EXHIBIT 10.32
CONSENT TO SUBLEASE
This CONSENT TO SUBLEASE (Consent) is made to be effective on 8/11/02 (the
"Effective Date") by and between CIENA Corporation, a Delaware corporation, as
successor to Cyras Systems, Inc. (as "Tenant" and/or "Sublessor"), whose present
address is 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, XX, 00000, Virage Logic, Inc. a
Delaware Corporation, (as "Sublessee") whose current address is 00000 Xxxxxxx
Xxxxxxx, Xxxxxxx XX 00000, and Renco Equities IV, a California general
partnership (as "Landlord") whose current address is 0000 Xxxxxxx Xxxxxxx,
Xxxxxxxxx XX 00000, who agree as follows:
THIS CONSENT IS MADE WITH REFERENCE TO THE FOLLOWING FACTS:
A. Landlord and Tenant entered into a lease dated as of November 4. 1999, (the
"Lease Agreement") for the following described space (the "Leased Premises"):
The Building Known as "Renco 50" located at 00000 Xxxxxxx Xxxxxxx, Xxxxxxx,
Xxxxxxxxxx.
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B. Sublessee desires to sublease the Leased Premises from Tenant and to assume
all the obligations of Tenant under the existing Lease Agreement as of the
Effective Date first above set forth.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES OF THE
PARTIES HEREIN CONTAINED, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Assumption Of Obligations By Sublessee: Tenant and Sublessee represent and
warrant that (a) they have entered into a sublease ("Sublease") for the Leased
Premises, subject to this consent being signed by the Landlord, (b) the Sublease
provides that Sublessee has assumed, for the benefit of Tenant and Landlord,
certain obligations of Tenant under the terms of the Lease Agreement and has
agreed to be liable for and to perform all obligations under the terms of the
Lease Agreement for the benefit of Landlord as if Sublessee were the original
tenant under the Lease Agreement. As such, upon full execution of this
Agreement, Sublessee assumes, jointly and severally, all obligations of Tenant
under the Lease Agreement for the benefit of Landlord, including, without
limitation, all obligations upon the expiration or earlier termination of the
Lease Agreement. It is expressly agreed that in the event Sublessee and/or
Tenant fail to timely surrender the Leased Premises to Landlord in good
condition and repair and in the condition required by the terms
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of the Lease Agreement at the expiration or earlier termination of the Lease
Agreement, Sublessee and Tenant shall be jointly and severally liable to
Landlord for all damages sustained by Landlord, including, but not limited to,
loss of rental income, construction and remodeling costs, attorney's fees and
court costs resulting from or in connection with Tenant's and/or Sublessee's
failure to timely vacate and surrender the Leased Premises to Landlord in the
condition provided for in the Lease Agreement as of the effective expiration or
termination date of the Lease Agreement.
2. Landlord's Consent: Landlord hereby agrees to permit Tenant to sublease the
Leased Premises to Sublessee. Landlord's consent shall in no way void or alter
any of the terms of the Lease Agreement nor shall this consent alter or
diminish, in any way, Tenant's obligations to Landlord. Sublessee's occupancy of
the Leased Premises shall be subject and subordinate to the Lease Agreement.
Landlord has not reviewed the terms of the Sublease nor any other agreement
between Tenant and Sublessee, and Landlord shall not be bound by any agreement
other than the terms of the Lease Agreement between Landlord and Tenant and this
Consent. Landlord does not make any warranties or representations as to the
condition of the Leased Premises or the terms of the Lease Agreement between
Landlord and Tenant. Landlord's consent to the sublease shall in no way obligate
Landlord to any further consents or agreements with Tenant and/or Sublessee.
Landlord does not waive enforcement of any terms of the Lease between Landlord
and Tenant including but not limited to the rights of Landlord regarding
construction of improvements in the Leased Premises and this Consent does not
grant Tenant or Sublessee any right to alter the Leased Premises.
3. Landlord's Default Options: It is agreed by all parties hereto that, in the
event a default occurs under the Lease Agreement, beyond any applicable cure
period that applies to such default, then, regardless of anything to the
contrary contained in the Sublease, Landlord may at it's sole option elect any
one or more of the following:
(a) pursue any right contained in the Lease Agreement or under
applicable law, including without limitation, the termination of the Lease
Agreement and, in such event, the Sublease shall automatically terminate
simultaneously with the Lease Agreement.
(b) elect that Sublessee become an assignee of all of Tenant's rights
and obligations under the Lease Agreement (whether arising before or after such
default and/or assignment), provided, however, that the Base Monthly Rent and
Additional Rent (as defined in the Lease Agreement) shall automatically become
the Base Monthly Rent and Additional Rent as stated in the Lease Agreement. In
such event, the Sublease shall be deemed terminated and Tenant shall not be
released from liability under the Lease Agreement. Such election of Landlord
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may be made at any time, both before or after a lease termination, so long as
Landlord has not had a sheriff actually remove the subtenant from possession of
the premises pursuant to an unlawful detainer judgment. Landlord shall not, in
any event, nor under any circumstance, be responsible or liable to Sublessee for
(i) the return of any security deposit paid by Sublessee to Tenant, nor shall
Sublessee be given credit for any prepaid rental or other monetary consideration
paid by Sublessee to Tenant under said Sublease; (ii) any other claim or damage
of any kind or nature whatsoever by reason of or in connection with Landlord's
election; and/or (iii) any default of Tenant under the Sublease.
(c) in the event Landlord elects to terminate the Lease Agreement, such
election may be rescinded by Landlord, or Landlord and Tenant may agree to
reinstate the Lease Agreement and in such event the sublease shall continue as
though a termination never occurred as shall Subtenant's obligations hereunder.
4. Assignment of Rights and Interest In Sublease: In consideration of
Landlord's consent to the Sublease, Tenant irrevocably assigns to Landlord, as
security for Tenant's obligations under Lease Agreement, all rent and income
payable to Tenant under the Sublease. Therefore, Landlord may collect all
payments due under the Sublease and apply such payments towards Tenant's
obligations under the Lease. Tenant and Sublessee agree to pay all rent and
income payable to Tenant under the Sublease to Landlord upon demand without
further consent of Tenant and Sublessee required; provided, however, that until
demand by Landlord, Tenant shall have the right to collect such payments. Tenant
hereby irrevocably authorizes and directs Sublessee, upon receipt of a written
notice from Landlord, to pay to Landlord the payments due and to become due
under the Sublease. Tenant agrees that Sublessee shall have the right to rely on
any such statement and request from Landlord, and that Sublessee shall pay such
rents to Landlord without any obligation or right to inquire as to whether any
default exists and notwithstanding any notice or claim from Tenant to the
contrary. Tenant shall have no right or claim against Sublessee or Landlord for
any such payments so paid by Sublessee to Landlord except that Tenant shall
receive proof of such payment. It is further agreed between the parties hereto
that neither Tenant's assignment of such rent and income, nor Landlord's
acceptance of any payment of rental or other sum due by Sublessee to Tenant
under said Sublease, whether payable directly to Landlord or endorsed to
Landlord by Tenant, shall in any way nor in any event be construed as creating a
direct contractual relationship between Landlord and Sublessee, unless the
parties expressly so agree in writing and such acceptance shall be deemed to be
an accommodation by Landlord to, and for the convenience of Tenant and
Sublessee. Except as expressly set forth herein, any direct contractual
agreement between Landlord and Sublessee must be in writing.
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5. Delivery Required: This Consent to Sublease shall only be effective, and
Landlord's consent to the Sublease given, when this Consent is executed by
Landlord, Tenant, Sublessee, and all guarantors, as applicable, and returned to
Landlord.
6. Attorneys' Fees: If any party commences an action against any of the parties
arising out of or in connection with this Consent, the prevailing party or
parties shall be entitled to recover from the losing party or parties reasonable
attorneys' fees and costs of suit.
IN WITNESS WHEREOF, Landlord, Tenant, Sublessee and Guarantors, as applicable,
have executed this Consent on the respective dates below set forth to be
effective as of the Effective Date first above set forth.
AS LANDLORD: AS TENANT:
CIENA Corporation
By: [SIGNATURE ILLEGIBLE] By: /s/ XXXXXX X. XXXXXXXX
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Xxxxxxx X. Xxxxxx, Trustee Title: Sr. V.P., Finance and CFO
Xxxxxx Family Trust ------------------------------
U/D/T Dated July 25,1986
By:
Title: G.P. ---------------------------------
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Title:
By: [SIGNATURE ILLEGIBLE] ------------------------------
-------------------------------
Dated:
Title: G.P. ------------------------------
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Dated: 8/13/02
---------------------------- AS GUARANTORS:
AS SUBLESSEE: By:
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By: /s/ XXXXX X. XXXXXXXX
------------------------------- Dated:
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Title: VP FINANCE, CFO
---------------------------- By:
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By:
------------------------------- Dated:
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Title:
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Dated:
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[CORNISH & XXXXX COMMERCIAL LETTERHEAD]
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SUBLESSOR: CIENA Corporation SUBLEASED PREMISES: 00000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx
SUBLESSEE: Virage Logic, Inc. DATE: July 11, 2002
1. PARTIES:
This Sublease is made and entered into as of July 11, 2002 by and between CIENA
Corporation, as successor to Cyras Systems, Inc. (Sublessor), and Virage Logic,
Inc. (Sublessee), under the Master Lease dated November 4, 1999, between Renco
Equities IV, as (Lessor) and Sublessor under this Sublease as (Lessee). A copy
of the Master Lease is attached hereto as Exhibit "A" and incorporated herein
by reference.
2. PROVISIONS CONSTITUTING SUBLEASE:
2.1 This Sublease is subject to all of the terms and conditions of the
Master Lease. Sublessee hereby assumes and agrees to perform all of the
obligations of Lessee under the Master Lease to the extent said
obligations apply to the Subleased Premises and Sublessee's use of the
common areas, except as specifically set forth herein. Sublessor hereby
agrees to cause Lessor, under the Master Lease, to perform all of the
obligations of Lessor thereunder to the extent said obligations apply to
the Subleased Premises and Sublessee's use of the common areas. Sublessee
shall not commit or permit to be committed on the Subleased Premises or on
any other portion of the Project any act or omission, which violates term,
or condition of the Master Lease. Except to the extent waived or consented
to in writing by the other party or parties hereto (which waiver or
consent may be withheld in the sole discretion of each party) who are
affected thereby, neither of the parties hereto will, by renegotiation or
surrender of the Master Lease, assignment, subletting, default or any
other voluntary action, avoid or seek to avoid the observance or
performance of the terms to be observed or performed hereunder by such
party but, will at all times, in good faith assist in carrying out all the
terms of this Sublease and in taking all such action as may be necessary
or appropriate to protect the rights of the other party or parties hereto
who are affected thereby against impairment. Nothing contained in this
Section 2.1 or elsewhere in this Sublease shall prevent or prohibit
Sublessor from exercising its right to terminate the Master Lease pursuant
to Paragraph 16 of the First Addendum to Lease thereto, provided Sublessee
has not exercised its renewal option as set forth in Section 5, below.
2.2 All of the terms and conditions contained in the Master Lease are
incorporated herein, except as specifically provided below, and shall
together with the terms and conditions specifically set forth in this
Sublease constitute the complete terms and conditions of this Sublease:
Paragraph 1.1(A), (B), (E), (G), (H), (I), (J), (K), (S), (U) (Exhibit "D"
only), (V) (Paragraph 2.3, 15, 16, 17 and 18 only); Paragraph 2.3;
Paragraph 2.4; Paragraph 2.6; Paragraph 2.7; Paragraph 3.1; Paragraph 3.6;
Paragraph 3.7, and Paragraph 14.2. As between the Sublessor and the
Sublessee, in the event of any conflict between the terms of the Master
Lease and the terms of this Sublease, the terms of the Sublease shall
control.
2.3 Subtenant shall maintain insurance complying with all of the
requirements specified in Master Lease section 9.1 "Tenant-Insurance",
with the additional requirements that (i) Notwithstanding the provisions
of Master Lease section 9.1.A.(1) and Article 1.M., Subtenant shall
procure and maintain Commercial General Liability coverage in an amount of
not less than Five Million Dollars ($5,000,000) (inclusive of any umbrella
coverage), (ii)
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all insurance maintained by Subtenant shall include CIENA as its interests
may appear as additional insured in addition to the parties specified as
additional insured in Master Lease section 9.1.A.(1) and (iii) Subtenant
shall deliver copies of the certificates of the insurer specified in Master
Lease Section 9.1.C. to both the Sublandlord and the Landlord.
Capitalized terms not otherwise defined herein shall have the meanings given to
them in the Master Lease.
3. PREMISES:
Sublessor leases to Sublessee and Sublessee leases from Sublessor the Subleased
Premises upon all of the terms, covenants and conditions contained in this
Sublease. The Subleased Premises consist of approximately 61,454 (more or less)
square feet located at 00000 Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxx.
4. RENT:
Upon execution of this Agreement, Sublessee shall pay to Sublessor as "Rent"
for the Subleased Premises the sum of Thirty Thousand Seven Hundred and
Twenty-Seven and 00/100 ($30,727.00) Dollars, representing the first month's
rent. Thereafter, rent shall be in accordance with the following schedule:
Months Amount per Square Foot/NNN
09/01/02-09/30/03 $.50
10/01/03-08/31/04 $.60
The rental amount shall be paid, without deductions, offset, prior notice or
demand. If the commencement date or the termination date of the Sublease occurs
on a date other than the first day or the last day, respectively, or a calendar
month, then the Rent for such partial month shall be prorated and the prorated
Rent shall be payable on the Sublease commencement date or on the first day of
the calendar month in which the Sublease termination date occurs, respectively.
During the Sublease term, Sublessee shall also be obligated to pay Additional
Rent. Sublessor shall promptly deliver to Sublessee all statements and
supporting documentation received from Lessor pertaining to Additional Rent
payable under the Master Lease.
5. RENEWAL OPTION:
Sublessee shall have an option to renew the Sublease for a period from
September 1, 2004 through December 31, 2006. Sublessee must notify Sublessor in
writing of its intent to renew the Sublease by December 1, 2003.
Months Amount per Square Foot/NNN
09/01/04-09/30/05 $1.30
10/01/05-12/31/06 $1.50
6. SECURITY DEPOSIT:
Upon execution of this Agreement, Sublessee shall pay to Sublessor the sum of
Thirty Thousand Seven Hundred and Twenty-Seven and 00/100 ($30,727.00) Dollars
as a noninterest bearing Security Deposit. In the event Sublessee has performed
all of the terms and conditions of this Sublease during the term hereof,
Sublessor shall return to Sublessee, within ten (10) days after Sublessee has
vacated the Subleased Premises, the Security Deposit less any sums due and
owing to Sublessor.
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7. RIGHTS OF ACCESS AND USE:
7.1 Use:
Sublessee shall use the Subleased Premises only for those purposes
permitted in the Master Lease, unless Sublessor and Master Lessor consent
in writing to other uses prior to the commencement thereof.
7.2 Equipment:
Sublessee shall have the right to use Sublessor's telephone system and
furniture (cubicles) systems and other furniture currently existing in the
space without additional charge. An inventory of such equipment and
furniture is attached hereto as Attachment 1. Each of the rights described
in the preceding sentences of this Section 6.2 shall be subject and
subordinate to Sublessor's prior right of access and use.
8. SUBLEASE TERM:
8.1 Sublease Term:
Subject to Sublessee's renewal option as set forth in Paragraph 5, the
Sublease Term shall be for the period commencing on October 1, 2002, and
continuing through August 31, 2004. In no event shall the Sublease Term
extend beyond the Term of the Master Lease. Notwithstanding the foregoing,
Sublessee shall be entitled to take occupancy of the Subleased Premises at
any time on or after September 1, 2002, subject to all the terms and
conditions of this Sublease other than the payment of Rent and Additional
Rent.
8.2 Inability to Deliver Possession:
In the event Sublessor is unable to deliver possession of the Subleased
Premises at the commencement of the term, Sublessor shall not be liable for
any damage caused thereby nor shall this Sublease be void or voidable, but
Sublessee shall not be liable for Rent until such time as Sublessor offers
to deliver possession of the Subleased Premises to Sublessee, but the term
hereof shall not be extended by such delay. If Sublessee, with Sublessor's
consent, takes possession prior to commencement of the term, Sublessee
shall do so subject to all the covenants and conditions hereof, except Base
Rent. In the event Sublessor has been unable to deliver possession of the
Subleased Premises within thirty (30) days from the commencement date,
Sublessee, at Sublessee's option, may terminate this Sublease.
8.3 Notwithstanding anything to the contrary in this Sublease, this
Sublease and Sublessor's obligations hereunder are conditioned upon
Sublandlord's and Subtenant's receipt of the written consent of Lessor
(which consent must include a nondisturbance provision) to this Sublease
within thirty (30) days after execution by both parties of this Sublease.
If the parties do not receive such consent within thirty (30) days after
execution of this Sublease, then either party may terminate this Sublease
without penalty by giving the other party written notice thereof, and upon
such termination, Sublandlord shall return to Subtenant its payment of
prepaid rent and the Security Deposit.
9. NOTICES:
All notices, demands, consents and approvals which may or are required to be
given by either party to the other hereunder shall be given in the manner
provided in the Master Lease at the addresses shown below. Sublessor shall
notify Sublessee of any Event of Default under the Master Lease, or of any other
event of which Sublessor has actual knowledge which will impair Sublessee's
ability to conduct its normal business at the Subleased Premises, as soon as
reasonably practicable following Sublessor's receipt of notice from the Lessor
of an Event of Default or actual knowledge of such impairment.
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If Sublessor elects to terminate the Master Lease, Sublessor shall so notify
Sublessee by giving at least 30 days notice prior to the effective date of such
termination.
Sublessor's Address: Sublessee's Address:
CIENA Corporation 00000 Xxxxxxx Xxxxxxx
0000 Xxxxxxxxx Xxxx Xxxxxxx, Xxxxxxxxxx 00000
Xxxxxxxxx, XX 00000
Attn: General Counsel Attn: Chief Financial Officer
Phone Number: (000) 000-0000 Phone Number: (000) 000-0000
Fax Number: (000) 000-0000 Fax Number: (000) 000-0000
10. BROKER FEE:
Upon execution of the Sublease, Sublessor shall pay Cornish & Xxxxx Commercial,
a licensed real estate broker, a full lease commission as set forth in a
separate agreement between Sublessor and Broker.
11. Sublessor represents that (i) the Master Lease is in full force and effect,
(ii) that no default (beyond applicable notice and cure periods) currently
exists under the Master Lease and (iii) to its current knowledge, no condition
exists that with giving of notice and/or the passage of time would be a default
under the Master Lease.
12. On or before the end of the Sublease Term or any sooner termination of this
Sublease, Sublessee shall remove all of its trade fixtures, personal property
(not including Sublessor's equipment as described in Section 7.2) and all
alterations constructed by Sublessee in the Subleased Premises which are
required to be removed under the terms of this Sublease or the Master Lease and
shall surrender the Subleased Premises to Sublessor in good condition, order and
repair, reasonable wear and tear and damage by casualty or condemnation
excepted. Sublessee shall repair any damage to the Subleased Premises caused by
Sublessee's removal of its personal property, furnishings and equipment. If the
Subleased Premises are not so surrendered, then Sublessee shall be liable to
Sublessor for all costs incurred by Sublandlord in returning the Subleased
Premises to the required condition.
13. Except to the extent caused by the negligence or willful misconduct of
Sublessor, its agents, employees or contractors or invitees, Sublessee shall
indemnify, defend with counsel reasonably acceptable to Sublessor, protect and
hold harmless Sublessor and its agents, employees, directors, shareholders, and
representatives from and against any and all losses, claims, liabilities,
judgments, causes of action, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees), caused by or arising in connection
with: (i) the Sublessee's use, occupancy or operation of the Subleased
Premises; or (ii) a breach of Sublessee's obligations under this Sublease or
the provisions of the Master Lease with respect to the Subleased Premises
except to the extent such breach is caused by a breach of Sublessor's
obligations under this Sublease or the Master Lease. This Section shall survive
the termination of this Sublease.
Except to the extent caused by the negligence or willful misconduct of
Sublessee, its agents, employees or contractors, Sublessor shall indemnify,
defend with counsel reasonably acceptable to Sublessee, protect and hold
harmless Sublessee and its agents, employees, directors, shareholders, and
representatives from and against any and all losses, claims, liabilities,
judgments, causes of action, damages, costs and expenses (including, without
limitation, reasonable attorneys' fees), caused by or arising in connection with
the Sublessor's use, occupancy or operation of the
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Subleased Premises prior to the Sublessee's occupancy of the Premises except to
the extent such breach is caused by a breach of sublessee's obligations under
the Sublease. This Section shall survive the termination of this Sublease.
13. BROKER REPRESENTATION:
Cornish & Xxxxx Commercial represents both parties. Sublessor and Sublessee
consent to such dual representation and waive any conflict of interest arising
out of such dual agency.
14. TOXIC CONTAMINATION DISCLOSURE:
Sublessee acknowledges that they have been advised that numerous federal,
state, and/or local laws, ordinances and regulations (Laws) affect the
existence and removal, storage, disposal, leakage of and contamination by
materials designated as hazardous or toxic (Toxics). Many materials, some
utilized in everyday business activities and property maintenance, are
designated as hazardous or toxic.
Some of the Laws require that Toxics be removed or cleaned up by landowners,
future landowners or former landowners without regard to whether the party
required to pay for "clean up" caused the contamination, owned the property at
the time the contamination occurred or even knew about the contamination. Some
items, such as asbestos or PCBs, which were legal when installed, now are
classified as Toxics and are subject to removal requirements. Civil lawsuits
for damages resulting from Toxics may be filed by third parties in certain
circumstances.
Sublessor and Sublessee each acknowledge that Broker has represented that
Broker has no specific expertise with respect to environmental assessment or
physical condition of the Subleased Premises, including, but not limited to,
matters relating to: (i) problems which may be posed by the presence or
disposal of hazardous or toxic substances on or from the Subleased Premises,
(ii) problems which may be posed by the Subleased Premises being within the
Special Studies Zone as designated under the Xxxxxxx-Xxxxxx Special Studies
Zone Act (Earthquake Zones), Section 2621-2630, inclusive of California Public
Resources Code, and (iii) problems which may be posed by the Subleased Premises
being within a HUD Flood Zone as set forth in the U.S. Department of Housing
and Urban Development "Special Flood Zone Area Maps," as applicable.
Sublessor and Sublessee each acknowledge that Broker has represented that Broker
has not made an independent investigation or determination of the physical or
environmental condition of the Subleased Premises, including, but not limited
to, the existence or nonexistence of any underground tanks, sumps, piping,
toxic or hazardous substances on the Subleased Premises. Sublessee agrees that
it will rely solely upon its own investigation and/or the investigation of
professionals retained by it or Sublessor, and neither Sublessor nor Sublessee
shall rely upon Broker to determine the physical and environmental condition of
the Subleased Premises or to determine whether, to what extent or in what
manner, such condition must be disclosed to potential sublessees, assignees,
purchasers or other interested parties.
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SUBLESSOR: CIENA CORPORATION
By: /s/ XXXXXX X. XXXXXXXX Date:
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Xxxxxx X. Xxxxxxxx
Xx. V.P., Finance and CFO
SUBLESSEE: VIRAGE LOGIC, Inc.
By: /s/ XXXXX X. XXXXXXXX Date: 7/11/02
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Xxxxx X. Xxxxxxxx, VP Finance, CFO
NOTICE TO SUBLESSOR AND SUBLESSEE: CORNISH & XXXXX COMMERCIAL, IS NOT
AUTHORIZED TO GIVE LEGAL OR TAX ADVICE; NOTHING CONTAINED IN THIS SUBLEASE OR
ANY DISCUSSIONS BETWEEN CORNISH & XXXXX COMMERCIAL AND SUBLESSOR AND SUBLESSEE
SHALL BE DEEMED TO BE A REPRESENTATION OR RECOMMENDATION BY CORNISH & XXXXX
COMMERCIAL, OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS DOCUMENT OR ANY TRANSACTION RELATING THERETO. ALL PARTIES
ARE ENCOURAGED TO CONSULT WITH THEIR INDEPENDENT FINANCIAL CONSULTANTS AND/OR
ATTORNEYS REGARDING THE TRANSACTION CONTEMPLATED BY THIS PROPOSAL.
File No. _______________________
INDUSTRIAL SPACE LEASE
(SINGLE TENANT NET)
THIS LEASE, dated November 4, 1999, for reference purposes only, is made by
and between: RENCO EQUITIES IV, A California General Partnership ("Landlord"),
and CYRAS SYSTEMS, a California Corporation ("Tenant"), to be effective and
binding upon the parties as of the date the last of the designated signatories
to this Lease shall have executed this Lease (the "Effective Date of this
Lease")
ARTICLE 1
REFERENCES
1.1 REFERENCES: All references in this Lease (subject to any further
clarifications contained in this Lease) to the following terms shall have the
following meaning or refer to the respective address, person, date, time period,
amount, percentage, calendar year or fiscal year as below set forth:
A. Tenant's Address for Notices: 00000 Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
B. Tenant's Representative: Xx. Xxxxxxx Xxxxxx
Phone Number: __________________________
C. Landlord's Address for Notices: 0000 Xxxxxxx Xxxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000
D. Landlord's Representative: Xxxxxxx Xxxxxx
Phone Number: 000-000-0000
E. Commencement Date: Upon execution of this Lease by both parties
F. Term: Seven (7) years from January 1, 2000
G. Lease Expiration Date: December 31, 2006
H. Tenant's Punchlist Period: Five (5) days for visual items and until January 30, 2000, for
plumbing, electrical and mechanical equipment.
I. First Month's Prepaid Rent: Forty Three Thousand One Hundred ($43,100.00) Dollars
J. Last Month's Prepaid Rent: None
K. Tenant's Security Deposit: One Hundred Fifteen Thousand Three Hundred
($115,300.00.00) Dollars
L. Late Charge Amount: Ten (10%) Percent of the late amount
M. Tenant's Required Liability Coverage: Three Million ($3,000,000.00) Dollars single limit
N. Brokers: Cornish & Xxxxx Commercial
O. Property or Project: That certain real property, situated in the City of
Fremont, County of Alameda, State of California, as presently improved with one
building, which real property is shown on the Site Plan attached hereto as
Exhibit "A" and is commonly known as or otherwise described as follows:
A building identified as Renco 50 located at 00000 Xxxxxxx Xxxxxxx in
Fremont, California
P. Buildings: Those certain Buildings located on the Property, which
Buildings are shown outlined in red on Exhibit "B" hereto.
Q. Outside Areas: The "Outside Areas" shall mean all areas within the
Property which are located outside the buildings, such as covered and uncovered
walkways, parking areas, landscaped areas, open areas and enclosed trash
disposal areas.
R. Leased Premises: All of the space which is located within the Building,
consisting of approximately 61,454 square feet of gross leaseable area and, for
purposes of this Lease, agreed to contain said number of square feet measuring
to the outside edge of the outside walls and drip lines, including the
electrical room and other common spaces and, for purposes of this Lease, agreed
between Landlord and Tenant to contain said number of square feet.
S. Base Monthly Rent: The term "Base Monthly Rent" shall mean the
following monthly sums:
January 1, 2000, through August 31, 2000, the amount of forty three thousand
one hundred ($43,100.00) dollars,
September 1, 2000, through February 28, 2001, the amount of fifty seven
thousand two hundred ($57,200.00) dollars,
March 1, 2001, through December 31, 2001, the amount of ninety thousand four
hundred ($90,400.00) dollars,
January 1, 2002, through December 31, 2002, the amount of ninety four thousand
nine hundred ($94,900.00) dollars,
January 1, 2003, through December 31, 2003, the amount of ninety nine thousand
six hundred ($99,600.00) dollars,
January 1, 2004, through December 31, 2004, the amount of one hundred four
thousand six hundred ($104,600.00) dollars,
January 1, 2005, through December 31, 2005, the amount of one hundred nine
thousand nine hundred ($109,900.00) dollars,
January 1, 2006, through December 31, 2006, the amount of one hundred fifteen
thousand three hundred ($115,300.00) dollars.
January 1, 2005, through December 31, 2005, the amount of one hundred nine
thousand nine hundred ($109,900.00) dollars,
January 1, 2006, through December 31, 2006, the amount of one hundred fifteen
thousand three hundred ($115,300.00) dollars.
T. Permitted use: the term "Permitted Use" shall mean the following:
The design, assembly, repair, sale, and distribution of small electronic parts
and components, general office and support functions, and for no other purpose.
U. Exhibits: The term "Exhibits" shall mean the Exhibits to this
Lease which are described as follows:
Exhibit "A" Site Plan showing the Property and
delineating the Building in which the Leased
Premises are located.
Exhibit "B" Floor Plan outlining the Leased Premise
Exhibit "D" Acceptance Agreement
V. Addenda: The term "Addenda" shall mean the Addendum (or Addenda)
to this Lease which is (or are) described as follows:
First Addendum to Lease:
ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION
2.1 DEMISE OF LEASED PREMISES: Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord for Tenant's own use in the conduct of Tenant's
business and not for purposes of speculating in real estate, for the Lease Term
and upon the terms and subject to the conditions of this Lease, that certain
interior space described in Article I as the Leased Premises, reserving and
excepting to Landlord the exclusive right to all profits to be derived from any
assignments or sublettings by Tenant during the Lease Term by reason of the
appreciation in the fair market rental value of the Leased Premises. Tenant's
lease of the Leased Premises, together with the appurtenant right to use the
Outside Areas as described in Article 2.2 below, shall be conditioned upon and
be subject to the continuing compliance by Tenant with (i) all the terms and
conditions of this Lease, (ii) all Laws governing the use of the Leased Premises
and the Property, (iii) all Private Restrictions, easements and other matters
now of public record respecting the use of the Leased Premises and the Property,
and (iv) all reasonable rules and regulations from time to time established by
Landlord.
2.2 RIGHT TO USE OUTSIDE AREAS: As an appurtenant right to Tenant's right
to the use and occupancy of the Leased Premises, Tenant shall have the right to
use the Outside Areas in conjunction with its use of the Leased Premises solely
for the purposes for which they were designed and intended and for no other
purposes whatsoever. Tenant's right to so use the Outside Areas shall be subject
to the limitations on such use as set forth in Article 4 and shall terminate
concurrently with any termination of this Lease.
2.3 LEASE COMMENCEMENT DATE AND LEASE TERM: The term of this Lease shall
begin, and the Lease Commencement Date shall be deemed to have occurred, on the
Intended Commencement Date (as set forth in Article I) unless either (i)
Landlord is unable to deliver possession of the Leased Premises to Tenant on the
Intended Commencement Date, in which case the Lease Commencement Date shall be
as determined pursuant to Article 2.4 below or (ii) Tenant enters into
possession of the Leased Premises prior to the Intended Commencement Date, in
which case the Lease Commencement Date shall be as determined pursuant to
Article 2.7 below (the "Lease Commencement Date"). The term of the Lease shall
end on the Lease Expiration Date (as set forth in Article I), irrespective of
whatever date the Lease Commencement Date is determined to be pursuant to the
foregoing sentence. The Lease Term shall be that period of time commencing on
the Lease Commencement Date and ending on the Lease Expiration Date (the "Lease
Term").
2.4 DELIVERY OF POSSESSION: Landlord shall deliver to Tenant possession of
the Leased Premises on or before the Intended Commencement Date (as set forth in
Article I) in their presently existing condition, broom clean, unless Landlord
shall have agreed, as a condition to Tenant's obligation to accept possession of
the Leased Premises pursuant to a written Exhibit or Addenda attached to and
made a part of this Lease, to modify existing interior improvements or to make,
construct and/or install additional specified improvements within the Leased
Premises or to the Outside Areas, in which case Landlord shall deliver to Tenant
possession of the Leased Premises on or before the Intended Commencement Date as
so modified and/or improved. If Landlord is unable to so deliver possession of
the Leased Premises to Tenant in the agreed condition on or before the Intended
Commencement Date, for whatever reason, Landlord shall not be in default under
this Lease, nor shall this Lease be void, voidable or cancelable by Tenant until
the lapse of one hundred twenty days after the Intended Commencement Date (the
"delivery grace period"); however, the Lease Commencement Date shall not be
deemed to have occurred until such date as Landlord notifies Tenant that the
Leased Premises are in the agreed condition and are Ready for Occupancy.
Additionally, the delivery grace period above set forth shall be extended for
such number of days as Landlord may be delayed in making the agreed improvements
and/or delivering possession of the Leased Premises to Tenant by reason of Force
Majeure or the actions of Tenant. If Landlord is unable to deliver possession of
the Leased Premises in the agreed condition to Tenant within the described
delivery grace period (including any extensions thereof by reason of Force
Majeure or the actions of Tenant), then Tenant's sole remedy shall be to cancel
and terminate this Lease, and in no event shall Landlord be liable in damages to
Tenant for such delay. Tenant may not cancel this Lease at any time after the
date Landlord notifies Tenant that the Leased Premises have been put into the
agreed condition and are Ready for Occupancy.
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2.5 ACCEPTANCE OF POSSESSION: Tenant acknowledges that it has inspected
the Leased Premises and is willing to accept them in their existing condition,
broom clean, unless Landlord shall have agreed, as a condition to Tenant's
obligation to accept possession for the Leased Premises pursuant to a written
Exhibit or Addenda attached to and made a part of the Lease, to modify existing
interior improvements or to make, construct and/or install specified
improvements within the Leased Premises, in which case Tenant agrees to accept
possession of the Leased Premises when Landlord has substantially completed such
modifications or improvements and the Leased Premises are Ready for Occupancy.
If Landlord shall have so modified existing improvements or constructed
additional improvements within the Leased Premises for Tenant, Tenant shall,
within Tenant's Punchlist Period (as set forth in Article I) which shall
commence on the date that Landlord notifies Tenant that the agreed improvements
have been completed and the Leased Premises are Ready for Occupancy, submit to
Landlord a signed copy of the Acceptance Agreement attached hereto as Exhibit
"D" together with a punchlist of all incomplete and/or improper work performed
by Landlord. Upon the expiration of Tenant's Punchlist Period, Tenant shall be
conclusively deemed to have accepted the Leased Premises in their then-existing
condition as so delivered by Landlord to Tenant, except as to those items
reasonably set forth in the punchlist submitted to Landlord prior to the
expiration of said period. Landlord agrees to correct all items reasonably set
forth in Tenant's punchlist, provided that such punchlist was submitted to
Landlord within Tenant's Punchlist Period. Additionally, Landlord agrees to
place in good working order all existing plumbing, lighting, heating,
ventilating and air conditioning systems within the Leased Premises and all man
doors and roll-up truck doors serving the Leased Premises to the extent that
such systems and/or items are not in good operating condition as of the date
Tenant accepts possession of the Leased Premises; provided that, and only if,
Tenant notifies Landlord in writing of such failures or deficiencies within five
business days from the date Tenant so accepts possession of the Leased Premises.
2.6 SURRENDER OF POSSESSION: Immediately prior to the expiration or upon
the sooner termination of this Lease, Tenant shall remove all of Tenant's signs
from the exterior of the Building and shall remove all of Tenant's equipment,
trade fixtures, furniture, supplies, wall decorations and other personal
property from the Leased Premises, and shall vacate and surrender the Leased
Premises to Landlord in the same condition, broom clean, as existed at the Lease
Commencement Date. Tenant shall repair all damage to the Leased Premises caused
by Tenant's removal of Tenant's property and all damage to the exterior of the
Building caused by Tenant's removal of Tenant's signs. Tenant shall patch and
refinish, to Landlord's reasonable satisfaction, all penetrations made by Tenant
or its employees to the floor, walls or ceiling of the Leased Premises, whether
such penetrations were made with Landlord's approval or not. Tenant shall clean,
repair or replace all stained or damaged ceiling tiles, wall coverings and clean
or replace as may be required floor coverings to the reasonable satisfaction of
Landlord. Tenant shall replace all burned out light bulbs and damaged light
lenses, and clean and repaint all painted walls. Landlord shall retain a
mechanical contractor at Tenant's expense to service all heating, ventilating,
and air-conditioning equipment, and Tenant shall pay the cost for the service
and the cost to restore (or replace as required) said equipment to good working
order. Tenant shall pay the cost of restoring or replacing all trees, shrubs,
plants, lawn and ground cover, and repair (or replace as required) all paved
surfaces of the Property, and otherwise satisfy all requirements to repair any
damage or excessive wear to the Leased Premises, Building, Outside Areas, and/or
Property. Tenant shall repair all damage caused by Tenant to the exterior
surface of the Building and the paved surfaces of the outside areas adjoining
the Leased Premises and, where necessary, replace or resurface same.
Additionally, Tenant shall, prior to the expiration or sooner termination of
this Lease, remove any improvements constructed or installed by Tenant which
Landlord requests be so removed by Tenant and repair all damage caused by such
removal. If the Leased Premises are not surrendered to Landlord in the condition
required by this Article at the expiration or sooner termination of this Lease,
Landlord may, at Tenant's expense, so remove Tenant's signs, property and/or
improvements not so removed and make such repairs and replacements not so made
or hire, at Tenant's expense, independent contractors to perform such work.
Tenant shall be liable to Landlord for all costs incurred by Landlord in
returning the Leased Premises to the required condition, plus interest on all
costs incurred from the date paid by Landlord at the then maximum rate of
interest not prohibited by Law until paid, payable by Tenant to Landlord within
ten days after receipt of a statement therefore from Landlord, and Tenant shall
be deemed to have impermissibly held over until such time as such required work
is completed, and Tenant shall pay Base Monthly Rent and Additional Rent in
accordance with the terms of Section 13.2 (Holding Over) until such work is
completed. Tenant shall indemnify Landlord against loss or liability resulting
from delay by Tenant in so surrendering the Leased Premises, including, without
limitation, any claims made by any succeeding tenant or any losses to Landlord
due to lost opportunities to lease to succeeding tenants.
2.7 EARLY OCCUPANCY: If Tenant enters into possession of the Leased
Premises prior to the Intended Commencement Date (or permits its contractors to
enter the Leased Premise prior to the Intended Commencement Date), unless
otherwise agreed in writing by Landlord, the Lease Commencement Date shall be
deemed to have occurred on such sooner date, and Tenant shall be obligated to
perform all its obligations under this Lease, including the obligation to pay
rent, from that sooner date.
ARTICLE 3:
RENT, LATE CHARGES AND SECURITY DEPOSITS
3.1 BASE MONTHLY RENT: Commencing on the Lease Commencement Date (as
determined pursuant to Article 2.3 above) and continuing throughout the Lease
Term, Tenant shall pay to Landlord, without prior demand therefore, in advance
on the first day of each calendar month, as base monthly rent, the amount set
forth as "Base Monthly Rent" in Article 1 (the "Base Monthly Rent").
3.2 ADDITIONAL RENT: Commencing on the Lease Commencement Date (as
determined pursuant to Article 2.3 above) and continuing throughout the Lease
Term, in addition to the Base Monthly Rent, Tenant shall pay to Landlord as
additional rent (the "Additional Rent") the following amounts:
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A. An amount equal to all Property/Operating Expenses (as defined in
Article 13) incurred by Landlord. Payment shall be made by whichever of the
following methods (or combination of methods) is (are) from time to time
designated by Landlord:
(1) Landlord may xxxx to Tenant, on a periodic basis not more
frequently than monthly, the amount of such expenses (or group of expenses) as
paid or incurred by Landlord, and Tenant shall pay to Landlord the amount of
such expenses within ten days after receipt of a written xxxx therefore from
Landlord; and/or
(2) Landlord may deliver to Tenant Landlord's reasonable estimate of
any given expense (such as Landlord's Insurance Costs or Real Property Taxes),
or group of expenses, which it anticipates will be paid or incurred for the
ensuing calendar or fiscal year, as Landlord may determine, and Tenant shall
pay to Landlord an amount equal to the estimated amount of such expenses for
such year in equal monthly, installments during such year with the installments
of Base Monthly Rent.
(3) Landlord reserves the right to change from time to time the
methods of billing Tenant for any given expense or group of expenses or the
periodic basis on which such expenses are billed.
B. Landlord's share of the consideration received by Tenant upon certain
assignments and sublettings as required by Article 7;
C. Any legal fees and costs that Tenant is obligated to pay or reimburse
to Landlord pursuant to Article 13; and
D. Any other charges or reimbursements due Landlord from Tenant pursuant
to the terms of this Lease other than late charges and interest on defaulted
rent.
3.3 YEAR-END ADJUSTMENTS: If Landlord shall have elected to xxxx Tenant
for the Property Operating Expenses (or any group of such expenses) on an
estimated basis in accordance with the provisions of Article 3.2A(2) above,
Landlord shall furnish to Tenant within three months following the end of the
applicable calendar or fiscal year, as the case may be, a statement setting
forth (i) the amount of such expenses paid or incurred during the just ended
calendar or fiscal year, as appropriate, and (ii) the amount that Tenant has
paid to Landlord for credit against such expenses for such period. If Tenant
shall have paid more than its obligation for such expenses for the stated
period, Landlord shall, at its election, either (i) credit the amount of such
overpayment toward the next ensuing payment or payments of Additional Rent that
would otherwise be due or (ii) refund in cash to Tenant the amount of such
overpayment. If such year-end statement shall show that Tenant did not pay its
obligation for such expenses in full, then Tenant shall pay to Landlord the
amount of such underpayment within ten days from Landlord's billing of same to
Tenant. The provisions of this Article shall survive the expiration or sooner
termination of this Lease.
3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges that
the late payment by Tenant of any monthly installment of Base Monthly Rent or
any Additional Rent will cause Landlord to incur certain costs and expense not
contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include, without
limitation, administration and collection costs and processing and accounting
expenses. Therefore, if any installment of Base Monthly Rent is not received by
Landlord from Tenant within six calendar days after receipt of written notice
after the same becomes due, Tenant shall immediately pay to Landlord a late
charge in an amount equal to the amount set forth in Article 1 as the "Late
Charge Amount", and if any Additional Rent is not received by Landlord within
six calendar days after receipt of written notice after same becomes due, Tenant
shall immediately pay to Landlord a late charge in an amount equal to ten
percent of the Additional Rent not so paid. Landlord and Tenant agree that this
late charge represents a reasonable estimate of such costs and expenses and is
fair compensation to Landlord for the anticipated loss Landlord would suffer by
reason of Tenant's failure to make timely payment. In no event shall this
provision for a late charge be deemed to grant to Tenant a grace period or
extension of time within to pay any rental installment or prevent Landlord from
exercising any right or remedy available to Landlord upon Tenant's failure to
pay each rental installment due under this Lease when due, including the right
to terminate this Lease. If any rent remains delinquent for a period in excess
of six calendar days, then, in addition to such late charge, Tenant shall pay to
Landlord interest on any rent that is not so paid from said sixth day at the
then maximum rate of interest not prohibited or made usurious by Law until paid.
3.5 PAYMENT OF RENT: All rent shall be paid in lawful money of the United
States, without any abatement, reduction or offset for any reason whatsoever,
to Landlord at such address as Landlord may designate from time to time.
Tenant's obligation to pay Base Monthly Rent and all Additional Rent shall be
appropriately prorated at the commencement and expiration of the Lease Term.
The failure by Tenant to pay any Additional Rent as required pursuant to this
Lease when due shall be treated the same as a failure by Tenant to pay Base
Monthly Rent when due, and Landlord shall have the same rights and remedies
against Tenant as Landlord would have if Tenant failed to pay the Base Monthly
Rent when due.
3.6 PREPAID RENT. Concurrent with the execution of this Lease, Tenant
shall pay to Landlord the amount set forth in Article I as "First Month's
Prepaid Rent" as prepayment of rent for credit against the first installment(s)
of Base Monthly Rent due hereunder. Additionally, Tenant has paid to Landlord
the amount set forth in Article I as "Last Month's Prepaid Rent" as prepayment
of rent for credit against the last installment(s) of Base Monthly Rent due
hereunder, subject, however, to the provisions of Article 3.7 below.
3.7 SECURITY DEPOSIT: Concurrent with the execution of this Lease, Tenant
shall deposit with Landlord the amount set forth in Article as the
"Security Deposit" as security for the performance by Tenant of the terms of
this Lease to be performed by Tenant, and not as prepayment of rent. Landlord
may apply such portion or portions of the Security Deposit as are reasonably
necessary for the following purposes: (i) to remedy any default by Tenant in the
payment of Base Monthly Rent or Additional Rent or a late charge or interest on
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defaulted rent; (ii) to repair damage to the Leased Premises, the Building or
the Outside Areas caused by Tenant; (iii) to clean and repair the Leased
Premises, the Building or the Outside Areas following their surrender to
Landlord if not surrendered in the condition required pursuant to the provisions
of Article 2; and (iv) to remedy any other default of Tenant to the extent
permitted by Law including, without limitation, paying in full on Tenant's
behalf any sums claimed by materialmen or contractors of Tenant to be owing to
them by Tenant for work done or improvements made at Tenant's request to the
Leased Premises. In this regard, Tenant hereby waives any restriction on the
uses to which the Security Deposit may be applied as contained in Section
1950.7(c) of the California Civil Code and/or any successor statute. In the
event the Security Deposit or any portion thereof is so used, Tenant shall pay
to Landlord, promptly upon demand, an amount in cash sufficient to restore the
Security Deposit to the full original sum. If Tenant fails to promptly restore
the Security Deposit and if Tenant shall have paid to Landlord any sums as "Last
Month's Prepaid Rent", Landlord may, in addition to any other remedy Landlord
may have under this Lease, reduce the amount of Tenant's Last Month's Prepaid
Rent by transferring all or portions of such Last Month's Prepaid Rent to
Tenant's Security Deposit until such Security Deposit is restored to the amount
set forth in Article 1. Landlord shall not be deemed a trustee of the Security
Deposit. Landlord may use the Security Deposit in Landlord's ordinary business
and shall not be required to segregate it from its general accounts. Tenant
shall not be entitled to any interest on the Security Deposit. If Landlord
transfers the Building or the Property during the Lease Term, Landlord may pay
the Security Deposit to any subsequent owner in conformity with the provisions
of Section 1950.7 of the California Civil Code and/or any successor statute, in
which event the transferring landlord shall be released from all liability for
the return of the Security Deposit. Tenant specifically grants to Landlord (and
Tenant hereby waives the provisions of California Civil Code Section 1950.7 to
the contrary) a period of sixty days following a surrender of the Leased
Premises by Tenant to Landlord within which to return the Security Deposit (less
permitted deductions) to Tenant, it being agreed between Landlord and Tenant
that sixty days is a reasonable period of time within which to inspect the
Leased Premises, make required repairs, receive and verify workmen's xxxxxxxx
therefore, and prepare a final accounting with respect to such deposit. In no
event shall the Security Deposit, or any portion thereof, be considered prepaid
rent.
ARTICLE 4:
USE OF LEASED PREMISES AND OUTSIDE AREA
4.1 PERMITTED USE: Tenant shall be entitled to use the Leased Premises
solely for the "Permitted Use" as set forth in Article 1 and for no other
purpose whatsoever. Tenant shall use the Leased Premises for such purpose for
the entire Lease Term. Any discontinuance of such use for a period of thirty
consecutive calendar days shall be, at Landlord's election, a default by, Tenant
under the terms of this Lease. Tenant shall have the right to use the Outside
Areas in conjunction with its Permitted Use of the Leased Premises solely for
the purposes for which they were designed and intended and for no other purposes
whatsoever.
4.2 GENERAL LIMITATIONS ON USE: Tenant shall not do or permit anything to
be done in or about the Leased Premises, the Building, the Outside Areas or the
Property which does or could (i) jeopardize the structural integrity of the
Building or (ii) cause damage to any part of the Leased Premises, the Building,
the Outside Areas or the Property. Tenant shall not operate any equipment within
the Leased Premises which does or could (i) injure, vibrate or shake the Leased
Premises or the Building, (ii) damage, overload, corrode, or impair the
efficient operation of any electrical, plumbing, sewer, heating, ventilating or
air conditioning systems within or servicing the Leased Premises or the Building
or (iii) damage or impair the efficient operation of the sprinkler system (if
any) within or servicing the Leased Premises or the Building. Tenant shall not
install any equipment or antennas on or make any penetrations of the exterior
walls or roof of the Building. Tenant shall not affix any equipment to or make
any penetrations or cuts in the floor, ceiling or walls of the Leased Premises.
Tenant shall not place any loads upon the floors, walls, ceiling or roof systems
which could endanger the structural integrity of the Building or damage its
floors, foundations or supporting structural components. Tenant shall not place
any explosive, flammable or harmful fluids or other waste materials including
Hazardous Materials in the drainage systems of the Leased Premises, the
Building, the Outside Areas or the Property. Tenant shall not drain or discharge
any fluids in the landscaped areas or across the paved areas of the Property.
Tenant shall not use any of the Outside Areas for the storage of its materials,
supplies, inventory or equipment, and all such materials, supplies, inventory or
equipment shall at all times be stored within the Leased Premises. Tenant shall
not commit nor permit to be committed any waste in or about the Leased Premises,
the Building, the Outside Areas or the Property.
4.3 NOISE AND EMISSIONS: All noise generated by Tenant in its use of the
Leased Premises shall be confined or muffled so that it does not interfere with
the businesses of or annoy the occupants and/or users of adjacent properties.
All dust, fumes, odors and other emissions generated by Tenant's use of the
Leased Premises shall be sufficiently dissipated in accordance with sound
environmental practices and exhausted from the Leased Premises in such a manner
so as not to interfere with the businesses of or annoy the occupants and/or
users of adjacent properties, or cause any damage to the Leased Premises, the
Building, the Outside Areas or the Property or any component part thereof or the
property of adjacent property owners.
4.4 TRASH DISPOSAL: Tenant shall provide trash bins (or other adequate
garbage disposal facilities) within the trash enclosure areas provided or
permitted by Landlord outside the Leased Premises sufficient for the interim
disposal of all of its trash, garbage and waste. All such trash, garbage and
waste temporarily stored in such areas shall be stored in such a manner so that
it is not visible from outside of such areas, and Tenant shall cause such trash,
garbage and waste to be regularly removed from the Property at Tenant's sole
cost. Tenant shall at all times keep the Leased Premises, the Building, the
Outside Areas and the Property in a clean, safe and neat condition free and
clear of all trash, garbage, waste and/or boxes, pallets and containers
containing same at all times.
4.5 PARKING: Tenant shall not, at any time, park or permit to be parked
any recreational vehicles, inoperative vehicles or equipment in the Outside
Areas or on any portion of the Property. Tenant agrees to assume responsibility
for compliance by its employees and invitees with the parking provisions
contained herein. If Tenant
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or its employees park any vehicle within the Property in violation of these
provisions, then Landlord may, in addition to any other remedies Landlord may
have under this Lease, charge Tenant, as Additional Rent, and Tenant agrees to
pay, as Additional Rent, Fifty Dollars per day for each day or partial day that
each such vehicle is so parked within the Property.
4.6 SIGNS: Other than one business identification sign which is first
approved by Landlord in accordance with this Article, Tenant shall not place or
install on or within any portion of the Leased Premises, the exterior of the
Building, the Outside Areas or the Property any sign, advertisement, banner,
placard, or picture which is visible from the exterior of the Leased Premises.
Tenant shall not place or install on or within any portion of the Leased
Premises, the exterior of the Building, the Outside Areas or the Property any
business identification sign which is visible from the exterior of the Leased
Premises until Landlord shall have first approved in writing the location,
size, content, design, method of attachment and material to be used in the
making of such sign. Any sign, once approved by Landlord, shall be installed
only in strict compliance with Landlord's approval, at Tenant's expense, using
a person first approved by Landlord to install same. Landlord may remove any
signs (which have not been first approved in writing by Landlord),
advertisements, banners, placards or pictures so placed by Tenant on or within
the Leased Premises, the exterior of the Building, the Outside Areas or the
Property and charge to Tenant the cost of such removal, together with any costs
incurred by Landlord to repair any damage caused thereby, including any cost
incurred to restore the surface upon which such sign was so affixed to its
original condition. Tenant shall remove all of Tenant's signs, repair any
damage caused thereby, and restore the surface upon which the sign was affixed
to its original condition, all to Landlord's reasonable satisfaction, upon the
termination of this Lease.
4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall abide by
and shall promptly observe and comply with, at its sole cost and expense, all
Laws and Private Restrictions respecting the use and occupancy of the Leased
Premises, the Building, the Outside Areas or the Property including, without
limitation, all Laws governing the use and/or disposal of hazardous materials,
and shall defend with competent counsel, indemnify and hold Landlord harmless
from any claims, damages or liability resulting from Tenant's failure to do so.
The indemnity provision of this Article shall survive the expiration or sooner
termination of this Lease, with respect to any activities of Tenant occurring
on or about the Property while Tenant was in possession of the Leased Premises.
4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS: With respect to any
insurance policies required or permitted to be carried by Landlord in
accordance with the provisions of this Lease, Tenant shall not conduct (or
permit any other person to conduct) any activities nor keep, store or use (or
allow any other person to keep, store or use) any item or thing within the
Leased Premises, the Building, the Outside Areas or the Property which (i) is
prohibited under the terms of any such policies, (ii) could result in the
termination of the coverage afforded under any of such policies, (iii) could
give to the insurance carrier the right to cancel any of such policies, or (iv)
could cause an increase in the rates (over standard rates) charged for the
coverage afforded under any of such policies. Tenant shall comply with all
requirements of any insurance company, insurance underwriter, or Board of Fire
Underwriters which are necessary to maintain, at standard rates, the insurance
coverages carried by either Landlord or Tenant pursuant to this Lease.
4.9 LANDLORD'S RIGHT TO ENTER: Landlord and its agents shall have the
right to enter the Leased Premises during normal business hours after giving
Tenant reasonable notice and subject to Tenant's reasonable security measures
for the purpose of (i) inspecting the same; (ii) showing the Leased Premises to
prospective purchasers, mortgagees or tenants; (iii) making necessary
alterations, additions or repairs; (iv) performing any of Tenant's obligations
when Tenant has failed to do so. Landlord shall have the right to enter the
Leased Premises during normal business hours (or as otherwise agreed), subject
to Tenant's reasonable security measures, for purposes of supplying any
maintenance or services agreed to be supplied by Landlord. Landlord shall have
the right to enter the Outside Areas during normal business hours for purposes
of (i) inspecting the exterior of the Building and the Outside Areas, (ii)
posting notices of non-responsibility, or "For Lease" of "For Sale" signs, and
(iii) supplying any services to be provided by Landlord. Any entry into the
Leased Premises or the Outside Areas obtained by Landlord in accordance with
this Article shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into, or a detainer of, the Leased Premises, or an
eviction, actual or constructive of Tenant from the Leased Premises or any
portion thereof.
4.10 USE OF OUTSIDE AREAS: Tenant, in its use of the Outside Areas,
shall at all times keep the Outside Areas in a safe condition free and clear of
all materials, equipment, debris, trash (except within existing enclosed trash
areas), inoperable vehicles, and other items which are not specifically
permitted by Landlord to be stored or located thereon by Tenant. If, in the
opinion of Landlord, unauthorized persons are using any of the Outside Areas by
reason of, or under claim of, the express or implied authority or consent of
Tenant, then Tenant, upon demand of Landlord, shall restrain, to the fullest
extent then allowed by Law, such unauthorized use, and shall initiate such
appropriate proceedings as may be required to so restrain such use.
4.11. RULES AND REGULATIONS: Landlord shall have the right from time to
time to establish reasonable rules and regulations and/or amendments or
additions thereto resulting the use of the Leased Premises and the Outside
Areas for the care and orderly management of the Property. Upon delivery to
Tenant of a copy of such rules and regulations or any amendments or additions
thereto, Tenant shall comply with such rules and regulations. A violation by
Tenant of any of such rules and regulations shall constitute a default by
Tenant under this Lease. If there is a conflict between the rules and
regulations and any of the provisions of this Lease, the provisions of this
Lease shall prevail. Landlord shall not be responsible or liable to Tenant for
the violation of such rules and regulations by any other tenant of the Property.
4.12 ENVIRONMENTAL PROTECTION: Landlord may voluntarily cooperate in a
reasonable manner with the efforts of all governmental agencies in reducing
actual or potential environmental damage. Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason of
such compliance or
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cooperation. Tenant agrees at all times to cooperate fully with Landlord and to
abide by all rules and regulations and requirements which Landlord may
reasonably prescribe in order to comply with the requirements and
recommendations of governmental agencies regulating, or otherwise involved in,
the protection of the environment.
4.13 OUTSIDE AREAS: No materials, pallets, supplies, tanks or containers
whether above or below ground level, equipment, finished products or
semifinished products, raw materials, inoperable vehicles or articles of any
nature shall be stored upon or permitted to remain outside of the Leased
Premises except in fully fenced and screened areas outside the Building which
have been designed for such purpose and have been approved in writing by
Landlord for such use by Tenant.
4.14 HAZARDOUS MATERIALS: Landlord and Tenant agree as follows with respect
to the existence or use of Hazardous Materials on the Property:
A. Any handling, transportation, storage, treatment, disposal or use of
Hazardous Materials by Tenant, Tenant's Agents, or any other party after the
Effective Date of this Lease in or about the Property shall strictly comply with
all applicable Hazardous Materials Laws. Tenant shall indemnify, defend upon
demand with counsel reasonably acceptable to Landlord, and hold harmless
Landlord from and against any and all liabilities, losses, claims, damages, lost
profits, consequential damages, interest, penalties, fines, court costs,
remediation costs, investigation costs, and other expenses which result from or
arise in any manner whatsoever out of the use, storage, treatment,
transportation, release, or disposal of Hazardous Materials on or about the
Property by Tenant, Tenant's Agents, Permits, or Invites after the Effective
Date.
B. If the presence of Hazardous Materials on the Property caused or
permitted by Tenant, Tenant's Agents, Permits, or Invites after the Effective
Date of this Lease results in contamination or deterioration of water or soil or
any other part of the Property, then Tenant shall promptly take any and all
action necessary to investigate and remedial such contamination. Tenant shall
further be solely responsible for, and shall defend, indemnify and hold Landlord
and its agents harmless from and against, all claims, costs and liabilities,
including attorney's fees and costs, arising out of or in connection with any
investigation and remediation (including investigative analysis, removal,
cleanup, and/or restoration work) required hereunder to return the Leased
Premises, Building, Common Areas, Outside Areas, and/or Property and any other
property of whatever nature to their condition existing prior to the appearance
of such Hazardous Materials.
C. Landlord and Tenant shall each give written notice to the other as soon
as reasonably practicable of (i) any communication received from any
governmental authority concerning Hazardous Materials which relates to the
Property, and (ii) any contamination of the Property by Hazardous Materials
which constitutes a violation of any Hazardous Materials Law. Tenant
acknowledges that Landlord, as the owner of the Property, at Landlord's
election, shall have the sole right at Tenant's expense to negotiate, defend,
approve, and/or appeal any action taken or order issued with regard to Hazardous
Materials by any applicable governmental authority. Tenant may use small
quantities of household chemicals such as adhesives, lubricants, and cleaning
fluids in order to conduct its business at the Premises and such other Hazardous
Materials as are necessary to the operation of Tenant's business of which
Landlord receives notice prior to such Hazardous Materials being brought onto
the Property (or any portion thereof) and which Landlord consents in writing may
be brought onto the Property. In granting Landlord's consent, Landlord may
specify the location and manner or use, storage, or handling of any Hazardous
Material. Landlord's consent shall in no way relieve Tenant from any of its
obligations as contained herein. Tenant shall notify Landlord in writing at
least ten (10) days prior to the first appearance of any Hazardous Material on
the Leased Premises, Building, Common Areas, Outside Areas, and/or Property.
Tenant shall provide Landlord with a list of all Hazardous Materials and the
quantities of each Hazardous Material to be stored on any portion of the
Property, and upon Landlord's request, Tenant shall provide Landlord with copies
of any and all Hazardous Materials Management Plans, Material Safety Data
Sheets, Hazardous Waste Manifests, and other documentation maintained or
received by Tenant pertaining to the Hazardous Materials used, stored, or
transported or to be used, stored, or transported on any portion of the
Property. At any time during the Lease Term, Tenant shall, within five days
after written request therefor received from Landlord, disclose in writing all
Hazardous Materials that are being used by Tenant on the Property (or have been
used on the Property), the nature of such use, and the manner of storage and
disposal.
D. Landlord may cause testing xxxxx to be installed on the Property, and
may cause the ground water to be tested to detect the presence of Hazardous
Material by the use of such tests as are then customarily used for such
purposes. If Tenant so requests, Landlord shall supply Tenant with copies of
such test results. The cost of such tests and of the installation, maintenance,
repair and replacement of such xxxxx shall be paid by Tenant if such tests
disclose the existence of facts which give rise to liability of Tenant pursuant
to its indemnity given in A and or B above. Landlord may retain consultants to
inspect the Property, conduct periodic environmental audits, and review any
information provided by Tenant. Tenant shall pay the reasonable cost of fees
charged by Landlord and/or Landlord's consultants as a Property Maintenance
Cost.
E. Upon the expiration or earlier termination of the Lease, Tenant, at its
sole cost, shall remove all Hazardous Materials from the Property and shall
provide a certificate to Landlord from a registered consultant satisfactory to
Landlord certifying that Tenant has caused no contamination of building (s),
soil or groundwater in or about the Leased Premises, Building, Common Areas,
Outside Areas, or Property. If Tenant fails to so surrender the Property, Tenant
shall indemnify and hold Landlord harmless from all damages resulting from
Tenant's failure to surrender the Property as required by this Subsection,
including, without limitation, any claims or damages in connection with the
condition of the Property including, without limitation, damages occasioned by
the inability to release the Property (or any portion thereof) or a reduction in
the fair market and/or rental value of the Property, Building, Common Areas,
Outside Areas, and/or Property by reason of the existence of any Hazardous
Materials in or around the Leased Premises, Building, Common Areas, Outside
Areas, and/or Property. If any action is required to be taken by a governmental
authority to test, monitor, and/or clean up Hazardous Materials from the Leased
Premises, Building, Common Areas, Outside Areas, and/or Property and such action
is not completed prior to the expiration or earlier termination of the Lease,
Tenant shall be deemed to have impermissibly held over until such time as such
required action is completed, and Tenant shall pay Base Monthly Rent and
Additional Rent in accordance with the terms of Section 13.2 (Holding Over). In
addition, Landlord shall be entitled to all damages directly or indirectly
incurred in connection with such holding over, including, without limitation,
damages
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occasioned by the inability to release the Property or a reduction of the
fair market and/or rental value of the Leased Premises, Building, Common
Areas, Outside Areas, and/or Property.
F. As used herein, the term "Hazardous Material(s)" means any hazardous
or toxic substance, material or waste, which is or becomes regulated by any
federal, state, regional or local governmental authority because it is in
any way hazardous, toxic, carcinogenic, mutagenic or otherwise adversely
affects any part of the environment or creates risks of any such hazards or
effects, including, but not limited to, petroleum; asbestos, and
polychlorinated bipheyls and any material, substance, or waste (a) defined
as a "hazardous waste," "extremely hazardous waste" or "restricted
hazardous waste" under Sections 25115, 25117 or 25122.7, or listed pursuant
to Section 25140 of the California Health and Safety Code, Division 20,
Chapter 6.5 (Hazardous Waste Control Law); (b) defined as a "hazardous
substance" under Section 25356 of the California Health and Safety Code,
Division 20, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx Xxxxxx Hazardous Substance
Account Act); (c) defined as a "hazardous material," "hazardous substance"
or "hazardous waste" under Section 25501 of the California Health and
Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory); (d) defined as a "hazardous substance" under
Section 25281 of the California Health and Safety Code, Division 20,
Chapter 6.7 (Underground Storage of Hazardous Substances); (e) defined as a
"hazardous substance" pursuant to Section 311 of the Clean Xxxxx Xxx, 00
Xxxxxx Xxxxxx Code Sections 1251 et seq. (33 U.S.C. 1321) or listed
pursuant to Section 307 of the Clean Water Act (33 U.S.C. 1317); (f)
defined as a "hazardous waste" pursuant to Section 1004 of the Resource
Conservation and Xxxxxxxx Xxx, 00 Xxxxxx Xxxxxx Code Sections 6901 et seq.
(42 U.S.C. 6903); or (g) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 United States Code Section 9601 et seq. (42 U.S.C. 9601)
or (h) defined as a "hazardous substance" pursuant to Section 311 of the
Federal Water Pollution Control Act, 33 U.S.C. 1251 et seq. or (i) listed
pursuant to Section 307 of the Federal Water Pollution Control Act (33
U.S.C. 1317) or (j) regulated under the Toxic Substances Control Act (15
U.S.C. 2601 et seq.) or (k) defined as a "hazardous material" under Section
66680 or 66084 of Title 22 of the California Code of Regulations
(Administrative Code) (l) listed in the United States Department of
Transportation Hazardous Materials Table (49 C.F.R. 172.101) or (m) listed
by the Environmental Protection Agency as "hazardous substances" (40 C.F.R.
Part 302) and amendments thereto. The term "Hazardous Material Laws" shall
mean (i) all of the foregoing laws as amended from time to time and (ii)
any other federal, state, or local law, ordinance, regulation, or order
regulating Hazardous Materials.
G. Tenant's failure to comply with any of the requirements of this
Section regarding the storage, use, disposal, or transportation of
Hazardous Materials, or the appearance of any Hazardous Materials on the
Leased Premises, Building, Common Area, Outside Area, and/or the Property
without Landlord's consent shall be an Event of Default as defined in this
Lease. The obligations of Landlord and Tenant under this Section shall
survive the expiration or earlier termination of the Lease Term. The
rights and obligations of Landlord and Tenant within respect to issues
relating to Hazardous Materials are exclusively established by this
section. In the event of any inconsistency between any other part of this
Lease and this Section, the terms of this Section shall control.
ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
5.1 REPAIR AND MAINTENANCE: Except in the case of damage to or
destruction of the Leased Premises, the Building, the Outside Areas or the
Property caused by an Act of God or other peril, in which case the
provisions of Article 10 shall control, the parties shall have the
following obligations and responsibilities with respect to the repair and
maintenance of the Leased Premises, the Building and the Outside Areas.
A. TENANT'S OBLIGATION: Tenant shall, at all times during the Lease
Term and at its sole cost and expense, regularly clean and continuously
keep and maintain in good order, condition and repair the Leased Premises
and every part thereof including, without limiting the generality of the
foregoing, (i) all interior walls, floors and ceilings, (ii) all windows,
doors and skylights, (iii) all electrical wiring, conduits, connectors and
fixtures, (iv) all plumbing, pipes, sinks, toilets, faucets and drains,
(v) all lighting fixtures, bulbs and lamps, (vi) all heating, ventilating
and air conditioning equipment, and (vii) all entranceways to the Leased
Premises. Tenant, if requested to do so by Landlord shall hire, at
Tenant's sole cost and expense, a licensed heating, ventilating and air
conditioning contractor to regularly and periodically (not less frequently
than every three months) inspect and perform required maintenance on the
heating, ventilating and air conditioning equipment and systems serving
the Leased Premises, or alternatively, Landlord may, at its election,
contract in its own name for such regular and periodic inspections of and
maintenance on such heating, ventilating and air conditioning equipment
and systems and charge to Tenant, as Additional Rent, the cost thereof.
Tenant shall, at all times during the Lease Term, keep in a clean and safe
condition the Outside Areas. Tenant shall regularly and periodically sweep
and clean the driveways and parking areas. Tenant shall, at its sole cost
and expense, repair all damage to the Leased Premises, the Building, the
Outside Areas or the Property caused by the activities of Tenant, its
employees, invitees or contractors promptly following written notice from
Landlord to so repair such damage. If Tenant shall fail to perform the
required maintenance or fail to make repairs required of it pursuant to
this Article within a reasonable period of time following notice from
Landlord to do so, then Landlord may, at its election and without waiving
any other remedy it may otherwise have under this Lease or at Law, perform
such maintenance or make such repairs and charge to Tenant, as Additional
Rent, the costs so incurred by, Landlord for same. All glass within or a
part of the Leased Premises, both interior and exterior, is at the sole
risk of Tenant and any broken glass shall promptly be replaced by Tenant
at Tenant's expense with glass of the same kind, size and quality.
B. LANDLORD'S OBLIGATION: Landlord shall, at all times during the Lease
Term, maintain in good condition and repair: (i) the exterior and
structural parts of the Building (including the foundation, subflooring,
loadbearing and exterior walls, and roof); and (ii) the landscaped areas
located outside the Building. The provisions of this Subarticle B shall in
no way limit the right of Landlord to charge to Tenant, as Additional Rent
pursuant to Article 3 (to the extent permitted pursuant to Article 3), the
costs incurred by Landlord in performing such maintenance and/or making
such repairs.
5.2 UTILITIES: Tenant shall arrange, at its sole cost and expense and
in its own name, for the supply of gas and electricity to the Leased
Premises. In the event that such services are not separately metered,
Tenant shall,
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at its sole expense, cause such meters to be installed. Landlord shall maintain
the water meter(s) in its own name; provided, however, that it at any time
during the Lease Term Landlord shall require Tenant to put the water service in
Tenant's name, Tenant shall do so at Tenant's sole cost. Tenant shall be
responsible for determining if the local supplier of water, gas and electricity
can supply the needs of Tenant and whether or not the existing water, gas and
electrical distribution systems within the Building and the Leased Premises are
adequate for Tenant's needs. Tenant shall be responsible for determining if the
existing sanitary and storm sewer systems now servicing the Leased Premises and
the Property are adequate for Tenant's needs. Tenant shall pay all charges for
water, gas, electricity, and storm and sanitary sewer services as so supplied to
the Leased Premises, irrespective of whether or not the services are maintained
in Landlord's or Tenant's name.
5.3 SECURITY: Tenant acknowledges that Landlord has not undertaken any duty
whatsoever to provide security for the Leased Premises, the Building, the
Outside Areas or the Property and, accordingly, Landlord is not responsible for
the security of same or the protection of Tenant's property or Tenant's
employees, invitees or contractors. To the extent Tenant determines that such
security or protection services are advisable or necessary, Tenant shall arrange
for and pay the costs of providing same.
5.4 ENERGY AND RESOURCE CONSUMPTION: Landlord may voluntarily cooperate in
a reasonable manner with the efforts of governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the Property.
Tenant shall not be entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of such compliance or cooperation. Tenant agrees at
all times to cooperate fully with Landlord and to abide by all reasonable rules
established by Landlord (i) in order to maximize the efficient operation of the
electrical, heating, ventilating and air conditioning systems and all other
energy or other resource consumption systems within the Property and/or (ii) in
order to comply with the requirements and recommendations of utility suppliers
and governmental agencies regulating the consumption of energy and/or other
resources.
5.5 LIMITATION OF LANDLORD'S LIABILITY: Landlord shall not be liable to
Tenant for injury to Tenant, its employees, agents, invitees or contractors,
damage to Tenant's property or loss of Tenant's business or profits, nor shall
Tenant be entitled to terminate this Lease or to any reduction in or abatement
of rent by reason of (i) Landlord's failure to provide security services or
systems within the Property for the protection of the Leased Premises, the
Building or the Outside Areas, or the protection of Tenant's property or
Tenant's employees, invitees, agents or contractors, or (ii) Landlord's failure
to perform any maintenance or repairs to the Leased Premises, the Building, the
Outside Areas or the Property until Tenant shall have first notified Landlord,
in writing, of the need for such maintenance or repairs, and then only after
Landlord shall have had a reasonable period of time following its receipt of
such notice within which to perform such maintenance or repairs, or (iii) any
failure, interruption, rationing or other curtailment in the supply of water,
electric current, gas or other utility service to the Leased Premises, the
Building, the Outside Areas or the Property from whatever cause (other than
Landlord's sole active negligence or willful misconduct), or (iv) the
unauthorized intrusion or entry into the Leased Premises by third parties (other
than Landlord).
ARTICLE 6:
ALTERATIONS AND IMPROVEMENTS
6.1 BY TENANT: Tenant shall not make any alterations to or modifications of
the Leased Premises or construct any improvements to or within the Leased
Premises without Landlord's prior written approval, and then not until Landlord
shall have first approved, in writing, the plans and specifications therefore,
which approval shall not be unreasonably withheld. All such modifications,
alterations or improvements, once so approved, shall be made, constructed or
installed by Tenant at Tenant's expense, using a licensed contractor first
approved by Landlord, in substantial compliance with the Landlord-approved plans
and specifications therefore. All work undertaken by Tenant shall be done in
accordance with all Laws and in a good and workmanlike manner using new
materials of good quality that match or complement the original improvements
existing as of the Lease Commencement Date. Tenant shall not commence the making
of any such modifications or alterations or the construction of any such
improvements until (i) all required governmental approvals and permits shall
have been obtained, (ii) all requirements regarding insurance imposed by this
Lease have been satisfied, (iii) Tenant shall have given Landlord at least five
business days prior written notice of its intention to commence such work so
that Landlord may post and file notices of non-responsibility, and (iv) if
requested by Landlord, Tenant shall have obtained contingent liability and broad
form builder's risk insurance in an amount satisfactory to Landlord to cover any
perils relating to the proposed work not covered by insurance carried by Tenant
pursuant to Article 9. In no event shall Tenant make any modifications,
alterations or improvements to the Common Areas or any areas outside of the
Leased Premises. As used in this Article, the term "modifications, alterations
and/or improvements" shall include, without limitation, the installation of
additional electrical outlets, overhead lighting fixtures, drains, sinks,
partitions, doorways, or the like. As a part of granting Landlord's approval for
Tenant to make alterations or modifications Landlord may require Tenant to
increase the amount of its Security Deposit to cover the cost of removing
Tenant's alterations or modifications and to restore the condition of the
Premises to its prior condition. Tenant shall pay Landlord's reasonable costs
to inspect the construction of Tenant's alterations or modifications and to have
Landlord's architect revise Landlord's drawings to show the work performed by
Tenant.
6.2 OWNERSHIP OF IMPROVEMENTS: All modifications, alterations or
improvements made or added to the Leased Premises by Tenant (other than Tenant's
inventory, equipment, movable furniture, wall decorations and trade fixtures)
shall be deemed real property and a part of the Leased Premises, but shall
remain the property of Tenant during the Lease Term. Any such modifications,
alterations or improvements, once completed, shall not be altered or removed
from the Leased Premises during the Lease Term without Landlord's written
approval first obtained in accordance with the provisions of Article 6.1 above.
At the expiration or sooner termination of this Lease, all such modifications,
alterations and improvements (other than Tenant's inventory, equipment, movable
furniture, wall decorations and trade fixtures) shall automatically become the
property of Landlord and shall be surrendered to Landlord as a part of the
Leased Premises as required pursuant to Article 2,
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unless Landlord shall require Tenant to remove any of such modifications,
alterations or improvements in accordance with the provisions of Article 2, in
which case Tenant shall so remove same. Landlord shall have no obligation to
reimburse to Tenant all or any portion of the cost or value of any such
modifications, alterations or improvements so surrendered to Landlord. All
modifications, alterations or improvements which are installed or constructed on
or attached to the Leased Premises by Landlord at Landlord's expense shall be
deemed real property and a part of the Leased Premises and shall be the property
of Landlord. All lighting, plumbing, electrical, heating, ventilating and air
conditioning fixtures, partitioning, window coverings, wall coverings and floor
coverings installed by Tenant shall be deemed improvements to the Leased
Premises and not trade fixtures of Tenant.
6.3 ALTERATIONS: Tenant shall, at its sole cost make all modifications,
alterations and improvements to the Leased Premises that are required by any Law
because of (i) Tenant's use or occupancy of the Leased Premises, the Building,
the Outside Areas, or the Property, (ii) Tenant's application for any permit or
governmental approval, or (iii) Tenant's making of any modifications,
alterations or improvements to or within the Leased Premises. If Landlord shall,
at any time during the Lease Term, (i) be required by any governmental authority
to make any modifications, alterations or improvements to the Building or the
Project, (ii) modify the existing (or construct additional) capital improvements
or provide building service equipment for the purpose of reducing the
consumption of utility services or project maintenance costs for the property,
the cost incurred by Landlord in making such modifications, alterations or
improvements, including an eighteen percent per annum cost of money factor,
shall be amortized by Landlord over the useful life of such modifications,
alterations or improvements, as determined in accordance with generally accepted
accounting standards, and the monthly amortized cost of such modifications,
alterations and improvements as so amortized shall be considered a Property
Maintenance Cost.
6.4 LIENS: Tenant shall keep the Property and every part thereof free from
any liens and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors relating to the Property. If any such claim of lien is recorded
against Tenant's interest in this Lease, the Property or any part thereof,
Tenant shall bond against, discharge or otherwise cause such lien to be entirely
released within ten days after the same has been so recorded. Tenant's failure
to do so shall be conclusively deemed a material default under the terms of this
Lease.
ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT
7.1 BY TENANT: Tenant shall not sublet the Leased Premises (or any portion
thereof) or assign or encumber its interest in this Lease, whether voluntarily
or by operation of Law, without Landlord's prior written consent first obtained
in accordance with the provisions of this Article 7. Any attempted subletting,
assignment or encumbrance without Landlord's prior written consent, at
Landlord's election, shall constitute a default by Tenant under the terms of
this Lease. The acceptance of rent by Landlord from any person or entity other
than Tenant, or the acceptance of rent by Landlord from Tenant with knowledge of
a violation of the provisions of this Article, shall not be deemed to be a
waiver by Landlord of any provision of this Article or this Lease or to be a
consent to any subletting by Tenant or any assignment or encumbrance of Tenant's
interest in this Lease.
7.2 MERGER OR REORGANIZATION: If Tenant is a corporation, any dissolution,
merger, consolidation or other reorganization of Tenant, or the sale or other
transfer in the aggregate over the Lease Term of a controlling percentage of the
capital stock of Tenant, shall be deemed a voluntary assignment of Tenant's
interest in this Lease. The phrase "controlling percentage" means the ownership
of and the right to vote stock possessing more than fifty percent of the total
combined voting power of all classes of Tenant's capital stock issued,
outstanding and entitled to vote for the election of directors. If Tenant is a
partnership, a withdrawal or change, whether voluntary, involuntary or by
operation of Law, of any general partner, or the dissolution of the partnership,
shall be deemed a voluntary assignment of Tenant's interest in this Lease.
7.3 LANDLORD'S ELECTION: If Tenant or Tenant's successors shall desire to
assign its interest under this Lease or to sublet the Leased Premises, Tenant
and Tenant's successors must first notify Landlord, in writing, of its intent to
so assign or sublet, at least thirty days in advance of the date it intends to
so assign its interest in this Lease or sublet the Leased Premises but not
sooner than sixty days in advance of such date, specifying in detail the terms
of such proposed assignment or subletting, including the name of the proposed
assignee or sublessee, the proposed assignee's or Sublessee's intended use of
the Leased Premises, a current financial statement of such proposed assignee or
sublessee and the form of documents to be used in effectuating such assignment
or subletting. Landlord shall have a period of fifteen days following receipt of
such notice and receipt of all information requested by Landlord regarding the
proposed assignee or sublessee within which to do one of the following: (a)
terminate this Lease or, in the case of a sublease of less than all of the
Leased Premises, terminate this Lease as to that part of the Leased Premises
proposed to be so sublet,* either (i) on the condition that the proposed
Transferee immediately enter into a direct lease of the Leased Premises with
Landlord (or, in the case of a partial sublease, a lease for the portion
proposed to be so sublet) on the same terms and conditions contained in Tenant's
(or Tenant's successors') notice, or (ii) so that Landlord is thereafter free to
lease the Leased Premises (or, in the case of a partial sublease, the portion
proposed to be so sublet) to whomever it pleases on whatever terms are
acceptable to Landlord. In the event Landlord elects to so terminate this Lease,
then (i) if such termination is conditioned upon the execution of a lease
between Landlord and the proposed Transferee, Tenant's and Tenant's successors'
obligations under this Lease shall not be terminated until such Transferee
executes a new lease with Landlord, enters into possession, and commences the
payment of rent, and (ii) if Landlord elects simply to terminate this Lease (or,
in the case of a partial sublease, terminate this Lease as to the portion to be
so sublet), the Lease shall so terminate in its entirety (or as to the space to
be so sublet) fifteen (15) days after Landlord has notified Tenant and Tenant's
successors in writing of such election. In the case of a partial termination of
the Lease, the Base Monthly Rent and Tenant's or Tenant's successors'
proportionate share shall be reduced to an amount which bears the same
relationship to the original amount thereof as the area of that part of the
Leased Premises which remains subject to the Lease bears to the original area of
the Leased Premises. Landlord and Tenant or Tenant's successors shall execute a
cancellation agreement with respect to the Lease to effect such
* LANDLORD MAY ONLY TERMINATE THIS LEASE IF TENANT SUBLEASES 80% OR MORE OF THE
SPACE FOR SUBSTANTIALLY THE THEN REMAINING TERM.
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termination or partial termination, or (b) if Landlord shall not have elected to
cancel and terminate this Lease, to either (i) consent to such requested
assignment or subletting subject to Tenant's and Tenant's successors' compliance
with the conditions set forth in Article 7.4 below or (ii) refuse to so consent
to such requested assignment or subletting, provided that such consent shall not
be unreasonably refused. It shall not be unreasonable for Landlord to withhold
its consent to any proposed assignment or subletting if (i) the proposed
assignee's or subtenant's anticipated use of the Premises involves the storage,
use or disposal of a Hazardous Material; (ii) if the proposed assignee or
subtenant has been required by any prior landlord, lender or governmental
authority to clean up Hazardous Materials unlawfully discharged by the proposed
assignee or subtenant; or (iii) if the proposed assignee or subtenant is subject
to investigation or enforcement order or proceeding by any governmental
authority in connection with the use, disposal or storage of a Hazardous
Material. Tenant and Tenant's successors covenant and agree to supply to
Landlord, upon request, with all necessary or relevant information which
Landlord may reasonably request respecting such proposed assignment or
subletting and/or the proposed assignee or sublessee. Landlord's review period
shall not commence until Landlord has received all information requested by
Landlord.
7.4 CONDITIONS TO LANDLORD'S CONSENT: If Landlord elects to consent, or
shall have been ordered to so consent by a court of competent jurisdiction, to
such requested assignment, subletting or encumbrance, such consent shall be
expressly conditioned upon the occurrence of each of the conditions below set
forth, and any purported assignment, subletting or encumbrance made or ordered
prior to the full and complete satisfaction of each of the following conditions
shall be void and, at the election of Landlord, which election may be exercised
at any time following such a purported assignment, subletting or encumbrance
shall constitute a material default by Tenant under this Lease giving Landlord
the absolute right to terminate this Lease. The conditions are as follows:
A. Landlord having approved in form and substance the assignment or
sublease agreement (or the encumbrance agreement), which approval shall not be
unreasonably withheld by Landlord if the requirements of this Article 7 are
otherwise complied with.
B. Each such sublessee or assignee having agreed, in writing
satisfactory to Landlord and its counsel and for the benefit of Landlord, to
assume, to be bound by, and to perform the obligations of this Lease to be
performed by Tenant (or, in the case of an encumbrance, each such encumbrancer
having similarly agreed to assume, be bound by and to perform Tenant's
obligations upon a foreclosure or transfer in lieu thereof).
C. Tenant having fully and completely performed all of its obligations
under the terms of this Lease through and including the date of the requested
consent, as well as through and including the date such assignment or subletting
is to become effective.
D. Tenant having reimbursed to Landlord all reasonable costs and
attorneys fees incurred by Landlord in conjunction with the processing and
documentation of any such requested subletting, assignment or encumbrance.
E. Tenant having delivered to Landlord a complete and fully-executed
duplicate original of such sublease agreement, assignment agreement or
encumbrance (as applicable) and all related agreements.
F. Tenant having paid, or having agreed in writing to pay as to future
payments, to Landlord one hundred percent of all assignment consideration or
excess rentals to be paid to Tenant or to any other on Tenant's behalf or for
Tenant's benefit for such assignment or subletting as follows:
(1) If Tenant assigns its interest under the Lease and if all or a
portion of the consideration for such assignment is to be paid by the assignee
at the time of the assignment, that Tenant shall have paid to Landlord and
Landlord shall have received an amount equal to one hundred percent of the
assignment consideration so paid or to be paid whichever is the greater) at the
time of the assignment by the assignee; or
(2) If Tenant assigns its interest under this Lease and if Tenant is
to receive all or a portion of the consideration for such assignment in future
installments, that Tenant and Tenant's assignee shall have entered into a
written agreement with and for the benefit of Landlord satisfactory to Landlord
and its counsel whereby Tenant and Tenant's assignee jointly agree to pay to
Landlord an amount equal to one hundred percent of all such future assignment
consideration installments to be paid by such assignee as and when such
assignment consideration is so paid.
(3) If Tenant subleases the Leased Premises, that Tenant and Tenant's
sublessee shall have entered into a written agreement with and for the benefit
of Landlord satisfactory to Landlord and its counsel whereby Tenant and Tenant's
sublessee jointly agree to pay to Landlord one hundred percent of all excess
rentals to be paid by such sublessee as and when such excess rentals are so
paid.
7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED: For purposes of
this article, the term "Assignment Consideration" shall mean all consideration
to be paid by the Assignee as consideration for such assignment, and the term
"Excess Rentals" shall mean all consideration to be paid by the Sublessee in
excess of the rent to be paid by said Sublessee/Sublessor for the premises
subleased for the same period. It is specifically intended and agreed that this
provision is intended to be a one hundred percent profit sharing clause, such
that neither Tenant nor any successor to Tenant shall make any profit whatsoever
as a result of any transfer of an interest in the Lease or the Leased Premises
or any other property, as more particularly described herein. Assignment
Considerations and/or "Excess Rentals" shall include all payments made or to be
made by any Assignee or Sublessee relating in any way to any transfer of an
interest in the Lease or the Leased Premises including, but not limited to, any
payment made with respect to property which would or shall become Landlord's
property upon the expiration or earlier termination of the lease, whether such
property was installed or paid for by Landlord or by Tenant or Tenant's
successors. In the event Tenant or Tenant's successors sublease a portion of the
Leased Premises, "Excess Rentals" shall be calculated by subtracting the rent
payable by the Sublessor for the portion of the Leased Premises so sublet from
all consideration to be paid by such Sublessee. Rent payable by the Sublessor
for the portion of the Leased Premises so sublet shall be calculated by
multiplying the Base Monthly Rent payable by the Sublessor for the Leased
Premises leased be such Sublessor by a fraction, the numerator of which is the
area in square feet subleased and the denominator of which is the total floor
area of the Leased Premises leased by such Sublessor also in square feet. Tenant
and Tenant's Successors agree that any Assignment Consideration and/or Excess
Rentals hereunder shall be the property of Landlord and not the property of
Tenant.
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7.6 PAYMENTS: All payments required by this Article to be made to Landlord
shall be made in cash in full as and when they become due. At the time Tenant,
Tenant's assignee or sublessee makes each such payment to Landlord, Tenant or
Tenant's assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the party making such payment as
true and correct. Landlord may require that all payments of Excess Rentals
and/or Assignment Consideration to be made hereunder be made directly to
Landlord by such Transferee.
7.7 GOOD FAITH: The rights granted to Tenant by this Article are granted in
consideration of Tenant's express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant's personal property which may be conveyed or leased
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in food faith. If Tenant shall breach this Covenant of Good Faith,
Landlord may immediately declare Tenant to be in default under the terms of this
Lease and terminate this Lease and/or exercise any other rights and remedies
Landlord would have under the terms of this Lease in the case of a material
default by Tenant under this Lease.
7.8 EFFECT OF LANDLORD'S CONSENT: No subletting, assignment or encumbrance,
even with the consent of Landlord, shall relieve Tenant of its personal and
primary obligation to pay rent and to perform all of the obligations to be
performed by Tenant hereunder. Consent by Landlord to one or more assignments or
encumbrances of Tenant's interest in this Lease or to one or more sublettings of
the Leased Premises shall not be deemed to be a consent to any subsequent
assignment, encumbrance or subletting. If Landlord shall have been ordered by a
court of competent jurisdiction to consent to a requested assignment or
subletting, or assignment or subletting shall have been ordered over the
objection of Landlord, such assignment or subletting shall not be binding
between the assignee (or sublessee) and Landlord until such time as all
conditions set forth in Article 7.4 above have been fully satisfied (to the
extent not then satisfied) by the assignee or sublessee, including, without
limitation, the payment to Landlord of all agreed assignment considerations
and/or excess rentals then due Landlord.
7.9 PROHIBITED FINANCIAL TRANSACTIONS: Tenant shall not, without Landlord's
consent, enter into or do any of the following acts if to do so would result in
Tenant having a net worth or net income after such action or event that is less
than Tenant's net worth and/or net income as of the date of this Lease; (i) make
any distribution or declare or pay any cash dividends on, or purchase, acquire,
redeem or retire any of its capital stock, of any class, whether now or
hereafter outstanding, (ii) acquire, merge, or consolidate with or into any
other business organization, (iii) make any changes in Tenant's financial
structure or (iv) borrow funds, pledge assets, or lease or sell equipment or
other property. Landlord and Tenant understand and agree that the value of the
Leased Premises is influenced by Tenant's financial standing, and the provisions
of this section are intended to prohibit those voluntary actions of Tenant that
are not conducted in the normal course of its business which would reduce
Tenant's net worth and/or net income and thereby would adversely effect the
value of the Leased Premises.
ARTICLE 8:
LIMITATIONS ON LANDLORD'S LIABILITY AND INDEMNITY
8.1 LIMITATION OF LANDLORD'S LIABILITY AND RELEASE: Landlord shall not be
liable to Tenant for, and Tenant hereby releases Landlord and its partners,
principals, officers, agents and employees from, any and all liability, whether
in contract, tort or on any other basis, for any injury to or any damage
sustained by Tenant, Tenant's agents, employees, contractors or invitees; any
damage to Tenant's property; or any loss to Tenant's business, loss of Tenant's
profits or other financial loss of Tenant resulting from or attributable to the
condition of, the management of, the repair or maintenance of, the protection
of, the supply of services or utilities to, the damage to or destruction of the
Leased Premises, the Building, the Project or the Common Areas, including
without limitation (i) the failure, interruption, rationing or other curtailment
or cessation in the supply of electricity, water, gas or other utility service
to the Project, the Building or the Leased Premises; (ii) the vandalism or
forcible entry into the Building or the Leased Premises; (iii) the penetration
of water into or onto any portion of the Leased Premises through roof leaks or
otherwise; (iv) the failure to provide security and/or adequate lighting in or
about the Project, the Building or the Leased Premises; (v) the existence of any
design or construction defects within the Project, the Building or the Leased
Premises; (vi) the failure of any mechanical systems to function properly (such
as the HVAC systems); or (vii) the blockage of access to any portion of the
Project, the Building or the Leased Premises, except that Tenant does not so
release Landlord from such liability to the extent such damage was proximately
caused by Landlord's active negligence, willful misconduct, or Landlord's
failure to perform an obligation expressly undertaken pursuant to this Lease
after a reasonable period of time shall have lapsed following receipt of written
notice from Tenant to so perform such obligation. In this regard, Tenant
acknowledges that it is fully apprised of the provisions of Law relating to
releases, and particularly to those provisions contained in Section 1542 of the
California Civil Code which reads 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 the debtor.
Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (i) waives the benefit of
such statutory provision and (ii) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
Article is a full and complete settlement and release and discharge of all
claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.
8.2 TENANT'S INDEMNIFICATION OF LANDLORD: Tenant shall defend with
competent counsel satisfactory to Landlord any claims made or legal actions
filed or threatened against Landlord with respect to the violation of any law,
or the death, bodily injury, personal injury, property damage, or interference
with
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contractual or property rights suffered by any third party (including other
tenants within the Project) occurring within the Leased Premises or resulting
from Tenant's use or occupancy of the Leased Premises, the Building or the
Outside Areas, or resulting from Tenant's activities in or about the Leased
Premises, the Building, the Outside Areas or the Property, and Tenant shall
indemnify and hold Landlord, Landlord's principals, employees, agents and
contractors harmless from any loss, liability, penalties, or expense whatsoever
(including any loss attributable to vacant space which otherwise would have
been leased, but for such activities) resulting therefrom, except to the extent
proximately caused by the active negligence or willful misconduct of Landlord.
This indemnity agreement shall survive the expiration or sooner termination of
this Lease, provided that Tenant shall not be required to indemnify Landlord
under this section 8.2 with respect to events that first occur after the later
of (a) the date of the expiration, or sooner termination, of this Lease, or (b)
the date Tenant actually vacates the Premises, provided that Landlord has
actual notice of such vacation.
ARTICLE 9:
INSURANCE
9.1 TENANT'S INSURANCE: Tenant shall maintain insurance complying with
all of the following:
A. Tenant shall procure, pay for and keep in full force and effect, at
all times during the Lease Term, the following:
(1) Commercial General Liability insurance insuring Tenant against
liability for bodily injury, death, property damage and personal injury
occurring at the Leased Premises, or resulting from Tenant's use or occupancy
of the Leased Premises or the Building, Outside Areas, Property, or Common
Areas or resulting from Tenant's activities in or about the Leased Premises.
Such insurance shall be on an occurrence basis with a combined single limit of
liability of not less than the amount of Tenant's Required Liability Coverage
(as set forth in Article 1). The policy or policies shall be endorsed to name
Landlord and such others as are designated by Landlord as additional insureds
in the form equivalent to CG20111185 or successor and shall contain the
following additional endorsement: "The insurance afforded to the additional
insureds is primary insurance. If the additional insureds have other insurance
which is applicable to the loss on a contributing, excess or contingent basis,
the amount of this insurance company's liability under this policy shall not be
reduced by the existence of such other insurance. Any insurance carried by the
additional insureds shall be excess and non contributing with the insurance
provided by the tenant." The policy shall not be canceled or reduced without at
least 30 days written notice to additional insureds. If the policy insures more
than one location, it shall be endorsed to show that the limits and aggregate
apply per location using endorsement CG25041185 or successor. Tenant's policy
shall also contain the severability of interest and cross-liability endorsement
or clauses.
(2) Fire and property damage insurance in so-called Special Form plus
earth quake and flood insuring Tenant against loss from physical damage to
Tenant's personal property, inventory, stock, trade fixtures and improvements
within the Leased Premises with coverage for the full actual replacement cost
thereof;
(3) Plate-glass insurance, at actual replacement cost;
(4) Boiler and machinery insurance, if applicable;
(5) Product Liability insurance (including without limitation Liquor
Liability insurance for liability arising out of the distribution, sale, or
consumption of food and/or beverages including alcoholic beverages at the
Leased Premises for not less than the Tenant's Required Liability Coverage as
set forth in Article 1;
(6) Workers' compensation insurance and any other employee benefit
insurance sufficient to comply with all Laws which policy shall be endorsed to
provide thirty (30) days written notice of cancellation to Landlord;
(7) With respect to making of alterations or the construction of
improvements or the like undertaken by Tenant, contingent liability and
builder's risk insurance, in an amount and with coverage satisfactory to
Landlord;
(8) Business Income Insurance at a minimum of 50% coinsurance
including coverage for loss of business income due to damage to equipment from
perils covered under the so called Special Form plus the perils of earth quake
and flood; and
(9) Comprehensive Auto Liability insurance with a combined single
limit coverage of not less than the amount of Tenant's Required Liability
Coverage (as set forth in Article 1) for bodily injury and/or property damage
liability for: a) Owned autos b) Hired or borrowed autos c) Non-owned autos d)
Auto blanket contractual form CA0029. The policy shall be endorsed to provide 30
days written notice of cancellation to Landlord.
B. Each policy of liability insurance required to be carried by Tenant
pursuant to this Article or actually carried by Tenant with respect to the
Leased Premises or the Property (i) shall be in a form satisfactory to Landlord,
(ii) Shall be provided by carriers admitted to do business in the state of
California, with a Best rating of "A/VI" or better and/or acceptable to
Landlord. Property insurance shall contain a waiver and/or a permission to waive
by the insurer any right of subrogation against Landlord, its principal,
employees, agents and contractors which might arise by reason of any payment
under such policy or by reason of any act or omission of Landlord, its
principals, employees, agents or contractors.
C. Prior to the time Tenant or any of its contractors enters the Leased
Premises, Tenant shall deliver to the Landlord with respect to each policy of
insurance required to be carried by Tenant pursuant to this article, a
certificate of the insurer certifying, in a form satisfactory to the Landlord,
that the policy has been issued and premium paid providing the coverage required
by this Article and containing the provisions herein. Attached to such a
certificate shall be endorsements naming Landlord as additional insured, and
including the wording under primary insurance above. With respect to each
renewal or replacement of any such insurance, the requirements of this Article
must be complied with not less than 30 days prior to the expiration or
cancellation of the policy being renewed or replaced. Landlord may at any time
and from time-to-time inspect and/or copy any and all insurance policies
required to be carried by Tenant pursuant to this article. If Landlord's lender,
insurance broker or advisor or counsel reasonably determines at any time that
the form or amount of coverage set forth in Article 9.1(A) for any policy of
insurance Tenant is required to carry pursuant to this Article is not adequate,
then Tenant shall increase the amount of coverage for such insurance to such
greater amount or change the form as Landlord's lender, insurance broker or
advisor or counsel reasonably deems adequate (provided however such increase
level of coverage may not exceed the level of coverage for such insurance
commonly carried by comparable businesses similarly situated and operating under
similar circumstances).
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D. The Commercial General Liability insurance carried by Tenant shall
specifically insure the performance by Tenant of the Indemnification provisions
set forth in Article 8.2 of this lease provided, however, nothing contained in
this Article 9 shall be construed to limit the liability of Tenant under the
Indemnification provisions set forth in said Article 8.2
9.2 LANDLORD'S INSURANCE: With respect to insurance maintained by Landlord:
A. Landlord shall maintain, as the minimum coverage required of it by this
Lease, property insurance in so-called "Special" form insuring Landlord (and
such others as Landlord may designate) against loss from physical damage to the
Building with coverage of not less than one hundred percent of the full actual
replacement cost thereof and against loss of rents for a period of not less
than twelve months. Such property damage insurance, at Landlord's election but
without any requirement on Landlord's behalf to do so, (i) may be written in
so-called Special Form, excluding only those perils commonly excluded from such
coverage by Landlord's then property damage insurer; (ii) may provide coverage
for physical damage to the improvements so insured for up to the entire full
actual replacement cost thereof; (iii) may be endorsed to include (or separate
policies may be carried to cover) loss or damage caused by any additional
perils against which Landlord may elect to insure, including earthquake and/or
flood; (iv) may provide coverage for loss of rents for a period of up to twelve
months; and/or (v) may contain "deductibles" per occurrence in an amount
reasonably acceptable to Landlord. Landlord shall not be required to cause such
insurance to cover any of Tenant's personal property, inventory and trade
fixtures, or any modifications, alterations or improvements made or constructed
by Tenant to or within the Leased Premises.
B. Landlord shall maintain Commercial General Liability insurance insuring
Landlord (and such others as are designated by Landlord) against liability for
personal injury, bodily injury, death, and damage to property occurring in, on
or about, or resulting from the use or occupancy of the Property, or any portion
thereof, with combined single limit coverage of at least Two Million Dollars.
Landlord may carry such greater coverage as Landlord or Landlord's Lender,
insurance broker or advisor or counsel may from time to time determine is
reasonably necessary for the adequate protection of Landlord and the Property.
C. Landlord may maintain any other insurance which in the opinion of its
lender, insurance broker or advisor, or legal counsel is prudent to carry under
the given circumstances.
9.3 MUTUAL WAIVER OF SUBROGATION. Landlord hereby releases Tenant, and
Tenant hereby releases Landlord and its respective principals, officers,
agents, employees and servants, from any and all liability for loss, damage or
injury to the property of the other in or about the Leased Premises or the
Property which is caused by or results from a peril or event or happening which
would be covered by insurance required to be carried by the party sustaining
such loss under the terms of this Lease, or is covered by insurance actually
carried and in force at the time of the loss, by the party sustaining such
loss; provided, however, that such waiver shall be effective only to the extent
permitted by the insurance covering such loss and to the extent such insurance
is not prejudiced thereby.
ARTICLE 10:
DAMAGED TO LEASED PREMISES
10.1 LANDLORD'S DUTY TO RESTORE: If the Leased Premises, the Building or
the Outside Areas are damaged by any peril after the Effective Date of this
Lease, Landlord shall restore the same, as and when required by this Article,
unless this Lease is terminated by Landlord pursuant to Article 10.3 or by
Tenant pursuant to Article 10.4. If this Lease is not so terminated, then upon
availability, of the insurance proceeds to Landlord (if the loss is covered by
insurance) and the issuance of all necessary governmental permits, Landlord
shall commence and diligently prosecute to completion the restoration of the
Leased Premises, the Building or the Outside Areas, as the case may be, to the
extent then allowed by Law, to substantially the same condition in which it
existed as of the Lease Commencement Date. Landlord's obligation to restore
shall be limited to the improvements constructed by Landlord. Landlord shall
have no obligation to restore any improvements made by Tenant to the Leased
Premises or any of Tenant's personal property, inventory or trade fixtures.
Upon completion of the restoration by Landlord, Tenant shall forthwith replace
or fully repair all of Tenant's personal property, inventory, trade fixtures
and other improvements constructed by Tenant to like or similar condition as
existed at the time of such damage or destruction.
10.2 INSURANCE PROCEEDS: All insurance proceeds available from the fire
and property damage insurance carried by Landlord shall be paid to and become
the property of Landlord. If this Lease is terminated pursuant to either
Article 10.3 or 10.4, all insurance proceeds available from insurance carried
by Tenant which cover loss of property that is Landlord's property or would
become Landlord's property on termination of this Lease shall be paid to and
become the property of Landlord, and the remainder of such proceeds shall be
paid to and become the property of Tenant. If this Lease is not terminated
pursuant to either Article 10.3 or 10.4, all insurance proceeds available from
insurance carried by Tenant which cover loss to property that is Landlord's
property shall be paid to and become the property of Landlord, and all proceeds
available from such insurance which cover loss to property which would only
become the property of Landlord upon the termination of this Lease shall be paid
to and remain the property of Tenant.
10.3 LANDLORD'S RIGHT TO TERMINATE: Landlord shall have the option to
terminate this Lease in the event any of the following occurs, which option may
be exercised only by delivery to Tenant of a written notice of election to
terminate within thirty days after the date of such damage or destruction:
A. The Building is damaged by any peril covered by valid and collectible
insurance actually carried by Landlord and in force at the time of such damage
or destruction (an "insured peril") to such an extent that the estimated cost
to restore the Building exceeds the lesser of (i) the insurance proceeds
available from insurance actually carried by Landlord, or (ii) seventy-five
percent of the then actual replacement cost thereof;
B. The Building is damaged by an uninsured peril, which peril Landlord was
required to insure against pursuant to the provisions of Article 9 of this
Lease, to such an extent that the estimated cost to restore the Building
exceeds the lesser of (i) the insurance proceeds which would have been
available had Landlord carried such required insurance, or (ii) seventy-five
percent of the then actual replacement cost thereof;
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C. The Building is damaged by an uninsured peril, which peril Landlord was
not required to insure against pursuant to the provisions of Article 9 of this
Lease, to any extent.
D. The Building is damaged by any peril and, because of the Laws then in
force, the Building (i) can not be restored at reasonable cost or (ii) if
restored, can not be used for the same use being made thereof before such
damage.
10.4 TENANT'S RIGHT TO TERMINATE: If the Leased Premises, the Building or
the Outside Areas are damaged by any peril and Landlord does not elect to
terminate this Lease or is not entitled to terminate this Lease pursuant to this
Article, then as soon as reasonably practicable, Landlord shall furnish Tenant
with the written opinion of Landlord's architect or construction consultant as
to when the restoration work required of Landlord may be complete. Tenant shall
have the option to terminate this Lease in the event any of the following
occurs, which option may be exercised in the case of A or B below only by
delivery to Landlord of a written notice of election to terminate within seven
days after Tenant receives from Landlord the estimate of the time needed to
complete such restoration:
A. The Leased Premises are damaged by any peril and, in the reasonable
opinion of Landlord's architect or construction consultant, the restoration of
the Leased Premises cannot be substantially completed within nine months after
the date of such notice from Landlord; or
B. The Leased Premises are damaged by any peril within nine months of the
last day of the Lease Term and, in the reasonable opinion of Landlord's
architect or construction consultant, the restoration of the Leased Premises
cannot be substantially completed within ninety days after the date such
restoration is commenced.
10.5 TENANT'S WAIVER: Landlord and Tenant agree that the provisions of
Article 10.4 above, captioned "Tenant's Right to Terminate", are intended to
supersede and replace the provisions contained in California Civil Code, Section
1932, Subdivision 2, and California Civil Code, Section 1934, and accordingly,
Tenant hereby waives the provisions of said Civil Code Sections and the
provisions of any successor Code Sections or similar laws hereinafter enacted.
10.6 ABATEMENT OF RENT: In the event of damage to the Leased Premises which
does not result in the termination of this Lease, the Base Monthly Rent (and any
Additional Rent) shall be temporarily abated during the period of restoration in
proportion to the degree to which Tenant's use of the Leased Premises is
impaired by such damage.
ARTICLE 11
CONDEMNATION
11.1 TENANT'S RIGHT TO TERMINATE: Except as otherwise provided in Article
11.4 below regarding temporary takings, Tenant shall have the option to
terminate this Lease if, as a result of any taking, (i) all of the Leased
Premises is taken, (ii) thirty-three and one-third percent or more of the Leased
Premises is taken and the part of the Leased Premises that remains cannot,
within a reasonable period of time, be made reasonably suitable for the
continued operation of Tenant's business, or (iii) there is a taking of a
portion of the Outside Areas and, as a result of such taking, Landlord cannot
provide parking spaces within the Property (or within a reasonable distance
therefrom) equal in number to at least sixty-six and two-thirds percent of the
number of parking spaces existing within the Outside Areas immediately prior to
such taking, whether by rearrangement of the remaining parking areas in the
Outside Areas (including, if Landlord elects, construction of multi-deck parking
structures or restriping for compact cars where permitted by Law). Tenant must
exercise such option within a reasonable period of time, to be effective on the
later to occur of (i) the date that possession of that portion of the Leased
Premises or the Outside Areas that is condemned is taken by the condemnor or
(ii) the date Tenant vacated the Leased Premises.
11.2 LANDLORD'S RIGHT TO TERMINATE: Except as otherwise provided in Article
11.4 below regarding temporary takings, Landlord shall have the option to
terminate this Lease if, as a result of any taking, (i) all or a substantial
part of the Leased Premises is taken, (ii) more than thirty-three and one-third
percent of the Outside Areas is taken, or (iii) because of the Laws then in
force, the Leased Premises may not be used for the same use being made thereof
before such taking, whether or not restored as required by Article 11.3 below.
Any, such option to terminate by Landlord must be exercisable within a
reasonable period of time, to be effective as of the date possession is taken by
the condemnor.
11.3 RESTORATION: If any part of the Leased Premises, the Building or the
Outside Areas is taken and this Lease is not terminated, then Landlord shall
repair any damage occasioned thereby to the remainder thereof to a condition
reasonably suitable for Tenant's continued operations and otherwise, to the
extent practicable, in the manner and to the extent provided in Article 10.1.
11.4 TEMPORARY TAKING: If any portion of the Leased Premises is temporarily
taken for a period of one year or less and such period does not extend beyond
the Lease Expiration Date, this Lease shall remain in effect. If any portion of
the Leased Premises is temporarily taken for a period which either exceeds one
year or which extends beyond the Lease Expiration Date, then Landlord and Tenant
shall each independently have the option to terminate this Lease, effective on
the date possession is taken by the condemnor.
11.5 DIVISION OF CONDEMNATION AWARD: Any award made for any taking of the
Property, the Building, the Outside Areas or the Leased Premises, or any portion
thereof, shall belong to and be paid to Landlord, and Tenant hereby assigns to
Landlord all of its right, title and interest in any such award; provided,
however, that Tenant shall be entitled to receive any portion of the award that
is made specifically (i) for the taking of personal property, inventory or trade
fixtures belong to Tenant, (ii) for the interruption of Tenant's business or its
moving costs, (iii) for loss of Tenant's goodwill, or (iv) for any temporary
taking where this Lease is not terminated as a result of such taking. The rights
of Landlord and Tenant regarding any condemnation shall be determined as
provided in this Article, and each party hereby waives the provisions of Section
1265.130 of the California Code of Civil Procedure, and the provisions of any
similar law hereinafter enacted, allowing either party
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to petition the Superior Court to terminate this Lease and/or otherwise
allocate condemnation awards between Landlord and Tenant in the event of
a taking of the Leased Premises.
11.6 ABATEMENT OF RENT: In the event of a taking of the Leased Premises
which does not result in a termination of this Lease (other than a temporary
taking), then, as of the date possession is taken by the condemning authority,
the Base Monthly Rent shall be reduced in the same proportion that the area of
that part of the Leased Premises so taken (less any addition to the area of the
Leased Premises by reason of any reconstruction) bears to the area of the
Leased Premises immediately prior to such taking.
11.7 TAKING DEFINED: The term "taking" or "taken" as used in this Article
11 shall mean any transfer or conveyance of all or any portion of the Property
to a public or quasi-public agency or other entity having the power of eminent
domain pursuant to or as a result of the exercise of such power by such an
agency, including any inverse condemnation and/or any sale or transfer by
Landlord of all or any portion of the Property to such an agency under threat
of condemnation or the exercise of such power.
ARTICLE 12:
DEFAULT AND REMEDIES
12.1 EVENTS OF TENANT'S DEFAULT: Tenant shall be in default of its
obligations under this Lease if any of the following events occur:
A. Tenant shall have failed to pay Base Monthly Rent or any Additional
Rent when due; or
B. Tenant shall have done or permitted to have been done any act, use or
thing in its use, occupancy or possession of the Leased Premises or the
Building or the Outside Areas which is prohibited by the terms of this Lease; or
C. Tenant shall have failed to perform any term, covenant or condition of
this Lease, except those requiring the payment of Base Monthly Rent or
Additional Rent, within ten days after written notice from Landlord to Tenant
specifying the nature of such failure and requesting Tenant to perform same,
provided that if such default cannot be used in 10 days, Tenant shall not be in
default hereunder if it assumes such care and diligently pursues it.
D. Tenant shall have sublet the Leased Premises or assigned or encumbered
its interest in this Lease in violation of the provisions contained in Article
7, whether voluntarily or by operation of Law; or
E.
F. Tenant or any Guarantor of this Lease shall have permitted or suffered
the sequestration or attachment of, or execution on, or the appointment of a
custodian or receiver with respect to, all or any substantial part of the
property or assets of Tenant (or such Guarantor) or any property or asset
essential to the conduct of Tenant's (or such Guarantors) business, and Tenant
(or such Guarantor) shall have failed to obtain a return or release of the same
within thirty days thereafter, or prior to sale pursuant to such sequestration,
attachment or levy, whichever is earlier; or
G. Tenant or any Guarantor of this Lease shall have made a general
assignment of all or a substantial part of its assets for the benefit of its
creditors; or
H. Tenant or any Guarantor of this Lease shall have allowed (or sought) to
have entered against it a decree or order which: (i) grants or constitutes an
order for relief, appointment of a trustee, or confirmation or a reorganization
plan under the bankruptcy laws of the United States; (ii) approves as properly
filed a petition seeking liquidation or reorganization under said bankruptcy
laws or any other debtor's relief law or similar statute of the United States
or any state thereof; or (iii) otherwise directs the winding up or liquidation
of Tenant; provided, however, if any decree or order was entered without
Tenant's consent or over Tenant's objection, Landlord may not terminate this
Lease pursuant to this Subarticle if such decree or order is rescinded or
reversed within thirty days after its original entry.
I. Tenant or any Guarantor of this Lease shall have availed itself of the
protection of any debtor's relief law, moratorium law or other similar Law
which does not require the prior entry of a decree or order.
12.2 LANDLORD'S REMEDIES: In the event of any default by Tenant, and
without limiting Landlord's right to indemnification as provided in Article
8.2, Landlord shall have the following remedies, in addition to all other
rights and remedies provided by Law or otherwise provided in this Lease, to
which Landlord may resort cumulatively, or in the alternative.
A. Landlord may, at Landlord's election, keep this Lease in effect and
enforce, by an action at law or in equity, all of its rights and remedies under
this Lease including, without limitation, (i) the right to recover the rent and
other sums as they become due by appropriate legal action, (ii) the right to
make payments required by Tenant, or perform Tenant's obligations and be
reimbursed by Tenant for the cost thereof with interest at the then maximum
rate of interest not prohibited by Law from the date the sum is paid by
Landlord until Landlord is reimbursed by Tenant, and (iii) the remedies of
injunctive relief and specific performance to prevent Tenant from violating the
terms of this Lease and/or to compel Tenant to perform its obligations under
this Lease, as the case may be.
B. Landlord may, at Landlord's election, terminate this Lease by giving
Tenant written notice of termination, in which event this Lease shall terminate
on the date set forth for termination in such notice. Any termination under
this Subarticle shall not relieve Tenant from its obligation to pay to Landlord
all Base Monthly Rent and
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Additional Rent then or thereafter due, or any other sums due or thereafter
accruing to Landlord, or from any claim against Tenant for damages previously
accrued or then or thereafter accruing. In no event shall any one or more of the
following actions by Landlord, in the absence of a written election by Landlord
to terminate the Lease, constitute a termination of the Lease:
(1) Appointment of a receiver or keeper in order to protect
Landlord's interest hereunder;
(2) Consent to any subletting of the Leased Premises or assignment
of this Lease by Tenant, whether pursuant to the provisions hereof or
otherwise; or
(3) Any other action by Landlord or Landlord's agents intended to
mitigate the adverse effects of any breach of this Lease by Tenant, including,
without limitation, any action taken to maintain and preserve the Leased
Premises or any action taken to relet the Leased Premises, or any portion
thereof, for the account of Tenant and in the name of Tenant.
C. In the event Tenant breaches this Lease and abandons the Leased
Premises, Landlord may terminate this Lease, but this Lease shall not terminate
unless Landlord gives Tenant written notice of termination. If Landlord does
not terminate this Lease by giving written notice of termination, Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover rent as it becomes due under this Lease as provided in California Civil
Code Section 1951.4, as in effect on the Effective Date of this Lease.
D. In the event Landlord terminates this Lease, Landlord shall be
entitled, at Landlord's election, to damages in an amount as set forth
in California Civil Code Section 1951.2, as in effect on the Effective Date of
this Lease. For purposes of computing damages pursuant to Section 1951.2, an
interest rate equal to the maximum rate of interest then not prohibited by Law
shall be used where permitted. Such damages shall include, without limitation:
(1) The worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided, computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco, at the time of award plus one percent; and
(2) Any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease, or which in the ordinary course of things would be likely to
result therefrom, including without limitation, the following: (i) expenses for
cleaning, repairing or restoring the Leased Premises; (ii) expenses for
altering, remodeling or otherwise improving the Leased Premises for the purpose
of reletting, including removal of existing leasehold improvements and/or
installation of additional leasehold improvements (regardless of how the same is
funded, including reduction of rent, a direct payment or allowance to a new
tenant, or otherwise); (iii) broker's fees, advertising costs and other expenses
of reletting the Leased Premises; (iv) costs of carrying and maintaining the
Leased Premises which costs would have been billed to Tenant as Additional Rent
had Tenant not defaulted and which include but are not limited to taxes,
insurance premiums, utility charges, landscape maintenance costs, costs of
maintaining electrical, plumbing and HVAC equipment and costs for providing
security; (v) expenses incurred in removing, disposing of and/or storing any of
Tenant's personal property, inventory or trade fixtures remaining therein; (vi)
attorneys' fees, expert witness fees, court costs and other reasonable expenses
incurred by Landlord but not limited to taxable costs) in retaking possession of
the Leased Premises, establishing damages hereunder, and re-leasing the Leased
Premises; and (vii) any other expenses, costs or damages otherwise incurred or
suffered as a result of Tenant's default.
12.3 LANDLORD'S DEFAULT AND TENANT'S REMEDIES: In the event Landlord fails
to perform any of its obligations under this Lease, Landlord shall nevertheless
not be in default under the terms of this Lease until such time as Tenant shall
have first given Landlord written notice specifying the nature of such failure
to perform its obligations, and then only after Landlord shall have had a
reasonable period of time following its receipt of such notice within which to
perform such obligations. In the event of Landlord's default as above set forth,
then, and only then, Tenant shall have the following remedies only:
A. Tenant may then proceed in equity or at law to compel Landlord to
perform its obligations and/or to recover damages proximately caused by such
failure to perform (except as and to the extent Tenant has waived its right to
damages as provided in this Lease).
B. Tenant, at its option, may then cure any default of Landlord at
Landlord's cost. If, pursuant to this Subarticle, Tenant reasonably pays any sum
to any third party or does any act that requires the payment of any sum to any
third part at any time by reason of Landlord's default, the sum paid by, Tenant
shall be immediately due from Landlord to Tenant at the time Tenant supplies
Landlord with an invoice therefor (provided such invoice sets forth and is
accompanied by a written statement of Tenant setting forth in reasonable detail
the amount paid, the party to whom it was paid, the date it was paid, and the
reasons giving rise to such payment), together with interest at twelve percent
per annum from the date of such invoice until Tenant is reimbursed by Landlord.
Tenant may not offset such sums against any installment of rent due Landlord
under the terms of this Lease.
12.4 LIMITATION ON TENANT'S RECOURSE: If Landlord is a corporation, trust,
partnership, joint venture, unincorporated association, or other form of
business entity, Tenant agrees that (i) the obligations of Landlord under this
Lease shall not constitute personal obligations of the officers, directors,
trustees, partners, joint venturers, members, owners, stockholders, or other
principals of such business entity and (ii) Tenant shall have recourse only to
Landlord's then equity interest, if any, in the Property for the satisfaction of
such obligations and not against the assets of such officers, directors,
trustees, partners, joint venturers, members, owners, stockholders or principals
(other than to the extent of their interest in the Property). Tenant shall look
exclusively to such equity interest of Landlord, if any, in the Property for
payment and discharge of any obligations imposed upon Landlord
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hereunder, and Landlord is hereby released and relieved of any other obligations
hereunder. Additionally, if Landlord is a partnership, then Tenant covenants and
agrees:
A. No partner of Landlord shall be sued or named as a party in
any suit or action brought by Tenant with respect to any alleged breach of this
Lease (except to the extent necessary to secure jurisdiction over the
partnership and then only for that sole purpose);
B. No service of process shall be made against any partner of
Landlord except for the sole purpose of securing jurisdiction over the
partnership; and
C. No writ of execution shall be levied against the assets of any
partner of Landlord other than to the extent of his interest in Property.
Tenant further agrees that each of the foregoing covenants and agreements shall
be enforceable by Landlord and by any partner of Landlord and shall be
applicable to any actual or alleged misrepresentation or non-disclosure made
respecting this Lease or the Leased Premises or any actual or alleged failure,
default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statute or at common law.
12.5 TENANT'S WAIVER: Landlord and Tenant agree that the provisions of
Article 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(1), 1941 and 1942, and accordingly, Tenant
hereby waives the provisions of California Civil Code Sections 1932(1), 1941 and
1942 and/or any similar or successor Law regarding Tenant's right to terminate
this Lease or to make repairs and deduct the expenses of such repairs from the
rent due under this Lease. Tenant hereby waives any right of redemption or
relief from forfeiture under the Laws of the State of California, or under any
other present or future Law, in the event Tenant is evicted or Landlord takes
possession of the Leased Premises by reason of any default by Tenant.
ARTICLE 13
GENERAL PROVISIONS
13.1 TAXES ON TENANT'S PROPERTY: Tenant shall pay before delinquency any
and all taxes, assessments, license fees, use fees, permit fees and public
charges of whatever nature or description levied, assessed or imposed against
Tenant or Landlord by a governmental agency arising our of, caused by reason of
or based upon Tenant's estate in this Lease, Tenant's ownership of property,
improvements made by Tenant to the Leased Premises or the Outside Areas,
improvements made by Landlord for Tenant's use within the Leased Premises or the
Outside Areas, Tenant's use (or estimated use) of public facilities or services
or Tenant's consumption (or estimated consumption) of public utilities, energy,
water or other resources. Upon demand by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of these payments. If any such taxes, assessments,
fees or public charges are levied against Landlord, Landlord's property, the
Building or the Property, or if the assessed value of the Building or the
Property is increased by the inclusion therein of a value placed upon same, then
Landlord, after giving written notice to Tenant, shall have the right,
regardless of the validity thereof, to pay such taxes, assessment, fee or public
charge and xxxx Tenant, as Additional Rent, the amount of such taxes,
assessment, fee or public charge so paid on Tenant's behalf. Tenant shall,
within ten days from the date it receives an invoice from Landlord setting forth
the amount of such taxes, assessment, fee or public charge so levied, pay to
Landlord, as Additional Rent, the amount set forth in said invoice. Failure by
Tenant to pay the amount so invoiced within said ten day period shall be
conclusively deemed a default by Tenant under this Lease. Tenant shall have the
right, and the Landlord's full cooperation if Tenant is not then in default
under the terms of this Lease, to bring suit in any court of competent
jurisdiction to recover from the taxing authority the amount of any such taxes,
assessment, fee or public charge so paid.
13.2 HOLDING OVER: This Lease shall terminate without further notice on the
Lease Expiration Date (as set forth in Article 1). Any holding over by Tenant
after expiration of the Lease Term shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased Premises
except as expressly provided in this Article. Any such holding over shall be
deemed an unlawful detainer of the Leased Premises unless Landlord has consented
to same. Any such holding over to which Landlord has consented 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 Base Monthly Rent shall
be increased to an amount equal to one hundred fifty percent of the Base Monthly
Rent payable during the last full month immediately preceding such holding over.
13.3 SUBORDINATION TO MORTGAGES: This Lease is subject to and subordinate
to all underlying ground leases, mortgages and deeds of trust which affect the
Building or the Property and which are of public record as of the Effective Date
of this Lease, and to all renewals, modifications, consolidations, replacements
and extensions thereof. However, if the lessor under any such ground lease or
any lender holding any such mortgage or deed of trust shall advise Landlord that
it desires or requires this Lease to be made prior and superior thereto, then,
upon written request of Landlord to Tenant, Tenant shall promptly execute,
acknowledge and deliver any and all documents or instruments which Landlord and
such lessor or lender deem necessary or desirable to make this Lease prior
thereto. Tenant hereby consents to Landlord's ground leasing the land underlying
the Building or the Property and/or encumbering the Building or the Property as
security for future loans on such terms as Landlord shall desire, all of which
future ground leases, mortgages or deeds of trust shall be subject to and
subordinate to this Lease. However, if any lessor under any such future ground
lease or any lender holding such future mortgage or deed of trust shall desire
or require that this Lease be made subject to and subordinate to such future
ground lease mortgage or deed of trust, then Tenant agrees, within ten days
after Landlord's written request therefor, to execute, acknowledge and deliver
to Landlord any and all documents or instruments requested by Landlord or by
such lessor or lender as may be necessary or proper to assure the subordination
of this Lease to such future ground lease, mortgage or deed of trust, but only
if such lessor or lender agrees to recognize Tenant's rights under this Lease
and agrees not to disturb Tenant's quiet possession of the Leased Premises so
long as Tenant is not in default under this Lease. Landlord will provide tenant
nondisturbance right and tenant shall have quiet enjoyment.
13.4 TENANT'S ATTORNMENT UPON FORECLOSURE: Tenant shall, upon request,
attorn (i) to any purchaser of the Building or the Property at any foreclosure
sale or private sale conducted pursuant to any security instrument encumbering
the Building or the Property, (ii) to any grantee or transferee designated in
any
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deed given in lieu of foreclosure of any security interest encumbering the
Building or the Property, or (iii) to the lessor under any underlying ground
lease of the land underlying the Building or the Property, should such ground
lease be terminated; provided that such purchaser, grantee or lessor recognizes
Tenant's rights under this Lease.
13.5 MORTGAGEE PROTECTION: In the event of any default on the part of
Landlord, Tenant will give notice by registered mail to any Lender or lessor
under any underlying ground lease who shall have requested, in writing, to
Tenant that it be provided with such notice, and Tenant shall offer such Lender
or lessor a reasonable opportunity to cure the default, including time to
obtain possession of the Leased Premises by power of sale or judicial
foreclosure or other appropriate legal proceedings if reasonably necessary to
effect a cure.
13.6 ESTOPPEL CERTIFICATES: Tenant will, following any request by Landlord,
promptly execute and deliver to Landlord an estoppel certificate (i) certifying
that this Lease is unmodified and in full force and effect, or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect, (ii) stating the date to which the rent
and other charges are paid in advance, if any, (iii) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if any are claimed, and (iv) certifying
such other information about this Lease as may be reasonably requested by
Landlord, its Lender or prospective lenders, investor or purchaser of the
Building or the Property. Tenant's failure to execute and deliver such estoppel
certificate within ten days after Landlord's request therefor shall be a
material default by Tenant under this Lease, and Landlord shall have all of the
rights and remedies available to Landlord as Landlord would otherwise have in
the case of any other material default by Tenant, including the right to
terminate this Lease and xxx for damages proximately caused thereby, it being
agreed and understood by Tenant that Tenant's failure to so deliver such
estoppel certificate in a timely manner could result in Landlord being unable to
perform committed obligations to other third parties which were made by Landlord
in reliance upon this covenant of Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Article may be relied upon by any Lender or
purchaser or prospective Lender or purchaser of the Building, the Property, or
any interest herein.
13.7 TENANT'S FINANCIAL INFORMATION: Tenant shall, within five business
days after Landlord's request therefor deliver to Landlord a copy of a current
financial statement including an income statement for the most recent twelve
month period and a balance sheet and any such other information reasonably
requested by Landlord regarding Tenant's financial condition. Tenant
acknowledges that Landlord is relying upon the financial information provided to
Landlord by Tenant prior to entering into this lease and the information to be
provided to Landlord by Tenant during the term of this Lease. Landlord shall be
entitled to disclose such financial statements or other information to its
Lender, to any present or prospective principal of or investor in Landlord, or
to any prospective Lender or purchaser of the Building, the Property or any
portion thereof or interest therein. Any such financial statement or other
information which is marked "confidential" or company secrets" (or is otherwise
similarly marked by Tenant) shall be confidential and shall not be disclosed by
Landlord to any third party except as specifically provided in this Article,
unless the same becomes a part of the public domain without the fault of
Landlord.
13.8 TRANSFER BY LANDLORD: Landlord and its successors in interest shall
have the right to transfer their interest in the Building, the Property, or any
portion thereof at any time and to any person or entity. In the event of any
such transfer, the Landlord originally named herein (and in the case of any
subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved, without any further act by any person or entity, of
all liability for the performance of the obligations of the Landlord hereunder
which may accrue after the date of such transfer and (ii) shall be relieved of
all liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer if its transferee agrees to
assume and perform all such prior obligations of the Landlord hereunder. Tenant
shall attorn to any such transferee. After the date of any such transfer, the
term "Landlord" as used herein shall mean the transferee of such interest in
the Building or the Property.
13.9 FORCE MAJEURE: The obligations of each of the parties under this Lease
(other than the obligations to pay money) shall be temporarily excused if such
party is prevented or delayed in performing such obligation by reason of any
strikes, lockouts or labor disputes; inability to obtain labor, materials, fuels
or reasonable substitutes therefor, governmental restrictions, regulations,
controls, action or inaction; civil commotion; inclement weather, fire or other
acts of God; or other causes (except financial inability) beyond the reasonable
control of the party obligated to perform (including acts or omissions of the
other party) for a period equal to the period of any such prevention, delay or
stoppage.
13.10 NOTICES: Any notice required or desired to be given by a party
regarding this Lease shall be in writing and shall be personally served, or in
lieu of personal service may be given by (i) delivery by Federal Express, United
Parcel Service or similar commercial carrier, (ii) electronic fax transmission,
or (iii) depositing such notice in the United States mail, postage prepaid,
addressed to the other party as follows:
A. If addressed to Landlord, to Landlord at its Address for Notices (as
set forth in Article 1).
B. If addressed to Tenant, to Tenant at its Address for Notices (as set
forth in Article 1). Any notice given by registered mail shall be deemed to have
been given on the third business day after its deposit in the United States
mail.
Any notice given by registered mail shall be deemed given on the date receipt
was acknowledged to the postal authorities. Any notice given by mail other than
registered or certified mail shall be deemed given only if received by the other
party, and then on the date of receipt. Any notice delivered by commercial
carrier or by fax shall be deemed given on the date of confirmation of delivery
by the carrier or by electronic confirmation. Each party may, by written notice
to the other in the manner aforesaid, change the address to which notices
addressed to it shall thereafter be mailed.
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13.11 ATTORNEYS FEES: In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorneys' fees, expert witness fees, court costs
and other reasonable expenses incurred by the prevailing party. In the event
that Landlord or Tenant shall be required to retain counsel to enforce any
provision of this Lease, and if Tenant or Landlord shall thereafter cure (or
desire to cure) such default, Landlord or Tenant shall be conclusively deemed
the prevailing party and Tenant or Landlord shall pay to Landlord or Tenant all
attorneys' fees, expert witness fees, court costs and other reasonable expenses
so incurred by Landlord or Tenant promptly upon demand. Landlord or Tenant may
enforce this provision by either (i) requiring Tenant or Landlord to pay such
fees and costs as a condition to curing its default or (ii) bringing a separate
action to enforce such payment, it being agreed by and between Landlord and
Tenant that Tenant's or Landlord's failure to pay such fees and costs upon
demand shall constitute a breach of this Lease.
13.12 DEFINITIONS: Any term that is given a special meaning by any
provision in this Lease shall, unless otherwise specifically stated, have such
meaning whenever used in this Lease or in any Addenda or amendment hereto. In
addition to the terms defined in Article 1, the following terms shall have the
following meanings:
A. REAL PROPERTY TAXES: The term "Real Property Tax" or "Real Property
Taxes" shall each 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 or new
construction), now or hereafter imposed by any governmental or
quasi-governmental authority or special district having the direct or indirect
power or tax or levy assessments, which are levied or assessed for whatever
reason against the Project or any portion thereof, or Landlord's interest
herein, or the fixtures, equipment and other property of Landlord that is an
integral part of the Project and located thereon, or Landlord's business of
owning, leasing or managing the Project or the gross receipts, income or rentals
from the Project; (ii) all charges, levies or fees imposed by any governmental
authority against Landlord by reason of or based upon the use of or number of
parking spaces within the Project, the amount of public services or public
utilities used or consumed (e.g. water, gas, electricity, sewage or surface
water disposal) at the Project, the number of persons employed by tenants of the
Project, the size (whether measured in area, volume, number of tenants or
whatever) or the value of the Project, or the type of use or uses conducted
within the Project; and (iii) all costs and fees (including attorneys' fees)
incurred by Landlord in contesting any Real Property Tax and in negotiating with
public authorities as to any Real Property Tax. If, at any time during the Lease
Term, the taxation or assessment of the Project prevailing as of the Effective
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, or imposed (whether by
reason of a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate, substitute, or additional tax
or charge (i) on the value, size, use or occupancy of the Project or Landlord's
interest therein or (ii) on or measured by the gross receipts, income or rentals
from the Project, or on Landlord's business of owning, leasing or managing the
Project or (iii) computed in any manner with respect to the operation of the
Project, then any such tax or charge, however designated, shall be included
within the meaning of the terms "Real Property Tax" or "Real Property Taxes" for
purposes of this Lease. If any Real Property Tax is partly based upon property
or rents unrelated to the Project, then only that part of such Real Property Tax
that is fairly allocable to the Project shall be included within the meaning of
the terms "Real Property Tax" or "Real Property Taxes." Notwithstanding the
foregoing, the terms "Real Property Tax" or "Real Property Taxes" shall not
include estate, inheritance, transfer, gift or franchise taxes of Landlord or
the federal or state income tax imposed on Landlord's income from all sources.
B. LANDLORD'S INSURANCE COSTS: The term "Landlord's Insurance Costs" shall
mean the costs to Landlord to carry and maintain the policies of fire and
property damage insurance including earth quake and flood for the Building and
the Property and general liability insurance required, or permitted, to be
carried by Landlord pursuant to Article 9, together with any deductible amounts
paid by Landlord upon the occurrence of any insured casualty or loss.
C. PROPERTY MAINTENANCE COSTS: The term "Property Maintenance Costs" shall
mean all costs and expenses (except Landlord's Insurance Costs and Real Property
Taxes) paid or incurred by Landlord in protecting, operating, maintaining,
repairing and preserving the Property and all parts thereof, including without
limitation, (i) professional management fees (equal to five percent of the
annualized Base Monthly Rent), (ii) the amortizing portion of any costs incurred
by Landlord in the making of any modifications, alterations or improvements as
set forth in Article 6, which are so amortized during the Lease Term, (iii)
costs of complying with governmental regulations governing Tenant's use of
Hazardous Materials, and Landlord's costs of monitoring Tenant's use of
Hazardous Materials including fees charged by Landlord's consultants to
periodically inspect the Premises and the Property, and (iv) such other costs as
may be paid or incurred with respect to operating, maintaining and preserving
the Property, such as repairing, replacing and resurfacing the exterior surfaces
of the buildings (including roofs), repairing, replacing, and resurfacing paved
areas, repairing structural parts of the buildings, cleaning, maintaining,
restoring and/or replacing the interior of the Leased Premises both during the
term of the Lease and upon its termination, and maintaining, repairing,
installing or replacing, electrical, plumbing, sewer, drainage, heating,
ventilating and air conditioning systems serving the buildings, providing
utilities to the common areas, maintenance, repair, replacement or installation
of lighting fixtures, directional or other signs and signals, irrigation or
drainage systems, trees, shrubs, materials, maintenance of all landscaped areas,
and depreciation and financing costs on maintenance and operating machinery and
equipment (if owned) and rental paid for such machinery and equipment (if
leased). Landlord may include as a Property Maintenance Cost a reserve for the
cost to maintain, repair, and replace building and property components including
but not
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limited to the roof, HVAC, electrical, and plumbing equipment, the parking lot,
the exterior surfaces of the building, and interior components which are subject
to wear. Any such reserve shall be reasonably established by Landlord to
amortize the costs of maintenance, repairs, and replacements over the practical
useful life of each component.
D. READY FOR OCCUPANCY: The term "Ready for Occupancy" shall mean the date
upon which (i) the Leased Premises are available for Tenant's occupancy in a
broom clean condition and (ii) the improvements, if any, to be made to the
Leased Premises by Landlord as a condition to Tenant's obligation to accept
possession of the Leased Premises have been substantially completed and the
appropriate governmental building department (i.e., the City building
department, if the Property is located within a City, or otherwise the County
building department) shall have approved the construction of such improvements
as substantially complete or is willing to so approve the construction of the
improvements as substantially complete subject only to compliance with specified
conditions which are the responsibility of Tenant to satisfy or is willing to
allow Tenant to occupy subject to its receiving assurances that specified work
will be completed.
E. PROPERTY OPERATING EXPENSES: The term "Property Operating Expenses"
shall mean and include the all Real Property Taxes, plus all Landlord's
Insurance Costs, plus the all Property Maintenance Costs, plus an accounting fee
equal to five percent of all such costs.
F. LAW: The term "Law" shall mean any judicial decision and any statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or
other requirement of any municipal, county, state, federal, or other
governmental agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Building or the Property, or any of them in
effect either at the Effective Date of this Lease or at any time during the
Lease Term, including, without limitation, any regulation, order, or policy of
any quasi-official entity or body (e.g. a board of fire examiners or a public
utility or special district).
G. LENDER: The term "Lender" shall mean the holder of any Note or other
evidence of indebtedness secured by the Property or any portion thereof.
H. PRIVATE RESTRICTIONS: The term "Private Restrictions" shall mean all
recorded covenants, conditions and restrictions, private agreements, easements,
and any other recorded instruments affecting the use of the Property, as they
may exist from time to time.
I. RENT: The term "rent" shall mean collectively Base Monthly Rent and all
Additional Rent.
13.13 GENERAL WAIVERS: One party's consent to or approval of any act by the
other party requiring the first party's consent or approval shall not be deemed
to waive or render unnecessary the first party's consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof or
any breach of any provision hereof shall be effective unless in writing and
signed by the waiving party. The receipt by Landlord of any rent or payment with
or without knowledge of the breach of any other provision hereof shall not be
deemed a waiver of any such breach. No waiver of any provision of this Lease
shall be deemed a continuing waiver unless such waiver specifically states so in
writing and is signed by both Landlord and Tenant. No delay or omission in the
exercise of any right or remedy accruing to either party upon any breach by the
other party under this Lease shall impair such right or remedy or be construed
as a waiver of any such breach therefore or thereafter occurring. The waiver by
either party of any breach of any provision of this Lease shall not be deemed to
be a waiver of any subsequent breach of the same or any other provisions herein
contained.
13.14 MISCELLANEOUS: Should any provision of this Lease prove to be invalid
or illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the parties shall be deemed
an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term "party"
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity, then all members of Tenant shall be jointly and
severally liable hereunder. This Lease shall be construed and enforced in
accordance with the Laws of the State in which the Leased Premises are located.
The language in all parts of this Lease shall in all cases be construed as a
whole according to its fair meaning, and not strictly for or against either
Landlord or Tenant. The captions used in this Lease are for convenience only and
shall not be considered in the construction or interpretation of any provision
hereof. When the context of this Lease requires, the neuter gender includes the
masculine, the feminine, a partnership or corporation or joint venture, and the
singular includes the plural. The terms "must", "shall", "will", and "agree" are
mandatory. The term "may" is permissive. When a party is required to do
something by this Lease, it shall do so at its sole cost and expense without
right of reimbursement from the other party unless specific provision is made
therefor. Where Tenant is obligated not to perform any act or is not permitted
to perform any act, Tenant is also obligated to restrain any others reasonably
within its control, including agents, invitees, contractors, subcontractors and
employees, from performing said act. Landlord shall not become or be deemed a
partner or a join venture with Tenant by reason of any of the provisions of this
Lease.
ARTICLE 14
CORPORATE AUTHORITY,
BROKERS AND ENTIRE AGREEMENT
14.1 CORPORATE AUTHORITY: If Tenant is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
Tenant is validly formed and duly authorized and existing, that Tenant is
qualified to do business in the State in which the Leased Premises are located,
that Tenant has the
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full right and legal authority to enter into this Lease, that he or she is duly
authorized to execute and deliver this Lease on behalf of Tenant in accordance
with the bylaws and/or a board of directors' resolution of Tenant, and that
this Lease is binding upon Tenant in accordance with its terms. Tenant shall,
within thirty days after execution of this Lease, deliver to Landlord a
certified copy of the resolution of its board of directors authorizing or
ratifying the execution of this Lease, and if Tenant fails to do so, Landlord
at its sole election may elect to (i) extend the Intended Commencement Date by
such number of days that Tenant shall have delayed in so delivering such
corporate resolution to Landlord or (ii) terminate this Lease.
14.2 BROKERAGE COMMISSIONS: Tenant warrants that it has not had any
dealings with any real estate broker(s), leasing agent(s), finder(s) or
salesmen, other than the Brokers (as named in Article I) with respect to the
lease by it of the Leased Premises pursuant to this Lease, and that it will
indemnify, defend with competent counsel, and hold Landlord harmless from any
liability for the payment of any real estate brokerage commissions, leasing
commissions or finder's fees claimed by any other real estate broker(s),
leasing agent(s), finder(s), or salesmen to be earned or due and payable by
reason of Tenant's agreement or promise implied or otherwise) to pay (or to
have Landlord pay) such a commission or finder's fee by reason of its leasing
the Leased Premises pursuant to this Lease.
14.3 ENTIRE AGREEMENT: This Lease, the Exhibits (as described in Article
1) and the Addenda (as described in Article 1), which Exhibits and Addenda are
by this reference incorporated herein, constitute the entire agreement between
the parties, and there are no other agreements, understandings or
representations between the parties relating to the lease by Landlord of the
Leased Premises to Tenant, except as expressed herein. No subsequent changes,
modifications or additions to this Lease shall be binding upon the parties
unless in writing and signed by both Landlord and Tenant.
14.4 LANDLORD'S REPRESENTATIONS: Tenant acknowledges that neither Landlord
nor any of its agents made any representation or warranties respecting the
Project, the Building or the Leased Premises, upon which Tenant relied in
entering into this Lease, which are not expressly set forth in this Lease.
Tenant further acknowledges that neither Landlord nor any of its agents made
any representations as to (i) whether the Leased Premises may be used for
Tenant's intended use under existing Law, or (ii) the suitability of the Leased
Premises for the conduct of Tenant's business, or (iii) the exact square
footage of the Leased Premises, and that Tenant relied solely upon its own
investigations respecting said matters. Tenant expressly waives any and all
claims for damage by reason of any state-management, representation, warranty,
promise or other agreement of Landlord or Landlord's agent(s), if any, not
contained in this Lease or in any Addenda hereto.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
respective dates below set forth with the intent to be legally bound thereby
as of the Effective Date of this Lease first above set forth.
AS LANDLORD: AS TENANT:
RENCO EQUITIES IV CYRAS SYSTEMS
A California General Partnership A California Corporation
By: [ILLEGIBLE] By: [ILLEGIBLE]
-------------------------- -----------------------
Title: [ILLEGIBLE] Title: [ILLEGIBLE]
-------------------------- -----------------------
By: [ILLEGIBLE] By: [ILLEGIBLE]
-------------------------- -----------------------
Title: [ILLEGIBLE] Title: [ILLEGIBLE]
-------------------------- -----------------------
Dated: [ILLEGIBLE] Dated: [ILLEGIBLE]
-------------------------- -----------------------
If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. This Lease
must be executed by the chairman of the board, president or vice-president, and
the secretary, assistant secretary, the chief financial officer or assistant
treasurer, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event a certified copy, of the bylaws or a
certified copy of the resolution, as the case may be, must be attached to this
Lease.
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FIRST ADDENDUM TO LEASE
THIS FIRST ADDENDUM TO LEASE ("Addendum") is made to that Industrial Space Lease
dated as of November 4, 1999, (the "Lease") by and between Renco Equities IV, a
California general partnership (as "Landlord"), and Cyras Systems, a California
corporation (as "Tenant"), for the lease of space located at 00000 Xxxxxxx
Xxxxxxx in Fremont California (the "Leased Premises"). The parties hereto agree
that the Lease is amended, changed and modified by the following provisions,
which are hereby added to the Lease:
Unless otherwise expressly provided herein, all terms which are given a special
definition by the Lease that are used herein are intended to be used with the
definition given to them by the Lease. The provisions of the Lease shall remain
in full force and effect except as specifically amended hereby. In the event of
any inconsistency between the Lease and this Addendum, the terms of this
Addendum shall prevail.
2.1 Demise of the Leased Premises: The terms of this section are subject to
Article 7.
2.3 Lease Commencement Date: The term of this Lease shall begin, and the Lease
Commencement Date shall be deemed to have occurred on the date when this Lease
is executed by Landlord and Tenant. Tenant shall be granted occupancy of the
Premises on that date.
2.6 Surrender of Possession: Landlord and Tenant acknowledge that the initial
condition of the Premises included freshly painted walls, and seven year old
carpet. Any required repairs shall be performed by a contractor reasonably
acceptable to Landlord and Tenant. Tenant shall not be required to remove
improvements specifically approved to remain in the Premises by Landlord. Upon
receipt of Tenant's written request Landlord shall inspect the space with Tenant
and advise Tenant of any required work. Landlord's inspection shall be limited
to a review of items easily visible. Tenant shall not be required to repaint all
interior walls provided that Tenant clean all walls to Landlord's reasonable
satisfaction and patch and paint all holes.
2.7 Early Occupancy: This section is deleted from the Lease.
3.2 Additional Rent: Additional Rent shall be billed no less frequently than
annually. Tenant shall not be required to pay Additional Rent until January 1,
2000. Tenant shall, however, pay the cost of utilities (gas, electricity,
telephone) starting as of the date this Lease is signed on behalf of Landlord
and Tenant. Tenant shall have the right to audit Landlord's expense xxxxxxxx
provided that any such audit shall be completed within nine (9) months following
the end of any year. Any overpayment by Tenant shall be repaid within ten (10)
days following reconciliation by Landlord or audit by Tenant. All xxxxxxxx by
Landlord shall be in writing and shall include reasonable detail.
4.9 Landlord's Right to Enter: Landlord's entry shall not materially interfere
with Tenant's business.
4.11 Rules and Regulations: Rules and Regulations, if any, shall be reasonable
and shall be provided to Tenant in writing. Landlord shall provide Tenant with
written notice of any violations observed by Landlord and a reasonable period
of time to comply with any rules and regulations. In the event of any conflict
between Landlord and Tenant the terms of this lease shall prevail.
5.1A Tenant's Repair Obligations: Tenant shall have the right of reasonable
approval of Landlord's HVAC contractor.
6.1 Alterations By Tenant: Tenant may perform minor alterations with a cost not
to exceed five thousand ($5,000) per year without Landlord's prior approval
provided that all such work shall be removed prior to the expiration of the
Lease, and Tenant shall provide written notice to Landlord and provide Landlord
with drawings identifying any
First Addendum To Lease
Page 2
such work. Tenant may install telephone and data wiring and install and remove
office cubicles at any time without notice to Landlord.
6.3 Alterations: The "cost of money factor" shall be the Xxxxx Fargo Bank prime
lending rate plus three (3%) percent.
7.4 Conditions To Landlord's Consent: Landlord shall retain fifty (50%) percent
of any sublease or assignment consideration in excess of rentals to be paid by
Tenant hereunder. Tenant shall retain fifty (50%) percent. There shall be no
deduction for any costs of subleasing.
7.9 Prohibited Financial Transactions: This section is deleted.
8.1 Limitation On Landlord's Liability and Release: The phrase "Landlord's
active negligence" is replaced with the phrase "Landlord's gross negligence".
9.1 Tenant's Insurance: Tenant shall not be required to carry earthquake or
flood insurance for item 9.1A(2), or boiler and machinery insurance so long as
Tenant conducts its business in the manner conducted prior to the date of this
Lease, and Tenant shall not be required to carry product liability insurance
9.1A(5) until Tenant produces products for sale to others.
11.4 Temporary Taking: In the event Landlord receives payment for any temporary
taking, Landlord shall provide the payment to Tenant after first deducting
Landlord's costs associated therein including any lost rent or reduction in
rent.
13.11 Attorneys Fees: Landlord shall provide written notice to Tenant before
charging Tenant for legal fees:
15. Landlord's Allowance: Landlord shall pay Tenant an amount of sixty thousand
($60,000.00) dollars) which shall reimburse Tenant for the cost of construction
for interior improvements to be constructed by Tenant or for the cost of
communications wiring, and/or moving costs. In order to qualify for Landlord's
contribution Tenant must do all of the following: (i) provide Landlord with
plans for the construction of the improvements for Landlord's approval (which
shall not be unreasonably withheld) and actually complete construction of the
improvements prior to June 30, 2000, (ii) comply with the terms of Article 6 of
the Lease, (iii) use materials and construction techniques (where appropriate)
identical to those used by Landlord in the construction of improvements built by
Landlord in the Leased Premises, (iv) provide Landlord with evidence that the
improvements have been completed and approved by all appropriate governmental
agencies and that Tenant has paid its contractors and architects for the
construction and all appropriate lien periods have expired, and (v) provide
Landlord with reproducible drawings showing the construction performed by
Tenant. Landlord shall make its contribution in two payments. One half when this
lease is signed by Landlord and Tenant, and one half when Tenant has complied
with the requirements of this section.
In the event that Tenant's work does not require construction drawings, and/or
governmental approvals (for work such as moving costs, security systems, data or
telephone wiring, etc.), no such documents shall be required.
16. Lease Termination: Tenant shall have the right to terminate this Lease as
of August 31, 2004, in order to exercise this right Tenant must, prior to
February 1, 2004, notify Landlord in writing and pay to Landlord a termination
fee of three hundred fifty thousand ($350,000.00) dollars. In the event that
Tenant does not provide notice and payment within the time period specified
above, Tenant may not terminate this Lease, and this Lease shall continue until
the Lease Expiration Date. Landlord shall not be required to remind Tenant of
this termination right. In the event Tenant provides notification
First Addendum To Lease
Page 3
and payment as specified herein, this lease shall terminate effective as of
August 31, 2004, and Tenant shall comply with the provisions of this Lease for
said termination.
17. Area To Be Occupied by Tenant: The Base Monthly Rent specified in this
Lease for the period from the Lease Commencement through February 28, 2001, is
based on Tenant conducting its business in no more than thirty thousand seven
hundred twenty seven (30,727) square feet through August 31, 2000, and no more
than forty one thousand (41,000) square feet from September 1, 2000, through
February 28, 2001. In the event that Tenant conducts business in more than the
above defined areas during the specified dates, then, the Base Monthly Rent
shall increase by one dollar and forty cents ($1.40) multiplied times the area
measured in square feet which is in excess of the above specified areas and the
additional Base Monthly Rent shall be paid during each month that the excess
area is used by Tenant to conduct its business. After March 1, 2001, no such
restriction shall apply.
18. Lease for Lakeview Boulevard Space: On the date this Lease is entered into
by Landlord and Tenant, Tenant occupied space located at 46832 and 00000
Xxxxxxxx Xxxxxxxxx. Effective on the date following the day that Tenant vacates
said space and complies with the terms of the Lakeview Boulevard lease for
vacating the premises (including but not limited to section 2.6 of the Lakeview
Boulevard lease), and from that date forward, Landlord shall be obligated to
perform Tenant's obligations under the terms of the Lakeview Boulevard lease.
Landlord shall cause Tenant's security deposit for the Lakeview Boulevard
lease to be returned to Tenant as provided in the Lakeview Boulevard lease.
Tenant shall remain liable for all obligations under the terms of the Lakeview
Boulevard lease which obligations occurred or were accrued prior to the date
Tenant vacates the spaces and complies with appropriate Lakeview Boulevard
lease terms. Tenant shall not be required to remove walls or other interior
improvements constructed by Tenant. Tenant shall clean all floor coverings,
repair, patch and paint any holes or marks on interior walls, replace any
damaged ceiling tiles, replace any burned out lights, and put all electrical,
HVAC, and plumbing systems in good working order, and otherwise comply with the
lease terms.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Addendum To
Lease with the intent to be legally bound thereby, to be effective as of the
date the second party signs this First Addendum To Lease.
AS LANDLORD: AS TENANT:
Renco Equities IV Cyras Systems
A California partnership A California corporation
By: By: [illegible]
---------------------------- ------------------------------
Title: General Partner Title: [illegible]
---------------------------
By: [illegible] By:
---------------------------- ------------------------------
Title: General Partner Title:
---------------------------
Dated: [illegible] Dated:
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