California-San Jose-110 Nortech Parkway Lease Agreement - Geomax and 3dfx Interactive Inc.
DATE: January 6, 1998
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LANDLORD: GEOMAX, a California general partnership
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TENANT: 3DFX Interactive, Inc. (TDFX), a California corporation
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PREMISES: 110 Nortech Parkway, San Jose, California
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LEASE AGREEMENT
TABLE OF CONTENTS
Paragraph Page
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1. Fundamental Lease Provisions.......................................... 1
2. Premises.............................................................. 1
3. Use................................................................... 1
4. Rent.................................................................. 2
5. Term.................................................................. 3
6. Possession............................................................ 3
7. Rules and Regulations and Common Area................................. 3
8. Parking............................................................... 3
9. Expenses of Operation and Maintenance of the Complex.................. 3
10. Acceptance and Surrender of Premises.................................. 3
11. Alterations and Additions............................................. 4
12. Tenant Maintenance.................................................... 4
13. Utilities............................................................. 4
14. Taxes................................................................. 4
15. Liabilities Insurance................................................. 5
16. Tenant's Property Insurance and Worker's Compensation................. 5
17. Landlord's Insurance; Waiver of Subrogation........................... 5
18. Indemnification; Exemption of Landlord from Liability................. 5
19. Compliance............................................................ 5
20. Liens................................................................. 5
21. Assignment and Subletting............................................. 5
22. Subordination and Mortgages........................................... 6
23. Entry by Landlord..................................................... 6
24. Bankruptcy; Tenant's Default.......................................... 6
25. Abandonment........................................................... 6
26. Destruction........................................................... 6
27. Eminent Domain........................................................ 7
28. Sale or Conveyance by Landlord........................................ 7
29. Attornment to Lender or Third Party................................... 7
30. Holding Over.......................................................... 7
31. Certificate of Estoppel............................................... 7
32. Construction Changes.................................................. 7
33. Right of Landlord to Perform.......................................... 7
34. Attorney's Fees....................................................... 7
35. Waiver................................................................ 8
36. Notices............................................................... 8
37. Examination of Lease.................................................. 8
38. Default by Landlord................................................... 8
39. Corporate Authority................................................... 8
40. Limitation of Liability............................................... 8
41. Brokers............................................................... 8
42. Signs................................................................. 8
43. Hazardous Materials................................................... 8
44. Interest.............................................................. 9
45. Miscellaneous and General Provisions.................................. 9
Exhibits
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A Legal Description
B Site Plan of Complex and Building
C Tenant Improvements Work Letter
D Acknowledgement of Commencement
E Hazardous Materials
F Estimated 1998 NNN Expenses
Riders
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Rider One
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LEASE AGREEMENT
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DATED: January 6, 1998
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LANDLORD: GEOMAX, a California general partnership
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TENANT: 3DFX Interactive, Inc. (TDFX), a California corporation
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1. FUNDAMENTAL LEASE PROVISIONS.
A. PREMISES: Approximately 52,040 square feet of leasable area in the building
containing approximately 52,040 leasable square feet located on a parcel of
land in the County of Santa Clara, State of California, as more
particularly described in the legal description attached as Exhibit A
hereto, with a common address of 110 Nortech Parkway, San Jose, CA. The
location of Premises is indicated on the site plan attached as Exhibit B
hereto. (Paragraph 2)
B. LEASE TERM: 105 full calendar months, plus any partial month at the
beginning of the Lease Term. (Paragraph 5)
C. COMMENCEMENT DATE: August 1, 1998 or 60 days after Landlord delivers
possession of the Premises to Tenant whichever is later. (Paragraph 5)
D. INITIAL BASIC RENT: (Paragraph 4A)
Lease Months (inclusive) Basic Rent (per leasable sq. ft.) Basic Rent (total)
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01-4.2857 * 0 0
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4.2858-12 $1.40 $72,856.00
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13-105 see paragraph H below. *The base monthly rent for
the initial 4.2857 months of the lease are hereby abated. Tenant shall,
however, pay the NNN charges during such period.
E. ADDITIONAL RENT: Real Property Taxes, insurance premiums, tenant
association dues (if any), maintenance and other costs and expenses under
this Lease. (Paragraph 4.E)
F. TENANT'S SHARE: One Hundred percent (100%). (Paragraph 4.E)
G. PREPAID RENT: $72,856.00 for the 5th month(s) of the Lease Term.
(Paragraph 4.H)
H. BASIC RENT ADJUSTMENT: The Basic Rent shall be subject to a four percent
(4%) increase on the first day of each of the following full calendar month
the lease term: Annually. (Paragraph 4.B)
I. SECURITY DEPOSIT: $72,856.00. (Paragraph 4.G)
J. PERMITTED USE: The Premises shall be used for corporate headquarters,
sales, marketing, engineering, design and testing, and
storage of semiconductors (Paragraph 3).
K. NUMBER OF PARKING SPACES: 100%. (Paragraph 8)
L. ADDRESSES FOR NOTICES AND PAYMENT OF RENT (Paragraphs 4.F and 36):
To Landlord: GEOMAX To Tenant: 3DFX Interactive, Inc.
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2025 Gateway Pl., Ste. 124 4435 Fortran Dr.
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San Jose, CA 95110 San Jose, CA 95134
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Facsimile No.: (408) 452-0268 Facsimile No.: (408) 262-8874
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M. TENANT'S BROKER: GRUBB & ELLIS . (Paragraph 41)
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N. GUARANTORS: N/A
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O. OTHER PROVISIONS: The following Riders are added hereto and included as
part of this Lease:
Rider No. Paragraph No. Title
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One 46-61 Rider One
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Each reference in this Lease to any of the provisions in this Paragraph 1 shall
be construed to incorporate all of the terms of each such provision. In the
event of any conflict between this Paragraph 1 and the balance of the Lease, the
balance of the Lease shall control.
2. PREMISES.
A. Premises. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord for the Lease Term, at the Rent and upon the terms and
conditions hereinafter set forth, that certain space ("Premises") within that
certain building ("Building") described in Paragraph 1.A. As used herein, the
"Complex" shall mean and include all of the land described in Exhibit A and
shown on Exhibit B attached hereto, and all of the buildings, improvements,
fixtures and equipment now or hereafter situated on said land.
Said letting and hiring is upon and subject to the terms, covenants and
conditions hereinafter set forth, and Tenant covenants as a material part of
the consideration for this Lease to perform and observe each and all of said
terms, covenants and conditions. This Lease is made upon the condition of such
performance and observance.
Landlord agrees to construct any improvements to the Premises ("Tenant
Improvements") as may be described in Exhibit C attached hereto and
incorporated herein by reference, upon such terms and conditions as are set
forth in such Exhibit C. The Tenant improvements shall be deemed substantially
complete when Landlord notifies Tenant in writing that the Tenant Improvements
(if any) are substantially completed in accordance with Exhibit C, subject
only to "punch list" items that do not materially diminish the usefulness of
the Premises.
B. Square Footage. Landlord and Tenant conclusively agree that the
statements of rentable square footage contained herein shall be deemed to be
correct and binding upon the parties for all purposes under this Lease, even if
subsequent measurements determine that one or more of such figures is incorrect.
3. USE. Tenant shall use the Premises only in conformance with
applicable governmental laws, regulations, rules and ordinances, including
without limitation the Americans With Disabilities Act of 1990 (the "ADA"), and
solely for the purpose specified in Paragraph 1.J and for no other purpose.
Tenant shall not do or permit to be done in or about the Premises or the Complex
nor bring or keep or permit to be brought or kept in or about the Premises or
the Complex anything which is prohibited by or will in any way increase the
existing rate of (or otherwise affect) fire or any insurance covering the
Premises or the Complex or any part thereof, or any of its contents, or will
cause a cancellation of any insurance covering the Premises or the Complex or
any part thereof, or any of its contents. Tenant shall not do or permit to be
done anything in, on or about the Premises or the Complex which will in any way
obstruct or interfere with the rights of other tenants or occupants of the
Complex or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance in, on or about the Premises or the Complex. No
sale by auction shall be permitted on the Premises. Tenant shall not place any
loads upon the floors, walls, or ceiling, which endanger the structure, or place
any harmful fluids or other
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materials in the drainage system of the Building therein, or overload existing
electrical or other mechanical systems. No waste materials or refuse shall be
dumped upon or permitted to remain upon any part of the Premises or outside of
the Premises, except in trash containers placed inside exterior enclosures
designated by Landlord for that purpose or inside of the Building proper where
designated by Landlord. No materials, supplies, equipment, finished products or
semi-finished products, raw materials or articles of any nature shall be stored
upon or permitted to remain outside the Premises. No loudspeaker or other
device, system or apparatus which can be heard outside the Premises shall be
used in or at the Premises without the prior written consent of Landlord.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises.
4. RENT
A. Basic Rent. Tenant agrees to pay to Landlord the sum set forth in
Paragraph 1.D hereof as "Basic Rent", in lawful money of the United States of
America, without deduction, offset, prior notice, or demand, on the first day
of every calendar month of the Lease Term, and Landlord agrees to accept such
sum as Basic Rent for the Premises.
B. Basic Rent Adjustment. On the first day of each calendar month
described in Paragraph 1.H hereof (hereinafter referred to as an "Adjustment
Date"), the Basic Rent provided for in Paragraph 4.A above shall be adjusted in
accordance with the following formula based on the Consumer Price Index ("CPI")
for all Urban Consumers "All Items", San Francisco-Oakland-San Jose (1982-84 =
100, standard reference base) published by the Bureau of Labor Statistics, U.S.
Department of Labor (the "Index") published nearest but prior to the first day
of the Lease Term or the last previous Adjustment Date, as applicable (the
"Beginning Index") and the Index which is published nearest but prior to the
current Adjustment Date (the "Adjustment Index"). On each Adjustment Date, the
Basic Rent shall be increased by an amount equal to the product obtained by
multiplying the then current Basic Rent by a fraction, the numerator of which
is the Adjustment Index and the denominator of which is the Beginning Index. On
or about each Adjustment Date, the parties shall execute an amendment to the
Lease stating the new (adjusted) Basic Rent. If the Index is changed so that
the Base Year of the Index differs from that used as of the month immediately
preceding the month in which the term commences, the Index shall be converted
in accordance with the conversion factor published by the United States
Department of Labor, Bureau of Labor Statistics. If the Index is discontinued
or revised during the Lease Term, such other government index or other
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index had not been
discontinued or revised. In no event shall the Basic Rent following any
Adjustment Date be less than the Basic Rent in existence immediately prior to
such Adjustment Date.
C. Partial Months. In the event that the Lease Term commences on a date
other than the first day of a calendar month, on the Commencement Date Tenant
shall pay to Landlord as Basic Rent for the period from such Commencement Date
to the first day of the first full calendar month that proportion of the
monthly Basic Rent hereunder which the number of days between such Commencement
Date and the first day of the next succeeding calendar month bears to thirty
(30), and such partial first month shall not be counted when computing the
number of months in the term of this Lease. In the event that the Lease Term is
terminated for any reason on a date other than the last day of a calendar
month, on the first day of the last calendar month of the Lease Term Tenant
shall pay to Landlord as Basic Rent for the period from said first day of said
last calendar month to and including the last day of the Lease Term that
proportion of the monthly Basic Rent hereunder which the number of days between
said first day of said last calendar month and the last day of the term hereof
bears to thirty (30).
D. Late Charge. Notwithstanding any other provision of this Lease, if
Tenant is delinquent in the payment of Rent as set forth in this Paragraph 4,
or any part thereof, Tenant agrees to pay Landlord, in addition to the
delinquent Rent due, a late charge for each Rent payment which is not received
by Landlord within ten (10) days after due date for such payment. Said late
charge shall equal ten (10%) of each Rent payment so in default. In the event
that a late charge is payable hereunder and not paid by Tenant for three (3)
consecutive months, then Rent shall automatically become due and payable three
(3) months in advance, rather than monthly notwithstanding Paragraph 4 or any
other provision of this Lease to the contrary.
E. Additional Rent. Beginning with the Commencement Date, Tenant shall
pay to Landlord in addition to the Basic Rent and as Additional Rent the
following:
(1) Tenant's proportionate share ("Tenant's Share") as specified in
Paragraph 1.F, of all Real Property Taxes relating to the Complex, as set forth
in Paragraph 14, and
(2) Tenant's Share of all property insurance premiums relating to
the Complex, as set forth in Paragraph 15, and
(3) Tenant's Share of expenses for the operation, management,
maintenance and repair of the Building (including Common Areas of the Building)
and Common Areas of the Complex in which the Premises are located, as set forth
in Paragraph 9, and
(4) The sums required to reimburse Landlord for the cost of repairs
and maintenance to the Premises, as set forth in Paragraph 12; and
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(5) All charges, costs and expenses, which Tenant is
required to pay hereunder, together with all interest and penalties, costs and
expenses including without limitation attorneys' fees and legal expenses, that
may accrue thereto in the event of Tenant's failure to pay such amounts, and all
damages, reasonable costs and expenses which Landlord may incur by reason of
default of Tenant or failure on Tenant's part to comply with the terms of this
Lease. In the event of nonpayment by Tenant of Additional Rent, Landlord shall
have all the rights and remedies with respect thereto as Landlord has to
nonpayment of Basic Rent.
The Additional Rent due hereunder shall be paid to Landlord or
Landlord's agent (i) within thirty (30) days for taxes and insurance and within
thirty (30) days for all other Additional Rent items after presentation of an
invoice from Landlord or Landlord's agent setting forth such Additional Rent,
and/or (ii) at the option of Landlord, directly to the designated recipient
thereof, as and when such amounts are due, in accordance with statements or
invoices presented to Tenant; and/or (iii) at the option of Landlord, to
Landlord monthly, in advance, in an amount estimated by Landlord to be
Landlord's approximate average monthly expenditure for such Additional Rent
items, which estimated amount shall be reconciled at the end of each calendar
year as compared to Landlord's actual expenditure for said Additional Rent
items, with Tenant paying to Landlord, upon demand, any amount of actual
expenses expended by Landlord in excess of said estimated amount, or Landlord
applying any amount of estimated payments made by Tenant in excess of
Landlord's actual expenditures for said Additional Rent items to Basic Rent
and/or Additional Rent next becoming due.
The respective obligations of Landlord and Tenant under this
Paragraph shall survive the expiration or other termination of this Lease, and
if the Lease Term shall expire or shall otherwise terminate on a day other than
the last day of a calendar year, the actual Additional Rent incurred for the
calendar year in which the Lease Term expires or otherwise terminates shall be
determined and settled on the basis of the statement of actual Additional Rent
for such calendar year and shall be prorated in the proportion which the number
of days in such calendar year preceding such expiration or termination bears to
365.
F. Place of Payment of Rent and Additional Rent. All Basic Rent
hereunder and all payments hereunder for Additional Rent shall be paid to
Landlord at the address of Landlord as specified in Paragraph 1.L or such other
place as Landlord may from time to time designate in writing.
G. Security Deposit. Concurrently with Tenant's execution of this
Lease, Tenant shall deposit with Landlord the sum specified in Paragraph 1.1
hereof as a "Security Deposit". Said sum shall be held by Landlord as a security
deposit for the faithful performance by Tenant of all of the terms, covenants,
and conditions of this Lease to be kept and performed by Tenant during the Lease
Term, and shall not in any event be used or applied by Tenant as "last month's
rent." If Tenant defaults with respect to any provision of this Lease,
including, but not limited to, the provision relating to the payment of Rent,
Landlord may (but shall not be required to) use, apply or retain all or any part
of the Security Deposit for the payment of any amount which Landlord may spend
by reason of Tenant's default or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any portion
of said Security Deposit is so used or applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in the amount
sufficient to restore the Security Deposit to its original amount. Tenant's
failure to do so shall be a material breach of this Lease. Landlord shall not be
required to keep this Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on such Security Deposit. If Tenant
fully and faithfully performs every provision of this Lease to be performed by
it, the Security Deposit or any balance thereof shall be returned to Tenant (or
at Landlord's option, to the last assignee of Tenant's interest hereunder) at
the expiration of the Lease Term and after Tenant has vacated the Premises. In
the event of termination of Landlord's interest in this Lease, Landlord shall
transfer said Security Deposit to Landlord's successor in interest whereupon
Landlord shall be released from liability for the return of such Security
Deposit or any accounting therefor.
H. Prepaid Rent. Concurrently with Tenant's execution of this
Lease, Tenant shall pay to Landlord the sum specified in Paragraph 1.G as
prepaid Rent for the months designated therein.
I. Definition of Rent. The term "Rent" as used in this Lease
shall mean Basic Rent. Additional Rent, and any and all other sums, however,
designated, required to be paid by Tenant under this Lease, whether payable to
Landlord or third parties.
J. Additional Rights of Landlord. In addition to any late payment
or interest charges payable to Landlord hereunder and any other rights or
remedies that Landlord may have under his Lease or applicable law, all of which
rights and remedies shall be cumulative, Tenant, as a material part of the
consideration for this Lease, hereby agrees as follows:
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(1) If Tenant makes any payment under this Lease by check and such
check is dishonored or otherwise returned unpaid to Landlord due to insufficient
funds, then Landlord, at its option, may require Tenant to make all future
payments under this Lease by cashier's check or wire transfer in accordance
with wiring instructions given to Tenant by Landlord.
(2) If Landlord fails to receive any payment that Tenant is required
to make under this Lease when due and Landlord thereafter, and prior to
receiving such payment, proceeds to serve a "3-Day Notice" or similar notice to
Tenant as permitted under Section 1162 of the California Code of Civil
Procedure, then in each such instance, and regardless of whether Tenant
thereafter makes such payment, Tenant shall pay to Landlord, upon demand, as
Additional Rent, an administrative charge in the amount of $200. Tenant
acknowledges that such charge constitutes liquidated damages and not a penalty
and represents a reasonable estimate of the additional administrative costs that
Landlord will incur in serving such notice.
(3) If Landlord fails to receive any payment that Tenant is required
to make under this Lease within ten (10) days after the due date for such
payment, and such delinquency occurs on two (2) separate occasions, then, at
Landlord's election, exercisable by written notice to Tenant at any time after
the second such delinquency, any and all rights of first offer with respect to
any premises in the Building or Complex, rights of first refusal with respect to
any such premises, and options to renew or extend the term of this Lease, which
in any case may be granted to Tenant under this Lease or any exhibit, rider or
amendment thereto (each referred to in this Lease as an "Option") shall
terminate. In such event, Tenant shall execute a quitclaim deed or other similar
document as may be requested by Landlord to evidence the termination of such
Option.
(4) If Landlord fails to receive any payment that Tenant is required
to make under this Lease within ten (10) days after the due date (or such
payment, and such delinquency occurs on three (3) separate occasions, then
Landlord, at its election, exercisable by one or more written notices to Tenant
at any time after the third such delinquency, may require any or all of the
following: (i) that all future payments of Basic Rent be paid three (3) months
in advance; (ii) that, subject to annual reconciliation as provided in Paragraph
4.E above, all future payments of Additional Rent shall be payable three (3)
months in advance based upon an amount estimated by Landlord to be Landlord's
average quarterly expenditure for such items of Additional Rent; and (iii) that
the Security Deposit specified in Paragraph 1.H be immediately increased by one
hundred percent (100%), in which event Tenant shall, within ten (10) days after
written demand therefor, deposit such additional amount in cash with Landlord.
5. TERM. The term of this Lease shall be for the period of time specified in
Paragraph 1.B (unless sooner terminated as hereinafter provided) and, subject to
Paragraph 6, shall commence on the commencement date ("Commencement Date")
specified in Paragraph 1.C. Within 10 days following the Commencement Date of
the Lease Term, Tenant will execute and deliver to Landlord a certificate
substantially in the form of Exhibit D indicating any exceptions thereto which
may exist at that time. Tenant's failure to execute and deliver such certificate
within such time limit shall constitute an unqualified acceptance of the
Premises and acknowledgement that the statements contained in Exhibit D are true
and correct without exception.
6. POSSESSION. If Landlord, for any reason whatsoever, cannot deliver
possession of said Premises to Tenant on the date set forth in Paragraph 1.C or
any other date, this Lease shall not be void or voidable; no obligation of
Tenant shall be affected thereby; nor shall Landlord or Landlord's agents be
liable to Tenant for any loss or damage resulting therefrom; but in that event
the commencement date and not the termination date of the Lease, and any other
dates affected thereby shall be revised to conform to the date of Landlord's
delivery to Tenant of possession of the Premises, and the Lease Term shall not
be extended for a period equal to the delay in delivery of possession, plus the
number of days necessary to end the Lease Term on the last day of a month. The
above is, however, subject to the provision that the period of delay of delivery
of the Premises shall not occur later than December 31, 1998 in which instance
Tenant, at its option, may, by written notice to Landlord on or before January
10, 1999, terminate the Lease and the parties shall have no further liability
thereafter accruing under this Lease.
7. COMMON AREAS. Subject to the terms and conditions of this Lease, Tenant
shall have the non-exclusive right to use the access roads, parking areas, and
facilities provided and designated by Landlord for the general use and
convenience of the occupants of the Complex, which areas and facilities are
referred to herein as "Common Areas". This right shall terminate upon the
termination of this Lease.
8. PARKING. Subject to the terms and conditions of this Lease, Tenant shall
have the exclusive right to use the number of parking spaces in the common
parking areas of the Complex as is specified in Paragraph 1.K. Neither Tenant
nor Tenant's employees, agents, representatives and/or invitees shall use
parking spaces in excess of said number of spaces allocated to Tenant
hereunder. Landlord shall also have the right to implement a system of parking
charges, vouchers, fines or other parking control fees to be paid by Tenant
and/or the users of the Complex, if so required by any governmental agency
having jurisdiction over the Complex or if required to meet parking programs
mandated by government.
Tenant shall not, at any time, park, or permit to be parked, any trucks
or vehicles adjacent to the loading areas so as to interfere in any way with the
use of such areas, nor shall Tenant at any time park, or permit the parking of
Tenant's trucks or other vehicles or the trucks and vehicles of Tenant's
suppliers or others, in any portion of the common area not designated by
Landlord for such use by Tenant. Tenant shall not park nor permit to be parked,
any inoperative vehicles or equipment on any portion of the parking area or
outside areas of the Complex, or use the same for storage. Tenant agrees to
assume responsibility for compliance by its employees with the parking
provisions contained herein.
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If Tenant or its employees park in other than such designated parking
areas, then Landlord may charge Tenant, as Additional Rent, and Tenant agrees
to pay, ten ($10.00) dollars per day for each day or partial day each such
vehicle is parked in any area other than that designated. Tenant hereby
authorizes Landlord at Tenant's sole expense to tow away from the Complex any
vehicle belonging to Tenant or Tenant's employees parked in violation of these
provisions, or to attach violation stickers or notices to such vehicles and
levy fines for such violations. Landlord shall have no obligation to Tenant to
police the parking areas or enforce any private or public parking restrictions,
which enforcement shall be at Landlord's sole and absolute discretion.
9. EXPENSES OF OPERATION AND MAINTENANCE OF THE COMPLEX. As Additional Rent
and in accordance with Paragraph 4.E of this Lease, and except for those
expenses required to be paid exclusively by Tenant as set forth in Paragraphs 12
and 13 or elsewhere in this Lease, Tenant shall pay to Landlord Tenant's Share
of all expenses of operation, management, maintenance and repair of the
Building, Complex and Common Areas including, but not limited to, all sums
expended in connection with the Common Areas and Building exteriors for all
general maintenance and repairs; license, permit, and inspection fees; security;
utility charges associated with exterior landscaping and lighting (including
water and sewer charges); janitorial services; trash removal; fire protection
systems; general liability insurance protecting against claims related to the
condition, use or occupancy of the Common Ares (in such amounts and providing
such coverage as determined in Landlord's sole discretion); exterior window
cleaning; maintenance of landscaped areas, irrigation systems, parking lots,
sidewalks, driveways, and stairways, including without limitation resurfacing,
restriping, cleaning and sweeping; maintenance, repair and replacement of all
Building systems and fixtures, including without limitation electrical,
mechanical, lighting, plumbing, and telecommunication systems, including without
limitation intra-Building telephone, telecommunication and network cabling which
telecommunication systems are located outside of the Premises, except as
otherwise provided in Paragraph 12 below; repair and replacement of roofs of the
buildings (excluding new capital improvement(s); salaries and employee benefits
of personnel (and payroll taxes applicable thereto) to the extent they are
engaged in the operation, supervision, and/or maintenance of the Complex;
reasonable attorneys' fees with respect to matters of common interest to
occupants of the Complex or relating to the Complex; fees for accounting,
bookkeeping, expense collection, and other management services rendered by
Landlord and/or by a third party manager engaged by Landlord (which may be a
party affiliated with Landlord), except that the total amount charged for such
management services and included in Tenant's share of expenses shall not exceed
three percent (3%) of the then current Basic Rent payable by Tenant for each
respective month; taxes on personal property, equipment and machinery utilized
in the operation of the Complex; supplies, materials, equipment and tools;
maintenance and/or insurance contracts covering all or any of the repairs or
maintenance described in this Paragraph 9; and the cost of complying with rules,
regulations and orders of governmental authorities, including without limitation
maintenance, alterations and repairs required in connection therewith.
"Additional Rent" as used herein shall not include Landlord's debt
repayments; interest on charges; expenses directly or indirectly incurred by
Landlord for the benefit of any other tenant; cost for the installation of
partitioning or any other tenant improvements; cost of attracting tenants;
depreciation; interest; or executive salaries.
10. ACCEPTANCE AND SURRENDER OF PREMISES. By taking possession hereunder,
Tenant accepts the Premises as being in good and sanitary, condition and
repair and accepts the Building, the Premises and the Common Areas in their
then existing condition and without representation or warranty by Landlord as
to its condition, the use or occupancy which may be made thereof, or the
precise square footage of the Building or the Premises. Any exceptions to the
foregoing must be by written agreement executed by Landlord and Tenant. Subject
to Paragraphs 26 and 27, Tenant agrees on the last day of the Lease Term, or on
the sooner termination of this Lease, to surrender the Premises promptly and
peaceably to Landlord in good condition and repair (normal wear and tear
excepted in broom clean condition), with all interior walls repaired and
replaced, if damaged; the air conditioning and heating equipment serviced by a
reputable and licensed service firm and in good operating condition (provided
the maintenance of such equipment has been Tenant's responsibility during the
term of this Lease) together with all alterations, additions, and improvements
which may have been made in, to, or on the Premises (except movable trade
fixtures installed at the expense of Tenant); provided, however, that Tenant
shall ascertain from Landlord within thirty (30) days before the end of the
Lease Term whether Landlord desires to have the Premises or any part or parts
thereof restored to their condition and configuration as when the Premises were
delivered to Tenant and if Landlord shall so desire, then Tenant shall restore
said Premises or such part or parts thereof before the end of this Lease at
Tenant's sole cost and expense. Tenant, on or before the end of the Lease Term
or sooner termination of this Lease, shall remove all of Tenant's personal
property and trade fixtures from the Premises, and all property not so removed
on or before the end of the Lease Term or sooner termination of this Lease
shall be deemed abandoned by Tenant and title to same shall thereupon pass to
Landlord without compensation to Tenant. Landlord may, upon termination of this
Lease, remove all moveable furniture and equipment so abandoned by Tenant,
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at Tenant's sole cost, and repair any damage caused by such removal at Tenant's
sole cost. If the Premises are not surrendered at the end of the term or sooner
termination of this Lease, Tenant shall indemnify Landlord against loss or
liability resulting from the delay by Tenant in so surrendering the Premises
including, without limitation, consequential damages to Landlord caused, in
whole or in part, by such delay. Nothing contained herein shall be construed as
an extension of the term hereof or as a consent of Landlord to any holding over
by Tenant. The voluntary or other surrender of this Lease or the Promissory
Tenant or a mutual cancellation of this Lease shall not work as a merger and,
at the option of Landlord, shall either terminate all or any existing subleases
or operate as an assignment to Landlord of all or any such subleases.
11. ALTERATIONS AND ADDITIONS. Other than the initial tenant improvements,
Tenant shall not make, or suffer to be made, any alteration or addition to the
Premises, or any part thereof, without the prior written consent of Landlord.
All work with respect to any alteration or addition shall be done in a good
and workmanlike manner, shall be under the supervision of a competent architect
or competent licensed structural engineer approved by Landlord, and shall be
made in accordance with all applicable laws, ordinances, codes and regulations
related thereto and the plans and specifications with respect thereto shall be
approved in writing by Landlord before commencement of work. Landlord's
approval of Tenant's plans and specification shall create no responsibility or
liability on the part of Landlord for the completeness, design sufficiency or
compliance with governmental laws, rules or regulations.
Tenant agrees that it will not proceed to make such alteration or
additions without having obtained consent from Landlord to do so, and until
ten (10) days after the receipt of such consent, in order that Landlord may
post appropriate notices to avoid any liability to contractors or material
suppliers for payment for Tenant's improvements. Tenant will at all times
permit such notices to be posted and to remain posted until the completion of
work. Tenant shall, if required by Landlord, secure at Tenant's own cost and
expense, a completion and lien indemnity bond, satisfactory to Landlord, for
such work. Tenant further covenants and agrees that any mechanic's lien filed
against the Premises or against the Complex for work claimed to have been done
for, or materials claimed to have been furnished to, Tenant will be discharged
by Tenant, by bond or otherwise, within ten (10) days after the imposition
thereof, at the cost and expense of Tenant. Any exceptions to the foregoing
must be made in writing and executed by both Landlord and Tenant. Upon
completion of the work, Tenant shall file a Notice of Completion as permitted
by law in the Office of the County Recorder where the Premises is located.
Any addition to, or alteration of, the Premises, except moveable furniture
and trade fixtures, shall at once become a part of the Premises and belong to
Landlord. Tenant shall retain title to all moveable furniture and trade
fixtures placed in the Premises. All heating, lighting, electrical, air
conditioning, floor to ceiling partitioning, drapery, carpeting, and floor
installations made by Tenant, together with all property that has become an
integral part of the Premises, shall not be deemed trade fixtures.
12. REPAIR AND MAINTENANCE OF THE PREMISES.
A. Landlord's Obligations. So long as no Event of Default (as defined in
Paragraph 24) has occurred, which remains uncured beyond the applicable cure
period (if any) set forth in this Lease, Landlord shall, at its sole cost and
expense, maintain and repair the building foundations, structural elements of
the exterior walls and structural elements of the roof, except to the extent
of any non-insured damage (or deductible portion of any insured damage) that is
the result of the negligence or willful act of Tenant or Tenant's employees,
agents or contractors, in which case Tenant shall be liable for the repair at
Tenant's sole cost and expense. Landlord shall also maintain and repair (i) the
roof membrane, (ii) the exterior surface of the building (including,
maintenance of equipment located on the roof top, exterior window washing and
exterior painting), and (iii) at Landlord's election, the HVAC equipment
(through a contract with a service company of Landlord's choice); provided,
however, that Tenant shall reimburse Landlord for the cost thereof as
Additional Rent in accordance with Paragraph 4.E. Landlord shall have no
obligation to make repairs under this Paragraph until a reasonable time after
receipt of written notice from Tenant of the need for such repairs. In no event
shall any payments owed by Tenant under this Lease be abated on account of
Landlord's failure to make repairs under this Paragraph. Tenant hereby waives
all statutory rights to make repairs for or at the expense of Landlord.
B. Tenant's Obligations. Except to the extent of Landlord's express
obligations under Paragraph 12.A, Tenant shall, at its sole cost and expense,
keep and maintain the Premises (including appurtenances) and every part thereof
in a high standard of maintenance and repair, and in good and sanitary
condition. Tenant's maintenance and repair responsibilities herein referred to
include, but are not limited to, all windows, window frames, plate glass,
glazing, truck doors, plumbing systems, (such as water and drain lines, sinks,
toilets, faucets, drains, showers and water fountains), electrical systems (such
as panels, conduits, outlets, lighting fixtures, lamps, bulbs, tubes, ballasts),
heating and air conditioning distribution and temperature control systems (such
as fans, air handlers, ducts, mixing boxes, thermostats, time clocks, supply and
return grills), telecommunication systems within the Premises (including,
without limitation all distribution throughout the Premises from Tenant's
computer closets), and telecommunication systems located outside of the Premises
(including without limitation intra Building telephone, telecommunication and
network cabling) installed to exclusively serve all or any portion of the
Premises, all interior improvements within the Premises including but not
limited to wall coverings, window coverings, carpet, floor coverings,
partitioning, ceilings, doors (both interior and exterior, including closing
mechanisms, latches, and locks), skylights (if any), automatic fire
extinguishing systems, and all other interior improvements of any nature
whatsoever. Tenant also agrees to provide janitorial services for the Premises.
If Landlord elects to require Tenant to maintain the HVAC equipment, Tenant
shall contract with a service company for the quarterly maintenance of the
heating and air conditioning equipment, with a copy of the service contract to
be furnished to Landlord within ten (10) days after opening for business, and a
copy of any subsequent contracts to be furnished from time to time. If Tenant
needs to access Building system, including without limitation the Building
telecommunication system, Tenant shall have the right to do so only upon the
prior written consent of Landlord and by utilization of a contractor consented
to by Landlord, provided that despite any such consent by Landlord, Tenant shall
remain fully responsible for the acts, omissions and negligence of any such
contractor.
<PAGE> 9
13. UTILITIES. Tenant shall pay, directly to the provider of such services,
as the same shall become due, all charges for water, gas, electricity,
telephone, telex and other electronic communications service, sewer service,
waste pick-up and any other utilities, materials or services furnished directly
to or used by Tenant on or about the Premises during the Lease Term, including,
without limitation, any temporary or permanent utility surcharge or other
exactions whether or not hereinafter imposed. If any such services and utilities
are jointly metered and not directly billed to Tenant, Tenant shall pay an
equitable portion of all charges as Additional Rent, with the determination of
Tenant's equitable portion to be made by Landlord. At Landlord's request, Tenant
shall pay Landlord for the cost of installing separate meters. Tenant shall pay
for any and all telecommunication or other utility system modifications or
additions which it may require and which Landlord expressly agrees to provide
pursuant to the terms of this Lease or any subsequent written agreement;
provided, however, that nothing in this Lease shall require Landlord to provide,
modify or install any utility system or utility system component for Tenant's
use except to the extent that the same is required by law or by an express
written agreement between Landlord and Tenant. Landlord shall not be liable for,
and Tenant shall not be entitled to, any abatement or reduction or Rent or other
compensation by reason of any interruption or failure of utility services to the
Premises.
14. TAXES.
A. Real Property Taxes. As Additional Rent and in accordance with
Paragraph 4.E of this Lease, Tenant shall pay to Landlord Tenant's Share of all
Real Property Taxes that accrue during the Lese Term and which constitute Real
Property Taxes pertaining to the Complex. This obligation shall survive the
expiration or earlier termination of this Lease, and if any Real Property Taxes
are imposed by the County Assessor or other governmental authority for the
period of time constituting the Lease Term, whether or not Landlord is billed
for the same during the Lease Term. Tenant shall pay such Real Property Taxes
when they are ultimately billed, in accordance with Paragraph 4.E. The term
"Real Property Taxes," as used herein, shall mean (i) all taxes, assessments,
levied 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 new improvements now or
hereafter imposed by any governmental or quasi-governmental authority or special
district having the direct or indirect power to tax or levy assessments, which
are levied or assessed against, or with respect to the value, occupancy or use
of, all or any portion of the Complex (as not constructed or as may at any time
hereafter be constructed, altered, or otherwise changed) or Landlord's interest
therein; any improvements located within the Complex (regardless of ownership);
the fixtures, equipment and other property of Landlord, real or personal, that
are an integral part of and located in the Complex; or parking areas, public
utilities, or energy within the Complex; (ii) all charges, levies or fees
imposed by reason of environmental regulation or other governmental control of
the Complex; and (iii) all costs and fees (including attorneys' fees) incurred
by Landlord in protesting any Real Property Tax and in negotiating with public
authorities as to any Real Property Tax, but only if Tenant has requested
Landlord to contest such taxes. If at any time during the term of this Lease the
taxation or assessment of the Complex prevailing as to the commencement date of
this Lease shall be altered to that in lieu or in addition to any Real Property
Tax described above there shall be levied, assessed or imposed (whether by
reason of a change in the method of taxation or assessment, creation of a new
tax or charge or any other cause) an alternate or additional tax or charge (i)
on the value, use or occupancy of the Complex, or Landlord's interest therein or
(ii) on or measured by the gross receipts, income or rentals from the Complex,
on Landlord's business of leasing the Complex, or computed in any manner with
respect to the operation of the Complex, then any such tax or charge, however
designated, shall be included within the meaning of the term "Real Property
Taxes" for purposes of the Lease. If any Real Property Tax is based upon
property or rents unrelated to the Complex, then only that part of such Real
Property Tax that is fairly allocable to the Complex shall be included within
the meaning of the term "Real Property Taxes." Notwithstanding the foregoing,
the term "Real Property Taxes" shall not include estate, inheritance, gift or
franchise taxes of Landlord or the federal or state net income tax imposed on
Landlord's income from all sources.
B. Taxes on Tenant's Property.
(1) Tenant shall be liable for and shall pay ten (10) days before
delinquency, taxes levied against any personal property or trade fixtures
placed by Tenant in or about the Premises. If any such taxes on Tenant's
personal property or trade fixtures are levied against Landlord or Landlord's
property or if the assessed value of the Premises is increased by the inclusion
therein of a value placed upon such personal property or trade fixtures of
Tenant and if Landlord, after written notice to Tenant, pays the taxes based on
such increased assessment, which Landlord shall have the right to do regardless
of the validity (but only under proper protest if requested by Tenant), Tenant
shall upon demand, as in the case may be, repay to Landlord the taxes so levied
against Landlord, or the proportion of such taxes resulting from such increase
in the assessment; provided that in any such event Tenant shall have the right,
in the name of Landlord and with Landlord's full cooperation (but without cost
to Landlord), to bring suit in any court of competent jurisdiction to recover
the amount of any such taxes so paid under protest, and any amount so recovered
shall belong to Tenant.
(2) If the Tenant improvements in the Premises, whether
installed, and/or paid for by Landlord or Tenant and whether or not affixed to
the real property so as to become a part thereof, are assessed for real property
tax purposes at a valuation higher than the valuation at which standard office
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<PAGE> 10
improvements in other space in the Complex are assessed, then the real property
taxes and assessments levied against Landlord or the Complex by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Paragraph
4.B.(1) above. If the records of the County Assessor are available and
sufficiently detailed to serve as a basis for determining whether said Tenant
improvements are assessed at a higher valuation than standard office
improvements in other space in the Complex, such records shall be binding on
both the Landlord and the Tenant. If the records of the County Assessor are not
available or sufficiently detailed to serve as a basis for making said
determination, the actual cost of construction shall be used.
15. LIABILITY INSURANCE. Tenant, at Tenant's expense, agrees to obtain and
keep in force during the term of this Lease a policy of comprehensive public
liability insurance against any and all claims for personal injury, death,
property damage, or other liabilities related to the condition, use or
occupancy of the Premises or to Tenant's operations on the Premises, including
an extended liability endorsement providing contractual liability and broad
form property damage coverage. Such insurance shall also contain a
cross-liability clause and shall insure Tenant's performance of the indemnity
agreement set forth in Paragraph 18, although Tenant's obligations pursuant to
such indemnity shall not be limited to the amount of any insurance required of,
or otherwise carried by, Tenant. Such liability insurance shall have a
combined single limit of not less than Two Million Dollars ($2,000,000) and
certificates evidencing such insurance shall be furnished to Landlord prior to
Tenant's occupancy of the Premises. The policy or policies affecting such
insurance shall name Landlord and the beneficiary or mortgagee of any deed of
trust or mortgage affecting the Premises as additional insureds, and shall
insure any liability of Landlord, contingent or otherwise, with respect to any
act of omission of Tenant, its agents, employees or invitees or otherwise by
any conduct or transactions of any of said persons in or about or concerning
the Premises, including any failure of Tenant to observe or perform any of
its obligations hereunder; shall be issued by an insurance company admitted to
transact business in the State of California having a rating of A or better in
"Best's Insurance Guide"; and shall provide that the insurance effected thereby
shall not be canceled, except upon thirty (30) days' prior written notice to
Landlord. Said liability insurance shall be primary and not contributing to any
insurance available to Landlord, and Landlord's insurance shall be in excess
thereto. If, during the Lease Term, in the considered opinion of Landlord's
lender, insurance advisor, or counsel, the amount of insurance described in
this Paragraph 15 is not adequate, Tenant agrees to increase said coverage to
such reasonable amount as Landlord's lender, insurance advisor, or counsel
shall deem adequate.
16. TENANT'S PROPERTY INSURANCE AND WORKER'S COMPENSATION. Tenant shall
maintain a policy or policies of fire and property damage insurance in "all
risk" form with a sprinkler leakage endorsement insuring the personal property,
inventory, trade fixtures, and leasehold improvements within the Premises for
the full replacement value thereof. The proceeds from any of such policies
shall be used for the repair or replacement of such items so insured. Tenant
shall also maintain a policy or policies of worker's compensation insurance
and any other employee benefit insurance sufficient to comply with all laws.
17. LANDLORD'S INSURANCE; WAIVER OF SUBROGATION.
A. Landlord's Property Insurance. Landlord shall purchase and keep
in force, a policy or policies of casualty insurance covering loss or damage to
the Premises, Building and related Common Area improvements in the amount of
the full replacement value thereof, providing protection against those perils
covered by "all risk" insurance, and including such other casualty endorsements
as Landlord may elect. Landlord shall also maintain at Landlord's election, or
if required by Landlord's lender from time to time, earthquake and/or flood
damage insurance, worker's compensation insurance, sprinkler leakage insurance
and rental income insurance in the amount of one hundred (100%) percent of
twelve (12) months Basic Rent, plus sums paid as Additional Rent. Tenant shall
pay to Landlord Tenant's Share of the cost of Landlord's insurance, as
described herein, as Additional Rent in accordance with Paragraph 4.E thereof.
If such insurance cost is increased due to the Tenant's use of the Premises or
the Complex, Tenant agrees to pay to Landlord the full cost of such increase.
Tenant shall have no interest in nor any right to the proceeds of any insurance
procured by landlord as described in this Paragraph 17.
B. Waiver of Subrogation. Each party hereby releases the other
party, and its partners, officers, agents, employees, and servants, from any
and all claims, demands, loss, expense, or injury to the Premises or to the
furnishings, fixtures, equipment, inventory, or other property in, about, or
upon the premises, which is caused by or results from perils, events, or
happenings which are the subject of fire or other casualty insurance in force
at the time of such loss irrespective of any negligence on the part of the
released party which may have contributed to or caused such loss; subject to
the following limitations: (i) the party being released shall not be released
from any liability to the extent that such damages are not covered by the
insurance recovery obtained by the releasing party, and (ii) the party being
released shall be responsible for reimbursing the releasing party for any
deductible owed as a result of such damages. Each party shall use commercially
reasonable efforts to obtain, if needed, appropriate endorsements to its
policies of insurance with respect to the foregoing releases; provided,
however, that failure to obtain such endorsements shall not affect the releases
hereinabove given.
18. INDEMNIFICATION; EXEMPTION OF LANDLORD FROM LIABILITY
A. Indemnification. Subject to Section 2782 of the California
Civil Code, and provided such matters have not be waived under the waiver of
subrogation in Section 17B above, Tenant shall defend, protect, indemnify, and
hold Landlord and its agents, contractors and employees harmless (except for
gross negligence or willful misconduct of Landlord and then only to the extent
that such loss is not waived under Paragraph 17.B) from and against any and all
obligations, losses, costs, expenses, liabilities, claims, damages, demands,
fines, penalties, attorneys' fees, investigation costs, court costs or expert
witness fees incurred in connection with or on account of, or arising from any
injury or death or property damage resulting from (i) the use, condition or
occupancy of the Premises or (ii) any act or omission or negligence of Tenant
or Tenant's agents, contractors, employees, or invitees or (iii) any occurrence
in, upon or at the Premises from any cause whatsoever or (iv) any breach,
violation or non-performance by Tenant of any of its obligations hereunder.
<PAGE> 11
B. Exemption of Landlord from Liability. Neither Landlord nor its agents
or contractors or employees shall be liable to Tenant, and Tenant waives all
claims against Landlord, and its agents, contractors and employees for injury or
death to any person (including without limitation Tenant and Tenant's employees)
or for damage or loss to Tenant's business (including consequential damages) or
for damage or loss to any property (including without limitation Tenant's
personal property) by and from all causes, including without limitation (i) any
latent or patent defect in the Premises, Building or Complex, or (ii) fire,
steam, electricity, gas, dampness, water or rain which may leak or flow from or
into any part of the Premises or the Complex, or (iii) interruption, breakage,
leakage, obstruction or defects of pipes, sprinklers, wires, appliances, or
Building Systems, including without limitation plumbing, heating, air condition,
telecommunications or lighting systems or fixtures, whether the damage or injury
results from conditions arising in, upon, or about the Premises, Building or
Complex or from other sources or (iv) any act or omission or neglect of any
other tenant of the Building or Complex. Tenant shall immediately notify
Landlord in writing of any known defect in the Premises. The provisions of this
Paragraph 18.B shall not apply to any damage or injury caused by Landlord's
willful misconduct or gross negligence, except to the extent the same is waived
under Paragraph 17.B.
19. COMPLIANCE. Tenant, at its sole cost and expense, shall promptly comply
with all laws, statutes, ordinances and governmental rules, regulations or
requirements now or hereafter in effect; with the requirements of any board of
fire underwriters or other similar body now or hereafter constituted; and with
any direction or occupancy certificate issued pursuant to law by any public
officer; provided, however, that no such failure shall be deemed a breach of
these provisions if Tenant, immediately upon notification, commences to remedy
or rectify said failure. The judgment of any court of competent jurisdiction or
the admission by Tenant in any action against Tenant, whether Landlord be a
party thereto or not, that Tenant has violated any such law, statute, ordinance
or governmental rule, regulation, requirement, direction or provision, shall be
conclusive of that fact as between Landlord and Tenant. This Paragraph shall not
be interpreted as requiring Tenant to make structural changes or structural
improvements, except to the extent such changes or improvements are required as
a result of Tenant's use or alteration of the Premises. Tenant shall, at its
cost and expense, comply with any and all requirements pertaining to said
premises, of any insurance organization or company, necessary for the
maintenance of reasonable fire and public liability insurance covering the
Premises.
20. LIENS. Tenant shall keep the Premises and the Complex free from any liens
arising out of any work performed, materials furnished or obligation occurred by
Tenant. In the event that Tenant shall not, within ten (10) days following the
imposition of such lien, cause the same to be released of record, by bond or
otherwise, Landlord shall have, in addition to all other remedies provided
herein and by law, the right, but not the obligation, to cause the same to be
released by such means as it shall deem proper, including payment of the claim
giving rise to such lien. All sums paid by Landlord for such purpose, and all
expenses incurred by it in connection therewith, shall be payable to Landlord by
Tenant on demand with interest thereon as specified in Paragraph 44 below.
21. ASSIGNMENT AND SUBLETTING.
A. Landlord's Consent Required. Tenant shall not assign, transfer, or
hypothecate the leasehold estate under this Lease, or any interest therein, and
shall not sublet the Premises, or any part thereof, or any right or privilege
appurtenant thereto (including, but not limited to the parking spaces to be used
in connection with Tenant's occupancy), or suffer any other person or entity to
occupy or use the Premises, or any portion thereof, without, in each case, the
prior written consent of Landlord, which consent will not be unreasonably
withheld. Any attempt to do so without such prior consent shall be wholly void
and shall constitute a default by Tenant under this Lease. In the event Landlord
consents to any assignment or subletting, such consent shall not constitute
waiver of any of the restrictions of this Paragraph 21 and the same shall apply
to each successive assignment or subletting hereunder, if any. In no event shall
Landlord's consent to an assignment or subletting affect the continuing primary
liability of Tenant (which, following assignment shall be joint and several with
the assignee), or relieve Tenant of any of its obligations hereunder without an
express written release being given by Landlord. In the event that Landlord
shall consent to an assignment or subletting under this Paragraph 21, such
assignment or subletting shall not be effective until the assignee or sublessee
shall assume all of the obligations of this Lease on the part of Tenant to be
performed or observed and whereby the assignee or sublessee shall agree that the
provisions contained in this Lease shall, notwithstanding such assignment or
subletting, continue to be binding upon it with respect to all future
assignments and sublettings. Such assignment or sublease agreement shall be duly
executed and a fully executed copy thereof shall be delivered to Landlord, and
Landlord may collect Rent due hereunder directly from the assignee or sublessee.
Collection of Rent directly from an assignee or sublessee shall not constitute a
consent or a waiver of the necessity of consent to such assignment or
subletting, nor shall such collection constitute a recognition of such assignee
or sublessee as the Tenant hereunder or a release of Tenant from the performance
of all of its obligations hereunder.
B. Reasonable Consent. If Tenant complies with the following conditions,
Landlord shall not unreasonably withhold its consent to the assignment of the
Lease or the subletting of the Premises or any portion thereof: Tenant shall
submit in writing to Landlord (a) the name and legal composition of the proposed
assignee or subtenant; (b) the nature of the proposed assignee's or subtenant's
business to be carried on in the Premises; (c) the terms and provisions of the
proposed assignment or sublease; (d) such reasonable financial information as
Landlord may request concerning the proposed assignee of subtenant including,
without limitation, financial history, credit rating and business experience.
Tenant acknowledges that Landlord has entered into this Lease.
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<PAGE> 12
in reliance on the particular skills, knowledge and experience of Tenant and/or
the principal officer of Tenant with respect to the conduct of business in the
Premises. Without limiting Landlord's right to refuse to give such consent on
any other reasonable grounds, Landlord reserves the right to refuse to give such
consent if in Landlord's reasonable business judgment (i) the quality of
operation of the Complex may be in any way adversely affected during the Lease
Term; (i) the financial worth of the proposed new tenant is less than that of
Tenant executing this Lease; (iii) the proposed assignee's or subtenant's use of
the Premises involves the storage, use of disposal of any Hazardous Materials;
(iv) the proposed assignee or subtenant has been required by any governmental
authority to clean up Hazardous Materials; (v) the proposed assignee or
subtenant is subject to investigation or enforcement by any governmental
authority in connection with the use, disposal or storage of a Hazardous
Material; or (vi) investigation discloses other information reasonably
unsatisfactory to Landlord.
C. Bonus Rent. Tenant agrees that fifty percent (50%) of any amounts
paid by the assignee or sublessee as Basic Rent or its equivalent, however
described, in excess of the Basic Rent payable by Tenant hereunder (or, in the
case of sublease of a portion of the Premises, in excess of the Basic Rent
reasonably allocable to such portion), shall be the property of Landlord and
such amounts shall be payable directly to Landlord by the assignee or sublessee.
At Landlord's request, a written agreement shall be entered into by and among
Tenant, Landlord and the proposed assignee or sublessee confirming the
requirements of this paragraph.
D. Certain Transactions. The sale of all or substantially all of
Tenant's assets (other than bulk sales in the ordinary course of business), or,
if Tenant is a corporation, limited liability company, an unincorporated
association, or a partnership, the transfer, assignment or hypothecation of any
stock or interest in such corporation, company, association or partnership in
the aggregate in excess of twenty-five percent (25%) (except for publicly traded
shares of stock constituting a transfer of fifty-one percent (51%) or more in
the aggregate, so long as no change in the controlling interests of Tenant
occurs as a result thereof) shall be deemed an assignment within the meaning and
provisions of this Paragraph 21.
E. Costs; Acknowledgement of Reasonableness. Tenant agrees to reimburse
Landlord for Landlord's expenses (including attorneys' fees and costs) incurred
in connection with processing and documentation associated with any consents
requested by Tenant under this Paragraph 21. Tenant agrees that the provisions
of this Paragraph 21 are not unreasonable standards or conditions for any
purpose, including for purposes of the California Civil Code Section 1951.4(b).
22. SUBORDINATION AND MORTGAGES. In the event Landlord's title or leasehold
interest in the Premises or the Complex is now or hereafter encumbered by the
lien of any mortgage or deed of trust to secure a loan from a lender
(hereinafter referred to as a "Lender") to Landlord, Tenant shall, at the
request of Landlord or Lender, execute in writing an agreement subordinating its
rights under this Lease to the lien of such mortgage or deed of trust, or, if so
requested, agreeing that the lien of Lender's mortgage or deed of trust shall be
or remain subject and subordinate to the rights of Tenant under this Lease.
Notwithstanding any such subordination, Tenant's possession under this Lease
shall not be disturbed if Tenant is not in default and so long as Tenant shall
pay all Rent and fully and faithfully observe and perform all of the provisions
set forth in this Lease. Tenant acknowledges that upon receipt from a lender of
"Demand to Pay Rent to Party other than Landlord" under Section 2936 of the
California Civil Code, Tenant shall be required to pay all Rents to the Lender
as they become due.
23. ENTRY BY LANDLORD. At all reasonable times after 24 hours prior notice
(except in emergencies, in which case no notice is required) Landlord shall
have, the right to enter the Premises to inspect them subject to compliance with
Tenant's security procedures to perform any services to be provided by Landlord
hereunder; to submit the Premises to prospective purchasers, lenders, or tenants
and to post "For Rent" or "For Sale" or other signs relative to the same; to
post notices of nonresponsibility; and to alter, improve, repair the Premises,
all without abatement of Rent; and may erect scaffolding and other necessary
structures in or through the Premises where reasonably required by the character
of the work to be performed; provided, however that Landlord shall endeavor not
to unreasonably interfere with Tenant's use of the Premises. For each of the
foregoing purposes, Landlord shall at all times have and retain a key with which
to unlock all of the doors in an emergency. Any entry to the Premises obtained
by Landlord by any of said means, or otherwise, shall not under any
circumstances be construed or deemed to be forcible unlawful entry into or a
detainer of the premises or an eviction, actual or constructive, of Tenant from
the Premises or any portion thereof.
24. TENANT'S DEFAULT. The occurrence of any of the following shall be an
"Event of Default" (sometimes referred to herein as a "default") by Tenant and a
material breach of this Lease:
(1) Tenant shall fail to make any payment owed by Tenant under this
Lease, as and when due, and such failure is not cured within three (3) days
after Tenant receives written notice from Landlord specifying such failure. At
Landlord's election, any such notice shall be concurrent with, and in addition
to, any notice required under Section 1161 of the California Code of Civil
Procedure;
(2) Tenant shall fail to observe, keep or perform any of the terms,
covenants, agreements or conditions under this Lease that Tenant is obligated to
observe or perform, other than that described in subsection (1) above, for a
period thirty (30) days after Tenant receives written notice from Landlord of
said failure; provided, however, that if the nature of Tenant's default is such
that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default under this Lease if Tenant shall
commence the cure of such default within said thirty (30) day period and
diligently execute the same to completion within such time period as is
reasonably needed but not to exceed ninety (90) days from the date of Landlord's
notice. At Landlord's election, any such notice from Landlord shall be
concurrent with, and not in addition to, any notice required under Section 1151
of the California Code of Civil Procedure;
<PAGE> 13
(3) Tenant shall (i) make any general arrangement or
assignment for the benefit of creditors; (ii) become a "debtor" as defined in
11 U.S.C. Section 101 or any successor statute thereto (unless, in case of a
petition filed against Tenant, the same is dismissed within 60 days); (iii)
suffer the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within 30
days; or (iv) suffer the attachment, execution or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within 30 days. The
provisions of this subparagraph 24(3) shall also apply to any Guarantor of this
Lease. However, in the event that any provision of this subparagraph is contrary
to any applicable law, such provision shall be of no force or effect; or
(4) Tenant shall vacate or abandon the Premises at any time
during the Lease Term (except that Tenant may vacate so long as it pays Rent,
provides an on site security guard during normal business hours from Monday
through Friday, and otherwise performs its obligations hereunder).
25. LANDLORD'S REMEDIES AND RIGHTS
A. Termination of Lease. In case of an event of Default by Tenant,
Landlord shall have the right, in addition to all other rights available to
Landlord under this Lease or now or hereafter permitted by law or in equity, to
terminate this Lease by providing Tenant with a notice of termination. Upon
termination, Landlord may recover any damages proximately caused by Tenant's
failure to perform under this Lease, or which are likely in the ordinary course
of business to be incurred, including any amount expended or to be expended by
Landlord in an effort to mitigate damages, as well as any other damages which
Landlord is entitled to recover under any statute now or hereafter in effect.
Landlord's damages include, without limitation, the following:
(1) the worth at the time of the award of any unpaid Rent
which had been earned at the time of termination;
(2) the worth at the time of the award of the amount by
which the unpaid Rent which would have been earned after termination until the
time of the award exceeds the amount of the loss of such Rent that Tenant proves
could have been reasonably avoided; and
(3) the worth at the time of the award of the amount by
which the unpaid Rent for the balance of the term after the time of the award
exceeds the amount of the loss of such Rent that Tenant proves could have been
reasonably avoided.
As used in subparagraphs (1) and (2) above, the "worth at the
time of award" shall be determined by allowing interest at the maximum rate of
interest permitted by applicable law. As used in subparagraph (3), the "worth
at the time of award" shall be determined by discounting to present value such
amount at one percent (1%) more than the discount rate of the Federal Reserve
Bank in San Francisco in effect at the time of the award.
B. Continuation of Lease. In accordance with California Civil Code
Section 1951.4 (or any successor statute). Tenant acknowledges that in the event
Tenant has breached this Lease and abandoned the Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant's right to
possession, and Landlord may enforce all its rights and remedies under this
Lease, including the right to recover the Rent as it becomes due under this
Lease. Acts of maintenance or preservation or efforts to relet the Premises or
the appointment of a receiver upon initiative of Landlord to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's right
to possession.
C. Right of Entry. In case of an Event of Default by Tenant,
Landlord shall also have the right, in accordance with all applicable laws with
or without terminating this Lease, to enter the Premises and remove all persons
and personal property from the Premises, such property being removed and stored
in a public warehouse or elsewhere at Tenant's sole cost and expense for at
least thirty (30) days, and after such thirty (30) day period. Landlord shall
have the right to discard or otherwise dispose of such property in accordance
with California law. No removal by Landlord of any persons or property in the
Premises shall constitute an election to terminate this Lease. Such an election
to terminate may only be made by Landlord in writing, or decreed by an
arbitrator or a court of competent jurisdiction. Landlord's right of entry
shall include the right to restore the Premises to the condition required at
the expiration of the Lease Term and relet the Premises. All costs incurred in
such entry and reletting shall be paid by Tenant. Rents collected by Landlord
from any other tenant which occupies the Premises shall be offset against the
amounts owed to Landlord by Tenant. Tenant shall be responsible for any amounts
not recovered by Landlord from any other tenant which occupies the Premises.
Any payments made by Tenant shall be credited to the amounts owed by Tenant in
the sole order and discretion of Landlord, irrespective of any designation or
request by Tenant. No entry by Landlord shall prevent Landlord from later
terminating this Lease by written notice.
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<PAGE> 14
D. REMEDIES. Tenant hereby waives, for itself and all persons claiming
by, through or under Tenant, all rights and privileges which it might have
under any present or future law to redeem the Premises or to continue this
Lease after being legally dispossessed or ejected from the Premises. The rights
and remedies of Landlord set forth in this Lease are not exclusive, and
Landlord may exercise any other right or remedy available to it under this
Lease at law or in equity.
26. DESTRUCTION. In the event the Premises are destroyed in whole or in part
from any cause, except damage and destruction caused from vandalism or accident
for which Tenant is responsible for under Paragraph 12, Landlord may, at its
option:
(a) Rebuild or restore the Premises to their condition prior to the
damage or destruction, or
(b) Terminate this Lease, provided that the Premises is damaged to the
extent of twenty percent (20%) of the replacement cost thereof or to any extent
if (i) the damage is not covered by insurance, and/or (ii) the damage occurs
during the last twelve (12) months of the Lease Term.
Landlord shall give Tenant notice in writing within thirty (30) days from
the destruction of the Premises of its election to either rebuild and restore
them, or to terminate this Lease. In the event Landlord agrees to rebuild or
restore the Premises, Landlord shall do so promptly at its expense. Except
when such damage is caused by Tenant or Tenant's agents, employees or
contractors and there is no rental loss insurance proceeds payable, Tenant
shall be entitled to a reduction in Rent while such repair is being made in the
proportion that the area of the Premises rendered untenantable by such damage
bears to the total area of the Premises. If Landlord initially estimates that
the rebuilding or restoration will exceed 180 days or if Landlord does not
complete the rebuilding or restoration within one hundred eighty (180) days
following the date of destruction (such period of time to be extended for
delays caused by the fault or neglect of Tenant or because of Acts of God, acts
of public agencies, labor disputes, strikes, fires, freight embargoes, rainy or
stormy weather, inability to obtain materials, supplies or fuels, acts of
contractors or subcontractors, or delay of the contractors or subcontractors
due to such causes or other contingencies beyond the control of Landlord), then
Tenant shall have the right to terminate this Lease by giving thirty (30) days
prior written notice to Landlord. Notwithstanding anything herein to the
contrary, Landlord's obligation to rebuild or restore shall include the initial
Tenant Improvements, but shall not include restoration of Tenant's fixtures,
equipment, (including telecommunication equipment, whether or not located
within the Premises), merchandise, or any improvements, alterations, or
additions made by Tenant to the Premises, which Tenant shall forthwith replace
or fully repair at Tenant's sole cost and expense provided this Lease is not
cancelled according to the provisions above.
Unless this Lease is terminated pursuant to the foregoing provisions, this
Lease shall remain in full force and effect. Tenant hereby expressly waives any
statutory rights of termination which may arise by reason of any partial or
total destruction of the Premises.
In the event the damage or destruction of the Premises is caused by Tenant
or Tenant's employees, agents or independent contractors, Tenant shall pay the
deductible portion of Landlord's insurance proceeds.
27. EMINENT DOMAIN. If all or any part of the Premises shall be taken by any
public or quasi-public authority under the power of eminent domain or
conveyance in lieu thereof, this Lease shall terminate as to any portion of the
Premises so taken or conveyed on the date when title vests in the condemnor,
and Landlord shall be entitled to any and all payment, income, rent, award, or
any interest therein whatsoever which may be paid or made in connection with
such taking or conveyance, and Tenant shall have no claim against Landlord or
otherwise for the value or any unexpired term of this Lease. Notwithstanding
the foregoing Paragraph, any compensation specifically awarded to Tenant for
loss of business, Tenant's personal property, moving cost or loss of goodwill,
shall be and remain the property of Tenant.
If (i) any action or proceeding is commenced for such taking of the
Premises or any part thereof, or if Landlord is advised in writing by any
entity or body having the right or power of condemnation of its intention to
condemn the Premises or any portion thereof, or (ii) any of the foregoing
events occur with respect to the taking of any other space in the Complex, or
(iii) any such spaces are taken or conveyed in lieu of such taking, Landlord
shall have the right to terminate this Lease by giving Tenant written notice
thereof within sixty (60) days of the date of receipt of said written advice,
or commencement of said action or proceeding, taking or conveyance, which
termination shall take place as of the first to occur of the last day of the
calendar month next following the month in which such notice is given or the
date on which title to the Premises shall vest in the condemnor.
In the event of a partial taking or conveyance of the Premises, if the
portion of the Premises taken or conveyed is so substantial that the Tenant
can no longer reasonably conduct its business, Tenant shall have the privilege
of terminating this Lease within sixty (60) days from the date of such taking
or conveyance upon written notice to Landlord of its intention to do so, and
upon giving of such notice this Lease shall terminate on the last day of the
calendar month next following the month in which such notice is given, upon
payment by Tenant of the Rent from the date of such taking or conveyance to the
date of termination.
If a portion of the Premises shall be taken by condemnation or conveyance
in lieu thereof and neither Landlord nor Tenant terminate this Lease as
provided herein, this Lease shall continue in full force and effect as to the
part of the Premises not so taken or conveyed, and the Rent herein shall be
apportioned as of the date of such taking or conveyance so that thereafter the
Rent to be paid by Tenant shall be in the ratio that the area of the portion of
the Premises not so taken or conveyed bears to the total area of the Premises
prior to such taking.
28. SALE OR CONVEYANCE BY LANDLORD. In the event of a sale or conveyance of
the Complex or any interest therein, by any owner of the reversion then
constituting Landlord, the transferor shall thereby be released from any further
liability upon any of the terms, covenants or conditions (express or implied)
herein contained in favor of Tenant, and in such event, insofar as such
transfer is concerned, Tenant agrees to look solely to the responsibility of
the successor in interest of such transferor in and to the Complex and this
Lease. This Lease shall not be affected by any such sale or conveyance, and
Tenant agrees to attorn to the successor in interest of such transferor.
<PAGE> 15
29. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest of
Landlord in the Complex is encumbered by mortgage or deed of trust, and such
interest is acquired by the lender or any third party through judicial
foreclosure, non-judicial foreclosure, or conveyance in lieu thereof, Tenant
hereby agrees to attorn to such purchaser or transferee and to recognize such
purchaser or transferee as the landlord under this Lease. In the event the lien
of the deed of trust securing the loan from a lender to Landlord is prior and
paramount to the Lease, this Lease shall nonetheless continue in full force and
effect for the remainder of the unexpired term hereof, all the same rental
herein reserved and upon all the other terms, conditions and covenants herein
contained.
30. HOLDING OVER. Any holding over by Tenant after expiration or other
termination of the Lease Term shall not constitute a renewal of the Lease or
give Tenant any rights to the Premises except as expressly provided in this
Lease. Any holding over after the expiration or other termination of the Lease
Term, with the prior written consent of Landlord, shall be construed to be a
tenancy from month to month, on the same terms and conditions herein specified
insofar as applicable except that the monthly Basic Rent shall be increased to
an amount equal to one hundred ten (110%) percent of the monthly Basic Rent
required during the last month of the Lease Term.
31. CERTIFICATE OF ESTOPPEL. Tenant shall within twenty (20) days after
written notice from Landlord, at any time, execute, acknowledge and deliver to
Landlord a statement in writing (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) and the date to which the rent and other charges are paid in
advance, if any; (ii) 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 (iii) certifying to such other matters
concerning the Premises, the Lease or Tenant's tenancy as Landlord may request.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Premises. Tenant's failure to deliver such statement
within such time shall be conclusive upon Tenant that this Lease is in full
force and effect, without modification except as may be represented by
Landlord, that there are no uncured defaults in Landlord's performance, and
that not more than one month's Rent has been paid in advance.
32. CONSTRUCTION CHANGES. It is understood that the description of the
Premises and the location of ductwork, plumbing and other facilities therein
are subject to such minor changes as Landlord or Landlord's architect determines
to be desirable in the course of construction of the Premises, and no such
changes, or any changes in plans for any other portions of the Premises or the
Complex shall affect this Lease or entitle Tenant to any reduction of Rent
hereunder or result in any liability of Landlord to Tenant. Landlord does not
guarantee the accuracy of any drawings supplied to Tenant and verification of
the accuracy of such drawings rests with Tenant.
33. RIGHT OF LANDLORD TO PERFORM. All terms, covenants and conditions of
this Lease to be performed or observed by Tenant shall be performed or observed
by Tenant at Tenant's sole cost and expense and without any reduction of Rent.
If Tenant shall fail to pay Rent, required to be paid by it hereunder or shall
fail to perform any other term or covenant required to be performed by it
hereunder after expiration of any applicable cure periods, and such failure
shall continue for five (5) days after written notice thereof from Landlord,
Landlord, without waiving or releasing Tenant from any obligation of Tenant
hereunder, may, but shall not be obligated to, make any such payment or perform
any such other term or covenant on Tenant's part to be performed. All sums so
paid by Landlord and all necessary costs of such performance by Landlord
together with interest thereon at the rate of interest specified in Paragraph
44 below, shall be paid to Landlord on demand as Additional Rent, and Landlord
shall have (in addition to any other right or remedy of Landlord) the same
rights and remedies in the event of nonpayment by Tenant of Rent hereunder.
34. ATTORNEY'S FEES. In the event that either Landlord or Tenant should
bring suit or become involved in any proceeding for the possession of the
Premises, for the recovery of any sum due under this Lease, or because of the
breach of any provision of this Lease, or for any other relief against the
other party hereunder, then all costs and expenses, including reasonable
attorneys' fees, incurred by the prevailing party therein shall be paid by the
other party, which obligation on the part of the other party shall be deemed to
have accrued on the date of the commencement of such action or proceeding and
shall be enforceable whether or not the action or proceeding is prosecuted to
judgment. Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy hereunder, Tenant
shall pay to Landlord its costs and expenses incurred in such suit, including a
reasonable attorneys' fees.
7
<PAGE> 16
35. WAIVER. No covenant, term or condition or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver
is claimed, and any waiver of the breach of any covenant, term or condition
shall not be deemed to be a waiver of any other covenant, term or condition or
any subsequent failure of the party failing to perform or observe the same or
any other such term, covenant or condition. Acceptance by Landlord of any
performance by Tenant after the time the same shall have become due shall
constitute a waiver by Landlord of such breach or default of any covenant,
term or condition.
36. NOTICES. All notices, demands, requests, advises or designations
(collectively "Notices") which may be or are required to be given by either
party to the other party hereunder shall be in writing. All Notices shall be
sufficiently given, made or delivered if (i) to Tenant, personally served on
Tenant at 4435 Fortran Dr. by leaving the same at the Premises, or (ii) to
Landlord, if personally served on a general partner of Landlord executing this
Lease. Notice shall also be sufficiently given made or delivered if sent by (a)
postage prepaid United States mail or overnight courier, addressed as specified
in Paragraph 1.L. or (b) facsimile transmission to the numbers specified in
Paragraph 1.L. with confirming copy sent by United States mail. Each Notice
referred to in this Paragraph shall be deemed received on the date of the
personal service or facsimile transmission, the next business day after sending
via overnight courier, or on the third (3rd) day after mailing thereof by United
States mail, postage prepaid, as the case may be. The address to which Notices
are to be delivered may be changed by either party by delivering notice of such
pursuant to this Section.
37. EXAMINATION OF LEASE. Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of or option for a lease,
and this instrument is not effective as a lease or otherwise until its
execution and delivery by both Landlord and Tenant.
38. DEFAULT BY LANDLORD. Landlord shall not be in default unless Landlord
fails to perform obligations required of Landlord within a reasonable time, but
in no event earlier than thirty (30) days after written notice by Tenant to
Landlord and to the holder of any mortgage or deed of trust covering the
Premises whose name and address shall have previously been furnished to Tenant
in writing, specifying wherein Landlord has failed to perform such obligations;
provided, however, that if the nature of Landlord's obligations is such that
more than thirty (30) days are required for performance, then Landlord shall
not be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
39. AUTHORITY. If Tenant is a corporation (or other entity) each individual
executing this Lease on behalf of said corporation (or other entity) represents
and warrants that he or she is duly authorized to execute and deliver this
Lease on behalf of said corporation (or other entity) in accordance with the
by-laws of said corporation (or in accordance with the agreement of such other
entity) and that this Lease is binding upon said corporation (or other entity)
in accordance with its terms. Tenant shall, within thirty (30) days after
execution of this Lease, deliver to Landlord a certified copy of the resolution
of the Board of Directors or other governing members of said corporation (or
other entity) authorizing or ratifying the execution of this Lease.
40. LIMITATION OF LIABILITY. In consideration of the benefits accruing
hereunder, Tenant and all successors and assigns covenant and agree that, in
the event of any actual or alleged failure, breach or default hereunder by
Landlord:
(i) the sole and exclusive remedy and source or recovery for any
judgment or award shall be against Landlord's interest in the Premises:
(ii) no partner of Landlord shall be sued or named as a party in any
suit or action (except as may be necessary to secure jurisdiction of the
partnership);
(iii) no service of process shall be made against any partner of Landlord
(except as may be necessary to secure jurisdiction of the partnership);
(iv) no partner of Landlord shall be required to answer or otherwise
plead to any service of process;
(v) no judgment will taken against any partner of Landlord;
(vi) any judgment taken against any partner of Landlord may be vacated
and set aside at any time without hearing;
(vii) no writ of execution will ever be levied against the asset of any
partner of Landlord;
(viii) these covenants and agreements are enforceable both by Landlord and
also by any partner of Landlord.
Tenant agrees that each of the foregoing covenants and agreements shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or at common law.
41. BROKERS. Tenant warrants that it has had dealings with only the real
estate broker(s) or agent(s) specified in Paragraph 1.M in connection with the
negotiation of this Lease and that it knows of no other real estate broker or
agent who is entitled to a commission in connection with this Lease. Tenant
shall indemnity, defend, protect and hold harmless Landlord and Landlord's
agents, employees and independent contractors from and against any and all
liabilities, losses, costs, expenses and damages (including attorneys' fees and
costs) arising out of any allegations or claim by any third party, other than
the broker(s) specified above, for a commission or fee in connection with the
negotiation of this Lease.
<PAGE> 17
42. SIGNS. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed or printed or affixed on or to any part of the outside of
the Premises or any exterior windows of the Premises without the prior written
consent of Landlord. If Tenant does not obtain Landlord's prior written consent
pursuant to the preceding sentence, Landlord shall have the right to remove any
such sign, placard, picture, advertisement, name or notice without notice to and
at the expense of Tenant. If Tenant is allowed to print or affix or in any way
place a sign in, on, or about the Premises, upon expiration or other sooner
termination of this Lease, Tenant at Tenant's sole cost and expense shall both
remove such sign and repair all damage in such a manner as to restore all
aspects of the appearance of the Premises to the condition prior to the
placement of said sign.
All approved signs or lettering on outside doors shall be printed, painted,
affixed or inscribed at the expense of Tenant or by a person approved of by
Landlord.
Tenant shall not place anything or allow anything to be placed near the
glass of any window, door partition or wall which may, in Landlord's judgment,
appear unsightly from outside the Premises.
43. HAZARDOUS MATERIALS.
A. Definitions. As used herein, the term "Hazardous Material" shall mean
any substance or material which has been determined by any state, federal, or
local governmental authority to be capable of posing a risk of injury to health,
safety or property including all of those materials and substances designated as
hazardous or toxic by the Environmental Protection Agency, the California Water
Quality Control Board, the Department of Labor, the California Department of
Industrial Relations, the Department of Transportation, the Department of
Agriculture, the Department of Human Services, the Food and Drug Agency or any
other governmental agency which regulates hazardous or toxic substances in the
environment. Without limiting the generality of the foregoing, the term
"Hazardous Material" shall include (i) all of those materials and substances
defined as "Toxic Materials" in Sections 66680 through 66685 of Title 22 of the
California Administrative Code, Division 4, Chapter 30, as the same shall be
amended from time to time, or any other federal, state or local statute, law,
ordinance, resolution, code, rule, regulation, order or decree regulating,
relating to, or imposing liability or standards of conduct concerning, any
hazardous, toxic or dangerous waste, substance or material as now or at any time
hereafter in effect, (ii) any substance, product, waste or other material of any
nature whatsoever which may give rise to liability under any statutory or common
law theory based on negligence, trespass, intentional tort, nuisance or strict
liability or under any reported decisions of a state or federal court, or (iii)
petroleum or crude oil other than petroleum and petroleum products which are
contained within regularly operated motor vehicles.
B. Restriction on Use. Tenant shall not cause or permit any Hazardous
Material to be used, generated, released, discharged, transported to or from,
stored, or disposed of in or about the Premises, the Complex, or any other land
or improvements in the vicinity of the Premises or the Complex, without the
prior written consent of Landlord, which consent may be withheld in Landlord's
sole and absolute discretion. However, subject to the terms and conditions set
forth herein, Landlord agrees that so long as the original party named herein as
Tenant remains the Tenant under this Lease, and so long as no uncured Event of
Default exists under this Lease, Tenant shall be permitted to use and store in
the Premises only the substances listed on Exhibit E attached hereto (however,
the inclusion of Exhibit E shall in no way be deemed to create any obligation on
Landlord's part to review the list of Hazardous Materials for conformity to
laws). Without limiting the generality of the foregoing, Tenant, at its sole
cost and expense, shall comply with all laws relating to the storage, use,
generation, release, transportation and disposal of Hazardous Materials. If the
presence of any Hazardous Material on the Premises caused or permitted by Tenant
results in contamination of the Premises, the Complex, or any nearby premises,
Tenant, at its sole cost and expense, shall promptly take all actions necessary
to return the same to the condition existing prior to such contamination.
Tenant shall indemnify, defend, protect and hold harmless Landlord and
Landlord's agents, employees and independent contractors from and against any
and all claims, judgments, damages (including, without limitation, punitive
damages), losses, penalties, fines, demands, liabilities (including strict
liability), encumbrances, liens, costs and expenses of investigation and defense
of any claim, including, without limitation, reasonable attorneys' fees and
disbursements and consultants' fees, arising out of, relating to or resulting
from any storage, use, generation, discharge, treatment, transportation, release
or disposal by Tenant, or Tenant's agents, employees or independent contractors,
of any Hazardous Material upon, about, above or beneath the Premises, the
Complex or any nearby premises. This indemnity shall survive the expiration or
earlier termination of this Lease. Tenant shall not suffer any lien to be
recorded against the Premises or the Complex as a consequence of a Hazardous
Material, including any so-called state, federal or local "super fund" lien
related to the "clean up" of a Hazardous Material in or about the Premises, the
Complex or any other premises.
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<PAGE> 18
C. Compliance. Tenant shall immediately notify Landlord of any inquiry,
test, investigation, or enforcement proceeding by or against Tenant or the
Premises concerning a Hazardous Material. Tenant acknowledges that Landlord,
as the owner of the Premises, at its election, shall have the sole right, at
Tenant's expense, to negotiate, defend, approve and appeal any action taken or
order issued with regard to a Hazardous Material by an applicable governmental
authority. Landlord shall have the right to appoint a consultant, at Tenant's
expense, to conduct an investigation to determine whether any Hazardous
Materials being used, stored and disposed of in an appropriate manner. Tenant,
at its expense, shall comply with all recommendations of the consultant.
D. Certification Upon Termination of Lease. Upon the expiration or
earlier termination of the Lease, Tenant, at its sole cost, shall remove all
Hazardous Materials from the Premises and shall provide a certificate to
Landlord at Landlord's request certifying that there is no contamination of
soil in or about the Premises and that there is no other contamination of
Hazardous Materials in the Premises. If Tenant fails to so surrender the
Premises, Tenant shall, in addition to its obligations under Paragraph 43.B
above, indemnify, defend, protect and hold harmless Landlord and Landlord's
agents, employees and independent contractors from and against any and all
damages arising out of, related to or resulting from Tenant's failure to
surrender the Premises as required by this Paragraph, including without
limitation any claims or damages in connection with the condition of the
Premises such as damages occasioned by the inability to relet the Premises or a
reduction in the fair market and/or rental value of the Premises by reason of
the existence of any Hazardous Material upon, about, above or beneath the
Premises, the Complex or any nearby premises.
E. Clean-up Activities. If any action is required to be taken by a
governmental authority to clean-up Hazardous Materials from the Premises 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 in addition to the requirements
of Paragraph 30, Landlord shall be entitled to all damages directly or
indirectly incurred in connection with such holding over, including without
limitation, damages occasioned by the inability to relet the Premises or a
reduction of the fair market and/or rental value of the Premises.
44. INTEREST. Any sum accruing to Landlord under the provisions of this
Lease which shall not be paid by Tenant within thirty (30) days after such sum
becomes due, shall bear interest from the expiration of such 30 day period,
until paid, at the rate of twelve percent (12%) per annum, or the maximum rate
then permitted under applicable law, whichever is less.
45. MISCELLANEOUS AND GENERAL PROVISIONS.
A. Use of Building Name. Tenant shall not, without the written consent
of Landlord, use the name of the Building for any purpose other than as the
address of the business conducted by Tenant in the Premises.
B. Governing Law, Partial Invalidity. This Lease shall in all respects
be governed by and construed in accordance with the laws of the State of
California. If any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.
C. Definitions; Binding Effect. The term "Premises" includes the space
leased hereby and any improvements now or hereafter installed therein or
attached thereto. The term "Landlord" or any pronoun used in place thereof
includes the plural as well as singular and the successors and assigns of
Landlord. The term "Tenant" or any pronoun used in place thereof includes the
plural as well as the singular and individuals, firms, associations,
partnerships and corporations, and their and each of their respective
heirs, executors, administrators, successors and permitted assigns, according to
the context hereof, and the provisions of this Lease shall inure to the benefit
of and bind such heirs, executors, administrators, successors and permitted
assigns.
The term "person" includes the plural as well as the singular and
individuals, firms, associations, partnerships and corporations. Words used in
any gender include other genders. If there be more than one Tenant,
the obligations of Tenant hereunder are joint and several. The paragraph
headings of this Lease are for convenience of reference only and shall have no
effect upon the construction or interpretation of any provision hereof.
D. Time of the Essence. Time is of the essence of this Lease and of
each and all of its provisions.
E. Quitcalm of Leasehold interest. At the expiration or earlier
termination of this Lease. Tenant shall execute, acknowledge and deliver to
Landlord, within ten (10) days after written demand from Landlord to Tenant,
any quitclaim deed or other document required by any reputable title company
licensed to operate in the State of California, to remove the cloud or
encumbrance created by this Lease from the real property of which Tenant's
Premises are a part.
F. Entire Agreement. All exhibits, riders and attachments referenced in
this Lease are hereby incorporated into this Lease. This instrument along with
any exhibits, riders and attachments hereto constitutes the entire agreement
between Landlord and Tenant relative to the Premises and this agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord and Tenant
hereby acknowledge that neither party has relied upon any representation
concerning the Premises that is not set forth in this Lease and agree that all
prior or contemporaneous oral agreements between and among themselves and their
agents or representatives relative to the leasing of the Premises are merged
in or revolved by this agreement.
G. Recording of Lease. Neither Landlord nor Tenant shall record this
Lease or a short form memorandum hereof without the consent of the other.
<PAGE> 19
H. Amendments Required by Lender. Tenant further agrees to execute any
amendments required by a lender to enable Landlord to obtain financing, so long
as Tenant's rights hereunder are not substantially or adversely affected.
I. Air Rights Retained by Landlord. Tenant covenants and agrees that no
diminution or shutting off of light, air or view by any structure which may be
hereafter erected (whether or not by Landlord) shall in any way affect this
Lease, entitle Tenant to any reduction of Rent hereunder or result in any
liability of Landlord to Tenant.
K. Options Personal to Tenant. Any Options shall (i) be personal to the
original Tenant executing this Lease (ii) not be assignable and (iii) not be
separated from this Lease in any manner, whether by reservation or otherwise.
Any such Option may be exercised only by the original Tenant executing this
lease while occupying the Premises and provided that such Option shall be
exercised in good faith without the intention of thereafter assigning this
Lease or subletting the Premises, or any portion thereof, and may not be
exercised or assigned, voluntarily or involuntarily, by or to any other person
or entity.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered this
Lease as of the day and year first above written.
LANDLORD: GEOMAX, a California TENANT: 3DFX Interactive, Inc. (TDFX),
general partnership a California corporation
By GEORGE L. QUINN JR. By GARY MARTIN
------------------------------- -----------------------------------
Print Name Print Name
/s/ GEORGE L. QUINN JR. /s/ GARY MARTIN
------------------------------- -----------------------------------
Signature Signature
PARTNER V.P. FINANCE
------------------------------- -----------------------------------
Title of Signatory Title of Signatory
By MAHMOUD GAHRAHMAT By
------------------------------- -----------------------------------
Print Name Print Name
/s/ MAHMOUD GAHRAHMAT
------------------------------- -----------------------------------
Signature Signature
PARTNER
------------------------------- -----------------------------------
Title of Signatory Title of Signatory
Landlord's Initials
--------
Tenant's Initials
--------
-9-
<PAGE> 20
EXHIBIT A
LEGAL DESCRIPTION OF COMPLEX
The real property referred to in this Lease as the "Complex" shall mean and
include all that certain real property situated in the County of Santa Clara,
State of California, more particularly described as follows:
PARCEL 3, as shown on that certain Map entitled, "Parcel Map", which was
filed for record in the office of the Recorder of the County of Santa
Clara, State of California on November 2, 1984 in Book 535 of Maps, at
page(s) 52 and 53.
<PAGE> 21
EXHIBIT B
SITE PLAN OF COMPLEX AND BUILDING
<PAGE> 22
EXHIBIT C
WORK LETTER AGREEMENT
Landlord and Tenant hereby agree as follows with regard to the Tenant
Improvements:
1. TENANT IMPROVEMENTS. Reference herein to "Tenant Improvements" shall
include all work to be done in the Premises pursuant to the Tenant Improvement
Plans described in Paragraph 2 below, for example, partitioning, doors,
ceilings, floor coverings, finishes (including paint and wall covering),
electrical (including lighting, switching, receptacles, telephone outlets etc.),
plumbing, restrooms, locker rooms, heating, ventilating and air conditioning,
and fire protection.
2. TENANT IMPROVEMENT PLANS. Prior to execution of the Lease, or as soon as
reasonably practicable thereafter, Tenant shall submit to Landlord a space plan
for Landlord's approval. Landlord's approval shall not be unreasonably withheld.
Such approved space plan shall be attached hereto as Exhibit "C-1". No material
changes shall be made to the approved space plan without the consent of
Landlord. The final working drawings and specifications for the Tenant
Improvements shall be prepared by Tenant's architect based upon the approved
space plan. Such final working drawings and specifications may be referred to
herein as the "Tenant Improvement Plans."
Tenant Improvement Plans shall be submitted to the appropriate governmental
body for plan checking and a building permit. Tenant, with Landlord's
cooperation, agrees to make all changes required by any public agency to conform
with governmental regulations. Any costs resulting from changes to the approved
space plan and/or the Tenant Improvement Plans shall be paid by Tenant.
3. CONSTRUCTION OF TENANT IMPROVEMENTS. Upon approval from the City of San
Jose, Tenant shall enter into a construction contract with a licensed contractor
of Tenant's choice for the installation of the Tenant Improvements in accordance
with the Tenant Improvement Plan. Such contract shall be approved and initialed
by Landlord and attached hereto as Exhibit "C-2". Tenant shall supervise the
completion of such work and shall use diligent efforts to secure completion of
the work in a timely manner.
4. PAYMENT OF COST OF THE TENANT IMPROVEMENTS. All tenant improvement costs
shall be paid by the Tenant.
5. NOTICES OF NON-RESPONSIBILITY. Landlord may place at any time during the
construction phase "notices of non-responsibility" in accordance with mechanics'
lien laws.
Landlord: GEOMAX, a California Tenant: 3DFX Interactive, Inc. (TDFX),
general partnership a California corporation
By: /s/ GEORGE L. QUINN JR. By: /s/ GARY MARTIN
--------------------------- ---------------
Its: Partner Its: V.P. Finance
-------------------------- --------------
By: /s/ MAHMOUD GAHRAHMAT Date: 1-22-98
--------------------------- -------------
Its: Partner
--------------------------
Date: 1-22-98
-------------------------
<PAGE> 23
EXHIBIT D
ACKNOWLEDGMENT OF COMMENCEMENT
Landlord: GEOMAX, a California general partnership
--------------------------------------------------------------
Tenant: 3DFX Interactive, Inc. (TDFX), a California corporation
----------------------------------------------------------------
Complex:
---------------------------------------------------------------
Premises: 110 Nortech Parkway, San Jose, California
--------------------------------------------------------------
For the Lease dated January 6, 1998, the undersigned hereby certifies:
I. That the undersigned Tenant occupies the above-described Premises
consisting of approximately 52,040 square feet.
II. That the initial Lease term commenced on _________, 19___ and will
terminate on April 30, 2007.
III. That Tenant's obligation to pay monthly Basic Rent in the amount of
$72,856.00 commenced or will commence on ____________, 19___.
IV. That a security deposit of $72,856.00 has been paid by Tenant to
Landlord.
V. That all construction to be performed by Landlord is complete and has
been accepted by Tenant.
Dated as of this _____ day of ___________, 19__.
LANDLORD: GEOMAX, a California TENANT: 3DFX Interactive, Inc. (TDFX)
general partnership a California corporation
By By GARY MARTIN
---------------------------------- -----------------------------------
Print Name Print Name
/s/ GARY MARTIN
---------------------------------- -----------------------------------
Signature Signature
V.P. FINANCE
---------------------------------- -----------------------------------
Title of Signatory Title of Signatory
By By
---------------------------------- -----------------------------------
Print Name Print Name
---------------------------------- -----------------------------------
Signature Signature
---------------------------------- -----------------------------------
Title of Signatory Title of Signatory
DO NOT EXECUTE UNTIL THE EXACT COMMENCEMENT DATE HAS
BEEN ESTABLISHED PURSUANT TO PARAGRAPH 6.B OF THE LEASE.
-13-
<PAGE> 24
EXHIBIT E
HAZARDOUS MATERIALS
Subject to the terms and conditions set forth in Paragraph 43 of the
Lease, so long as the original party named therein as Tenant remains the
Tenant under the Lease, and so long as no uncured Event of Default exists under
the Lease, Tenant shall be permitted to use and store in the Premises only the
substances listed below. If no items are listed, then Tenant shall not be
entitled to use or store any Hazardous Material on or about the Premises.
Any Hazardous Material used for general office purposes.
<PAGE> 25
EXHIBIT F
ESTIMATED 1998 NNN EXPENSES
FOR
110 NORTECH PARKWAY, SAN JOSE, CALIFORNIA
Annual Per S.F./Month
--------- --------------
Taxes (including assessments*): $ 86,334 $0.138
Insurance: $ 5,352 $0.103
Ground Maintenance: $ 9,367 $0.015
Repair and Maintenance: $ 6,245 $0.010
Exterior Utilities: $ 2,498 $0.004
Capital Reserves: $ 11,865 $0.019
Property Management: $ 26,228 $0.042
-------- ------
TOTAL ANNUAL ESTIMATED EXPENSES: $147,889 $0.237
Tenant always pays inside water, PG&E, HVAC maintenance contract.
Capital Reserves are for roof replacement, HVAC replacement and outside paint.
* See attached tax bill
<PAGE> 26
RIDER ONE
THIS RIDER ONE SHALL BE ATTACHED TO AND MADE A PART OF THAT CERTAIN LEASE
AGREEMENT BY AND BETWEEN GEOMAX, A CALIFORNIA GENERAL PARTNERSHIP ("LANDLORD")
AND 3DFX INTERACTIVE, INC. (TDFX) ("TENANT") FOR THE PREMISES LOCATED AT 110
NORTECH PARKWAY, SAN JOSE, CALIFORNIA AND DATED JANUARY 6, 1998, FOR REFERENCE
PURPOSES ONLY.
46. OPTION TO RENEW - ARBITRATED RENT: Tenant is given the option to extend the
term subject to all the provisions contained in this Lease, except for
minimum monthly rent, for a period of three (3) years ("extended term")
following the expiration of the initial term, by giving notice of exercise
of the option ("option notice") to Landlord at least four (4) months but no
more than six (6) months before the expiration of the initial term.
Provided that, if Tenant is in material default on the date of giving the
option notice, the option notice shall be totally ineffective, or if tenant
is in material default on the date the extended term is to commence,
Landlord may elect that the extended term shall not commence and this Lease
shall expire at the end of the initial term.
The minimum monthly rent is to be set at 100% of market rent. The parties
shall have thirty (30) days after Landlord receives the option notice in
which to agree on minimum monthly rent during the extended term. If the
parties agree on the minimum monthly rent for the extended term during that
period, they shall immediately execute an amendment to this Lease stating
the minimum monthly rent for the extended term. If the parties are unable
to agree on the minimum monthly rent for the extended term within that
period, then within ten days after the expiration of that period, each
party, at its cost and by giving notice to the other party, shall appoint a
real estate appraiser with at least five years' full-time commercial
appraisal experience in the area in which the premises are located, to
appraise and set the minimum monthly rent for the extended term. If a party
does not appoint an appraiser within ten days after the other party has
given notice of the name of its appraiser, the single appraiser appointed
shall be the sole appraiser and shall set the minimum monthly rent for the
extended term. If the two appraisers are appointed by the parties as stated
in this paragraph they shall meet promptly and attempt to set the minimum
monthly rent for the extended term. If they are unable to agree within ten
days after the second appraiser has been appointed, they shall attempt to
elect a third appraiser meeting the qualifications stated in this paragraph
within ten days after the last day the two appraisers are given to set the
minimum monthly rent. Each of the parties shall bear one half of the cost
of appointing the third appraiser and of paying the third appraiser's fee.
The third appraiser, however selected, shall be a person who has not
previously acted in any capacity for either party.
Within thirty days after the selection of the third appraiser, a majority
of the appraisers shall set the minimum monthly rent for the extended term.
If a majority of the appraisers are unable to set the minimum monthly rent
within the stipulated period of time, the three appraisers shall be added
together and their total divided by three; the resulting quotient shall be
the minimum monthly rent for the premises during the extended term. In no
event, however, shall the minimum monthly rent for the first year of the
extended term be less than the minimum monthly rent for the last year of
the initial term, unless otherwise agreed to in writing by Landlord and
Tenant.
During the extended term, the rent shall be adjusted annually on each
anniversary of the extended term (the Base Period) if the Consumer Price
Index - All Urban Consumers - San Francisco/Oakland/San Jose metropolitan
area (1982-84 = 100), as published by the Bureau of Labor Statistics (the
Index) increases over the Base Period Index. The base period Index shall be
the index for the calendar month which is four months prior to the month in
which the extended term begins. The base period index shall be compared
with the Index for the same calendar month for each subsequent year
(comparison month). If the Index for any comparison month is higher than
the base period Index, then the monthly rent for the next year shall be
increased by the identical percentage. In no event, however, should each
annual adjustment be less than four percent (4%) or more than eight percent
(8%) of the previous years rent.
<PAGE> 27
47. SIGNAGE: Tenant shall be allowed to install a sign at Tenant's sole cost
and liability in accordance with the City of San Jose's sign ordinance.
48. ESTIMATED 1998 NNN EXPENSES: Attached is Landlord's estimated 1998 NNN
expenses (see Exhibit F).
49. EARLY ACCESS: Tenant will have the right to access the premises upon
delivery of the possession of the Premises prior to the scheduled
commencement date to install Tenant Improvements referenced in Exhibit C.
Tenant's early access will be subject to all the terms and provisions of
the Lease except that Tenant will not be required to pay any base rent and
operating expenses until the commencement date.
50. TENANT IMPROVEMENTS. Tenant improvements are to be constructed within the
Premises. Tenant shall construct such Tenant Improvements pursuant to the
terms of the attached work letter agreement (see Exhibit C).
51. CAPITAL RESERVE ACCOUNT: The provisions of Section 9 of the Lease to the
contrary notwithstanding, as Additional Rent, Tenant shall pay:
A. into a capital reserve account Tenant's Share of reasonable reserves
for the replacement of the HVAC, roof, and exterior paint of the Building
(the "Capital Reserve Account"). The monthly installment into the Capital
Reserve Account may be adjusted annually based on any CPI increases as set
forth in section 46 above. Tenant shall have no further obligation to pay
any additional expenses associated with the replacement of such capital
expense items notwithstanding any deficiencies in the Capital Reserve
Account at the time of such replacement, unless the replacement is required
as a result of the negligence of Tenant in which event Tenant shall pay all
costs not covered by insurance which are incurred in connection with such
replacement; and
B. not more than (i) Ten Thousand Dollars ($10,000) per year for the
maintenance and repair of the roof and its components (other than
structural repairs which are Landlord's sole cost), and (ii) Five Thousand
Dollars ($5,000) per year for the repair of the HVAC system servicing the
Building. In the event the repair costs exceed the applicable caps set
forth in the preceding sentence, then Landlord shall be required to replace
the capital expense item(s) which have had a continuing repair need, rather
than continue to repair such item(s).
52. At Tenant's option, Landlord shall restore the parking to approximately 196
spaces as originally designed (see attached Exhibit B) by removing the
playground, equipment and re-paving and striping, as necessary, the play
yard area located on the south side of the Building. Upon completion of
parking lot restoration, eighty percent (80%) of the cost of such
restoration shall be paid by Landlord and twenty percent (20%) of it shall
be paid for by Tenant.
53. Subject to the approval of City of San Jose and Tenant's current premises
owner (which shall be obtained by Tenant, Landlord hereby approves of the
installation, at Tenant's expense, of a pedestrian walkway and gate to be
situated between the Complex and Tenant's current premises located at 4435
Fortran Drive, San Jose, CA. Such pedestrian walkway shall be removed by
Tenant and returned to its original condition upon termination of this
Lease.
54. Insert at the end of Section 9 of the Lease: "This paragraph shall not be
interpreted as requiring Tenant to make (i) any structural changes or
structural improvements to the Complex, except to the extent such changes
or improvements are required as a result of Tenant's use or alteration of
the Premises, or (ii) any repairs to or replacement of major portions of
the parking facilities, except routine sealing, stripping, and pothole
repairs."
55. Insert in Section 10 of the Lease: "The provisions of this Section 10 the
contrary notwithstanding, provided Landlord has approved the plans and
specifications of the Tenant Improvements prior to installation, Tenant
shall not be required to remove such improvements at the expiration or
earlier termination of the Lease Term."
<PAGE> 28
56. Insert at end of Section 11: "The provision of section 11 to the contrary
notwithstanding, Tenant shall have the right to install up to Twenty
Thousand Dollars ($20,000) per year in alterations, modifications and
improvements to the Premises without Landlord's prior written consent,
provided such alterations, modifications and/or improvements do not
adversely affect the structural integrity of, or the electrical, plumbing
or HVAC systems servicing the Building."
57. Insert at the end of Section 14: "The foregoing notwithstanding, Tenant
shall have no obligation to pay any increase in real property taxes
resulting from a change in ownership of the Complex during the first five
(5) years of the Lease Term, provided, however, after the initial five
years of the Lease Term, any increase in real property taxes resulting
from a change in ownership shall be paid by Tenant."
58. Insert at the end of Section 28: "Tenant shall have the right to
terminate this Lease if the Premises are destroyed in whole or in part
during the last twelve (12) months of the Lease Term."
59. Insert at end of Section 38: "The foregoing notwithstanding, in the event
of an emergency Landlord shall be required to perform such obligations as
required under the terms of this Lease, as soon as reasonably possible
under the circumstances."
60. Insert at the end of Section 43C: "Landlord shall have the right to
appoint a consultant to conduct an investigation to determine whether any
Hazardous Material is being used, stored and disposed of by Tenant in
accordance with all applicble laws. In the event the consultant discovers
any violations of applicable laws by Tenant, then Tenant shall pay the
consultant's fees and all costs of compliance required in connection with
such violations.
<PAGE> 29
61. In the event of any inconsistencies between the Lease and this Rider One,
the terms of Rider One shall prevail and supersede.
Landlord: GEOMAX, a California Tenant: 3DFX Interactive, Inc., a
general partnership California corporation
By: /s/ GEORGE L. QUINN JR. By: /s/ GARY MARTIN
------------------------------ --------------------------------
Title: Partner Title: V.P. Finance
--------------------------- -----------------------------
By: /s/ MAHMOUD GAHRAHMAT Date: 1-22-98
------------------------------- ------------------------------
Title: Partner
---------------------------
Date: 1-22-98
----------------------------
CONSULT YOUR PROFESSIONAL ADVISORS: THIS DOCUMENT HAS BEEN PREPARED FOR
SUBMISSION TO YOUR ATTORNEY, TAX ACCOUNTANT, GEOLOGIST OR OTHER PROFESSIONAL
ADVISOR FOR APPROVAL FROM THE STANDPOINT OF PROTECTION OF YOUR INTERESTS AND
RIGHTS. NO REPRESENTATION OR RECOMMENDATIONS IS MADE BY CPS THE COMMERCIAL
PROPERTY SERVICES COMPANY, ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS DOCUMENT OR THE TRANSACTION RELATING
THERETO. ADDRESS THESE QUESTIONS TO YOUR ATTORNEY AND/OR OTHER PROFESSIONAL
ADVISORS.
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