of the Premises.
2. TERM *
A. The term of this Lease shall be for a period of SEVEN (7) years (unless
sooner terminated as hereinafter provided) and, subject to Paragraphs 2B and 3,
shall commence on the 1st day of January, 2000.
B. Possession of the Promises shall be deemed tendered and the term of the
Lease shall commence when the first of the following occurs:
(a) One day after a Certificate of Occupancy is granted by the proper
governmental agency, or, if the governmental agency having jurisdiction over the
area in which the Premises are situated does not issue certificates of
occupancy, then the same number of days after certification by Xxxxxxxx's
architect or contractor that Landlord's construction work has been completed; or
(b) Upon the occupancy of the Premises by any of Tenant's operating
personnel: or
(c) When the Tenants have been substantially completed for Tenant's use and
occupancy, in accordance and compliance with Exhibit B of this Lease Agreement;
or
(d) As otherwise agreed in writing.
*it is agreed in the event said Xxxxx commences on a date other than the first
day of the month the term of the Lease will be extended to account for the
number of days in the partial month at the Basic Rent during the resulting
partial month will be prorated for the number of days in the partial month) at
the Basic Rent rate scheduled for the projected commencement date as shown in
Paragraph 39.
-Within thirty (30) days after receipt of Landlord's reconciliation, Tenant
shall have the right at Tenant's sole expense, to audit, at a mutually
convenient time at Xxxxxxxx's office, Xxxxxxxx's records relating to the
foregoing expenses. Such audit must be conducted' by Tenant or an independent
nationally recognized accounting firm that is not being compensated by Xxxxxx or
other third party on a audit reveals that contingency fee basis. Landlord shall
be provided a complete copy of said audit at no expense to Landlord. if such
Landlord has overcharged Tenant and the audit is not challenged by Landlord, the
amount overcharged shall be credited to Xxxxxx's account within thirty (30) days
after the audit is concluded.
3. Possession. if Landlord, for any reason whatsoever, cannot deliver
possession of said premises to Tenant at the commencement of the said term, as
herainbefore specified, this Lease shall not be void or voidable; no obligation
of Tenant shall be affected thereby: nor shall Landlord of Landlord's agents be
liable to Tenant for any loss or damage resulting therefrom; but in that event
the commencement and termination dates of the Lease, and all other dates
affected thereby shall be revised to conform to the date of Landlords delivery
of possession, as specified in Paragraph 2B, above. The above is, however,
subject to the provision that the period of delay of delivery of the Premises
shall not exceed 60 days from the commencement date herein (except those delays
Caused Acts Of God, strikes, war; utilities, governmental bodies, weather,
unavailable materials, and delays beyond Landlord's control shall be excluded in
calculating such period) in which instance Tenant at its option, may, by written
notice to Landlord, terminate this Lease.
4. RENT
A. Basic Rent. Tenant agrees to pay to Landlord at such place as Landlord may
designate without deduction, offset, prior notice, agrees to accept as Basic
Rent for the leased Premises the total sum of ELEVEN MiLLiON THREE HUNDRED FIFTY
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SiX THOUSAND TWO ($11,356,296.00) in lawful money of the United States of
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America, payable as follows:
See Paragraph 39 for Basic Rent Schedule
E. Fixed Management Fee. Beginning with the Commencement Date of the Term
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of this Lease, Tenant shall pay to Landlord, in addition to the Basic Rent and
Additional Rent, a fixed monthly management fee ("Management Fee") equal to 2%
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of the Basic Rent due for each month during the Lease Term.
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or more frequently if Landlord elects to do so at Landlord's sole and absolute
discretion
B. Time for Payment. Full monthly rent is due in advance on the first
day of each calendar month. in the event that the term of this Lease commences
on a date other than the first day of a calendar month, on the date of
commencement of the term hereof Tenant shall pay to Landlord as rent for the
period from such date of commencement to the first day of the next succeeding
calendar month that proportion of the monthly rent hereunder which the number of
days between such date of commencement and the first day of the next succeeding
calendar month bears to thirty (30). in the event that the term of this Lease
for any reason ends on a date other than the last day of a calendar month, on
the first day of the last calendar month of the term hereof Tenant shall pay to
Landlord as rent for the period from said first day of said last calendar month
to and including the last day of the term hereof that proportion of the monthly
rent hereunder which the number of days between said first day of said last
calendar month and the last day of the term hereof bears to thirty (30).
C. Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is in default in the payment of rental as set forth in this Paragraph 4
when due, or any part thereof, Xxxxxx agrees to pay Landlord, in addition to the
delinquent rental due, a late charge for each rental payment in default ten (10)
days. Said late charge shall equal ten percent (10%) of each rental payment so
in default.
D. Additional Rent. Beginning with the commencement date of the term of
this Lease, Tenant shall pay to Landlord or to Landlord's designated agent in
addition to the Basic Rent and as Additional Rent the following:
(a) All Taxes relating to the Premises as set forth in Paragraph 9,
and
(b) All insurance premiums and deductibles relating to the Premises,
asset forth in Paragraph 12, and
(c) All charges, costs and expenses, which Tenant is required to pay
hereunder, together with all interest and penalties, costs and expenses
including reasonable attorneys' fees and legal expenses, that may accrue
thereto in the event of Tenant's failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason
of default of Tenant or failure on Tenant's part art to comply with the
terms of this Lease. in the event of nonpayment by Tenant of Additional
Rent, Landlord shall have all the rights and remedies with respect thereto
as Landlord has for nonpayment of rent.
The Additional Rent due hereunder shall be paid to Landlord or Landlord's agent
(1) within five days for taxes and insurance and within thirty (30) days for all
other Additional Rent items after presentation of invoice from Landlord or
Landlord's agent setting forth such Additional Rent and/or (ii) at the option of
Landlord, Tenant shall pay to Landlord monthly, in advance, Xxxxxx's prorata
share of an amount estimated by Landlord to be Landlord's approximate average
monthly expenditure for such Additional Rent items, which estimated amount shall
be reconciled at the end of each calendar year as compared to Landlord's actual
expenditure for said Additional Rent items, with Tenant paying to Landlord, upon
demand, any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord crediting to Tenant (providing Tenant is not in
default in the performance of any of the terms, covenants or conditions of this
Lease) any amount of estimated payments made by Tenant in excess of Landlord's
actual expenditures for said Additional Rent items. The respective obligations
of Landlord and Tenant under this paragraph shall survive the expiration or
other termination of the term of this Lease, and if the term hereof shall expire
or shall otherwise terminate on a day other than the last day of
a calendar year, the actual Additional Rent incurred for the calendar year in
which the term hereof expires or otherwise terminates shall be determined and
settled on the basis of the statement of actual Additional Rent for such
calendar year and shall be prorated in the proportion which the number of days
in such calendar year preceding such expiration or termination bears to 365.
F. Place of Payment of Rent and Additional Rent. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the office of Landlord at Xxxxx/Xxxxxxxxx, File 1504. Box 60000, San
Francisco.; CA 94160 or to such other person or to such other place as Landlord
may from time to time designate in writing.
*G. Security Deposit. Concurrently with Xxxxxx's execution of this Lease,
Tenant shall deposit with Landlord the sum of THREE HUNDRED FiVE THOUSAND SiX
HUNDRED FiFTY SiX AND N0/100 Dollars ($ 305,656.00). Said sum shall be held by
Landlord as a Security Deposit for the faithful performance by Tenant of all of
the terms, covenants, and conditions of this Lease to be kept and performed by
Tenant during the term hereof, if Tenant defaults with respect to any provision
of this Lease, including, but not limited to, the provisions relating to the
payment of rent and any of the monetary sums due herewith, Landlord may (but
shall not be required to) use, apply or retain all or any part of this Security
Deposit for the payment of any other amount which Landlord may spend by reason
of Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. if any portion of said
Deposit is so used or applied, Tenant shall, within ten (10) days after written
demand therefor, deposit cash with Landlord in the amount sufficient to restore
the Security Deposit to its original amount. Xxxxxx's 'failure to do so shall be
a material breach of this Lease. Landlord shall not be required to keep this
Security Deposit separate from its general funds, and Tenant shall not be
entitled to interest on such Deposit. if Xxxxxx fully and faithfully performs
every provision of this Lease to be performed by it, the Security Deposit or any
balance thereof shall be returned to Tenant (or at Landlord's option, to the
last assignee of Xxxxxx's interest hereunder) at the expiration of the Lease
term and after Xxxxxx has vacated the Premises. in the event of termination of
Landlord's interest in this Lease, Landlord shall transfer said Deposit to
Xxxxxxxx's successor in interest whereupon Xxxxxx agrees to release Landlord
from liability for the return of such Deposit or the accounting therefor.
* $152,828.00 Cash due upon Lease execution. initials:
$152,828.00 Promissory Note due January 1, 2000. initials:
5. ACCEPTANCE AND SURRENDER OF PREMISES. By entry hereunder, Xxxxxx accepts
the Premises as being in good and sanitary order, condition and repair and
accepts the building and improvements included in the Premises in their present
condition and without representation or warranty by Landlord as to the condition
of such building or as to the use or occupancy which may be made thereof. Any
exceptions to the foregoing must be by written agreement executed by Landlord
and Xxxxxx. Tenant agrees on the last day of the Lease term, or on the sooner
termination of this Lease, to surrender the Premises promptly and peaceably to
Landlord in good condition and repair (damage by Acts of God, fire, normal wear
and tear excepted), with all interior walls painted, or cleaned so that they
appear freshly painted, and repaired and replaced, if damaged; all floors
cleaned and waxed; all carpets cleaned and shampooed; all broken, marred or
nonconforming accoustical coiling tiles replaced; all windows washed; the
airconditioning and heating systems serviced by a reputable and licensed service
firm and in good operating condition and repair; the plumbing and electrical
systems and lighting in good order and repair, including replacement of any
burned out or broken light bulbs or ballasts; the lawn and shrubs in good
condition including the replacement of any dead or damaged plantings; the
sidewalk, driveways and parking areas in good order, condition and repair;
together with all alterations, additions, and improvements which may have been
made in, to, or on the Premises (except moveable trade fixtures installed at the
expense of Tenant) except that Tenant shall ascertain from Landlord within
thirty (30) days before the end of the term of this Lease whether Landlord
desires to have the Premises or any part or parts thereof restored to their
condition and configuration as when the Premises were delivered to Tenant and if
' Landlord shall so desire, then Tenant shall restore said Premises or such part
or parts thereof before the end of this Lease at Tenant's sole cost and expense.
Tenant, on or before the end of the
term or sooner termination of this Lease, shall remove all of Tenant's personal
property and trade fixtures from the Premises, and all property not so removed
on or before the end of the term or sooner termination of this Lease shall be
deemed abandoned by Tenant and title to same shall thereupon pass to Landlord
without compensation to Tenant. Landlord may, upon termination of this Lease,
remove all moveable furniture and equipment so abandoned by Tenant, at Tenant's
sole cost, and repair any damage caused by such removal at Tenant's sole cost.
if the Premises be not surrendered at the end of the term or sooner termination
of this Lease, Tenant shall indemnify Landlord against loss or liability
resulting from the delay by Xxxxxx in so surrendering the Premises including,
without limitation, any claims made by any succeeding tenant founded on such
delay. Nothing contained herein shall be construed as an extension of the term
hereof or as a consent of Landlord to any holding over by Tenant. The voluntary
or other surrender of this Lease or the Premises by Tenant or a mutual
cancellation of this Lease shall not work as a merger and, at the option of
Landlord, shall either terminate all or any existing subleases or subtenancies
or operate as an assignment to Landlord of all or any such subleases or
subtenancies.
6. ALTERATIONS AND ADDITIONS. Tenant shall not make, or suffer to be made, any
alteration or addition to the Premises, or any part thereof, without the written
consent of Landlord first had and obtained by Tenant (such consent not to be
unreasonably withhold), but at the cost of Tenant, and any addition to, or
alteration of, the Premises, except moveable furniture and trade fixtures, shall
at once become a part of the Premises and belong to Landlord. Landlord reserves
the right to approve all contractors and mechanics proposed by Xxxxxx to make
such alterations and additions. Tenant shall retain title to all moveable
furniture and trade fixtures placed in the Premises. All heating, lighting,
electrical, airconditioning, floor and ceiling partitioning, drapery, carpeting,
and floor installations made by Tenant, together with all property that has
become an integral part of the Premises, shall not be deemed trade fixtures.
Xxxxxx agrees that it will not proceed to make such alteration or additions,
without having obtained consent from Landlord to do so, and until five (5) days
from the receipt of such consent, in order that Landlord may post appropriate
notices to avoid any liability to contractors or material suppliers for payment
for Tenant's improvements. Tenant will at all times permit such notices to be
posted and to remain posted until the completion of work. Tenant shall, if
required by Xxxxxxxx, secure at Xxxxxx's own cost and expense, a completion and
lien indemnity bond, satisfactory to Landlord, for such work. Tenant further
covenants and agrees that any mechanic's lien filed against the Premises for
work claimed to have been done for, or materials claimed to have been furnished
to Tenant, will be discharged by Tenant, by bond or otherwise, within ten (10)
days after the filing thereof, at the cost and expense of Tenant. Any exceptions
to the foregoing must be made in writing and executed by both Landlord and
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Tenant.
7 TENANT MAINTENANCE: Tenant shall at its sole cost and expense, keep and
maintain the Premises (including appurtenances) and every part thereof in a,
high standard of maintenance and repair, or replacement, and in good and
sanitary condition. Tenant's maintenance and repair responsibilities herein
referred to include, but are not limited to, janitorization, all windows
(interior and exterior), window frames, plate glass and glazing (destroyed by
accident or act of third parties), truck doors, plumbing systems (such as water
and drain lines, sinks, toilets, faucets, drains, showers and water fountains),
electrical systems (such as panels, conduits, outlets, lighting fixtures, lamps,
bulbs, tubes and ballasts), heating and airconditioning systems (such as
compressors, fans, air handlers, ducts, mixing boxes, thermostats, time clocks,
boilers, heaters, supply and return grills), structural elements and exterior
surfaces of the building, store fronts, roofs, downspouts, all interior
improvements within the premises including but not limited to wall coverings,
window coverings, carpet, floor coverings, partitioning, ceilings, doors (both
interior and exterior), including closing mechanisms, latches, locks, skylights
(if any), automatic fire extinguishing systems, and elevators and all other
interior improvements of any nature whatsoever, and all exterior improvements
including but not limited to landscaping, sidewalks, driveways, parking lots
including striping and sealing, sprinkler systems, lighting, ponds, fountains,
waterways, and drains. Tenant agrees to provide carpet xxxxxxx under all rolling
chairs or to otherwise be responsible for wear and tear of the carpet caused by
such rolling chairs if such wear and tear exceeds that caused by normal foot
traffic in surrounding areas. Areas of excessive wear shall be replaced at
Tenant's sole expense upon Lease termination. Tenant hereby waives all rights
under, and benefits of, Subsection 1 of Section 1932 and Section 1941 and 1942
of the California Civil Code and under any similar law, statute or ordinance now
or hereafter in
effect. in the event any of the above maintenance responsibilities apply to any
other tenant(s) of Landlord where there is common usage with other tenant(s),
such maintenance responsibilities and charges shall be allocated to the [eased
Premises by square footage or other equitable basis as calculated and determined
by Landlord.
8. UTILITIES. Tenant shall pay promptly, as ' the same become due, all charges
for water, gas, electricity, telephone, telex and other electronic communication
service, sewer service, waste pick-up and any other utilities, materials or
services furnished directly to or used by Tenant on or about the Premises during
the term of this Lease, including, without limitation, any temporary or
permanent utility surcharge or other exactions whether or not hereinafter
imposed. in the event the above charges apply to any other tenant(s) of Landlord
where there is common usage with other tenant(s), such charges shall be
allocated to the, leased Premises by square footage or other equitable basis as
calculated and determined by Landlord. Landlord shall not be liable for and
Tenant shall not be entitled to any abatement or reduction of rent by reason of
any interruption or failure of utility services to the Premises when such
interruption or failure is caused by accident, breakage, repair, strikes,
lockouts, or other labor disturbances or labor disputes of any nature, or by any
other cause, similar or dissimilar, beyond the reasonable control of Landlord .
9. TAXES. As Additional Rent and in accordance with Paragraph 4D of this
Lease, Tenant shall pay to Landlord, or if Landlord so directs, directly to the
Collector, all Real Property Taxes relating to the Promises. in the event the
Premises leased hereunder consist of only a portion of the entire tax parcel,
Tenant shall pay to Landlord Xxxxxx's proportionate share of such real estate
taxes allocated to the leased Premises by square footage or other reasonable
basis as calculated and determined by Landlord. if the tax billing pertains 100%
to the leased Premises, and Landlord chooses to have Tenant pay said real estate
taxes directly to the Tax Collector, then in such event it shall be the
responsibility of Tenant to obtain the tax and assessment bills and pay, prior
to delinquency, the applicable real property taxes and assessments pertaining to
the leased Premises, and failure to receive a bill for taxes and/or assessments
shall not provide a basis for cancellation of or nonresponsibility for payment
of penalties for nonpayment or late payment by Tenant. The term "Real Property
Taxes", as used herein, shall mean (i) all taxes, assessments, levies and other
charges of any kind or nature whatsoever, general and special, foreseen and
unforeseen (including all installments of principal and interest required to pay
any general or special assessments for public improvements and any increases
resulting from reassessments caused by any change in ownership of the Premises)
now or hereafter imposed by any governmental or quasi-governmental authority or
special district having the direct or indirect power to tax or levy assessments,
which are levied or assessed against, or with respect to the value, occupancy or
use of, all or any portion of the Premises (as now constructed or as may at any
time hereafter be constructed, altered, or otherwise changed) or Landlord's
interest therein; any improvements located within the Premises (regardless of
ownership); the fixtures, equipment and other property of Landlord, real or
personal, that are an integral part of and located in the Premises; or parking
areas, public utilities, or energy within the Premises; (ii) all charges, levies
or fees imposed by reason of environmental regulation or other governmental
control of the Premises; and (iii) all costs and fees (including reasonable
attorneys' fees) incurred by Landlord in reasonably contesting any Real Property
Tax and in negotiating with public authorities as to any Real Property Tax. If
at any time during the term of this Lease the taxation or assessment of the
Premises prevailing as of the commencement date of this Lease shall be altered
so that in lieu of or in addition to any Real Property Tax described above there
shall be levied, assessed or imposed (whether by reason of a change in the
method of taxation or assessment, creation of a now tax or charge, or any other
cause) an alternate or additional tax or charge (i) on the value, use or
occupancy of the Promises or Landlord's interest therein or (ii) on or measured
by the gross receipts, income or rentals from the Premises, on Landlord's
business of leasing the Premises, or computed in any manner with respect to the
operation of the Premises, then any such tax or charge, however designated,
shall be included within the meaning of the term "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is based upon property or rents
unrelated to ft Promises, then only that part of such Real Property Tax that is
fairly allocable to the Promise; shall be included within the meaning of the
term "Real Property Taxes". Notwithstanding the foregoing, the term "Real
Property Taxes" shall not include estate, inheritance, gift or franchise taxes
of Landlord or the federal or state net income tax imposed on Landlord's income
from all sources.
The term "Real Estate Taxes" shall also include supplemental taxes related to
the period of Tenant's Lease Term whenever levied, including any such taxes that
may be levied after the Lease Term has expired.
B. Taxes On Tenants Property. Tenant shall be liable for and shall pay
ten days before delinquency, taxes levied against any personal property or trade
fixtures placed by Tenant in or about the Promises. it any such taxes on
Tenant's personal property or trade fixtures are levied against Landlord or
Landlord's property or if the assessed value of the Premises is increased by the
inclusion therein of a value placed upon such personal property or trade
fixtures of Tenant and if Landlord, after written notice to Tenant, pays the
taxes based on such increased assessment, which Landlord shall have the right to
do regardless of the validity thereof, but only under proper protest if
requested by Tenant, Tenant shall upon demand. as the case may be, repay to
Landlord the taxes so levied against Landlord, or the proportion of such taxes
resulting from such increase in the assessment; provided that in any such event
Tenant shall have the right in the name of Landlord and with Xxxxxxxx's full
cooperation, to bring suit in any court of competent jurisdiction to recover the
amount of such taxes so paid under protest, and any amount so recovered shall
belong to Tenant.
10. LIABILITY INSURANCE. Tenant, at Xxxxxx's expense, agrees to keep in force
during the term of this Lease a policy of commercial general liability insurance
with combined single limit coverage of not less than Two Million Dollars
($2,000,000) per occurrence) for bodily injury and property damage occurring in,
on or about the Premises, including parking and landscaped areas. Such insurance
shall be primary and noncontributory as respects any insurance carried by
Landlord. The policy or policies effecting such insurance shall name Landlord as
additional insureds, and shall insure any liability of Landlord, contingent or
otherwise, as respects acts or omissions of Tenant its agents, employees or
invitees or otherwise by any conduct or transactions of any of said persons in
or about or concerning the Premises, including any failure of Tenant to observe
or perform any of its obligations hereunder; shall be issued by an insurance
company admitted to transact business in the State of California; and shall
provide that the insurance effected thereby shall not be canceled, except upon
thirty (30) days' prior written notice to Landlord. A Certificate of Insurance
of said policy shall be delivered to Landlord. if. during the term of this
Lease, in the considered opinion of Xxxxxxxx's Lender, insurance advisor, or
counsel, the amount of insurance described in this Paragraph 10 is not adequate,
Tenant agrees to increase said coverage to such reasonable amount as Landlord's
Lender, insurance advisor, or counsel shall deem adequate.
11. TENANT'S PERSONAL PROPERTY INSURANCE AND XXXXXXX'X COMPENSATION INSURANCE.
Tenant shall maintain a policy or policies of fire and property damage insurance
in "all risk* form with a sprinkler leakage endorsement insuring the personal
property inventory, trade fixtures, and leasehold improvements within the leased
Premises for the full replacement value thereof. The proceeds from any of such
policies shall be used for the repair or replacement of such items so insured.
Tenant shall also maintain a policy or policies of xxxxxxx'x compensation
insurance and any other employee benefit insurance sufficient to comply with the
laws.
12. PROPERTY INSURANCE. Tenant shall pay to Landlord Tenant's proportionate
share (allocated to the leased Premises by square footage or other equitable
basis as calculated and determined by Landlord) of the deductibles on insurance
claims and the cost of, policy or Policies of insurance covering loss or damage
to the Premises (excluding routine and incidental damage or destruction caused
by accidents or vandalism for which Tenant is responsible under Paragraph 7) in
the amount of the full replacement value thereof, providing protection against
those perils included within the classification of 'all risks" insurance and
flood and/or earthquake insurance, 0 available, plus a policy of rental income
insurance in the amount of one hundred (100%) percent of twelve (12) months
Basic Rent, plus sums paid as Additional Rent. if such insurance cost 13
increased due to Xxxxxx's use of the Premises, Xxxxxx agrees to pay to Landlord
the full -cost of such increase. Tenant shall have no interest in nor any right
to the proceeds of any insurance procured by Landlord for the Premises.
Landlord and Tenant do each hereby respectively release the other, to the extent
of insurance coverage of the releasing party from any liability for loss or
damage caused by fire or any of the extended coverage casualties included in the
releasing party's insurance policies, irrespective of the cause of such fire or
casualty; provided, however, that if the insurance policy of either releasing
party prohibits such waiver,
then this waiver shall not take effect until consent to such waiver is obtained.
If such waiver is so prohibited, the insured Party affected shall promptly
notify the other party thereof.
13. INDEMNIFICATION. Landlord shall not be liable to Tenant and Tenant hereby
waives all claims against Landlord or any injury to or death of any person or
damage to or destruction of property in or about the Premises by or from any
cause whatsoever, including, without limitation, gas, fire, oil, electricity or
leakage of any character from the root, walls, basement or other portion of the
Premises but excluding, however, in negligence of Landlord, its agents,
servants, employees. invitees, or contractors of which negligence Landlord has
knowledge and reasonable time to correct. Except as to injury to persons or
damage to property, the negligence of Landlord Tenant shall hold Landlord
harmless from and defend Landlord against any and all expenses, including
reasonable attorneys' fees, in connection therewith? arising out or any injury
to or death of any person or do or destruction of property occurring in, on or
about the Promises, or any part thereof, from any cause whatsoever.
14. COMPLIANCE. Tenant, at its sole cost and expense, shall promptly comply
with all statutes, ordinances and governmental rules, regulations of
requirements now or hereafter in effect, with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate be issued pursuant to law by any public
officer, provided, however, that no such failure shall be deemed a breach of the
provisions if Tenant, immediately upon notification, commences to remedy or
rectify said failure. The judgment of any court of competent jurisdiction or the
admission of Tenant in any action against Tenant, whether Landlord be a party
thereto or not, that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. Tenant shall, at its
sole cost and expense. comply with any and all requirements pertaining to said
Premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance covering
requirements pertaining to said Premises, all any insurance organization or
company, necessary for the maintenance of reasonable fire and public liability
insurance covering requirements pertaining to said Premises.
15. LIENS. Tenant shall keep the Promises free from any liens arising out of
any work performed, materials furnished or obligation incurred by Tenant. in the
event that Tenant shall not, within ten (10) days following the imposition of
such lien, cause the same to be released of record, Landlord shall have. in
addition to all other remedies provided herein and by law, the right, but no
obligation, to cause the same to be released by such means as it shall deem
proper, including payment of the claim giving rise to such lien. All sums paid
by Landlord for such purpose, and all expenses incurred by it in connection
therewith, shall be payable to Landlord by Tenant on demand with interest at the
prime rate of interest as quoted by the Bank of America.
16. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest therein and
shall not sublet the Premises, or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person or entity to occupy or lease the
Premises, or any portion thereof, without, in each case, the prior written
consent of Landlord which consent will not be unreasonably withheld. As a
condition for granting this consent to any assignment, transfer, or subletting,
Landlord shall require Tenant to pay to Landlord, as Additional Rent, all rents
and/or additional consideration due. Tenant from its assignees, transferees, or
subtenants in excess of the Rent payable by Tenant to Landlord hereunder for the
assigned, transferred and/or subleased space. Tenant shall, by thirty (30) days
written notice, advise, Landlord of its intent to assign or transfer Xxxxxx's
interest in the Lease or sublet the Premises or any portion thereof for any part
of the term hereof. Within thirty (30) days after receipt of said written
notice, Landlord may, in its sole discretion, elect to terminate this Lease as
to the portion of the Premises described in Xxxxxx's notice on the date
specified in Tenant's notice by giving written notice of such election to
terminate. If no such notice to terminate is given to Tenant within said thirty
(30) day period, Tenant may proceed to locate an acceptable sublessee, assignee.
or other transferee for presentment to Landlord for Landlords approval, all in
accordance with the terms, covenants, and conditions of this paragraph 16. if
Tenant intends to sublet the entire Premises and Landlord elects to terminate
this Lease, this Lease shall be terminated on the date specified in Tenant's
notice. if, however, this Lease shall terminate pursuant to the foregoing with
respect to less than all the Premises, the rent, as defined
and reserved hereinabove shall be adjusted on a pro rata basis to the number of
square feet retained by Tenant, and this Lease as so amended shall continue in
full force and effect. In the event Tenant is allowed to assign, transfer or
sublet the whole or any part of the Premises, with the prior written consent of
Landlord, no assignee, transferee or subtenant shall assign or transfer this
Lease, either in whole or in part, or sublet the whole or any part of the
Premises, without also having obtained the prior written consent of Landlord. A
consent of Landlord to one assignment, transfer, hypothecation, subletting,
occupation or use by any other person shall not release Tenant from any of
Tenant's obligations hereunder or be deemed to be a consent to any subsequent
similar or dissimilar assignment, transfer, hypothecation, subletting.
occupation or use by any other person. Any such assignment, transfer,
hypothecation. subletting, occupation or use without such consent shall be void
and shall constitute a breach of this Lease by Tenant and shall, at the option
of Landlord exercised by written notice to Tenant, terminate this Lease. The
leasehold estate under this Lease shall not, nor shall any interest therein, be
assignable for any purpose by operation of law without the written consent of
Landlord. As a condition to its consent, Landlord may require Tenant to pay all
expenses in connection with the assignment, and Landlord shall require Xxxxxx's
assignee or transferee (or other assignees or transferees) to assume in writing
all of the obligations under this Lease and for Tenant to remain liable to
Landlord under the Lease.
17. SUBORDINATION AND MORTGAGES. In the event Landlord's title or leasehold
interest is now or hereafter encumbered by a deed of trust, upon the interest of
Landlord in the land and buildings in which the demised Premises are located, to
secure a loan from a lender (hereinafter referred to as "Lender") to Landlord,
Tenant shall, at the request of Landlord or Lender, execute in writing an
agreement subordinating its rights under this Lease to the lien of such deed of
trust, or, if so requested, agreeing that the lien of Lendees deed of trust
shall be or remain subject and subordinate to the rights of Tenant under this
Lease. Notwithstanding any such subordination, Xxxxxx's possession under this
Lease shall not be disturbed if Tenant is not in default and so long as Tenant
shall pay all rent and observe and perform all of the provisions set forth in
this Lease.
18. ENTRY BY LANDLORD. Landlord reserves, and shall at all reasonable times
after at least 24 hours notice (except in emergencies), have, the right to enter
the Premises to inspect them; to perform any services to be provided by Landlord
hereunder; to make repairs or provide any services to a contiguous tenant(s); to
submit the Premises to prospective purchasers, mortgagers or tenants; to post
notices of nonresponsibility, and to alter, improve or repair the Premises or
other parts of the building, all without abatement of rent, and may erect
scaffolding and other necessary structures in or through the Premises where
reasonably required by the character of the work to be performed; provided,
however that the business of Tenant shall be interfered with to the least extent
that is reasonably practical. Any entry to the Premises by Landlord for the
purposes provided for herein shall not under any circumstances be construed or
deemed to be a forcible or unlawful entry into or a detainer of the Premises or
an eviction, actual or constructive, of Tenant from the Premises or any portion
thereof.
19. BANKRUPTCY AND DEFAULT. The commencement of a bankruptcy action or
liquidation action or reorganization action or insolvency action or an
assignment of or by Tenant for the benefit of creditors, or any similar action
undertaken by Xxxxxx, or the insolvency of Tenant, shall, at Landlord's option,
constitute a breach of this Lease by Tenant. if the trustee or receiver
appointed to serve during a bankruptcy, liquidation, reorganization, insolvency
or similar action elects to reject Tenant's unexpired Lease, the trustee or
receiver shall notify Landlord in writing of its election within thirty (30)
days after an order for relief in a liquidation action or within thirty (30)
days after the commencement of any action. Within thirty (30) days after court
approval of the assumption of this Lease, the trustee or receiver shall cure (or
provide adequate assurance to the reasonable satisfaction of Landlord that the
trustee or receiver shall cure) any and all previous defaults under the
unexpired Lease and shall compensate Landlord for all actual pecuniary loss and
shall provide adequate assurance of future performance undersold Lease to the
reasonable satisfaction of Landlord. Adequate assurance of future performance,
as used herein, includes, but shall not be limited to: (i) assurance of source
and payment of rent, and other consideration due under this Lease; (11)
assurance that the assumption or assignment of this Lease will not breach
substantially any provision, such as radius, location, use, & exclusivity
provision, in any agreement relating to the above described Promises. Nothing
contained in this
section shall affect the existing right of Landlord to refuse to accept an
assignment upon commencement of or in connection with a bankruptcy, liquidation,
reorganizition or insolvency action or an assignment of Tenant for the benefit
of creditors or other similar act. Nothing contained in this Lease shall be
construed as giving or granting or creating an equity in the demised Premises to
Tenant. In no event shall the leasehold estate under this Lease, or any interest
therein, be assigned by voluntary or involuntary bankruptcy proceeding without
the prior written consent of Landlord. In no event shall this Lease or any
rights or privileges hereunder be an asset of Tenant under any bankruptcy,
insolvency or reorganization proceedings. The failure to perform or honor any
covenant, condition or representation made under this Lease shall constitute a
default hereunder by Tenant upon expiration of the appropriate grace period
hereinafter provided. Tenant shall have a period of five (5) days from the date
of written notice from Landlord within which to cure any default in the payment
of rental or adjustment thereto. Tenant shall have a period of "days from the
date of written notice from Landlord within which to cure any other default
under this Lease. Upon an uncured default of this Lease by Tenant, Landlord
shall have the following rights and remedies in addition to any other rights or
remedies available to Landlord at law or in equity:
(a) The rights and remedies provided for by California Civil Code Section
1951.2, including but not limited to, recovery of the worth at the time of award
of the amount by which the unpaid rent for the balance of the term after the
time of award exceeds the amount of rental loss for the same period that Tenant
proves could be reasonably avoided, as computed pursuant to subsection (b) of
said Section 1951.2. Any proof by Tenant under subparagraphs (2) and (3) of
Section 1951.2 of the California Civil Code of the amount of rental loss that
could be reasonably avoided shall be made in the following manner: Landlord and
Tenant shall each select a licensed real estate broker in the business of
renting property of the same type and use as the Promises and in the same
geographic vicinity. Such two real estate brokers shall select a third licensed
real estate broker, and the three licensed real estate brokers so selected shall
determine the amount of the rental loss that could be reasonably avoided from
the balance of the term of this Lease after the time of award. The decision of
the majority of said licensed real estate brokers shall be final and binding
upon the parties hereto.
(b) The rights and remedies provided by California Civil Code Section which
allows Landlord to continue the Lease in effect and to enforce all of its rights
and remedies under this Lease, including the right to recover rent as it becomes
due, for so long as Landlord does not terminate Xxxxxx's right to possession,,
acts of maintenance or preservation, efforts to relet the Premises, or the
appointment of a receiver upon Xxxxxxxx's initiative to protect its interest
under this Lease shall not constitute a termination of Tenant's right to
possession.
(c) The right to terminate this Lease by giving notice to Tenant in
accordance with applicable law.
(d) The right and power; provided however, that if the nature of Tenant's
failure is such that more than thirty (30) days is reasonably required to cure
the same, Tenant shall not be in default so long as Tenant commences performance
within such thirty (30) day period and thereafter prosecutes the same to
completion, to enter the Premises and remove therefrom all persons and property,
to store such property in a public warehouse or elsewhere at the cost of and for
the account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord, may from time to
time, sublet the Promises or any part thereof for such term or terms (which may
extend beyond the term of this Lease) and at such rent and such other terms as
Landlord in its reasonable sole discretion may deem advisable, with the right to
make alterations and repairs to the Premises. Upon each subletting, (i) Tenant
shall be immediately liable to pay Landlord, in addition to indebtedness other
than rent due hereunder, the reasonable cost of such subletting, including, but
not limited to, reasonable attorneys' fees, and any real estate commissions
actually paid, and the cost of such reasonable alterations and repairs incurred
by Landlord and the amount, if any, by which the rent hereunder for the period
of such subletting (to the extent such period does not exceed the term hereof)
exceeds the amount to be paid as rent for the Premises for such period or (ii)
at the option of Landlord, rents received from such subletting shall be applied
first to payment of indebtedness other than rent due hereunder from Tenant to
Landlord; second, to the payment of any costs of such subletting and of such
alterations and repairs; third to payment of rent due and unpaid hereunder; and
the residue, if any, shall be held by Landlord and applied in payment of future
rent as the same becomes due hereunder. it Tenant has been credited with any
rent to be received by such subletting under option (i) and such rent shall not
be promptly paid to Landlord by the subtenant(s), or if such rental received
from such subletting under option (ii) during any month
be less than that to be paid during that month by Tenant hereunder, Tenant shall
pay any such deficiency to Landlord. Such deficiency shall be calculated and
paid monthly. No taking possession of the Premises by Landlord, shall be
construed as an election on its part to terminate this Lease unless a written
notice of such intention be given to Tenant. Notwithstanding any such subletting
without termination, Landlord may at any time hereafter elect to terminate this
Lease for such previous breach.
(e) The right to have a receiver appointed for Tenant upon application by
Landlord, to take possession of the Premises and to apply any rental collected
from the Premises and to exercise all other rights and remedies granted to
Landlord pursuant to subparagraph d. above.
20. ABANDONMENT. Tenant shall not vacate or abandon the Premises at any time
during the term of this Lease and if Tenant shall abandon, vacate or surrender
said Promises, or be dispossessed by the process of law, or otherwise, any
personal property belonging to Xxxxxx and left on the Premises shill be deemed
to be abandoned, at the option of Landlord, except such property as may be
mortgaged to Landlord.
21. DESTRUCTION. In the event the Premises are destroyed in whole or in part
from any cause, except for routine maintenance and repairs and incidental damage
and destruction caused from vandalism and accidents for which Tenant is
responsible under Paragraph 7. Landlord may, at it option:
(a) Rebuild or restore the Premises to their condition prior to the damage
or destruction, or
(b) Terminate this Lease (providing that the Premises is damaged to the
extent of 33 1/3% of the replacement cost).
If Landlord does not give Tenant notice in writing within thirty (30) days
from the destruction of the Premises of its election to either rebuild and
restore them, or to terminate this Lease, Landlord shall be deemed to have
elected to rebuild or restore them, in which event Landlord agrees, at its
expense, promptly to rebuild or restore the Premises to their condition prior to
the damage or destruction. Tenant shall be entitled to a reduction in rent while
such repair is being made in the proportion that the area of the Premises
rendered untenantable by such damage bears to the total area of the Premises. If
Landlord does not complete the rebuilding or restoration within one hundred
eighty (180) days following the date of destruction (such period of time to be
extended for delays caused by the fault or neglect of Tenant or because of Acts
of God, acts of public agencies, labor disputes, strikes, fires, freight
embargos, rainy or stormy weather, inability to obtain materials, supplies or
fuels, acts of contractors or subcontractors, or delay of the contractors or
subcontractors due to such causes, or other contingencies beyond the control of
Landlord), then Tenant shall have the right to terminate this Lease by giving
fifteen (15) days prior written notice CD to Landlord. Notwithstanding anything
herein to the contrary, Landlord's obligation to rebuild or restore shall be
limited to the building and interior improvements" constructed by Landlord as
they existed as of the commencement date of the Lease and shall not include
restoration of Tenant's trade fixtures, equipment, merchandise, or any
improvements, alterations or additions made by Tenant to the Premises, which
Tenant shall forthwith replace or fully repair at Tenant's sole cost and expense
provided this Lease is not cancelled according to the provisions above. Unless
this Lease is terminated pursuant to the foregoing provisions, this Lease shall
remain in full force and effect. Tenant hereby expressly waives the provisions
of Section 1932, Subdivision 2, in Section 1933, Subdivision 4 of the California
Civil Code. In the event that the building in which the Promises are situated is
damaged or destroyed to the extent of not less than 331/3% of the replacement
cost thereof, Landlord may elect to terminate this Lease, whether the Premises
be injured or not. Notwithstanding anything to the contrary herein, Landlord May
terminate this Lease in the event of an uninsured event or if insurance proceeds
are insufficient to cover one hundred percent of the rebuilding costs net of the
deductible subject however, to Tenant's right to cover 100% of the deficit
amount necessary to cover 100% of said costs.
22. EMINENT DOMAIN. If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or conveyance
in lieu thereof, this Lease shall terminate as to any portion of the Premises so
taken or conveyed on the date when title vests in the condemnor, and Landlord
shall be entitled to any and all payment, income, rent, award, or any interest
therein whatsoever which may be paid or made in connection with such taking or
conveyance, and Tenant shall have no claim against Landlord or otherwise for the
value of any unexpired term of this Lease. Notwithstanding the foregoing
paragraph, any compensation
specifically awarded Tenant for loss of business, Xxxxxx's personal property,
moving cost or loss of goodwill, shall be and remain the property of Tenant. if
any action or proceeding is commenced for such taking of the Premises or any
part thereof, or if Landlord is advised in writing by any entity or body having
the right or power of condemnation of its intention to condemn the premises or
any portion thereof, then Landlord shall have the right to terminate this Lease
by giving Tenant written notice thereof within sixty (60) days of the date of
receipt of said written advice, or commencement of said action or proceeding, or
taking conveyance, which termination shall take place as of the first to occur
of the last day of the calendar month next following the month in which such
notice is given or the date on which title to the Premises shall vest in the
condemnor. In the event of such a partial taking or conveyance of the Premises,
if the portion of the Premises taken or conveyed is so substantial that the
Tenant can no longer reasonably conduct its business, Tenant shall have the
privilege of terminating this Lease within sixty (60) days from the date of such
taking or conveyance, upon written notice to Landlord of its intention so to do,
and upon giving of such notice this Lease shall terminate on the last day of the
calendar month next following the month in which such notice is given, upon
payment by Tenant of the rent from the date of such taking or conveyance to the
date of termination. If a portion of the Premises be taken by condemnation or
conveyance in lieu thereof and neither Landlord nor Tenant shall terminate this
Lease as provided herein, this Lease shall continue in full force and effect as
to the part of the Promises not so taken or conveyed, and the rent herein shall
be apportioned as of the date of such taking or conveyance so that thereafter
the rent to be paid by Tenant shall be in the ratio that the area of the portion
of the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking fee.
23. EMINENT DOMAIN. In the event of a sale or conveyance of the Premises or any
interest therein, by any owner of the revision then constituting Landlord, the
transferor shall thereby be released from any further liability upon any of the
terms, covenants or conditions (express or Implied) herein contained In favor of
Tenant, and In such event, Insofar as such transfer Is concerned, Xxxxxx agrees
to look solely to the responsibility of the successor In Interest of such
transferor In and to the Premises and this Lease. This Lease shall not be
affected by any such sale or conveyance, and Xxxxxx agrees to afforn to the
successor In Interest of such transferor.
24. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the Interest of Landlord
In the land and buildings in which the leased Premises are located (whether such
Interest of Landlord is a fee title Interest or a leasehold interest) Is
encumbered by deed of trust, and such interest Is acquired by the lender or any
third party through judicial foreclosure or by exercise of a power of sale at
private trustee's foreclosure sale, Tenant hereby agrees to afforn to the
purchaser at any such foreclosure sale and to recognize such purchaser as the
Landlord under this Lease. In the event the lien of the deed of trust securing
the loan from a Lender to Landlord Is prior and paramount to the Lease, this
Lease shall nonetheless continue In full force and effect for the remainder of
the unexpired term hereof, at the same rental herein reserved and upon all the
other terms, conditions and covenants herein contained.
25. HOLDING OVER. Any holding over by Tenant after expiration or other
termination of the term of this Lease with the written consent of Landlord
delivered to Tenant shall not constitute a renewal or extension of the Lease or
give Tenant any rights In or to the leased Premises except as expressly provided
In this Lease. Any holding over after the expiration or other termination of the
term of this Lease, with the consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
Insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred fifty (150%) percent of the monthly Basic Rent
required during the last month of the Lease term.
26. CERTIFICATE OF ESTOPPEL. Tenant shall at any time upon not less than ten
(10) days prior written notice to Landlord execute, acknowledge and deliver to
Landlord a statement In writing (i) certifying that this Lease Is unmodified and
In full force and affect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, Is In full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Xxxxxx's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults, if any, are claimed. Any such statement may be conclusively
relied upon by any prospective purchaser or encumbrance of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon Tenant that this Lease
is in full force and effect, without modification except as may be represented
by Landlord: that there are no uncured defaults In Landlord's performance, and
that not more than one month's rent has been paid in advance.
27. CONSTRUCTION CHANGES. It is understood that the description of the Promises
and the location of ductwork, plumbing and other facilities therein are subject
to such minor changes as Landlord or Landlord's architect determines to be
desirable in the course of construction of the Premises, and no such changes
shall affect this Lease or entitle Tenant to any reduction of rent hereunder or
result in any liability of Landlord to Tenant. Landlord does not guarantee the
accuracy of any drawings supplied to Tenant and verification of the accuracy of
such drawings rests with Tenant.
28. RIGHT OF LANDLORD TO PERFORM. All terms, covenants and conditions of this
Lease to be performed or observed by Tenant shall be performed or observed by
Tenant at Tenant's sole cost and expense and without any reduction of rent. If
Tenant shall fall to pay any sum of money, or other rent, required to be paid by
It hereunder or shall fail to perform any other term or covenant hereunder on
its part to be performed, and such failure shall continue for his (6) days after
written notice thereof by Landlord, Landlord, without waiving or releasing
Tenant from any obligation of Tenant hereunder, may, but shall not be obliged
to, make any such payment or perform any such other term or covenant on Tenant's
part to be performed. All sums so paid by Xxxxxxxx and all necessary costs of
such performance by Landlord together with Interest thereon at the rate of the
prime rate of interest per annum as quoted by the Bank of America from the date
of such payment on performance by Landlord, shall be paid (and Tenant covenants
to make such payment) to Landlord on demand by Landlord, and Landlord shall have
(In addition to any other right or remedy of Landlord) the same rights and
remedies in the event of nonpayment by Tenant as In the case of failure by
Xxxxxx In the payment of rent hereunder.
29. ATTORNEYS' FEES.
A. In the event that either Landlord or Tenant should bring suit for
the possession of the Promises, for the recovery of any sum due under this
Lease, or because of the breach of any provision of this Lease, or for any other
relief against the other party hereunder, then all costs and expenses, including
reasonable attorneys' fees incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
30. WAIVER. The waiver by either party of the other party's failure to perform
or observe any term, covenant or condition herein contained to be performed or
observed by such waiving party shall not be deemed to be a waiver of such term,
covenant or condition or of any subsequent failure of the party failing to
perform or observe the same or any other such term, covenant or condition
therein contained, and no custom or practice which may develop between the
parties hereto during the term hereof shall be deemed a waiver of, or in anyway
affect, the right of either party to insist upon performance and observance by
the other party in strict accordance with the terms hereof.
31. NOTICES. All notices, demands, requests, advices or designations which
maybe or are required to be given by either party to the other hereunder shall
be in writing. All notices, demands, requests, advices or designations by
Landlord to Tenant shall be sufficiently given, made or delivered if personally
served on Tenant by leaving the same at the Premises of if sent by United Stated
certified or registered mail, postage prepaid, addressed to Tenant at the
Premises. All notices, demands, requests, advices or designations by Tenant to
Landlord shall be sent by United States certified or registered mail, postage
prepaid, addressed to Landlord at its offices at Xxxxx/Xxxxxxxxx, 0000 Xxxxxxx
Xxxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxx, XX.__Each notice, request, demand, advice
or designation referred to in this. paragraph shall be deemed received on the
date of the personal service or mailing thereof in the manner herein provided,
as the case may be.
32. EXAMINATION OF LEASE. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its execution
and delivery by both Landlord and Tenant.
33. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
falls to perform obligations required of Landlord within a reasonable time, but
in no event earlier than (30) days after written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have heretofore been furnished to Tenant in
writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such that
more than thirty (30) days are required for performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
34. CORPORATE AUTHORITY. If Tenant is a corporation (or a partnership), each
individual executing this Lease on behalf of said corporation (or partnership)
represents and warrants that he is duly authorized to execute and deliver this
Lease on behalf of said corporation (or partnership) in accordance with the by-
laws of said corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or partnership)
in accordance with its terms. if Tenant is a corporation, Tenant shall, within
thirty (30) days after execution of this Lease, deliver to Landlord a certified
copy of the resolution of the Board of Directors of said corporation authorizing
or ratifying the execution of this Lease.
36. LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder. Tenant and all successors and assigns covenant and agree that, in the
event of any actual or alleged failure, breach or default hereunder by
Landlord:(a) the sole and exclusive remedy shall be against Landlord's interest
in the Premises leased herein;(b) no partner of Landlord shall be sued or named
as a party in any suit or action (except as may be necessary to secure
jurisdiction of the partnership);(c) no service of process shall be made against
any partner of Landlord (except as may be necessary to secure jurisdiction of
the partnership); (d) no partner of Landlord shall be required to answer or
otherwise plead to any service of process; (e) no judgment will be taken against
any partner of Landlord; (f) any judgment taken against any partner of Landlord
may be vacated and set aside at any time without hearing; (g) no writ of
execution will ever by levied against the assets of any partner of Landlord; (h)
these covenants and agreements are enforceable both by Landlord and also by any
partner of Landlord. Tenant agrees that each of the foregoing covenants and
agreements shall be applicable to any covenant or agreement either expressly
contained in this Lease or imposed by statute or at common law.
Initials: /s/ JA
-------------
Initials: /s/ TJS JA
-------------
37. SIGNS. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the written consent
of Landlord first had and obtained and Landlord shall have the right to remove
any such sign, placard, picture, advertisement, name or notice without notice to
and at the expense of Tenant. if Tenant is allowed to print or affix or in any
way place a sign in, on, or about the Premises, upon expiration or other sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign. All approved signs or lettering on outside doors shall
be printed, painted, affixed or inscribed at the expense of Tenant by a person
approved of by Landlord. Tenant shall not place anything or allow anything to
be placed near the glass of any window, door partition or wall which may appear
unsightly from outside the Premises.
38. MISCELLANEOUS AND GENERAL PROVISIONS.
A. Use of Building Name. Tenant shall not, without the written
consent of Landlord, use the name of the building for any purpose other than as
the address of the business conducted by Xxxxxx in the Premises.
B. Choice of Law, Severability. This Lease shall in all respects be
governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect. Definition of Terms. The term "Premises"
includes the space leased hereby and any improvements now or hereafter installed
therein or attached thereto. The term "Landlord" or any pronoun used in place
thereof includes the plural as well as the singular and the successors and
assigns of Landlord. The term "Tenant" or any pronoun used in place thereof
includes the plural as well as the singular and individuals, firms,
associations, partnerships and corporations, and their and each of their
respective heirs, executors, administrators, successors and permitted assigns,
according to the context hereof, and the provisions of this Lease shall inure to
the benefit of and bind such heirs, executors, administrators, successors and
permitted assigns. The term "person" includes the plural as well as the singular
and individuals, firms, associations, partnerships and corporations. Words used
in any gender include other genders. if there be more than one Tenant the
obligations of Tenant hereunder are joint and several. The paragraph headings of
this Lease are for convenience of reference only and shall have no effect upon
the construction or interpretation of any provision hereof.
D. Time of Essence. Time is of the essence of this Lease and of each and
all of its provisions.
E. Quitclaim. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within ten (10) days
after written demand from Landlord to Tenant, any quitclaim deed or other
document required by any reputable title company, licensed to operate in the
State of California, to remove the cloud or encumbrance created by this Lease
from the real property of which Xxxxxx's Premises are a part.
F. Incorporation of Prior Agreements; Amendments. This instrument along
with any exhibits and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Xxxxxx. Landlord and Xxxxxx
agree hereby that all prior or contemporaneous oral agreements between and among
themselves and their agents or representatives relative to the leasing of the
Premises are merged in or revoked by this agreement.
G. Recording. Neither Landlord nor Tenant shall record this Lease or a
short form memorandum hereof without the consent of the other.
H. Amendments for Financing. Xxxxxx further agrees to execute any
amendments required by a lender to enable Landlord to obtain financing, so long
as Tenants rights hereunder are not substantially affected.
I. Additional Paragraphs. Paragraphs 39 through 51 are added hereto and
are included as a part of this lease.
K. Diminution of Light. Air or View. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect his
Lease, entitle Tenant to any reduction of rent hereunder or result in any
liability of Landlord to Tenant.
IN WITNESS WHEREOF, Xxxxxxxx and Xxxxxx have executed and delivered this
Lease as of the day and year last written below.
LANDLORD:
XXXX XXXXXXXXX SURVIVOR'S TRUST
By Xxxx Xxxxxxxxx, Trustee
/s/ Xxxx Xxxxxxxxx
----------------------------------
XXXXXXX X. XXXXX SEPARATE PROPERTY TRUST
By: /s/ Xxxxx Xxxxx
---------------
Xxxxxxx X. Xxxxx, Trustee, Xxxxx Xxxxx Trustee Special Trustee
TENANT:
OPTICAL NETWORKS, INC.
a California corporation
By: /s/ Xxxxx Xxxxxx
---------------------
Title: CFO
------------------
Type or Print Name: Xxxxxxxx X. Xxxxxx
------------------
Date: 10/14/99
--------------------------------
Paragraphs 39 through 51 to Lease Agreement dated September 29, 1999, By and
Between the Xxxx Xxxxxxxxx Survivor's Trust and the Xxxxxxx X. Xxxxx Separate
Property Trust, as Landlord, and Optical Networks, Inc., a California
corporation, as Tenant for 58,780+ Square Feet of Space Located at 000 X. Xxxxxx
Xxxxx, Xxx Xxxx, Xxxxxxxxxx.
39. BASIC RENT: In accordance with Paragraph 4A herein, the total aggregate sum
------------
of ELEVEN MILLION FOUR HUNDRED SEVENTY THREE THOUSAND EIGHT HUNDRED FIFTY SIX
AND 04/100 DOLLARS ($11,473,856.04), shall be payable as follows:
On January 1, 2000, the sum of ONE HUNDRED EIGHTEEN THOUSAND NINE HUNDRED FIFTY
NINE AND 52/100 DOLLARS ($118,959.52) shall be due, and a like sum due on the
first day of each month thereafter, through and including December 1, 2000.
On January 1, 2001, the sum of ONE HUNDRED TWENTY FOUR THOUSAND EIGHT HUNDRED
THIRTY SEVEN AND 52/100 DOLLARS ($124,837.52) shall be due, and a like sum due
on the first day of each month thereafter, through and including December 1,
2001.
On January 1, 2002, the sum of ONE HUNDRED THIRTY THOUSAND SEVEN HUNDRED FIFTEEN
AND 52/100 DOLLARS ($130,715.52) shall be due, and a We sum due on the first
day of each month thereafter, through and including December 1, 2002.
On January 1, 2003, the sum of ONE HUNDRED THIRTY SIX THOUSAND FIVE HUNDRED
NINETY THREE AND 52/100 DOLLARS ($136,593.52) shall be due, and a like sum due
on the first day of each month thereafter, through and including December 1,
2003.
On January 1, 2004, the sum of ONE HUNDRED FORTY TWO THOUSAND FOUR HUNDRED
SEVENTY ONE AND 53/100 DOLLARS ($142,471.53) shall be due, and a like sum due on
the first day of each month thereafter, through and including December 1, 2004.
On January 1, 2005, the sum of ONE HUNDRED FORTY EIGHT THOUSAND THREE HUNDRED
FORTY NINE AND 53/100 DOLLARS ($148,349.53) shall be due, and a like sum due on
the first day of each month thereafter, through and including December 1, 20(75.
On January 1, 2006, the sum of ONE HUNDRED FIFTY FOUR THOUSAND TWO HUNDRED
TWENTY SEVEN AND 53/100 DOLLARS ($154,227.53.00) shall be due, and sum due on
the first day of each month thereafter, through and including December 1,, 2006;
or until the entire aggregate sum of ELEVEN MILLION FOUR HUNDRED SEVENTY THREE
THOUSAND EIGHT HUNDRED FIFTY SIX AND 04/100 DOLLARS ($11,473,856.(4) has been
paid.
40. "AS IS" BASIS: Subject only to Paragraph 41 and to Landlord making the
-------------
improvements shown on Exhibit B to be attached hereto, it is hereby agreed that
---------
the Premises lease hereunder is leased strictly on an "as-is" basis and in its
present condition, and in the configuration as shown on Exhibit B to be
attached hereto, and by reference made a part hereof Except as noted herein, it
is specifically agreed between the parties that after Landlord makes the
interior improvements as shown on Exhibit B, Landlord shall not be required to
----------
make, nor be
responsible for any cost, in connection with any repair, restoration, and/or
improvement to the Premises in order for this Lease to commence, or thereafter,
throughout the Term of this Lease. Notwithstanding anything to the contrary
within this Lease, Landlord makes no warranty or representation of any kind or
nature whatsoever as to the condition or repair of the Premises, nor as to the
use or occupancy which may be made thereof.
41. TENANT INTERIOR IMPROVEMENTS: Landlord shall, at its sole cost and expense,
------------------------------
construct certain interior improvements (the "Tenant Improvements") in the
Premises, as shown on Exhibit B to be attached to the Lease and Landlord agrees
to deliver the Premises leased hereunder to Tenant, at Landlord's expense, in
the configuration shown in Red on Exhibit B to be attached hereto.
----------
Notwithstanding anything to the contrary above, it is specifically understood,
and agreed that Landlord shall be required to furnish only a standard air
conditioning/heating system, normal electrical outlets, standard fire sprinkler
systems, standard bathroom, standard lobby, 2" x 4' suspended acoustical tile
drop ceiling throughout the entire space leased, carpeting and/or vinylcoated
floor tile, and standard office partitions and doors, as shown on Exhibit B to
----------
b- attached hereto; provided however, that any special HVAC and/or plumbing
and/or electrical requirements over and above that normally supplied by Landlord
shall be 100 percent the responsibility of and be paid for 100 percent by
Tenant.
It is further agreed that Tenant shall famish Landlord with Xxxxxx's required
specifications and a preliminary space plan showing the layout of the
improvements to be constructed in the Premises by November 11, 1999. At that
time, Landlord shall have the final interior plans drawn by Xxxxxxxx's
architect. All of the plans and specifications shall be Exhibit B to this Lease.
--
If said preliminary plans and specifications for any items affecting the
interior improvements to be constructed in the building are not received by
Landlord for Landlord's approval (which approval shall not be unreasonably
withheld) by November 11, 1999, then it is agreed that, notwithstanding anything
to the contrary in this Lease, this Lease and Xxxxxx's obligation to perform all
terms, covenants and conditions of this Lease shall commence January 1, 2000
regardless of whether or not the building and interior improvements are
completed on January 1, 2000, and Landlord shall complete construction of the
interior improvements as soon as reasonably possible thereafter.
Notwithstanding anything to the contrary, it is agreed that in the event Tenant
makes changes, additions, or modifications to the plans and specifications to be
constructed by Landlord as set forth herein, or improvements are installed for
Tenant in excess of those to be provided Tenant by Landlord as set forth on
Exhibit B. any increased cost(s) resulting from said changes, additions, and/or
modifications and/or improvements in excess of those to be provided Tenant shall
be contracted for with Landlord and paid for one hundred percent (100%) by
Tenant.
The interior shall be constructed in accordance with Exhibit B of the Lease, it
being agreed, however, that if the interior improvements constructed by Landlord
relating thereto, do not conform exactly to the plans and specifications as set
forth in the Lease, and the general appearance, structural integrity, and
Xxxxxx's uses and occupancy of the Premises and interior improvements relating
thereto are not materially or unreasonably affected by such deviation, it is
agreed that the commencement date of the Lease, and Tenant's obligation to pay
rental, shall not be affected, and Tenant hereby agrees, in such event, to
accept the Premises and interior improvements as constructed by Landlord.
Tenant shall have thirty (30) days after the Commencement Date to provide
Landlord with a "punch list" pertaining to Landlord's work with respect to
Xxxxxx's interior improvements. As soon as reasonably possible thereafter,
Landlord, or one of Landlord's representatives (if so approved by Landlord), and
Tenant shall conduct a joint walk-through of the Premises (if Landlord so
requires), and inspect such Tenant Improvements, using their best efforts to
agree on the incomplete or defective construction related to the Tenant
Improvements installed by Landlord. After such inspection has been completed,
Landlord shall prepare, and both parties shall sign, a list of all "punch list"
items which the parties reasonably agree are to be corrected by Landlord (but
which shall exclude any damage or defects caused by Tenant, its employees,
agents or parties Tenant has contracted with to work on the Premises). Landlord
shall have thirty (30) days thereafter (or longer if necessary, provided
Landlord is diligently pursuing the completion of the same) to complete, at
Landlord's expense, the repairs on the "punch list" without the Commencement
Date of the Lease and Xxxxxx's obligation to pay Rental thereunder being
affected. This Paragraph shall be of no force and effect if Tenant shall fail to
give any such notice to Landlord within thirty (30) days after the Commencement
Date of this Lease.
42. ASSESSMENT CREDITS: The demised property herein may be subject to a special
------------------
assessment levied by the City of San Xxxx as part of an Improvement District. As
a part of said special assessment proceedings (if any), additional bonds were
or may be sold and assessments were or may be levied to provide for
construction contingencies and reserve funds. Interest shall be earned on such
funds created for contingencies and on reserve funds which will be credited for
the benefit of said assessment district. To the extent surpluses are created in
said district through unused contingency funds, interest earnings or reserve
funds, such surpluses shall be deemed the property of Landlord. Notwithstanding
that such surpluses may be credited on assessments otherwise due against the
Leased Premises, Tenant shall pay to Landlord, as additional rent if, and at the
time of any such credit of surpluses, an amount equal to all such surpluses so
credited. For example: if (i) the property is subject to an annual assessment of
$ 1,000.00, and (ii) a surplus of $200.00 is credited towards the current year's
assessment which reduces the assessment amount shown on the property tax bill
from $1,000.00 to $800.00, Tenant shall, upon receipt of notice from Landlord,
pay to Landlord said $200.00 credit as Additional Rent.
43. ASSIGNMENT AND SUBLETTING (CONTINUED)
-------------------------------------
A. Notwithstanding anything to the contrary in Paragraph 16 of this Lease,
provided Tenant is not in default of any of the provisions of this Lease,
Landlord agrees not to exercise its right to terminate this Lease as a result of
a request by Tenant to sublease all or a portion of the Premises.
B. In addition to and notwithstanding anything to the contrary in Paragraph 16
of this Lease, Landlord hereby agrees to consent to Tenant's assigning or
subletting said Lease to: (i) any parent or subsidiary corporation, affiliate,
or corporation with which Tenant merges or consolidates, provided that the net
worth of said parent or subsidiary corporation, affiliate, or said corporation
has a net worth equal to or greater than the net worth of Tenant (a) at the time
of Lease execution or (b) at the time of such assignment, merger, or
consolidation (whichever is greater); or (ii) any third party or entity to whom
Tenant sells all or substantially all of its assets including a sale of Tenant's
stock through a private offering or an initial public offering; provided, that
the net worth of the resulting or acquiring corporation has a net worth after
the merger, consolidation or acquisition equal to or greater than the net worth
of Tenant (a) at the time of Lease execution or (b) at the time of such merger,
consolidation or acquisition (whichever is greater). No such assignment or
subletting will release the Tenant from its liability and responsibility under
this Lease to the extent Tenant continues in existence following such
transaction. Notwithstanding the above, Tenant shall be required to (a) give
Landlord written notice prior to such assignment or subletting to any party as
described in (i) and (ii) above, (b) execute Landlord's consent document
prepared by Landlord reflecting the assignment or subletting and (c) pay
Landlord's costs for processing said Consent prior to the effective date of said
assignment or sublease.
C. Notwithstanding the foregoing, Landlord and Tenant agree that it shall not
be unreasonable for Landlord to refuse to consent to a proposed assignment,
sublease or other transfer ("Proposed Transfer") if the Premises or another
portion of the Property would become subject to additional or different
Government Requirements as a direct or indirect consequence of the Proposed
Transfer and/or the Proposed Transferee's use and occupancy of the Premises and
the Property, unless Landlord is indemnified by Tenant and (i) Subtenant or (ii)
Assignee, in form and substance satisfactory to Landlord's counsel from and
against any and all costs, expenses, obligations and liability arising out of
the Proposed Transfer and/or the Proposed Transferee's use and occupancy of the
Premises and the Property.
D. Any and all sublease agreement(s) between Tenant and any and all
subtenant(s) (which agreements must be consented to by Landlord, pursuant to the
requirements of this Lease) shall contain the following language:
"If Landlord and Xxxxxx jointly and voluntarily elect, for any reason
whatsoever, to terminate the Master Lease prior to the scheduled Master Lease
termination date, then this
Sublease (if then still in effect) shall terminate concurrently with the
termination of the Master Lease. Subtenant expressly acknowledges and agrees
that (1) the voluntary termination of the Master Lease by Landlord and Tenant
and the resulting termination of this Sublease shall not give Subtenant any
right or power to make any legal or equitable claim against Landlord, including
without limitation any claim for interference with contract or interference with
prospective economic advantage, and (2) Subtenant hereby waives any and all
rights it may have under law or at equity against Landlord to challenge such an
early termination of the Sublease, and unconditionally releases and relieves
Landlord, and its officers, directors, employees and agents, from any and all
claims, demands, and/or causes of action whatsoever (collectively, 'Claims),
whether such matters are known or unknown, latent or apparent, suspected or
unsuspected, foreseeable or unforeseeable, which Subtenant may have arising out
of or in connection with any such early termination of this Sublease. Subtenant
knowingly and intentionally waives any and all protection which is or may be
given by Section 1542 of the California Civil Code which provides as follows: 'A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with debtor.
The term of this Sublease is therefore subject to early termination. Subtenants
initials here below evidence (a) Subtenant's on of and agreement to this early
termination provision, (b) Subtenant's acknowledgment that, in determining the
net benefits to be derived by Subtenant under the terms of this Sublease,
Subtenant has anticipated the potential for early termination, and (c)
Subtenant's agreement to the general waiver and release of Claims above.
Initials:
Subtenant __________
Tenant ____________
44. BANKRUPTCY AND DEFAULT: Paragraph 19 is modified to provide that with
------------------------
respect to non-monetary defaults not involving Tenant's failure to pay Basic
Rent or Additional Rent, Tenant shall not be in default of any non-monetary
obligation if (i) more than thirty (30) days is required to cure such non-
monetary default, and (ii) Tenant commences cure of such default as soon as
reasonably practicable after receiving written notice of such default from
Landlord and thereafter continuously and with due diligence prosecutes such cure
to completion.
45. ABANDONMENT: Paragraph 20 is modified to provide that Tenant shall not be
-------------
in default under the Lease if it leaves all or any part of Premises vacant so
long as (i) Tenant is performing all of its other obligations under the Lease
including the obligation to pay Basic Rent and Additional Rent (ii) Tenant
provides on-site security during normal business hours for those parts of the
Premises left vacant, (iii) such vacancy does not materially and adversely
affect the validity or coverage of any policy of insurance carried by Landlord
with respect to the Premises, and (iv) the utilities and heating and ventilation
system are operated and maintained to the extent necessary to prevent damage to
the Premises or its systems.
46. HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect to
-------------------
the existence or use of "Hazardous Materials" (as defined herein) on, in, under
or about the Premises and real property located beneath said Premises, which
includes the entire parcel of land on which the Premises are located as shown in
Green on Exhibit A attached hereto (hereinafter collectively referred to as the
"Property"):
A. As used herein, the term "Hazardous Materials" shall mean any material,
waste, chemical, mixture or byproduct which is or hereafter is defined, listed
or designated under Environmental Laws (defined below) as a pollutant, or as a
contaminant, or as a toxic or hazardous substance, waste or material, or any
other unwholesome, hazardous, toxic, biohazardous, or radioactive material,
waste, chemical, mixture or byproduct, or which is listed, regulated or
restricted by any Environmental Law (including, without limitation, petroleum
hydrocarbons or any distillates or derivatives or fractions thereof,
polychlorinated, biphenyls, or asbestos). As used herein, the term
"Environmental Laws" shall mean any applicable Federal, State of California or
local government law (including common law), statute, regulation, rule,
ordinance, permit, license,
order, requirement, agreement, or approval, or any determination, judgment,
directive, or order of any executive or judicial authority at any level of
Federal, State of California or local government (whether now existing or
subsequently adopted or promulgated) relating to pollution or the protection of
-----------
the environment, ecology, natural resources, or public health and safety.
B. Tenant shall obtain Landlord's written consent, which may be withheld in
Landlord's discretion, prior to the occurrence of any Tenant's Hazardous
Materials Activities (defined below); provided, however, that Landlord's consent
shall not be required for normal use in compliance with applicable Environmental
Laws of customary household and office supplies (Tenant shall first provide
Landlord with a list of said materials use), such as mild cleaners, lubricants
and copier toner. As used herein, the term "Tenant's Hazardous Materials
Activities" shall mean any and all use, handling, generation, storage, disposal,
treatment, transportation, release, discharge, or emission of any Hazardous
Materials on, in, beneath, to, from, at or about the Property, in connection
with Xxxxxx's use of the Property, or by Tenant or by any of Tenant's agents,
employees, contractors, vendors, invitees, visitors or its future subtenants or
assignees. Tenant agrees that any and all Tenant's Hazardous Materials
Activities shall be conducted in strict, full compliance with applicable
Environmental Laws at Tenant's expense, and shall not result in any
contamination of the Property or the environment. Xxxxxx agrees to provide
Landlord with prompt written notice of any spill or release of Hazardous
Materials at the Property during the term of the Lease of which Xxxxxx becomes
aware, and further agrees to provide Landlord with prompt written notice of any
violation of Environmental Laws in connection with Xxxxxx's Hazardous Materials
Activities of which Xxxxxx becomes aware. If Xxxxxx's Hazardous Materials
Activities involve Hazardous Materials other than normal use of customary
household and office supplies, Xxxxxx also agrees at Tenant's expense: (i) to
install such Hazardous Materials monitoring, storage and containment devices as
Landlord reasonably deems necessary (Landlord shall have no obligation to
evaluate the need for any such installation or to require any such
installation); (ii) provide Landlord with a written inventory of such Hazardous
Materials, including an update of same each year upon the anniversary date of
the Commencement Date of the Lease ("Anniversary Date"); and (iii) on each
Anniversary Date, to retain a qualified environmental consultant, acceptable to
Landlord, to evaluate whether Tenant is in compliance with all applicable
Environmental Laws with respect to Xxxxxx's Hazardous Materials Activities.
Tenant, at its expense, shall submit to Landlord a report from such
environmental consultant which discusses the environmental consultant's findings
within two (2) months of each Anniversary Date. Tenant, at its expense, shall
promptly undertake and complete any and all steps necessary, and in full
compliance with applicable Environmental Laws, to fully correct any and all
problems or deficiencies identified by the environmental promptly provide
Landlord with documentation of all such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at its expense,
shall (i) properly remove from the Property all Hazardous Materials which come
to be located at the Property in connection with Tenant's Hazardous Materials
Activities, and (ii) fully comply with and complete all facility closure
requirements of applicable Environmental Laws regarding Tenant's Hazardous
Materials Activities, including but not limited to (x) properly restoring and
repairing the Property to the extent damaged by such closure activities, and (y)
obtaining from the local Fire Department or other appropriate governmental
authority with jurisdiction a written concurrence that closure has been
completed in compliance with applicable Environmental Laws. Tenant shall
promptly provide Landlord with copies of any claims, notices, work plans, data
and reports prepared, received or submitted in connection with any such closure
activities.
D. If Landlord, in its sole discretion, believes that the Property has become
contaminated as a result of Xxxxxx's Hazardous Materials Activities, Landlord in
addition to any other rights it may have under this Lease or under Environmental
Laws or other laws, may enter upon the Property and conduct inspection, sampling
and analysis, including but not limited to obtaining and analyzing samples of
soil and groundwater, for the purpose of determining the nature and extent of
such contamination. Tenant shall promptly reimburse Landlord for the costs of
such an investigation, including but not limited to reasonable attorneys' fees
Landlord incurs with respect to such investigation, that discloses Hazardous
Materials contamination for which Tenant is liable under this Lease.
Notwithstanding the above, Landlord may, at its option and in its sole and
absolute discretion, choose to perform remediation and obtain reimbursement for
cleanup costs as set forth herein from Tenant. Any cleanup costs incurred by
Landlord as the result of
Tenant's Hazardous Materials Activities shall be reimbursed by Tenant within
thirty (30) days of presentation of written documentation of the expense to
Tenant by Landlord. Such reimbursable costs shall include, but not be limited
to, any reasonable consultant and attorney fees incurred by Landlord. Tenant
shall take all actions necessary to preserve any claims, it has against third
parties, including, but not limited to, its insurers, for claims related to its
operation, management of Hazardous Materials or contamination of the Property.
Except as may be required of Tenant by applicable Environmental Laws, Tenant
shall not perform any sampling, testing, or drilling to identify the presence of
any Hazardous Materials at the Property, without Xxxxxxxx's prior written
consent which may be withheld in Landlord's discretion. Tenant shall promptly
provide Landlord with copies of any claims, notices, work plans, data and
reports prepared, received or submitted in connection with any sampling, testing
or drilling performed pursuant to the preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel acceptable to Landlord,
whose consent shall not unreasonably be withheld) and hold harmless Landlord,
its employees, assigns, successors, successors-in-interest, agents and
representatives from and against any and all claims (including but not limited
to third party claims from a private party or a government authority),
liabilities, obligations, losses, causes of action, demands, governmental
proceedings or directives, fines, penalties, expenses, costs (including but not
limited to reasonable attorneys', consultants' and other experts' fees and
costs), and damages, which arise from or relate to: (i) Tenant's Hazardous
Materials Activities; (ii) any Hazardous Materials contamination caused by
Tenant prior to the Commencement Date of the Lease; or (iii) the breach of any
obligation of Tenant under this Paragraph 46 (collectively, "Tenant's
Environmental Indemnification"). Tenant's Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully reimburse
Landlord for losses in or reductions to rental income, and diminution in fair
market value of the Property. Tenant's Environmental Indemnification shall
further include but is not limited to the obligation to diligently and properly
implement to completion, at Tenant's expense, any and all environmental
investigation, removal, remediation, monitoring, reporting, closure activities,
or other environmental response action (collectively, "Response Actions").
Tenant shall promptly provide Landlord with copies of any claims, notices, work
plans, data and reports prepared, received or submitted in connection with any
Response Actions.
It is agreed that the Tenant's responsibilities related to Hazardous Materials
will survive the expiration or termination of this Lease and that Landlord may
obtain specific performance of Tenant's responsibilities under this Paragraph
46.
47. CONSENT: Whenever the consent of one party to the other is required
hereunder, such consent shall not be unreasonably withheld.
48. AUTHORITY TO EXECUTE. The parties executing this Lease Agreement hereby
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warrant and represent that they are properly authorized to execute this Lease
Agreement and bind the parties on behalf of whom they execute this Lease
Agreement and to all of the terms, covenants and conditions of this Lease
Agreement as they relate to the respective parties hereto.
Page 13 Initial:
/s/ TJS/JA
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49. ADDRESS FOR LEASED PREMISES: It is understood that (i) the current address
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for the building in which the Premises are located is 000 X. Xxxxxx Xxxxx, Xxx
Xxxx, Xxxxxxxxxx, and that (ii) the address for the Premises may be changed by
the City of San Xxxx (the "City") upon issuance of a building permit for the
Interior Improvements as defined herein. In the event the address assigned to
the Premises is changed by the City, said Lease shall thereafter be amended to
reflect the assigned address for the Premises leased hereunder.
50. SUBORDINATION AND MORTGAGES: Paragraph 17 is modified to provide that
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provided Tenant is not in default in the terms of this Lease, this Lease shall
not be subordinate to a mortgage or deed of trust unless the Lender holding such
mortgage or deed of trust enters into a written subordination, non-disturbance
and attornment agreement in which the Xxxxxx agrees that notwithstanding any
subordination of this Lease to such Xxxxxx's mortgage or deed of trust, (i) such
Lender shall recognize all of Tenant's rights under this Lease, and (ii) in the
event of a foreclosure, this Lease shall not be terminated so long as Tenant is
not in default of its obligations under this Lease, but shall continue in effect
and Tenant and such Lender (or any party acquiring the Premises through such
foreclosure) shall each be bound to perform the respective obligations of Tenant
and Landlord with respect to the Premises arising after such foreclosure.
51. ASSIGNMENT OF WARRANTIES: During the Term of the Lease, Landlord hereby
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assigns to Tenant all of Landlord's Contractor's warranties and shall cooperate
with Tenant in enforcing any of such warranties except that Landlord shall not
be required to pay any legal fees or incur any expenses in this regard.
